<PAGE>
As filed with the Securities and Exchange Commission on February 10, 1999
Registration No. 333-69533
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
Group Maintenance America Corp.
(Exact name of Registrant as specified in its charter)
Texas 1711 76-0535259
(State or other (Primary Standard (I.R.S. Employer
jurisdiction Industrial Identification No.)
of incorporation or Classification Code
organization) Number)
Randolph W. Bryant
Senior Vice President, General
8 Greenway Plaza, Suite 1500 Counsel and Secretary
Houston, Texas 77046 8 Greenway Plaza, Suite 1500
(713) 860-0100 Houston, Texas 77046
(713) 860-0100
(Address, including zip code
and telephone (Name, address, including zip code and
number, including area code, telephone number, including area code,
of Registrant's of agent for service)
principal executive offices)
----------------
Copies to:
Gary W. Orloff
Bracewell & Patterson, L.L.P.
711 Louisiana Street , Suite 2900
Houston, Texas 77002-2781
Phone: (713) 221-1306
Telecopier: (713) 221-1212
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box [_]
Pursuant to Rule 429 under the Securities Act of 1933, this Registration
Statement contains a combined prospectus that also relates to 3,341,034 shares
of Common Stock registered on Form S-4, Registration No. 333-63923, which was
declared effective on September 28, 1998 (the "Previously Registered
Securities"). This Registration Statement constitutes Post-Effective Amendment
No. 1 to such Registration Statement, pursuant to which the total amount of
unsold Previously Registered Securities thereon, without limitation as to class
of securities, may be offered and sold as Subordinated Notes, Warrants to
Purchase Common Stock and Common Stock, through the use of the combined
Prospectus included herein. In the event such Previously Registered Securities
are offered and sold prior to the effective date of this Registration
Statement, the amount of such Previously Registered Securities so sold will not
be included in the prospectus hereunder.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information contained in this prospectus is not complete and may be +
+amended. These securities may not be sold until the related registration +
+statement filed with the Securities and Exchange Commission or any applicable +
+state securities commission becomes effective. This prospectus is not an +
+offer to sell nor is it seeking an offer to buy these securities in any state +
+where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED FEBRUARY 10, 1999
[Logo of GroupMac Appears Here]
Group Maintenance America Corp.
Subordinated Notes
Common Stock
Warrants to Purchase Common Stock
Preferred Stock
-----------
This prospectus covers the sale of several types of securities we may issue
in connection with the acquisition of other mechanical and electrical
contracting businesses. We may offer and issue from time to time:
. unsecured subordinated notes in one or more series not to exceed $50,000,000
in aggregate principal amount,
. 5,341,034 shares of common stock,
. warrants to purchase up to 2,000,000 shares of common stock issuable upon
exercise of the warrants, and
. one or more series of preferred stock at aggregate offering prices not to
exceed $10 million.
We currently plan to make additional acquisitions of the securities or assets
of mechanical and electrical contracting businesses. The number of shares of
common stock, the terms on which any shares are issued and the price and other
terms at which any notes, warrants and preferred stock are offered will be
determined by negotiations between us and representatives of the businesses we
acquire. Our common stock trades on the New York Stock Exchange under the
symbol "MAK."
This prospectus discusses the terms of the common stock and the terms common
to any notes, warrants and preferred stock we might issue. We will provide
specific terms of these securities in supplements to this prospectus. You
should read this prospectus and any prospectus supplement carefully before you
invest in any of these securities.
Investing in the notes involves risks which are described in the "Risk
Factors" section beginning on page 6 of this prospectus.
These securities have not been approved by the Securities and Exchange
Commission or any state securities commission, nor have these organizations
determined that this prospectus is accurate or complete. Any representation to
the contrary is a criminal offense.
The date of this prospectus is , 1999.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
About This Prospectus............... 2
Group Maintenance America Corp...... 3
Recent Developments................. 4
Risk Factors........................ 5
Ratios of Earnings to Fixed Charges
and Earnings to Fixed Charges and
Preferred Stock Dividends.......... 11
Description of Notes................ 12
</TABLE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
Description of Warrants............................................... 15
Description of Capital Stock.......................................... 16
Plan of Distribution.................................................. 19
Cautionary Statements Regarding Forward-Looking Statements............ 19
Where You Can Find More Information................................... 20
Experts............................................................... 21
</TABLE>
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
SEC utilizing a "shelf" registration process. Under this shelf process, we may,
over the next two years, offer and issue any combination of the securities
described in this prospectus in one or more offerings, so long as the aggregate
principal amount of the notes issued does not exceed $50,000,000, the aggregate
amount of the preferred stock issued does not exceed $10 million and the number
of shares of common stock issued does not exceed 5,341,034. This prospectus
provides you with a general description of the securities we may offer and
issue. Each time we issue securities, we will provide a prospectus supplement
that will contain specific information about the terms of that issuance. The
prospectus supplement may also add, update or change information contained in
this prospectus. You should read both this prospectus and any prospectus
supplement together with additional information described under the heading
"Where You Can Find More Information."
You should rely only on the information provided or incorporated by reference
in this prospectus and any prospectus supplement. We have not authorized anyone
else to provide you with different information. We are not making an offer of
these securities in any state where the offer is not permitted. You should not
assume that the information in or incorporated by reference in this prospectus
or any prospectus supplement is accurate as of any date other than the date on
the front of those documents. Our business, financial condition, results of
operations and prospects may have changed since those dates.
2
<PAGE>
GROUP MAINTENANCE AMERICA CORP.
Group Maintenance America Corp, or GroupMAC, is a leading nationwide provider
of mechanical and electrical services. We provide services to
commercial/industrial and residential customers through our operations in 57
cities across 26 states. Since our inception, we have acquired 64 companies
which represent $1,013.1 million in pro forma combined 1997 revenues.
We provide our commercial/industrial customers with maintenance, repair and
replacement and installation services for products such as:
. Boilers, chillers, and central plants,
. Process piping, and control systems and
. Data cabling.
We provide our residential customers with maintenance, repair and replacement
and installation services for products such as:
. Central air conditioning systems and furnaces,
. Plumbing fixtures and pipes, and
. Water heaters.
When we refer to the business of GroupMAC, the term means Group Maintenance
America Corp. and its subsidiaries on a combined basis.
RECENT DEVELOPMENTS
From September 30, 1998 through December 31, 1998, we completed the
acquisitions of four companies. On January 14, 1999, we acquired Pacific Rim
Mechanical Contractors, Inc., which will be accounted for as a purchase, for
approximately $14.1 million of cash and assumed debt, $1.6 million of junior
subordinated convertible debt, 0.3 million shares of common stock and warrants
to purchase 0.1 million shares of common stock.
On January 14, 1999, we announced that the holders of 7.2 million shares of
our common stock had agreed to extend their lock-up terms through December 31,
1999. These shareholders included our executive officers, our board members,
our initial equity sponsor and some larger shareholders who received common
stock when we acquired their businesses.
On January 22, 1999, we completed a private placement to institutional
investors of $130 million aggregate principal amount of 9 3/4% senior
subordinated notes due 2009. We used the proceeds of that offering to repay
indebtedness under our $230 million bank credit agreement (the "credit
agreement") that we incurred to make acquisitions of businesses.
We have letters of intent to acquire two other companies that had aggregate
1997 revenues of approximately $95.5 million. The proposed acquisition of each
of these companies is subject to negotiation of definitive agreements, receipt
of necessary governmental approvals, completion of due diligence and other
conditions to closing. The aggregate purchase price for these companies,
subject to adjustment, is approximately $36.4 million of cash and assumed debt
and 1.8 million shares of our common stock.
We currently plan to continue our past business practice of acquiring other
businesses in our industry. We are currently evaluating financial statements of
potential acquisition targets with approximately $1,100.0 million in annualized
revenues from which we intend to select acquisition targets.
3
<PAGE>
RISK FACTORS
You should carefully consider the following factors and other information in
this prospectus before deciding to invest in our securities. We may also
discuss other risks you should carefully consider in a prospectus supplement.
Restrictions in Credit Agreement and Indentures on Our Operations--We may not
be able to finance future needs or adapt our business plans to changes because
of restrictions placed on us by our lenders and noteholders.
The operating and financial restrictions and covenants in our credit
agreement, the indenture governing our senior subordinated notes and the
indenture governing these notes adversely affect, and in fact limit or
prohibit, our ability to:
. finance future operations or capital needs,
. respond to changes in our business or competitive activities,
. pay dividends on our common stock, or
. engage in other business activities.
Any future financing arrangements may have the same effect. A breach of any of
these restrictions or covenants could cause a default under the credit
agreement, other more senior notes and the notes and in some cases acceleration
of debt under other instruments that contain cross-default or cross-
acceleration provisions. A significant portion of our indebtedness then may
become immediately due and payable. We are not certain whether we would have,
or be able to obtain, sufficient funds to make these accelerated payments,
including payments on the notes.
Integration of Acquired Companies--Any delay or inability to integrate
businesses we acquire could adversely affect our financial health.
We have grown, and plan to continue to grow, by acquiring other companies in
our industry. Our future success is dependent on our ability to integrate our
past and future acquisitions into one enterprise with a common operating plan.
We must also monitor the performance of our acquired companies. Many of these
acquired companies must change their past operating systems such as accounting,
employment, purchasing and marketing. We may not be successful in our efforts
to integrate acquired companies or monitor their performance. If we are unable
to do so, or if we experience delays or unusual expenses in doing so, it could
have a material adverse effect on our business, financial condition and results
of operations.
Dependence on Acquisitions for Growth--If our acquisition program strategy is
not achieved, our growth will be diminished.
We plan to grow primarily by acquisitions. This strategy requires that we
identify acquisition targets and negotiate and close acquisitions without
disrupting our existing operations. The strategy may result in the diversion of
our time from operating matters, which may cause the loss of business and
personnel. There are also possible adverse effects on earnings resulting from
the possible loss of acquired customer bases, amortization of goodwill created
in purchase transactions and the contingent and latent risks associated with
the past operations and other unanticipated problems arising in the acquired
business. Our success is dependent upon our ability to identify, acquire,
integrate and manage profitably acquired businesses. If we cannot do this, our
business and growth may be harmed.
4
<PAGE>
Significant Indebtedness and Interest Payment Obligations--Our substantial
indebtedness could adversely affect our financial health, make us more
vulnerable to adverse economic conditions and prevent us from fulfilling our
obligations under the notes.
We are highly leveraged. As of January 31, 1999, we have outstanding
approximately $247.7 million of consolidated indebtedness, of which
approximately $100.1 million is senior indebtedness. We will require
substantial capital to finance our anticipated growth, so we expect to incur
additional debt in the future. However, we will be limited in the amount we
could incur by our existing and future debt agreements.
Our high level of indebtedness could have important consequences to holders
of notes, such as:
. limiting our ability to obtain additional financing to fund our growth
strategy, working capital, capital expenditures, debt service requirements or
other purposes,
. limiting our ability to use operating cash flow in other areas of our
business because we must dedicate a substantial portion of these funds to
make principal payments and fund debt service,
. placing us at a competitive disadvantage compared to competitors with less
debt,
. increasing our vulnerability to adverse economic and industry conditions, and
. increasing our vulnerability to interest rate increases because borrowings
under our credit agreement are at variable interest rates.
Our ability to pay interest on the notes and to satisfy our other debt
obligations will depend upon, among other things, our future operating
performance and our ability to refinance indebtedness when necessary. Each of
these factors is to a large extent dependent on economic, financial,
competitive and other factors beyond our control. If we cannot generate
sufficient cash from operations to make scheduled payments on the notes or to
meet our other obligations, we will need to refinance, obtain additional
financing or sell assets. We cannot assure you that our business will generate
cash flow, or that we will be able to obtain funding sufficient to satisfy our
debt service requirements.
Subordination of the Notes to Senior and Senior Subordinated Indebtedness--Your
right to receive payment on the notes is junior to most of our existing
indebtedness and possibly all of our future borrowings.
The notes will be subordinate to all our senior and senior subordinated
indebtedness. As of January 31, 1999, we have outstanding approximately $230.1
million of senior and senior subordinated indebtedness, $229.5 million of which
is guarantor senior and senior subordinated indebtedness. We also may incur
additional senior and senior subordinated indebtedness under the terms of the
credit agreement. For example, as of January 31, 1999, we have, subject to the
terms and conditions thereof, approximately $130.0 million available under our
credit agreement which, if borrowed, would be senior indebtedness. In the event
of our bankruptcy, liquidation or dissolution, our assets would be available to
pay obligations on the notes only after all payments have been made on our
senior and senior subordinated indebtedness. Similarly, in the event of a
bankruptcy, liquidation or dissolution of any guarantor, its assets would be
available to pay obligations on the guarantee only after all payments had been
made on its guarantor senior and senior subordinated indebtedness. In addition,
no cash payments may be made with respect to the notes during the continuance
of a payment default with respect to senior and senior subordinated
indebtedness. Furthermore, under some circumstances, no cash payments with
respect to the notes may be made for a period of up to 179 days during
5
<PAGE>
each period of 360 days if a nonpayment default exists with respect to
designated senior indebtedness. We cannot assure you that sufficient assets
will remain to make any payments to you or other holders of the notes. In
addition, some events of default under the credit agreement would prohibit us
from making any payments on the notes.
Notes are Unsecured--Your right to enforce remedies is limited by the rights of
holders of secured debt.
In addition to being subordinate to all of our senior and senior subordinated
indebtedness, the notes will not be secured by any of our assets. Our
obligations under our credit agreement are secured by all of our inventory and
accounts receivable and those of our subsidiary guarantors and a pledge of the
capital stock of each guarantor. If we became insolvent or are liquidated, or
if payment under our credit agreement is accelerated, the lenders under our
credit agreement would be entitled to exercise the remedies available to a
secured lender under applicable law. Therefore, our bank lenders will have a
claim on our assets before the holders of notes that rank senior to these notes
and the holders of these notes.
Cyclical Nature of New Installation Market--Downturns in the construction
industry could cause our revenues from installing equipment to decrease.
A substantial portion of our business involves installation of mechanical and
electrical systems in newly constructed residences and commercial/industrial
facilities. Our revenues from new installation services in the residential
market is dependent upon the level of housing starts in the areas in which we
operate. The housing industry is cyclical, and our revenues from new
residential installation will be affected by the factors that affect the
housing industry. These factors include changes in employment and income
levels, the availability and cost of financing for new home buyers and general
economic conditions. The level of new commercial/industrial installation
services is also affected by changes in economic conditions and interest rates.
General downturns in housing starts or new commercial/industrial construction
in the areas in which we operate could have a material adverse effect on our
business, including its financial condition and results of operations.
Availability of Technicians--A skilled labor force is important to our planned
internal growth.
Our ability to provide high-quality mechanical and electrical services on a
timely basis requires an adequate supply of skilled technicians. Shortages of
qualified technicians sometimes occur. We cannot assure you that we will be
able to maintain an adequate skilled labor force or that our labor expenses
will not increase. A shortage of skilled labor would require us to curtail our
planned internal growth.
Weather--Our profitability will be affected by prolonged bad weather or
seasonal variations.
Our business tends to be affected adversely by moderate weather patterns.
Comparatively warm winters and cool summers reduce the demand for our
maintenance, repair and replacement services. Additionally, our new
installation business is affected adversely by extremely cold weather and large
amounts of rain. As a result, we expect our revenues and operating results to
be lower in our first and fourth calendar quarters. Prolonged weather
conditions or seasonal variations may cause unpredictable fluctuations in
operating results.
Competition--We face competition from owner-operated companies and large public
companies and utilities for the services we provide and for companies we may
want to acquire.
The mechanical and electrical and plumbing service industries are very
6
<PAGE>
competitive. These industries are served by small, owner-operated private
companies and by larger companies operating nationwide, including unregulated
affiliates of electric and gas public utilities and heating, ventilating and
air conditioning equipment manufacturers, and there are few barriers to entry.
Some of the smaller competitors have lower overhead cost structures and may be
able to provide their services at lower rates than we can. Some of the larger
competitors have greater financial resources, name recognition or other
competitive advantages and may be willing to pay higher prices than we are
willing to pay for the same opportunities. Consequently, we may encounter
significant competition in our efforts to achieve our growth objectives.
Dependence on Key Personnel--Our business may suffer if we do not retain our
management and the management of any company we acquire.
We depend on our executive officers and senior management personnel and on
the senior management of significant businesses we acquire. Our business could
be affected adversely if these persons do not continue in their roles and we
are unable to attract and retain qualified replacements.
Dependence on Additional Capital for Future Growth--If we cannot use our common
stock or raise capital for consideration in acquisitions, we may not be able to
grow our business by acquisitions.
We have financed capital expenditures and acquisitions primarily through the
issuance of equity securities, secured bank borrowings and internally generated
cash flow. We currently intend to finance future acquisitions by using shares
of our common stock for a significant portion of the consideration to be paid.
If our common stock does not maintain a sufficient market value, or if
potential acquisition candidates are otherwise unwilling to accept our common
stock as part of the consideration for the sale of their businesses, we may be
required to utilize more of our cash resources, if available, in order to
initiate and maintain our acquisition program. We cannot assure you that we
will be able to raise the additional capital required. If we cannot do so, our
growth through acquisitions may be limited.
Control by Existing Management and Shareholders--GroupMAC's management and
larger shareholders can exert substantial influence over our business affairs
and their interests may not be the same as other shareholders' interests.
Our executive officers, directors and 5% shareholders owned in the aggregate
approximately 19% of our outstanding common stock as of December 31, 1998.
These persons have substantial influence over the outcome of any matters
submitted to GroupMAC's shareholders for approval, including the election of
our board of directors. These persons may have economic and business reasons to
act together that make their interests different from what might be in the best
interest of GroupMAC's other shareholders.
Shares Eligible for Future Sale--Most of the shares of our outstanding common
stock will be freely-tradeable only in the future and, when they are tradeable,
this could cause our stock price to decrease.
We issued most of the shares of our outstanding common stock as part of our
acquisition of other businesses. These shares are currently restricted from
resale by contractual lock-up agreements between GroupMAC and the shareholder
and, in some cases, by federal and state securities laws. The lock-up
agreements controlling these shares generally allow the holder to make sales
one year after the acquisition. Should those shareholders all choose to sell
their shares, the aggregate effect of many shareholders selling their shares
could cause our stock price to decrease.
7
<PAGE>
As of December 31, 1998, we had 33,153,982 shares of common stock outstanding
and only approximately 10.0 million of these shares were freely-tradeable. The
restricted shares may only be sold upon their registration under the Securities
Act of 1933, pursuant to an available exemption under the securities laws or in
accord with any contractual provisions of the lock-up agreement. The
contractual lock-up agreements generally have a complete prohibition on the
resale of common stock for a term of one year from the date of issuance of the
common stock and, during the second year from the date of issuance, resales are
limited to no more than 36% of the person's holdings. As of the date of this
prospectus, approximately 9.5 million restricted shares of our common stock are
eligible for resale under Rule 144 and the contractual lock-up agreements. The
shares eligible for sale under Rule 144 must be sold in accordance with the
restrictions of that rule, including restrictions on the volume of shares that
may be sold and the manner in which they may be sold. After these shares have
been held for a period of two years from the date of issuance, both the
provisions of Rule 144 and the contractual lock-up agreements, unless extended,
will no longer apply and the shares will be freely-tradeable.
Dependence on Subsidiaries for Cash Flow--We rely on our subsidiaries for our
operating funds and our subsidiaries have no obligation to supply us with any
funds.
We conduct our operations through subsidiaries and are dependent upon our
subsidiaries for the funds we need to operate. We will be dependent on the
transfer of funds from our subsidiaries to make the payments due under the
notes and other outstanding debt securities. Each of our subsidiaries is a
distinct legal entity and has no obligation, contingent or otherwise, to
transfer funds to us. Our ability to pay the notes and other outstanding debt
securities, and the ability of our subsidiaries to transfer funds to us, could
be restricted by the terms of subsequent financings.
Volatility of Our Stock Price--We may experience significant fluctuations in
the price of our common stock for a variety of reasons, some of which are
outside of our control.
The market price of our common stock may fluctuate significantly from time to
time in response to many factors, some of which are:
. variations in our reported financial results,
. changing conditions in the general economy, and
. changing conditions in our industry.
Stock markets generally experience price and volume volatility from time to
time and this may affect the price of our common stock for reasons unrelated to
our business performance.
Potential Anti-Takeover Effects--It may be hard for other shareholders to
obtain control of GroupMAC because of provisions in our charter documents and
state law that allow our current board of directors to defend against those
attempts.
Provisions in GroupMAC's Articles of Incorporation (the "Articles") and
Bylaws and the Texas Business Corporation Act (the "TBCA") may delay, inhibit
or prevent someone from gaining control of GroupMAC through a tender offer,
business combination, proxy contest or some other way. These provisions
include:
. authorization in our Articles for our board of directors to issue preferred
stock that have preferences, powers and rights as our board of directors may
determine,
. classification of our board of directors,
. a TBCA restriction on the ability of shareholders to take action by written
consent, and
8
<PAGE>
. a TBCA restriction on business combinations with some types of interested
shareholders.
The Year 2000 Issue--If our computer systems or those with whom we do business
are not Year 2000 compliant, our ability to manage our business and our
financial results could be harmed.
Many computer systems, including some of those we use, identify dates using
only the last two digits of the year. These systems are unable to distinguish
between dates in the year 2000 and dates in the year 1900. That inability,
referred to as the year 2000 ("Y2K") issue, if not addressed, could cause these
systems to fail or provide incorrect information after December 31, 1999 or
when using dates after December 31, 1999. This in turn could have a material
adverse effect on our ability to manage our business. We conducted an
assessment of the magnitude of its Y2K issue as it relates to computer systems
and determined that we were required to upgrade or replace significant portions
of our software so that our computer systems would be able to function properly
beyond December 31, 1999. However, we cannot assure you that such systems
upgrades and replacements will be completed on time, which could adversely
affect our business, financial condition, results of operations or prospects.
Our Y2K issue relates not only to our own systems but also to those of our
customers and suppliers. We are communicating with our suppliers, customers and
others with whom we do business to determine the extent of our vulnerability to
the failure of third parties to remediate their own Y2K issues. Because of the
complexity of the Y2K issue, it is possible that the efforts of suppliers,
customers and others with whom we do business may not be satisfactorily
completed in a timely fashion. The failure of suppliers, customers or other
entities to address the Y2K issue could adversely affect our business,
financial condition, results of operations or prospects.
9
<PAGE>
RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO FIXED CHARGES AND PREFERRED
STOCK DIVIDENDS
Our unaudited ratios of earnings to fixed charges and earnings to fixed
charges and preferred stock dividends for the periods indicated are as follows:
<TABLE>
<CAPTION>
Nine Months Ten Months Years Ended
Ended Ended February 28 or 29,
September 30, December 31, --------------------
1998 1997(1) 1997 1996 1995 1994
------------- ------------ ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed
charges(2)................... 6.7x -- 8.6x 8.7x 6.6x 13.5x
Ratio of earnings to fixed
charges and preferred stock
dividends(3)................. 6.7x -- 8.6x 8.7x 6.6x 13.5x
</TABLE>
- --------
(1) In the historical ten months ended December 31, 1997, earnings were
inadequate to cover fixed charges in the amount of $0.8 million due to the
impact of a $7.0 million compensation charge that will not recur.
(2) The ratio of earnings to fixed charges was computed by dividing earnings by
fixed charges. For this purpose, earnings consist of income from operations
before income taxes and fixed charges. Fixed charges consist of interest
expense, amortization of debt issuance costs and the estimated interest
portion of rental expense.
(3) No dividends were paid on our preferred stock.
10
<PAGE>
DESCRIPTION OF NOTES
General
We will issue the notes in one or more series under an indenture between us
and State Street Bank and Trust Company, as Trustee (the "Trustee"). The
following statements discuss the important terms of the notes and the
indenture. We filed the form of the indenture as an exhibit to the registration
statement and we urge you to read the indenture because it defines your rights
as a holder of notes. As of January 31, 1999, on a proforma basis, we and our
subsidiaries had outstanding approximately $230.1 million of indebtedness that
ranks senior to the notes and approximately $17.6 million of indebtedness that
ranks with the same preference as the notes.
Unless otherwise indicated in the prospectus supplement related thereto, we
will issue the notes only in fully registered form, without coupons.
The notes and the indenture do not contain financial covenants binding on us
or our subsidiaries, nor do they limit the amount of indebtedness, whether
senior or subordinated, that we or our subsidiaries can incur.
No public market exists for the notes and none is expected to develop.
Investors should proceed on the assumption that they may have to bear the
economic risk of an investment in the notes for an indefinite period of time.
The notes will be non-transferable, except upon our consent or to the spouse or
lineal decendents of a holder upon the death of the holder.
Please refer to the prospectus supplement for the following terms of a series
of notes:
. The title of the notes;
. Any limit upon the aggregate principal amount of the notes;
. The date or dates on which the principal of the notes is due;
. The fixed rate or variable rates, or the method by which the fixed rate or
variable rates will be determined, at which the notes will bear interest, if
any;
. The date or dates from which any interest will accrue or the method by which
any accrual date or dates will be determined;
. The interest payment dates on which any interest will be payable and the
regular record date for the interest payable on any interest payment date;
and
. Any other terms of the notes.
Subordination
The notes will be our direct, unsecured subordinated obligations. The notes
will have a junior position to all other indebtedness except for approximately
$16 million aggregate principal amount of notes issued in connection with the
acquisition of Trinity Contractors, Inc. that rank with the same preference as
the notes. In this context, "indebtedness" means all indebtedness for borrowed
money incurred by us and our subsidiaries or indebtedness to secured creditors,
holders of any indebtedness guaranteed by us or our subsidiaries and any
preferred stockholders, as well as other kinds of contracts and obligations,
such as leases, to which we or any of our subsidiaries are a party.
Prepayment Right
We may prepay the principal of the notes of any series at any time, in whole
or in part, without penalty.
Right of Set-Off
When we acquire a business, the acquisition agreement may require the seller
to make payments to us or indemnify us for various obligations. Examples of
these obligations include (1) adjustments to the purchase price that might
occur after the transaction closes, (2) any obligations of the
11
<PAGE>
seller to purchase uncollected accounts receivable and (3) any obligations of
the seller to indemnify us. Any note issued to a seller as part of the
consideration for the acquisition allows us to credit amounts the seller owes
us against amounts we owe the holder of a note.
Consolidation, Merger or Sale
The indenture generally permits us to consolidate or merge with another
business entity. It also permits the sale by us of our properties and assets
substantially as an entirety. If this happens, the remaining or acquiring
business entity must assume all of our responsibilities and liabilities with
respect to the indenture, including the payment of all amounts when due on the
notes and the performance of covenants under the indenture.
However, we can consolidate or merge with or into another business entity or
sell our property and assets substantially as an entirety only according to the
conditions of the indenture. The remaining or acquiring business entity will be
substituted for us in the indenture with the same effect as if it had been the
original party thereto. It will also be substituted for us on the notes with
the same effect as if it had been the original obligor. If we sell our
properties and assets substantially as an entirety, we shall be released from
all of our obligations and liabilities under the indenture and the notes.
Payment and Transfer
Principal, interest and any premium on the notes will be paid at designated
places. Payment will be made by check mailed to the person in whose name the
notes are registered on days specified in the notes and reflected in any
prospectus supplement.
Subject to the restrictions on transfer described above, a holder may
transfer or exchange fully registered notes at the office of the Trustee or at
any other office or agency maintained by us for such purposes, without the
payment of any service charge except for any tax or governmental charge.
Events of Default
An event of default occurs if:
. we fail to pay the principal amount of any note when due;
. we fail to pay interest on any note for 30 days;
. we or a court take certain actions relating to the bankruptcy, insolvency or
reorganization of GroupMAC; or
. any other event of default included in a specific series of notes occurs.
If an event of default for any series of notes occurs and continues, the
Trustee or the holders of at least 25% in aggregate principal amount of the
notes of that series may, after notifying the holders of our senior
indebtedness and receiving their consent to act, require us to repay
immediately the principal of the notes of that series by giving us written
notice to repay. Subject to certain conditions, the holders of a majority of
the aggregate principal amount of the notes of that series can rescind this
accelerated payment requirement. For information as to waiver of defaults, see
"Modification and Waiver" below.
The Trustee may withhold notice to the holders of notes of any default, other
than the payment of principal and/or interest, if it considers withholding of
notice to be in the best interest of the holders.
A default under other indebtedness of GroupMAC is not an event of default
under the indenture or the notes, and an event of default under one series of
notes will not necessarily be an event of default under another series.
Modification and Waiver
Under the indenture, our rights and obligations and the rights of the holders
may be modified with the consent of the holders of a majority in aggregate
principal amount of the outstanding notes of each
12
<PAGE>
series affected by the modification. No modification of the principal,
including any premium, or interest payment terms, and no modification reducing
the percentage required for modifications, is effective against any holder
without its consent.
Discharge of Indenture
In most situations, we will be discharged from our obligations under the
indenture for any series of notes by either (1) paying or causing to be paid
the principal, including any premium, and interest on all outstanding notes of
that series when the payments are due or (2) delivering to the Trustee all
outstanding notes of that series for cancellation.
We will also be discharged of our obligations under the indenture if we
deposit in escrow or with the Trustee sufficient cash or government securities
to pay the principal, premium, if any, and interest on the notes of a
particular series to the stated maturity date or a redemption date. This act is
commonly known as defeasance. If that happens, payment of the notes of such
series may not be accelerated because of an event specified as a default or
event of default with respect to the notes, and the holders of the notes of the
series will not be entitled to the benefits of the indenture, except for
registration of transfer and exchange of notes and replacement of lost, stolen
or mutilated notes.
The indenture defines "government securities" to mean interest bearing
obligations as a result of the deposit of which the notes are rated in the
highest generic long-term debt rating category assigned to defeased debt by one
or more nationally recognized rating agencies.
Under federal income tax law as of the date of this prospectus, a discharge
may be treated as an exchange of the related debt securities. The indenture
restricts our ability to discharge our obligations under notes of a series in
this way without assurance that a holder will not be required to recognize gain
or loss for federal income tax purposes equal to the difference between the
holder's cost or other basis for the notes and the value of the holder's
interest in the escrow or trust. As with many tax matters, there can be no
assurance that such will be the case, and prospective investors are urged to
consult their tax advisers as to the consequences of a discharge of our
obligations under the indenture, including the applicability and effect of tax
laws other than federal income tax law.
Concerning the Trustee
State Street Bank and Trust Company is the Trustee under the indenture. The
corporate trust office of the Trustee is located at 225 Franklin Street,
Boston, Massachusetts 02110.
Other than its duties in case of a default, the Trustee is not obligated to
exercise any of its rights or powers under the indenture at the request, order
or direction of any holder, unless the holders offer the Trustee reasonable
indemnity. If they provide this reasonable indemnification, the holders of a
majority in principal amount of any series of notes may direct the time, method
and place of conducting any proceeding or the remedy available to the Trustee,
or exercise any power conferred upon the Trustee for any series of notes. The
indenture provides that if an event of default occurs and is not cured, the
Trustee will be required, in the exercise of its power, to use the degree of
care of a prudent person in the conduct of such person's own affairs.
The Trustee may resign from its duties with respect to the indenture at any
time or may be removed by us. If the Trustee resigns, is removed or becomes
incapable of acting as Trustee or a vacancy occurs in the office of the Trustee
for any reason, a successor Trustee shall be appointed in accordance with the
provisions of the indenture.
The indenture contains the provisions required by the Trust Indenture Act of
1939
13
<PAGE>
with reference to the disqualification of the Trustee if it shall have or
acquire any "conflicting interest," as defined in that law. The indenture also
contains limitations on the right of the Trustee, as our creditor, to obtain
payment of claims in some cases, or to realize on property received by it in
respect of any such claims, as security or otherwise.
DESCRIPTION OF WARRANTS
The following statements discuss the important terms of the warrants. We urge
you to read the provisions of the warrant agreement to be entered into by us
and the person receiving the warrants and the terms described in the prospectus
supplement relating to the warrant agreement for any terms and provisions that
may be important to you.
General
We may issue the warrants, evidenced by warrant certificates, under a warrant
agreement independently or together with any notes or common stock. Warrants
may be attached to or separate from such notes or common stock. No public
market exists for the warrants and none is expected to develop. Investors
should proceed on the assumption that they may have to bear the economic risk
of an investment in the warrants for an indefinite period of time. The warrants
will be non-transferable, except upon our consent or death of the holder.
If warrants are offered, the prospectus supplement will describe the terms of
the warrants, including the following:
. the offering price, if any;
. the number of shares of common stock purchasable upon exercise of one warrant
and the initial price at which such shares may be purchased upon exercise;
. the date on which the right to exercise the warrants begins and the date on
which the right expires;
. resale restrictions on the common stock into which the warrants are
exercisable;
.call provisions; and
.any other terms of the warrants.
The shares of common stock issuable upon exercise of the warrants will, when
issued in accordance with the warrant agreement, be fully paid and
nonassessable.
Exercise of Warrants
A warrant holder may exercise a warrant by delivering to us a notice signed
by the warrant holder or a duly authorized agent, indicating the warrant
holder's election to exercise all or a portion of the warrants evidenced by the
surrendered warrant certificate. This required notice may be in the form found
at the end of the warrant certificate. The notice must be accompanied by the
surrendered warrant certificate and payment of the aggregate exercise price of
the warrants to be exercised. The payment must be made in the form of cash or a
cashier's check equal to the exercise price. Within 10 business days after the
effectiveness of such exercise, we will deliver or cause to be delivered to the
exercising warrant holder a certificate representing the number of shares of
common stock purchased, together with cash in lieu of any fraction of a share.
If fewer than all of the warrants evidenced by any certificate are exercised,
we will deliver to the exercising warrant holder a new warrant certificate
representing the unexercised warrants or we will make an appropriate notation
on the warrant certificate and return the same certificate to the warrant
holder.
Antidilution Provisions
The exercise price payable and the number of shares of common stock
14
<PAGE>
purchasable upon the exercise of each warrant will be subject to adjustment in
some circumstances, including the issuance of a stock dividend to holders of
common stock or a combination, subdivision or reclassification of common stock.
In lieu of adjusting the number of shares of common stock purchasable upon
exercise of each warrant, we may elect to adjust the number of warrants. No
adjustment in the number of shares purchasable upon exercise of the warrants
will be required until cumulative adjustments require an adjustment of at least
1% of the number of shares purchasable. We may, at our option, reduce the
exercise price at any time. No fractional shares will be issued upon exercise
of warrants, but we will pay the cash value of any fractional shares otherwise
issuable. Regardless of these other provisions, in case of any consolidation,
merger or sale or conveyance of our property as an entirety or substantially as
an entirety, the holder of each outstanding warrant shall have the right to
exercise those warrants for the kind and amount of shares of stock, cash and
other securities and property receivable by a holder of the number of shares of
common stock for which such warrant was exercisable immediately prior to such
transaction.
No Rights as Shareholders
Simply having the status of being a warrant holder will not entitle a warrant
holder to:
. vote as shareholders,
. consent as shareholders,
. receive dividends as shareholders,
. receive notice as shareholders with respect to any meeting of shareholders
for the election of directors of GroupMAC or any other matter, or
. exercise any rights whatsoever as shareholders of GroupMAC.
DESCRIPTION OF CAPITAL STOCK
General
Under our Articles, we have authority to issue 150,000,000 shares of capital
stock, consisting of 50,000,000 shares of preferred stock, par value $0.001 per
share, and 100,000,000 shares of common stock, par value $0.001 per share. As
of January 31, 1999, we had outstanding 33,624,803 shares of common stock and
no shares of preferred stock.
The following statements discuss the important terms of our capital stock. We
urge you to read the Articles, a copy of which has been filed as an exhibit to
the registration statement of which this prospectus is a part, for any terms
and provisions that may be important to you.
