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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Building One Services Corporation
- ------------------------------------------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, Par Value $.001
- ------------------------------------------------------------------------------------------------------------------
(Title of Class of Securities)
120114103
- ------------------------------------------------------------------------------------------------------------------
(CUSIP Number)
Mr. Andrew Africk
Boss Investment LLC
c/o Apollo Management, L.P.
1301 Avenue of the Americas, 38th Floor
New York, NY 10019
(212) 261-4000
with copies to:
Michael D. Weiner, Esq. John J. Suydam, Esq.
Apollo Management, L.P. O'Sullivan Graev & Karabell, LLP
1999 Avenue of the Stars, Suite 1900 30 Rockefeller Plaza, 24th Floor
Los Angeles, CA 90067 New York, NY 10012
(310) 201-4100 (212) 408-2400
- ------------------------------------------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
April 30, 1999
- ------------------------------------------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the
subject of this Schedule 13D, and is filing this schedule because of (S)(S)240.13d-1(e), 240.13d-1(f) or
240.13d-1(g), check the following box.[_]
Note: Schedules filed in paper format shall include a signed original and five copies of the schedule,
including all exhibits. See (S)240.13d-7 for other parties to whom copies of this statement are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's initial filing on this form
with respect to the subject class of securities, and for any subsequent amendment containing information
which would alter disclosures provided in a prior cover page.
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CUSIP NO. ............ 120114103
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The information required on the remainder of this cover page shall not be deemed to be "filed" for the
purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the
liabilities of that section of the Act but shall be subject to all other provisions of the Act (however,
see the Notes).
Potential persons who are to respond to the collection of information contained in this form are not
required to respond unless the form displays a currently valid OMB control number.
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2
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CUSIP NO. ............ 120114103
- --------------------------------------------------------------------------------
1. Names of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
Boss Investment LLC*
- --------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) X
(b)
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds (See Instructions) OO
- --------------------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e)
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
- --------------------------------------------------------------------------------
Number of Shares 7. Sole Voting Power 4,444,444 shares of Common Stock
Beneficially Owned ----------------------------------------------------------
by Each Reporting 8. Shared Voting Power -0-
Person With ----------------------------------------------------------
9. Sole Dispositive Power 4,444,444 shares of
Common Stock
----------------------------------------------------------
10. Shared Dispositive Power -0-
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned
by Each Reporting Person 4,444,444 shares of Common Stock
- --------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11) 17%
- --------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions)
OO
- --------------------------------------------------------------------------------
3
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CUSIP NO. ............ 120114103
- --------------------------------------------------------------------------------
1. Names of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
Apollo Investment Fund IV, L.P.*
- --------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) X
(b)
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds (See Instructions) OO
- --------------------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e)
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
- --------------------------------------------------------------------------------
Number of Shares 7. Sole Voting Power 4,218,222 shares of Common Stock**
Beneficially Owned ----------------------------------------------------------
by Each Reporting 8. Shared Voting Power 4,444,444 share of Common Stock**
Person With ----------------------------------------------------------
9. Sole Dispositive Power 4,218,222 shares of
Common Stock**
----------------------------------------------------------
10. Shared Dispositive Power 4,444,444 shares of
Common Stock**
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned
by Each Reporting Person 4,444,444 shares of Common Stock**
- --------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11) 17%
- --------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions)
PN
- --------------------------------------------------------------------------------
4
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CUSIP NO. ............ 120114103
- --------------------------------------------------------------------------------
1. Names of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
Apollo Overseas Partners IV, L.P.*
- --------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) X
(b)
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds (See Instructions) OO
- --------------------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e)
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
- --------------------------------------------------------------------------------
Number of Shares 7. Sole Voting Power 226,222 shares of Common Stock**
Beneficially Owned ----------------------------------------------------------
by Each Reporting 8. Shared Voting Power 4,444,444 share of Common Stock**
Person With ----------------------------------------------------------
9. Sole Dispositive Power 226,222 shares of
Common Stock**
----------------------------------------------------------
10. Shared Dispositive Power 4,444,444 shares of
Common Stock**
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned
by Each Reporting Person 4,444,444 shares of Common Stock**
- --------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11) 17%
- --------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions)
PN
- --------------------------------------------------------------------------------
5
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CUSIP NO. ............ 120114103
- --------------------------------------------------------------------------------
1. Names of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
Apollo Advisors IV, L.P.*
- --------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) X
(b)
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds (See Instructions) OO
- --------------------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e)
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
- --------------------------------------------------------------------------------
Number of Shares 7. Sole Voting Power -0-
Beneficially Owned ----------------------------------------------------------
by Each Reporting 8. Shared Voting Power 4,444,444 share of Common Stock**
Person With ----------------------------------------------------------
9. Sole Dispositive Power -0-
----------------------------------------------------------
10. Shared Dispositive Power 4,444,444 shares of
Common Stock**
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned
by Each Reporting Person 4,444,444 million shares of Common Stock**
- --------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11) 17%
- --------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions)
PN
- --------------------------------------------------------------------------------
6
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* On March 22, 1999 Boss Investment LLC, a Delaware limited liability
company owned by certain Reporting Entities (as defined in Item 2) (the
"Investor"), entered into a Securities Purchase Agreement (the "Purchase
- --------- --------
Agreement"), with Building One Services Corporation, a Delaware corporation (the
- ---------
"Issuer"). Pursuant to the Purchase Agreement, on April 30, 1999 the Investor
------
acquired approximately $100.0 million of the Issuer's 7.5% Junior Subordinated
Convertible Debentures (the "Convertible Notes"). Assuming conversion of the
-----------------
principal amount of the Notes and assuming that all interest is paid in cash,
the Convertible Notes are convertible into 4,444,444 shares of common stock of
the Issuer, par value $.001 per share (the "Common Stock"). This represents
------------
approximately 17% of the outstanding shares of Common Stock.
**The Investor will be dissolved and will distribute the Convertible Notes
to its members, each of whom is a Reporting Entity, resulting in direct
beneficial ownership by Apollo Investment Fund IV, L.P. and Apollo Overseas
Partners IV, L.P. of $94.9 million and $5.1 million, respectively, of the
Convertible Notes corresponding to 4,218,222 shares and 226,222 shares of Common
Stock upon conversion, respectively.
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ITEM 1. SECURITY AND ISSUER
This Statement relates to the common stock, par value $.001 per share
("Common Stock"), of Building One Services Corporation, a Delaware
------------
corporation (the "Issuer"). The address of the principal executive
------
office of the Issuer is 800 Connecticut Avenue, N.W., Suite 1111,
Washington, D.C. 20006.
ITEM 2. IDENTITY AND BACKGROUND
(a)-(c) This statement is filed jointly by (i) Boss Investment LLC,
and (f) a Delaware limited liability company (the "Investor"); (ii) Apollo
Investment Fund IV, L.P., a Delaware limited partnership ("AIF IV");
------
(iii) Apollo Overseas Partners IV, L.P., a limited partnership
registered in the Cayman Islands ("Overseas Partners"); and (iv) Apollo
-----------------
Advisors IV, L.P., a Delaware limited partnership and the general
partner of each AIF IV and Overseas Partners ("Advisors"). The
--------
foregoing entities are hereinafter referred to collectively as the
"Reporting Entities." The Reporting Entities are making this joint
filing because they may be deemed to constitute a "group" within the
meaning of Section 13(d)(3) of the Securities Exchange Act of 1934.
AIF IV and Overseas Partners are principally engaged in the
business of investing in securities. Advisors is principally engaged in
the business of serving as general partner of AIF IV and managing
general partner of Overseas Partners. The principal office of each of
the Reporting Entities is c/o Apollo Advisors IV, L.P., Two
Manhattanville Road, Purchase, New York 10577.
Apollo Capital Management IV, Inc., a Delaware corporation
("Capital Management IV"), is the general partner of Advisors. Capital
---------------------
Management IV is principally engaged in the business of serving as
general partner to Advisors.
Apollo Management IV, L.P., a Delaware limited partnership
("Apollo Management IV"), serves as manager of the Reporting Entities
--------------------
and manages their day-to-day operations.
AIF IV Management, Inc., a Delaware corporation ("AIM IV"), is
------
the general partner of Apollo Management IV. AIM IV is principally
engaged in the business of serving as general partner to Apollo
Management IV.
The respective addresses of the principal office of Capital
Management IV, Apollo Management IV and AIM IV are c/o Apollo Advisors
IV, L.P., Two Manhattanville Road, Purchase, New York 10577.
Apollo Fund Administration IV, LLC, a Delaware limited liability
company ("Administration"), is the administrative general partner of
--------------
Overseas Partners. Administration is principally engaged in the
business of serving as administrative general partner of Overseas IV.
The principal place of business of Administration is c/o Apollo
Advisors IV, L.P., Two Manhattanville Road, Purchase, New York 10577.
Attached as Appendix A to Item 2 is certain information
concerning the principals, executive officers, directors and principal
shareholders of the Reporting Entities and other entities as to which
such information is required to be disclosed in
8
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response to Item 2 and General Instruction C to Schedule 13D.
(d) and None of the Reporting Entities or any of the persons or entities
(e) referred to in Appendix A to Item 2 has, during the last five years,
been convicted in a criminal proceeding (excluding traffic violations
and similar misdemeanors) or been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a
result of such proceeding was or is subject to a judgment, decree, or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, Federal or state securities laws or finding any
violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The Investor obtained financing from its members for the
purchase of the Convertible Notes (as defined in Item 4). The members
(AIF IV and Overseas Partners), in turn, obtained their respective
funds from capital contributions of their partners.
ITEM 4. PURPOSE OF THE TRANSACTION
The purpose of the transaction was to acquire $100.0 million of
7.5% Junior Subordinated Convertible Debentures Due 2012 to be issued
by the Issuer (the "Convertible Notes"). The Issuer used proceeds from
-----------------
the sale of the Convertible Notes to finance, in part, the repurchase
of 25,500,000 shares of Common Stock in connection with its Amended
Tender Offer, dated April 6, 1999 (the "Amended Offer").
-------------
On March 22, 1999 the Investor entered into the Securities
Purchase Agreement (the "Purchase Agreement") with the Issuer, under
------------------
which the Investor agreed to invest $100.0 million in the Issuer in
exchange for the Convertible Notes. Pursuant to the Purchase Agreement,
the Investor acquired $100.0 million of the Convertible Notes on April
30, 1999. In connection with the Purchase Agreement, the Issuer and
Investor also entered into the Investors' Rights Agreement, dated March
22, 1999 (as amended on April 6, 1999, the "Investors' Rights
-----------------
Agreement").
---------
The Convertible Notes will mature on the thirteenth anniversary
of the date of issuance and will provide for quarterly interest
payments at a rate of 7.5% to be paid in additional Convertible Notes
or cash, at the Issuer's election, for the first five years after their
issuance, and in cash thereafter. The holders of a majority of the
outstanding principal amount of the Convertible Notes, however, will
have the right to require payment of interest in cash after the third
and through the fifth anniversary of the issuance of the Convertible
Notes. Upon a "change of control," as defined in the indenture
governing the Convertible Notes, each holder may require the Issuer to
redeem its Convertible Notes plus all accrued interest and all interest
that would have otherwise accrued through the fifth anniversary of the
issuance of the Convertible Notes. The indenture governing the
Convertible Notes entitles the Issuer to redeem the Convertible Notes
at a 3% premium on the principal and accrued interest at any
9
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time after the fifth anniversary of their issuance.
The Convertible Notes are convertible into shares of Common
Stock at an initial conversion price of $22.50 per share plus all
accrued and unpaid interest. Assuming conversion of the principal
amount of the Convertible Notes and assuming that all interest is paid
in cash, the Investor has the right to acquire upon conversion
4,444,444 shares of Common Stock, or approximately 17% of the
outstanding voting power. If the Convertible Notes are converted prior
to the fifth anniversary of their issuance, the amount converted into
shares of Common Stock will include additional interest that would have
accrued or been paid from the date of conversion through the fifth
anniversary of the issuance of the Convertible Notes. However, unless
the conversion is in connection with a change of control, the
additional interest will not exceed a total of 30 months of interest.
The Issuer will adjust the conversion price under certain
circumstances, including the issuance of Common Stock at a price below
the conversion price of the Convertible Notes or below the fair market
value of a share of Common Stock or the repurchase of shares of Common
Stock at prices above the then fair market value. The indenture for the
Convertible Notes limits the Issuer's ability to incur additional
indebtedness, pay dividends, repurchase securities or repay certain
other indebtedness.
In connection with the sale of the Convertible Notes to the
Investor, on April 30, 1999 the Issuer increased the size of its Board
of Directors (the "Board") from nine to ten persons and appointed three
designees of the Investor to the Board. The Issuer has agreed to seek
stockholder approval of amendments to its restated certificate of
incorporation that would authorize the holders of the Convertible Notes
to vote together with the holders of the Common Stock on all matters
submitted to the stockholders for a vote and to elect three directors
of the Issuer (or, if the Board has more than then directors, no less
than 30% of the directors). The holders of the Convertible Notes will
be able to cast the number of votes that they would be entitled to cast
if they had converted the Convertible Notes into shares of Common
Stock. If this amendment is not enacted by the later of July 25, 1999
and the 60th day after the issuance of the Convertible Notes (the
"deadline"), the interest rate on the Convertible Notes will increase
to 12.5%, but will revert back to 7.5% after the amendment is enacted.
In addition, if the amendment is not enacted by 90 days after the
deadline, the conversion price will be permanently reduced by $1.00. It
will be permanently reduced by another $1.00 every 90 days afterward
(up to a maximum $4.00 reduction), unless the amendment has been
enacted before the scheduled reduction. Additionally, if certain events
of default occur which the Issuer does not correct, the Investor will
be entitled to elect a majority of the Board to hold office only for so
long as such events of default are continuing.
Pursuant to the Investors' Rights Agreement, as long as the
Investor holds at least 50% of the outstanding Convertible Notes, the
Issuer, without the consent of the Investor, will be precluded from,
among other things:
. merging with another company unless in connection with a
permitted acquisition, as defined;
. liquidating, recapitalizing or reorganizing or otherwise
materially altering its business;
10
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. acquiring or disposing of any business or assets in one or
more transactions with an aggregate value in excess of $100.0
million;
. declaring or paying a dividend;
. repurchasing any capital stock or indebtedness junior to the
Convertible Notes;
. agreeing to restrict its ability to honor the rights of the
holders of the Convertible Notes;
. entering into any agreement with an affiliate that is not in
the ordinary course of business and on terms no less
favorable to the Issuer than those in an arm's-length
transaction;
. increasing the size of the Board above ten directors, unless
the Investor's designees continue to represent at least 30%
of the Board; or
. hiring, firing or amending the employment terms of its chief
executive officer or chief operating officer.
In addition, the Investor will have the right to acquire equity
securities or securities convertible or exercisable for equity
securities of the Issuer in an amount equal to 50% of the amount to be
sold in a private placement. The Investor and any other holders of the
Convertible Notes will have the right to require the Issuer to register
the shares of Common Stock that they acquire upon conversion of the
Convertible Notes for resale under the Securities Act of 1933, as
amended. Upon the issuance of the Convertible Notes, the Issuer paid
the Investor a financing fee in the amount of $2,500,000, based upon
the principal amount of the Convertible Notes, and reimbursed the
Investor for its related expenses.
The Investor will be dissolved and will distribute the
Convertible Notes to its members, each of whom is a Reporting Entity,
resulting in direct beneficial ownership by AIF IV and Overseas
Partners of $94.9 million and $5.1 million, respectively, of the
Convertible Notes corresponding to 4,218,222 shares and 226,222 shares
of Common Stock upon conversion, respectively.
The Purchase Agreement and the Investors' Rights Agreement each
contain other terms and conditions. The foregoing description of such
agreements is qualified in its entirety by reference to the text of
such agreements, which are filed as exhibits to this Schedule 13D and
are incorporated herein by reference.
Except as set forth in this Item 4, the Reporting Entities have
no present plans or proposals to acquire additional securities of the
Issuer. However, the Reporting Entities reserve the right from time to
time to acquire additional securities and/or to dispose of securities
and to participate in future transactions with respect to the Issuer's
Securities. Upon a material change in the beneficial ownership of the
Reporting Persons, the Reporting Persons will amend this Schedule 13D.
11
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ITEM 5. INTEREST IN THE SECURITIES OF THE ISSUER
(a) Assuming conversion of the principal amount of the Convertible
Notes and assuming that all interest is paid in cash, the Reporting
Entities beneficially own Convertible Notes convertible into an
aggregate of 4,444,444 shares of Common Stock, or approximately 17% of
the total issued and outstanding shares of Common Stock.
Information concerning the identity and background of such
persons who share in the power to vote or to direct the vote or to
dispose or direct the disposition of such Common Stock is as set forth
in Appendix A to Item 2 and is incorporated herein by reference.
(b) The responses set forth in Item 4 are incorporated herein.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
The responses set forth in Item 4 are incorporated herein.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
1. Securities Purchase Agreement, dated as of March 22, 1999,
between Boss Investment LLC, a Delaware limited liability company, and
Building One Services Corporation, a Delaware corporation.
2. Investors' Rights Agreement, dated as of March 22, 1999,
among Building One Services Corporation, a Delaware corporation, and
Boss Investment LLC, a Delaware limited liability company.
3. Amendment No. 1, dated as of April 6, 1999, to the
Investors' Rights Agreement, dated March 22, 1999, among Building One
Services Corporation, a Delaware Corporation and Boss Investment LLC, a
Delaware Limited Liability Company.
4. Indenture, dated as of April 30, 1999, between Building One
Services Corporation, a Delaware corporation, and United States Trust
Company of New York, a national banking association, as Trustee.
5. Press Release, dated March 23, 1999.
6. Press Release, dated April 30, 1999.
12
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APPENDIX A TO ITEM 2
The following sets forth information with respect to the general
partners, executive officers, directors and principal shareholders of Advisors,
Capital Management IV, and Administration. Capitalized terms used herein
without definition have the meanings assigned thereto in the Schedule 13D to
which this Appendix A relates. Except as otherwise indicated in this Appendix A
or in the Schedule 13D to which this Appendix A relates, the principal business
address of each person or entity set forth below is c/o Apollo Advisors IV,
L.P., Two Manhattanville Road, Purchase, New York 10577, and each such person or
entity is a citizen of the United States of America.
The principal business of Advisors is to provide advice regarding
investments by, and serving as general partner to, the Reporting Persons, and
the principal business of Capital Management IV is that of serving as general
partner of Advisors.
The directors and principal executive officers of Capital Management IV
are Messrs. Leon D. Black and John J. Hannan. The principal occupation of each
of Messrs. Black and Hannan is to act as an executive officer and director of
Capital Management IV. Messrs. Black and Hannan are also limited partners of
Advisors IV. Mr. Black is the President and director of AIM IV, the general
partner of Apollo Management IV. Mr. Hannan is a Vice President and director of
AIM IV. AIM IV is principally engaged in the business of serving as general
partner of Apollo Management IV.
Messrs. Black and Hannan are also founding principals of Apollo
Advisors, L.P. and its successive investment managers (collectively "Apollo
------
Advisors") with respect to the Apollo Investment Funds, including AIF IV and
- --------
Apollo Real Estate Advisors, L.P. and its successive investment managers
(collectively "AREA") with respect to the Apollo Real Estate Investment Funds.
----
The principal business of Apollo Advisors is to provide advice regarding
investments in securities on behalf of the Apollo Investment funds and the
principal business of AREA is to provide advice regarding investments in real
estate and real estate-related investments on behalf of the Apollo Real Estate
Investment funds. The business address of each of Messrs. Black and Hannan is
c/o Apollo Management, L.P., 1301 Avenue of the Americas, New York, New York
10019.
13
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After reasonable inquiry and to the best of his knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct. In addition, by signing below, the undersigned
agrees that this Schedule 13D may be filed jointly on behalf of each of Boss
Investment LLC, Apollo Investment Fund IV, L.P., Apollo Advisors IV, L.P. and
Apollo Overseas Partners IV, L.P.
Dated as of the 6th day of May, 1999.
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BOSS INVESTMENT LLC APOLLO ADVISORS IV, L.P.
By: Apollo Capital Management IV, Inc.,
By: /s/ Andrew Africk its General Partner
----------------------------------
Name: Andrew Africk
Title: Manager By: /s/ Michael D. Weiner
----------------------------------
Name: Michael D. Weiner
Title: Vice President
APOLLO INVESTMENT FUND IV, L.P. APOLLO OVERSEAS PARTNERS IV, L.P. IV, L.P.
By: Apollo Advisors IV, L.P., By: Apollo Advisors IV, L.P.,
its General Partner its General Partner
By: Apollo Capital Management IV, Inc., By: Apollo Capital Management IV, Inc.
its General Partner its General Partner
By: /s/ Michael D. Weiner By: /s/ Michael D. Weiner
---------------------------------- ----------------------------------
Name: Michael D. Weiner Name: Michael D. Weiner
Title: Vice President Title: Vice President
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14
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Exhibit 99.1
SECURITIES PURCHASE AGREEMENT
BETWEEN
BOSS INVESTMENT LLC
and
BUILDING ONE SERVICES CORPORATION
Dated as of March 22, 1999
<PAGE>
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS...................................................... 1
ARTICLE II ISSUANCE OF DEBENTURES; AMENDED OFFER........................... 6
2.1 Issuance of Debentures............................................... 6
2.2 Closing.............................................................. 6
2.3 Offer................................................................ 6
2.4 Warrants and Company Stock Options................................... 7
2.5 Company Actions...................................................... 7
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY.................. 8
3.1 Organization......................................................... 8
3.2 Capitalization....................................................... 8
3.3 Subsidiaries......................................................... 9
3.4 Authority............................................................ 10
3.5 Consents and Approvals; No Violations................................ 10
3.6 SEC Documents; Financial Statements; Other Financial Information..... 10
3.7 Company Acquisitions................................................. 11
3.8 Information Supplied................................................. 12
3.9 Absence of Certain Changes or Events................................. 12
3.10 Litigation........................................................... 13
3.11 Contracts............................................................ 13
3.12 Compliance with Laws................................................. 13
3.13 Environmental Matters................................................ 13
3.14 Absence of Changes in Benefit Plans; Labor Relations................. 14
3.15 Employment Matters; Affiliate Transactions........................... 15
3.16 ERISA Compliance..................................................... 15
3.17 Taxes................................................................ 17
3.18 Title to Properties; Condition of Assets............................. 18
3.19 Intellectual Property................................................ 19
3.20 Non-Compete.......................................................... 19
3.21 State Takeover Statutes.............................................. 19
3.22 Brokers.............................................................. 19
3.23 Government Contracts................................................. 20
3.24 Insurance............................................................ 20
3.25 Share Retention Agreements........................................... 20
3.26 No Material Adverse Change Relative to Investment.................... 20
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF INVESTOR...................... 21
4.1 Organization......................................................... 21
4.2 Authority............................................................ 21
4.3 Consents and Approvals; No Violations................................ 21
4.4 Information Supplied................................................. 22
4.5 Ownership of Company Common Stock.................................... 22
4.6 Financing............................................................ 22
4.7 Brokers.............................................................. 22
4.8 Investment Representations and Warranties............................ 22
ARTICLE V COVENANTS........................................................ 23
5.1 Conduct of Business.................................................. 23
5.2 No Solicitation...................................................... 25
5.3 Certain Tax Matters.................................................. 26
5.4 Other Actions........................................................ 27
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5.5 Advice of Changes; Filings........................................... 27
5.6 Financial Information................................................ 27
ARTICLE VI ADDITIONAL AGREEMENTS........................................... 27
6.1 Access to Information; Confidentiality............................... 27
6.2 Reasonable Efforts; Notification..................................... 28
6.3 Fees and Expenses.................................................... 29
6.4 Public Announcements................................................. 30
6.5 NASD................................................................. 30
ARTICLE VII CONDITIONS..................................................... 30
7.1 Conditions to Each Party's Obligation................................ 30
7.2 Conditions to the Company's Obligations.............................. 31
7.3 Conditions to the Investor's Obligations............................. 31
ARTICLE VIII TERMINATION AND AMENDMENT..................................... 32
8.1 Termination.......................................................... 32
8.2 Effect of Termination................................................ 34
ARTICLE IX MISCELLANEOUS................................................... 34
9.1 Amendment............................................................ 34
9.2 Extension; Waiver.................................................... 34
9.3 Survival of Representations, Warranties and Agreements, Limitation
on Liability......................................................... 34
9.4 Notices.............................................................. 34
9.5 Indemnification...................................................... 35
9.6 Interpretation....................................................... 36
9.7 Entire Agreement; Third Party Beneficiaries.......................... 36
9.8 Governing Law........................................................ 36
9.9 Counterparts......................................................... 37
9.10 Assignment........................................................... 37
9.11 Enforcement.......................................................... 37
</TABLE>
ii
<PAGE>
Schedules
- ---------
Schedule 1.1A: 1998 Financial Statements
Schedule 3.2(b): Company Stock Options and Warrants
Schedule 3.2(c): Employee Ownership of Capital Stock
Schedule 3.3(a): Subsidiaries
Schedule 3.3(b): Stock Ownership of Subsidiaries
Schedule 3.3(d): Investments
Schedule 3.5(b): Governmental Consents
Schedule 3.5(d): Third Party Consents
Schedule 3.5(f): Loss of Permits
Schedule 3.6: Undisclosed Liabilities
Schedule 3.7: Company Acquisitions
Schedule 3.9: Absence of Certain Changes or Events
Schedule 3.10(a): Proceedings
Schedule 3.10(b): Orders
Schedule 3.11(a): Material Contracts
Schedule 3.12: Compliance with Laws
Schedule 3.13(a): Compliance with Environmental Laws
Schedule 3.13(b): Release of Hazardous Materials
Schedule 3.13(c): Environmental Litigation
Schedule 3.13(d): Assumption of Environmental Liabilities
Schedule 3.13(e): Storage Tanks
Schedule 3.14(a): Absence of Changes in Benefit Plans and Labor Relations
Schedule 3.14(b): Employment Agreements
Schedule 3.14(c): Payments to Employees
Schedule 3.14(d): Collective Bargaining Agreements
Schedule 3.14(e): Labor Unionizing Activity
Schedule 3.15(a): List of Directors, Officers and Key Employees
Schedule 3.15(b): Affiliate Transactions
Schedule 3.16(e): Welfare Benefit Plans
Schedule 3.16(f): Post-Retirement Medical and Life Insurance Benefits Coverage
Schedule 3.16(g): Acceleration of Benefits
Schedule 3.17(a): Audits of Tax Returns
Schedule 3.17(b): Net Operating Loss Carryovers
Schedule 3.17(c): Excess Parachute Payments
Schedule 3.17(d): Right to Receive Parachute Gross-Up Payments
Schedule 3.18(a): Owned Real Property
Schedule 3.20: Non-Competition Agreements
Schedule 3.24: Insurance
Schedule 3.25: Share Retention Agreements
Schedule 5.1(d): Pending Acquisitions
Schedule 5.1(k): Certain Matters with Respect to Options and Bonuses
iii
<PAGE>
Exhibits
- --------
Exhibit A: Investor Rights Agreement
Exhibit 1.1A: Commitment Letter
Exhibit 1.1B: Highly Confident Letter
Exhibit 1.1C: Form of Indenture
Exhibit 7.3(d): Form of Opinion of Morgan, Lewis & Bockius LLP
iv
<PAGE>
SECURITIES PURCHASE AGREEMENT (this
"Agreement"), dated as of March 22, 1999, between
----------
BOSS INVESTMENT LLC, a limited liability company
(the "Investor"), and BUILDING ONE SERVICES
--------
CORPORATION, a Delaware corporation (the
"Company").
-------
WHEREAS, the Company currently has a pending offer to purchase up to
50% of its shares (the "Shares") of common stock, par value $.01 per share (the
------
"Common Stock"), for $25.00 per share in cash and to purchase up to 50% of its
------------
currently outstanding options.
WHEREAS, the Company desires to issue $100 million of 7 1/2%
Convertible Junior Subordinated Debentures Due 2012 to partially finance the
purchase of its Shares and the Investor is willing to purchase such notes from
the Company on the terms and conditions set forth herein.
WHEREAS, the Company desires to amend its offer to purchase its shares
to, among other things, provide for an offer price of $22.50 per share in cash.
WHEREAS, the Company and the Investor have executed and delivered an
Investor Rights Agreement (the "Investor Rights Agreement"), which sets forth
-------------------------
certain registration and other rights granted to the Investor.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, and intending to be legally bound hereby, the
Investor and the Company hereby agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the following
respective meanings:
"Affiliate" means, with respect to any specified person, any other person
---------
who, directly or indirectly, owns or controls, is under common ownership or
control with, or is owned or controlled by, such specified person. As used in
this definition, the term "control" (including the terms "controlling",
"controlled by" and "under common control with") of a person means the
possession, direct or indirect, of the power to vote five percent or more of the
voting securities of such person or to direct or cause the direction of the
management and policies of such person, whether through the ownership of voting
securities, by contract or otherwise.
"Benefit Plans" has the meaning set forth in Section 3.16(a).
------------- ---------------
"Closing" has the meaning set forth in Section 2.2.
------- -----------
"Closing Date" has the meaning set forth in Section 2.2.
------------ -----------
<PAGE>
"Code" means the Internal Revenue Code of 1986, as amended.
----
"Commission" means the Securities and Exchange Commission.
----------
"Commonly Controlled Entity" has the meaning set forth in Section 3.16(a).
-------------------------- ---------------
"Company Acquisitions" has the meaning set forth in Section 3.7.
-------------------- -----------
"Company Stock Options" has the meaning set forth in Section 3.2(a).
--------------------- --------------
"Contract" means any loan or credit agreement, note, bond, mortgage,
--------
indenture, lease, sublease, purchase order or other contract, agreement,
commitment, instrument, Permit, concession, franchise or license.
"Debentures" means the Company's 7 1/2% Convertible Junior Subordinated
----------
Debentures Due 2012 to be issued pursuant to this Agreement and to be governed
by the Indenture.
"Environmental Laws" means any Law, and any common law, relating to (a)
------------------
Releases or threatened Releases of Hazardous Materials into the environment; (b)
the generation, treatment, storage, disposal, use, handling, manufacturing,
transportation or shipment of Hazardous Materials or (c) otherwise relating to
pollution or protection of health or safety or the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended.
"Exchange Act" means the Securities Exchange Act of 1934 and the rules and
------------
regulations promulgated thereunder, each as amended.
"Expense Reimbursement Event" shall mean that this Agreement is terminated
---------------------------
(a) pursuant to Section 8.1(d)(i) if the Company had knowledge of the applicable
-----------------
breach of a representation or warranty when such representation or warranty was
made, (b) pursuant to Section 8.1(d)(ii) in a situation (i) that fundamentally
------------------
affects the viability or the consummation of the transactions contemplated by
this Agreement, (ii) in which the Investor would be entitled to terminate this
Agreement pursuant to Section 8.1(d)(i) or (iii) that has resulted or is
-----------------
reasonably likely to result in a material adverse change or (c) pursuant to
Section 8.1(h).
- --------------
"Financing Letters" means the commitment letter set forth in Exhibit 1.1A
----------------- ------------
and the highly confident letter set forth in Exhibit 1.1B.
------------
"GAAP" means generally accepted accounting principles.
----
"Governmental Entity" means any national, federal, state, municipal, local,
-------------------
territorial, foreign or other government or any department, commission, board,
bureau, agency, regulatory authority or instrumentality thereof, or any court,
judicial, administrative, or arbitral body or public or private tribunal.
"Hazardous Materials" means any pollutant, contaminant, hazardous,
-------------------
radioactive or toxic substance, material, constituent or waste, or any other
waste, substance, chemical or material
2
<PAGE>
regulated under any Environmental Law, including (1) petroleum, crude oil and
any fractions thereof, (2) natural gas, synthetic gas and any mixtures thereof,
(3) asbestos and/or asbestos-containing material, (4) radon and (5)
polychlorinated biphenyls ("PCBs"), or materials or fluids containing PCBs
----
"HSR Act" Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
-------
"Indenture" means the Indenture governing the Debentures, to be entered
---------
into on the Closing Date, between the Company and the Trustee, in substantially
the form set forth in Exhibit 1.1C, together with such changes as are (i)
------------
reasonably requested by either of the parties delivering the Financing Letters
or by the Trustee and (ii) reasonably acceptable to the Investor and the
Company.
"Intellectual Property Right" means any trademark, service mark, trade
---------------------------
name, mask work, copyright, patent, software license, other data base,
invention, trade secret, know-how (including any registrations or applications
for registration of any of the foregoing) or any other similar type of
proprietary intellectual property right.
"Investor's Expenses" means all out-of-pocket expenses (including
-------------------
reasonable attorneys fees) paid or incurred by or on behalf of the Investor in
connection with the negotiation, execution and delivery of, the due diligence
conducted by the Investor and its affiliates and each of their respective agents
and representatives in connection with, and the consummation (to the extent
applicable) of the transactions contemplated by, (i) this Agreement, (ii) the
Merger Agreement, (iii) the Stockholders Agreement among the Investor and the
individuals identified on Schedule I thereto and (iv) the Termination Agreement,
dated as of February 7, 1999, between the Investor and the Company, and each of
the agreements, documents and instruments referred to in any of the foregoing,
including, without limitation, the indebtedness to be incurred in connection
with the transactions contemplated by this Agreement and the Merger Agreement.
"Law" means all provisions of laws, statutes, ordinances, rules, bylaws,
---
regulations, writs, Permits or Orders of any Governmental Entity.
"Leased Property" has the meaning set forth in Section 3.18(b).
--------------- ---------------
"Liens" means, with respect to any asset, (a) any mortgage, deed of trust,
-----
lien, pledge, encumbrance, charge or security interest of any kind whatsoever in
or on such asset (including the filing of or agreement to give any financing
statement under the Uniform Commercial Code of any jurisdiction), (b) the
interest of a vendor or a lessor under any conditional sale agreement, capital
Lease or title retention agreement relating to such asset and (c) in the case of
securities, any purchase option, right of first refusal, call, appreciation
right or similar right of a third party with respect to such securities.
"Material Contract" means any Contract that (i) evidences or provides for
-----------------
any Indebtedness of the Company or any Subsidiary, or any of their Affiliates,
in an amount in excess of $1,000,000, or any Encumbrance securing such
Indebtedness, (ii) restricts the Company or any Subsidiary, or any of their
Affiliates, from engaging in any line of business or (iii) is otherwise material
to the business, financial condition or results of operations or prospects of
the Company and its Subsidiaries taken as a whole.
3
<PAGE>
"Merger Agreement" means the Agreement and Plan of Merger, dated as of
----------------
December 23, 1998, between the Investor and the Company.
"Merger Schedules" means the schedules to the Merger Agreement with
----------------
schedule numbers corresponding to the schedule numbers referred to in Article
-------
III hereof, as such Merger Schedules have been updated through February 4, 1999:
- ---
"1998 Financial Statements" means the consolidated financial statements of
-------------------------
the Company and its Subsidiaries for the fiscal year ended December 31, 1998, in
substantially the form set forth in Schedule 1.1A.