Preferred Stock
The Articles authorize the issuance of preferred stock in one or more series
having designations, rights and preferences determined from time to time by our
board of directors. Accordingly, our board of directors is empowered, without
approval of holders of common stock, to issue preferred stock with dividends,
liquidation, conversion, voting or other rights that could adversely affect the
voting power or other rights of the holders of the common stock. In the event
of issuance, the preferred stock could be used as a method of discouraging,
delaying or preventing a change in control of GroupMAC. Although we have no
present intention to issue any additional shares of preferred stock, we could
do so at any time in the future.
The particular terms of any series of preferred stock we offer will be set
forth in a prospectus supplement. GroupMAC's board of directors or its designee
will fix or designate, in a statement of designation that will be filed as part
of our Articles, the rights, preferences, privileges and
15
<PAGE>
restrictions of that series of preferred stock we offer, including:
.dividend rights,
.voting rights,
.terms of redemption, and
.liquidation preferences.
The description of our preferred stock contained in this prospectus and any
description that will be contained in a prospectus supplement discusses or will
discuss the important terms of the preferred stock. We urge you to read the
statement of designation relating to that series of preferred stock, for any
terms and provisions that may be important to you.
Common Stock
Voting Rights. Holders of common stock are entitled to one vote for each
share on all matters on which shareholders generally are entitled to vote,
including elections of directors. GroupMAC's board of directors is classified
into three classes of four or five directors each, with the term of each class
expiring on a staggered basis. The classification of our board of directors may
make it more difficult to change the composition of the board of directors.
This may discourage or make more difficult an attempt by a person or group to
obtain control of GroupMAC. The Articles do not provide for cumulative voting
for the election of directors.
Dividends. Subject to the preferential rights of any outstanding preferred
stock that may be created by our board of directors under the Articles,
dividends may be paid to holders of common stock as may be declared by our
board of directors out of funds legally available for that purpose. The
declaration and payment of dividends on common stock could be restricted by the
terms of any preferred stock issued or any loan agreements or other contracts
we may enter. Under the TBCA, dividends may be paid by us out of "surplus" (as
defined under Article 1.02 of the TBCA) or, if there is no surplus, out of net
profits for the fiscal year in which the dividends are declared and/or the
preceding fiscal year. However, we do not intend to pay dividends at the
present time.
Liquidation. In the event of the dissolution or winding up of GroupMAC, after
payment or provision for payment of our debts and other liabilities and any
other series or class of our stock issued in the future that ranks senior as to
liquidation rights to the common stock, the holders of common stock will be
entitled to receive pro rata all our remaining assets available to such
holders.
Miscellaneous. Holders of common stock have no preemptive, subscription,
redemption or conversion rights.
The common stock is listed on the New York Stock Exchange under the symbol
"MAK."
The transfer agent and registrar for the common stock is ChaseMellon
Shareholder Services, L.L.C.
Statutory Business Combination Provision
We are subject to Article 13 of the TBCA ("Article 13") which, with limited
exceptions, prohibits a Texas corporation from engaging in a "business
combination" (as defined in Article 13) with any shareholder who is a
beneficial owner of 20% or more of the corporation's outstanding stock for a
period of three years after such shareholder's acquisition of a 20% ownership.
However, this type of transaction is permitted if (1) the board of directors of
the corporation approves the transaction or the shareholder's acquisition of
shares prior to the acquisition or (2) two-thirds of the unaffiliated
shareholders of the corporation approve the transaction at a shareholders'
meeting. Shares that are issuable, but have not yet been issued, pursuant to
options, conversion or exchange rights or other agreements are not considered
outstanding for purposes of Article 13.
16
<PAGE>
Some Important Provisions of the Articles of Incorporation and Bylaws
The Articles contain a "fair price" provision which generally requires that
certain mergers, business combinations and similar transactions constituting a
"Business Combination" with an "Interested Shareholder" be approved by the
holders of at least 80% of the Company's voting stock. An "Interested
Shareholder" is generally the beneficial owner of at least 10% of GroupMAC's
voting stock. However, this type of transaction is permitted if (1) the
transaction is approved by at least 80% of the "Continuing Directors" of
GroupMAC, who constitute a majority of the entire board or (2) certain "fair
price" and procedural requirements are satisfied. The Articles define "Business
Combination" as:
. any merger or consolidation involving GroupMAC or a subsidiary of GroupMAC,
. any sale, lease, exchange, transfer or other disposition in one transaction
or a series of transactions, including without limitation a mortgage or any
other security device, of all or any substantial part of the assets either of
GroupMAC or of a subsidiary of GroupMAC to or with any Interested
Shareholder,
. the issuance, sale, exchange, transfer or other disposition by GroupMAC or
a subsidiary of GroupMAC of any securities of GroupMAC or any subsidiary of
GroupMAC to or with any Interested Shareholder,
. any recapitalization or reclassification of GroupMAC's securities (including
without limitation, any reverse stock split) or other transaction that would
have the effect of increasing the voting power of an Interested Shareholder,
. any liquidation, spinoff, splitoff, splitup or dissolution of GroupMAC
proposed by or on behalf of any Interested Shareholder, or
. any agreement, contract or other arrangement providing for any of the
transactions described in this definition of Business Combination.
"Continuing Director" is defined to mean a director who either was a member
of GroupMAC's board of directors prior to the time such Interested Shareholder
became an Interested Shareholder or who subsequently became a director of
GroupMAC and whose election, or nomination for election by GroupMAC's
shareholders, was approved by a vote of at least 80% of the Continuing
Directors then on GroupMAC's board of directors, either by a specific vote or
by approval of the proxy statement issued by GroupMAC on behalf of GroupMAC's
board of directors in which such person is named as nominee for director,
without an objection to such nomination; provided, however, that in no event
shall a director be considered a "Continuing Director" if such director is an
Interested Shareholder and the Business Combination to be voted upon is with
such Interested Shareholder or is one in which such Interested Shareholder
otherwise has an interest except proportionately as a shareholder of GroupMAC.
In accordance with our Bylaws, a shareholder of GroupMAC may nominate persons
for election to our board of directors if the shareholder submits such
nomination, together with certain related information required by our Bylaws,
in writing to the Secretary of GroupMAC not less than 120 days nor more than
150 days prior to the anniversary date of the mailing of our proxy statement
for the previous annual meeting of shareholders.
17
<PAGE>
PLAN OF DISTRIBUTION
This prospectus covers the offer and sale of up to $50,000,000 of notes,
5,341,034 shares of common stock, warrants to purchase up to 2,000,000 shares
of common stock, common stock issuable upon exercise of the warrants and up to
$10 million of preferred stock. We currently plan to make additional
acquisitions of businesses in our industry. We will issue these securities from
time to time in connection with any future acquisitions that we may make of
other businesses, properties or securities.
We expect that the number of shares of common stock, the terms on which those
shares will be issued and the price and other terms at which the notes,
warrants and preferred stock covered in this prospectus will be offered and
issued shall be determined by direct negotiations with the owners or
controlling persons of the businesses or assets to be acquired. We also expect
that the shares of common stock issued will be valued at prices reasonably
related to market prices prevailing either at the time an acquisition agreement
is executed or at or about the time of delivery of shares.
CAUTIONARY STATEMENTS REGARDING
FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference contain forward-
looking statements within the meaning of Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking
statements can be identified by the use of the future tense or other forward-
looking terms such as "may," "intend," "will," "expect," "anticipate,"
"objective," "projection," "forecast," "plan," "management believes,"
"estimate," "continue," "should," "strategy" or "position" or the negatives of
those terms or other variations on them or by comparable terminology. In
particular, statements, express or implied, concerning future operating results
or the ability to generate net sales, income or cash flow are forward-looking
statements. We have based these forward-looking statements on our current
expectations and projections about future events. These forward-looking
statements are subject to risks, uncertainties and assumptions about us,
including, among other things:
. Our dependence on acquisitions for growth,
. Our plan to use our stock, other securities and borrowed funds as
consideration in future acquisitions, and the effects on our acquisition plan
of a perceived decline in the value of our stock and other securities or our
inability to borrow money,
. Our ability to integrate acquired businesses,
. Our reliance on the commercial success of businesses in the industries we
serve, and
. Our ability to compete both with national companies and with local companies.
We undertake no obligation to update or revise our forward-looking
statements, whether as a result of new information, future events or otherwise.
In light of these risks, uncertainties and assumptions, the forward-looking
events discussed in this offering memorandum might not occur.
18
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
GroupMAC files annual, quarterly and other reports, proxy statements and
other information with the SEC. Our current SEC filings are available to the
public over the Internet at the SEC's web site at http://www.sec.gov. You may
also read and copy any document we file at the SEC's public reference rooms in
Washington, D.C., New York, New York, and Chicago, Illinois. Please call the
SEC at 1-800-SEC-0330 for further information on the public reference rooms.
Because our common stock is listed on the New York Stock Exchange, our
reports, proxy statements and other information can be reviewed and copied at
the office of that exchange at 20 Broad Street, New York, New York 10005.
The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings made
with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934 until we sell all of the securities:
1. Our Transition Report on Form 10-K for the ten month period ended
December 31, 1997;
2. Our Quarterly Reports on Form 10-Q for the quarters ended March 31,
1998, June 30, 1998 and September 30, 1998;
3. Our Current Reports on Form 8-K dated January 19, 1999, January 5, 1999,
December 22, 1998, November 25, 1998, November 4, 1998, October 28,
1998, September 15, 1998, June 26, 1998, May 22, 1998 and January 29,
1998 and on Form 8-K/A dated January 19, 1999, December 22, 1998 (two
reports were filed on this date and both reports are incorporated by
reference), September 21, 1998 and July 20, 1998 (two reports were filed
on this date and both reports are incorporated by reference); and
4. Our Registration Statement on Form 8-A filed with the SEC on November 4,
1997.
You may request a copy of these filings (in most cases, without exhibits) at
no cost, by writing or telephoning us at our principal executive offices
located at the following address:
Investor Relations
Group Maintenance America Corp.
8 Greenway Plaza, Suite 1500
Houston, Texas 77046
(713) 860-1000
19
<PAGE>
EXPERTS
The historical financial statements of Group Maintenance America Corp., Group
Maintenance America Corp. and Subsidiaries, K&N Plumbing, Heating and Air
Conditioning, Inc., A-ABC Appliance, Inc. and A-1 Appliance & Air Conditioning,
Inc., Arkansas Mechanical Services, Inc. and Mechanical Services, Inc.,
Callahan Roach Products and Publications, Inc., Central Carolina Air
Conditioning Company, Hallmark Air Conditioning, Inc. and Subsidiary, Sibley
Services, Incorporated, Southeast Mechanical Service, Inc., Willis
Refrigeration, Air Conditioning & Heating, Inc., Yale, Incorporated, Hungerford
Mechanical Corporation, Mechanical Interiors, Inc., Premex, Inc. and
Subsidiary, Barr Electric Corp., Atlantic Industrial Constructors, Inc., Clark
Converse Electric Service, Inc., HPS Plumbing Services, Inc., Ray & Claude
Goodwin, Inc., Reliable Mechanical, Inc., Romanoff Electric Corp., Continental
Electrical Construction Co., Trinity Contractors, Inc. and Trinity Air
Technologies, L.P. and Stephen C. Pomeroy, Inc., to the extent and for the
periods indicated in their reports, have been incorporated by reference in the
registration statement in reliance upon the reports of KPMG LLP, independent
certified public accountants, incorporated by reference and upon the authority
of said firm as experts in accounting and auditing.
The financial statements of Masters, Inc., as of December 31, 1995, December
31, 1996 and June 30, 1997 and for each of the three years in the period ended
December 31, 1996 and for the six-month period ended June 30, 1997,
incorporated in this prospectus, have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report which is incorporated by
reference and have been so incorporated in reliance upon the reports of such
firm given upon their authority as experts in accounting and auditing.
The financial statements of MacDonald-Miller Industries, Inc. incorporated by
reference in this prospectus, to the extent and for the periods indicated in
their reports, have been audited by Moss Adams LLP, independent public
accountants, and are incorporated by reference in reliance upon the authority
of said firm as experts in accounting and auditing in giving said reports.
20
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers.
Article 2.02A of the TBCA provides, in relevant part, as follows:
Subject to the provisions of Sections B and C of this Article, each
corporation shall have power:
(16) to indemnify directors, officers, employees, and agents of the
corporation and to purchase and maintain liability insurance for those
persons.
Article IX of the Articles of Incorporation of Group Maintenance America
Corp. (the "Company") (therein referred to as the "Corporation") provides as
follows:
1. Right to Indemnification. Each person who was or is made a party or is
threatened to be made a party to or is otherwise involved in any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative, arbitrative or investigative, any appeal in such
action, suit or proceeding, and any inquiry or investigation that would
lead to such action, suit or proceeding (hereinafter a "proceeding"), by
reason of the fact that he or she, or a person of whom he or she is the
legal representative, is or was a director or officer of the Corporation or
is or was serving at the request of the Corporation as a director or
officer of another corporation or of a partnership, joint venture, trust or
other enterprise, including service with respect to any employee benefit
plan (hereinafter an "indemnitee"), whether the basis of such proceeding is
alleged action in an official capacity as a director or officer or in any
other capacity while serving as a director or officer, shall be indemnified
and held harmless by the Corporation to the fullest extent authorized by
the TBCA, as the same exists or may hereafter be amended (but, in the case
of any such amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than permitted prior
thereto), against all judgments, fines, penalties (including excise tax and
similar taxes), settlements, and reasonable expenses actually incurred by
such indemnitee in connection therewith. The right to indemnification
conferred in this Article shall include the right to be paid by the
Corporation the expenses incurred in defending any such proceeding in
advance of its final disposition (hereinafter an "advancement of
expenses"); provided, however, that, if the TBCA requires, an advancement
of expenses incurred by an indemnitee shall be made only upon delivery to
the Corporation of an undertaking, by or on behalf of such indemnitee, to
repay all amounts so advanced if it shall ultimately be determined that
such indemnitee is not entitled to be indemnified for such expenses under
this Article or otherwise.
2. Insurance. The Corporation may purchase and maintain insurance, at its
expense, on behalf of any indemnitee against any liability asserted against
him and incurred by him in such a capacity or arising out of his status as
a representative of the Corporation, whether or not the Corporation would
have the power to indemnify such person against such expense, liability or
loss under the TBCA.
3. Indemnity of Employees and Agents of the Corporation. The Corporation
may, to the extent authorized from time to time by the board of directors,
grant rights to indemnification and to the advancement of expenses to any
employee or agent of the Corporation to the fullest extent of the
provisions of this Article or as otherwise permitted under the TBCA with
respect to the indemnification and advancement of expenses of directors and
officers of the Corporation.
The Company has entered into employment agreements with its executive
officers pursuant to which the Company generally is obligated to indemnify such
officers to the full extent permitted by the TBCA as described above.
The Company has purchased liability insurance policies covering the directors
and officers of the Company, including, to provide protection where the Company
cannot legally indemnify a director or officer and where a claim arises under
the Employee Retirement Income Security Act of 1974 against a director or
officer based on an alleged breach of fiduciary duty or other wrongful act.
II-1
<PAGE>
Item 21. Exhibits and Financial Statement Schedules.
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
------- ----------------------
<C> <S>
3.1* Articles of Incorporation of the Company, as amended.
3.2** Bylaws of the Company, as amended.
4.1* Form of Certificate representing the Common Stock, par value $0.001
per share, of the Company.
4.2** Form of Indenture dated as of December , 1998 between the Company
and State Street Bank and Trust Company, as Trustee, including the
form of note.
4.3*** Indenture dated January 22, 1999 between the Company and State Street
Bank and Trust Company, as Trustee.
5** Opinion of Bracewell & Patterson, L.L.P. as to the legality of the
Common Stock being offered.
10.1*** Form of Lock-up Agreement dated as of January 5, 1999 between the
Company and certain shareholders of the Company.
12** Calculation of Earnings to Fixed Charges and Earnings to Fixed Charges
and Preferred Stock Dividends.
21** Subsidiaries of the Company.
23.1** Consent of Bracewell & Patterson, L.L.P. (included in its opinion
filed as Exhibit 5 hereto).
23.2*** Consent of KPMG LLP.
23.3** Consent of Deloitte & Touche LLP.
23.4** Consent of Moss Adams LLP.
24** Powers of attorney.
25** Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939 of State Street Bank and Trust Company.
27**** Financial Data Schedule.
</TABLE>
- --------
* Filed as an exhibit to the Company's Form S-1 (Registration No. 333-34067).
** Filed previously.
*** Filed herewith.
**** Filed as an exhibit to the Company's Form 10-Q dated November 16, 1998
under exhibit number 27 and incorporated by this reference.
II-2
<PAGE>
(b) Financial Statement Schedules
No financial statement schedules are included herein. All other schedules for
which provision is made in the applicable accounting regulations of the
Commission are not required under the related instructions, are inapplicable,
or the information is included in the consolidated financial statements, and
have therefore been omitted.
(c) Reports, Opinions, and Appraisals
The following reports, opinions and appraisals are included herein.
None.
Item 22. Undertakings.
(a) Regulation S-K, Item 512 Undertakings
(1) The undersigned registrant hereby undertakes:
(i) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(a) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(b) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement.
(c) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
(ii) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(iii) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(2) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to section 13(a) or section 15(d)
of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in
the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(3) Registration on Form S-4 of Securities Offered for Resale.
(i) The undersigned hereby undertakes as follows: That prior to any
public reoffering of the securities registered hereunder through the
use of a prospectus which is a part of this registration
II-3
<PAGE>
statement, by any person or party who is deemed to be an underwriter
within the meaning of Rule 145(c), the issuer undertakes that such
reoffering prospectus will contain the information called for by the
applicable registration form with respect to reofferings by person who
may be deemed underwriters, in addition to the information called for
by the other Items of the applicable form.
(ii) The registrant undertakes that every prospectus (a) that is
filed pursuant to the paragraph immediately preceding, or (b) that
purports to meet the requirements of section 10(a)(3) of the Act and is
used in connection with an offering of securities subject to Rule 415,
will be filed as a part of an amendment to the registration statement
and will not be used until such amendment is effective, and that, for
purposes of determining any liability under the Securities Act of 1933,
each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of new securities at that time shall be deemed to be the
initial bona fide offering thereof.
(4) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise,
the Company has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than payment by the Company
of expenses incurred or paid by a director, officer or controlling person
of the Company in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection
with the securities being registered, the Company will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication of such
issue.
(b) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4 of this Form, within one business day of receipt of such request, and to
send the incorporated documents by first class mail or other equally prompt
means. This includes information contained in documents filed subsequent to the
effective date of the registration statement through the date of responding to
the request.
(c) The undersigned hereby undertakes to supply by means of a post-effective
amendment all information concerning a transaction, and the company being
acquired therein, that was not the subject of and included in the registration
statement when it became effective.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Group Maintenance
America Corp. has duly caused this registration statement or amendment thereto
to be signed on its behalf by the undersigned, thereunto duly authorized, in
the City of Houston, State of Texas, on February 10, 1999.
GROUP MAINTENANCE AMERICA CORP.
By: /s/ J. Patrick Millinor, Jr.
----------------------------------
J. Patrick Millinor, Jr.
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this registration
statement or amendment thereto has been signed below by the following persons
in the indicated capacities on February 10, 1999.
<TABLE>
<S> <C>
Signature Title
James P. Norris* Chairman of the Board;
------------------------------------- Director
James P. Norris
/s/ J. Patrick Millinor, Jr. Director and Chief Executive
------------------------------------- Officer (principal executive
J. Patrick Millinor, Jr. officer)
/s/ Darren B. Miller Executive Vice President--
------------------------------------- Chief Financial Officer
Darren B. Miller (principal financial officer)
/s/ Daniel W. Kipp Senior Vice President and
------------------------------------- Corporate Controller
Daniel W. Kipp (principal accounting
officer)
Donald L. Luke* Director, President and Chief
------------------------------------- Operating Officer
Donald L. Luke
Ronald D. Bryant* Director
-------------------------------------
Ronald D. Bryant
David L. Henninger* Director
-------------------------------------
David L. Henninger
Chester J. Jachimiec* Director
-------------------------------------
Chester J. Jachimiec
Timothy Johnston* Director
-------------------------------------
Timothy Johnston
Andrew Jeffrey Kelly* Director
-------------------------------------
Andrew Jeffrey Kelly
Thomas B. McDade* Director
-------------------------------------
Thomas B. McDade
</TABLE>
II-5
<PAGE>
<TABLE>
<S> <C>
Signature Title
Lucian Morrison* Director
-------------------------------------
Lucian Morrison
Robert Munson III* Director
-------------------------------------
Robert Munson III
Fredric Sigmund* Director
-------------------------------------
Fredric Sigmund
John M. Sullivan* Director
-------------------------------------
John M. Sullivan
James D. Weaver* Director
-------------------------------------
James D. Weaver
</TABLE>
/s/ Randolph W. Bryant
*By: ________________________________
Randolph W. Bryant
(Attorney-in-fact for persons
indicated)
II-6
<PAGE>
EXHIBIT 4.3
================================================================================
GROUP MAINTENANCE AMERICA CORP.
as the Company
and
THE SUBSIDIARIES NAMED HEREIN
as Guarantors
to
--------------------
STATE STREET BANK AND TRUST COMPANY
as Trustee
--------------------
INDENTURE
Dated as of January 22, 1999
up to $200,000,000
9 3/4% Senior Subordinated Notes due 2009,
Series A
9 3/4% Senior Subordinated Notes due 2009,
Series B
================================================================================
<PAGE>
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
- ------- ----------
310(a)(1)............... 6.9
310(a)(2)............... 6.9
310(a)(3)............... N.A
310(a)(4)............... N.A.
310(a)(5)............... N.A.
310(b).................. 6.8; 6.10
310(c).................. N.A.
311(a).................. 6.13
311(b).................. 6.13
311(c).................. N.A.
312(a).................. 7.1; 7.2
312(b).................. 7.2
312(c).................. 7.2
313(a).................. 7.3
313(b).................. 7.3
313(c).................. 1.6
313(d).................. 7.3
314(a).................. 7.4
314(b).................. N.A.
314(c)(1)............... 1.2
314(c)(2)............... 1.2
314(c)(3)............... N.A.
314(d).................. N.A.
314(e).................. 1.2
314(f).................. N.A.
315(a).................. 6.1
315(b).................. 6.2
315(c).................. 6.1
315(d).................. 6.1
315(e).................. 5.14
316(a)(1)(A)............ 5.12
316(a)(1)(B)............ 5.13
316(a)(2)............... N.A.
316(a)(last sentence)... 1.1*
316(b).................. 5.7; 5.8
316(c).................. 1.4
317(a)(1)............... 5.3
317(a)(2)............... 5.4
317(b).................. 10.3
317(a).................. 1.7
____________________
Note: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
N.A. means Not Applicable
* Definition of "Outstanding."
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
Definitions and Other Provisions
of General Application
SECTION 1.1. Definitions. 2
SECTION 1.2. Compliance Certificates and Opinions. 34
SECTION 1.3. Form of Documents Delivered to Trustee. 35
SECTION 1.4. Acts of Holders; Record Dates. 36
SECTION 1.5. Notices to Trustee, the Company or a Guarantor. 39
SECTION 1.6. Notice to Holders; Waiver. 40
SECTION 1.7. Conflict with Trust Indenture Act. 40
SECTION 1.8. Effect of Headings and Table of Contents. 41
SECTION 1.9. Successors and Assigns. 41
SECTION 1.10. Separability Clause. 41
SECTION 1.11. Benefits of Indenture. 41
SECTION 1.12. Governing Law. 42
SECTION 1.13. Legal Holidays. 42
ARTICLE II
Security Forms
SECTION 2.1. Forms Generally. 42
ARTICLE III
The Securities
SECTION 3.1. Title and Terms. 43
SECTION 3.2. Denominations. 44
SECTION 3.3. Execution, Authentication, Delivery and Dating. 44
SECTION 3.4. Temporary Securities. 46
SECTION 3.5. Registration, Registration of Transfer and Exchange. 46
SECTION 3.6. Mutilated, Destroyed, Lost and Stolen Securities. 43
SECTION 3.7. Payment of Interest; Rights Preserved. 44
SECTION 3.8. Persons Deemed Owners. 45
- ---------------
Note: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
i
<PAGE>
Page
----
SECTION 3.9. Cancellation. 45
SECTION 3.10. Computation of Interest. 46
SECTION 3.11. CUSIP and CINS Numbers. 46
SECTION 3.12. Deposits of Monies. 46
SECTION 3.13. Book-Entry Provisions for Global Securities. 46
SECTION 3.14. Special Transfer Provisions. 47
ARTICLE IV
Satisfaction and Discharge
SECTION 4.1. Satisfaction and Discharge of Indenture. 51
SECTION 4.2. Application of Trust Money. 52
ARTICLE V
Remedies
SECTION 5.1. Events of Default. 53
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment. 55
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by
Trustee. 56
SECTION 5.4. Trustee May File Proofs of Claim. 57
SECTION 5.5. Trustee May Enforce Claims Without Possession of Securities. 58
SECTION 5.6. Application of Money Collected. 58
SECTION 5.7. Limitation on Suits. 59
SECTION 5.10. Unconditional Right of Holders to Receive Principal,
Premium and Interest. 60
SECTION 5.11. Restoration of Rights and Remedies. 60
SECTION 5.12. Rights and Remedies Cumulative. 60
SECTION 5.13. Delay or Omission Not Waiver. 60
SECTION 5.14. Control by Holders. 61
SECTION 5.15. Waiver of Past Defaults. 61
SECTION 5.16. Undertaking for Costs. 61
SECTION 5.17. Waiver of Stay or Extension Laws. 62
ARTICLE VI
The Trustee
SECTION 6.1. Certain Duties and Responsibilities. 62
SECTION 6.2. Notice of Defaults. 63
- ---------------
Note: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
ii
<PAGE>
Page
----
SECTION 6.3. Certain Rights of Trustee. 64
SECTION 6.4. Not Responsible for Recitals or Issuance of Securities. 65
SECTION 6.5. May Hold Securities. 65
SECTION 6.6. Money Held in Trust. 66
SECTION 6.7. Compensation and Reimbursement. 66
SECTION 6.8. Conflicting Interests. 67
SECTION 6.9. Corporate Trustee Required; Eligibility. 67
SECTION 6.10. Resignation and Removal; Appointment of Successor. 67
SECTION 6.11. Acceptance of Appointment by Successor. 69
SECTION 6.12. Merger, Conversion, Consolidation or Succession to Business. 70
SECTION 6.13. Preferential Collection of Claims Against the Company or a
Guarantor. 70
SECTION 6.14. Appointment of Authenticating Agent. 70
ARTICLE VII
Holders' Lists and Reports by Trustee and Company
SECTION 7.1. Company to Furnish Trustee Names and Addresses of Holders. 72
SECTION 7.2. Preservation of Information; Communications to Holders. 72
SECTION 7.3. Reports by Trustee. 73
SECTION 7.4. Reports by Company. 73
ARTICLE VIII
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 8.1. Company or Guarantor May Consolidate, Etc. Only on Certain
Terms. 74
SECTION 8.2. Successor Substituted. 75
ARTICLE IX
Amendments; Waivers; Supplemental Indentures
SECTION 9.1. Amendments, Waivers and Supplemental Indentures Without
Consent of Holders. 76
SECTION 9.2. Modifications, Amendments and Supplemental Indentures
with Consent of Holders. 77
- ---------------
Note: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
iii
<PAGE>
Page
----
SECTION 9.3. Execution of Supplemental Indentures. 78
SECTION 9.4. Effect of Supplemental Indentures. 79
SECTION 9.5. Conformity with Trust Indenture Act. 79
SECTION 9.6. Reference in Securities to Supplemental Indentures. 79
SECTION 9.7. Waiver of Certain Covenants. 79
SECTION 9.8. No Liability for Certain Persons. 80
ARTICLE X
Covenants
SECTION 10.1. Payment of Principal, Premium and Interest. 80
SECTION 10.2. Maintenance of Office or Agency. 80
SECTION 10.3. Money for Security Payments to be Held in Trust. 81
SECTION 10.4. Existence; Activities. 82
SECTION 10.5. Maintenance of Properties. 83
SECTION 10.6. Payment of Taxes and Other Claims. 83
SECTION 10.7. Maintenance of Insurance. 83
SECTION 10.8. Limitation on Indebtedness. 84
SECTION 10.9. Limitation on Restricted Payments. 84
SECTION 10.10. Limitation on Issuance of Preferred Stock of Restricted
Subsidiaries. 88
SECTION 10.11. Limitation on Transactions with Affiliates. 88
SECTION 10.12. Limitation on Liens. 89
SECTION 10.13. Change of Control. 89
SECTION 10.14. Disposition of Proceeds of Asset Sales. 90
SECTION 10.15. Limitation on Dividends and Other Payment Restrictions
Affecting Restricted Subsidiaries. 93
SECTION 10.16. Limitation on Issuance of Subordinated Indebtedness. 94
SECTION 10.17. Additional Subsidiary Guarantees. 94
SECTION 10.18. Limitation on Designations of Unrestricted Subsidiaries. 95
SECTION 10.19. Provision of Financial Information. 96
SECTION 10.20. Statement by Officers as to Default; Compliance
Certificates. 97
- ---------------
Note: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
iv
<PAGE>
Page
----
ARTICLE XI
Redemption of Securities
SECTION 11.1. Right of Redemption. 97
SECTION 11.2. Applicability of Article. 97
SECTION 11.3. Election to Redeem; Notice to Trustee. 97
SECTION 11.4. Selection by Trustee of Securities To Be Redeemed. 98
SECTION 11.5. Notice of Redemption. 98
SECTION 11.6. Deposit of Redemption Price. 99
SECTION 11.7. Securities Payable on Redemption Date. 99
SECTION 11.8. Securities Redeemed in Part. 100
ARTICLE XII
Defeasance and Covenant Defeasance
SECTION 12.1. Company's Option To Effect Defeasance or Covenant
Defeasance. 100
SECTION 12.2. Defeasance and Discharge. 101
SECTION 12.3. Covenant Defeasance. 101
SECTION 12.4. Conditions to Defeasance or Covenant Defeasance. 102
SECTION 12.5. Deposited Money and U.S. Government Obligations To Be
Held in Trust; Miscellaneous Provisions. 104
SECTION 12.6. Reinstatement. 105
ARTICLE XIII
Guaranty
SECTION 13.1. Guaranty. 105
SECTION 13.2. Limitation on Liability. 108
SECTION 13.3. Execution and Delivery of Guarantees. 108
SECTION 13.4. Guarantors May Consolidate, Etc., on Certain Terms. 109
SECTION 13.5. Release of Guarantors. 109
SECTION 13.6. Successors and Assigns. 110
SECTION 13.7. No Waiver, etc. 110
SECTION 13.8. Modification, etc. 110
SECTION 13.9. Subordination of Guarantees. 111
- ---------------
Note: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
v
<PAGE>
Page
----
ARTICLE XIV
Subordination
SECTION 14.1. Securities Subordinate to Senior Indebtedness and
Senior to Subordinated Indebtedness. 111
SECTION 14.2. Payment Over of Proceeds Upon Dissolution, Etc. 112
SECTION 14.3. No Payment When Designated Senior Indebtedness in Default. 112
SECTION 14.4. Subrogation to Rights of Holders of Senior Indebtedness. 114
SECTION 14.5. Provisions Solely to Define Relative Rights. 114
SECTION 14.6. Trustee to Effectuate Subordination. 115
SECTION 14.7. No Waiver of Subordination Provisions. 115
SECTION 14.8. Notice to Trustee. 115
SECTION 14.9. Reliance on Judicial Order or Certificate of Liquidating
Agent. 116
SECTION 14.10. Trustee Not Fiduciary for Holders of Senior Indebtedness. 116
SECTION 14.11. Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights. 117
SECTION 14.12. Article Applicable to Paying Agents. 117
- ---------------
Note: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
vi
<PAGE>
Schedule A The Guarantors
Exhibit A-1 Form of Security
Exhibit A-2 Form of Series B Security
Exhibit B Global Securities Legend
Exhibit C Transfer Letter
Exhibit D Form of Notation on Security Relating to Guaranty
vii
<PAGE>
INDENTURE, dated as of January 22, 1999, among GROUP MAINTENANCE
AMERICA CORP., a corporation duly organized and existing under the laws of the
State of Texas (herein called the "Company"), having its principal office at 8
Greenway Plaza, Suite 1500, Houston, Texas 77046, the Subsidiaries of the
Company named in Schedule A as of the date of issuance (herein called the
"Initial Guarantors") and STATE STREET BANK AND TRUST COMPANY, as trustee
(herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of 9 3/4%
Senior Subordinated Notes due 2009 (the "Securities") of substantially the tenor
and amount hereinafter set forth, and to provide therefor the Company has duly
authorized the execution and delivery of this Indenture.
Each Guarantor desires to make the Guaranty provided herein and has
duly authorized the execution and delivery of this Indenture.
All things necessary to make the Securities, when executed by the
Company, authenticated and delivered hereunder and duly issued by the Company,
and each Guaranty, when executed and delivered hereunder by each Guarantor, the
valid obligations of the Company and each Guarantor, and to make this Indenture
a valid agreement of the Company and each Guarantor, in accordance with their
and its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders (as defined herein) thereof, it is mutually covenanted
and agreed, for the equal and proportionate benefit of all Holders of the
Securities, as follows:
ARTICLE I
Definitions and Other Provisions
of General Application
SECTION 1.1. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
<PAGE>
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP (whether or not such is
indicated herein);
(4) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or Section, as the case may
be, of this Indenture;
(5) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision; and
(6) each reference herein to a rule or form of the Commission shall
mean such rule or form and any rule or form successor thereto, in each case
as amended from time to time.
Whenever this Indenture requires that a particular ratio or amount be
calculated with respect to a specified period after giving effect to certain
transactions or events on a pro forma basis, such calculation shall be made as
if the transactions or events occurred on the first day of such period, unless
otherwise specified.
"Acquired Indebtedness means Indebtedness of a Person (a) assumed in
connection with an Asset Acquisition from such Person or (b) existing at the
time such Person becomes or is merged into a Subsidiary of any other Person
other than Indebtedness incurred in connection with, or in contemplation of,
such Asset Acquisition or such Person becoming a Subsidiary.
"Act," when used with respect to any Holder, has the meaning specified
in Section 1.4.
"Affiliate" means, with respect to any specified Person, (i) any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person, (ii) any other Person that
owns, directly or indirectly, 10% or more of such specified Person's Voting
Stock or (iii) any officer or director of (A) any such specified Person, (B) any
Subsidiary of such specified Person or (C) any Person described in clauses (i)
or (ii) above.
2
<PAGE>
"Asset Acquisition" means (a) an Investment by the Company or any
Restricted Subsidiary of the Company in any other Person pursuant to which such
Person shall become a Restricted Subsidiary of the Company, or shall be merged
with or into the Company or any Restricted Subsidiary of the Company, or (b) the
acquisition by the Company or any Restricted Subsidiary of the Company of the
assets of any Person which constitute all or substantially all of the assets of
such Person, any division or line of business of such Person or, other than in
the ordinary course of business, any other properties or assets of such Person.
"Asset Sale" means any sale, issuance, conveyance, transfer, lease
(that has the effect of a disposition) or other disposition by the Company or
any Restricted Subsidiary of the Company to any Person other than the Company or
a Restricted Subsidiary of the Company, of (a) any Capital Stock of any
Restricted Subsidiary of the Company; (b) all or substantially all of the
properties and assets of any division or line of business of the Company or any
Restricted Subsidiary of the Company; or (c) any other properties or assets of
the Company or any Restricted Subsidiary outside of the ordinary course of
business, other than (i) sales of obsolete, damaged or used equipment or other
equipment or inventory sales in the ordinary course of business, (ii) sales of
assets in one or a series of related transactions for an aggregate consideration
of less than $5,000,000, (iii) sales of accounts receivable for financing
purposes, (iv) the grant in the ordinary course of business of any non-exclusive
license of patents, trademarks, registrations therefor and other similar
intellectual property, (v) any Lien (or foreclosure thereon) securing
Indebtedness to the extent that such Lien is granted in compliance with Section
10.12 and (vi) any Restricted Payment permitted by Section 10.9. For the
purposes of this definition, the term "Asset Sale" shall not include any sale,
issuance, conveyance, transfer, lease or other disposition of properties or
assets that is governed by the provisions of Article VIII.