-------------
"Offer" means the transactions contemplated by the Offer Documents.
-----
"Offer Conditions" has the meaning set forth in Section 2.3(a).
---------------- --------------
"Offer Documents" means the amended Offer to Purchase shares of the
---------------
Company's Common Stock for the Offer Price, the related letter of transmittal
and each of the other related documents and instruments.
"Offer Price" means $22.50.
-----------
"Order" means all judgments, injunctions, orders and decrees of all
-----
Governmental Entities in Proceedings in which the person in question is a party
or by which any of its Properties is bound.
"Organizational Documents" means, with respect to any person, each
------------------------
instrument or other document that (a) defines the existence of such person,
including its certificate of limited partnership or articles or certificate of
incorporation, as filed or recorded with an applicable Governmental Entity, or
(b) governs the internal affairs of such person, including its partnership
agreement or by-laws.
"Owned Property" has the meaning set forth in Section 3.18(a).
-------------- ---------------
"Payment Event" shall mean that this Agreement shall have been terminated
------- -----
(a) pursuant to Section 8.1(d)(ii) (in a situation in which the breach of
------------------
covenant is reasonably attributable primarily to the Company's avoidance of its
obligations under this Agreement and the breach fundamentally affects (i) the
viability or the consummation of the transactions contemplated by this Agreement
or (ii) the benefits expected by the Investor immediately after the Closing from
the transactions contemplated hereby), (b) pursuant to Section 8.1(g) in the
--------------
event that the Company has failed to receive valid tenders of at least 21
million shares and, prior to the earlier of nine months after such termination,
the Company shall have entered into an agreement or arrangement providing for an
Alternative Transaction for a higher value per Share to the stockholders of the
Company (other than an Alternative Transaction which is financed solely by the
issuance of (x) debt securities that are not convertible directly or indirectly
into equity securities plus (y) warrants representing the right to acquire not
more than 7% of the outstanding shares of Common Stock giving effect to the
exercise of such warrants) or (c) pursuant to Section 8.1(h).
--------------
"Pension Plan" has the meaning set forth in Section 3.16(b).
------------ ---------------
4
<PAGE>
"Permits" means, collectively, all franchises, approvals, clearances,
-------
permits, licenses, authorizations, Orders, registrations, certificates, and
variances obtained from, or agreements with, any Governmental Entity.
"Permitted Liens" means Liens permitted under the Indenture.
---------------
"Permitted Securities" means shares of Common Stock that will not be
--------------------
entitled to be sold in the Offer and that are required to be issued prior to the
Closing Date (a) pursuant to earnout arrangements contained in agreements
relating to acquisitions consummated prior to the date hereof if (other than
with respect to earnouts payable in connection with the acquisition by the
Company of Tri-City Electrical Contractors, Inc., Wilson Electric Corporation,
Inc., Town & Country Electric, Inc., Riviera Electric Construction Co., Garfield
Electric Corporation, Indecon, Inc., SKC Electric, Inc., Walker Engineering,
Inc. or Service Management USA, Inc.) the Company has used its best efforts to
obtain a waiver so that such Shares can be issued after the Closing Date, (b)
under definitive agreements listed in Schedule 5.1(d) plus the signed LOI's
---------------
listed on Schedule 5.1(d) with Hunt Electric, Marathon Electric and Mountain
---------------
View Electric (in an amount not to exceed the applicable number of Shares to be
issued pursuant to such agreement or LOI as set forth in Schedule 5.1(d)) or (c)
---------------
Shares issuable upon the exercise of Company Stock Options or Warrants or
pursuant to the Employee Stock Purchase Plan in the ordinary course of business.
"Proceeding" means any claim, demand, suit, action, hearing, grievance,
----------
arbitration, mediation or proceeding in any court or before any Governmental
Entity, whether at law or in equity.
"Release" has the meaning set forth in 42 U.S.C. (S) 9601(22).
-------
"Schedule 13E-4" has the meaning set forth in Section 2.3(c).
-------------- --------------
"SEC Documents" means all reports, forms, schedules and statements and
-------------
other documents required to be filed by the Company with the Commission.
"Securities Act" means the Securities Act of 1933 and the rules and
--------------
regulations promulgated thereunder, each as amended.
"Share Retention Agreement" has the meaning set forth in Section 3.25.
------------------------- ------------
"Shares" has the meaning set forth in the recitals to this Agreement
------
"Third Party" means any person or "group," as described in Rule 13d-5(b)
----- -----
promulgated under the Exchange Act, other than the Investor or any of its
Affiliates.
"Transaction Documents" means this Agreement, the Investor Rights
---------------------
Agreement, the Restated Charter (as defined in the Investor Rights Agreement),
the Indenture and the Debentures issued thereunder and the fee letter dated the
date hereof from the Company to the Investor.
5
<PAGE>
"Trustee" means the trustee under the Indenture, which trustee shall be
-------
reasonably acceptable to the Company and the Investor.
"Warrants" has the meaning set forth in Section 3.2(a)
-------- --------------
ARTICLE II
ISSUANCE OF DEBENTURES; AMENDED OFFER
2.1 Issuance of Debentures.
At the Closing, the Company shall issue and deliver to the Investor
pursuant to the Indenture one or more Debentures in an aggregate principal
amount equal to $100 million against receipt by the Company of a wire transfer
in the amount of $100 million to an account designated by the Company at least
two business days prior to the Closing. Such Debentures shall be registered in
the names designated by the Investor to the Company at least one business day
prior to the Closing.
2.2 Closing.
The closing (the "Closing") hereunder with respect to the issuance and sale
-------
of the Debentures shall take place at the offices of O'Sullivan Graev &
Karabell, LLP, 30 Rockefeller Plaza, 24th Floor, New York, New York (or at the
offices of the lenders to the Company or such other place as the parties may
agree) promptly after the satisfaction or waiver of all of the conditions set
forth in Article VIII (the date upon which the Closing occurs being referred to
------------
as the "Closing Date").
------------
2.3 Offer.
(a) As soon as practicable after the date hereof, the Company will
amend its Offer to Purchase dated February 19, 1999 to provide that the
Offer, as amended, will be at a price per Share equal to the Offer Price
(less, in the case of Shares issuable upon the conditional exercise of
Company Stock Options, the exercise price thereof) and to disclose the
terms and conditions set forth in this Agreement. No condition to the offer
(the "Offer Conditions") may be waived in whole or in part, and the Offer
----------------
shall not be terminated, without the prior written consent of the Investor
and the Company in their sole discretion. Notwithstanding the foregoing but
subject to Section 8.1(b), the Company shall, unless otherwise requested by
--------------
the Investor, and may, without the consent of the Investor, extend the
Offer periodically through the Outside Date if at the then scheduled or any
extended expiration date of the Offer any of the Offer Conditions shall not
be satisfied or waived, until such time as such conditions are satisfied or
waived.
(b) Subject to the terms and conditions of the Offer and this
Section 2.3, the Company shall accept for payment, and pay for, not less
-----------
than 21.0 million Shares and not more than 26.5 million Shares validly
tendered and not withdrawn pursuant to the Offer that the Company becomes
obligated to accept for payment, and pay for, pursuant to the Offer as soon
as practicable after the expiration of the Offer.
(c) On the date of amendment of the Offer, the Company shall file with
the SEC a Tender Offer Statement on Schedule 13E-4 (the "Schedule 13E-4")
--------------
with respect to the Offer,
6
<PAGE>
which shall contain the Offer Documents. The Offer Documents shall comply
as to form in all material respects with the Exchange Act, and the Offer
Documents, on the date first published, sent or given to the Company's
stockholders, shall not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, except that no representation
or warranty is made by the Company with respect to written information
supplied by or on behalf of the Investor for inclusion or incorporation by
reference in the Offer Documents. The Investor and the Company each agrees
promptly to correct any written information provided by it for use in the
Offer Documents if and to the extent that such information shall have
become false or misleading in any material respect, and the Company further
agrees to take all steps necessary to cause the Schedule 13E-4 as so
corrected to be filed with the Commission and the other Offer Documents as
so corrected to be disseminated to holders of Shares, in each case as and
to the extent required by applicable Federal securities laws. The Offer
Documents shall be in form and substance reasonably satisfactory to the
Investor and the Company will not file any Offer Document with the
Commission or disseminate any Offer Document to its stockholders without
the prior written consent of the Investor. The Company agrees to provide
the Investor and its counsel any comments the Company or its counsel may
receive from the Commission or its staff with respect to the Offer
Documents promptly after the receipt of such comments and the Company will
provide to the Investor and its counsel sufficient time and the opportunity
to comment on any written or oral response to any such comments.
(d) Each Share purchased in the Offer shall automatically be cancelled
and retired and shall cease to exist.
2.4 Warrants and Company Stock Options.
Except to the extent that the acceleration of Company Stock Options is
permitted by Section 5.1(k), the outstanding Warrants and outstanding Company
--------------
Stock Options shall not be affected by the Offer and shall remain outstanding
and exercisable for Shares in accordance with their terms.
2.5 Company Actions.
The Company represents and warrants that at meetings duly called and held,
its Board of Directors, has (a) taken all necessary steps to render the
restrictions of Section 203 of the DGCL inapplicable to the transactions
contemplated by this Agreement, (b) resolved to elect not to be subject, to the
extent permitted by Law, to any state takeover law other than Section 203 of the
DGCL that may purport to be applicable to the transactions contemplated by this
Agreement and (c) determined not to accelerate the vesting of any Company Stock
Options or Warrants except as permitted by Section 5.1(k).
--------------
7
<PAGE>
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Investor as follows (it being
understood that, except for Section 3.6, Section 3.25 and Section 3.26, the
----------- ------------ ------------
representations and warranties contained in this Article III shall be deemed to
-----------
be made as of February 4, 1999 and the Merger Schedules as modified through such
date shall serve as the applicable schedules to this Agreement):
3.1 Organization.
The Company and each Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of the State of its organization
and has all requisite corporate power and authority to carry on its business as
now being conducted. The Company and each Subsidiary is duly qualified or
licensed to do business and in good standing in each jurisdiction in which the
property owned, leased or operated by it or the nature of the business conducted
by it makes such qualification or licensing necessary, except in such
jurisdictions where the failure to be so duly qualified or licensed and in good
standing has not had a Material Adverse Effect (as defined in Section 9.5 of
-----------
this Agreement) that has not been cured and reasonably would not be expected to
have a Material Adverse Effect or prevent or materially delay the consummation
of the transactions contemplated by this Agreement. As soon as practicable
after the date hereof, the Company will make available to the Investor complete
and correct copies of its and each Subsidiary's Organizational Documents, as
amended to the date supplied.
3.2 Capitalization.
(a) The authorized capital stock of the Company consists of
250,000,000 Shares and 500,000 shares of Convertible Non-Voting Common
Stock, par value $.001. At the close of business the business day
immediately preceding the date hereof, (i) 45,232,292 Shares were issued
and outstanding, (ii) 2,990,000 Shares were held by the Company in its
treasury, (iii) no shares of Convertible Non-Voting Common Stock were
outstanding, (iv) 3,822,971 Shares were reserved for issuance upon exercise
of outstanding options to purchase Shares ("Company Stock Options") and
---------------------
360,984 Shares were reserved for issuance upon exercise of options to
purchase Shares that the Company has agreed to grant but that have not been
granted, (v) 3,080,000 Shares were issuable upon the exercise of
outstanding warrants, rights or other options to purchase Shares
("Warrants") and (vi) 1,000,000 Shares are reserved for issuance pursuant
--------
to the Company's Employee Stock Purchase Plan. Except as set forth above,
and except for Shares issued since the close of business on the business
day immediately preceding the date hereof upon the exercise of any then
outstanding Company Stock Option or any then outstanding Warrant, since
such date no shares of capital stock or other voting securities of the
Company were issued, reserved for issuance, issuable or outstanding. All
outstanding Shares are, duly authorized, validly issued, fully paid and
nonassessable and not subject to preemptive rights. There are no bonds,
debentures, notes or other indebtedness of the Company having the right to
vote (or convertible into, or exchangeable for, securities having the right
to vote) on any matters on which stockholders of the Company may vote.
Except as set forth above, there are no securities, options, warrants,
calls, rights, commitments, agreements, arrangements or
8
<PAGE>
undertakings of any kind to which the Company is a party or by which it is
bound obligating the Company to issue, deliver or sell, or cause to be
issued, delivered or sold, additional shares of capital stock or other
voting securities of the Company or obligating the Company to issue, grant,
extend or enter into any such security, option, warrant, call, right,
commitment, agreement, arrangement or undertaking. There are no outstanding
obligations of the Company to repurchase, redeem or otherwise acquire any
shares of capital stock of the Company.
(b) Schedule 3.2(b) sets forth a true, correct and complete list, with
---------------
respect to each Company Stock Option or Warrant, of (i) the holder thereof,
(ii) the number of Shares issuable upon exercise of each such vested
Company Stock Option or Warrant, (iii) the number of Shares issuable upon
exercise of each such unvested Company Stock Option or Warrant, (iv) the
date of grant, (v) the exercise price thereof and (vi) the vesting
schedule.
(c) Schedule 3.2(c) sets forth a true, correct and complete list of
---------------
all holders of the Company's capital stock as of the date hereof who are
employed by the Company or any Subsidiary and who, to the knowledge of the
Company, own in excess of 50,000 Shares.
3.3 Subsidiaries.
(a) Schedule 3.3(a) sets forth a list of each Subsidiary of the
---------------
Company.
(b) Except as set forth on Schedule 3.3(b), all of the outstanding
---------------
shares of capital stock of Subsidiaries are owned of record and
beneficially by the Company, free and clear of all Liens.
(c) All outstanding shares of capital stock of Subsidiaries are, duly
authorized, validly issued, fully paid and nonassessable and not subject to
preemptive rights. There are no bonds, debentures, notes or other
indebtedness of any Subsidiary having the right to vote (or convertible
into, or exchangeable for, securities having the right to vote) on any
matters on which stockholders of Subsidiaries may vote. There are no
securities, options, warrants, calls, rights, commitments, agreements,
arrangements or undertakings of any kind to which the Company or any
Subsidiary is a party or by which any of them is bound obligating the
Company or any Subsidiary to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock or other voting
securities of any Subsidiary or obligating the Company or any Subsidiary to
issue, grant, extend or enter into any such security, option, warrant,
call, right, commitment, agreement, arrangement or undertaking other than
pursuant to the non-binding letters of intent set forth in Schedule 5.1(d).
---------------
There are no outstanding obligations of the Company or any Subsidiary to
repurchase, redeem or otherwise acquire any shares of capital stock of any
Subsidiary.
(d) Except for the Company's interest in the Subsidiaries or as set
forth on Schedule 3.3(d), neither the Company nor any Subsidiary owns
---------------
directly or indirectly any interest or investment in the form of debt or
equity in, and neither the Company nor any Subsidiary is subject to any
obligation or requirement to provide for or to make any investment in, any
person (in each case, other than non-recourse interests or investments in
an amount not in excess of $500,000).
9
<PAGE>
3.4 Authority.
The Company has the requisite corporate power and authority to execute and
deliver this Agreement and each other Transaction Document and to consummate the
transactions contemplated hereby and thereby. The execution, delivery and
performance of this Agreement, the other Transaction Documents and the other
agreements, documents and instruments referred to herein have been duly
authorized by all necessary corporate action on the part of the Company and no
other corporate proceedings on the part of the Company are necessary to
authorize this Agreement, any other Transaction Document or any such other
agreement, document or instrument or to consummate the transactions so
contemplated. This Agreement and the other Transaction Documents have been duly
executed and delivered by the Company and each such document constitutes a valid
and binding obligation of the Company enforceable against the Company in
accordance with its respective terms.
3.5 Consents and Approvals; No Violations.
Except for Permits as may be required under, and other applicable
requirements of, the Securities Act, the Exchange Act and applicable foreign and
state securities or blue sky laws and the HSR Act, neither the execution,
delivery or performance of this Agreement by the Company nor the consummation by
the Company of the transactions contemplated hereby will (a) conflict with or
result in any breach of any provision of the Organizational Documents of the
Company or any of its Subsidiaries, (b) except as set forth on Schedule 3.5(b)
---------------
require any filing with, notice to, or Permit (as defined in Section 3.12),
------------
authorization, consent or approval of, any Governmental Entity, (c) result in
the creation or imposition of any Liens upon the properties or assets of the
Company or any Subsidiary, (d) except as set forth on Schedule 3.5(d), result in
---------------
a violation or breach of, require any notice to any party pursuant to, or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, amendment, cancellation, acceleration or
right of non-renewal or require any prepayment or offer to purchase any debt or
give rise to the loss of a material benefit) under, any of the terms, conditions
or provisions of any Material Contract (as defined in Section 3.11) to which the
------------
Company or any of its Subsidiaries is a party or by which the Company's or any
of its Subsidiaries' properties or assets may be bound, (e) violate any Order or
Law applicable to the Company or any of its Subsidiaries or any of their
respective properties or assets or (f) except as set forth on Schedule 3.5(f)
---------------
result in the loss, forfeiture, revocation, termination or diminution of any
Permit.