"Asset Sale Offer" has the meaning specified in Section 10.14.
"Asset Sale Offer Price" has the meaning specified in Section 10.14.
"Asset Sale Purchase Date" has the meaning specified in Section 10.14.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 6.14 hereof to act on behalf of the Trustee to authenticate
Securities.
3
<PAGE>
"Average Life to Stated Maturity" means, with respect to any
Indebtedness, as at any date of determination, the quotient obtained by dividing
(i) the sum of the products of (a) the number of years from such date of such
determination to the date or dates of each successive scheduled principal
payment (including, without limitation, any sinking fund requirements) of such
Indebtedness and (b) the amount of each such principal payment by (ii) the sum
of all such principal payments.
"Board of Directors" means the board of directors of a company or its
equivalent, including managers of a limited liability company, general partners
of a partnership or trustees of a business trust, or any duly authorized
committee thereof.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of a company to have been duly adopted by
the Board of Directors of such company and to be in full force and effect on the
date of such certification, and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in the Borough of
Manhattan, The City of New York or the city in which the corporate trust office
of the Trustee is located are authorized or obligated by law or executive order
to close.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations, rights in or other equivalents (however designated)
of such Person's capital stock or equity participations, and any rights (other
than debt securities convertible into capital stock), warrants or options
exchangeable for or convertible into such capital stock and, including, without
limitation, with respect to partnerships, limited liability companies or
business trusts, ownership interests (whether general or limited) and any other
interest or participation that confers on a Person the right to receive a share
of the profits and losses of, or distributions of assets of, such partnerships,
limited liability companies or business trusts.
"Capitalized Lease Obligation" means any obligation under a lease of
(or other agreement conveying the right to use) any property (whether real,
personal or mixed) that is required to be classified and accounted for as a
capital lease obligation under GAAP, and, for the purpose of this Indenture, the
amount of such obligation at any date shall be the capitalized amount thereof at
such date, determined in accordance with GAAP and the stated maturity thereof
shall be the date of the last payment of rent or any other amount due under such
lease
4
<PAGE>
prior to the first date upon which such lease may be terminated by the lessee
without payment of a penalty.
"Cash Equivalents" means, at any time, (i) any evidence of
Indebtedness, maturing not more than one year after such time, issued or
guaranteed by the United States Government or any agency thereof, (b) commercial
paper, maturing not more than one year from the date of issue, or corporate
demand notes, in each case rated at least A-1 by S&P or P-1 by Moody's, (c) any
certificate of deposit (or time deposits represented by such certificates of
deposit) or bankers' acceptance, maturing not more than one year after such
time, or overnight Federal Funds transactions that are issued or sold by a
commercial banking institution that is a member of the Federal Reserve System
and has a combined capital and surplus and undivided profits of not less than
$500,000,000, (d) any repurchase agreement entered into with any commercial
banking institution of the stature referred to in clause (c) which (i) is
secured by a fully perfected security interest in any obligation of the type
described in any of clauses (a) through (c) and (ii) has a market value at the
time such repurchase agreement is entered into of not less than 100% of the
repurchase obligation of such commercial banking institution thereunder, (e)
investments in short term asset management accounts managed by any bank party to
the New Credit Agreement (or by affiliate of any such bank) which are invested
in indebtedness of any state or municipality of the United States or of the
District of Columbia and which are rated under one of the two highest ratings
then obtainable from S&P or by Moody's or investments of the types described in
clauses (a) through (d) above, and (f) investments in funds investing primarily
in investments of the types described in clauses (a) through (e) above.
"Cedel" means Cedel Bank, Societe anonyme.
"Change of Control" means the occurrence of any of the following
events: (a) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act), is or becomes the "beneficial owner" (as defined
in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person shall be
deemed to have "beneficial ownership" of all securities that such person has the
right to acquire, whether such right is exercisable immediately or only after
the passage of time), directly or indirectly, of more than 50% of the total
Voting Stock of the Company; (b) the Company consolidates with, or merges with
or into, another Person or sells, assigns, conveys, transfers, leases or
otherwise disposes of all or substantially all of its assets to any Person, or
any Person consolidates with, or merges with or into, the Company, in any such
event pursuant to a transaction in which the outstanding Voting Stock of the
Company is converted into or exchanged for
5
<PAGE>
cash, securities or other property, other than any such transaction where (i)
the outstanding Voting Stock of the Company is converted into or exchanged for
Voting Stock (other than Redeemable Capital Stock) of the surviving or
transferee corporation and (ii) immediately after such transaction no "person"
or "group" (as such terms are used in Section 13(d) and 14(d) of the Exchange
Act) is the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a person shall be deemed to have "beneficial
ownership" of all securities that such person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time),
directly or indirectly, of more than 50% of the total Voting Stock of the
surviving or transferee corporation; (c) during any consecutive two-year period,
individuals who at the beginning of such 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 66-2/3% 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) cease for any reason to
constitute a majority of the Board of Directors of the Company then in office;
or (d) the Company is liquidated or dissolved or adopts a plan of liquidation."
"Change of Control Offer" has the meaning specified in Section 10.13.
"Change of Control Purchase Date" has the meaning specified in Section
10.13.
"Change of Control Purchase Price" has the meaning specified in
Section 10.13.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, and the rules and regulations thereunder.
"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 Trust Indenture Act, then the
body performing such duties at such time.
"Common Stock" means the common stock of the Company, par value $0.001
per share.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture and thereafter "Company"
shall mean such successor Person.
6
<PAGE>
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Chief
Executive Officer, its Chief Financial Officer, its President or a Vice
President, and by its Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary, and delivered to the Trustee or Paying Agent, as
applicable.
"Consolidated Cash Flow Available for Fixed Charges" as of any date of
determination means, with respect to any Person for any period, (i) the sum of,
without duplication, the amounts for such period, taken as a single accounting
period, of (a) Consolidated Net Income, (b) Consolidated Non-cash Charges, (c)
Consolidated Interest Expense, (d) Consolidated Income Tax Expense (other than
income tax expense (either positive or negative) attributable to extraordinary
gains or losses), (e) one-fourth of Consolidated Rental Payments, and (f) if any
Asset Sale or Asset Acquisition shall have occurred since the first day of any
four-quarter period for which "Consolidated Cash Flow Available for Fixed
Charges" is being calculated (including to the date of calculation) (A) the
amount of any compensation, remuneration or other benefit paid or provided to
any employee, consultant, Affiliate or equity owner of the entity involved in
any such Asset Acquisition to the extent such costs are eliminated or reduced
(or public announcement has been made of the intent to eliminate or reduce such
costs) prior to the date of such calculation and not replaced and (B) the amount
of any reduction in general, administrative or overhead costs of the entity
involved in any such Asset Acquisition, to the extent such amounts under clauses
(A) and (B) would be permitted to be eliminated in a pro forma income statement
prepared in accordance with Rule 11-02 of Regulation S-X, less (ii) the sum of
(x) non-cash items increasing Consolidated Net Income and (y) all cash payments
during such period relating to non-cash charges that were added back in
determining Consolidated Cash Flow Available for Fixed Charges in the most
recent Four Quarter Period (as defined in the definition of "Consolidated Fixed
Charge Coverage Ratio").
"Consolidated Fixed Charge Coverage Ratio" as of any date of
determination means, with respect to any Person, the ratio of the aggregate
amount of Consolidated Cash Flow Available for Fixed Charges of such Person for
the four full fiscal quarters, treated as one period, for which financial
information in respect thereof is available immediately preceding the date of
the transaction (the "Transaction Date") giving rise to the need to calculate
the Consolidated Fixed Charge Coverage Ratio (such four full fiscal quarter
period being referred to
7
<PAGE>
herein as the "Four Quarter Period") to the aggregate amount of Consolidated
Fixed Charges of such Person for the Four Quarter Period. In calculating
"Consolidated Fixed Charges" for purposes of determining the denominator (but
not the numerator) of this "Consolidated Fixed Charge Coverage Ratio", (i)
interest on outstanding Indebtedness determined on a fluctuating basis as of the
Transaction Date and which will continue to be so determined thereafter shall be
deemed to have accrued at a fixed rate per annum equal to the rate of interest
on such Indebtedness in effect on the Transaction Date; and (ii) if interest on
any Indebtedness actually incurred on the Transaction Date may optionally be
determined at an interest rate based upon a factor of a prime or similar rate, a
eurocurrency interbank offered rate, or other rates, then the interest rate in
effect on the Transaction Date will be deemed to have been in effect during the
Four Quarter Period. If such Person or any of its Restricted Subsidiaries
directly or indirectly guarantees Indebtedness of a third Person, the above
clause shall give effect to the incurrence of such guaranteed Indebtedness as if
such Person or such Subsidiary had directly incurred or otherwise assumed such
guaranteed Indebtedness.
"Consolidated Fixed Charges" means, with respect to any Person for any
period, the sum of, without duplication, the amounts for such period of (i)
Consolidated Interest Expense, (ii) the aggregate amount of dividends and other
distributions paid or accrued during such period in respect of Redeemable
Capital Stock of such Person and its Restricted Subsidiaries on a consolidated
basis and (iii) one-fourth of Consolidated Rental Payments.
"Consolidated Income Tax Expense" means, with respect to any Person
for any period, the provision for federal, state, local and foreign income taxes
of such Person and its Restricted Subsidiaries for such period as determined on
a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" means, with respect to any Person for
any period, without duplication, the sum of (i) the interest expense of such
Person and its Restricted Subsidiaries for such period as determined on a
consolidated basis in accordance with GAAP, including, without limitation, (a)
any amortization of debt discount, (b) the net cost under Interest Rate
Protection Obligations (including any amortization of discounts), (c) the
interest portion of any deferred payment obligation, (d) all commissions,
discounts and other fees and charges owed with respect to letters of credit,
bankers' acceptance financing or similar facilities and (e) all accrued interest
and (ii) the interest component of Capitalized Lease Obligations paid, accrued
and/or scheduled to be paid or accrued by such Person and its Restricted
Subsidiaries during such period as determined on a consolidated basis in
accordance with GAAP.
8
<PAGE>
"Consolidated Net Income" means, with respect to any Person, for any
period, the consolidated net income (or loss) of such Person and its Restricted
Subsidiaries for such period as determined in accordance with GAAP, adjusted, to
the extent included in calculating such net income, by excluding, without
duplication, (i) all extraordinary gains or losses (net of fees and expenses
relating to the transaction giving rise thereto), (ii) the portion of net income
of such Person and its Restricted Subsidiaries allocable to minority interests
in unconsolidated Persons or to Investments in Unrestricted Subsidiaries to the
extent that cash dividends or distributions have not actually been received by
such Person or one of its Restricted Subsidiaries, (iii) net income (or loss) of
any Person combined with such Person or one of its Restricted Subsidiaries on a
"pooling of interests" basis attributable to any period prior to the date of
combination, (iv) gains or losses in respect of any Asset Sales by such Person
or one of its Restricted Subsidiaries (net of fees and expenses relating to the
transaction giving rise thereto), on an after-tax basis, (v) the net income of
any Restricted Subsidiary of such Person to the extent that the declaration of
dividends or similar distributions by that Restricted Subsidiary of that income
is not at the time permitted, directly or indirectly, by operation of the terms
of its charter or any agreement, instrument, judgment, decree, order, statute,
rule or governmental regulations applicable to that Restricted Subsidiary or its
stockholders and (vi) any gain or loss realized as a result of the cumulative
effect of a change in accounting principles.
"Consolidated Non-cash Charges" means, with respect to any Person for
any period, the aggregate depreciation, amortization (including amortization of
goodwill and other intangibles) and other non-cash expenses of such Person and
its Restricted Subsidiaries reducing Consolidated Net Income of such Person and
its Restricted Subsidiaries for such period, determined on a consolidated basis
in accordance with GAAP (excluding any such charges constituting an
extraordinary item or loss).
"Consolidated Rental Payments" of any Person means, for any period,
the aggregate rental obligations of such Person and its Restricted Subsidiaries
(not including taxes, insurance, maintenance and similar expenses that the
lessee is obligated to pay under the terms of the relevant leases), determined
on a consolidated basis in accordance with GAAP, payable in respect of such
period (net of income from subleases thereof, not including taxes, insurance,
maintenance and similar expenses that the sublessee is obligated to pay under
the
9
<PAGE>
terms of such sublease), whether or not such obligations are reflected as
liabilities or commitments on a consolidated balance sheet of such Person and
its Restricted Subsidiaries or in the notes thereto, excluding, however, in any
event, (i) that portion of Consolidated Interest Expense of such Person
representing payments by such Person or any of its Restricted Subsidiaries in
respect of Capitalized Lease Obligations (net of payments to such Person or any
of its Restricted Subsidiaries under subleases qualifying as capitalized lease
subleases to the extent that such payments would be deducted in determining
Consolidated Interest Expense) and (ii) the aggregate amount of amortization of
obligations of such Person and its Restricted Subsidiaries in respect of such
Capitalized Lease Obligations for such period (net of payments to such Person or
any of its Restricted Subsidiaries and subleases qualifying as capitalized lease
subleases to the extent that such payments could be deducted in determining such
amortization amount).
"control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be administered, which
address as of the date of this Indenture is located at Goodwin Square, 23rd
Floor, 225 Asylum Street, Hartford, CT 06103, Attention: Corporate Trust,
Administration.
"corporation" means (except in the definition of "Subsidiary") a
corporation, association, company, joint-stock company or business trust.
"Covenant Defeasance" has the meaning specified in Section 12.3.
"Credit Facility" means one or more debt or commercial paper
facilities with banks or other institutional lenders (including the New Credit
Agreement) providing for revolving credit loans, term loans, receivables or
inventory financing (including through the sale of receivables or inventory to
such lenders or to special purpose, bankruptcy remote entities formed to borrow
from such lenders against such receivables or inventory) or letters of credit,
in each case together with any amendments, supplements, modifications (including
by any extension of the maturity thereof), substitutions, refinancing or
replacements thereof by a lender or syndicate of lenders in one or more
successive transactions (including any such transaction that changes the amount
available thereunder, replaces such agreement or document, or provides for other
agents or lenders).
10
<PAGE>
"Default" means any event that is, or after notice or passage of time
or both would be, an Event of Default.
"Defeasance" has the meaning specified in Section 12.2.
"Depository" means The Depositary Trust Company, or its successor.
"Designated Guarantor Senior Indebtedness" means, with respect to a
Guarantor, amounts owing by such Guarantor under the Credit Facility and
guarantees by such Guarantor of Designated Senior Indebtedness.
"Designated Senior Indebtedness" means (i) all Indebtedness under the
New Credit Agreement and (ii) any other issue of Senior Indebtedness which (a)
at the time of the determination is equal to or greater than $25,000,000 in
aggregate principal amount and (b) is specifically designated by the Company in
the instrument evidencing such Senior Indebtedness as "Designated Senior
Indebtedness."
"Disinterested Member of the Board of Directors of the Company" means,
with respect to any transaction or series of transactions, a member of the Board
of Directors of the Company other than a member who has any material direct or
indirect financial interest in or with respect to such transaction or series of
transactions or who is an Affiliate, officer, director or an employee of any
Person (other than the Company) who has any direct or indirect financial
interest in or with respect to such transaction or series of transactions.
"Distribution Compliance Period" has the meaning set forth in Section
3.14.
"Equity Offering" means a sale of Common Stock of the Company net cash
proceeds to the Company of at least $25,000,000.
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear System.
"Event of Default" has the meaning specified in Section 5.1.
"Excess Proceeds" has the meaning specified in Section 10.14.
11
<PAGE>
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Securities" has the meaning specified in the form of the
Security in Exhibit A.
"Expiration Date" shall have the meaning set forth in the definition
of "Offer to Purchase."
"Fair Market Value" means, with respect to any asset, the price (after
taking into account any liabilities relating to such assets) which could be
negotiated in an arm's-length free market transaction between a willing seller
and a willing buyer, neither of which is under pressure or compulsion to
complete the transaction. Fair Market Value shall be determined by the Board of
Directors of the Company in good faith.
"Federal Bankruptcy Code" means Title 11, U.S. Code.
"Foreign Restricted Subsidiary" means a Restricted Subsidiary which is
not organized under the laws of the United States, or any possession or
territory thereof, any State of the United States, or the District of Columbia.
"GAAP" means generally accepted accounting principles 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 may be approved by a significant segment of the accounting
profession of the United States of America, which are applicable at the date of
the Indenture.
"Global Securities" means one or more Regulation S Global Securities
and 144A Global Securities.
"guarantee" means, as applied to any obligation, (i) a guarantee
(other than by endorsement of negotiable instruments for collection in the
ordinary course of business), direct or indirect, in any manner, of any part or
all of such obligation and (ii) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the event of nonperformance) of all or any
part of such obligation, including, without limiting the foregoing, the payment
of amounts available to be drawn down under letters of credit of another Person.
The term "guarantee" used as a verb has a corresponding meaning. The term
"guarantor" shall mean any Person providing a guarantee of any obligation.
12
<PAGE>
"Guarantor Senior Indebtedness" of a Guarantor means the principal of,
premium, if any, and interest on any Indebtedness of such Guarantor, whether
outstanding on the Issue Date or thereafter created, incurred or assumed,
unless, in the case of any particular Indebtedness, the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly
provides that such Indebtedness shall not be senior in right of payment to such
Guarantor's Guaranty. Without limiting the generality of the foregoing, (x)
"Guarantor Senior Indebtedness" shall include the principal of, premium, if any,
and interest on all obligations of every nature of such Guarantor from time to
time owed to the lenders under the New Credit Agreement, including, without
limitation, principal of and interest on, and all fees, indemnities and expenses
payable under the New Credit Agreement, and (y) in the case of amounts owing
under the New Credit Agreement and guarantees of Designated Senior Indebtedness,
"Guarantor Senior Indebtedness" shall include interest accruing thereon
subsequent to the occurrence of any Event of Default specified in clause (7) or
(8) of Section 5.1 relating to such Guarantor, whether or not the claim for such
interest is allowed under any applicable Bankruptcy Code. Notwithstanding the
foregoing, "Guarantor Senior Indebtedness" shall not include (a) Indebtedness
evidenced by the Notes or the Guarantees, (b) Indebtedness that is expressly
subordinate or junior in right of payment to any Indebtedness of such Guarantor,
(c) Indebtedness which, when incurred and without respect to any election under
Section 1111(b) of Title 11, United States Code, is without recourse to such
Guarantor, (d) Indebtedness which is represented by Redeemable Capital Stock,
(e) Indebtedness for goods, materials or services purchased in the ordinary
course of business or Indebtedness consisting of trade payables or other current
liabilities (other than any current liabilities owing under the New Credit
Agreement, or the current portion of any long-term Indebtedness which would
constitute Guarantor Senior Indebtedness but for the operation of this clause
(e)), (f) Indebtedness of or amounts owed by such Guarantor for compensation to
employees or for services rendered to such Guarantor, (g) any liability for
federal, state, local or other taxes owed or owing by such Guarantor, (h)
Indebtedness of such Guarantor to the Company or a Subsidiary of the Company or
any other Affiliate of the Company or any of such Affiliate's Subsidiaries, (i)
that portion of any Indebtedness which is incurred by such Guarantor in
violation of this Indenture, (j) Indebtedness of such Guarantor that by
operation of law is subordinate to any general unsecured obligations of such
Guarantor and (k) amounts owing under leases.
"Guarantor Subordinated Indebtedness" means, with respect to a
Guarantor, indebtedness and other obligations of such Guarantor which are
expressly subordinated in right of payment to such Guarantor's Guaranty.
13
<PAGE>
"Guarantors" shall mean each Initial Guarantor and each future
Subsidiary that is not designated an Unrestricted Subsidiary in accordance with
Section 10.18 herein.
"Guaranty" means each guaranty of the Securities contained in Article
XIII given by each Guarantor.
"Guaranty Obligations" means, with respect to each Guarantor, the
obligations of such Guarantor under Article XIII.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indebtedness" means, with respect to any Person, without duplication,
(a) all liabilities of such Person for borrowed money or for the deferred
purchase price of property or services, excluding any trade payables and other
accrued current liabilities incurred in the ordinary course of business, but
including, without limitation, all obligations, contingent or otherwise, of such
Person in connection with any letters of credit, banker's acceptance or other
similar credit transaction, (b) all obligations of such Person evidenced by
bonds, notes, debentures or other similar instruments, (c) all indebtedness
created or arising under any conditional sale or other title retention agreement
with respect to property acquired by such Person (even if the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), but excluding
consignments, trade accounts payable arising in the ordinary course of business,
(d) all Capitalized Lease Obligations of such Person, (e) all Indebtedness
referred to in the preceding clauses of other Persons and all dividends of other
Persons, the payment of which is secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien upon property (including, without limitation, accounts and contract
rights) owned by such Person, even though such Person has not assumed or become
liable for the payment of such Indebtedness (the amount of such obligation being
deemed to be the lesser of the Fair Market Value of such property or asset or
the amount of the obligation so secured), (f) all guarantees of Indebtedness
referred to in this definition by such Person, (g) all Redeemable Capital Stock
of such Person valued at the greater of its voluntary or involuntary maximum
fixed repurchase price plus accrued dividends, (h) all Interest Rate Protection
Obligations of such Person, and (i) any amendment, supplement, modification,
deferral, renewal, extension, refinancing or refunding of any liability of the
types referred to in clauses (a) through (h) above; provided, however, that
Indebtedness shall not include (i) any holdback or escrow of the purchase price
of property,
14
<PAGE>
services, businesses or assets, (ii) any contingent payment obligations incurred
in connection with the acquisition of assets or businesses, which are contingent
on the performance of the assets or businesses so acquired or (iii) obligations
under performance bonds, performance guarantees, surety bonds, appeal bonds,
security deposits or similar obligations. For purposes hereof, the "maximum
fixed repurchase price" of any Redeemable Capital Stock which does not have a
fixed repurchase price shall be calculated in accordance with the terms of such
Redeemable Capital Stock as if such Redeemable Capital Stock were purchased on
any date on which Indebtedness shall be required to be determined pursuant
hereto, and if such price is based upon, or measured by, the fair market value
of such Redeemable Capital Stock, such fair market value shall be approved in
good faith by the Board of Directors of the issuer of such Redeemable Capital
Stock.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively.
"Initial Guarantors" see introduction to this Indenture.
"Initial Purchasers" means Merrill Lynch, NationsBanc Montgomery
Securities LLC, ABN Amro Incorporated, The Robinson-Humphrey Company, LLC,
Jefferies & Company, Inc. and U.S. Bancorp Libra, a division of U.S. Bancorp
Investments, Inc.
"Initial Securities" means the 9 3/4% Senior Subordinated Notes due
2009, Series A, of the Company.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.
"Interest Rate Protection Agreement" means, with respect to any
Person, any arrangement with any other Person whereby, directly or indirectly,
such Person is entitled to receive from time to time periodic payments
calculated by applying either a floating or a fixed rate of interest on a stated
notional amount in exchange for periodic payments made by such Person calculated
by applying a fixed or a floating rate of interest on the same notional amount
and shall include, without limitation, interest rate swaps, caps, floors,
collars and similar agreements.
15
<PAGE>
"Interest Rate Protection Obligations" means the net obligations of
any Person pursuant to any Interest Rate Protection Agreements.
"Investment" means, with respect to any Person, any direct or indirect
loan or other extension of credit (including, without limitation, a guarantee)
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), but other than advances to customers in the ordinary course of business
recorded as an account receivable in accordance with GAAP on the books of the
Person making the advance, or any purchase or acquisition by such Person of any
Capital Stock, bonds, notes, debentures or other securities or evidences of
Indebtedness issued by, any other Person.
"Issue Date" means the original date of issuance of the Initial
Securities.
"Lien" means any mortgage, charge, pledge, lien (statutory or other),
security interest, hypothecation, assignment for security, claim or other
encumbrance upon or with respect to any property of any kind. A Person shall be
deemed to own subject to a Lien any property which such Person has acquired or
holds subject to the interest of a vendor or lessor under any conditional sale
agreement (other than a consignment), capital lease or other title retention
agreement.
"Maturity Date" means January 15, 2009.
"Merrill Lynch" means Merrill Lynch, Pierce, Fenner & Smith
Incorporated.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Net Cash Proceeds" means, with respect to any Asset Sale, the
proceeds thereof in the form of cash or Cash Equivalents including payments in
respect of deferred payment obligations when received in the form of cash or
Cash Equivalents (except to the extent that such obligations are financed or
sold with recourse to the Company or any Restricted Subsidiary of the Company)
net of (i) brokerage commissions and other fees and expenses (including, without
limitation, fees and expenses of legal counsel and investment bankers, recording
fees, transfer fees and appraisers' fees) related to such Asset Sale, (ii)
provisions for all taxes payable as a result of such Asset Sale, (iii) amounts
required to be paid to any Person (other than the Company or any Restricted
Subsidiary of the Company) owning a beneficial interest in the assets subject to
the Asset Sale, (iv) payments made to retire Indebtedness where payment
16
<PAGE>
of such Indebtedness is secured by the assets or properties the subject of such
Asset Sale, and (v) appropriate amounts to be provided by the Company or any
Restricted Subsidiary of the Company, as the case may be, as a reserve required
in accordance with GAAP against any liabilities associated with such Asset Sale
and retained by the Company or any Restricted Subsidiary of the Company, as the
case may be, after 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.
"New Credit Agreement" means the Second Amended and Restated Credit
Agreement dated as of October 15, 1998 among the Company, the Subsidiaries of
the Company listed as guarantors therein, Chase Bank of Texas, National
Association, as the Agent, Bank of America Texas, N.A., as co-agent, Paribas, as
syndication agent and ABN AMRO Bank, N.A., as documentation agent, and the Banks
named therein, including any notes, guarantees, collateral documents,
instruments and agreements executed in connection therewith, and in each case as
amended (including any amendment and restatement thereof), modified, extended,
deferred, renewed, refunded, substituted or replaced or refinanced from time to
time, including any agreement extending the maturity of, refinancing, replacing
or otherwise restructuring (including increasing the amount of available
borrowings thereunder or adding Subsidiaries of the Company as additional
borrowers or guarantors thereunder) all or any portion of the Indebtedness under
such agreement or any successor or replacement agreement and whether by the same
or any other agents, creditor, lender or group of creditors or lenders.
"Non-U.S. Person" means a Person that is not a U.S. Person as such
term is defined in Regulation S.
"Notice of Default" means a written notice of the kind specified in
Section 5.2.
"Offer" means a Change of Control Offer or an Asset Sale Offer.
"Offer to Purchase" means an Offer sent by or on behalf of the Company
by first-class mail, postage prepaid, to each Holder of Securities at its
address appearing in the-register for the Securities on the date of the Offer
offering to purchase up to the principal amount of Securities specified in such
Offer at the purchase price specified in such Offer (as determined pursuant to
this Indenture). Unless otherwise provided in Section 10.13 or 10.14 or
otherwise required by applicable law, the Offer shall specify an expiration date
(the "Expiration Date") of the Offer to Purchase, which shall be not
17
<PAGE>
less than 20 Business Days nor more than 60 days after the date of such Offer
(or such later date as may be necessary for the Company to comply with the
Exchange Act), and a settlement date (the "Purchase Date") for purchase of
Securities to occur no later than five Business Days after the Expiration Date.
The Company shall notify the Trustee at least 15 Business Days (or such shorter
period as is acceptable to the Trustee) prior to the mailing of the Offer of the
Company's obligation to make an Offer to Purchase, and the Offer shall be mailed
by the Company or, at the Company's request, by the Trustee in the name and at
the expense of the Company. The Offer shall contain all the information required
by applicable law to be included therein. The Offer shall contain all
instructions and materials necessary to enable such Holders to tender Securities
pursuant to the Offer to Purchase. The Offer shall also state:
(1) the Section of this Indenture pursuant to which the Offer to
Purchase is being made;
(2) the Expiration Date and the Purchase Date;
(3) the purchase price to be paid by the Company for each $1,000
aggregate principal amount of Securities accepted for payment (as specified
pursuant to this Indenture) (the "Purchase Price"); and the amount of
accrued and unpaid interest to be paid;
(4) that the Holder may tender all or any portion of the Securities
registered in the name of such Holder and that any portion of a Security
tendered must be tendered in an integral multiple of $1,000 principal
amount;
(5) the place or places where Securities are to be surrendered for
tender pursuant to the Offer to Purchase;
(6) that interest on any Security not tendered or tendered but not
purchased by the Company pursuant to the Offer to Purchase will continue to
accrue;
(7) that on the Purchase Date the Purchase Price will become due
and payable upon each Security being accepted for payment pursuant to the
Offer to Purchase and that interest thereon shall cease to accrue on and
after the Purchase Date;
(8) that each Holder electing to tender all or any portion of a
Security pursuant to the Offer to Purchase will be required to surrender
such Security at the place or places specified in the Offer prior to the
close of business on the Expiration Date (such Security being, if the
Company or the Trustee so requires, duly endorsed by,
18
<PAGE>
or accompanied by a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by the Holder thereof or his
attorney duly authorized in writing);
(9) that Holders will be entitled to withdraw all or any portion of
Securities tendered if the Company (or its Paying Agent) receives, not
later than the close of business on the fifth Business Day next preceding
the Expiration Date, a facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Security the Holder
tendered, the certificate number of the Security the Holder tendered and a
statement that such Holder is withdrawing all or a portion of his tender;
(10) that (a) if Securities purchasable at an aggregate Purchase
Price less than or equal to the Purchase Amount are duly tendered and not
withdrawn pursuant to the Offer to Purchase, the Company shall purchase all
such Securities and (b) if Securities purchasable at an aggregate Purchase
Price in excess of the Purchase Amount are tendered and not withdrawn
pursuant to the Offer to Purchase, the Company shall purchase Securities on
a pro rata basis based on the Purchase Price therefor or such other method
as the Company shall deem fair and appropriate (subject in each case to
applicable rules of the Depositary and any securities exchange upon which
the Securities may then be listed), with such adjustments as may be deemed
appropriate so that only Securities in denominations of $1,000 principal
face amount or integral multiples thereof shall be purchased; and
(11) that in the case of a Holder whose Security is purchased only
in part, the Company shall execute and the Trustee shall authenticate and
deliver to the Holder of such Security without service charge, a new
Security or Securities, of any authorized denomination as requested by such
Holder, in an aggregate principal amount equal to and in exchange for the
unpurchased portion of the Security so tendered.
An Offer to Purchase shall be governed by and effected in accordance with the
provisions of this Indenture pertaining to the type of Offer to which it
relates.
"Offering Memorandum" means the Offering Memorandum dated January 19,
1999 pursuant to which the Securities were offered, and any supplement thereto.
"Officer's Certificate" means a certificate signed by the Chairman of
the Board, the Chief Executive Officer, the
19
<PAGE>
President or a Vice President, the Chief Financial Officer, the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company,
and delivered to the Trustee. One of the officers signing an Officer's
Certificate given pursuant to Section 10.20 shall be the principal executive,
financial or accounting officer of the Company.
"144A Global Security" means a permanent global security in registered
form representing the aggregate principal amount of Securities sold in reliance
on Rule 144A under the Securities Act.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be acceptable to the Trustee.
"Outstanding," when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and segregated
in trust by the Company (if the Company shall act as its own Paying Agent)
for the Holders of such Securities; provided that, if such Securities are
to be redeemed, notice of such redemption has been duly given pursuant to
this Indenture or provision therefor satisfactory to the Trustee has been
made;
(iii) Securities which have been paid pursuant to Section 3.6 or
in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any such
Securities in respect of which there shall have been presented to the
Trustee proof satisfactory to it that such Securities are held by a bona
fide purchaser in whose hands such Securities are valid obligations of the
Company; and
(iv) Securities as to which Defeasance has been effected pursuant
to Section 12.2;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given, made or taken any
request, demand, authorization, direction, notice, consent, waiver or other
action hereunder as of any date, Securities owned by the Company or any other
obligor upon the Securities or any Affiliate of the Company or of
20
<PAGE>
such other obligor shall be disregarded and deemed not to be Outstanding (it
being understood that Securities to be acquired by the Company pursuant to an
Offer or other offer to purchase shall not be deemed to be owned by the Company
until legal title to such Securities passes to the Company), except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent, waiver or other
action, only Securities which a Responsible Officer of the Trustee actually
knows to be so owned shall be so disregarded. Securities 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 Securities and that the pledgee is not the Company or any
other obligor upon the Securities or any Affiliate of the Company or of such
other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities on behalf of
the Company.
"Permitted Indebtedness" means, without duplication:
(a) Indebtedness of the Company and the Guarantors evidenced by up to
$130,000,000 principal amount of the Securities and the Guarantees;
(b) Indebtedness of the Company and Restricted Subsidiaries under one
or more Credit Facilities in an aggregate principal amount at any one time
outstanding not to exceed $300,000,000 less any amounts permanently repaid
in accordance with Section 10.14;
(c) Indebtedness of the Company or any Restricted Subsidiary
outstanding on the Issue Date;
(d) Indebtedness of the Company or any Restricted Subsidiary of the
Company incurred in respect of bankers' acceptances and letters of credit
in the ordinary course of business, including Indebtedness evidenced by
letters of credit issued in the ordinary course of business to support the
insurance or self-insurance obligations of the Company or any of its
Restricted Subsidiaries (including to secure workers' compensation and
other similar insurance coverages), in an aggregate amount not to exceed
$30,000,000 at any time; but excluding letters of credit issued in respect
of or to secure money borrowed;
(e) (i) Interest Rate Protection Obligations of the Company or a
Guarantor covering Indebtedness of the Company or a Guarantor and (ii)
Interest Rate Protection
21
<PAGE>
Obligations of any Restricted Subsidiary covering Permitted Indebtedness or
Acquired Indebtedness of such Restricted Subsidiary; provided that, in the
case of either clause (i) or (ii), (x) any Indebtedness to which any such
Interest Rate Protection Obligations correspond bears interest at
fluctuating interest rates and is otherwise permitted to be incurred under
Section 10.8 and (y) the notional principal amount of any such Interest
Rate Protection Obligations that exceeds the principal amount of the
Indebtedness to which such Interest Rate Protection Obligations relate
shall not constitute Permitted Indebtedness;
(f) Indebtedness of a Restricted Subsidiary owed to and held by the
Company or another Restricted Subsidiary, except that (i) any transfer of
such Indebtedness by the Company or a Restricted Subsidiary (other than to
the Company or another Restricted Subsidiary), (ii) the sale, transfer or
other disposition by the Company or any Restricted Subsidiary of the
Company of Capital Stock of a Restricted Subsidiary which is owed
Indebtedness of another Restricted Subsidiary such that it shall no longer
be a Restricted Subsidiary and (iii) the designation of a Restricted
Subsidiary which is owed Indebtedness of another Restricted Subsidiary as
an Unrestricted Subsidiary shall, in each case, be an incurrence of
Indebtedness by such Restricted Subsidiary subject to the other provisions
of this Indenture;
(g) Indebtedness of the Company owed to and held by a Restricted
Subsidiary which is unsecured and subordinated in right of payment to the
payment and performance of the obligations of the Company under this
Indenture and the Notes, except that (i) any transfer of such Indebtedness
by a Restricted Subsidiary (other than to another Restricted Subsidiary)
and (ii) the sale, transfer or other disposition by the Company or any
Restricted Subsidiary of the Company of Capital Stock of a Restricted
Subsidiary which is owed Indebtedness of the Company such that it shall no
longer be a Restricted Subsidiary and (iii) the designation of a Restricted
Subsidiary which is owed Indebtedness of the Company shall, in each case,
be an incurrence of Indebtedness by the Company, subject to the other
provisions of this Indenture;
(h) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
(except in the case of daylight overdrafts) drawn against insufficient
funds in the ordinary course of business; provided, however, that such
Indebtedness is extinguished within five Business Days of incurrence;
22
<PAGE>
(i) Indebtedness of the Company or any Restricted Subsidiary, in
addition to that described in clauses (a) through (h) of this definition,
in an aggregate principal amount outstanding at any time not to exceed
$20,000,000;
(j) (i) Indebtedness of the Company the proceeds of which are used
solely to refinance (whether by amendment, renewal, extension or refunding)
Indebtedness of the Company or any of its Restricted Subsidiaries incurred
pursuant to the Consolidated Fixed Charge Coverage Ratio test of the
proviso of Section 10.8 or clauses (a), (c) or (j) of this definition and
(ii) Indebtedness of any Restricted Subsidiary of the Company the proceeds
of which are used solely to refinance (whether by amendment, renewal,
extension or refunding) Indebtedness of such Restricted Subsidiary incurred
pursuant to the Consolidated Fixed Charge Coverage Ratio test of the
proviso of Section 10.8 or clauses (a), (c) or (j) of this definition (in
each case other than the Indebtedness to be refinanced, redeemed or retired
as described under "Use of Proceeds" in the Offering Memorandum); provided,
however, that (x) the principal amount of Indebtedness incurred pursuant to
this clause (j) (or, if such Indebtedness provides for an amount less than
the principal amount thereof to be due and payable upon a declaration of
acceleration of the maturity thereof, the original issue price of such
Indebtedness) shall not exceed the sum of principal amount of Indebtedness
so refinanced, plus the amount of any premium required to be paid in
connection with such refinancing pursuant to the terms of such Indebtedness
or the amount of any premium reasonably determined by the Company as
necessary to accomplish such refinancing by means of a tender offer or
privately negotiated purchase, plus the amount of expenses in connection
therewith, and (y) in the case of Indebtedness incurred by the Company
pursuant to this clause (j) to refinance Subordinated Indebtedness, such
Indebtedness (A) has no scheduled principal payment prior to the 91st day
after the Maturity Date, (B) has an Average Life to Stated Maturity greater
than the remaining Average Life to Stated Maturity of the Securities and
(C) is subordinated to the Securities in the same manner and to the same
extent that the Subordinated Indebtedness being refinanced is subordinated
to the Securities;
(k) Indebtedness arising from agreements of the Company or any
Restricted Subsidiary providing for indemnification, adjustment or holdback
of purchase price or similar obligations, in each case, incurred or assumed
in connection with the acquisition or disposition of any business, assets
or a Subsidiary, other than guarantees of Indebtedness incurred by any
person acquiring all or any
23
<PAGE>
portion of such business, assets or Subsidiary for the purpose of financing
such acquisition; and
(l) Guarantees by the Company or guarantees by a Guarantor of
Indebtedness that was permitted to be incurred under this Indenture.