3.6 SEC Documents; Financial Statements; Other Financial Information.
(a) The Company has filed with the Commission all SEC Documents
required to be filed on or prior to the date hereof. As of their respective
filing dates, (i) the SEC Documents complied in all material respects with
the requirements of the Securities Act, or the Exchange Act, as the case
may be, and the rules and regulations of the Commission promulgated
thereunder applicable to such SEC Documents, and (ii) as of its filing
date, none of the SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The financial
statements included in the SEC Documents complied in all material respects,
as of their respective filing dates, as to
10
<PAGE>
form with applicable accounting requirements and the published rules and
regulations of the Commission with respect thereto, were prepared in
accordance with GAAP (except, in the case of unaudited statements, as
permitted by Form 10-Q of the Commission) applied on a consistent basis
during the periods involved (except as may be indicated in the notes
thereto) and fairly present the consolidated financial position of the
Company and its Subsidiaries as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case
of unaudited statements, to normal year-end audit adjustments). The 1998
Financial Statements have been prepared in accordance with GAAP and fairly
present the consolidated financial position of the Company and its
Subsidiaries as of the date thereof and the results of the Company's and
its Subsidiaries' operations and cash flows for the periods then ended.
(b) Except (x) as set forth on Schedule 3.6, (y) as set forth in the
------------
consolidated balance sheet included in the 1998 Financial Statements and
(z) for liabilities and obligations incurred in the ordinary course of
business consistent with past practice since the date of such balance
sheet, neither the Company nor any of its Subsidiaries has any liabilities
or obligations of any nature (whether accrued, absolute, contingent or
otherwise) required by GAAP to be set forth on a balance sheet or in the
notes thereto.
3.7 Company Acquisitions.
Schedule 3.7 sets forth a true, correct and complete description of all the
------------
following information with respect to all pending and completed acquisitions by
the Company or any Subsidiary (the "Company Acquisitions"):
--------------------
(a) the name of the acquired person,
(b) in respect of the post-closing performance of the person acquired,
the potential maximum cash consideration that the Company or any Subsidiary
may be required to pay, the potential maximum value of the Shares that the
Company may be required to issue and the method for valuing such Shares and
the timing, and the formula which will determine the amount, of any cash or
stock consideration that could be payable in respect of the post-closing
performance of the person acquired,
(c) a good faith estimate of any post-closing adjustments for each
Company Acquisition, the cash portion thereof and the portion thereof
payable in Shares and the method for valuing such Shares,
(d) a schedule of the amount of cash held in escrow or otherwise
securing the indemnification obligations to the Company or any Subsidiary
in respect of such Company Acquisition or any holdback arrangement for
Shares or cash in respect of any such indemnification obligation, and
(e) a description of all indemnification claims submitted or proposed
to be submitted by the Company or any Subsidiary in respect of each such
Company Acquisition.
11
<PAGE>
3.8 Information Supplied.
None of the information supplied or to be supplied by the Company
specifically for inclusion or incorporation by reference in any documents to be
filed by the Company with the Commission or any other Governmental Entity in
connection with the transactions contemplated hereby (including, without
limitation, the Offer Documents) contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading; provided that no representation or warranty is
-------- ----
made by the Company with respect to statements made or incorporated by reference
therein based on information supplied by the Investor specifically for inclusion
or incorporation by reference therein. The Offer Documents and any such other
documents filed by the Company with the Commission or with any other
Governmental Entity will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations thereunder.
3.9 Absence of Certain Changes or Events.
Except as set forth on Schedule 3.9, since December 31, 1998, the Company
------------
and its Subsidiaries (only from the date such Subsidiary was acquired by the
Company) have conducted their respective businesses only in the ordinary course
consistent with prior practice, and there has not been (a) any material adverse
change, (b) any declaration, setting aside or payment of any dividend or other
distribution (whether in cash, stock or property) with respect to any of the
Company's capital stock, (c) any split, combination or reclassification of any
of the capital stock of the Company or any issuance or the authorization of any
issuance of any other securities in respect of, in lieu of or in substitution
for shares of capital stock of the Company, (d) any incurrence, assumption or
guarantee by the Company or any Subsidiary of any indebtedness for borrowed
money, other than in the ordinary course of business and in amounts and on terms
consistent with past practices; (e) (i) any granting by the Company or any
Subsidiary to any officer of the Company of any material increase in
compensation, (ii) any granting by the Company or any Subsidiary to any officer,
director or consultant or an employee who earned more than $200,000 in the most
recent fiscal year or is currently earning (on an annualized basis) more than
$200,000 (in salary, bonus and other cash compensation), of any material
increase in severance or termination pay or (iii) any entry by the Company or
any Subsidiary into any written or oral employment agreement, or any severance
or termination agreement or arrangement with any officer, director or consultant
or an employee who earned more than $200,000 in the most recent fiscal year or
is currently earning (on an annualized basis) more than $200,000 (in salary,
bonus and other cash compensation), (f) any damage, destruction or loss to
property, whether or not covered by insurance, that, individually or in the
aggregate, has not been cured and may be reasonably expected to have,
individually or in the aggregate, a Material Adverse Effect, (g) any material
change in accounting methods, principles or practices by the Company or any
Subsidiary other than those required by GAAP, (h) any delivery of a notice of
non-renewal or any other failure to renew Contracts between the Company or any
Subsidiary, on the one hand, and its customers, on the other hand, which are
material, individually or in the aggregate or (i) any loss of any employee who
earned more than $200,000 in the most recent fiscal year (in salary, bonus and
other cash compensation).
12
<PAGE>
3.10 Litigation.
(a) Except as disclosed on Schedule 3.10(a), there is no Proceeding
----------------
pending or, to the knowledge of the Company, threatened against or
affecting the Company or any of its Subsidiaries which is material to the
Company and/or its Subsidiaries, taken as a whole
(b) Except as disclosed on Schedule 3.10(b), there is no Order
----------------
outstanding against the Company or any Subsidiary.
3.11 Contracts.
(a) Schedule 3.11(a) sets forth a true, correct and complete list of
----------------
all Material Contracts to which the Company or any Subsidiary is a party or
by which any of their respective assets or properties are bound.
(b) Neither the Company nor any Subsidiary, nor any of their
Affiliates, is and, to the knowledge of the Company, no other party is in
violation of or in default under (nor does there exist any condition
affecting the Company or any Subsidiary, or to the knowledge of the
Company, other parties to such Material Contracts which upon the passage of
time or the giving of notice or both would reasonably be expected to cause
such a violation of or default under) any Material Contract to which it is
a party or by which it or any of its properties or assets is bound, except
for any such violations or defaults which have not had, and would not
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect. Each Material Contract constitutes a valid and
binding obligation of the Company and/or Subsidiary, or any of their
Affiliates, party thereto and, to the knowledge of the Company, each other
party thereto, enforceable against such other party in accordance with its
terms, except as enforceability may be limited by equitable principles of
bankruptcy, fraudulent conveyance or insolvency laws affecting creditors'
rights generally.
3.12 Compliance with Laws.
Neither the Company nor any Subsidiary is in violation of, and to the
knowledge of the Company none is under investigation with respect to or has been
threatened to be charged with or given notice of any violation of, in each case,
by any Governmental Entity, any applicable Law, except for violations that have
not had, and would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect. Except as set forth on Schedule 3.12 or
-------------
except as has not had, and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, (a) the Permits are
valid and in full force and effect, (b) neither the Company nor any Subsidiary
is in default under, and no condition exists that with notice or lapse of time
or both would constitute a default under, the Permits and (c) none of the
Permits will be terminated or impaired or become terminable, in whole or in
part, as a result of the transactions contemplated hereby.
3.13 Environmental Matters.
(a) Except as set forth in Schedule 3.13(a), the Company and each
----------------
Subsidiary is in compliance with all applicable Environmental Laws except
for any non-compliance which has
13
<PAGE>
not had, and would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.
(b) Except as set forth in Schedule 3.13(b), there has been no Release
----------------
or threatened Release of Hazardous Materials, in, on, under or affecting
any property owned, leased, controlled or operated by the Company or any
Subsidiary, except for releases which have not had, and would not
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
(c) Except as set forth in Schedule 3.13(c), there is no pending, or,
----------------
to the knowledge of the Company, threatened Proceeding or inquiry of or
against the Company or any Subsidiary by any Governmental Entity or other
person relating to any actual or potential violations or liability under of
Environmental Law or any actual or potential obligation to investigate or
remediate a Release or threatened Release of any Hazardous Materials except
for Proceedings which have not had, and would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
(d) Except in connection with the Company Acquisitions (for which the
Company is indemnified except as set forth in Schedule 3.13(d)), neither
----------------
the Company nor any Subsidiary has assumed any liabilities or obligations
arising under Environmental Laws in connection with properties or
facilities previously owned, leased or operated by the Company or any
Subsidiary or their predecessors.
(e) Except as set forth in Schedule 3.13(e), to the knowledge of the
---------------
Company, there are no underground or aboveground storage tanks,
incinerators or surface impoundments at, on or about, under or within any
property, owned, leased, controlled or operated by the Company or any
Subsidiary, and no such tanks, incinerators or impoundments have been
removed from any such property.
(f) Neither the Company nor any Subsidiary has used any waste disposal
site, or otherwise disposed of, transported, or arranged for the
transportation of, any Hazardous Materials to any place or location, with
respect to which it has incurred or, in the future, could reasonably be
expected to incur, liability under CERCLA or any other Environmental Law
which would reasonably be expected to have, individually, or in the
aggregate, a Material Adverse Effect.
3.14 Absence of Changes in Benefit Plans; Labor Relations.
(a) Except as disclosed on Schedule 3.14(a), since December 31, 1998
----------------
(or in the case of a Subsidiary, if later, the date of its acquisition by
the Company), there has not been any adoption or amendment by the Company
or any Subsidiary of any collective bargaining agreement or any bonus,
pension, profit sharing, deferred compensation, incentive compensation,
stock ownership, stock purchase, stock option, phantom stock, retirement,
vacation, severance, disability, death benefit, hospitalization, medical or
other plan or arrangement providing benefits to any current or former
employee, officer or director of the Company or any Subsidiary (for the
avoidance of doubt, regular salary and/or wage increases and modifications
to bonus, commission and other incentive compensation arrangements in case
with respect to non-officer
14
<PAGE>
employees of the Company or any Subsidiary in the ordinary course of
business and consistent with past practice are excluded from the
foregoing).
(b) Except as set forth in Schedule 3.14(b), there exist no
----------------
employment, consulting, severance, termination or indemnification
agreements or arrangements between the Company or any Subsidiary and any
current or former employee, officer or director of the Company or any
Subsidiary which involve the payment on or after the date hereof of more
than $200,000 per year.
(c) Schedule 3.14(c) sets forth a true, correct and complete list of
----------------
all amounts payable or that will or may become payable to each director,
officer or employee or former director, officer or employee of the Company
or any Subsidiary pursuant to any employment, change-in-control, severance
or termination agreement or arrangement as a result of the execution and
delivery of this Agreement or the consummation of the transactions
contemplated by this Agreement.
(d) Except as set forth in Schedule 3.14(d), there are no collective
----------------
bargaining or other labor union agreements to which the Company or any
Subsidiary is a party or by which it is bound.
(e) Except as set forth on Schedule 3.14(e), to the knowledge of the
----------------
Company, since February 1, 1997 (or in the case of a Subsidiary, if later,
the date of its acquisition by the Company), neither the Company nor any
Subsidiary has encountered any labor union organizing activity, or had any
actual or threatened employee strikes, work stoppages, slowdowns or
lockouts.
3.15 Employment Matters; Affiliate Transactions.
(a) Schedule 3.15(a) sets forth a true, correct and complete list of
----------------
all directors, officers and key employees of the Company and each
Subsidiary as of the date hereof and the aggregate salary, bonus and other
cash compensation paid to each such officer, director and employee of the
Company or any Subsidiary in the most recently completed fiscal year and
paid to each such person from the beginning of the current fiscal year
through the date hereof. For purposes hereof, "key employee" shall mean any
------------
person whose current salary is at least $100,000 per annum.
(b) Except as set forth on Schedule 3.15(b), all Contracts,
----------------
transactions and arrangements between the Company or its Subsidiaries, on
the one hand, and any of their respective Affiliates, directors, officers,
employees, or consultants, on the other hand, (i) were in existence at the
time that the applicable Subsidiary was acquired by the Company, (ii) to
the knowledge of the Company, were and, if applicable, are on terms
representing an arms' length negotiation and (iii) are not material to the
Company and its Subsidiaries taken as a whole.
3.16 ERISA Compliance.
(a) The Company and certain other persons or entities that, together
with the Company, are treated as single employer under Section 414(b), (c),
(m) or (o) of the Code (the Company and each such other person or entity, a
"Commonly Controlled Entity"), maintain or
--------------------------
15
<PAGE>
contribute to "employee welfare benefit plans" (as defined in Section 3(1)
of ERISA) and other benefit plans for the benefit of any current or former
employees, officers or directors of the Company or dependents of any such
person (collectively, "Benefit Plans"). None of the following has occurred
-------------
which has had, or reasonably would be expected to have a Material Adverse
Effect: (i) any failure to administer any Benefit Plan in accordance with
its terms (ii) any failure by the Company or any Subsidiary or any Benefit
Plan to comply, or any failure of any Benefit Plan to be operated and
administered in accordance with the applicable provisions of ERISA and the
Code, (iii) any "reportable event" or "prohibited transaction" (as such
terms are defined in ERISA and the Code), (iv) any termination of any
Benefit Plan which results in a "reportable event" or (v) the consummation
of the transactions entered into pursuant to this Agreement if such
transactions result in a "reportable event."
(b) None of the Company, any Subsidiary or any Commonly Controlled
Entity has any "employee pension benefit plans" (as defined in Section 3(2)
of ERISA) that are subject to Title IV of ERISA (sometimes referred to
herein as "Pension Plans").
--------------
(c) There have been no violations of ERISA or the Code that could
reasonably be expected to have a Material Adverse Effect with respect to
the filing of applicable documents, notices or reports (including, without
limitation, annual reports filed on IRS Form 5500) relating to any Benefit
Plan maintained by the Company or any Commonly Controlled Entity with any
Governmental Authority or the furnishing of such required documents to the
participants or beneficiaries of such Benefit Plans.
(d) Neither the Company nor any Commonly Controlled Entity has within
the five year period immediately preceding the date hereof maintained,
contributed to or been obligated to contribute to any Benefit Plan that is
subject to Title IV of ERISA or Section 412 of the Code. Neither the
Company nor any Commonly Controlled Entity is required to contribute to any
"multiemployer plan" (as defined in Section 4001(a) (3) of ERISA) or has
withdrawn from any multiemployer plan where such withdrawal has resulted or
would result in any "withdrawal liability" (within the meaning of Section
4201 of ERISA) that has not been fully paid.
(e) With respect to any Benefit Plan that is an employee welfare
benefit plan, except as disclosed in Schedule 3.16(e), (i) no such Benefit
----------------
Plan is funded through a "welfare benefits fund", as such term is defined
in Section 419 (e) of the Code, (ii) each such Benefit Plan that is a
"group health plan", as such term is defined in Section 5000 (b)(1) of the
Code, complies substantially with the applicable requirements of Section
4980B(f) of the Code and (iii) except as provided in writing in such plan,
there are no understandings, agreements or undertakings, written or oral,
that would prevent any such plan (including any such plan covering retirees
or other former employees) from being amended or terminated without
liability to the Company or any Subsidiary on or at any time after the
Effective Time.
(f) Except as set forth in Schedule 3.16(f), no Benefit Plan that is a
----------------
welfare benefit plan provides for post-retirement medical or life insurance
benefits coverage to any current or former employee, officer, or director
of the Company or any Subsidiary or any dependent of any such individual
except as may be required under Section 4980B of the Code.
16
<PAGE>
(g) Except as set forth on Schedule 3.16(g), no employee or director
----------------
of the Company or any Subsidiary will be entitled to any additional
compensation or benefits or any acceleration of the time of payment or
vesting of any compensation or benefits under any Benefit Plan in
connection with the transactions contemplated by this Agreement.
(h) All contributions due and payable in respect of any Benefit Plan
have been made in full and proper form, or adequate accruals have been
provided for in the financial statements for all other contributions or
amounts in respect of the Benefit Plans, or, in the case of any
contributory Benefit Plan, amounts have been contributed to such Benefit
Plan within the time prescribed by the Code, ERISA, or any regulations
thereunder or interpretations thereof by the Internal Revenue Service or
the Department of Labor.
(i) As of the Closing Date, there are no actions, suits, disputes,
arbitrations or claims pending (other than routine claims for benefits) or
legal, administrative or other proceedings or governmental investigations
pending or, to the knowledge of the Company and any Commonly Controlled
Entity, threatened against any Benefit Plan or against the assets of any
Benefit Plan which could reasonably be expected to have a Material Adverse
Effect.
3.17 Taxes.
(a) The Company and each Subsidiary has filed all tax returns and
reports required to be filed by it (which returns are true and complete in
all material respects) and has paid all taxes due and required to be paid
by it. The 1998 Financial Statements reflect an adequate reserve for all
taxes payable by the Company or any Subsidiary for all taxable periods and
portions thereof through the date of such financial statements and there
has been no tax liability incurred by the Company or any Subsidiary since
such date other than in the ordinary course of business. No deficiencies
for any taxes which remain outstanding have been proposed, asserted or
assessed against the Company or any Subsidiary, and no requests for waivers
of the time to assess any such taxes are pending. Except as disclosed in
Schedule 3.17(a), no income tax return of the Company or any Subsidiary has
----------------
been or is currently being examined by the United States Internal Revenue
Service or any other Governmental Entity.
(b) Schedule 3.17(b) sets forth the periods during which the Company's
----------------
and its Subsidiaries' Consolidated Federal net operating loss carryforwards
(the "NOL Carryforwards") arose and the expiration dates of the NOL
Carryforwards, identifies which portions thereof are currently limited
under Section 382 of the Code or the "separate return limitation year"
("SRLY") rules of the consolidated return regulations, and, in the case of
----
NOL Carryforwards currently limited under Section 382 of the Code, the
relevant Section 382 limitation (within the meaning of Section 382(b) (1)
of the Code). As used in this Agreement, "taxes" shall mean all Federal,
-----
state, local and foreign income, property, sales, payroll, employment,
excise, withholding and other taxes, tariffs or other governmental charges
in the nature of a tax as well as any interest, penalties and additions to
tax.