For purposes of determining compliance with Section 10.8 described in
the preceding paragraph, (A) in the event that an item of Indebtedness meets the
criteria of more than one of the types of Indebtedness described in the clauses
of the preceding paragraph, the Company, in its sole discretion, shall classify
such item of Indebtedness and only be required to include the amount and type of
such Indebtedness in one such clause, and (B) the amount of Indebtedness issued
at a price that is less than the principal amount thereof shall be equal to the
amount of the liability in respect thereof determined in conformity with GAAP.
"Permitted Investments" means any of the following: (i) Investments
in the Company or in a Restricted Subsidiary; (ii) Investments in another
Person, if as a result of such Investment (A) such other Person becomes a
Restricted Subsidiary or (B) such other Person is merged or consolidated with or
into, or transfers or conveys all or substantially all of its assets to the
Company or a Restricted Subsidiary; (iii) Investments representing Capital Stock
or obligations issued to, the Company or any of its Restricted Subsidiaries in
settlement of claims against any other Person by reason of a composition or
readjustment of debt or a reorganization of any debtor of the Company or such
Restricted Subsidiary; (iv) Investments in Interest Rate Protection Agreements
on commercially reasonable terms entered into by the Company or any of its
Restricted Subsidiaries in the ordinary course of business in connection with
the operations of the business of the Company or its Restricted Subsidiaries to
hedge against fluctuations in interest rates on its outstanding Indebtedness;
(v) Investments in the Securities; (vi) Investments in Cash Equivalents; (vii)
Investments acquired by the Company or any Restricted Subsidiary in connection
with an Asset Sale permitted under Section 10.14 to the extent such Investments
are non-cash proceeds as permitted under Section 10.14; (viii) advances to
employees or officers of the Company or any Restricted Subsidiary in the
ordinary course of business; (ix) any Investment to the extent that the
consideration therefor is Capital Stock (other than Redeemable Capital Stock) of
the Company; (x) any loans, payments or other advances made pursuant to any
employee benefit plans (including plans for the benefit of directors) or
employment agreements or other compensation arrangements, in each case as
approved by the Board of Directors of the Company in its good faith judgment,
not to exceed $1,000,000 at any one time outstanding; and (xi) other Investments
not to exceed $25,000,000 at any time outstanding.
24
<PAGE>
"Permitted Liens" means the following types of Liens:
(a) any Lien existing as of the Issue Date;
(b) Liens securing Indebtedness under the New Credit Agreement;
(c) any Lien securing Acquired Indebtedness created prior to (and not
created in connection with, or in contemplation of) the incurrence of such
Indebtedness by the Company or any Restricted Subsidiary, if such Lien does
not attach to any property or assets of the Company or any Restricted
Subsidiary other than the property or assets subject to the Lien prior to
such incurrence;
(d) Liens in favor of the Company or a Restricted Subsidiary;
(e) Liens on and pledges of the Capital Stock of any Unrestricted
Subsidiary securing any Indebtedness of such Unrestricted Subsidiary;
(f) Liens for taxes, assessments or governmental charges or claims
either (i) not delinquent or (ii) contested in good faith by appropriate
proceedings and as to which the Company or its Restricted Subsidiaries
shall have set aside on its books such reserves as may be required pursuant
to GAAP;
(g) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, suppliers, materialmen, repairmen and other Liens imposed by law
incurred in the ordinary course of business for sums not yet delinquent or
being contested in good faith, if such reserve or other appropriate
provision, if any, as shall be required by GAAP shall have been made in
respect thereof;
(h) Liens incurred or deposits made in the ordinary course of business
in connection with workers' compensation, unemployment insurance and other
types of social security, or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, government
contracts, contracts for utilities, performance and return-of-money bonds
and other similar obligations (exclusive of obligations for the payment of
borrowed money);
25
<PAGE>
(i) judgment Liens not giving rise to an Event of Default so long as
such Lien is adequately bonded and any appropriate legal proceedings which
may have been duly initiated for the review of such judgment shall not have
been finally terminated or the period within which such proceedings may be
initiated shall not have expired;
(j) easements, rights-of-way, zoning restrictions and other similar
charges or encumbrances in respect of real property not interfering in any
material respect with the ordinary conduct of the business of the Company
or any of its Restricted Subsidiaries;
(k) any interest or title of a lessor under any Capitalized Lease
Obligation or operating lease;
(l) purchase money Liens to finance property or assets of the Company
or any Restricted Subsidiary of the Company acquired in the ordinary course
of business, provided, however, that (i) the related purchase money
Indebtedness shall not be secured by any property or assets of the Company
or any Restricted Subsidiary other than the property and assets so acquired
and (ii) the Lien securing such Indebtedness shall be created within 90
days of such acquisition;
(m) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other property
relating to such letters of credit and products and proceeds thereof;
(n) Liens securing refinancing Indebtedness permitted under clause (j)
of the definition of "Permitted Indebtedness"; provided such Liens are not
secured by any property or assets of the Company or any Restricted
Subsidiary other than the property or assets securing such refinanced
Indebtedness;
(o) Liens incurred in the ordinary course of business by the Company
or any Restricted Subsidiary with respect to obligations that do not exceed
$5,000,000 at any time outstanding;
(p) Liens encumbering deposits made to secure obligations arising from
statutory, regulatory, contractual, or warranty requirements of the Company
or any of its Restricted Subsidiaries, including rights of offset and set-
off;
(q) Liens securing Interest Rate Protection Obligations which Interest
Rate Protection Obligations relate to Indebtedness that is secured by Liens
otherwise permitted under this Indenture; and
26
<PAGE>
(r) Liens on property or assets of a Foreign Restricted Subsidiary
securing Indebtedness of Foreign Restricted Subsidiaries.
"Person" means any individual, corporation, partnership (general or
limited), limited liability company, joint venture, association, joint stock
company, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Preferred Stock," as applied to any Person, means Capital Stock of
any class or series (however designated) which is preferred as to the payment of
dividends or distributions, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such Person, over shares
of Capital Stock of any other class or series of such Person.
"Private Placement Legend" shall mean the legend initially set forth
on the Securities in the form set forth on Exhibit A-1.
"Purchase Amount" means, with respect to an Offer to Purchase, the
maximum aggregate amount payable by the Company for Securities under the terms
of such Offer to Purchase, if such Offer to Purchase were accepted in respect of
all Securities.
"Purchase Date" shall have the meaning set forth in the definition of
"Offer to Purchase."
"Qualified Equity Interest" in a Person means any interest in Capital
Stock of such Person, other than Redeemable Capital Stock.
"Qualified Institutional Buyer" or "QIB" has the meaning specified in
Rule 144A under the Securities Act.
"Record Expiration Date" has the meaning specified in Section 1.4.
"Redeemable Capital Stock" means any class or series of Capital Stock
that, either by its terms, by the terms of any security into which it is
convertible or exchangeable or by contract or otherwise, is or upon the
happening of an event or passage of time would be required to be redeemed prior
to the Maturity Date or is redeemable at the option of the holder thereof at any
time prior to the Maturity Date, or is convertible
27
<PAGE>
into or exchangeable for debt securities at any time prior to the Maturity Date;
provided that Capital Stock will not constitute Redeemable Capital Stock solely
because the holders thereof have the right to require the Company to repurchase
or redeem such Capital Stock upon the occurrence of a Change of Control or an
Asset Sale.
"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price," when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Registrable Securities" has the meaning set forth in the Registration
Rights Agreement.
"Registration Rights Agreement" means the Notes Registration Rights
Agreement dated as of January 22, 1999 by and among the Company, the Guarantors
and the Initial Purchasers, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with the terms thereof.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the January 1 or July 1 (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.
"Regulation S Global Security" means a permanent global Security in
registered form representing the aggregate principal amount of Securities sold
in reliance on Regulation S under the Securities Act.
"Replacement Assets" has the meaning specified in Section 10.14.
"Representative" means the agent in respect of the New Credit
Agreement.
"Required Filing Dates" has the meaning specified in Section 10.19.
"Responsible Officer," when used with respect to the Trustee, means
any officer within the Corporate Trust Office, including, any vice president,
any assistant vice president, any assistant secretary, any assistant treasurer,
or any other officer of the Trustee customarily performing functions similar
28
<PAGE>
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 knowledge of and familiarity with the
particular subject.
"Restricted Payments" has the meaning specified in Section 10.9.
"Restricted Security" means a Security that constitutes a "restricted
security" within the meaning of Rule 144(a)(3) under the Securities Act;
provided, however, that the Trustee shall be entitled to request and
conclusively rely on an opinion of counsel with respect to whether any Security
constitutes a Restricted Security.
"Restricted Subsidiary" means any Subsidiary of the Company that is
not an Unrestricted Subsidiary.
"Revocation" has the meaning set forth in Section 10.18.
"Rule 144A" means Rule 144A under the Securities Act.
"S&P" means Standard & Poor's Ratings Group, and its successors.
"Securities" means securities designated in the first paragraph of the
RECITALS OF THE COMPANY.
"Securities Act" means the Securities Act of 1933 and any statute
successor thereto, in each case as amended from time to time.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 3.5.
"Senior Indebtedness" means the principal of, premium, if any, and
interest on any Indebtedness of the Company, whether outstanding on the Issue
Date or thereafter created, incurred or assumed, unless, in the case of any
particular Indebtedness, the instrument creating or evidencing the same or
pursuant to which the same is outstanding expressly provides that such
Indebtedness shall not be senior in right of payment to the Securities. Without
limiting the generality of the foregoing, (x) "Senior Indebtedness" shall
include the principal of, premium, if any, and interest on all obligations of
every nature of the Company from time to time owed to the lenders under the New
Credit Agreement, including, without limitation, principal of and interest on,
and all fees, indemnities and expenses payable under the New Credit Agreement
and (y) in
29
<PAGE>
the case of Designated Senior Indebtedness, "Senior Indebtedness" shall include
interest accruing thereon subsequent to the occurrence of any Event of Default
specified in clause (7) or (8) under Section 5.1, whether or not the claim for
such interest is allowed under any applicable Bankruptcy Code. Notwithstanding
the foregoing, "Senior Indebtedness" shall not include (a) Indebtedness
evidenced by the Securities, (b) Indebtedness that is expressly subordinate or
junior in right of payment to any Indebtedness of the Company, (c) Indebtedness
which, when incurred and without respect to any election under Section 1111(b)
of Title 11, United States Code, is without recourse to the Company, (d)
Indebtedness which is represented by Redeemable Capital Stock, (e) Indebtedness
for goods, materials or services purchased in the ordinary course of business or
Indebtedness consisting of trade payables or other current liabilities (other
than any current liabilities owing under the New Credit Agreement, or the
current portion of any long-term Indebtedness which would constitute Senior
Indebtedness but for the operation of this clause (e)), (f) Indebtedness of or
amounts owed by the Company for compensation to employees or for services
rendered to the Company, (g) any liability for federal, state, local or other
taxes owed or owing by the Company, (h) Indebtedness of the Company to a
Subsidiary of the Company or any other Affiliate of the Company or any of such
Affiliate's Subsidiaries, (i) that portion of any Indebtedness, which is
incurred by the Company in violation of this Indenture (j) Indebtedness of the
Company that by operation of law is subordinate to any general unsecured
obligations of the Company and (k) amounts owing under leases.
"Significant Subsidiary" of any Person means a Restricted Subsidiary
of such Person which would be a significant subsidiary of such Person as of such
date as determined in accordance with the definition in Rule 1-02(w) of Article
I of Regulation S-X promulgated by the Commission and as in effect on the date
of this Indenture.
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 3.7.
"Stated Maturity" means, when used with respect to any Security or any
installment of interest thereon, the date specified in such Security as the
fixed date on which the principal of such Security or such installment of
interest is due and payable, and when used with respect to any other
Indebtedness, means the date specified in the instrument governing such
Indebtedness as the fixed date on which the principal of such Indebtedness, or
any installment of interest thereon, is due and payable (including as a result
of the exercise of any put option contained in such instrument).
30
<PAGE>
"Subordinated Indebtedness" means, with respect to the Company,
Indebtedness of the Company which is expressly subordinated in right of payment
to the Securities.
"Subsidiary" means, with respect to any Person, (i) a corporation a
majority of whose Voting Stock is at the time, directly or indirectly, owned by
such Person, by one or more Subsidiaries of such Person or by such Person and
one or more Subsidiaries thereof and (ii) any other Person (other than a
corporation), including, without limitation, a partnership, limited liability
company, business trust or joint venture, in which such Person, one or more
Subsidiaries thereof or such Person and one or more Subsidiaries thereof,
directly or indirectly, at the date of determination thereof, has at least
majority ownership interest entitled to vote in the election of directors,
managers or trustees thereof (or other Person performing similar functions).
For purposes of this definition, any directors' qualifying shares or investments
by foreign nationals mandated by applicable law shall be disregarded in
determining the ownership of a Subsidiary.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.
"Unrestricted Securities" means one or more Securities in the form set
forth in Exhibit A-2, including, without limitation, the Exchange Securities,
that do not and are not required to bear the Private Placement Legend.
"Unrestricted Subsidiary" means each Subsidiary of the Company
designated as such pursuant to and in compliance with Section 10.18.
"U.S. Government Obligation" has the meaning specified in Section
12.4.
"Vice President," when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president."
31
<PAGE>
"Voting Stock" means any class or classes of Capital Stock pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors, managers
or trustees of any Person (irrespective of whether or not, at the time, stock of
any other class or classes shall have, or might have, voting power by reason of
the happening of any contingency).
"Wholly-Owned Restricted Subsidiary" means any Restricted Subsidiary
of the Company of which 100% of the outstanding Capital Stock is owned by the
Company or another Wholly-Owned Restricted Subsidiary of the Company or both.
For purposes of this definition, any directors' qualifying shares or investments
by foreign nationals mandated by applicable law shall be disregarded in
determining the ownership of a Subsidiary.
SECTION 1.2. Compliance Certificates and Opinions.
Upon any application or request by the Company or a Guarantor to the
Trustee to take any action under any provision of this Indenture, the Company or
the Guarantor shall furnish to the Trustee such certificates and opinions as may
be required under the Trust Indenture Act. Each such certificate or opinion
shall be given in the form of an Officer's Certificate, if to be given by an
officer of the Company or a Guarantor, or an opinion of Counsel, if to be given
by counsel, and shall comply with the requirements of the Trust Indenture Act
and any other requirement set forth in this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include
(i) a statement that each individual 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 statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such individual, 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
32
<PAGE>
(iv) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.3. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company or a Guarantor
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or opinion of counsel may
be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company or a
Guarantor stating that the information with respect to such factual matters is
in the possession of the Company or such Guarantor, unless such counsel knows,
or in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.4. Acts of Holders; Record Dates.
Any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company or a
Guarantor, as applicable. Such instrument or instruments (and the action
33
<PAGE>
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 6.1)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.
The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
The ownership of Securities shall be proved by the Security Register.
Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee, the Company or a
Guarantor in reliance thereon, whether or not notation of such action is made
upon such Security.
The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Indenture to be given or taken by Holders
of Securities; provided that the Company may not set a record date for, and the
provisions of this paragraph shall not apply with respect to, the giving or
making of any notice, declaration, request or direction referred to in the next
paragraph. If any record date is set pursuant to this paragraph, the Holders of
Outstanding Securities on such record date, and no other Holders, shall be
entitled to take the relevant action, whether or not such Holders remain Holders
after such record date; provided that no such action shall be effective
hereunder unless taken on or prior to the applicable Record Expiration Date by
Holders of the requisite principal amount of Outstanding
34
<PAGE>
Securities on such record date. Nothing in this paragraph shall prevent the
Company from setting a new record date for any action for which a record date
has previously been set pursuant to this paragraph (whereupon the record date
previously set shall automatically and with no action by any Person be cancelled
and of no effect), nor shall anything in this paragraph be construed to render
ineffective any action taken pursuant to or in accordance with any other
provision of this Indenture by Holders of the requisite principal amount of
Outstanding Securities on the date such action is taken. Promptly after any
record date is set pursuant to this paragraph, the Company, at its own expense,
shall cause notice of such record date, the proposed action by Holders and the
applicable Record Expiration Date to be given to the Trustee in writing and to
each Holder of Securities in the manner set forth in Section 1.6.
The Trustee may but need not set any day as a record date for the
purpose of determining the Holders of Outstanding Securities entitled to join in
the giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in Section 5.2, (iii) any request to institute
proceedings referred to in Section 5.7(2) or (v) any direction referred to in
Section 5.12. If any record date is set pursuant to this paragraph, the Holders
of Outstanding Securities on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, whether or
not such Holders remain Holders after such record date; provided that no such
action shall be effective hereunder unless taken on or prior to the applicable
Record Expiration Date by Holders of the requisite principal amount of
Outstanding Securities on such record date. Nothing in this paragraph shall be
construed to prevent the Trustee from setting a new record date for any action
(whereupon the record date previously set shall automatically and without any
action by any Person be cancelled and of no effect), nor shall anything in this
paragraph be construed to render ineffective any action taken pursuant to or in
accordance with any other provision of this Indenture by Holders of the
requisite principal amount of Outstanding Securities on the date such action is
taken. Promptly after any record date is set pursuant to this paragraph, the
Trustee, at the Company's expense, shall cause notice of such record date, the
matter(s) to be submitted for potential action by Holders and the applicable
Record Expiration Date to be given to the Company in writing and to each Holder
of Securities in the manner set forth in Section 1.6.
With respect to any record date set pursuant to this Section, the
party hereto that sets such record date may designate any day as the "Record
Expiration Date" and from time to time may change the Record Expiration Date to
any earlier or later day; provided that no such change shall be effective unless
35
<PAGE>
notice of the proposed new Record Expiration Date is given to the other party
hereto in writing, and to each Holder of Securities in the manner set forth in
Section 1.6, on or before the existing Record Expiration Date. If a Record
Expiration Date is not designated with respect to any record date set pursuant
to this Section, the party hereto that set such record date shall be deemed to
have initially designated the 180th day after such record date as the Record
Expiration Date with respect thereto, subject to its right to change the Record
Expiration Date as provided in this paragraph. Notwithstanding the foregoing,
no Record Expiration Date shall be later than the 180th day after the applicable
record date.
Without limiting the foregoing, a Holder entitled hereunder to take
any action hereunder with regard to any particular Security may do so with
regard to all or any part of the principal amount of such Security or by one or
more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any part of such principal amount.
SECTION 1.5. Notices to Trustee, the Company or a Guarantor.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(i) the Trustee by any Holder or by the Company or a Guarantor
shall be sufficient for every purpose hereunder if made, given, furnished
or filed in writing and mailed, first class postage prepaid, to or with the
Trustee at its Corporate Trust Office, Attention: Corporate Trust
Administration,
(ii) the Company or a Guarantor by the Trustee or by any Holder
shall be sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid,
to the Company or such Guarantor addressed to it at the address of the
Company's principal office, for the attention of the [General Counsel],
specified in the first paragraph of this instrument, or at any other
address previously furnished in writing to the Trustee by the Company and
such Guarantor.
SECTION 1.6. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed,
36
<PAGE>
first-class postage prepaid, to each Holder affected by such event, at his
address as it appears in the Security Register, not later than the latest date
(if any), and not earlier than the earliest date (if any), prescribed for the
giving of such notice. In any case where notice to Holders is given by mail,
neither the failure to mail or receive such notice, nor any defect in any such
notice, to any particular Holder shall affect the sufficiency or validity of
such notice. 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.
SECTION 1.7. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under the Trust Indenture
Act to be part of and govern this Indenture, such provision of the Trust
Indenture Act shall control. If any provision of this Indenture modifies or
excludes any provision of the Trust Indenture Act that may be so modified or
excluded, such provision shall be deemed to be so modified or excluded, as the
case may be.
SECTION 1.8. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 1.9. Successors and Assigns.
Without limiting Articles VIII and XIII hereof, all covenants and
agreements in this Indenture by each of the Company or the Guarantors shall bind
their respective successors and assigns, whether so expressed or not.
37
<PAGE>
SECTION 1.10. Separability Clause.
In case any provision in this Indenture or in the Securities 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 1.11. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders of Securities, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 1.12. Governing Law.
This Indenture and the Securities shall be governed by and construed
in accordance with the laws of the State of New York, without regard to the
conflicts of laws principles thereof.
SECTION 1.13. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date, Purchase
Date or Stated Maturity of any Security shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of interest or principal (and premium, if any) need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect (including with respect to the accrual of interest) as if made on the
Interest Payment Date, Redemption Date or Purchase Date, or at the Stated
Maturity.
ARTICLE II
Security Forms
SECTION 2.1. Forms Generally.
The Securities and the Trustee's certificates of authentication shall
be in substantially the forms set forth or referenced in Exhibit A-1 and Exhibit
A-2 annexed hereto, with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture, and may
have such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or the Depository or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution thereof.
38
<PAGE>
ARTICLE III
The Securities
SECTION 3.1. Title and Terms.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to $200,000,000
principal amount, of which $130,000,000 will be issued on the Issue Date, except
for Securities authenticated and delivered upon registration or transfer of, or
in exchange for, or in lieu of, other Securities pursuant to Section 3.4, 3.5,
3.6, 9.6 or 11.8 or in connection with an Offer pursuant to Sections 10.13 or
10.14.
The Securities shall be known and designated as the "9 3/4% Senior
Subordinated Notes due 2009" of the Company. Their Stated Maturity for payment
of principal shall be January 15, 2009. Interest on the Securities shall accrue
at the rate of 9 3/4% per annum and shall be payable semi-annually on each
January 15 and July 15, commencing July 15, 1999, to the Holders of record of
Securities at the close of business on the January 1 and July 1, respectively,
immediately preceding such Interest Payment Date. Interest on the Securities
will accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the Issue Date of such Securities. Interest will
be computed on the basis of a 360-day year comprised of twelve 30-day months.
The principal of (and premium, if any) and interest on the Securities
shall be payable at the office or agency of the Trustee in the Borough of
Manhattan, The City of New York or such other office maintained by the Trustee
for such purpose and at any other office or agency maintained by the Company for
such purpose; provided, however, that, at the option of the Company, payment of
interest may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register.
The Company may be required to make a Change of Control Offer as
provided in Section 10.13, or an Asset Sale Offer as provided in Section 10.14.
The Securities shall be redeemable as provided in Article XI and the
Securities.
39
<PAGE>
The Securities shall be subject to Defeasance and/or Covenant
Defeasance as provided in Article XII.
SECTION 3.2. Denominations.
The Securities shall be issuable only in registered form without
coupons and only in denominations of $1,000 principal amount and any integral
multiple thereof.
SECTION 3.3. Execution, Authentication, Delivery and Dating.
The Initial Securities and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A-1 hereto. The Exchange
Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A-2 hereto.
The terms and provisions contained in the Securities annexed hereto as
Exhibits A-1 and A-2 shall constitute, and are hereby expressly, made, a part of
this Indenture and, to the extent applicable, the Company and the Trustee, by
their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
Securities offered and sold in reliance on Rule 144A and Securities
offered and sold in reliance on Regulation S shall be issued initially in the
form of one or more Global Securities, substantially in the form set forth in
Exhibit A-1, deposited with the Trustee, as custodian for the Depository, duly
executed by the Company and authenticated by the Trustee as hereinafter provided
and shall bear the legend set forth in Exhibit B. The aggregate principal amount
of the Global Securities may from time to time be increased or decreased by
adjustments made on the records of the Trustee, as custodian for the Depository,
as hereinafter provided.
All Securities shall remain in the form of a Global Security, except
as provided herein.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Chief Executive officer, its President or one of its
Vice Presidents, or its Chief Financial Officer, attested by its Secretary or
one of its Assistant Secretaries. The signature of any of these officers on the
Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior
40
<PAGE>
to the authentication and delivery of such Securities or did not hold such
offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company to
the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities; and the Trustee in accordance
with such Company order shall authenticate and deliver such Securities as in
this Indenture provided and not otherwise.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder.
SECTION 3.4. Temporary Securities.
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at any office
or agency of the Company designated pursuant to Section 10.2, without charge to
the Holder. Upon surrender for cancellation of any one or more temporary
Securities the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a like principal amount of definitive Securities of
authorized denominations and of a like tenor. Until so exchanged the temporary
Securities shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities.
41
<PAGE>
SECTION 3.5. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 10.2 being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as the Company may prescribe, the Company shall provide
for the registration of Securities and of transfers of Securities. The Trustee
is hereby appointed the initial "Security Registrar" for the purpose of
registering Securities and transfers of Securities as herein provided.
Subject to Sections 3.13 and 3.14 of this Indenture, upon surrender
for registration of transfer of any Security at an office or agency of the
Company designated pursuant to Section 10.2 for such purpose, the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one more or more new Securities of any
authorized denominations and of a like aggregate principal amount and tenor.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denominations and of a like aggregate principal
amount and tenor, upon surrender of the Securities to be exchanged at such
office or agency. Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 3.4, 9.6 or 11.8 or in accordance
42
<PAGE>
with any Change of Control Offer pursuant to Section 10.13 or any Asset Sale
Offer pursuant to Section 10.14, and in any such case not involving any
transfer.
The Company shall not be required (i) to issue, register the transfer
of or exchange any Security during a period beginning at the opening of business
15 days before the day of the mailing of a notice of redemption of Securities
selected for redemption under Section 11.4 and ending at the close of business
on the day of such mailing, (ii) to register the transfer of or exchange any
Security so selected for redemption in whole or in part, except the unredeemed
portion of any Security being redeemed in part or (iii) to register the transfer
of any Securities other than Securities having a principal amount of $1,000 or
integral multiples thereof.
SECTION 3.6. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of each of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute, and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of, issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company,
43
<PAGE>
whether or not the destroyed, lost or stolen Security shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities duly
issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.7. Payment of Interest; Rights Preserved.
Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name that Security (or one or more predecessor securities) is registered
at the close of business on the Regular Record Date for such interest payment.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities (or their respective
predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which shall
be fixed in the following manner. The Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each
Security and the date of the proposed payment, and at the same time the
Company shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest
or shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited to be
held in trust for the benefit of the Persons entitled to such Defaulted
Interest as in this clause provided. Thereupon the Trustee shall fix a
Special Record Date for the payment of such Defaulted Interest which shall
be not more than 15 days and not less than 10 days prior to the date of the
proposed payment and not less than 15 days after the receipt by the Trustee
of the notice of the proposed payment. The Trustee shall promptly notify
the Company of such Special Record Date and, in the name and at the expense
44
<PAGE>
of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be given to each
Holder in the manner specified in Section 1.6, not less than 10 days prior
to such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been so
mailed, such Defaulted Interest shall be paid to the Persons in whose names
the Securities (or their respective predecessor Securities) are registered
at the close of business on such Special Record Date and shall no longer be
payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this Clause,
such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION 3.8. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of (and premium, if
any) and (subject to Section 3.7) interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
SECTION 3.9. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or tendered and accepted pursuant to any Change of Control
Offer pursuant to Section 10.13 or any Asset Sale Offer pursuant to Section
10.14 shall, if surrendered to any Person other than the Trustee, be delivered
to the Trustee and shall be promptly cancelled by it. The Company may at any
time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder
45
<PAGE>
which the Company may have acquired in any manner whatsoever, and all Securities
so delivered shall be promptly cancelled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as provided
in this Section, except as expressly permitted by this Indenture. All cancelled
Securities held by the Trustee shall be disposed of in the customary manner by
the Trustee unless otherwise directed by a Company Order.
SECTION 3.10. Computation of Interest.
Interest on the Securities shall be computed on the basis of a 360-day
year comprised of twelve 30-day months.
SECTION 3.11. CUSIP and CINS Numbers.
The Company in issuing the Securities may use "CUSIP" and "CINS"
numbers (if then generally in use), and, if so, the Trustee shall use the CUSIP
or CINS numbers in notices of redemption or repurchase as a convenience to
Holders; provided that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Securities or as
contained in any notice of a redemption or repurchase and that reliance may be
placed only on the other identification numbers printed on the Securities, and
any such redemption or repurchase shall not be affected by any defect in or
omission of such numbers.
SECTION 3.12. Deposits of Monies.
Except to the extent payment of interest is made by the Company's
check pursuant to Section 3.1, prior to 11:00 a.m. New York City time on each
Interest Payment Date, Redemption Date, Stated Maturity, and Purchase Date, the
Company shall deposit with the Paying Agent in immediately available funds money
sufficient to make cash payments, if any, due on such Interest Payment Date,
Redemption Date, Stated Maturity and Purchase Date, as the case may be, in a
timely manner which permits the Paying Agent to remit payment to the Holders on
such Interest Payment Date, Redemption Date, Stated Maturity, and Purchase Date,
as the case may be.
SECTION 3.13. Book-Entry Provisions for Global Securities.
(a) The Global Securities initially shall (i) be registered in the
name of the Depository or the nominee of such Depository, (ii) be delivered
to the Trustee as custodian for such Depository and (iii) bear legends as
set forth in Exhibit B hereto.
46
<PAGE>
Members of, or participants in, the Depository ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depository, or the Trustee as its custodian, or
under any Global Security, and the Depository may be treated by the
Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of the Global Securities 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
Depository or impair, as between the Depository and its Agent Members, the
operation of customary practices governing the exercise of the rights of a
Holder of any Security.
(b) Transfer of Global Securities shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their
respective nominees. Interests of beneficial owners in the Global
Securities may not be transferred or exchanged for physical securities,
except that physical securities shall be transferred to all beneficial
owners in exchange for their beneficial interests in Global Securities if
(i) the Depository notifies the Company that it is unwilling or unable to
continue as Depository for any Global Security, or that it will cease to be
a "Clearing Agency" under the Exchange Act, and in either case a successor
Depository is not appointed by the Company within 90 days of such notice or
(ii) an Event of Default has occurred and is continuing and the Security
Registrar has received a written request from the Depository to issue
physical securities.
(c) The Holder of any Global Security 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 Securities.
SECTION 3.14. Special Transfer Provisions.
(a) Transfers to Non-U.S. Persons. The following additional
provisions shall apply with respect to the registration of any proposed
transfer of and the transfer of the beneficial interest in an Initial
Security to any Non-U.S. Person:
(i) the Security Registrar shall register the transfer of any
Initial Security, whether or not such Security bears the Private Placement
Legend, and a transfer of the beneficial interest in an Initial Security
may be made if
47
<PAGE>
(x) the requested transfer is after the second anniversary of the Issue
Date; provided, however, that neither the Company nor any Affiliate of the
Company has held any beneficial interest in such Security, or portion
thereof, at any time on or prior to the second anniversary of the Issue
Date and such transfer can otherwise be lawfully made under the Securities
Act without registering such Initial Security thereunder,(y) in the case of
the registration of a transfer by the Security Registrar, the proposed
transferor has delivered to the Security Registrar a certificate
substantially in the form of Exhibit C hereto or (i) in the case of the
transfer of the beneficial interest in an Initial Security, (other than a
transfer by an Agent Member, to which clause (ii) below shall apply), the
transfer is made in accordance with Regulation S under the Securities Act
and in accordance with clause (iii) below to the extent applicable;
(ii) if the proposed transferor is an Agent Member seeking to
transfer an interest in a 144A Global Security, upon receipt by the
Security Registrar of (x) written instructions given in accordance with the
Depository's and the Security Registrar's procedures and (y) the
appropriate certificate, if any, required by clause (y) of paragraph (i)
above, together with any required legal opinions and certifications, the
Security Registrar shall register the transfer and reflect on its books and
records the date and (A) a decrease in the principal amount of the 144A
Global Security from which such interests are to be transferred in an
amount equal to the principal amount of the Securities to be transferred
and (B) an increase in the principal amount of the Regulation S Global
Security in an amount equal to the principal amount of the Global Security
to be transferred; and
(iii) subject to Section 3.14(b), until the 41st day after the
Issue Date (the "Distribution Compliance Period"), an owner of a beneficial
interest in the Regulation S Global Security may not transfer such interest
to a transferee that is a U.S. Person or for the account or benefit of a
U.S. Person within the meaning of Rule 902(o) of the Securities Act.
Subject to Section 3.14(b), during the Distribution Compliance Period, all
beneficial interests in the Regulation S Global Security shall be
transferred only through Cedel or Euroclear, either directly if the
transferor and transferee are participants in such systems, or indirectly
through organizations that are participants therein.
(b) Transfers to QIBs. The following provisions shall apply with
respect to the registration of any proposed
48
<PAGE>
transfer of an Initial Security and the transfer of the beneficial interest
in an Initial Security to a QIB (excluding Non-U.S. Persons):
(i) the Security Registrar shall register the transfer of any
Initial Security, whether or not such Security bears the Private Placement
Legend, and the transfer of the beneficial interest in an Initial Security
may be made if (x) the requested transfer is after the second anniversary
of the Issue Date; provided, however, that neither the Company nor any
Affiliate of the Company has held any beneficial interest in such Security,
or portion thereof, at any time on or prior to the second anniversary of
the Issue Date and such transfer can otherwise be lawfully made under the
Securities Act without registering such Initial Security thereunder, (y) in
the case of the registration of a transfer by the Security Registrar, such
transfer is being made by a proposed transferor who has checked the box
provided for on the form of Security stating, or has otherwise advised the
Company and the Security 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 Security stating, or
has otherwise advised the Company and the Security Registrar in writing,
that it is purchasing the Security 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 (z) in the case of the transfer of the beneficial
interest in an Initial Security, (other than a transfer by an Agent Member,
to which clause (ii) below shall apply), the transfer is made in accordance
with Rule 144A under the Securities Act; and
(ii) if the proposed transferor is an Agent Member seeking to
transfer an interest in a Regulation S Global Security, upon receipt by the
Security Registrar of written instructions given in accordance with the
Depository's and the Security Registrar's procedures, the Security
Registrar shall register the transfer and reflect on its books and records
the date and (A) a decrease in the principal amount of the Regulation S
Global Security from which interests are to be transferred in an amount
equal to the principal amount of the Securities to be transferred
49
<PAGE>
and (B) an increase in the principal amount of the 144A Global Security in
an amount equal to the principal amount of the Global Security to be
transferred.
(c) Private Legend. Upon the registration of transfer, exchange or
replacement of Securities not bearing the Private Placement Legend, the
Security Registrar shall deliver Securities that do not bear the Private
Placement Legend. Upon the registration of transfer, exchange or
replacement of Securities bearing the Private Placement Legend, the
Security Registrar shall deliver only Securities that bear the Private
Placement Legend unless (i) the circumstances contemplated by paragraph
(a)(i)(x) or (b)(i)(x) of this Section 3.14 exists, (ii) there is delivered
to the Security 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 or (iii) such Security
has been sold pursuant to an effective registration statement under the
Securities Act.
(d) Other Transfers. If a Holder proposes to transfer a Security
constituting a Restricted Security pursuant to any exemption from the
registration requirements of the Securities Act other than as provided for
by Section 3.14(a), (b) and (c), the Security Registrar shall only register
such transfer or exchange if such transferor delivers an opinion of counsel
satisfactory to the Company and the Security Registrar that such transfer
is in compliance with the Securities Act and the terms of this Indenture.
(e) General. By its acceptance of any Security bearing the Private
Placement Legend and by its ownership of a beneficial interest therein,
each Holder of such a Security and each owner of a beneficial interest
therein acknowledges the restrictions on transfer of such Security and of
beneficial interests therein set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security and
beneficial interests therein only as provided in this Indenture.
The Security Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 3.13 or this Section
3.14. 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 prior written notice to the Security Registrar.
50
<PAGE>
ARTICLE IV
Satisfaction and Discharge
SECTION 4.1. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as to any
surviving rights of registration of transfer or exchange of Securities herein
expressly provided for), and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered (other
than (i) Securities which have been destroyed, lost or stolen and
which have been replaced or repaid as provided in Section 3.6 and (ii)
Securities for whose payment money has theretofore been deposited in
trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 10.3) have been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the Trustee
for cancellation (other than Securities which have been destroyed,
lost or stolen and which have been replaced or repaid as provided in
Section 3.6),
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within
one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has irrevocably
deposited or caused to be deposited with the Trustee as trust funds in
trust for the purpose an amount sufficient to pay and discharge the entire
Indebtedness on such Securities not theretofore delivered to the Trustee
for cancellation, for principal (and premium, if any) and interest on the
Securities to the date of such
51
<PAGE>
deposit (in the case of Securities which have become due and payable) or to
the Stated Maturity or Redemption Date, as the case may be, together with
irrevocable instructions from the Company directing the Trustee to apply
such funds to the payment thereof at maturity or redemption, as the case
may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company or the Guarantors; and
(3) the Company has delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of
this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture pursuant to
this Article IV, the obligations of the Company to the Trustee under Section
6.7, the obligations of the Company to any Authenticating Agent under Section
6.14 and, if money shall have been deposited with the Trustee pursuant to
subclause (B) of clause (1) of this Section, the obligations of the Trustee
under Section 4.2 and the last paragraph of Section 10.3 shall survive.
SECTION 4.2. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 10.3, all
money deposited with the Trustee pursuant to Section 4.1 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee.
ARTICLE V
Remedies
SECTION 5.1. Events of Default.
"Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment,
52
<PAGE>
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of the principal of or premium, if any,
when due and payable, on any of the Securities (at Stated Maturity, upon
optional redemption, required purchase or otherwise); or
(2) default in the payment of an installment of interest on any of
the Securities, when due and payable, for 30 days; or
(3) default in the performance, or breach, of any covenant or
agreement of the Company under this Indenture (other than a default in the
performance or breach of a covenant or agreement which is specifically
dealt with in clauses (1), (2) or (4)) and such default or breach shall
continue for a period of 45 days after written notice has been given, by
certified mail, (x) to the Company by the Trustee or (y) to the Company and
the Trustee by the holders of at least 25% in aggregate principal amount of
the Outstanding Securities; or
(4) (a) there shall be a default in the performance or breach of
the provisions of Section 8.1 with respect to the Company; (b) the Company
shall have failed to make or consummate an Asset Sale Offer in accordance
with the provisions of Section 10.14; or (c) the Company shall have failed
to make or consummate a Change of Control Offer in accordance with the
provisions of Section 10.13; or
(5) default or defaults under one or more agreements, instruments,
mortgages, bonds, debentures or other evidences of Indebtedness under which
the Company or any Significant Subsidiary of the Company then has
outstanding Indebtedness in excess of $15,000,000, individually or in the
aggregate, and (a) such default or defaults include a failure to make a
payment of principal, (b) such Indebtedness is already due and payable in
full or (c) such default or defaults have resulted in the acceleration of
the maturity of such Indebtedness; or
(6) one or more judgments, orders or decrees of any court or
regulatory or administrative agency of competent jurisdiction for the
payment of money in excess of $15,000,000, either individually or in the
aggregate, shall be entered against the Company or any Significant
Subsidiary of the Company or any of their respective properties and shall
not be discharged and there shall have been a period of 60 days after the
date on which any period for appeal has expired and during which a stay of
enforcement of such judgment, order or decree, shall not be in effect; or
53
<PAGE>
(7) the entry of a decree or order by a court having jurisdiction
in the premises (A) for relief in respect of the Company or any Significant
Subsidiary in an involuntary case or proceeding under the Federal
Bankruptcy Code or any other federal, state or foreign bankruptcy,
insolvency, reorganization or similar law or (B) adjudging the Company or
any Significant Subsidiary bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment or composition of or in respect of
the Company or any Significant Subsidiary under the Federal Bankruptcy Code
or any other similar federal, state or foreign law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Company or any Significant Subsidiary or of any
substantial part of any of their properties, or ordering the winding up or
liquidation of any of their affairs, and the continuance of any such decree
or order unstayed and in effect for a period of 60 consecutive days; or
(8) the institution by the Company or any Significant Subsidiary of
a voluntary case or proceeding under the Federal Bankruptcy Code or any
other similar federal, state or foreign law or any other case or
proceedings to be adjudicated a bankrupt or insolvent, or the consent by
the Company or any Significant Subsidiary to the entry of a decree or order
for relief in respect of the Company or any Significant Subsidiary in any
involuntary case or proceeding under the Federal Bankruptcy Code or any
other similar federal, state or foreign law or to the institution of
bankruptcy or insolvency proceedings against the Company or any Significant
Subsidiary, or the filing by the Company or any Significant Subsidiary of a
petition or answer or consent seeking reorganization or relief under the
Federal Bankruptcy Code or any other similar federal, state or foreign law,
or the consent by it to the filing of any such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee or sequestrator (or other similar official) of any of the
Company or any Significant Subsidiary or of any substantial part of its
property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its
debts generally as they become due or the taking of corporate action by the
Company or any Significant Subsidiary in furtherance of any such action; or
(9) any of the Guarantees by a Significant Subsidiary ceases to be
in full force and effect or any of such
54
<PAGE>
Guarantees is declared to be null and void and unenforceable or any of such
Guarantees is found to be invalid or any of such Guarantors denies its
liability under its Guaranty (other than by reason of release of such
Guarantor in accordance with the terms of this Indenture).
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than those covered by clause (7) or (8)
of Section 5.1 with respect to the Company) shall occur and be continuing, the
Trustee, by notice to the Company, or the Holders of at least 25% in aggregate
principal amount of the Securities then Outstanding, by notice to the Trustee
and the Company, may declare the principal of, premium, if any, and accrued and
unpaid interest, if any, on all of the outstanding Securities due and payable
immediately, upon which declaration, all amounts payable in respect of the
Securities (i) shall be due and payable and (ii) if there are any amounts
outstanding under the New Credit Agreement, shall become immediately due and
payable upon the first to occur of an acceleration under the New Credit
Agreement or five business days after receipt by the Company and the
Representative under the New Credit Agreement of such notice of acceleration.
If an Event of Default specified in clause (7) or (8) of Section 5.1 with
respect to the Company occurs and is continuing, then the principal of, premium,
if any, and accrued and unpaid interest, if any, on all the outstanding
Securities shall ipso facto become and be immediately due and payable without
any declaration or other act on the part of the Trustee or any Holder of
Securities.
After a declaration of acceleration under the Indenture, but before a
judgment or decree for payment of the money due has been obtained by the
Trustee, the Holders of a majority in aggregate principal amount of the
Outstanding Securities, by written notice to the Company and the Trustee, may
rescind such declaration if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all sums paid or advanced by the Trustee under this Indenture
and the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel,
(B) all overdue interest on all Securities,
(C) the principal of and premium, if any, on any Securities which
have become due otherwise than
55
<PAGE>
by such declaration of acceleration and interest thereon at the rate
borne by the Securities, and
(D) to the extent that payment of such interest is lawful,
interest upon overdue interest and overdue principal at the rate set
forth in the Securities which has become due otherwise than by such
declaration of acceleration;
(2) the rescission would not conflict with any judgment or decree
of a court of competent jurisdiction; and
(3) all Events of Default, other than the nonpayment of principal
of, premium, if any, and interest on the Securities that have become due
solely by such declaration of acceleration, have been cured or waived.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company and each Guarantor covenants that if
(i) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for a
period of 30 days, or
(ii) default is made in the payment of the principal of (or
premium, if any, on) any Security on the due date for payment thereof,
including, with respect to any Security required to have been purchased
pursuant to a Change of Control Offer or an Asset Sale Offer made by the
Company, at the Purchase Date thereof, the Company or such Guarantor will,
upon demand of the Trustee, pay to it, for the benefit of the Holders of
such Securities, the whole amount then due and payable on such Securities
for principal (and premium, if any) and interest, and, to the extent that
payment of such interest shall be legally enforceable, interest on any
overdue principal (and premium, if any) and on any overdue interest, at the
rate provided by the Securities, and, in addition thereto, 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.
In addition to the rights and powers set forth in Section 317(a) of
the Trust Indenture Act, the Trustee shall be entitled to file such other papers
or documents as may be necessary
56
<PAGE>
or advisable in order to have the claims of the Trustee and of the Holders of
the Securities allowed in any judicial proceeding relative to the Company, any
Guarantor or any other obligor upon the Securities, its creditors, or its
property, and to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute the same after the deduction
of its charges and expenses; and any receiver, assignee or trustee in bankruptcy
or reorganization is hereby authorized by each of the Holders 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 it for compensation and expenses, including counsel fees incurred by
it up to the date of such distribution.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 5.4. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company, a
Guarantor (or any other obligor upon the Securities), its property or its
creditors, the Trustee shall be entitled and empowered, by intervention in such
proceeding or otherwise, to take any and all actions authorized under the Trust
Indenture Act in order to have claims of the Holders and the Trustee allowed in
any such proceeding. In particular, the Trustee shall be authorized to collect
and receive any moneys or other property payable or deliverable on 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 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 6.7.
No provision of this Indenture shall be deemed to authorize 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
Securities 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;
57
<PAGE>
provided, however, that the Trustee may, on behalf of the Holders, vote for the
election of a trustee in bankruptcy or similar official and be a member of a
creditors, or other similar committee.
SECTION 5.5. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
distributions and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 5.6. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (or premium,
if any) or interest, upon presentation of the Securities and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
6.7;
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Securities 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 Securities for principal (and premium, if
any) and interest, respectively;
THIRD: To the payment of any and all other amounts due under the
Indenture, the Securities or the Guarantees; and
FOURTH: To the Company (or such other Person as a court of competent
jurisdiction may direct).
58
<PAGE>
SECTION 5.7. Limitation on Suits.
Subject to Section 5.8, no Holder of any Security shall have and right
to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(i) such Holder has previously given written notice to the Trustee
of a continuing Event of Default;
(ii) the Holders of not less than 25% in principal amount of the
Outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name
as Trustee hereunder;
(iii) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(iv) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding;
and
(v) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority
in principal amount of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders, or to obtain or to seek to obtain priority or preference over any
other Holders or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all the
Holders.
SECTION 5.10. Unconditional Right of Holders to Receive Principal, Premium and
Interest.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of (and premium, if any) and (subject to
Section 3.7) interest on such Security on the respective Stated Maturities
expressed in such Security (or, in the case of redemption, on the Redemption
Date or in the case of a Change of Control Offer or an Asset
59
<PAGE>
Sale Offer made by the Company and required to be accepted as to such Security,
on the relevant Purchase Date) and to institute suit for the enforcement of any
such payment, and such rights shall not be impaired without the consent of such
Holder.
SECTION 5.11. 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, each Guarantor, the Trustee and
the Holders shall be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of the Trustee and
the Holders shall continue as though no such proceeding had been instituted,
subject to the determination in such proceeding.
SECTION 5.12. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 3.6, 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 5.13. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security
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 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.
SECTION 5.14. Control by Holders.
The Holders of a majority in principal amount of the Outstanding
Securities shall have the right to direct the time,
60
<PAGE>
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
(i) such direction shall not be in conflict with any rule of law or
with this Indenture, and
(ii) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 5.15. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities may on behalf of the Holders of all the Securities waive
any past default hereunder and its consequences, except a default
(i) in the payment of the principal of (or premium, if any) or
interest on any Security (including any Security which is required to have
been purchased pursuant to a Change of Control Offer or an Asset Sale Offer
which has been made by the Company), or
(ii) in respect of a covenant or provision hereof which under
Article IX cannot be modified or amended without the consent of the Holder
of each Outstanding Security 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 impair any right consequent thereon.
SECTION 5.16. 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, suffered 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 such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided, that neither this Section nor the Trust Indenture Act
hall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Company or a Guarantor, in any
suit instituted by the Trustee, in any suit instituted by any Holder or group of
Holders, holding in the aggregate more than 10% in principal amount of the
Outstanding Securities, or in any suit instituted by any Holder for the
61
<PAGE>
enforcement of the payment of the principal of (or premium, if any) or interest
on any Security on or after the Stated Maturity expressed in such Security (or,
in the case of redemption, on or after the Redemption Date or, in the case of a
Change of Control Offer or an Asset Sale Offer, made by the Company and required
to be accepted as to such Security, on the applicable Purchase Date, as the case
may be).
SECTION 5.17. Waiver of Stay or Extension Laws.
The Company and each Guarantor covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, or plead, or in any
manner whatsoever claim or take the benefit or advantage of, any usury, stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and the Company and
each Guarantor (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law and covenants that it will not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
ARTICLE VI
The Trustee
SECTION 6.1. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(i) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture; but in
the case of any such certificates or opinions which by the provisions
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture but need not verify
the contents thereof.
62
<PAGE>
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as
a prudent Person would exercise or use under the circumstances in the
conduct of such Person's own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent misconduct, except that 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 under this Indenture, unless the Trustee has received security and
indemnity satisfactory to it against any loss, liability or expense. The
Trustee shall not be liable for any error of judgment unless it is proved
that the Trustee was negligent in the performance of its duties hereunder.
(d) Whether or not therein 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 Section 6.1.
SECTION 6.2. Notice of Defaults.
Within 30 days after the occurrence of any Default, the Trustee shall
transmit by mail to all Holders, as their names and addresses appear in the
Security Register, notice of such Default hereunder known to the Trustee, unless
such Default shall have been cured or waived; provided, however, that, except in
the case of a Default in the payment of the principal of, premium, if any, or
interest on any Security, the Trustee shall be protected in withholding such
notice if and so long as a trust committee of Responsible Officers of the
Trustee in good faith determines that the withholding of such notice is in the
interest of the Holders.
SECTION 6.3. Certain Rights of Trustee.
Subject to the provisions of Section 6.1:
(a) the Trustee may conclusively rely as to the truth of the
statements and correctness of the opinions expressed therein and shall be
fully protected in acting or refraining from acting upon any resolution,
Officer's Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note,
63
<PAGE>
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 party or
parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors of the Company may be sufficiently
evidenced by a Board Resolution of the Company;
(c) 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 Officer's Certificate directing the Trustee
with respect to the taking, suffering or omitting any such action;
(d) the Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) 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 pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(f) 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 (subject to reasonable confidentiality arrangements as
may be proposed by the Company or any Guarantor) to make reasonable
examination (upon prior notice and during regular business hours) of the
books, records and premises of the Company or a Guarantor, personally or by
agent or attorney;
64
<PAGE>
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or custodians or nominees and the Trustee shall not be
responsible for the supervision of, or any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder;
(h) the Trustee shall not be liable for any action taken, suffered, or
omitted to be taken by it in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon it
by this Indenture; and
(i) in the event that the Trustee is also acting as Authenticating
Agent, Paying Agent or Security Registrar hereunder, the rights and
protections afforded to the Trustee pursuant to this Article VI shall also
be afforded to such Authenticating Agent, Paying Agent and Security
Registrar.
SECTION 6.4. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee or any Authenticating Agent assumes no
responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Indenture or of the Securities. The
Trustee shall not be accountable for the use or application by the Company of
Securities or the proceeds thereof.
SECTION 6.5. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company or any Guarantor, in its individual
or any other capacity, may become the owner or pledgee of Securities and,
subject to Sections 6.8 and 6.13, may otherwise deal with the Company or a
Guarantor with the same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Security Registrar or such other agent.
SECTION 6.6. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed in writing with the Company.
65
<PAGE>
SECTION 6.7. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time such reasonable
compensation as the Company and the Trustee shall from time to time agree
in writing for all services rendered by it hereunder (which compensation
shall not be limited by any provision of law in regard to the compensation
of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to promptly
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance
with any provision of this Indenture (including the reasonable compensation
and the expenses and disbursements of its agents and counsel), except any
such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(3) to indemnify the Trustee, its directors, officers, agents and
employees for, and to hold them harmless against, any and all loss, damage,
claim, liability or expense incurred without negligence or bad faith on its
part, including taxes (other than taxes based upon, measured by or
determined by the revenue or income of the Trustee), arising out of or in
connection with the acceptance or administration of this trust, including
the costs and expenses of defending itself against any claim or liability
in connection with the exercise or performance of any of its powers or
duties hereunder.
The Trustee shall have a lien prior to the Securities as to all
property and funds held by it hereunder for any amount owing to it pursuant to
this Section 6.7, except with respect to funds held in trust for the benefit of
the Holders of particular Securities.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 5.1(7) or Section 5.1(8), the
expenses (including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or State bankruptcy, insolvency or
other similar law.
The Company's obligations under this Section 6.7 shall survive the
termination of this Indenture.
66
<PAGE>
SECTION 6.8. Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
SECTION 6.9. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such and
has, or is a wholly-owned subsidiary of a bank holding company that has, a
combined capital and surplus of at least $100,000,000 and a Corporate Trust
Office in the Borough of Manhattan, The City of New York. If such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of a Federal or State supervising or examining authority, then for
the purposes of this Section and to the extent permitted by the Trust Indenture
Act, the combined capital and surplus of such Person shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.
SECTION 6.10. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 6.11.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If an instrument of acceptance by a successor
Trustee in accordance with the applicable requirements of Section 6.11
shall not have been delivered to the Company and the resigning Trustee
within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of a
majority in principal amount of the Outstanding Securities, delivered to
the Trustee and to the Company.
67
<PAGE>
(d) If at any time:
(i) the Trustee shall fail to comply with Section 6.8 after written
request therefor by the Company or by any Holder who has been a bona fide
Holder of a Security for at least six months, or
(ii) the Trustee shall cease to be eligible under Section 6.9 and
shall fail to resign after written request therefor by the Company, any
Guarantor or by any such Holder, or
(iii) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company or any Guarantor, in each case by a
Board Resolution, may remove the Trustee, or (ii) subject to Section 5.14,
any Holder who has been a bona fide Holder of a Security for at least six
months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause,
the Company, by a Board Resolution, shall promptly appoint a successor
Trustee. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee shall
be appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities delivered to the Company and the retiring Trustee,
the successor Trustee so appointed shall, forthwith upon its acceptance of
such appointment in accordance with the applicable requirements of Section
6.11, become the successor Trustee and supersede the successor Trustee
appointed by the Company. If no successor Trustee shall have been so
appointed by the Company or the Holders and accepted appointment in
accordance with the applicable requirements of Section 6.11, any Holder who
has been a bona fide Holder of a Security for at least six months may, on
behalf of himself and all others similarly situated, or
68
<PAGE>
the Trustee petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee to all Holders
in the manner provided in Section 1.6. Each notice shall include the name
of the successor Trustee and the address of its Corporate Trust Office.
(g) The resignation or removal of the Trustee pursuant to this Section
6.10 shall not affect the obligation of the Company to indemnify the
Trustee pursuant to Section 6.7(3) in connection with the exercise or
performance by the Trustee prior to its resignation or removal of any of
its powers or duties hereunder.
(h) No Trustee under this Indenture shall be liable for any action or
omission of any successor Trustee.
SECTION 6.11. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee; but, on request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder. Upon request of any such successor Trustee,
the Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts.
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.
SECTION 6.12. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation
69
<PAGE>
to which the Trustee shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided such corporation shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto. In case
any Securities shall have been authenticated, but not delivered, by the Trustee
then in office, any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver the Securities
so authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities.
SECTION 6.13. Preferential Collection of Claims Against the Company or a
Guarantor.
If and when the Trustee shall be or become a creditor of the Company
or a Guarantor (or any other obligor upon the Securities), the Trustee shall be
subject to the provisions of the Trust Indenture Act regarding the collection of
claims against the Company or such Guarantor (or any such other obligor).
SECTION 6.14. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents which shall
be authorized to act on behalf of the Trustee to authenticate Securities issued
upon original issue and upon exchange, registration of transfer or partial
redemption or partial purchase or pursuant to Section 3.6, and Securities so
authenticated shall be entitled to the benefits of this Indenture and shall be
valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. Wherever reference is made in this Indenture to the authentication
and delivery of Securities by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company and shall at all
times be a corporation organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia, authorized
under such laws to act as Authenticating Agent, having a combined capital and
surplus of not less than $100,000,000 and subject to supervision or examination
by Federal or State authority. If such Authenticating Agent publishes reports
of condition at least annually, pursuant to law or to the requirements of said
70
<PAGE>
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Authenticating Agent shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to
be eligible in accordance with the provisions of this Section, such
Authenticating Agent shall resign immediately in the manner and with the effect
specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate agency or corporate trust business of an Authenticating Agent,
shall continue to be an Authenticating Agent, provided such corporation shall be
otherwise eligible under this Section, without the execution or filing of any
paper or any further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice
of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 1.6, to all Holders as their names
and addresses appear in the Security Register. Any successor Authenticating
Agent upon acceptance of its appointment hereunder shall become vested with all
the rights, powers and duties of its predecessor hereunder, with like effect as
if originally named as an Authenticating Agent. No successor Authenticating
Agent shall be appointed unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.
If an appointment is made pursuant to this Section, the Securities may
have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternative certificate of authentication in the following
form:
This is one of the Securities described in the within-mentioned
Indenture.
71
<PAGE>
Dated:
State Street Bank and Trust Company,
As Trustee
By:
----------------------------------------
As Authenticating Agent
By:
----------------------------------------
Authorized Signatory
ARTICLE VII
Holders' Lists and Reports by Trustee and Company
SECTION 7.1. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee (a)
semiannually, not more than 10 days after each Regular Record Date, a list, in
such form as the Trustee may reasonably require, of the names and addresses of
the Holders as of such Regular Record Date; and (b) at such times as the Trustee
may reasonably request in writing, within 30 days after the receipt by the
Company of any such request, a list of similar form and content to that in
subsection (a) hereof as of a date not more than 15 days prior to the time such
list is furnished; excluding from any such list names and addresses received by
the Trustee in its capacity as Security Registrar.
SECTION 7.2. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 7.1 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar, if so acting.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
72
<PAGE>
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company, any Guarantor
nor the Trustee nor any agent of either of them shall be held accountable by
reason of any disclosure of information as to the names and addresses of Holders
made pursuant to the Trust Indenture Act.
SECTION 7.3. Reports by Trustee.
(a) Within 60 days after May 15 of each year commencing May 15, 1999,
the Trustee shall transmit to Holders such reports concerning the Trustee and
its actions under this Indenture to the extent required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant thereto.
(b) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Trustee with each stock exchange upon which the
Securities are listed, with the Commission and with the Company. The Company
will promptly notify the Trustee when the Securities are listed on any stock
exchange.
SECTION 7.4. Reports by Company.
The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to the Trust Indenture Act; provided
that any such information, documents or reports required to be filed with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act shall be filed
with the Trustee within 15 days after the same is so required to be filed with
the Commission.
ARTICLE VIII
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 8.1. Company or Guarantor May Consolidate, Etc. Only on Certain Terms.
(A) Neither the Company nor, except as otherwise provided by Section
13.5, any Guarantor will, in any transaction or series of transactions, merge or
consolidate with or into, or sell, assign, convey, transfer, lease or otherwise
dispose of all or substantially all of its properties and assets
73
<PAGE>
as an entirety to, any Person or Persons, and (B) the Company will not permit
any of its Restricted Subsidiaries to enter into any such transaction or series
of transactions if such transaction or series of transactions, in the aggregate,
would result in a sale, assignment, conveyance, transfer, lease or other
disposition of all or substantially all of the properties and assets of the
Company or the Company and its Restricted Subsidiaries, taken as a whole, to any
other Person or Persons, unless, in each of cases (A) and (B), at the time and
after giving effect thereto by:
(1) either:
(x) if the transaction or series of transactions is a merger or
consolidation, the Company, the Guarantor or such Restricted
Subsidiary, as the case may be, shall be the surviving Person of
such merger or consolidation, or
(y) the Person formed by such consolidation or into which the
Company, such Guarantor or such Restricted Subsidiary, as the
case may be, is merged or to which the properties and assets of
the Company, such Guarantor or such Restricted Subsidiary, as the
case may be, substantially as an entirety, are transferred (any
such surviving Person or transferee Person being the "Surviving
Entity") shall be a corporation organized and existing under the
laws of the United States of America, any state thereof or the
District of Columbia and shall expressly assume by a supplemental
indenture executed and delivered to the Trustee, in form
satisfactory to the Trustee, (i) in the case of the Company, all
the obligations of the Company under the Securities, this
Indenture and the Registration Rights Agreement and (ii) in the
case of a Guarantor, all the obligations of such Guarantor under
its Guaranty, this Indenture and the Registration Rights
Agreement, and in each case, this Indenture, the Securities, the
Guarantees and the Registration Rights Agreement shall remain in
full force and effect;
(2) immediately after giving effect to such transaction or series
of transactions on a pro forma basis (including, without limitation, any
Indebtedness incurred or anticipated to be incurred in connection with or
in respect of such transaction or series of transactions), no Default or
Event of Default shall have occurred and be continuing; and
74
<PAGE>
(3) except in the case of any merger of the Company with any
Wholly-Owned Restricted Subsidiary of the Company or any merger of
Guarantors, in each case with no other Person, the Company or the Surviving
Entity, as the case may be, after giving effect to such transaction or
series of transactions on a pro forma basis (including, without limitation,
any Indebtedness incurred or anticipated to be incurred in connection with
or in respect of such transaction or series of transactions), could incur
$1.00 of additional Indebtedness (other than Permitted Indebtedness) under
Section 10.8 (assuming a market rate of interest with respect to such
additional Indebtedness).
In connection with any consolidation, merger, transfer, lease,
assignment or other disposition contemplated by the foregoing provisions of this
Section 8.1, the Company shall deliver, or cause to be delivered, to the
Trustee, in form and substance reasonably satisfactory to the Trustee, an
Officer's Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, transfer, lease, assignment, or other disposition and the
supplemental indenture in respect thereof (required under clause (1)(y) of this
Section 8.1) comply with the requirements of this Indenture. Each such
Officer's Certificate shall set forth the manner of determination of the ability
to incur Indebtedness in accordance with clause (3) of this Section 8.1.
SECTION 8.2. Successor Substituted.
Except as otherwise provided by Section 13.5, upon any consolidation
or merger, or any sale, assignment, conveyance, transfer, lease or disposition
of all or substantially all of the properties and assets of the Company or a
Guarantor in accordance with Section 8.1, the successor Person formed by such
consolidation or into which the Company, such Guarantor or a Restricted
Subsidiary, as the case may be, is merged or the successor Person to which such
sale, assignment, conveyance, transfer, lease or disposition is made shall
succeed to, and be substituted for, and may exercise every right and power of
the Company or Guarantor under the Securities, such Guarantor's Guaranty, this
Indenture and/or the Registration Rights Agreement, as applicable, with the same
effect as if such successor had been named as the Company or Guarantor in the
Securities, such Guaranty, this Indenture and/or in the Registration Rights
Agreement, as the case may be, and, except in the case of a lease, the Company,
the Guarantor or such Restricted Subsidiary, as the case may be, shall be
automatically and unconditionally released and discharged from its obligations
thereunder.
75
<PAGE>
For all purposes of this Indenture and the Securities (including the
provisions of this Article VIII and Sections 10.8, 10.9 and 10.12), Subsidiaries
of any Surviving Entity shall, upon consummation of such transaction or series
of related transactions, become Restricted Subsidiaries unless and until
designated Unrestricted Subsidiaries pursuant to and in accordance with Section
10.18 and all Indebtedness, and all Liens on property or assets, of the Company,
any Guarantor and the Restricted Subsidiaries in existence immediately prior to
such transaction or series of related transactions will be deemed to have been
incurred upon consummation of such transaction or series of related
transactions.
ARTICLE IX
Amendments; Waivers; Supplemental Indentures
SECTION 9.1. Amendments, Waivers and Supplemental Indentures Without Consent of
Holders.
Without the consent of any Holders, the Company and each Guarantor,
when authorized by Board Resolutions, and the Trustee, at any time and from time
to time, may together amend, waive or supplement this Indenture, for any of the
following purposes:
(i) to evidence the succession of another Person to the Company or
a Guarantor and the assumption by any such successor of the covenants of
the Company or such Guarantor herein and in the Securities or such
Guarantor's Guaranty and to evidence the assumption of obligations under
this Indenture and a Guaranty pursuant to Section 10.17; or
(ii) to add to the covenants of the Company or a Guarantor for the
benefit of the Holders, or to surrender any right or power herein conferred
upon the Company or a Guarantor; or
(iii) to secure the Securities pursuant to the requirements of
Section 10.12 or otherwise; or
(iv) to comply with any requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust
Indenture Act; or
(v) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent
76
<PAGE>
with any other provision herein, or to make any other provisions with
respect to matters or questions arising under this Indenture which shall
not be inconsistent with the provisions of this Indenture,
provided that (a) such amendment, waiver or supplement does not adversely affect
the rights of any Holder of Securities and (b) the Company shall have delivered
to the Trustee an Opinion of Counsel stating that such action pursuant to
clauses (i), (ii), (iii), (iv) or (v) above is permitted by this Indenture. The
Trustee shall not be obligated to enter into any such amendment or supplemental
indenture that adversely affects its own rights, duties or immunities under this
Indenture or otherwise.
SECTION 9.2. Modifications, Amendments and Supplemental Indentures with Consent
of Holders.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities, by Act of said Holders delivered
to the Company and the Trustee, the Company and the Guarantors, when authorized
by Board Resolutions, and the Trustee may together modify, amend or supplement
this Indenture for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Indenture or of modifying in
any manner the rights of the Holders under this Indenture; provided, however,
that no such modification, amendment or supplemental indenture shall, without
the consent of the Holder of each Outstanding Security affected thereby,
(i) reduce the principal amount of, change the fixed maturity of or
alter the redemption provisions of, the Securities,
(ii) change the currency in which any Securities or any premium or
the interest thereon is payable,
(iii) reduce the percentage in principal amount of Outstanding
Securities that must consent to an amendment, supplement or waiver or
consent to take any action under the Indenture or the Securities or any
Guaranty,
(iv) impair the right to institute suit for the enforcement of any
payment on or with respect to the Securities or any Guaranty,
(v) waive a default in payment with respect to the Securities or
any Guaranty,
77
<PAGE>
(vi) amend, change or modify the obligation of the Company to make
and consummate a Change of Control Offer after the occurrence of a Change
of Control or make and consummate an Asset Sale Offer with respect to any
Asset Sale that has been consummated or modify any of the provisions or
definitions with respect thereto,
(vii) reduce or change the rate or time for payment of interest on
the Securities, or
(viii) modify or change any provision of this Indenture affecting
the subordination or ranking of the Security or any Guarantee in a manner
which adversely affects the holders of Securities.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed amendment or supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
The Trustee shall join with the Company and each Guarantor in the
execution of such amended or supplemental indenture unless such amended or
supplemental indenture affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise, in which case the Trustee may in its
discretion but shall not be obligated to enter into such amendment or
supplemental indenture.
In addition, no modification, amendment or supplement to the
provisions of Article XIV which is adverse to the interests of the lenders under
the Credit Facility shall be made without the consent of the representative of
such lenders.
SECTION 9.3. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 6.1) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise;
provided that the Trustee shall enter into and execute all other supplemental
indentures which satisfy all applicable conditions under this Article IX.
78
<PAGE>
SECTION 9.4. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 9.5. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 9.6. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture, provided that any failure by the
Trustee to make such notation shall not affect the validity of the matter
provided for in such supplemental indenture or any Security or Guarantee
hereunder. If the Company shall so determine, new Securities or Guarantees so
modified as to conform, in the opinion of the Trustee, the Guarantors and the
Company, to any such supplemental indenture may be prepared and executed by the
Company or Guarantor and authenticated and delivered by the Trustee in exchange
for Outstanding Securities.
SECTION 9.7. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
covenant or condition set forth in Section 8.1, provided pursuant to Section
9.1(2) and set forth in Sections 10.4 to 10.12 and 10.15 to 10.18, inclusive, if
before the time for such compliance the Holders of at least a majority in
principal amount of the Outstanding Securities shall, by Act of such Holders,
either waive such compliance in such instance or generally waive compliance with
such covenant or condition, but no such waiver shall extend to or affect such
covenant or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the duties of
the Trustee in respect of any such covenant or condition shall remain in full
force and effect; provided, however, with respect to an Offer as to which an
Offer to Purchase has been mailed, no such waiver may be made or
79
<PAGE>
shall be effective against any Holder tendering Securities pursuant to such
Offer, and the Company may not omit to comply with the terms of such Offer as to
such Holder.
SECTION 9.8. No Liability for Certain Persons.
No present or future incorporator, director, officer, employee, or
stockholder of the Company, nor any present or future incorporator, director,
officer or employees of any Guarantor, as such, shall have any liability
directly or indirectly for any obligations of the Company or any Guarantor under
the Securities, the Guarantees or this Indenture based on or by reason of such
obligations or their creation whether by virtue of any constitution, statute,
rule or law, or by the enforcement of any assessment or penalty or otherwise, it
being expressly agreed and understood that this Indenture, the Securities,
Guarantees and obligations are solely corporate obligations. Each Holder by
accepting a Security waives and releases all such liability. The foregoing
waiver and release is an integral part of the consideration for the issuance of
the Securities and the Guarantees.
ARTICLE X
Covenants
SECTION 10.1. Payment of Principal, Premium and Interest.
The Company shall duly and punctually pay the principal of (and
premium, if any) and interest on the Securities in accordance with the terms of
the Securities and this Indenture.
SECTION 10.2. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, The City of
New York, an office or agency where Securities may be presented or surrendered
for payment, where Securities may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company or any Guarantor
in respect of the Securities, the Guarantees and this Indenture may be served.