(c) Except as set forth on Schedule 3.17(c), no amount that could be
----------------
received pursuant to the Benefit Plans or any executed and delivered
agreements between the Company or any Subsidiary and any officer, director
or employee thereof in effect as of the date hereof (whether in cash or
property or the vesting of property) as a result of any of the transactions
17
<PAGE>
contemplated by this Agreement by any employee, officer or director of the
Company or any Subsidiary who is a "disqualified individual" (as such term
is defined in proposed Treasury Regulation Section 1.280G-1) under any
employment, severance, change-in-control or termination agreement, other
compensation arrangement or Benefit Plan currently in effect would be an
"excess parachute payment" (as such term is defined in Section 280G(b) (1)
of the Code). No disqualified individual is entitled to receive any
additional payment from the Company, any Subsidiary, the Surviving
Corporation, or any other person referred to in Q&A 10 under proposed
Treasury Regulation Section 1.280G-1 (a "Parachute Gross-Up Payment") in
--------------------------
the event that the 20 per cent parachute excise tax of Section 4999(a) of
the Code is imposed on such person.
(d) Except as set forth in Schedule 3.17(d), neither the Board of
----------------
Directors of the Company nor the Board of Directors of any Subsidiary has
during the six months prior to the date hereof (or in the case of a
Subsidiary, if later, the date of its acquisition by the Company) granted
to any officer, director or employee of the Company or any Subsidiary any
right to receive any Parachute Gross-Up Payment.
3.18 Title to Properties; Condition of Assets.
(a) Schedule 3.18(a) sets forth a true, correct and complete list, as
----------------
of the date hereof, by location of all of the real property owned by
Company or any of its Subsidiaries (the "Owned Property"), including the
--------------
name of the owner thereof. All Owned Property is located in the United
States and, except as set forth on Schedule 3.18(a), is owned by the
----------------
Company or one of its wholly owned Subsidiaries free and clear of all Liens
except for Permitted Liens. There are no rights of first refusal or other
options to purchase any parcel of Owned Property or any portion or interest
therein.
(b) None of the real property leased by the Company (the "Leased
------
Property") is material to the Company and its Subsidiaries taken as a
--------
whole. The Company or such Subsidiary is the owner and holder of all the
leasehold estates purported to be granted by such leases.
(c) The Leased Property and the Owned Property constitute all real
property used or occupied by the Company or any Subsidiary of the Company.
(d) To the knowledge of the Company, the Company and each Subsidiary
has good and marketable title to, or valid leasehold interests in, all its
material properties and assets except for such as are no longer used in the
conduct of its businesses or as have been disposed of in the ordinary
course of business. All such assets and properties are free and clear of
all Liens except for Liens that, individually or in the aggregate, do not
interfere with the ability of the Company or any Subsidiary to conduct its
business as currently conducted and do not materially adversely affect the
value of, or the ability to sell such assets and properties.
(e) The material personal properties and assets of the Company and its
Subsidiaries are in reasonably good repair and operating condition,
ordinary wear and tear excepted and are sufficient for the conduct of the
business of the Company and Subsidiaries as presently conducted.
18
<PAGE>
3.19 Intellectual Property.
(a) The Company and the Subsidiaries own or possess adequate licenses
or other rights to use all Intellectual Property Rights necessary to
conduct the business now operated by them, except where the failure to own
or possess such licenses or rights, individually or in the aggregate, has
not had, and would not reasonably be expected to have, a Material Adverse
Effect. To the knowledge of the Company, the Intellectual Property Rights
of the Company and the Subsidiaries do not conflict with or infringe upon
any Intellectual Property Rights of others to the extent that, if
sustained, such conflict or infringement, individually or in the aggregate,
would reasonably be expected to have a Material Adverse Effect.
(b) All information technology (including, without limitation,
software and firmware) presently expected to be used by the Company or by
any Subsidiary after December 31, 1999 in the administration and the
operations of the Company or such Subsidiary, as the case may be,
including, without limitation, in all services and products provided by the
Company or any such Subsidiary, whether to third parties or for internal
use, or, to the knowledge of the Company after reasonable investigation,
used in combination with any information technology of its customers or
suppliers, and which is material to the conduct of the business of the
Company in the ordinary course of business , accurately processes or will
process date and time data (including, without limitation, calculating,
comparing and sequencing) from, into and between the years 1999 and 2000
and the twentieth century and the twenty-first century, including leap year
calculations and neither performance nor functionality of such technology
will be affected by dates prior to, during and after the year 2000. Neither
the Company nor any Subsidiary has any material obligations under warranty
agreements, service agreements or otherwise to remedy any information
technology defect relating to the year 2000.
3.20 Non-Compete.
Except as set forth on Schedule 3.20, neither the Company nor any
-------------
Subsidiary is subject to any agreement, covenant or understanding that restricts
the Company or any Subsidiary from entering or conducting any line of business
in any location at any time.
3.21 State Takeover Statutes.
No state takeover statute or similar statute or regulation applies or
purports to apply to this Agreement or the transactions contemplated by this
Agreement.
3.22 Brokers.
With the exception of fees payable to Friedman, Billings, Ramsey & Co.,
Inc., a copy of whose engagement agreement has been provided to the Investor,
there is no investment banker, broker, finder or other intermediary which has
been retained by or is authorized to act on behalf of, the Company or any
Subsidiary who might be entitled to any fee or commission from the Company or
any Subsidiary or any of their respective Affiliates upon consummation of the
transactions contemplated by this Agreement.
19
<PAGE>
3.23 Government Contracts.
(a) Neither the Company nor any Subsidiary is a party to any contract
with any Governmental Entity that is material to the Company and its
Subsidiaries taken as a whole.
(b) Neither the Company nor any Subsidiary (since the date of its
acquisition by the Company) has been suspended or debarred from bidding on
contracts or subcontracts for any agency or instrumentality of the United
States Government or any other Governmental Entity and, to the knowledge of
the Company, no suspension or debarment action has been threatened or
commenced. To the knowledge of the Company, there is no valid basis for the
Company's or any Subsidiary's suspension or debarment from bidding on
contracts or subcontracts for any agency of the United States Government or
any other Governmental Entity.
3.24 Insurance.
Schedule 3.24 accurately sets forth as of the day preceding the date hereof
-------- ----
all policies of insurance, other than title insurance policies, held by or on
behalf of the Company and all outstanding claims thereunder in excess,
individually or in the aggregate, of $100,000. All such policies of insurance
are in full force and effect, and no notice of cancellation has been received.
In the reasonable judgment of the Company, such policies are in amounts which
are adequate in relation to the business and properties of the Company, and all
premiums to date have been paid in full.
3.25 Share Retention Agreements.
The Company has received share retention agreements from the shareholders
listed in Schedule 3.25, copies of which are attached in Exhibit 3.25 (the
------------- ------------
"Share Retention Agreements") and has delivered copies of each such Share
- ---------------------------
Retention Agreement to the Investor. No Share Retention Agreement has been
amended, waived, supplemented or restated and each Share Retention Agreement
remains in full force and effect, enforceable in accordance with its terms
against the shareholders party thereto. The Company has not amended, waived,
supplemented or restated any contractual restrictions on transfer of any shares
of Common Stock (except (a) pursuant to the Share Retention Agreements, (b) for
a waiver with respect to a sale of up to 50% of a holder's Shares in connection
with the Offer and (c) for waivers with respect to up to 250,000 other Shares in
the aggregate) and all such restrictions are enforceable in accordance with
their terms against the shareholders party thereto.
3.26 No Material Adverse Change Relative to Investment.
Since February 4, 1999, except as set forth in Schedule 3.26, no changes
-------------
have occurred with respect to the matters covered by the representations and
warranties contained in Article III, as modified by the Merger Schedules that,
-----------
in the aggregate, has had or reasonably could be expected to have an adverse
effect on the Company and its Subsidiaries, taken as a whole, that a reasonably
prudent investor in the Investor's position would consider material relative to
the investment to be made by the Investor pursuant to this Agreement. Since
February 4, 1999, there has been no act or omission to act by the Company with
respect to its capital stock, Company Stock Options or Warrants that would cause
the representations set forth in Section 3.2 or Section 3.3 to be untrue or
inaccurate as if such representations and warranties were made as of
20
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the date hereof, in each case, such that a reasonably prudent investor in the
Investor's position would consider such untruths or inaccuracies to be material
relative to the investment to be made by the Investor pursuant to this
Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF INVESTOR
The Investor represents and warrants to the Company as follows:
4.1 Organization.
The Investor is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization and has all requisite power and
authority to carry on its business as now being conducted. The Investor is duly
qualified or licensed to do business and is in good standing in each
jurisdiction in which the nature of its business or the ownership or leasing of
its properties makes such qualifications or licensing necessary, other than in
such jurisdictions where the failure to be so qualified or licensed
(individually or in the aggregate) could not be reasonably expected to either
prevent or materially delay its ability to perform its obligations hereunder.
The Investor has made available to the Company complete and correct copies of
its certificate of formation, operating agreement and by-laws, as amended to the
date hereof.
4.2 Authority.
The Investor has the requisite power and authority to execute and deliver
this Agreement and each other Transaction Document to which it is party, and to
consummate the transactions contemplated hereby and thereby. The execution,
delivery and performance of this Agreement, the other Transaction Documents and
the other agreements, documents and instruments referred to herein, in each case
to which the Company is a party, and the consummation of the transactions
contemplated hereby and thereby, have been duly authorized by all necessary
action on the part of the Investor and no other proceedings on the part of the
Investor are necessary to authorize this Agreement, any other Transaction
Document or any such other agreement, document or instrument or to consummate
the transactions so contemplated hereby or thereby. This Agreement and the
other Transaction Documents to which the Investor is a party have been duly
executed and delivered by the Investor and each such document constitutes a
valid and binding obligation of the Investor enforceable against the Investor in
accordance with its respective terms.
4.3 Consents and Approvals; No Violations.
Except for filings, permits, authorizations, consents and approvals as may
be required under, and other applicable requirements of the Exchange Act,
applicable foreign and state securities or blue sky laws, the HSR Act, the DGCL
and state takeover laws, neither the execution, delivery or performance of this
Agreement by the Investor, nor the consummation by the Investor of the
transactions contemplated hereby will (i) conflict with or result in any breach
of any provision of its certificate of formation, by-laws or operating
agreement, (ii) require any filing with, notice to, or permit, authorization,
consent or approval of, any Governmental Entity
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(except where the failure to obtain such permits, authorizations, consents or
approvals or to make such filings would not reasonably be expected to prevent or
materially delay the consummation of the transactions contemplated by this
Agreement), (iii) result in a violation or breach of, require any notice to any
party pursuant to, or constitute (with or without due notice or lapse of time or
both) a default (or give rise to any right of termination, amendment,
cancellation or acceleration) under, any of the terms, conditions or provisions
of any Contract to which the Investor or any of its subsidiaries is a party or
by which any of them or any of their properties or assets may be bound or (iv)
violate any Order applicable to the Investor any of its properties or assets,
except in the case of clauses (iii) and (iv) for violations, breaches or
defaults which could not, individually or in the aggregate, be reasonably
expected to either prevent or materially delay its ability to perform its
obligations hereunder.
4.4 Information Supplied.
None of the written information supplied or to be supplied by the Investor
specifically for inclusion or incorporation by reference in the Offer Documents,
as supplemented if necessary, and any other documents to be filed by the Company
with the Commission or any Governmental Entity in connection with the
transactions contemplated hereby will, on the date of its filing contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading.
4.5 Ownership of Company Common Stock.
As of the date hereof, the Investor does not own of record or beneficially,
a number of Shares which, in the aggregate, exceed 1% of the outstanding Shares
on the date hereof and, without the consent of the Company, which consent will
not be unreasonably withheld, the Investor shall not acquire or dispose of any
Shares until after the Closing Date except in connection with the transactions
contemplated by this Agreement.
4.6 Financing.
At the Closing, the Investor will have $100 million available to purchase
the Debentures.
4.7 Brokers.
No broker, investment banker, financial advisor, finder or other person is
entitled to any brokerage, investment banker's, financial advisor's, finder's or
other fee or commission for which the Company will be liable in connection with
the execution of this Agreement by the Investor or the performance by the
Investor of its obligations hereunder, except as otherwise set forth in this
Agreement.
4.8 Investment Representations and Warranties.
(a) The Investor is acquiring the Debentures to be acquired hereunder
for its own account, for investment and not with a view to the distribution
thereof, and without any present intention of distributing the same.
22
<PAGE>
(b) The Investor understands that the Debentures have not been, and
will not upon issuance be, registered or qualified under the Securities
Act, or any applicable state securities laws, by reason of their issuance
in a transaction exempt from the registration or qualification requirements
of the Securities Act and such laws, and that the Debentures must be held
indefinitely unless a subsequent disposition thereof is registered or
qualified under the Securities Act and such laws or is exempt from such
registration or qualification.
(c) The Investor is an "accredited investor" within the meaning of
Rule 501(a) promulgated under the Securities Act.
(d) The Investor (A) has been furnished with or has had access to the
information that the Investor has requested from the Company, (B) has had
an opportunity to discuss with management of the Company the intended
business and financial affairs of the Company and (C) has generally such
knowledge and experience in business and financial matters so as to enable
the Investor to understand and evaluate the risks of and form an investment
decision with respect to its or his investment in the Debentures.
(e) The Investor has no need for liquidity in its investment in the
Debentures and is able to bear the economic risk of its investment in the
Debentures and the complete loss of all of such investment.
(f) The Investor understands that there is no public market for the
Debentures and that the transferability of the Debentures is restricted.
(g) The Investor recognizes that an investment in the Company involves
certain risks, and has taken full cognizance of, and understands all of,
the risk factors related to the purchase of the Debentures.
ARTICLE V
COVENANTS
5.1 Conduct of Business.
From the date hereof to the Closing Date, the Company shall, and shall
cause each Subsidiary to, carry on its business in the ordinary course
consistent with past practice and use reasonable efforts to preserve intact its
current business organization, keep available the services of its current
officers and employees and preserve its relationships with customers, suppliers,
licensors, licensees and others having significant business dealings with it.
Without limiting the generality of the foregoing, from the date hereof to the
Closing Date, the Company shall not and shall cause each Subsidiary not to
(except as expressly permitted by this Agreement or with the Investor's consent,
which consent will not be unreasonably withheld):
(a) (i) declare, set aside or pay any dividends on, or make any other
distributions in respect of, any of its capital stock (other than cash
dividends and distributions by a wholly-owned Subsidiary to the Company or
to a Subsidiary all of the capital stock of which is owned directly or
indirectly by the Company), (ii) split, combine or reclassify any of its
capital stock or issue or authorize the issuance of any other securities in
respect of, in lieu of or in substitution
23
<PAGE>
for Shares of its capital stock, or (iii) purchase, redeem or otherwise
acquire any Shares or any capital stock of the Company or any other
securities thereof or any rights, warrants or options to acquire any such
shares or other securities;
(b) issue, deliver, sell, pledge or otherwise encumber any shares of
its capital stock, any other voting securities or any securities
convertible into, or any rights, warrants or options to acquire, any such
shares, voting securities or convertible securities, including any issuance
of securities in any mergers or acquisitions (whether pursuant to any
existing earn-outs or otherwise) other than Permitted Securities;
(c) amend its Organizational Documents;
(d) acquire or agree to acquire (i) by merging or consolidating with,
or by purchasing a substantial portion of the assets or stock of, or by any
other manner, any business or any person or (ii) any assets except for the
purchase of equipment or other assets in the ordinary course of business,
including, without the Investor's consent, any such acquisition or
agreement pursuant to any letter of intent or other arrangement pursuant to
which the Company or any Subsidiary is a party, provided that the amount
-------- ----
thereof does not exceed, individually or in the aggregate, $2,000,000,
other than as set forth on Schedule 5.1(d);
---------------
(e) sell, lease, license, mortgage or otherwise encumber or subject to
any Lien or otherwise dispose of any of its properties or assets, except
(i) immaterial assets, (ii) in the ordinary course of business (including
for trade-ins) and (iii) where the amount of such sales does not exceed,
individually or in the aggregate, $2,000,000;
(f) except in the ordinary course of business consistent with past
practice (i) incur any Indebtedness or guarantee any such Indebtedness of
another person, issue or sell any debt securities or warrants or other
rights to acquire any debt securities of the Company or any Subsidiary,
guarantee any debt securities of another person, enter into any "keep well"
or other agreement to maintain any financial statement condition of another
person or enter into any arrangement having the economic effect of any of
the foregoing or (ii) make any loans, advances (other than advances to
Subsidiaries or among Subsidiaries) or capital contributions to, or
investments in, any other person;
(g) from the date hereof through the Closing Date, make or agree to
make any capital expenditure or expenditures with respect to property,
plant or equipment for an amount in excess of $5 million;
(h) make any material tax election or settle or compromise any
material income tax liability;
(i) pay, discharge, settle or satisfy any material claims, liabilities
or obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction, in the
ordinary course of business consistent with past practice or in accordance
with their terms, of liabilities reflected or reserved against in the most
recent consolidated financial statements (or the notes thereto) of the
Company included in the 1998 Financial Statements or incurred thereafter in
the ordinary course of business consistent with past
24
<PAGE>
practice, or waive any material benefits of, or agree to modify any
confidentiality, standstill, non-solicitation or similar agreement to which
the Company or any Subsidiary is a party;
(j) modify, amend in any material respect or terminate any Material
Contract to which the Company or any Subsidiary is a party, or waive,
release or assign any material rights or claims (including any restrictions
on transfer of Shares issued or to be issued pursuant to Company
Acquisitions), other than in the ordinary course of business consistent
with past practice;
(k) except as set forth in Schedule 5.1(k), or as required to comply
---------------
with applicable Law or with the Investor's consent, (i) adopt, enter into,
terminate or amend any Benefit Plan or other arrangement for the benefit or
welfare of any director, officer or current or former employee, other than,
in the case of non-officer or non-key employees, in the ordinary course of
business consistent with past practice, (ii) increase in any manner the
compensation or fringe benefits of, or pay any bonus to, any director,
officer or key employee except pursuant to existing written agreements,
(iii) pay any material benefit not provided for under any Benefit Plan,
(iv) except as permitted in clause (ii), grant any awards under any bonus,
incentive, performance or other compensation plan or arrangement or Benefit
Plan (including the grant of stock options, stock appreciation rights,
stock based or stock related awards, performance units or restricted stock,
or the removal of existing restrictions in any Benefit Plans or agreement
or awards made thereunder), (v) accelerate the vesting of any Company Stock
Option or (vi) take any action to fund or in any other way secure the
payment of compensation or benefits under any employee plan, agreement,
contract or arrangement or Benefit Plan; or
(l) authorize any of, or commit or agree to take any of, the foregoing
actions.
5.2 No Solicitation.
The Company shall not and shall cause each Subsidiary and its Subsidiaries'
officers and directors not to, and each of the foregoing shall not permit their
respective agents, representatives, advisors or subsidiaries to (whether
directly or indirectly) (i) solicit, initiate or take any action knowingly
to facilitate the submission of inquiries, proposals or offers
("Acquisition Proposals") from any Third Party (as defined below) relating to
- ------------- ---------
(A) any acquisition or purchase of assets of the Company and its Subsidiaries
other than in the ordinary course of business consistent with past practice,
(B) the purchase of any equity security of the Company or any of its
Subsidiaries (including a self tender offer) or any security that is
convertible, exchangeable or exercisable for any equity security, (C) any
merger, consolidation, business combination, sale of substantially all assets,
recapitalization, liquidation, dissolution or similar transaction involving the
Company or any of its Subsidiaries, or (D) any other transaction the
consummation of which would, or could reasonably be expected to impede,
interfere with, prevent or materially delay the transactions contemplated by
this Agreement or which would, or could reasonably be expected to, materially
dilute the benefits to the Investor of the transactions contemplated hereby
(each of the foregoing items set forth in (A) through (D), an "Alternative
-----------
Transaction"), or agree to or endorse any Alternative Transaction, or (ii) enter
- -----------
into or participate in any discussions or negotiations regarding any of the
foregoing, or furnish to any Third Party any information with respect to its
business, properties or assets or any of the foregoing, or otherwise cooperate
in any way with, or knowingly assist or participate in, facilitate or
25
<PAGE>
encourage, any effort or attempt by any Third Party (other than the Investor) to
do or seek any of the foregoing. Subject to the provisions of the previous
sentence, the Company shall immediately cease and cause its Subsidiaries and its
and their advisors, agents and other intermediaries to cease any and all
existing activities, discussions or negotiations with any Third Party conducted
heretofore with respect to any of the foregoing, and shall use its reasonable
best efforts to cause any such parties in possession of confidential information
about the Company that was furnished by or on behalf of the Company to return or
destroy all such information in the possession of any such Third Party or in the
possession of any agent or advisor of any such Third Party; provided, however,
that the foregoing shall not prohibit the Company (either directly or indirectly
through advisors, agents or other intermediaries) from (i) furnishing
information pursuant to an appropriate confidentiality letter (which letter
shall not be less favorable to the Company in any material respect than the
Confidentiality Agreement, and a copy of which shall be provided for
informational purposes only to the Investor) concerning the Company and its
businesses, properties or assets to a Third Party who has made a bona fide
Acquisition Proposal, (ii) engaging in discussions or negotiations with such a
Third Party who has made a bona fide Acquisition Proposal, (iii) following
receipt of a bona fide Acquisition Proposal, taking and disclosing to its
stockholders a position contemplated by Rule 14d-9 or Rule 14e-2(a) under the
Exchange Act or otherwise making disclosure to its stockholders and/or (iv)
taking any non-appealable, final action ordered to be taken by the Company by
any court of competent jurisdiction but in each case referred to in the
foregoing clauses (i) through (iv) only to the extent that the Board of
Directors of the Company shall have concluded in good faith after consultation
with outside counsel that such action is required to prevent the Board of
Directors of the Company from breaching its fiduciary duties to the stockholders
of the Company under applicable law (it being understood that the Board of
Directors of the Company may rely on the written advice of its outside counsel
in good faith and the Investor agrees not to take a contrary position to any
such written advice); provided, further, that (A) the Board of Directors of the
-------- -------
Company shall not take any of the foregoing actions until after it provides
reasonable notice to the Investor of its intent to take such action; and (B) if
the Board of Directors of the Company receives an Acquisition Proposal, to the
extent it may do so without breaching its fiduciary duties to stockholders as
advised by counsel and as determined in good faith, then the Company shall
promptly inform the Investor of the terms and conditions of such proposal and
the identity of the person making it.
5.3 Certain Tax Matters.
From the date hereof until the Closing Date, (i) the Company and each
Subsidiary will file all material tax returns and reports ("Post-Signing
------------
Returns") required to be filed; (ii) the Company and each Subsidiary will timely
- -------
pay all taxes shown as due and payable on the Company's Post-Signing Returns
that are so filed; (iii) the Company and each Subsidiary will make provision for
all taxes payable by the Company for which no Post-Signing Return is due prior
to the Closing Date; and (iv) the Company will promptly notify the Investor of
any action, suit, proceeding, claim or audit pending against or with respect to
the Company and each Subsidiary in respect of any tax where there is a
reasonable possibility of a determination or decision which would reasonably be
expected to have a significant adverse effect on the Company's or any
Subsidiary's tax liabilities or tax attributes.
26
<PAGE>
5.4 Other Actions.
(a) The Company shall not, and shall cause each Subsidiary not to,
take or omit to take any action, the taking or omission of which would
reasonably be expected to result in (i) any of the representations and
warranties of the Company set forth in this Agreement becoming untrue or
inaccurate in any material respect or (ii) any of the conditions set forth
in Section 7.2 not being satisfied (subject to the Company's right to take
-----------
actions specifically permitted by Section 5.1, Section 5.2 or Section 8.1).
----------- ----------- -----------
(b) Without limiting Section 5.4(a), prior to the Closing, the Company
--------------
shall execute and deliver the Indenture, increase the size of its board of
directors to 10 persons and cause at least three persons designated by the
Investor to be added to the Company's board of directors.
5.5 Advice of Changes; Filings.
The Company shall confer with the Investor on a regular and frequent basis
as reasonably requested by the Investor, report on operational matters and
promptly advise the Investor orally and, if requested by the Investor, in
writing of any material change with respect to the Company or any Subsidiary.
The Company shall promptly provide to the Investor (or its counsel) copies of
all filings made by the Company or any Subsidiary with any Governmental Entity
in connection with this Agreement and the transactions contemplated hereby.
5.6 Financial Information.
The Company shall furnish to the Investor all documents filed with or
submitted to the Commission by the Company simultaneously with such filing or
submission. The Company shall also furnish to the Investor as soon as available
but in any event within 30 days of each calendar month, the unaudited
consolidated and consolidating balance sheets and income statements of the
Company and its Subsidiaries, showing its financial condition as of the close of
such month and the results of operations during such month and for then elapsed
portion of the Company's fiscal year, in each case, setting forth, to the extent
available, the comparative figures for the corresponding month in the prior
fiscal year, the corresponding elapsed portion of the prior fiscal year and the
budget amount for such month (all to be prepared in accordance with GAAP
consistently applied).
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 Access to Information; Confidentiality.
The Company and its Subsidiaries shall afford to the Investor, and to the
Investor's officers, employees, accountants, counsel, financial advisers and
other representatives, reasonable access during normal business hours from the
date hereof to the Closing Date to all their respective properties, books,
contracts, commitments, personnel and records and, during such period, the
Company shall furnish promptly to the Investor (a) a copy of each report,
schedule, registration statement and other document filed by it during such
period pursuant to the
27
<PAGE>
requirements of Federal or state securities laws and (b) all other information
concerning its business, properties and personnel as the Investor may reasonably
request. The Investor will hold, and will cause its officers, employees,
accountants, counsel, financial advisers and other representatives and
Affiliates to hold, any and all information received from the Company, directly
or indirectly, in confidence, according to the terms of the confidentiality
agreement dated as of November 11, 1998, between the Company and an affiliate of
the Investor (the "Confidentiality Agreement").
-------------------------
6.2 Reasonable Efforts; Notification.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, each of the parties agrees to use all commercially reasonable
efforts to take, or cause to be taken, all actions, and to do, or cause to
be done, and to assist and cooperate with the other parties in doing, all
things necessary, proper or advisable to consummate and make effective, in
the most expeditious manner practicable, the transactions contemplated by
this Agreement, including (i) the obtaining of all necessary actions or
non-actions, waivers, consents and approvals from Governmental Entities and
the making of all necessary registrations and filings (including filings
with Governmental Entities, if any) and the taking of all reasonable steps
as may be necessary to obtain an approval or waiver from, or to avoid an
action or proceeding by, any Governmental Entity, (ii) the obtaining of all
necessary consents, approvals or waivers from third parties, (iii) the
defending of any lawsuits or other legal proceedings, whether judicial or
administrative, challenging this Agreement or the consummation of any of
the transactions contemplated by this Agreement, including seeking to have
any stay or temporary restraining order entered by any court or other
Governmental Entity vacated or reversed, (iv) the execution and delivery of
any additional instruments necessary to consummate the transactions
contemplated by, and to fully carry out the purposes of, this Agreement and
(v) reasonably cooperating with all potential sources of financing to the
Investor in connection with the transactions contemplated by this
Agreement, and the taking of all reasonable steps as may be necessary or
advisable to consummate one or more financing transactions with such
potential sources of financing, including participating in "road shows"
with respect to the issuance of securities in one or more private
placements or transactions registered under the Securities Act. In
connection with and without limiting the foregoing, the Company and its
Board of Directors shall (i) take all action necessary to ensure that no
state takeover statute or similar statute or regulation is or becomes
applicable to this Agreement or any of other transactions contemplated by
this Agreement and (ii) if any state takeover statute or similar statute or
regulation becomes applicable to any transaction contemplated by this
Agreement, take all action reasonably necessary to ensure that the
transactions contemplated by this Agreement may be consummated as promptly
as practicable on the terms contemplated by this Agreement and otherwise to
minimize the effect of such statute or regulation on this Agreement and the
transactions contemplated by this Agreement. Nothing in this Agreement
shall be deemed to require the Investor to dispose of or hold separate any
asset or collection of assets.
(b) The Company shall give prompt notice to the Investor of (i) any
representation or warranty made by it contained in this Agreement becoming
untrue or inaccurate in any material respect or (ii) the failure by it or
any Subsidiary to comply with or satisfy in any material respect any
covenant, condition or agreement to be complied with or satisfied by it or
any Subsidiary under this Agreement; provided, however, that no such
-------- -------
notification shall affect
28
<PAGE>
the representations, warranties, covenants or agreement of the parties or
the conditions to the obligations of the parties under this Agreement.
(c) The Investor shall give prompt notice to the Company of (i) any
representation or warranty made by it contained in this Agreement becoming
untrue or inaccurate in any material respect or (ii) the failure by it to
comply with or satisfy in any material respect any covenant, condition or
agreement to be complied with or satisfied by it under this Agreement;
provided, however, that no such notification shall affect the
-------- -------
representations, warranties, covenants or agreements of the parties or the
conditions to the obligations of the parties under this Agreement.
6.3 Fees and Expenses.
(a) Except as otherwise provided in this Agreement or as otherwise
agreed to by the parties hereto in writing, all fees and expenses incurred
in connection with this Agreement and the transactions contemplated by this
Agreement shall be paid by the party incurring such fees or expenses,
whether or not the transactions contemplated by this Agreement are
consummated.
(b) If a Payment Event shall occur at any time, then, within two
business days following such Payment Event, the Company shall pay to the
Investor a fee in an amount equal to $12.5 million (the "Termination Fee")
---------------
and shall reimburse the Investor for up to $3 million of the Investor's
Expenses not previously reimbursed.
(c) If an Expense Reimbursement Event shall occur at any time, then,
within two business days following such Expense Reimbursement Event, the
Company shall reimburse the Investor for up to $3 million of the Investor's
Expenses not previously reimbursed.
(d) Notwithstanding anything to the contrary set forth in this
Agreement, if this Agreement shall have been terminated for any reason and
at the time of termination, this Agreement could have been terminated
pursuant to more than one subsection of Section 8.1, then the Investor
-----------
shall be entitled to choose which such subsection this Agreement shall have
been terminated pursuant to.
(e) The Company acknowledges that the agreements contained in this
Section 6.3 are an integral part of the transactions contemplated by this
-----------
Agreement and that, without these agreements, the Investor would not enter
into this Agreement. Accordingly, if the Company fails to pay the
Termination Fee or the Investor's Expenses and, in order to obtain such
payment, the Investor commences a suit which results in a judgment against
the Company for the Termination Fee and/or the Investor's Expenses, the
Company shall pay to the Investor all costs and expenses (including
attorneys fees and expenses) incurred by or on behalf of the Investor in
connection with such suit, together with interest on the amount of the
Termination Fee and the Investor's Expenses that are the subject of such
judgment at the prime rate of the Bankers Trust Company in effect on the
date such payment was required to be made.
29
<PAGE>
6.4 Public Announcements.
The Investor, on the one hand, and the Company, on the other hand, will
consult with each other before issuing, and provide each other the opportunity
to review and comment upon, any press release or other public statements with
respect to the transactions contemplated by this Agreement and shall not issue
any such press release or make any such public statement without the prior
consent of the other party, except to the extent required by applicable Law.
6.5 NASD.
The Company agrees to use its best efforts to obtain adequate assurances
prior to Closing that the NASD will not take any action to cease quoting the
Common Stock on Nasdaq in connection with the issuance of the Debentures
(without any modification of the terms of the Debentures as set forth in the
Indenture). The Company further agrees to consult and cooperate with the
Investor and its counsel in performing its obligations under this Section 6.5.
-----------
The Company will not engage in any discussions or otherwise communicate in
writing or orally with the NASD or any of its agents or representatives with
respect to the transactions contemplated by the Transaction Documents without
the prior written consent of the Investor. The Investor agrees to cooperate and
assist the Company in connection with the foregoing.
ARTICLE VII
CONDITIONS
7.1 Conditions to Each Party's Obligation.
The respective obligations of each party to consummate the transactions
contemplated by Section 2.1 are subject to the prior satisfaction or waiver,
-----------
where permissible, of the following conditions:
(a) No statute, rule, regulation, executive order, decree or
injunction shall have been enacted, entered, promulgated or enforced by any
court or Governmental Entity that prohibits or restricts the consummation
of the transactions contemplated by this Agreement or makes such
consummation illegal (each party agreeing to use commercially reasonable
efforts to have any such prohibition lifted).
(b) The waiting period applicable to the consummation of the
transactions contemplated by this Agreement under the HSR Act shall have
expired or been terminated.
(c) All consents, approvals and licenses of any Governmental Entity
required in connection with the execution, delivery and performance of this
Agreement and for the Company to continue to conduct its business in
substantially the manner now conducted, shall have been obtained, unless
the failure to obtain such consents, authorizations, orders or approvals
would not have a Material Adverse Effect after giving effect to the
transactions contemplated by this Agreement.
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(d) The conditions set forth in the Financing Letters shall have been
satisfied or waived and the funding referred to therein shall be available
to the Company on terms and conditions and in such amounts satisfactory to
the Investor and the Company.
(e) There shall be no Proceeding pending or threatened by the National
Association of Securities Dealers, Inc. (the "NASD") to terminate the
----
NASD's quotation of the Common Stock on the Nasdaq Stock Market ("Nasdaq").
------
(f) Each of the Offer Conditions shall have been waived by the Company
and the Investor or shall have been satisfied.
7.2 Conditions to the Company's Obligations.
The obligation of the Company to consummate the transactions contemplated
by Section 2.1 are subject to the prior satisfaction or waiver of the following
-----------
conditions:
(a) All of the representations and warranties of the Investor set
forth in this Agreement shall be true and correct in all material respects
(except for those representations and warranties that are qualified as to
materiality, which shall be true and correct in all respects) as of the
Closing Date as though made on and as of such time, and the Investor shall
have performed in all material respects all covenants and agreements
required to be performed by it under this Agreement at or prior to the
Closing Date and the Company shall have received a certificate signed by an
executive officer of the Investor to the foregoing effect.
(b) The Investor and the Trustee shall have executed and delivered the
Indenture.
7.3 Conditions to the Investor's Obligations.
The obligations of the Investor to consummate the transactions contemplated
by Section 2.1 are subject to the prior satisfaction or waiver by the Investor
-----------
of the following conditions:
(a) The representations and warranties of the Company set forth in
this Agreement shall be true and correct as of the Closing Date as though
made on and as of such time except to the extent that the failure to be
true and correct has not had and could not reasonably be expected to have,
in the aggregate, an adverse effect on the Company and its Subsidiaries,
taken as a whole, that a reasonably prudent investor in the Investor's
position would consider material relative to the investment to be made by
the Investor pursuant to this Agreement, and the Company shall have
performed in all material respects all covenants and agreements required to
be performed by it under this Agreement at or prior to the Closing Date (it
being understood that any such breach may be cured to the extent permitted
by Section 8.1(d)). The Investor shall have received a certificate signed
--------------
by an executive officer of the Company to the foregoing effect.