The 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 Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive all
80
<PAGE>
such presentations, surrenders, notices and demands. In the event any such
notice or demands are so made or served on the Trustee, the Trustee shall
promptly forward copies thereof to the Company.
The Company may also from time to time designate one or more other
offices or agencies (in or outside the Borough of Manhattan, The City of New
York) where the Securities may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided, however,
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.
SECTION 10.3. Money for Security Payments to be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it will,
on or before each due date of the principal of (and premium, if any) or interest
on any of the Securities, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal (and premium, if
any) or interest so becoming due until such sums shall be paid to such Persons
or otherwise disposed of as herein provided and will promptly notify the Trustee
of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents, the Company
will, prior to 11:00 a.m. New York City time on each due date of the principal
of (and premium, if any) or interest on any Securities, deposit with a Paying
Agent a sum sufficient to pay the principal (and premium, if any) or interest so
becoming due, such sum to be held as provided by the Trust Indenture Act, and
(unless such Paying Agent is the Trustee) the Company will promptly notify the
Trustee of its action or failure so to act.
The Company shall cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will: (i) comply with the provisions of the Trust Indenture
Act applicable to it as Paying Agent and (ii) during the continuance of any
default by the Company (or any other obligor upon the Securities) in the making
of any payment in respect of the Securities, upon the written request of the
Trustee, forthwith pay to the Trustee all sums held in trust by such Paying
Agent as such.
81
<PAGE>
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Trustee upon the same
trusts as those upon which such sums were held by such Paying Agent; and, upon
such payment by any Paying Agent (other than the Company) to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (and premium, if
any) or interest on any Security and remaining unclaimed for two years after
such principal (and premium, if any) or interest has become due and payable
shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in The City of New York, notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such publication, any unclaimed balance of such money then
remaining will be repaid to the Company.
SECTION 10.4. Existence; Activities.
Subject to Article VIII, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect its existence,
rights (charter and statutory) and material franchises; provided, however, that
the Company shall not be required to preserve any such right or franchise if the
Board of Directors of the Company in good faith shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and that the loss thereof is not disadvantageous in any material
respect to the Holders.
SECTION 10.5. Maintenance of Properties.
The Company shall cause all material properties used in the conduct of
its business or the business of any Restricted Subsidiary to be maintained and
kept in good condition, repair and working order (regular wear and tear
82
<PAGE>
excepted), 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, however, that nothing in this Section shall
prevent the Company from disposing of any asset (subject to compliance with
Section 10.14) or from discontinuing the operation or maintenance of any of such
material properties if such discontinuance is, as determined by the Company in
good faith, desirable in the conduct of its business or the business of any
Restricted Subsidiary and not disadvantageous in any material respect to the
Holders.
SECTION 10.6. Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon the Company or any of its Restricted
Subsidiaries or upon the income, profits or property of the Company or any of
its Restricted Subsidiaries, and (2) all lawful material claims for labor,
materials and supplies which, if unpaid, might by law become a lien upon
property of the Company or any of its Restricted Subsidiaries; provided,
however, that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings.
SECTION 10.7. Maintenance of Insurance.
The Company shall, and shall cause its Restricted Subsidiaries to,
keep at all times all of their material properties which are of an insurable
nature insured against loss or damage with insurers believed by the Company to
be responsible to the extent that property of similar character is usually so
insured by corporations similarly situated and owning like properties in
accordance with good business practice. The Company shall, and shall cause its
Restricted Subsidiaries to, use the proceeds from any such insurance policy to
repair, replace or otherwise restore all material properties to which such
proceeds relate, provided, however, that the Company shall not be required to
repair, replace or otherwise restore any such material property if the Company
in good faith determines that such inaction is desirable in the conduct of the
business of the Company or any Restricted Subsidiary and not disadvantageous in
any material respect to the Holders.
83
<PAGE>
SECTION 10.8. Limitation on Indebtedness.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or in any manner become directly or indirectly liable, contingently or otherwise
(in each case, to "incur"), for the payment of any Indebtedness (including any
Acquired Indebtedness) other than Permitted Indebtedness; provided, however,
that (i) the Company and any Guarantor will be permitted to incur Indebtedness
(including Acquired Indebtedness), and (ii) a Restricted Subsidiary will be
permitted to incur Acquired Indebtedness, if in each case, after giving pro
forma effect to (1) the incurrence of such Indebtedness and (if applicable) the
application of the net proceeds therefrom, including to refinance other
Indebtedness, as if such Indebtedness were incurred at the beginning of the four
full fiscal quarters immediately preceding such incurrence, taken as one period;
(2) the incurrence, repayment or retirement of any other Indebtedness or any
obligations giving rise to Consolidated Rental Payments by the Company and its
Restricted Subsidiaries since the first day of such four-quarter period as if
such Indebtedness or obligations were incurred, repaid or retired at the
beginning of such four-quarter period (except that, in making such computation,
the amount of Indebtedness under any revolving credit facility shall be computed
based upon the average daily balance of such Indebtedness during such four-
quarter period); and (3) any Asset Sale or Asset Acquisition occurring since the
first day of such four-quarter period (including to the date of calculation) as
if such acquisition or disposition occurred at the beginning of such four-
quarter period, the Consolidated Fixed Charge Coverage Ratio of the Company is
at least 2:1.
SECTION 10.9. Limitation on Restricted Payments.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly:
(a) declare or pay any dividend or make any other distribution or
payment on or in respect of Capital Stock of the Company or any of its
Restricted Subsidiaries or make any payment to the direct or indirect
holders (in their capacities as such) of Capital Stock of the Company or
any of its Restricted Subsidiaries (other than dividends or distributions
payable solely in Capital Stock of the Company (other than Redeemable
Capital Stock) or in options, warrants or other rights to purchase Capital
Stock of the Company (other than Redeemable Capital Stock)) (other than the
declaration or payment of dividends or other distributions to the extent
declared or paid to the Company or any Restricted Subsidiary);
84
<PAGE>
(b) purchase, redeem, or otherwise acquire or retire for value any
Capital Stock of the Company or any of its Restricted Subsidiaries or any
options, warrants, or other rights to purchase any such Capital Stock
(other than any securities owned by the Company or a Restricted
Subsidiary);
(c) make any principal payment on, or purchase, defease, repurchase,
redeem or otherwise acquire or retire for value, prior to any scheduled
maturity, scheduled repayment, scheduled sinking fund payment or other
Stated Maturity, any Subordinated Indebtedness outstanding on the Issue
Date (other than any such Subordinated Indebtedness owed by the Company or
a Restricted Subsidiary); or
(d) make any Investment (other than any Permitted Investment) in any
Person,
(such payments or Investments described in the preceding clauses (a), (b),
(c) and (d) are collectively referred to as "Restricted Payments"), unless,
after giving effect to the proposed Restricted Payment (the amount of any
such Restricted Payment, if other than cash, shall be the Fair Market Value
of the asset(s) proposed to be transferred by the Company or such
Restricted Subsidiary, as the case may be, pursuant to such Restricted
Payment), (A) no Default or Event of Default shall have occurred and be
continuing, (B) immediately after giving effect to such Restricted Payment,
the Company would be able to incur $1.00 of additional Indebtedness (other
than Permitted Indebtedness) and (C) the aggregate amount of all Restricted
Payments declared or made from and after the Issue Date would not exceed
the sum of:
(1) 50% of the aggregate Consolidated Net Income of the Company
accrued on a cumulative basis during the period beginning on the Issue Date
and ending on the last day of the fiscal quarter of the Company ending
immediately prior to the date of such proposed Restricted Payment (or, if
such aggregate cumulative Consolidated Net Income of the Company for such
period shall be a loss, minus 100% of such loss);
(2) the aggregate net cash proceeds received by the Company as
capital contributions to the Company after the Issue Date and which
constitute shareholders' equity of the Company in accordance with GAAP;
(3) the aggregate net cash proceeds received by the Company from
the issuance or sale of Capital Stock (excluding Redeemable Capital Stock)
of the Company to any
85
<PAGE>
Person (other than to a Subsidiary of the Company) after the Issue Date;
(4) the aggregate net cash proceeds received by the Company from
any Person (other than a Subsidiary of the Company) upon the exercise of
any options, warrants or rights to purchase shares of Capital Stock (other
than Redeemable Capital Stock) of the Company after the Issue Date;
(5) the aggregate net cash proceeds received after the Issue Date
by the Company from any Person (other than a Subsidiary of the Company) for
debt securities that have been converted into or exchanged for Capital
Stock of the Company (other than Redeemable Capital Stock) (to the extent
such debt securities were originally sold for cash) plus the aggregate
amount of cash received by the Company (other than from a Subsidiary of the
Company) in connection with such conversion or exchange;
(6) in the case of the disposition or repayment of any Investment
constituting a Restricted Payment after the Issue Date, an amount equal to
the lesser of the return of capital with respect to such Investment and the
initial amount of such Investment, in either case, less the cost of the
disposition of such Investment; and
(7) so long as the Designation (as defined in Section 10.18)
thereof was treated as a Restricted Payment made after the Issue Date, with
respect to any Unrestricted Subsidiary that has been redesignated as a
Restricted Subsidiary after the Issue Date in accordance with Section 10.18
below, the Fair Market Value of the Company's interest in such Subsidiary
(at the time of such redesignation); provided that such amount shall not in
any case exceed the Designation Amount (as defined in Section 10.18) with
respect to such Restricted Subsidiary upon its Designation,
minus:
the Designation Amount (measured as of the date of Designation) with
respect to any Restricted Subsidiary of the Company which has been
designated as an Unrestricted Subsidiary after the Issue Date in accordance
with Section 10.18 below.
For purposes of the preceding clause (C)(4), the value of the
aggregate net proceeds received by the Company upon the issuance of Capital
Stock upon the exercise of options, warrants or rights will be the net cash
proceeds
86
<PAGE>
received upon the issuance of such options, warrants or rights plus the
incremental amount received by the Company upon the exercise thereof.
None of the foregoing provisions shall prohibit, so long, in the case
of clauses (ii), (iii), (vi) and (vii) below, as there is no Default or Event of
Default continuing, (i) the payment of any dividend or distribution within 60
days after the date of its declaration, if at the date of declaration such
payment would be permitted by the first paragraph of this covenant; (ii) the
redemption, repurchase or other acquisition or retirement of any shares of any
class of Capital Stock of the Company in exchange for, or out of the net cash
proceeds of, a substantially concurrent issue and sale of other shares of
Capital Stock of the Company (other than Redeemable Capital Stock) to any Person
(other than to a Subsidiary of the Company); provided, however, that such net
cash proceeds are excluded from clause (C) of the first paragraph of this
covenant; (iii) any redemption, repurchase or other acquisition or retirement of
Subordinated Indebtedness in exchange for, or out of the net cash proceeds of, a
substantially concurrent issue and sale of (1) Capital Stock (other than
Redeemable Capital Stock) of the Company to any Person (other than to a
Subsidiary of the Company); provided, however, that any such net cash proceeds
are excluded from clause (C) of the first paragraph of this covenant; or (2)
Indebtedness of the Company so long as such Indebtedness is Subordinated
Indebtedness which (w) has no scheduled principal payment prior to the 91st day
after the Maturity Date, (x) has an Average Life to Stated Maturity greater than
the remaining Average Life to Stated Maturity of the Securities and (y) is
subordinated to the Securities in the same manner and to the same extent as the
Subordinated Indebtedness so purchased, exchanged, redeemed, acquired or
retired; (iv) Investments constituting Restricted Payments made as a result of
the receipt of non-cash consideration from any Asset Sale or other sale of
assets or property made pursuant to and in compliance with this Indenture; (v)
payments to purchase Capital Stock of the Company from management or employees
of the Company or any of its Subsidiaries, or their authorized representatives,
upon the death, disability or termination of employment of such employees, in
aggregate amounts under this clause (v) not to exceed $1,000,000 in any fiscal
year of the Company; (vi) the payment of any dividend or distribution by a
Restricted Subsidiary to the holders of its Capital Stock on a pro rata basis
and (vii) payments to purchase Capital Stock of the Company, in the aggregate
amount under this clause (vii) not to exceed $5,000,000 from the Issue Date.
Any payments made pursuant to clauses (i) or (v) of this paragraph shall be
taken into account in calculating the amount of Restricted Payments made from
and after the Issue Date.
87
<PAGE>
SECTION 10.10. Limitation on Issuance of Preferred Stock of Restricted
Subsidiaries.
The Company shall not permit any Restricted Subsidiary to issue any
Preferred Stock other than Preferred Stock issued to the Company or a Wholly-
Owned Restricted Subsidiary. The Company shall not sell, transfer or otherwise
dispose of Preferred Stock issued by a Restricted Subsidiary of the Company or
permit a Restricted Subsidiary to sell, transfer or otherwise dispose of
Preferred Stock issued by a Restricted Subsidiary, other than to the Company or
a Wholly-Owned Restricted Subsidiary. Notwithstanding the foregoing, nothing in
this covenant shall prohibit Preferred Stock (other than Redeemable Capital
Stock) issued by a Person prior to the time (A) such Person becomes a Restricted
Subsidiary of the Company, (B) such Person merges with or into a Restricted
Subsidiary of the Company or (C) a Restricted Subsidiary of the Company merges
with or into such Person; provided, that such Preferred Stock was not issued or
incurred by such Person in anticipation of a transaction contemplated by
subclause (A), (B), or (C) above.
SECTION 10.11. Limitation on Transactions with Affiliates.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into any transaction or series of
related transactions (including, without limitation, the sale, transfer,
disposition, purchase, exchange or lease of assets, property or services) with,
or for the benefit of, any of its Affiliates (other than Restricted
Subsidiaries), except (a) on terms that are no less favorable to the Company or
such Restricted Subsidiary, as the case may be, than those which could have been
obtained at the time in a comparable transaction or series of related
transactions from Persons who are not Affiliates of the Company, (b) with
respect to a transaction or series of related transactions involving aggregate
payments or value equal to or greater than $2,000,000 the Company shall have
delivered an Officer's Certificate to the Trustee certifying that such
transaction or transactions comply with the preceding clause (a), and (c) with
respect to a transaction or series of related transactions involving aggregate
payments or value equal to or greater than $5,000,000, such transaction or
transactions shall have been approved by a majority of the disinterested members
of the Board of Directors of the Company.
Notwithstanding the foregoing, the restrictions set forth in this
covenant shall not apply to (i) transactions with or among the Company and the
Restricted Subsidiaries, (ii) customary
88
<PAGE>
directors' fees, indemnification and similar arrangements, consulting fees,
employee salaries, bonuses or employment agreements, compensation or employee
benefit arrangements and incentive arrangements with any officer, director or
employee of the Company or any Restricted Subsidiary entered into in the
ordinary course of business, (iii) any dividends made in compliance with Section
10.9, (iv) loans and advances to officers, directors and employees of the
Company or any Restricted Subsidiary made in the ordinary course of business,
(v) the incurrence of intercompany Indebtedness which constitutes Permitted
Indebtedness and (vi) transactions pursuant to agreements in effect on the Issue
Date.
SECTION 10.12. Limitation on Liens.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, create, incur, assume or suffer to exist any Liens of any kind
securing Indebtedness upon any of its property or assets, or any proceeds
therefrom, unless the Securities are equally and ratably secured (except that
Liens securing Subordinated Indebtedness shall be expressly subordinate to Liens
securing the Securities to the same extent such Subordinated Indebtedness is
subordinate to the Securities), except for (a) Liens securing Senior
Indebtedness and Guarantor Senior Indebtedness; (b) Liens securing the
Securities; (c) Liens securing Indebtedness which is incurred to refinance
Indebtedness which has been secured by a Lien (other than a Lien in favor of the
Company or a Restricted Subsidiary) permitted under the Indenture and which has
been incurred in accordance with the provisions of this Indenture; provided,
however, that such Liens do not extend to or cover any property or assets of the
Company or any its Restricted Subsidiaries not securing the Indebtedness so
refinanced; and (d) Permitted Liens.
SECTION 10.13. Change of Control.
On or before the 30th day after the date of the occurrence of a Change
of Control (the "Change of Control Date"), the Company shall make an Offer to
Purchase (a "Change of Control Offer") on a Business Day not more than 60 nor
less than 30 days following the occurrence of the Change of Control, (the
"Change of Control Purchase Date") all of the then Outstanding Securities
tendered at a purchase price (the "Change of Control Purchase Price") equal to
101% of the principal amount thereof plus accrued and unpaid interest, if any,
thereon to the Change of Control Purchase Date. The Company shall be required
to purchase all Securities tendered into the Change of Control Offer and not
withdrawn.
89
<PAGE>
On the Change of Control Purchase Date, the Company shall (i) accept
for payment Securities or portions thereof (not less than $1,000 principal
amount and integral multiples thereof) tendered pursuant to the Change of
Control Offer, (ii) deposit with the Paying Agent money, in immediately
available funds, sufficient to pay the purchase price of all Securities or
portions thereof so tendered and accepted and (iii) deliver to the Trustee the
Securities so accepted together with an Officer's Certificate setting forth the
Securities or portions thereof tendered to and accepted for payment by the
Company. The Paying Agent shall promptly mail or deliver to the Holders of
Securities so accepted payment in an amount equal to the purchase price, and the
Trustee shall promptly authenticate and make available for delivery to such
Holders a new Security of like tenor equal in principal amount to any
unpurchased portion of the Security surrendered. Any Securities not so accepted
shall be promptly mailed or delivered by the Company to the Holder thereof. The
Company shall publicly announce the results of the Change of Control Offer not
later than the third Business Day following the Change of Control Purchase Date.
The Company shall not be required to make a Change of Control offer
upon a Change of Control if a third party makes the Change of Control Offer in
the manner, at the times and otherwise in compliance with the requirements
applicable to a Change of Control Offer made by the Company and purchases all
Securities validly tendered and not withdrawn under such Change of Control
Offer.
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 or
regulations are applicable, in the event that a Change of Control occurs and the
Company is required to purchase Securities as described above.
SECTION 10.14. Disposition of Proceeds of Asset Sales.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, make any Asset Sale unless (a) the Company or such Restricted
Subsidiary, as the case may be, receives consideration at the time of such Asset
Sale at least equal to the Fair Market Value of the shares or assets sold or
otherwise disposed of and (b) at least 75% of such consideration consists of
cash or Cash Equivalents or Replacement Assets; provided, however, that (i) the
amount of any Indebtedness (as shown on the most recent balance sheet of the
Company or such Restricted Subsidiary) of the Company or such Restricted
Subsidiary that is assumed by the transferee of such assets and (ii) any
securities, notes or other obligations received by the Company or such
Restricted Subsidiary from such
90
<PAGE>
transferee that are converted within 30 days into cash or Cash Equivalents (to
the extent of the cash or Cash Equivalents received) shall be deemed to be cash
for the purposes of this provision; and provided, further, that the 75%
limitation referred to in clause (b) shall not apply to any Asset Sale in which
the cash or Cash Equivalent portion of the consideration received therefrom
determined in accordance with the foregoing provision is equal to or greater
than what the after tax proceeds would have been had such Asset Sale complied
with the aforementioned 75% limitation. To the extent that the Net Cash
Proceeds, or portions thereof, of any Asset Sale are not required to be applied
to repay, and permanently reduce the commitments under Senior Indebtedness,
Guarantor Senior Indebtedness or Indebtedness of a Foreign Restricted Subsidiary
which is not a Guarantor, the Company or such Restricted Subsidiary, as the case
may be, may apply the Net Cash Proceeds, or portions thereof, from such Asset
Sale, within 360 days of such Asset Sale, to an investment in properties and
assets that replace the properties and assets that were the subject of such
Asset Sale or in properties and assets that (as determined in good faith by the
Board of Directors of the Company or the Restricted Subsidiary, as the case may
be) are used or useful in the business of the Company and its Restricted
Subsidiaries conducted at such time or in businesses reasonably related thereto
or in Capital Stock of a Person, the principal portion of whose assets consist
of such property or assets ("Replacement Assets"). Any Net Cash Proceeds or
portion thereof from any Asset Sale that are neither used to repay, and
permanently reduce the commitments under, Senior Indebtedness, Guarantor Senior
Indebtedness or Indebtedness of a Foreign Restricted Subsidiary which is not a
Guarantor, nor invested in Replacement Assets within such 360-day period
constitute "Excess Proceeds" subject to disposition as provided below.
When the aggregate amount of Excess Proceeds equals or exceeds
$10,000,000, the Company shall make an offer to purchase (an "Asset Sale
Offer"), from all holders of the Securities, an aggregate principal amount of
Securities equal to such Excess Proceeds, at a price in cash equal to 100% of
the outstanding principal amount thereof plus accrued and unpaid interest, if
any, thereon to the Purchase Date (the "Asset Sale Offer Price"). To the extent
that the aggregate principal amount of Securities tendered pursuant to an Asset
Sale Offer is less than the Excess Proceeds, the Company may use such deficiency
for general corporate purposes. The Securities shall be purchased by the
Company, at the option of the Holder thereof, in whole or in part in integral
multiples of $1,000, on a date that is not earlier than 30 days and not later
than 60 days from the date the notice is given to Holders, or such later date as
may be necessary for the Company to comply with the requirements under the
Exchange Act. If Securities purchasable
91
<PAGE>
at an aggregate Purchase Price in excess of the Purchase Amount are tendered and
not withdrawn pursuant to the Asset Sale Offer to Purchase, the Company shall
purchase Securities on a pro rata basis, based on the Purchase Price therefor,
or such other method as the Trustee shall deem fair and appropriate (subject in
each case to applicable rules of the Depository and any securities exchange upon
which the Securities may then be listed), with such adjustments as may be deemed
appropriate so that only Securities in denominations of $1,000 principal face
amount or integral multiples thereof shall be purchased. Upon completion of such
Asset Sale Offer, the amount of Excess Proceeds shall be reset to zero.
On the Asset Sale Offer Purchase Date, the Company shall (i) accept
for payment (subject to proration as described in the Offer to Purchase)
Securities or portions thereof tendered pursuant to the Asset Sale Offer, (ii)
deposit with the Paying Agent money, in immediately available funds, sufficient
to pay the purchase price of all Securities or portions thereof so tendered and
accepted and (iii) deliver to the Trustee the Securities so accepted together
with an Officer's Certificate setting forth the Securities or portions thereof
tendered to and accepted for payment by the Company. The Paying Agent shall
promptly mail or deliver to the Holders of Securities so accepted payment in an
amount equal to the purchase price, and the Trustee shall promptly authenticate
and make available for delivery to such Holders a new Security of like tenor
equal in principal amount to any unpurchased portion of the Security
surrendered. Any Securities not so accepted shall be promptly mailed or
delivered by the Company to the Holder thereof. The Company shall publicly
announce the results of the Asset Sale Offer not later than the third Business
Day following the Asset Sale Offer Purchase Date.
Whenever the aggregate amount of Excess Proceeds received by the
Company and its Restricted Subsidiaries exceeds $10,000,000, such Excess
Proceeds shall, prior to the purchase of Securities, be set aside by the Company
or such Restricted Subsidiary, as the case may be, in a separate account pending
(i) deposit with the Paying Agent of the amount required to purchase the
Securities tendered in an Asset Sale Offer or (ii) delivery by the Company of
the Asset Sale Offer Price to the Holders of the Securities validly tendered and
not withdrawn pursuant to an Asset Sale Offer. Such Excess Proceeds may be
invested in Cash Equivalents, as directed by the Company, having a maturity date
which is not later than the earliest possible date for purchase of Securities
pursuant to the Asset Sale Offer. The Company will be entitled to any interest
or dividends accrued, earned or paid on such Cash Equivalents.
92
<PAGE>
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 an Asset Sale occurs and the
Company is required to purchase Securities as described above.
SECTION 10.15. Limitation on Dividends and Other Payment Restrictions Affecting
Restricted Subsidiaries.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction on the
ability of any Restricted Subsidiary of the Company to (a) pay dividends, in
cash or otherwise, or make any other distributions on or in respect of its
Capital Stock or any other interest or participation in, or measured by, its
profits, (b) pay any Indebtedness owed to the Company or any other Restricted
Subsidiary of the Company, (c) make loans or advances to the Company or any
other Restricted Subsidiary of the Company, (d) transfer any of its properties
or assets to the Company or any other Restricted Subsidiary of the Company or
(e) guarantee any Indebtedness of the Company or any other Restricted Subsidiary
of the Company, except for such encumbrances or restrictions existing under or
by reason of (i) applicable law or any applicable rule, regulation or order,
(ii) customary non-assignment provisions of any contract or any lease governing
a leasehold interest of the Company or any Restricted Subsidiary of the Company,
(iii) customary restrictions on transfers of property subject to a Lien
permitted under this Indenture, (iv) the New Credit Agreement as in effect on
the Issue Date, (v) any agreement or other instrument of a Person acquired by
the Company or any Restricted Subsidiary of the Company in existence at the time
of such acquisition (but not created in contemplation thereof), which
encumbrance or restriction is not applicable to any Person, or the properties or
assets of any Person, other than the Person, or the property or assets of the
Person, so acquired, (vi) an agreement entered into for the sale or disposition
of Capital Stock or assets of a Restricted Subsidiary or an agreement entered
into for the sale of specified assets (in either case, so long as such
encumbrance or restriction, by its terms, terminates on the earlier of the
termination of such agreement or the consummation of such agreement and so long
as such restriction applies only to the Capital Stock or assets to be sold),
(vii) any agreement in effect on the Issue Date, (viii) this Indenture and the
Guarantees, and (ix) any agreement that amends, extends, refinances, renews or
replaces any agreement described in the foregoing clauses; provided that the
terms and conditions of any such agreement are not materially less favorable to
the Holders of the Securities with respect to such
93
<PAGE>
dividend and payment restrictions than those under or pursuant to the agreement
amended, extended, refinanced, renewed or replaced.
SECTION 10.16. Limitation on Issuance of Subordinated Indebtedness.
The Company shall not, and shall not permit any Guarantor to, directly
or indirectly, incur any Indebtedness (including Acquired Indebtedness) that is
subordinate in right of payment to any Indebtedness of the Company or such
Guarantor and senior in right of payment to the Securities or the Guarantee of
such Guarantor, as the case may be; provided, however, that the Company and the
Guarantors may incur such Acquired Indebtedness in an aggregate amount no to
exceed $25,000,000 at any one time outstanding.
SECTION 10.17. Additional Subsidiary Guarantees.
If the Company or any of its Restricted Subsidiaries acquires, creates
or designates another Restricted Subsidiary organized under the laws of the
United States, or any possession or territory thereof, any state of the United
States or the District of Columbia, then such newly acquired, created or
designated Restricted Subsidiary shall, within 30 days after the date of its
acquisition, creation or designation, whichever is later, (i) execute and
deliver to the Trustee a supplemental indenture in form reasonably satisfactory
to the Trustee pursuant to which such Subsidiary shall unconditionally guarantee
all of the Company's obligations under the Securities and this Indenture on the
terms set forth in this Indenture and (ii) deliver to the Trustee an opinion of
counsel that such supplemental indenture has been duly authorized, executed and
delivered by such Subsidiary and constitutes a legal, valid, binding and
enforceable obligation of such Subsidiary, subject to normal exceptions,
provided that if such Subsidiary (a) is not incorporated or organized in the
State of New York or the State of Delaware and (b) is not a Significant
Subsidiary of the Company, such opinion of counsel may assume due authorization,
execution and delivery of such supplemental indenture. Thereafter, such
Subsidiary shall be a Guarantor for all purposes of this Indenture. The Company
at its option may also cause any other Restricted Subsidiary of the Company to
so become a Guarantor.
94
<PAGE>
SECTION 10.18. Limitation on Designations of Unrestricted Subsidiaries.
(a) The Company may designate after the Issue Date any Restricted
Subsidiary as an "Unrestricted Subsidiary" under this Indenture (a
"Designation") only if:
(i) no Default shall have occurred and be continuing at the time of
or after giving effect to such Designation;
(ii) the Company would be permitted to make an Investment (other
than a Permitted Investment, except a Permitted Investment covered by
clause (x) of the definition thereof) at the time of Designation (assuming
the effectiveness of such Designation) pursuant to the first paragraph of
Section 10.9 in an amount (the "Designation Amount") equal to the Fair
Market Value of the Company's interest in such Subsidiary on such date; and
(iii) the Company would be permitted under this Indenture to incur
$1.00 of additional Indebtedness (other than Permitted Indebtedness)
pursuant to Section 10.8 at the time of such Designation (assuming the
effectiveness of such Designation).
In the event of any such Designation, the Company shall be deemed to
have made an Investment constituting a Restricted Payment pursuant to Section
10.9 for all purposes of this Indenture in the Designation Amount.
The Company shall not, and shall not cause or permit any Restricted
Subsidiary to, at any time (x) provide credit support for or subject any of its
property or assets (other than the Capital Stock of any Unrestricted Subsidiary)
to the satisfaction of, any Indebtedness of any Unrestricted Subsidiary
(including any undertaking, agreement or instrument evidencing such
Indebtedness), (y) be directly or indirectly liable for any Indebtedness of any
Unrestricted Subsidiary or (z) be directly or indirectly liable for any
Indebtedness which provides that the holder thereof may (upon notice, lapse of
time or both) declare a default thereon or cause the payment thereof to be
accelerated or payable prior to its final scheduled maturity upon the occurrence
of a default with respect to any Indebtedness of any Unrestricted Subsidiary
(including any right to take enforcement action against such Unrestricted
Subsidiary), except any non-recourse guarantee given solely to support the
pledge by the Company or any Restricted Subsidiary of the Capital Stock of an
Unrestricted Subsidiary. All Subsidiaries of Unrestricted Subsidiaries shall
automatically be deemed to be Unrestricted Subsidiaries.
95
<PAGE>
(b) The Company may revoke any Designation of a Subsidiary as an
Unrestricted Subsidiary (a "Revocation") if:
(i) no Default shall have occurred and be continuing at the time of
and after giving effect to such Revocation, and
(ii) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately following such Revocation would, if incurred at
such time, have been permitted to be incurred for all purposes of this
Indenture.
(c) All Designations and Revocations must be evidenced by Officer's
Certificates of the Company delivered to the Trustee certifying compliance with
the foregoing provisions.
SECTION 10.19. Provision of Financial Information.
For so long as the Securities are outstanding, whether or not the
Company is subject to Section 13(a) or 15(d) of the Exchange Act, or any
successor provision thereto, the Company shall file with the Commission (if
permitted by Commission practice and applicable law and regulations) the annual
reports, quarterly reports and other documents which the Company would have been
required to file with the Commission pursuant to such Section 13(a) or 15(d) or
any successor provision thereto if the Company were so subject, such documents
to be filed with the Commission on or prior to the respective dates (the
"Required Filing Dates") by which the Company would have been required so to
file such documents if the Company were so subject. The Company shall also in
any event (a) within 15 days after each Required Filing Date (whether or not
permitted or required to be filed with the Commission) (i) transmit (or cause to
be transmitted) by mail to all Holders of Securities, as their names and
addresses appear in the Securities register, without cost to such Holders, and
(ii) file with the Trustee, copies of the annual reports, quarterly reports and
other documents which the Company would be required to file with the Commission
if the Securities were then registered under the Exchange Act. In addition, for
so long as any Securities remain outstanding, the Company will furnish to the
Holders of Securities and to securities analysts and prospective investors, upon
their request, the information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act, and, to any beneficial holder of
Securities, if not obtainable from the Commission, information of the type that
would be filed with the Commission pursuant to the foregoing provisions upon the
request of any such Holder.
96
<PAGE>
SECTION 10.20. Statement by Officers as to Default; Compliance Certificates.
(a) The Company shall deliver to the Trustee, prior to March 31 in
each year commencing March 31, 1999, an Officer's Certificate, stating whether
or not to the best knowledge of the signers thereof the Company is in default in
the performance and observance of any of the terms, provisions and conditions of
this Indenture (without regard to any period of grace or requirement of notice
provided hereunder), and if the Company shall be in default, specifying all such
defaults and the nature and status thereof of which he may have knowledge.
(b) The Company shall deliver to the Trustee, as soon as possible and
in any event within five business days after the Company becomes aware of the
occurrence of a Default or an Event of Default, an Officer's Certificate setting
forth the details of such Default or Event of Default, and the action which the
Company proposes to take with respect thereto.
ARTICLE XI
Redemption of Securities
SECTION 11.1. Right of Redemption.
The Securities may be redeemed at the election of the Company, in the
amounts, at the times, at the Redemption Prices (together with any applicable
accrued and unpaid interest to the Redemption Date), and subject to the
conditions specified in the form of Security and hereinafter set forth.
SECTION 11.2. Applicability of Article.
Redemption of Securities at the election of the Company, as permitted
by this Indenture and the provisions of the Securities, shall be made in
accordance with such provisions and this Article.
SECTION 11.3. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities pursuant to
Section 11.1 shall be evidenced by a Board Resolution. In the event of any
redemption at the election of the Company pursuant to Section 11.1, the Company
shall notify the Trustee, in case of a redemption of less than all the
Securities, at least 60 days, and in the case of a redemption of all the
Securities, at least 40 days, prior to the Redemption Date
97
<PAGE>
fixed by the Company (in each case, unless a shorter notice shall be
satisfactory to the Trustee) of such Redemption Date and of the principal amount
of Securities to be redeemed.
SECTION 11.4. Selection by Trustee of Securities To Be Redeemed.
In the event that less than all of the Securities are to be redeemed
at any time, selection of such Securities for redemption will be made by the
Trustee in compliance with the requirements of the principal national securities
exchange, if any, on which the Securities are listed or, if the Securities are
not then listed on a national securities exchange, on a pro rata basis, by lot
or by such method as the Trustee shall deem fair and appropriate (subject to the
rules of the Depository); provided, however, that Securities shall only be
redeemable in amounts of $1,000 or an integral multiple of $1,000.
The Trustee shall promptly notify the Company and each Security
Registrar in writing of the Securities selected for redemption and, in the case
of any Securities selected for partial redemption, the principal amount thereof
to be redeemed.
For all purposes of this Indenture and of the Securities, unless the
context otherwise requires, all provisions relating to the redemption of
Securities shall relate, in the case of any Securities redeemed or to be
redeemed only in part, to the portion of the principal amount of such Securities
which has been or is to be redeemed.
SECTION 11.5. Notice of Redemption.
Notice of redemption shall be given by first class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at his address appearing in
the Security Register.
All notices of redemption shall identify the Securities to be redeemed
(including, if used, CUSIP or CINS numbers) and shall state:
(i) the Redemption Date,
(ii) the Redemption Price,
(iii) if less than all the Outstanding Securities are to be
redeemed, the identification (and, in the case of partial redemption, the
principal amounts) of the particular Securities to be redeemed,
98
<PAGE>
(iv) that on the Redemption Date the Redemption Price will become
due and payable upon each such Security to be redeemed and that interest
thereon will cease to accrue on and after such Redemption Date,
(v) the place or places where such Securities are to be surrendered
for payment of the Redemption Price, and
(vi) if the redemption is being made pursuant to the provisions of
the Securities regarding a Public Equity Offering, a brief description of
the transaction or transactions giving rise to such redemption, the nature
and amount of Qualified Equity Interests sold by the Company thereto in
such transaction or transactions, the aggregate purchase price thereof and
the net cash proceeds therefrom available for such redemption, the date or
dates on which such transaction or transactions were completed and the
percentage of the aggregate principal amount of Outstanding Securities
being redeemed.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall be irrevocable.
SECTION 11.6. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 10.3) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) any applicable accrued interest on, all
the Securities which are to be redeemed on that date.
SECTION 11.7. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and any applicable
accrued interest) such Securities shall not bear interest. Upon surrender of
any such Security for redemption in accordance with said notice, such Security
shall be paid by the Company at the Redemption Price, together with any
applicable accrued and unpaid interest to the Redemption Date; provided,
however, that installments of interest whose Stated Maturity is on or prior to
the Redemption Date shall be payable to the
99
<PAGE>
Holders of such Securities, or one or more predecessor securities, registered as
such at the close of business on the relevant record dates according to their
terms and the provisions of Section 3.7.