(b) All notices required to be given prior to the Closing Date with,
and all consents, approvals, authorizations, waivers and amendments
required to be obtained prior to the Closing Date from, any third party in
connection with the consummation by the Company of the transactions
contemplated by this Agreement have been made and/or obtained.
31
<PAGE>
(c) The Investor shall have been provided with a certificate from an
officer of the Company certifying that the conditions precedent to the
Investor's obligations set forth in this Section shall have been satisfied.
(d) The Investor shall have been provided with an opinion of Morgan,
Lewis & Bockius LLP, counsel to the Company, or the general counsel of the
Company, as to the matters set forth in Exhibit 7.3(d).
--------------
(e) The Company shall have performed all of its obligations required
to be performed at or prior to the Closing pursuant to the Investor Rights
Agreement. Without limiting the foregoing, the Company shall have performed
its obligations under Section 5.4(b) of this Agreement.
--------------
(f) The Company and the Trustee shall have executed and delivered the
Indenture.
(g) The Company shall have accepted for payment not less than 21.0
million Shares and not more than 26.5 million Shares tendered in the Offer.
(h) The seven persons to serve on the Board of Directors of the
Company from and after the Closing (other than the three persons designated
by the Investor pursuant to the Investor Rights Agreement) shall be
reasonably acceptable to the Investor.
ARTICLE VIII
TERMINATION AND AMENDMENT
8.1 Termination.
This Agreement may be terminated at any time prior to the Closing Date as
follows:
(a) By mutual written consent of the Investor and the Company.
(b) By either the Investor or the Company if the Closing Date shall
not have occurred on or before the 90th day immediately following the date
hereof (the "Outside Date"); provided that the right to terminate this
------------ -------- ----
Agreement under this Section 8.1(b) shall not be available to any party
--------------
whose failure to fulfill any obligation under this Agreement has been the
cause of or resulted in the failure of the Closing Date to occur on or
before such date.
(c) By either the Investor or the Company if any Governmental Entity
shall have issued an Order or taken any other action permanently enjoining,
restraining or otherwise prohibiting the issuance of the Debentures and
such Order or other action shall have become final and nonappealable.
(d) By the Investor, if (i) any of the representations and warranties
of the Company contained in this Agreement shall fail to be true and
correct in any material respect when made or since February 4, 1999 have
become untrue or incorrect (without giving effect to the first paragraph of
Article III) except to the extent that the failure to be true and correct
-----------
has not had and could not reasonably be expected to have, in the aggregate,
an adverse affect on the
32
<PAGE>
Company and its Subsidiaries, taken as a whole, that a reasonably prudent
investor in the Investor's position would consider material relative to the
transactions to be consummated by the Investor pursuant to this Agreement
or (ii) the Company shall have breached or failed to comply in any material
respect with any of its obligations under this Agreement, and such failure
to be true and correct, breach or failure shall continue unremedied for 15
days after the Company has received written notice from the Investor of the
occurrence of such failure to be true and correct, breach or failure;
provided, however, that in remedying any such failure to be true and
-------- -------
correct, breach or failure the Company shall not have spent any money,
incurred any liabilities or undertaken any obligations which expenditure,
incurrence or undertaking, individually or together with the breach or
failure so remedied, would itself constitute a material breach of or
failure to perform any representation, warranty or covenant of this
Agreement.
(e) By the Investor if there shall have occurred any material adverse
change since December 31, 1998.
(f) By the Company if (i) any of the representations and warranties of
the Investor contained in this Agreement shall fail to be true and correct
in any material respect, in each case either as of the date hereof or have
since become, and at the time of termination remain, untrue in any material
respect, or (ii) the Investor shall have breached or failed to comply in
any material respect with any of its obligations under this Agreement
(other than as a result of a breach by the Company of any of its
obligations under this Agreement) and such failure to be true and correct,
breach or failure shall continue unremedied for 15 days after the Investor
has received written notice from the Company of the occurrence of such
breach or failure.
(g) By the Investor if either (i) the Offer shall have been terminated
for any reason or (ii) the Offer shall have expired in accordance with its
terms and the Company shall not have accepted for payment at the Offer
Price at least 21 million Shares.
(h) By the Company if prior to the Closing Date, (i) the Company shall
have received an Acquisition Proposal, (ii) in connection with such
Acquisition Proposal, the Board of Directors of the Company shall have
concluded in good faith after consultation with outside counsel that it is
required to terminate this Agreement to prevent the Board of Directors of
the Company from breaching its fiduciary duties to its stockholders under
applicable law, (iii) the Company has complied and is in compliance with
Section 5.2, (iv) prior to being entitled to terminate this Agreement under
-----------
this Section 8.1(h), the Company shall have provided to the Investor at
--------------
least 7 days prior written notice (which notice shall set forth the terms
and conditions of such Acquisition Proposal and identify the applicable
Third Party), the Company shall have cooperated with the Investor during
such 7 day period with the intent of enabling the Investor (if it so
desires) and the Company to agree to a modification of the terms and
conditions of this Agreement and (v) the Company shall have paid to the
Investor the Termination Fee and reimbursed all of the Investor's Expenses.
(i) By the Investor if the Company shall not have received a signed
audit report from PricewaterhouseCoopers LLP in respect of the 1998
Financial Statements prior to March 31, 1999 or such audited financial
statements shall not be substantially identical to the 1998 Financial
Statements.
33
<PAGE>
8.2 Effect of Termination.
In the event of a termination of this Agreement by either the Company or
the Investor as provided in Section 8.1, this Agreement shall forthwith become
-----------
void and there shall be no liability or obligation on the part of the Investor
or the Company or their respective officers, directors or Affiliates, except
that Section 6.1, Section 6.3, Section 6.4, Section 8.1, this Section 8.2 and
----------- ----------- ----------- ---- -----------
Article IX shall survive any such termination and except that nothing herein
- ----------
shall relieve any party for liability for any breach hereof.
ARTICLE IX
MISCELLANEOUS
9.1 Amendment.
This Agreement may not be amended except by an instrument in writing signed
on behalf of all of the parties.
9.2 Extension; Waiver.
At any time prior to the Closing Date, the parties hereto, by action taken
or authorized by their respective Boards of Directors, may, to the extent
legally allowed, (i) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (ii) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto or (iii) subject to Section 9.1, waive
-----------
compliance with any of the agreements or conditions contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in a written instrument signed on behalf of such party.
The failure of any party to this Agreement to assert any of its rights under
this Agreement or otherwise shall not constitute a waiver of those rights.
9.3 Survival of Representations, Warranties and Agreements, Limitation on
Liability.
The representations, warranties and covenants contained in this Agreement
or in any instrument delivered pursuant to this Agreement shall survive the
execution and delivery of this Agreement, the Debentures and the Indenture, the
purchase or transfer by the Investor of any Note or portion thereof or interest
therein and the payment of any Debenture until the later of April 1, 2001 and 10
days after the delivery to the Investor of the Company's audited financial
statements for the fiscal year ending December 31, 2000, and may be relied upon
by a subsequent holder of a Debenture, regardless of any investigation made by
or on behalf of the Investor or any other holder of a Debenture at any time.
Notwithstanding anything to the contrary set forth in this Agreement, the
Company shall not be liable to the Investor for such a breach for an amount in
excess of the sum of the principal amount of the Debentures plus accrued
interest thereon.
9.4 Notices.
All notices and other communications hereunder shall be in writing and
shall be deemed given if delivered personally, telecopied (which is confirmed),
sent by overnight courier
34
<PAGE>
(providing proof of delivery) or mailed by registered or certified mail (return
receipt requested) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
if to the Investor, to
Boss Investment LLC
c/o Apollo Management, L.P.
1301 Avenue of the Americas, 38th Floor
New York, New York 10019
Attention: Mr. Andrew Africk
Telecopy No.: (212) 261-4102
with a copy to:
O'Sullivan Graev & Karabell, LLP
30 Rockefeller Plaza, 41st Floor
New York, NY 10112
Attention: John J. Suydam, Esq.
Telecopy No.: (212) 408-2420
and, if to the Company, to
Building One Services Corporation
800 Connecticut Avenue, NW
Suite 1111
Washington, DC 20006
Attention: Jonathan J. Ledecky
Telecopy: (202) 261-6020
with a copy to:
Morgan, Lewis & Bockius LLP
1701 Market Street
Philadelphia, PA 19103
Attention: N. Jeffrey Klauder
Telecopy No.: (215) 963-5299
9.5 Indemnification.
The Company hereby agrees to indemnify and hold harmless each purchaser of
Notes and its Affiliates, partners, officers, directors, employees, agents and
representatives (each, an "Indemnified Party") against any liability, obligation
-----------------
or Proceeding by any third party (including derivative actions brought through
or in the name of the Company) in connection with (a) the status or conduct of
the Company, (b) the execution, delivery and performance of this Agreement, the
Investor Rights Agreement, the Indenture or any other document or instrument
entered into in connection with the transactions contemplated hereby or thereby
or (c) the
35
<PAGE>
Indemnified Party's role with the Company or any such transactions, in each
case, except to the extent of any willful misconduct or gross negligence of the
Indemnified Party.
9.6 Interpretation.
When a reference is made in this Agreement to an Article or a Section, such
reference shall be to an Article or a Section of this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Unless the context otherwise requires, words
importing the singular shall include the plural, and vice versa. Whenever the
words "include", "includes" or "including" are used in this Agreement, they
------- -------- ---------
shall be deemed to be followed by the words "without limitation". The phrase
------------------
"made available" in this Agreement shall mean that the information referred to
- ---------------
has been made available if requested by the party to whom such information is to
be made available. As used in this Agreement, the term "subsidiary" of any
----------
person means another person, an amount of the voting securities, other voting
ownership or voting partnership interests of which is sufficient to elect at
least a majority of its Board of Directors or other governing body (or, if there
are no such voting interests, 50% or more of the equity interests of which) is
owned directly or indirectly by such first person. As used in this Agreement,
"Material Adverse Effect" means, when used in respect of the Company and its
- ------------------------
Subsidiaries, any effect or condition that, individually or in the aggregate
with any other effect or condition, is materially adverse to the assets,
properties, business, financial condition or results of operations of the
Company and its Subsidiaries taken as a whole. As used in this Agreement,
"material adverse change" means, when used in respect of the Company and its
- ------------------------
Subsidiaries, any change or event that, individually or in the aggregate with
any other change or event, is materially adverse to the assets, properties,
business, financial condition or results of operations of the Company and its
Subsidiaries, but excluding any change resulting from general economic
conditions. As used in this Agreement, except where expressly indicated
otherwise, the phrase "knowledge" with respect to the Company, means to the
---------
actual knowledge, after due inquiry (i.e., the amount of inquiry that would be
----
undertaken by a reasonably prudent business person given like facts and
circumstances) of each of the Company's directors and officers and the President
of each Subsidiary. As used in this Agreement, the term "person" shall be
interpreted broadly and shall include any person, individual, corporation,
limited partnership, limited liability company, trust, association or other
entity or business organization of any kind or division thereof.
9.7 Entire Agreement; Third Party Beneficiaries.
This Agreement (a) constitutes the entire agreement and supersedes all
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof, and (b) is not intended to confer
upon any person other than the parties hereto any rights or remedies hereunder.
9.8 Governing Law.
This Agreement shall be governed and construed in accordance with the laws
of the State of New York without regard to the conflicts of laws principles
thereof.
36
<PAGE>
9.9 Counterparts.
This Agreement may be executed in two or more counterparts, all of which
shall be considered one and the same agreement and shall become effective when
two or more counterparts have been signed by each of the parties and delivered
to the other parties, it being understood that all parties need not sign the
same counterpart.
9.10 Assignment.
Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the parties hereto (whether by operation
of law or otherwise) without the prior written consent of the other parties.
Subject to the preceding sentence, this Agreement will be binding upon, inure to
the benefit of and be enforceable by the parties and their respective successors
and assigns.
9.11 Enforcement.
The parties agree that irreparable damage would occur in the event that any
of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions of this
Agreement in any court of the United States located in the State of New York or
in a State court located in the City of New York, this being in addition to any
other remedy to which they are entitled at law or in equity. In addition, each
of the parties hereto (i) consents to submit such party to the personal
jurisdiction of any such Federal or State court if any dispute arises out of
this Agreement or any of the transactions contemplated hereby, (ii) agrees that
such party will not attempt to deny or defeat such personal jurisdiction by
motion or other request for leave from any such court, (iii) agrees that such
party will not bring any action relating to this Agreement or any of the
transactions contemplated hereby in any court other than a Federal court sitting
in the state of New York or a New York State court located in the City of New
York and (iv) waives any right to trial by jury with respect to any claim or
proceeding related to or arising out of this Agreement or any of the
transactions contemplated hereby.
37
<PAGE>
IN WITNESS WHEREOF, the Investor and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized as
of the date first written above.
BOSS INVESTMENT LLC
By: _________________________________
Name:
Title:
BUILDING ONE SERVICES CORPORATION
By: _________________________________
Name:
Title:
38
<PAGE>
Exhibit 99.2
================================================================================
INVESTORS' RIGHTS AGREEMENT
dated March 22, 1999
among
BUILDING ONE SERVICES CORPORATION
and
CERTAIN OF ITS INVESTORS
================================================================================
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 1. Definitions........................................................................................1
- ---------- -----------
Section 2. Rights to Subscribe for Securities.................................................................4
- ---------- ----------------------------------
Section 3. Board of Directors.................................................................................5
- ---------- ------------------
Section 4. Information rights; Covenants......................................................................7
- ---------- -----------------------------
Section 5. Demand Registration................................................................................9
- ---------- -------------------
Section 6. Piggyback Registration............................................................................10
- ---------- ----------------------
Section 7. S-3 Registrations.................................................................................11
- ---------- -----------------
Section 8. Expenses..........................................................................................11
- ---------- --------
Section 9. Preparation and Filing............................................................................12
- ---------- ----------------------
Section 10. Indemnification...................................................................................14
- ----------- ---------------
Section 11. Underwriting Agreement............................................................................17
- ----------- ----------------------
Section 12. Information by Investor...........................................................................17
- ----------- ----------------------
Section 13. Exchange Act Compliance...........................................................................17
- ----------- -----------------------
Section 14. No Conflict of Rights.............................................................................17
- ----------- ---------------------
Section 15. Additional Covenants of the Company...............................................................18
- ----------- -----------------------------------
Section 16. Protective provisions.............................................................................18
- ----------- ---------------------
Section 17. Miscellaneous.....................................................................................19
- ----------- -------------
Section 18. Effectiveness.....................................................................................23
- ----------- -------------
</TABLE>
<PAGE>
INVESTORS' RIGHTS
AGREEMENT dated as of March 22, 1999, among
BUILDING ONE SERVICES CORPORATION, a Delaware
corporation (the "Company"), and the
-------
investors of the Company listed on Schedule I
----------
(the "Investors").
Each Investor currently holds that number of Debentures of the
Company set forth opposite the name of such Investor under column (1) on
Schedule I, which are initially convertible into the number of shares of Common
Stock set forth opposite the name of such Investor under column (2) on Schedule
I. The parties hereto deem it to be in their best interests to set forth their
rights and obligations in connection with public offerings, sales of shares of
Common Stock and certain other duties of the Company to the Investors.
Accordingly, the parties agree as follows:
SECTION 1. DEFINITIONS.
-----------
As used in this Agreement, the following terms shall have the following
meanings:
"Affiliate" has the meaning assigned to such term in the
---------
Indenture.
"Board" means the Board of Directors of the Company.
-----
"Boss Investment" means Boss Investment LLC, a Delaware
---------------
limited liability company.
"Closing" has the meaning assigned to such term in the
-------
Securities Purchase Agreement.
"Commission" means the Securities and Exchange Commission or
----------
any other Federal agency at the time administering the Securities Act.
"Common Stock" means the Common Stock, par value $.001 per
------------
share, of the Company.
"Common Stock Equivalent" means the right to acquire, whether
-----------------------
or not immediately exercisable, one share of Common Stock, whether evidenced by
an option, warrant, convertible security or other instrument or agreement.
"Common Stock Percentage" means, with respect to any Investor,
-----------------------
the fraction, expressed as a percentage, the numerator of which fifty percent of
the total number of shares of Common Stock held by such Investor and the
denominator of which is the total number of shares of Common Stock held by all
Investors, in each case including Common Stock issuable upon exercise or
conversion of Securities held by such Investor or Investors which are
convertible or exercisable at the time in question.
"Debentures" means the 7 1/2% Convertible Subordinated
----------
Debentures Due 2012 issued by the Company.
<PAGE>
"Debentures Directors" has the meaning set forth in
--------------------
Section 3(f).
"Event of Non-Compliance" means the occurrence of any of the
-----------------------
following:
(i) any material, intentional breach by the Company of
this Agreement, the Securities Purchase Agreement or the Indenture or
any other material, intentional breach by the Company of any of the
terms and conditions of the Debentures (such as, but not limited to, a
change in the chief executive officer or chief operating officer or an
acquisition for a consideration greater than $100 million without the
consent of Boss Investment); or
(ii) there is a payment default, or any other default
giving rise to a right of acceleration, under any Indebtedness
(including pursuant to the Indenture) of the Company.
"Exchange Act" means the Securities Exchange Act of 1934, and
------------
the rules and regulations of the Commission promulgated thereunder, all as the
same shall be in effect from time to time.