If any Security called for redemption in accordance with the election
of the Company made pursuant to Section 11.1 shall not be so paid upon surrender
thereof for redemption, the principal (and premium, if any) shall, until paid,
bear interest from the Redemption Date at the rate provided by the Security.
SECTION 11.8. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered
at an office or agency of the Company designated for that purpose pursuant to
Section 10.2 (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or his attorney duly authorized
in writing), and the Company shall execute, and the Trustee shall authenticate
and deliver to the Holder of such Security without service charge, a new
Security or Securities, of any authorized denomination as requested by such
Holder, in aggregate principal amount at Stated Maturity equal to and in
exchange for the unredeemed portion of the principal amount at Stated Maturity
of the Security so surrendered.
ARTICLE XII
Defeasance and Covenant Defeasance
SECTION 12.1. Company's Option To Effect Defeasance or Covenant Defeasance.
The Company may elect, at its option at any time, to have Section 12.2
or Section 12.3 applied to the Outstanding Securities (as a whole and not in
part) upon compliance with the conditions set forth below in this Article. Any
such election shall be evidenced by a Board Resolution.
SECTION 12.2. Defeasance and Discharge.
Upon the Company's exercise of its option to have this Section applied
to the Outstanding Securities (as a whole and not in part), the Company shall be
deemed to have been discharged from its obligations with respect to such
Securities as provided in this Section on and after the date the conditions
100
<PAGE>
set forth in Section 12.4 are satisfied (hereinafter called "Defeasance"). For
this purpose, such Defeasance means that the Company shall be deemed to have
paid and discharged the entire Indebtedness represented by such Securities and
to have satisfied all its other obligations under such Securities and this
Indenture insofar as such Securities are concerned (and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging the
same), subject to the following which shall survive until otherwise terminated
or discharged hereunder: (1) the rights of Holders of Outstanding Securities to
receive, solely from the trust fund described in Section 12.4 and as more fully
set forth in such Section, payments in respect of the principal of, premium, if
any, and interest on such Securities when payments are due, (2) the Company's
obligations with respect to such Securities under Sections 3.4, 3.5, 3.6, 10.2
and 10.3, (3) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and (4) this Article. Subject to compliance with this Article, the
Company may exercise its option to have this Section applied to the Outstanding
Securities (as a whole and not in part) notwithstanding the prior exercise of
its option to have Section 12.3 applied to such Securities.
SECTION 12.3. Covenant Defeasance.
Upon the Company's exercise of its option to have this Section applied
to the Outstanding Securities (as a whole and not in part), (i) the Company
shall be released from its obligations under Section 8.1(3), Sections 10.5
through 10.19, inclusive, and any covenant provided pursuant to Section 9.1(2)
and the Guarantors shall be released from their obligations under Article XIII
and the Guarantees, (ii) the occurrence of any event specified in Sections
5.1(3) and 5.1(4) (with respect to Section 8.1(3) and any of Sections 10.5
through 10.19, inclusive, and any such covenants provided pursuant to Section
9.1(2)), shall be deemed not to be or result in an Event of Default, in each
case with respect to such Securities as provided in this Section on and after
the date the conditions set forth in Section 12.4 are satisfied (hereinafter
called "Covenant Defeasance"). For this purpose, such Covenant Defeasance means
that, with respect to such Securities, the Company may omit to comply with and
shall have no liability in respect of any term, condition or limitation set
forth in any such specified Section (to the extent so specified in the case of
Section 5.1(3) or 5.1(4)), whether directly or indirectly, by reason of any
reference elsewhere herein to any such Section or by reason of any reference in
any such Section to any other provision herein or in any other document, but the
remainder of this Indenture and such Securities shall be unaffected thereby.
101
<PAGE>
SECTION 12.4. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to the application of Section
12.2 or Section 12.3 to the Outstanding Securities:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee which satisfies the
requirements contemplated by Section 6.9 and agrees to comply with the
provisions of this Article applicable to it) as trust funds in trust for
the purpose of making the following payments, specifically pledged as
security for, and dedicated solely to, the benefits of the Holders of such
Securities, (A) money in an amount, or (B) U.S. Government Obligations
which through the scheduled payment of principal and interest in respect
thereof in accordance with their terms will provide, not later than one day
before the due date of any payment, money in an amount, or (C) a
combination thereof, in each case 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, and which shall be applied by the Trustee (or any such other
qualifying trustee) to pay and discharge, the principal of, premium, if
any, and any installment of interest on such Securities on the respective
Stated Maturities thereof, in accordance with the terms of this Indenture
and such Securities. As used herein, "U.S. Government obligation" means
(x) any security which is (i) a direct Obligation of the United States of
America for the payment of which the full faith and credit of the United
States of America is pledged or (ii) an obligation 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 (i) or (ii), is not callable or redeemable at the option of the
issuer thereof, and (y) any depositary receipt issued by a bank (as defined
in Section 3(a)(2) of the Securities Act) as custodian with respect to any
U.S. Government Obligation which is specified in clause (x) above and held
by such bank for the account of the holder of such depositary receipt, or
with respect to any specific payment of principal of or interest on any
U.S. Government Obligation which is so specified and held, provided U
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depositary receipt
from any amount received by the custodian in respect of the U.S. Government
Obligation or
102
<PAGE>
the specific payment of principal or interest evidenced by such depositary
receipt.
(2) In the event of an election to have Section 12.2 apply to the
Outstanding Securities, the Company shall have delivered to the Trustee an
Opinion of Counsel stating that (A) the Company has received from, or there
has been published by, the Internal Revenue Service a ruling or (B) since
the date of this instrument, there has been a change in the applicable
Federal income tax law, in either case to the effect that, and based
thereon such opinion shall confirm that, the Holders of such Securities
will not recognize gain or loss for Federal income tax purposes as a result
of the deposit, Defeasance and discharge to be effected with respect to
such Securities and will be subject to Federal income tax on the same
amount, in the same manner and at the same times as would be the case if
such deposit, Defeasance and discharge were not to occur.
(3) In the event of an election to have Section 12.3 apply to the
Outstanding Securities, the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that the Holders of such Securities will
not recognize gain or loss for Federal income tax purposes as a result of
the deposit and Covenant Defeasance to be effected with respect to such
Securities and will be subject to Federal income tax on the same amount, in
the same manner and at the same times as would be the case if such deposit
and Covenant Defeasance were not to occur.
(4) No Default or Event of Default with respect to the Outstanding
Securities shall have occurred and be continuing at the time of such
deposit (excluding a Default or Event of Default due to a breach of Section
10.8 which arises solely due to the borrowing of funds entirely and
immediately applied to such deposit).
(5) Such Defeasance or Covenant Defeasance shall not cause the
Trustee to have a conflicting interest with respect to any securities of
the Company or any Guarantor.
(6) Such Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any other agreement
or instrument to which the Company or any Subsidiary is a party or by which
it is bound.
(7) The Company shall have delivered to the Trustee an Opinion of
Counsel (which opinion may be subject to customary assumptions and
exceptions) to the effect that after the 91st day following the deposit,
the trust funds
103
<PAGE>
will not be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally.
(8) The Company shall have delivered to the Trustee an Officer's
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders of the Securities over the other creditors
of the Company or any Guarantor with the intent of defeating, hindering,
delaying or defrauding creditors of the Company or any Guarantor or others.
(9) No event or condition shall exist that would prevent the
Company from making payments of the principal of, premium, if any, and
interest on the Securities on the date of such deposit or at any time
ending on the 91st day after the date of such deposit.
(10) The Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent under this Indenture to either Defeasance or Covenant Defeasance,
as the case may be, have been complied with.
SECTION 12.5. Deposited Money and U.S. Government Obligations To Be Held in
Trust; Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 10.3, all
money and U.S. Government Obligations (including the proceeds thereof) deposited
with the Trustee or other qualifying trustee (solely for purposes of this
Section and Section 12.6, the Trustee and any such other trustee are referred to
collectively as the "Trustee") pursuant to Section 12.4 in respect of the
Outstanding Securities shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any such Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Holders of
such Securities, of all sums due and to become due thereon in respect of
principal and any premium and interest, but money so held in trust need not be
segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 12.4 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by
104
<PAGE>
law is for the account of the Holders of Outstanding Securities.
Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or U.S. Government Obligations held by it as provided in Section 12.4
which, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof which would then be required to be
deposited to effect the Defeasance or Covenant Defeasance, as the case may be,
with respect to the Outstanding Securities.
SECTION 12.6. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article with respect to any Securities by reason of any
order or judgment of any court or governmental authority enjoining, restraining,
or otherwise prohibiting such application, then the obligations under this
Indenture, such Securities and the Guarantees from which the Company and the
Guarantors have been discharged or released pursuant to Section 12.2 or 12.3
shall be revived and reinstated as though no deposit had occurred pursuant to
this Article with respect to such Securities, until such time as the Trustee or
Paying Agent is permitted to apply all money held in trust pursuant to Section
12.5 with respect to such Securities in accordance with this Article; provided,
however, that if the Company makes any payment of principal of or any premium or
interest on any such Security following such reinstatement of its obligations,
the Company shall be subrogated to the rights (if any) of the Holders of such
Securities to receive such payment from the money so held in trust.
ARTICLE XIII
Guaranty
SECTION 13.1. Guaranty.
Each Guarantor hereby unconditionally and irrevocably guarantees on a
senior subordinated basis, jointly and severally, to each Holder and to the
Trustee and its successors and assigns (a) the full and prompt payment (within
applicable grace periods) of principal of and interest on the Securities when
due, whether at maturity, by acceleration, by redemption or otherwise, and all
other monetary obligations of the Company under this Indenture and the
Securities and (b) the full and
105
<PAGE>
prompt performance within applicable grace periods of all other obligations of
the Company under this Indenture and the Securities (all the foregoing being
hereinafter collectively called the "Guaranty Obligations"). Each Guarantor
further agrees that the Guaranty Obligations may be extended or renewed, in
whole or in part, without notice or further assent from such Guarantor, and that
such Guarantor will remain bound under this Article XIII notwithstanding any
extension or renewal of any Guaranty Obligation.
To the extent that any Guarantor shall be required to pay any amounts
on account of the Securities pursuant to a Guaranty in excess of an amount
calculated as the product of (i) the aggregate amount payable by the Guarantors
on account of the Securities pursuant to the Guarantees times (ii) the
proportion (expressed as a fraction) that such Guarantor's net assets
(determined in accordance with GAAP) at the date enforcement of the Guarantees
is sought bears to the aggregate net assets (determined in accordance with GAAP)
of all Guarantors at such date, then such Guarantor shall be reimbursed by the
other Guarantors for the amount of such excess, pro rata, based upon the
respective net assets (determined in accordance with GAAP) of such other
Guarantors at the date enforcement of the Guarantees is sought. This paragraph
is intended only to define the relative rights of Guarantors as among
themselves, and nothing set forth in this paragraph is intended to or shall
impair the joint and several obligations of the Guarantors under their
respective Guarantees.
The Guarantors shall have the right to seek contribution from any non-
paying Guarantor so long as the exercise of such right does not impair the
rights of the Holders under any Guaranty.
Each Guarantor waives presentation to, demand of payment from and
protest to the Company of any of the Guaranty Obligations and also waives notice
of protest for nonpayment. Each Guarantor waives notice of any default under
the Securities or the Guaranty Obligations. The obligations of each Guarantor
hereunder shall not be affected by (a) the failure of any Holder or the Trustee
to assert any claim or demand or to enforce any right or remedy against the
Company or any other Person under this Indenture, the Securities or any other
agreement or otherwise; (b) any extension or renewal of any thereof; (c) any
rescission, waiver, amendment or modification of any of the terms or provisions
of this Indenture, the Securities or any other agreement; (d) the release of any
security held by any Holder or the Trustee for the Guaranty Obligations or any
of them; (e) the failure of any Holder or Trustee to exercise any right or
remedy against any other guarantor of the Guaranty
106
<PAGE>
Obligations; or (f) any change in the ownership of any Guarantor (subject to
Section 13.5(b)).
Each Guarantor further agrees that its Guaranty herein constitutes a
guaranty of payment, performance and compliance when due (and not a guaranty of
collection) and waives any right to require that any resort be had by any Holder
or the Trustee to any security held for payment of the Guaranty Obligations.
To the fullest extent permitted by law, the obligations of each
Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to any
defense of setoff, counterclaim, recoupment or termination whatsoever or by
reason of the invalidity, illegality or unenforceability of the Guaranty
Obligations or otherwise. Without limiting the generality of the foregoing, to
the fullest extent permitted by law, the obligations of each Guarantor herein
shall not be discharged or impaired or otherwise affected by the failure of any
Holder or the Trustee to assert any claim or demand or to enforce any remedy
under this Indenture, the Securities or any other agreement, by any waiver or
modification of any thereof, by any default, failure or delay, willful or
otherwise, in the performance of the Guaranty Obligations, or by any other act
or thing or omission or delay to do any other act or thing which may or might in
any manner or to any extent vary the risk of such Guarantor or would otherwise
operate as a discharge of each Guarantor as a matter of law or equity.
Each Guarantor further agrees that its Guaranty herein shall continue
to be effective or be reinstated, as the case may be, if at any time payment, or
any part thereof, of principal of or interest on any Guaranty Obligation is
rescinded or must otherwise be restored by any Holder or the Trustee upon the
bankruptcy or reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any other
right which any Holder or the Trustee has at law or in equity against each
Guarantor by virtue hereof, upon the failure of the Company to pay the principal
of or interest on any Guaranty Obligation when and as the same shall become due,
whether at maturity, by acceleration, by redemption or otherwise (within
applicable grace periods), or to perform or comply with any other Guaranty
Obligation (within applicable grace periods), each Guarantor hereby promises to
and shall, upon receipt of written demand by the Trustee, forthwith pay, or
cause to be paid, in cash, to the Holders or the Trustee an amount equal to the
sum of (i) the unpaid principal amount of such
107
<PAGE>
Guaranty Obligations (ii) accrued and unpaid interest on such Guaranty
Obligations (but only to the extent not prohibited by law) and (iii) all other
monetary Guaranty Obligations of the Company to the Holders and the Trustee.
Each Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any Guaranty Obligations
guarantied hereby until payment in full of all Guaranty Obligations. Each
Guarantor further agrees that, as between the Guarantors, on the one hand, and
the Holders and the Trustee, on the other hand, (x) the maturity of the Guaranty
Obligations guarantied hereby may be accelerated as provided in Article V for
the purposes of its Guaranty herein, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the Guaranty
Obligations guaranteed hereby, and (y) in the event of any declaration of
acceleration of such Guaranty Obligations as provided in Article V, such
Guaranty Obligations (whether or not due and payable) shall forthwith become due
and payable by each Guarantor for the purposes of this Section.
Each Guarantor also agrees to pay any and all costs and expenses
(including reasonable attorneys' fees and expenses) incurred by the Trustee or
any Holder in enforcing any rights under this Section.
SECTION 13.2. Limitation on Liability.
Any term or provision of this Indenture to the contrary
notwithstanding, the maximum aggregate amount of the obligations guaranteed
hereunder by each Guarantor shall not exceed the maximum amount that can be
hereby guaranteed without rendering this Indenture, as it relates to such
Guarantor, voidable under applicable federal or state law relating to fraudulent
conveyance or fraudulent transfer.
SECTION 13.3. Execution and Delivery of Guarantees.
The Guarantees to be endorsed on the Securities shall be in the form
set forth in Exhibit D. Each of the Guarantors hereby agrees to execute its
Guaranty in such form, to be endorsed on each Security authenticated and
delivered by the Trustee.
Each Guaranty shall be executed on behalf of each respective Guarantor
by any one of such Guarantor's Chairman of the Board, Vice Chairman of the
Board, President, Chief Financial Officer, or Vice Presidents. The signature of
any or all of these officers on the Guaranty may be manual or facsimile.
108
<PAGE>
A Guaranty bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of a Guarantor shall bind such
Guarantor, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of the Security on
which such Guaranty is endorsed or did not hold such offices at the date of such
Guaranty.
Each Guaranty shall be registered, transferred, exchanged and
cancelled, and shall be held in definitive or global form, in the same manner
and together with, the Security to which it relates, in accordance with Article
III.
The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Guaranty endorsed
thereon on behalf of the Guarantors. Each of the Guarantors hereby jointly and
severally agrees that its Guaranty set forth in Section 13.1 shall remain in
full force and effect notwithstanding any failure to endorse a Guaranty on any
Security.
SECTION 13.4. Guarantors May Consolidate, Etc., on Certain Terms.
Except as may be provided in Section 13.5 and in Articles VIII and X,
nothing contained in this Indenture or in any of the Securities shall prevent
any consolidation or merger of a Guarantor with or into the Company or a
Guarantor or shall prevent any sale or conveyance of the assets of a Guarantor
as an entirety or substantially as an entirety or the Capital Stock of a
Guarantor to the Company or a Guarantor.
SECTION 13.5. Release of Guarantors.
(a) Concurrently with any consolidation or merger of a Guarantor or
any sale or conveyance of the assets of a Guarantor as an entirety or
substantially as an entirety, in each case as permitted by Section 13.4 hereof
in accordance with the other provisions of this Indenture (including, without
limitation, Sections 10.9, 10.11 and 10.14) and as a result of which such
Guarantor ceases to be a Subsidiary of the Company, upon delivery by the Company
to the Trustee of an Officer's Certificate to the effect that such
consolidation, merger, sale or conveyance was made in accordance with Section
13.4 and the other provisions hereof and an Opinion of Counsel to the effect
that such transaction is permitted by this Indenture (which opinion may be
subject to customary assumptions and limitations), the Trustee shall execute any
documents reasonably required in order to evidence the release of such Guarantor
from its obligations under its Guaranty endorsed on the Securities and under
this Article XIII. Any Guarantor not released from
109
<PAGE>
its obligations under its Guaranty endorsed on the Securities and under this
Article XIII shall remain liable for the full amount of principal of and
premium, if any, and interest on the Securities and for the other obligations of
a Guarantor under its Guaranty endorsed on the Securities and under this Article
XIII.
(b) Except as provided by clause (a) hereof, upon the consummation of
any transaction (whether involving a sale or other disposition of securities, a
merger, or otherwise, including any Asset Sale) whereby any Guarantor ceases to
be a Subsidiary and which transaction is otherwise in compliance with the
provisions of this Indenture, such Guarantor shall automatically be released
from all obligations under its Guaranty endorsed on the Securities and under
this Article XIII without need for any further act or the execution or delivery
of any document.
SECTION 13.6. Successors and Assigns.
This Article XIII shall be binding upon each Guarantor and its
successors and assigns and shall inure to the benefit of the successors and
assigns of the Trustee and the Holders and, in the event of any transfer or
assignment of rights by any Holder or the Trustee, the rights and privileges
conferred upon that party in this Indenture and in the Securities shall
automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions of this Indenture.
SECTION 13.7. No Waiver, etc.
Neither a failure nor a delay on the part of either the Trustee or the
Holders in exercising any right, power or privilege under this Article XIII
shall operate as a waiver thereof, nor shall a single or partial exercise
thereof preclude any other or further exercise of any right, power or privilege.
The rights, remedies and benefits of the Trustee and the Holders herein
expressly specified are cumulative and not exclusive of any other rights,
remedies or benefits which either may have under this Article XIII at law, in
equity, by statute or otherwise.
SECTION 13.8. Modification, etc.
No modification, amendment or waiver of any provision of this Article,
nor the consent to any departure by a Guarantor therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Trustee, and
then such waiver or consent shall be effective only in the specific instance and
for the purpose for which given. No notice to or
110
<PAGE>
demand on a Guarantor in any case shall entitle such Guarantor or any other
guarantor to any other or further notice or demand in the same, similar or other
circumstances.
SECTION 13.9. Subordination of Guarantees.
The obligations of each Guarantor pursuant to its Guaranty and this
Article XIII shall be (a) junior and subordinated in right of payment to the
prior payment in full in cash of all Guarantor Senior Indebtedness of such
Guarantor and (b) senior in right of payment to all existing and future
Guarantor Subordinated Indebtedness of such Guarantor, in each case on the same
basis as the Securities and the obligations of the Company hereunder are junior
and subordinated to all Senior Indebtedness and senior in right of payment to
all Subordinated Indebtedness. For the purposes of this Section 13.9, Article
XIV shall apply to the obligations of each Guarantor under its Guaranty, this
Article XIII and the other provisions of this Indenture as if references therein
to the Company, the Securities, Senior Indebtedness, Subordinated Indebtedness
and Designated Senior Indebtedness were references to such Guarantor, such
Guarantor's Guaranty, Guarantor Senior Indebtedness, Guarantor Subordinated
Indebtedness and Designated Guarantor Senior Indebtedness, respectively.
ARTICLE XIV
Subordination
SECTION 14.1. Securities Subordinate to Senior Indebtedness and Senior to
Subordinated Indebtedness.
The Company covenants and agrees, and each Holder of a Security, by
his acceptance thereof, likewise covenants and agrees that, to the extent and in
the manner hereinafter set forth in this Article XIV, the Indebtedness evidenced
by the Securities is hereby expressly made subordinate in right of payment to
the prior payment in full in cash of all Senior Indebtedness and senior in right
of payment to all existing and future Subordinated Indebtedness of the Company.
SECTION 14.2. Payment Over of Proceeds Upon Dissolution, Etc.
In the event of any insolvency or bankruptcy case or proceeding, or
any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relating to the Company or its assets, or
any liquidation, dissolution
111
<PAGE>
or other winding-up of the Company, whether voluntary or involuntary, or any
assignment for the benefit of creditors or other marshalling of assets or
liabilities of the Company, all Senior Indebtedness (including, in the case of
Designated Senior Indebtedness, any interest accruing subsequent to the filing
of a petition for bankruptcy (regardless of whether such interest is an allowed
claim in the bankruptcy proceeding)) must be paid in full in cash before any
payment (other than payments in the form of Qualified Equity Interests or other
securities the payment of which is subordinated, at least to the same extent as
the Securities, to the payment of all Senior Indebtedness which may at the time
be outstanding and other than payments from a trust created pursuant to Article
XII) is made on account of the principal of, premium, if any, or interest on the
Securities.
SECTION 14.3. No Payment When Designated Senior Indebtedness in Default.
During the continuance of any default in the payment of principal, or
premium, if any, or interest on any Designated Senior Indebtedness, when the
same becomes due, and after receipt by the Trustee and the Company from
representatives of holders of such Designated Senior Indebtedness of written
notice of such default, no direct or indirect payment (other than payments from
trusts previously created pursuant to Article XII) by or on behalf of the
Company of any kind or character (other than Qualified Equity Interests or other
securities the payment of which is subordinated, at least to the same extent as
the Notes, to the payment of all Senior Indebtedness which may at the time be
outstanding) may be made on account of the principal of, premium, if any, or
interest on, or the purchase, redemption or other acquisition of, the Securities
unless and until such default has been cured or waived or has ceased to exist or
such Designated Senior Indebtedness shall have been discharged or paid in full
in cash, after which the Company shall resume making any and all required
payments in respect of the Securities, including any missed payments.
In addition, during the continuance of any other default with respect
to any Designated Senior Indebtedness that permits, or would permit with the
passage of time or the giving of notice or both, the maturity thereof to be
accelerated (a "Non-payment Default") and upon the earlier to occur of (a)
receipt by the Trustee and the Company from the representatives of holders of
such Designated Senior Indebtedness of a written notice of such Non-payment
Default or (b) if such Non-payment Default results from the acceleration of the
maturity of the Securities, the date of such acceleration, no payment (other
than payments from trusts previously created pursuant to Article XII) of any
kind or character (excluding Qualified Equity
112
<PAGE>
Interests or subordinated securities) may be made by the Company on account of
the principal of, premium, if any, or interest on, or the purchase, redemption,
or other acquisition of, the Securities for the period specified below (the
"Payment Blockage Period").
The Payment Blockage Period shall commence upon the receipt of notice
of a Non-payment Default by the Trustee and the Company from the representatives
of holders of Designated Senior Indebtedness or the date of the acceleration
referred to in clause (b) of the preceding paragraph, as the case may be, and
shall end on the earliest to occur of the following events: (i) 179 days have
elapsed since the receipt of such notice or the date of the acceleration
referred to in clause (b) of the preceding paragraph (provided the maturity of
such Designated Senior Indebtedness shall not theretofore have been
accelerated), (ii) such default is cured or waived or ceases to exist or such
Designated Senior Indebtedness is discharged or paid in full in cash, or (iii)
such Payment Blockage Period shall have been terminated by written notice to the
Company or the Trustee from the representatives of holders of Designated Senior
Indebtedness initiating such Payment Blockage Period, after which the Company
shall promptly resume making any and all required payments in respect of the
Securities, including any missed payments. Only one Payment Blockage Period
with respect to the Securities may be commenced within any 360 consecutive day
period. No Non-payment Default with respect to Designated Senior Indebtedness
that existed or was continuing on the date of the commencement of any Payment
Blockage Period shall be, or can be, made the basis for the commencement of a
second Payment Blockage Period, whether or not within a period of 360
consecutive days, unless such default has been cured or waived for a period of
not less than 90 consecutive days. In no event shall a Payment Blockage Period
extend beyond 180 days from the date of the receipt by the Trustee of the notice
or the date of the acceleration initiating such Payment Blockage Period and
there must be a 180 consecutive day period in any 360 day period during which no
Payment Blockage Period is in effect.
113
<PAGE>
SECTION 14.4. Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the payment in full in cash of all Senior Indebtedness, the
Holders of the Securities shall be subrogated to the extent of the payments or
distributions made to the holders of such Senior Indebtedness pursuant to the
provisions of this Article XIV to the rights of the holders of such Designated
Senior Indebtedness to receive payments and distributions of cash, property and
securities applicable to the Senior Indebtedness until the principal of,
premium, if any, and interest on the Securities shall be paid in full. For
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 of
the Securities or the Trustee would be entitled except for the provisions of
this Article XIV, and no payments over pursuant to the provisions of this
Article XIV to the holders of Senior Indebtedness by Holders of the Securities
or the Trustee, shall, as among the Company, its creditors other than holders of
Senior Indebtedness and the Holders of the Securities, be deemed to be a payment
or distribution by the Company to or on account of the Senior Indebtedness.
SECTION 14.5. Provisions Solely to Define Relative Rights.
The provisions of this Article XIV are and are intended solely for the
purpose of defining the relative rights of the Holders of the Securities on the
one hand and the holders of Senior Indebtedness on the other hand. Nothing
contained in this Article XIV or elsewhere in this Indenture or in the
Securities is intended to or shall (a) impair, as among the Company, its
creditors other than holders of Senior Indebtedness and the Holders of the
Securities, the obligation of the Company, which is absolute and unconditional,
to pay to the Holders of the Securities the principal of, premium, if any and
interest on the Securities as and when the same shall become due and payable in
accordance with their terms; (b) affect the relative rights against the Company
of the Holders of the Securities and creditors of the Company other than the
holders of Senior Indebtedness; or (c) prevent the Trustee or the Holder of any
Securities from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, subject to the rights, if any, under this
Article XIV of the holders of Senior Indebtedness to receive cash, property and
securities otherwise payable or deliverable to the Trustee or such Holder.
114
<PAGE>
SECTION 14.6. Trustee to Effectuate Subordination.
Each Holder of a Security by its acceptance thereof authorizes and
directs the Trustee on its behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article XIV and
appoints the Trustee its attorney-in-fact for any and all such purposes.
SECTION 14.7. No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall 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
non-compliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph,
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 of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article
XIV or the obligations hereunder of the Holders of the Securities to the holders
of Senior Indebtedness, do any one or more of the following: (i) change the
manner, place or terms of payment or extend the time of payment of, or renew or
alter, Senior Indebtedness, or otherwise amend or supplement in any manner
Senior Indebtedness or any instrument evidencing the same or any agreement under
which Senior Indebtedness is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (iii) release any Person liable in any manner for the collection
of Senior Indebtedness; and (iv) exercise or refrain from exercising any rights
against the Company and any other Person.
SECTION 14.8. Notice to Trustee.
The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the Securities. Notwithstanding the provisions of
this Article XIV or any other provision of this Indenture, the Trustee shall not
be charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Securities, unless
and until the Trustee shall have received written notice thereof from the
115
<PAGE>
Company or a holder of Designated Senior Indebtedness or from any trustee
therefor; and, prior to the receipt of any such written notice, the Trustee,
subject to the provisions of Section 6.1, shall be entitled in all respects to
assume that no such facts exist; provided, however, that if the Trustee shall
not have received at its Corporate Trust Office the notice provided for in this
Section at least three Business Days prior to the date upon which by the terms
hereof any money may become payable for any purpose (including, without
limitation, the payment in cash of the principal of, premium, if any or interest
on any Security), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive such
money and to apply the same to the purpose for which such money was received and
shall not be affected by any notice to the contrary which may be received by it
within three Business Days prior to such date.
SECTION 14.9. Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets of the Company referred to
in this Article XIV, the Trustee, subject to the provisions of Section 6.1, and
the Holders of the Securities shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding up
or similar case or proceeding is pending, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit
of creditors, agent or other Person making such payment or distribution,
delivered to the Trustee or to the Holders of Securities, for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of 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
XIV.
SECTION 14.10. Trustee Not Fiduciary for Holders of Senior Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be liable to any such holders if it
shall in good faith mistakenly pay over or distribute to Holders of Securities
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
XIV or otherwise, except in the case of gross negligence or wilful misconduct on
the part of the Trustee.
116
<PAGE>
SECTION 14.11. Rights of Trustee as Holder of Senior Indebtedness; Preservation
of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article XIV with respect to any Senior Indebtedness
which may at any time be held by it, to the same extent as any other holder of
Senior Indebtedness, and nothing in this Indenture shall deprive the Trustee of
any of its rights as such holder.
Nothing in this Article XIV shall apply to claims of, or payments to,
the Trustee or its agent or counsel under or pursuant to Section 6.7.
SECTION 14.12. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article XIV shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article XIV in addition to or in place of the Trustee; provided,
however, that Section 14.11 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.
----------------
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
117
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
GROUP MAINTENANCE AMERICA CORP.
By:
-----------------------------------
Name:
Title:
STATE STREET BANK AND TRUST COMPANY
By:
-----------------------------------
Name:
Title:
Guarantors:
A-1 APPLIANCE & AIR CONDITIONING, INC.
By:
-----------------------------------
Name:
Title:
A-1 MECHANICAL OF LANSING, INC.
By:
-----------------------------------
Name:
Title:
AA ADVANCE AIR, INC.
By:
-----------------------------------
Name:
Title:
118
<PAGE>
A-ABC APPLIANCE, INC.
By:
-----------------------------------
Name:
Title:
A-ABC SERVICES, INC.
By:
-----------------------------------
Name:
Title:
AA JARL, INC.
By:
-----------------------------------
Name:
Title:
AIR CONDITIONING ENGINEERS, INC.
By:
-----------------------------------
Name:
Title:
AIR CONDITIONING, PLUMBING & HEATING SERVICE CO.,
INC.
By:
-----------------------------------
Name:
Title:
AIRCON ENERGY INCORPORATED
By:
-----------------------------------
Name:
Title:
119
<PAGE>
AIRTRON, INC.
By:
-----------------------------------
Name:
Title:
AIRTRON OF CENTRAL FLORIDA, INC.
By:
-----------------------------------
Name:
Title:
ALL SERVICE ELECTRIC, INC.
By:
-----------------------------------
Name:
Title:
ARKANSAS MECHANICAL SERVICES, INC.
By:
-----------------------------------
Name:
Title:
ATLANTIC INDUSTRIAL CONSTRUCTORS, INC.
By:
-----------------------------------
Name:
Title:
BARR ELECTRIC CORP.
By:
-----------------------------------
Name:
Title:
120
<PAGE>
CALLAHAN ROACH PRODUCTS & PUBLICATIONS, INC.
By:
-----------------------------------
Name:
Title:
CENTRAL AIR CONDITIONING CONTRACTORS, INC.
By:
-----------------------------------
Name:
Title:
CENTRAL CAROLINA AIR CONDITIONING COMPANY
By:
-----------------------------------
Name:
Title:
CHARLIE CRAWFORD, INC.
By:
-----------------------------------
Name:
Title:
CLARK CONVERSE ELECTRIC SERVICE, INC.
By:
-----------------------------------
Name:
Title:
COLONIAL AIR CONDITIONING COMPANY
By:
-----------------------------------
Name:
Title:
121
<PAGE>
COMMERCIAL AIR HOLDING COMPANY
By:
-----------------------------------
Name:
Title:
COMMERCIAL AIR, POWER & CABLE, INC.
By:
-----------------------------------
Name:
Title:
CONTINENTAL ELECTRICAL CONSTRUCTION CO.
By:
-----------------------------------
Name:
Title:
COSTNER BROTHERS, INC.
By:
-----------------------------------
Name:
Title:
DIVCO, INC.
By:
-----------------------------------
Name:
Title:
DYNAMIC SOFTWARE CORPORATION
By:
-----------------------------------
Name:
Title:
122
<PAGE>
EVANS SERVICES, INC.
By:
-----------------------------------
Name:
Title:
THE FARFIELD COMPANY
By:
-----------------------------------
Name:
Title:
FERGUSON ELECTRIC CORPORATION
By:
-----------------------------------
Name:
Title:
GENTZLER ELECTRICAL CONTRACTORS, INC.
By:
-----------------------------------
Name:
Title:
GILBERT MECHANICAL CONTRACTORS, INC.
By:
-----------------------------------
Name:
Title:
GREGORY ELECTRIC, INC.
By:
-----------------------------------
Name:
Title:
123
<PAGE>
GROUPMAC HOLDING CORP.
By:
-----------------------------------
Name:
Title:
GROUPMAC MANAGEMENT CO.
By:
-----------------------------------
Name:
Title:
HPS PLUMBING SERVICES, INC.
By:
-----------------------------------
Name:
Title:
HALLMARK AIR CONDITIONING, INC.
By:
-----------------------------------
Name:
Title:
HUNGERFORD MECHANICAL CORPORATION
By:
-----------------------------------
Name:
Title:
J.D. STEWARD AIR CONDITIONING, INC.
By:
-----------------------------------
Name:
Title:
124
<PAGE>
K & N PLUMBING, HEATING AND AIR CONDITIONING, INC.
By:
-----------------------------------
Name:
Title:
LANEY'S, INC.
By:
-----------------------------------
Name:
Title:
LINFORD SERVICE CO.
By:
-----------------------------------
Name:
Title:
MACDONALD-MILLER CO., INC.
By:
-----------------------------------
Name:
Title:
MACDONALD-MILLER INDUSTRIES, INC.
By:
-----------------------------------
Name:
Title:
MACDONALD-MILLER OF OREGON, INC.
By:
-----------------------------------
Name:
Title:
125
<PAGE>
MACDONALD-MILLER SERVICE, INC.
By:
-----------------------------------
Name:
Title:
MASTERS, INC.
By:
-----------------------------------
Name:
Title:
MECHANICAL INTERIORS, INC.
By:
-----------------------------------
Name:
Title:
MERRITT ISLAND AIR & HEAT, INC.
By:
-----------------------------------
Name:
Title:
NEW CONSTRUCTION AIR CONDITIONING, INC.
By:
-----------------------------------
Name:
Title:
NORON, INC.
By:
-----------------------------------
Name:
Title:
126
<PAGE>
PAUL E. SMITH CO., INC.
By:
-----------------------------------
Name:
Title:
PHOENIX ELECTRIC COMPANY
By:
-----------------------------------
Name:
Title:
RAY AND CLAUDE GOODWIN, INC.
By:
-----------------------------------
Name:
Title:
RELIABLE MECHANICAL, INC.
By:
-----------------------------------
Name:
Title:
ROMANOFF ELECTRIC CORP.
By:
-----------------------------------
Name:
Title:
SIBLEY SERVICES, INCORPORATED
By:
-----------------------------------
Name:
Title:
127
<PAGE>
SOUTHEAST MECHANICAL SERVICE, INC.
By:
-----------------------------------
Name:
Title:
STEPHEN C. POMEROY, INC.
By:
-----------------------------------
Name:
Title:
STERLING AIR CONDITIONING, INC.
By:
-----------------------------------
Name:
Title:
SUN PLUMBING, INC.
By:
-----------------------------------
Name:
Title:
TEAM MECHANICAL, INC.
By:
-----------------------------------
Name:
Title:
TRINITY CONTRACTORS, INC.
By:
-----------------------------------
Name:
Title:
128
<PAGE>
UNITED ACQUISITION CORP.
By:
-----------------------------------
Name:
Title:
VALLEY WIDE PLUMBING AND HEATING, INC.
By:
-----------------------------------
Name:
Title:
VAN'S COMFORTEMP AIR CONDITIONING, INC.
By:
-----------------------------------
Name:
Title:
VANTAGE MECHANICAL CONTRACTORS, INC.
By:
-----------------------------------
Name:
Title:
WADE'S HEATING AND COOLING, INC.
By:
-----------------------------------
Name:
Title:
WIEGOLD & SONS, INC.
By:
-----------------------------------
Name:
Title:
129
<PAGE>
WILLIS REFRIGERATION, AIR CONDITIONING & HEATING,
INC.
By:
-----------------------------------
Name:
Title:
YALE INCORPORATED
By:
-----------------------------------
Name:
Title:
PACIFIC RIM MECHANICAL CONTRACTORS, INC.
By:
-----------------------------------
Name:
Title:
130
<PAGE>
Schedule A
----------
GROUP MAINTENANCE AMERICA CORP.
-------------------------------
Except as otherwise indicated, 100% of the voting stock of each of the
Subsidiaries listed below is owned by its parent.
State of
Name of Subsidiary Incorporation
- ------------------ -------------
A-1 Appliance & Air Conditioning, Inc. Delaware
A-1 Mechanical of Lansing, Inc. Michigan
AA Advance Air, Inc. Florida
A-ABC Appliance, Inc. Texas
A-ABC Services, Inc. Delaware
AA JARL, Inc. Delaware
Air Conditioning Engineers, Inc. Michigan
Air Conditioning, Plumbing & Heating Service Co., Inc. Colorado
Aircon Energy Incorporated California
Airtron, Inc. Delaware
Airtron of Central Florida, Inc. Florida
All Service Electric, Inc. Florida
Arkansas Mechanical Services, Inc. Arkansas
Atlantic Industrial Constructors, Inc. Virginia
Barr Electric Corp. Illinois
Callahan Roach Products & Publications, Inc. Colorado
Central Air Conditioning Contractors, Inc. Delaware
Central Carolina Air Conditioning Company North Carolina
Charlie Crawford, Inc. Delaware
Clark Converse Electric Service, Inc. Ohio
Colonial Air Conditioning Company Delaware
Commercial Air Holding Company Maryland
Commercial Air, Power & Cable, Inc. Maryland
Continental Electrical Construction Co. Delaware
Costner Brothers, Inc. South Carolina
Divco, Inc. Washington
Dynamic Software Corporation Maryland
Evans Services, Inc. Alabama
The Farfield Company Delaware
Ferguson Electric Corporation Delaware
Gentzler Electrical Contractors, Inc. Delaware
Gilbert Mechanical Contractors, Inc. Minnesota
Gregory Electric, Inc. Illinois
GroupMAC Holding Corp. Delaware
GroupMAC Management Co. Delaware
HPS Plumbing Services, Inc. California
<PAGE>
State of
Name of Subsidiary Incorporation
- ------------------ -------------
Hallmark Air Conditioning, Inc. Delaware
Hungerford Mechanical Corporation Virginia
J.D. Steward Air Conditioning, Inc. Colorado
K & N Plumbing, Heating and Air Delaware
Conditioning, Inc.
Laney's, Inc. Delaware
Linford Service Co. California
MacDonald-Miller Co., Inc. Washington
MacDonald-Miller Industries, Inc. Washington
MacDonald-Miller of Oregon, Inc. Delaware
MacDonald-Miller Service, Inc. Washington
Masters, Inc. Maryland
Mechanical Interiors, Inc. Delaware
Merritt Island Air & Heat, Inc. Delaware
New Construction Air Conditioning, Inc. Michigan
Noron, Inc. Ohio
Pacific Rim Mechanical Contractors, Inc. California
Paul E. Smith Co., Inc. Indiana
Phoenix Electric Company Delaware
Ray and Claude Goodwin, Inc. Florida
Reliable Mechanical, Inc. Delaware
Romanoff Electric Corp. Ohio
Sibley Services, Incorporated Tennessee
Southeast Mechanical Service, Inc. Florida
Stephen C. Pomeroy, Inc. Delaware
Sterling Air Conditioning, Inc. Delaware
Sun Plumbing, Inc. Florida
Team Mechanical, Inc. Utah
Trinity Contractors, Inc. Delaware
United Acquisition Corp. Iowa
Valley Wide Plumbing and Heating, Inc. Colorado
Van's Comfortemp Air Conditioning, Inc. Florida
Vantage Mechanical Contractors, Inc. Maryland
Wade's Heating and Cooling, Inc. Florida
Wiegold & Sons, Inc. Florida
Willis Refrigeration, Air Conditioning & Heating, Inc. Ohio
Yale Incorporated Minnesota
2
<PAGE>
EXHIBIT A-1
-----------
[FORM OF SECURITY]
------------------
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE OR OTHER
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN
MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT
(A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS NOT A "U.S. PERSON" AND IS ACQUIRING THIS SECURITY
IN AN "OFFSHORE TRANSACTION" PURSUANT TO RULE 903 or 904 OF REGULATION S, (2)
AGREES THAT IT WILL NOT PRIOR TO (X) THE DATE WHICH IS TWO YEARS (OR SUCH
SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(k) UNDER THE SECURITIES ACT OR
ANY SUCCESSOR PROVISION THEREUNDER) AFTER THE LATER OF THE ORIGINAL ISSUE DATE
HEREOF (OR OF ANY PREDECESSOR OF THIS SECURITY) OR THE LAST DAY ON WHICH THE
COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY OR ANY
PREDECESSOR OF THIS SECURITY AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED
BY APPLICABLE LAWS (THE "RESALE RESTRICTION TERMINATION DATE"), OFFER, SELL OR
OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THE SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE
144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) THAT PURCHASES THIS SECURITY
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO
WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A,
(D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE
UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, OR
(E) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM
THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND; PROVIDED THAT THE COMPANY, THE TRUSTEE, AND THE SECURITY REGISTRAR SHALL
HAVE THE RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (I) PURSUANT TO CLAUSE
(D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND (II) IN EACH OF THE
FOREGOING CASES, TO REQUIRE THAT A CERTIFICATION OF TRANSFER IN THE FORM
APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE
TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE
A-1-1
<PAGE>
HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE RESPECTIVE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
Group Maintenance America Corp.
9 3/4% Senior Subordinated Note due 2009, Series A
No. ___________ $_________
CUSIP NO.__________
Group Maintenance America Corp., a corporation duly organized and
existing under the laws of the State of Delaware (herein called the "Company,"
which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay to ___________ or
registered assigns, the principal sum of __________ Dollars on January 15, 2009
and to pay interest thereon from January 22, 1999 or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
semiannually in arrears on January 15 and July 15 in each year, commencing July
15, 1999 at the rate of 9 3/4% per annum, until the principal hereof is paid or
duly provided for, provided that any principal and premium, and any such
installment of interest, which is overdue shall bear interest at the rate of
9 3/4% per annum (to the extent that the payment of such interest shall be
legally enforceable), from the dates such amounts are due until they are paid or
duly provided for. The interest so payable and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in such Indenture, be paid
to the Person in whose name this Security (or one or more predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the January 1 and July 1 (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
Any such interest not so punctually paid or duly provided for will forthwith
cease to be payable to the Holder on such Regular Record Date and may either be
paid to the Person in whose name this Security (or one or more predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Holders of securities not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in said Indenture.
A-1-2
<PAGE>
Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Company maintained for that
purpose in the Borough of Manhattan, The City of New York, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that, at the
option of the Company, payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
A-1-3
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed and attested.
Attest: Group Maintenance America Corp.
By:
- ----------------------------- --------------------------------
Title: Title:
A-1-4
<PAGE>
Trustee's Certificate of Authentication
This is one of the Securities referred to in the within-mentioned
Indenture.
STATE STREET BANK AND TRUST COMPANY, as Trustee
Dated: January 22, 1999 By:
---------------------------------
Authorized Signatory
A-1-5
<PAGE>
Form of Reverse of Security
This Security is one of a duly authorized issue of Securities of the
Company designated as 9 3/4% Senior Subordinated Notes due 2009, Series A
(herein called the "Initial Securities"), limited in aggregate principal amount
at Stated Maturity to $130,000,000 issued and to be issued under an Indenture,
dated as of January 22, 1999 (herein called the "Indenture," which term shall
have the meaning assigned to it in such instrument), among the Company, the
guarantors named therein and State Street Bank and Trust Company, as Trustee
(herein called the "Trustee," which term includes any successor trustee under
the Indenture), and reference is hereby made to the Indenture for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee and the Holders of the Securities and of the terms
upon which the Securities are, and are to be, authenticated and delivered. The
Securities include the Initial Securities and the Exchange Securities referred
to below, issued in exchange for the Initial Securities pursuant to the
Registration Rights Agreement. The Initial Securities and the Exchange
Securities are treated as a single class of securities under the Indenture.
The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S.C. (S)(S) 7aaa - 77bbbb (the "TIA"), as in effect on the date of the
Indenture. Notwithstanding anything to the contrary herein, the Securities are
subject to all such terms, and Holders of Securities are referred to the
Indenture and the TIA for a statement of such terms. The Securities are
unsecured senior subordinated obligations of the Company limited to
$200,000,000.
This Security is redeemable at the option of the Company, in whole or
in part, at any time on or after January 15, 2004, at the Redemption Prices
(expressed as percentages of principal amount) set forth below, plus accrued and
unpaid interest, if any, thereon to the Redemption Date, if redeemed during the
12-month period beginning January 15 of the years indicated below:
Redemption
Year Price
- --------------------------- -----------
2004.................. 104.875
2005.................. 103.250
2006.................. 101.625
2007 and thereafter... 100.000%
A-1-6
<PAGE>
In addition, at any time, or from time to time, on or prior to January
15, 2002, the Company may, at its option, use the net cash proceeds of one or
more Equity Offerings to redeem up to an aggregate of 35% of the principal
amount of the Securities originally issued, at a redemption price equal to
109.750%. of the principal amount thereof plus accrued and unpaid interest, if
any, thereon to the Redemption Date; provided that at least 65% of the
originally issued principal amount of Securities remains outstanding immediately
after the occurrence of such redemption. In order to effect the foregoing
redemption with the proceeds of any Equity Offering, the Company shall send a
redemption notice not later than 90 days after the consummation of any such
Equity Offering.
The Securities are not subject to any sinking fund.
The Indenture provides that the Company is obligated (a) upon the
occurrence of a Change in Control to make an offer to purchase all outstanding
Securities at a purchase price equal to 101% of the principal amount thereof,
plus accrued and unpaid interest, if any, thereon to the date of purchase and
(b) to make an offer to purchase Securities with a portion of the net cash
proceeds of certain sales or other dispositions of assets (not applied as
specified in the Indenture within the periods set forth therein) at a purchase
price equal to 100% of the principal amount thereof plus accrued and unpaid
interest, if any, to the date of purchase.
In the event of redemption or purchase of this Security in part only
pursuant to a Change of Control Offer or an Asset Sale Offer, a new Security or
Securities for the unredeemed or unpurchased portion hereof will be issued in
the name of the Holder hereof upon the cancellation hereof.
The Indenture contains provisions for defeasance at any time of the
entire indebtedness of this Security or of certain restrictive covenants and
Events of Default with respect to this Security, in each case upon compliance
with certain conditions set forth in the Indenture.
If an Event of Default shall occur and be continuing, there may be
declared due and payable the principal of, premium, if any, and accrued and
unpaid interest, if any, on all of the outstanding Securities, in the manner and
with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of
A-1-7
<PAGE>
a majority in aggregate principal amount of the Securities at the time
Outstanding. The Indenture also contains provisions permitting the Holders of
specified percentages in aggregate principal amount of the Securities at the
time Outstanding, on behalf of the Holders of all the Securities, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities, the Holders of not less than 25% in principal amount of the
Securities at the time Outstanding shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default as Trustee
and offered the Trustee reasonable indemnity and the Trustee shall not have
received from the Holders of a majority in principal amount of Securities at the
time Outstanding a direction inconsistent with such request, and shall have
failed to institute any such proceeding for 60 days after receipt of such
notice, request and offer of indemnity. The foregoing shall not apply to
certain suits described in the Indenture, including any suit instituted by the
Holder of this Security for the enforcement of any payment of principal hereof
or any premium or interest hereon on or after the respective due dates expressed
herein (or, in the case of redemption, on or after the Redemption Date or, in
the case of any purchase of this Security required to be made pursuant to a
Change of Control Offer or an Asset Sale Offer, on or after the relevant
Purchase Date).
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency
A-1-8
<PAGE>
of the Company in the Borough of Manhattan, The City of New York, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Company and the Security Registrar duly executed by, the Holder hereof or
his attorney duly authorized in writing, and thereupon one or more new
Securities, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
This Security is issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Securities are
exchangeable for a like aggregate principal amount of Securities of like tenor
of a different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
Pursuant to the Registration Rights Agreement by and among the Company
and the Initial Purchasers, the Company will be obligated to consummate an
exchange offer pursuant to which the Holder of this Security shall have the
right to exchange this Security for 9 3/4% Senior Subordinated Notes due 2009,
Series B, of the Company (herein called the "Exchange Securities"), which have
been registered under the Securities Act, in like principal amount and having
identical terms as the Initial Securities (other than as set forth in this
paragraph). The Holders of Initial Securities shall be entitled to receive
certain additional interest payments in the event such exchange offer is not
consummated and upon certain other conditions, all pursuant to and in accordance
with the terms of the Registration Rights Agreement. Such additional interest
will constitute liquidated damages and will be the exclusive monetary remedy
available to the Holder of this Security in respect of a Registration Default
(as defined in the Registration Rights Agreement), but without prejudice to any
non-monetary remedies otherwise available to such Holder, whether pursuant to
the Registration Rights Agreement or otherwise.
A-1-9
<PAGE>
Interest on this Security shall be computed on the basis of a 360-day
year of twelve 30-day months.
The obligations of the Company under the Indenture and this Security
are expressly subordinated to all Senior Indebtedness and senior in right of
payment to all Subordinated Indebtedness, in each case to the extent set forth
in Article XIV of the Indenture, and reference is hereby made to such Indenture
for the precise terms of such subordination.
As provided in the Indenture and subject to certain limitations
therein set forth, the obligations of the Company under the Indenture and this
Security are Guaranteed pursuant to Guarantees endorsed hereon as provided in
the Indenture. Each Holder, by holding this Security, agrees to all of the
terms and provisions of said Guarantees. The Indenture provides that each
Guarantor shall be released from its Guaranty upon compliance with certain
conditions.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
The Indenture and this Security shall be governed by and construed in
accordance with the laws of the State of New York, without regard to the
conflicts of laws principles thereof.
A-1-10
<PAGE>
ASSIGNMENT FORM
If you, the Holder, want to assign this Security, fill in the form below and
have your signature guaranteed:
I (or we) assign and transfer this Security to
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax ID number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code) and irrevocably appoint
- --------------------------------------------------------------------------------
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for such agent.
In connection with any transfer of this Security occurring prior to
the date which is the earlier of (i) the date of the declaration by the
Commission of the effectiveness of a registration settlement under the
Securities Act of 1933, as amended (the "Securities Act"), covering resales of
this Security (which effectiveness shall not have been suspended or terminated
at the date of the transfer) and (ii) the date two years (or such shorter period
of time as permitted by Rule 144(k) under the Securities Act or any successor
provision thereunder) after the later of the original issuance date appearing on
the face of this Security (or any predecessor thereto) or the last date on which
the Company or any affiliate of the Company was the owner of this Security (or
any predecessor thereto), the undersigned confirms that it has not utilized any
general solicitation or general advertising in connection with the transfer and
that:
[Check One]
[ ] (a) this Security is being transferred in compliance with the exemption
from registration under the Securities Act provided by Rule 144A
thereunder.
A-1-11
<PAGE>
[ ] (b) this Security is being transferred other than in accordance with
(a) above and documents, and a transferor certificate substantially
in the form of Exhibit C to the Indenture in the case of a transfer
pursuant to Regulation S, are being furnished which comply with the
conditions of transfer set forth in this Security and the
Indenture.
If none of the foregoing boxes is checked and, in the case of (b) above, if the
appropriate document is not attached or otherwise furnished to the Trustee, the
Trustee or Security Registrar shall not be obliged to register this Security 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
3.14 of the Indenture shall have been satisfied.
- --------------------------------------------------------------------------------
Date: ___________ Your Signature:
---------------------------------------
(Sign exactly as your name
appears on the other side of
this Security)
By:
---------------------------------------
NOTICE: To be executed by
an executive officer
Signature Guarantee:
------------------------------------
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Security 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
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 (including the information
specified in Rule 144A(d)(4)) 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
A-1-12
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased in its entirety
by the Company pursuant to Section 10.13 or 10.14 of the Indenture, check the
applicable box:
Section 10.13
Section 10.14
If you want to elect to have only a part of the principal amount of
this Security purchased by the Company pursuant to Section 10.13 or 10.14 of the
Indenture, state the portion of such amount: $___________
Dated: Your Signature:
--------------------------------
(Sign exactly as name appears
on the other side of this
Security)
Signature Guarantee:
-----------------------------------------------------------
(Signature must be guaranteed by a financial institution
that is a member of the Securities Transfer Agent Medallion
Program ("STAMP"), the Stock Exchange Medallion Program
("SEMP"), the New York Stock Exchange, Inc. Medallion
Signature Program ("MSP") or such other signature guarantee
program as may be determined by the Security Registrar in
addition to, or in substitution for, STAMP, SEMP or MSP,
all in accordance with the Securities Exchange Act of 1934,
as amended.)
A-1-13
<PAGE>
EXHIBIT A-2
Group Maintenance America Corp.
9 3/4% Senior Subordinated Note due 2009, Series B
No. ___________ $__________
CUSIP NO.__________
Group Maintenance America Corp., a corporation duly organized and
existing under the laws of the State of Delaware (herein called the "Company,"
which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay to ________________ or
registered assigns, the principal sum of ________________ Dollars on January 15,
2009 and to pay interest thereon from January 22, 1999 or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
semiannually in arrears on January 15 and July 15 in each year, commencing
January 22, 1999 at the rate of 9 3/4% per annum, until the principal hereof is
paid or duly provided for, provided that any principal and premium, and any such
installment of interest, which is overdue shall bear interest at the rate of
9 3/4% per annum (to the extent that the payment of such interest shall be
legally enforceable), from the dates such amounts are due until they are paid or
duly provided for. The interest so payable and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in such Indenture, be paid
to the Person in whose name this Security (or one or more predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the January 1 and July 1 (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
Any such interest not so punctually paid or duly provided for will forthwith
cease to be payable to the Holder on such Regular Record Date and may either be
paid to the Person in whose name this Security (or one or more predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Holders of securities not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in said Indenture.
Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Company maintained for that
purpose in the Borough of
A-2-1
<PAGE>
Manhattan, The City of New York, in such coin or currency of the United States
of America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that, at the option of the Company, payment of
interest may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
A-2-2
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed and attested.
Attest: Group Maintenance America Corp.
By:
- ---------------------------- -------------------------------
Title: Title:
A-2-3
<PAGE>
Trustee's Certificate of Authentication
This is one of the Securities referred to in the within-mentioned
Indenture.
STATE STREET BANK AND TRUST COMPANY, as Trustee
Dated: January 22, 1999 By:
----------------------------------
Authorized Signatory
A-2-4
<PAGE>
Form of Reverse of Security
This Security is one of a duly authorized issue of Securities of the
Company designated as 9 3/4% Senior Subordinated Notes due 2009, Series B
(herein called the "Exchange Securities"), limited in aggregate principal amount
at Stated Maturity to $130,000,000 issued and to be issued under an Indenture,
dated as of January 22, 1999 (herein called the "Indenture," which term shall
have the meaning assigned to it in such instrument), among the Company, the
guarantors named therein and State Street Bank and Trust Company, as Trustee
(herein called the "Trustee," which term includes any successor trustee under
the Indenture), and reference is hereby made to the Indenture for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee and the Holders of the Securities and of the terms
upon which the Securities are, and are to be, authenticated and delivered. The
Securities include the Initial Securities and the Exchange Securities, issued in
exchange for the Initial Securities pursuant to the Registration Rights
Agreement. The Initial Securities and the Exchange Securities are treated as a
single class of securities under the Indenture.
The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S.C. (S)(S) 7aaa - 77bbbb (the "TIA")), as in effect on the date of the
Indenture. Notwithstanding anything to the contrary herein, the Securities are
subject to all such terms, and Holders of Securities are referred to the
Indenture and the TIA for a statement of such terms. The Securities are
unsecured senior subordinated obligations of the Company limited to
$200,000,000.
This Security is redeemable at the option of the Company, in whole or
in part, at any time on or after January 15, 2004, at the Redemption Prices
(expressed as percentages of principal amount) set forth below, plus accrued and
unpaid interest, if any, thereon to the Redemption Date, if redeemed during the
12-month period beginning January 15 of the years indicated below:
A-2-5
<PAGE>
Redemption
Year Price
---- -----------
2004.................. 104.875
2005.................. 103.250
2006.................. 101.625
2007 and thereafter... 100.000%
In addition, at any time, or from time to time, on or prior to January
15, 2002, the Company may, at its option, use the net cash proceeds of one or
more Equity Offerings to redeem up to an aggregate of 35% of the principal
amount of the Securities originally issued, at a redemption price equal to
109.750% of the principal amount thereof plus accrued and unpaid interest, if
any, thereon to the Redemption Date; provided that at least 65% of the
originally issued principal amount of Securities remains outstanding immediately
after the occurrence of such redemption. In order to effect the foregoing
redemption with the proceeds of any Equity Offering, the Company shall send the
redemption notice not later than 90 days after the consummation of any such
Equity Offering.
The Securities are not subject to any sinking fund.
The Indenture provides that the Company is obligated (a) upon the
occurrence of a Change in Control to make an offer to purchase all outstanding
Securities at a purchase price equal to 101% of the principal amount thereof,
plus accrued and unpaid interest, if any, thereon to the date of purchase and
(b) to make an offer to purchase Securities with a portion of the net cash
proceeds of certain sales or other dispositions of assets (not applied as
specified in the Indenture within the periods set forth therein) at a purchase
price equal to 100% of the principal amount thereof plus accrued and unpaid
interest, if any, to the date of purchase.
In the event of redemption or purchase of this Security in part only
pursuant to a Change of Control Offer or an Asset Sale Offer, a new Security or
Securities for the unredeemed or unpurchased portion hereof will be issued in
the name of the Holder hereof upon the cancellation hereof.
The Indenture contains provisions for defeasance at any time of the
entire indebtedness of this Security or of certain restrictive covenants and
Events of Default with respect to this Security, in each case upon compliance
with certain conditions set forth in the Indenture.
If an Event of Default shall occur and be continuing, there may be
declared due and payable the principal of, premium, if any, and accrued and
unpaid interest, if any, on all
A-2-6
<PAGE>
of the outstanding Securities, in the manner and with the effect provided in the
Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of a
majority in aggregate principal amount of the Securities at the time
Outstanding. The Indenture also contains provisions permitting the Holders of
specified percentages in aggregate principal amount of the Securities at the
time Outstanding, on behalf of the Holders of all the Securities, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities, the Holders of not less than 25% in principal amount of the
Securities at the time Outstanding shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default as Trustee
and offered the Trustee reasonable indemnity and the Trustee shall not have
received from the Holders of a majority in principal amount of Securities at the
time Outstanding a direction inconsistent with such request, and shall have
failed to institute any such proceeding for 60 days after receipt of such
notice, request and offer of indemnity. The foregoing shall not apply to
certain suits described in the Indenture, including any suit instituted by the
Holder of this Security for the enforcement of any payment of principal hereof
or any premium or interest hereon on or after the respective due dates expressed
herein (or, in the case of redemption, on or after the Redemption Date or, in
the case of any purchase of this Security required to be made pursuant to a
Change of Control Offer or an Asset Sale Offer, on or after the relevant
Purchase Date).
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional,
A-2-7
<PAGE>
to pay the principal of (and premium, if any) and interest on this Security at
the times, place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in the Borough of Manhattan, The City of New
York, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Security Registrar duly executed by,
the Holder hereof or his attorney duly authorized in writing, and thereupon one
or more new Securities, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
This Security is issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Securities are
exchangeable for a like aggregate principal amount of Securities of like tenor
of a different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
Interest on this Security shall be computed on the basis of a 360-day
year of twelve 30-day months.
The obligations of the Company under the Indenture and this Security
are expressly subordinated to all Senior Indebtedness, in each case to the
extent set forth in Article XIV of the Indenture, and reference is hereby made
to such Indenture for the precise terms of such subordination.
As provided in the Indenture and subject to certain limitations
therein set forth, the obligations of the Company under the Indenture and this
Security are Guaranteed pursuant to Guarantees endorsed hereon as provided in
the Indenture.
A-2-8
<PAGE>
Each Holder, by holding this Security, agrees to all of the terms and provisions
of said Guarantees. The Indenture provides that each Guarantor shall be released
from its Guaranty upon compliance with certain conditions.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
The Indenture and this Security shall be governed by and construed in
accordance with the laws of the State of New York, without regard to the
conflicts of laws principles thereof.
A-2-9
<PAGE>
ASSIGNMENT FORM
If you, the Holder, want to assign this Security, fill in the form below and
have your signature guaranteed:
I (or we) assign and transfer this Security to
- -------------------------------------------------------------------------------
(Insert assignee's social security or tax ID number)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code) and irrevocably appoint
- -------------------------------------------------------------------------------
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for such agent.
Date: Your Signature:
------------ -----------------------------------------
(Sign exactly as your name appears on the
other side of this Security)
By:
---------------------------------------
NOTICE: To be executed by an executive
officer
Signature Guarantee:
------------------------------------
A-2-10
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased in its entirety
by the Company pursuant to Section 10.13 or 10.14 of the Indenture, check the
applicable box:
Section 10.13 [_]
Section 10.14 [_]
If you want to elect to have only a part of the principal amount of
this Security purchased by the Company pursuant to Section 10.13 or 10.14 of the
Indenture, state the portion of such amount: $_______________
Dated: Your Signature:
-----------------------------------
(Sign exactly as name appears on
the other side of this Security)
Signature Guarantee:
---------------------------------------------
(Signature must be guaranteed by a financial
institution that is a member of the
Securities Transfer Agent Medallion Program
("STAMP"), the Stock Exchange Medallion
Program ("SEMP"), the New York Stock Exchange,
Inc. Medallion Signature Program ("MSP")
or such other signature guarantee program as
may be determined by the Security Registrar
in addition to, or in substitution for, STAMP,
SEMP or MSP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
A-2-11
<PAGE>
EXHIBIT B
FORM OF LEGEND FOR BOOK-ENTRY SECURITIES
Any Global Security authenticated and delivered hereunder shall bear a
legend (which would be in addition to any other legends required in the case of
a Restricted Security) in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS SECURITY IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS
SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A
NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), 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
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
B-1
<PAGE>
EXHIBIT C
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
------------------------
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
Re: Group Maintenance America Corp.
(the "Company") 9 3/4% Senior
Subordinated Notes due 2009
(the "Securities")
Ladies and Gentlemen:
In connection with our proposed sale of $___________ aggregate
principal amount of the Securities, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the U.S. Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Securities was not made to a Person in the
United States;
(2) either (a) at the time the buy offer 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, or (b) the transaction was executed in, on or through the
facilities of a designated offshore securities market described in Rule
902(a) of Regulation S and neither we nor any Person acting on our behalf
knows that the transaction has been pre-arranged with a buyer in the United
States;
(3) no directed selling efforts have been made in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act;
(5) we have advised the transferee of the transfer restrictions
applicable to the Securities;
(6) if the circumstances set forth in rule 904(c) under the
Securities Act are applicable, we have complied
C-1
<PAGE>
with the additional conditions therein, including (if applicable) sending a
confirmation or other notice stating that the Securities may be offered and
sold during the distribution compliance period specified in Rule 903(c)(2)
or (3), as applicable, only in accordance with the provisions of Regulation
S; pursuant to registration of the Securities under the Securities Act; or
pursuant to another available exemption from the registration requirements
under the Securities Act; and
(7) if the sale is made during a distribution compliance period and
the provisions of Rule 903(c)(3) are applicable thereto, we confirm that
such sale has been made in accordance with such provisions.
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:
---------------------------------
Authorized Signature
C-2
<PAGE>
EXHIBIT D
[FORM OF NOTATION ON SECURITY RELATING TO GUARANTY]
GUARANTY
________________, a _________________ corporation (the "Guarantor,"
which term includes any successor under the Indenture (the "Indenture") referred
to in the Security upon which this notation is endorsed), hereby unconditionally
and irrevocably guarantees on a senior subordinated basis, jointly and severally
with each other Guarantor of the Securities, to each Holder and to the Trustee
and its successors and assigns (a) the full and prompt payment (within
applicable grace periods) of principal of and interest on the Securities when
due, whether at maturity, by acceleration, by redemption or otherwise, and all
other monetary obligations of the Company under this Indenture and the
Securities and (b) the full and prompt performance within applicable grace
periods of all other obligations of the Company under the Indenture and the
Securities, subject to certain limitations set forth in the Indenture (all the
foregoing being hereinafter collectively called the "Guaranty Obligations").
The Guarantor further agrees that the Guaranty Obligations may be extended or
renewed, in whole or in part, without notice or further assent from such
Guarantor, and that such Guarantor will remain bound under Article XIII of the
Indenture notwithstanding any extension or renewal of any Guaranty Obligation.
Capitalized terms used herein have the meanings assigned to them in the
Indenture unless otherwise indicated.
Subject to the terms of the Indenture, this Guaranty shall be binding
upon the Guarantor and its successors and assigns and shall inure to the benefit
of the successors and assigns of the Trustee and the Holders and, in the event
of any transfer or assignment of rights by any Holder or the Trustee, the rights
and privileges herein conferred upon that party shall automatically extend to
and be vested in such transferee or assignee, all subject to the terms and
conditions hereof.
This Guaranty shall not be valid or obligatory for any purpose until
the certificate of authentication on the Security upon which this Guaranty is
noted shall have been executed by the Trustee under the Indenture by the
signature of one of its authorized officers.
The obligations of the Guarantor to the Holders of Securities and to
the Trustee pursuant to this Guaranty and the
D-1
<PAGE>
Indenture are expressly subordinated to all Guarantor Senior Indebtedness and
senior in right of payment to all Guarantor Subordinated Indebtedness, in each
case to the extent set forth in Section 13.9 and Article XIV of the Indenture,
and reference is hereby made to such Indenture for the precise terms of such
subordination.
Notwithstanding any other provision of the Indenture or this Guaranty,
under the Indenture and this Guaranty the maximum aggregate amount of the
obligations guaranteed by the Guarantor shall not exceed the maximum amount that
can be guaranteed without rendering the Indenture or this Guaranty, as it
relates to such Guarantor, voidable under applicable federal or state law
relating to fraudulent conveyance or fraudulent transfer. This Guaranty shall
be governed by the internal laws of the State of New York, without regard to
conflict of laws provisions thereof.
[Name of Guarantor]
By:
--------------------------------------------
Name:
Title:
D-2
<PAGE>
EXHIBIT 10.1
LOCK-UP AGREEMENTS
OF SENIOR
DIRECTORS AND EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
NAME SHARES AGREED TO LOCK UP
- ----------------------------------------------------------------------------------
<S> <C>
Ronald D. Bryant 366,806
David L. Henninger 102,000
Chester J. Jachimiec 131,000
Timothy Johnston 41,000
Andrew Jeffrey Kelly 362,800
Donald L. Luke 1,000
Thomas B. McDade 8,000
J. Patrick Millinor, Jr. 220,145
Lucian L. Morrison 8,000
James P. Norris 1,500
Fredric J. Sigmund 151,982
John M. Sullivan 27,000
James D. Weaver 86,000
William M. Callahan 49,000
Darren B. Miller 54,000
Alfred R. Roach 44,000
Richard S. Rouse 124,000
Randolph W. Bryant 1,000
Daniel Kipp 2,000
Gordon Cain 2,417,350
---------
TOTAL DIRECTORS & EXEC. 4,198,583
=========
</TABLE>
LOCK-UP AGREEMENTS
OF SHAREHOLDERS
<TABLE>
<CAPTION>
NAME SHARES AGREED TO LOCK UP
- ----------------------------------------------------------------------------------
<S> <C>
Stephen B. Becker 150,000
Arthur Hungerford 500,000
James D. Jennings 456,898
I. Ahron Katz 225,000
Richard Lacy 200,000
James D. Miller 248,000
John Newlin 232,320
Richard M. Siefring 650,000
Joseph Sullivan 200,000
Bruce Walker 190,500
Dale Wilkerson 175,041
---------
TOTAL SHAREHOLDERS 3,227,759
=========
Total Directors & Exec. Off. 4,198,583
Total Shareholders 3,227,759
---------
GRAND TOTAL 7,426,342
=========
</TABLE>
<PAGE>
January 5, 1999
[Name and Address of
Shareholder]
Dear :
---------------------
The purpose of this letter is to request a modification to the Stock
Transfer Restriction Agreement (the "Agreement") between Group Maintenance
America Corp. ("GroupMAC") and you to extend some of the restrictions imposed on
your transfer of GroupMAC stock. We believe that this change will allow the
supply of our stock available for sale to more closely match the current demand
for our stock.
Under this proposal, the Agreement would be modified to provide that,
until December 31, 1999, you will retain ownership of at least
____________________ shares of common stock of GroupMAC currently held, directly
or indirectly, by you, except that you will be permitted to make (i) Permitted
Dispositions (as defined in the Agreement), (ii) transfers of shares held in an
employee benefit plan, and (iii) pledges of stock to secure loans and sales of
such stock by the lender pursuant to the exercise of its rights under the
pledge.
Additionally, it is our intent to waive the provisions of this letter
agreement if, as a result of an emergency situation, you have an immediate need
for cash and that need can be satisfied without undue hardship on you only by
the sale of GroupMAC stock. Furthermore, if GroupMAC implements any program
that allows other shareholders to sell GroupMAC stock, such as the filing of a
registration statement with the Securities and Exchange Commission for a
secondary offering, you will be allowed to participate in that program to the
same extent as other shareholders of GroupMAC.
<PAGE>
[Name of Shareholder]
January 5, 1999
Page 2
The Agreement would also be modified to provide that if you make any sales
of GroupMAC stock, as permitted by the Agreement and as modified by this letter
agreement, you will make such sales through a broker approved by GroupMAC.
If the foregoing modification of the Agreement is acceptable to you, please
sign the copy of this letter in the space provided below and return the copy to
us by the close of business on January 8. Your agreement set forth in this
letter will become effective only after the holders of 6,000,000 shares of
GroupMAC stock have entered into substantially similar agreements with GroupMAC.
Very truly yours,
GROUP MAINTENANCE AMERICA CORP.
By:
_________________________________
J. Patrick Millinor, Jr.
Chief Executive Officer
ACCEPTED AND AGREED
this ______ day of January, 1999.
________________________________
[Name of Shareholder]
<PAGE>
EXHIBIT 23.2
The Board of Directors
Group Maintenance America Corp.:
We consent to the use of our reports incorporated by reference herein and to
the reference to our firm under the heading "Experts" in this prospectus.
KPMG LLP
Houston, Texas
February 10, 1999