"Excluded Stock" means (i) shares of Common Stock issuable
---------------
upon exercise of any warrants or options of the Company outstanding on the
Closing Date or issued thereafter under the Company's customary incentive plans,
(ii) shares of Common Stock issued as consideration pursuant to any Permitted
Acquisition, (iii) shares of Common Stock issued pursuant to the conversion of
the Debentures, (iv) Debentures issued as dividends to the Investors and
(v) shares issued pursuant to earn-out arrangements in definitive, binding
agreements in existence on the date hereof relating to acquisitions by the
Company.
"Fair Market Value" has the meaning assigned to such term in
-----------------
the Indenture.
"Indebtedness" has the meaning assigned to such term in the
------------
Indenture.
"Indenture" means the Indenture to be dated as of the Closing
---------
Date, between the Company and the Trustee (as defined in the Securities Purchase
Agreement).
"Investors" has the meaning set forth in the preamble to this
---------
Agreement.
"Liquidation" has the meaning assigned to such term in the
-----------
Indenture.
"NASD" means the National Association of Securities Dealers,
----
Inc.
"NASDAQ" means the automated quotation system of the NASD.
------
"1999 Annual Meeting" means the annual meeting of the
-------------------
stockholders of the Company to be held for the year 1999.
"Notice of Acceptance" has the meaning set forth in
--------------------
Section 2(b).
"Offer" has the meaning set forth in Section 2(a).
-----
2
<PAGE>
"Offer Period" has the meaning set forth in Section 2(a).
------------
"Offered Securities" means (A) shares of Common Stock, (B) any
------------------
other equity security of the Company, (C) any debt security of the Company which
by its terms is convertible into or exchangeable for any equity security of the
Company or has an equity kicker or other participation rights, (D) any security
of the Company that is a combination of debt and equity or (E) any option,
warrant or other right to subscribe for, purchase or otherwise acquire any
equity security or any such debt security of the Company, in each case other
than Excluded Stock; provided that Offered Securities shall not include any
Security that is issued in an underwritten public offering that is registered
under the Securities Act.
"Other Shares" means at any time those shares of Common Stock
------------
which do not constitute Primary Shares.
"Permitted Acquisition" means any acquisition by the Company
----------------------
or any Subsidiary of (i) any business or assets with a purchase price of
$100,000,000 or less (including all assumed debt, all cash payments, and the
fair market value of all securities or other property issued as consideration)
or (ii) any business or assets for which the consent or approval of Boss
Investment has been given.
"Person" shall be construed broadly and shall include, without
------
limitation, an individual, a partnership, an investment fund, a limited
liability corporation, a corporation, an association, a joint stock corporation,
a trust, a joint venture, an unincorporated organization and a governmental
entity or any department, agency or political subdivision thereof.
"Primary Shares" means at any time the authorized but unissued
--------------
shares of Common Stock or shares of Common Stock held by the Company in its
treasury.
"Refused Securities" has the meaning set forth in
------------------
Section 2(d).
"Restated Certificate" means the Amended and Restated
--------------------
Certificate of Incorporation to be filed with the Secretary of State of
Delaware, in substantially the form attached as Exhibit A.
---------
"Restricted Shares" means at any time, with respect to any
-----------------
Investor, the shares of Common Stock held by such Investor.
"Rule 144" means Rule 144 promulgated under the Securities Act
--------
or any successor rule thereto or any complementary rule thereto.
"Rule 144A" means Rule 144A promulgated under the Securities
---------
Act or any successor rule thereto or any complementary rule thereto.
"Securities" means "securities" as defined in Section 2(1) of
----------
the Securities Act and includes capital stock or other equity interests or any
options, warrants or other securities that are directly or indirectly
convertible into, or exercisable or exchangeable for, capital stock or other
equity interests. Whenever a reference herein to Securities is referring to any
derivative Securities, the rights of a Investor shall apply to such derivative
Securities and all underlying
3
<PAGE>
Securities directly or indirectly issuable upon conversion, exchange or exercise
of such derivative Securities.
"Securities Act" means the Securities Act of 1933, and the
---------------
rules and regulations of the Commission thereunder, all as the same shall be in
effect from time to time.
"Securities Purchase Agreement" means the Securities Purchase
------------------------------
Agreement dated as of the date hereof between the Company and Boss Investment,
as the same may be amended or modified.
"Selling Investor" shall have the meaning set forth in
----------------
Section 9(b).
"Selling Investors' Counsel" shall have the meaning set forth
--------------------------
in Section 9(b).
"Subsidiary" has the meaning assigned to such term in the
----------
Indenture.
"Trigger Event" shall have the meaning set forth in
-------------
Section 3(h).
SECTION 2. RIGHTS TO SUBSCRIBE FOR SECURITIES.
----------------------------------
(a) The Company shall not issue, sell or exchange, or agree to
issue, sell or exchange, any Offered Securities unless the Company shall have
first offered to sell to Boss Investment up to Boss Investment's Common Stock
Percentage of such Offered Securities, at a price and on such other terms as
shall have been specified by the Company in writing delivered to Boss Investment
(the "Offer"), which Offer by its terms shall remain open for a period of
-----
15 business days from the date it is delivered by the Company (the "Offer
Period"). The rights of Boss Investment to subscribe for Offered Securities
pursuant to this Section are assignable to any other Investor or any Affiliates
of any Investors.
(b) Notice of Boss Investment's intention to accept, in whole or
in part, an Offer shall be evidenced by a writing signed by Boss Investment and
delivered to the Company prior to the end of the Offer Period, setting forth
such portion of the Offered Securities as Boss Investment elects to purchase
(the "Notice of Acceptance"); provided, however, that if Boss Investment
-------------------- -------- -------
exercises its rights under this Section 2, Boss Investment must purchase a
ratable portion of each class of the Offered Securities (if more than one class
is offered). Within 20 days after receipt by the Company of such Notices of
Acceptance, the Company shall sell and the Investors shall purchase the Offered
Securities in respect of which the Notice of Acceptance was delivered, upon the
terms and conditions of the Offer.
(c) In the event the Company materially amends the terms of the
Offer at any time, the Offer Period shall be extended for a period of not less
than 10 business days (or 48 hours if the amendment relates solely to the price
of the Offer or the number of shares to be sold in the Offer, in each case based
solely on the closing price of the shares of Common Stock as quoted by Nasdaq).
(d) In the event that the Notice of Acceptance is not given by
Boss Investment in respect of all the Offered Securities, the Company shall have
90 days from the expiration of the Offer Period to sell all or any part of such
Offered Securities as to which the Notice of
4
<PAGE>
Acceptance has not been given by Boss Investment (the "Refused Securities") to
------------------
any other Person(s), but only upon terms and conditions in all respects,
including, without limitation, unit price and interest rates, which are no more
favorable, in the aggregate, to such other Person(s) or less favorable, in the
aggregate, to the Company than those set forth in the Offer.
(e) In each case, any Offered Securities not purchased by Boss
Investment or any other Person(s) in accordance with Sections 2(b) and 2(d) may
not be sold or otherwise disposed of until they are again offered to Boss
Investment under the procedures specified in this Section 2.
SECTION 3. BOARD OF DIRECTORS
------------------
(a) At least five days prior to Closing, the Company shall
deliver to Boss Investment a notice setting forth the names of seven persons
that the Company proposes to serve on the Board from and after the Closing. At
the Closing, the Company shall cause Michael Gross, Andrew Africk and Brook
Newmark to be added to the Board.
(b) After the Closing and at least ten days prior to the mailing
of the Company's proxy statement for the 1999 Annual Meeting, the Company shall
deliver to Boss Investment a notice setting forth the Company's seven
nominations for election to the Board at such meeting. Promptly after receipt of
such notice, Boss Investment shall deliver to the Company a notice setting forth
the names of three persons that Boss Investment designates for election to the
Board at the 1999 Annual Meeting. The Company will nominate and otherwise
support for election to its Board the persons so designated by Boss Investment.
The Company also will either nominate at the 1999 Annual Meeting the persons
serving on the Board immediately following the Closing or, if any of such
persons have resigned or otherwise cannot or will not serve on the Board
following the 1999 Annual Meeting, such other persons as are mutually acceptable
to the Company and the Investor. The Company agrees not to nominate or support
any such other person that is not so mutually acceptable.
(c) After the 1999 Annual Meeting, if the holders of the
Debentures cannot elect three persons to the Board for any reason (whether
because (i) the Restated Certificate has not been approved by the Company's
stockholders or is otherwise not effective, (ii) there are no longer any
Debentures outstanding or (iii) otherwise), then the Company will deliver a
notice to Boss Investment not more than 40 and not less than 10 days prior to
the mailing of the Company's proxy materials relating to any election of
directors informing Boss Investment of the earliest date that the Company may
mail proxy materials in connection with any election of directors. At least
5 days prior to such date, if Boss Investment owns at least 33-1/3% of the
shares of Common Stock that it owns on the Closing Date (assuming the conversion
of all Debentures), then Boss Investment will deliver a notice to the Company
designating three persons for election to the Board. The Company shall nominate
such persons for election to its Board and will otherwise support in good faith
the election of such persons to its Board.
(d) If (i) the holders of Debentures cannot elect three persons
to the Board for any reason, including those reasons set forth above, (ii) the
persons designated by Boss Investment as set forth above are not elected to the
Board and (iii) Boss Investment owns at least 33-1/3% of the shares of Common
Stock that it owns on the Closing Date (assuming the conversion of all
5
<PAGE>
Debentures), then Boss Investment shall have the right to designate one
representative to serve as an observer at each meeting of the Board and each
committee thereof. The Company shall provide such observer with copies of all
actions taken by written consent of the Board or any committee thereof, advance
notice of such meeting as if such observer were a director and copies of all
materials that are distributed to the Board (in each case as if such observer
was a director). The Company shall reimburse the observer for all out-of-pocket
expenses incurred in connection with attending any meetings of the Board.
(e) Each committee of the Board shall include directors
designated by the holders of Debentures or Boss Investment pursuant to the
provisions set forth above, as the case may be (each, a "Debentures Director"),
-------------------
in the same proportion as such representatives comprise the Board. The Company
shall provide to each Debentures Director serving on any committee of the Board
with notice at least one week prior to any meeting of any committee that such
person serves on.
(f) The authorized number of directors on the Board shall be at
all times no more than ten (10) directors (or a higher number if the holders of
the Debentures shall be entitled to elect at least 30% of the total number of
directors), except as contemplated by Section 3(i) hereof. The Company shall
provide the Debentures Directors with notice at least one week prior to any
meeting of the Board.
(g) The Company agrees to cause its bylaws to provide, at all
times from and after the Closing Date in which either the holders of Debentures
or Boss Investment have the right to elect or nominate a director, that meetings
of the Board or any committee thereof may be conducted by teleconference.
(h) The Company shall deliver a notice to the holders of
Debentures if an Event of Non-Compliance shall occur or is reasonably likely to
occur. Such notice shall set forth in reasonable detail a description of the
Event of Non-Compliance.
(i) If the holders of Debentures conclude, either as a result of
a notice delivered by the Company pursuant to Section 3(h), or otherwise, that
an Event of Non-Compliance has occurred or is reasonably likely to occur, the
holders of Debentures shall deliver a notice to the Company to such effect. If
an Event of Non-Compliance shall occur and shall be continuing at the end of the
one week period following delivery by the holders of Debentures of the notice
referred to in the preceding sentence (each, a "Trigger Event"), the holders of
-------------
Debentures (voting as a separate class) shall have the special right to elect
that number of individuals to the Board that will constitute a majority of the
Board. The Company agrees to take all necessary and desirable action within its
control in connection with and in furtherance of the execution of such special
right. Such special right shall continue until such time as there is no longer a
Trigger Event in existence, at which time such special right shall terminate,
subject to revesting upon the occurrence and continuation of any Trigger Event
which gives rise hereunder. After designees of the holders of Debentures
represent a majority of the Board, the directors of the Company shall use
commercially reasonable efforts promptly to cure the condition that constituted
the Event of Non-Compliance. After the expiration of such Trigger Event, the
term of office of such newly elected directors shall automatically cease so that
the Board shall be constituted as it was
6
<PAGE>
immediately prior to the occurrence of the Trigger Event giving rise to the
special right to elect the directors.
SECTION 4. INFORMATION RIGHTS; COVENANTS.
-----------------------------
(a) Access to Records.
-----------------
The Company shall, and shall cause each Subsidiary to, afford
to Boss Investment the Affiliates of Boss Investment and each of their
respective officers, employees, advisors, counsel and other authorized
representatives (collectively with the Affiliates of Boss Investment, the
"Representatives"), during normal business hours, reasonable access, upon
- ----------------
reasonable advance notice, to all of the books, records and properties of the
Company and such Subsidiary and all officers and employees of the Company and
such Subsidiary. Boss Investment shall use its best efforts to maintain the
confidentiality of any confidential and proprietary information regarding the
Company and its Subsidiaries; provided, however, that the foregoing shall in no
-------- -------
way limit or otherwise restrict the ability of Boss Investment or any of its
Representatives to disclose any such information concerning the Company and each
Subsidiary which it may be required to disclose (i) to its partners or limited
partners to the extent required to satisfy its fiduciary obligations to such
Persons, or (ii) otherwise pursuant to or as required by law.
(b) Financial Reports.
-----------------
The Company shall furnish to Boss Investment with the
following:
(i) Monthly Reports. As soon as available, but not
---------------
later than 30 days after the end of each fiscal month, a consolidated
balance sheet of the Company as of the end of such period and
consolidated statements of income of the Company for such period and
for the period commencing at the end of the previous fiscal year and
ending with the end of such period, setting forth in each case in
comparative form the corresponding figures for the corresponding period
of the preceding fiscal year, and including comparisons to the budget
or business plan and an analysis of the variances from the budget or
plan, all prepared in accordance with generally accepted accounting
principals consistently applied (except for the absence of footnotes
and year-end adjustments).
(ii) Quarterly Reports. As soon as available, but not
-----------------
later than 45 days after the end of each quarterly accounting period,
(A) a consolidated balance sheet of the Company as of the end of such
period and consolidated statements of income, cash flows and changes in
Investors' equity for such quarterly accounting period and for the
period commencing at the end of the previous fiscal year and ending
with the end of such period, setting forth in each case in comparative
form the corresponding figures for the corresponding period of the
preceding fiscal year, and including comparisons to the budget or
business plan and an analysis of the variances from the budget or plan,
all prepared in accordance with generally accepted accounting
principals consistently applies and (B) a report by management of the
Company of the operating and financial highlights of the Company and
its Subsidiaries for such period, which shall include (x) a comparison
between operating and financial results and budget and (y) an analysis
of the operations of the Company and its Subsidiaries for such period.
7
<PAGE>
(iii) Annual Audit. As soon as available, but not later
------------
than 90 days after the end of each fiscal year of the Company, audited
consolidated financial statements of the Company, which shall include
statements of income, cash flows and changes in Investors' equity for
such fiscal year and a balance sheet as of the last day thereof, each
prepared in accordance with generally accepted accounting principles,
consistently applied, and accompanied by the report of a "Big 5" firm
of independent certified public accountants selected by the Board (the
"Accountants"). The Company and its Subsidiaries shall maintain a
-----------
system of accounting sufficient to enable its Accountants to render the
report referred to in this Section 4.
(iv) Miscellaneous. Promptly upon becoming available,
-------------
the Company shall provide to Boss Investment:
(A) copies of all financial statements, reports,
press releases, notices, proxy statements and other documents
sent by the Company or its Subsidiaries to its Investors
generally or released to the public and copies of all regular
and periodic reports, if any, filed by the Company or its
Subsidiaries with the Securities and Exchange Commission, any
securities exchange or the NASD;
(B) notification in writing of any litigation or
governmental proceeding in which it or any of its Subsidiaries
is involved and which might, if determined adversely,
materially and adversely effect the Company or any of its
Subsidiaries;
(C) notification in writing of the existence of any
default under any material agreement or instrument to which
the Company or any of its Subsidiaries is a party or by which
any of their assets are bound;
(D) upon request, copies of all reports prepared
for or delivered to the management of the Company or its
Subsidiaries by its accountants; and
(E) upon request, any other routinely collected
financial or other information available to management of the
Company or its subsidiaries (including, without limitation,
routinely collected statistical data).
(c) Other Investors. Without duplication of any document or
---------------
information provided pursuant to this Section 4, the Company shall provide to
each Investor the following:
(i) as soon as available, but not later than 45 days
after the end of each quarterly accounting period, a Form 10-Q or, if
the Company does not file quarterly reports with the Commission, the
documents referred to in Section 4(b)(ii).
(ii) as soon as available, but not later than 90 days
after the end of each fiscal year, a Form 10-K or, if the Company does
not file quarterly reports with the Commission, the audited
consolidated financial statements referred to in Section 4(b)(iii).
8
<PAGE>
(iii) simultaneously with any distribution of any
document to holders of the Company's common stock, any such document so
distributed.
SECTION 5. DEMAND REGISTRATION.
-------------------
(a) If the Company shall be requested by the Investors holding
at least 20% of the total number of outstanding Restricted Shares (assuming
conversion of all Debentures) to effect a registration under the Securities Act
of Restricted Shares in accordance with this Section, then the Company shall
promptly give written notice of such proposed registration to all holders of
Restricted Shares and shall offer to include in such proposed registration any
Restricted Shares requested to be included in such proposed registration by such
holders who respond in writing to the Company's notice within 15 days after
delivery of such notice (which response shall specify the number of Restricted
Shares proposed to be included in such registration and the intended method of
distribution, which may be pursuant to a shelf registration). The Company shall
promptly use its best efforts to effect such registration on an appropriate
form, including Form S-2, if available, under the Securities Act of the
Restricted Shares which the Company has been so requested to register; provided,
--------
however, that the Company shall not be obligated to effect any registration
- -------
under the Securities Act except in accordance with the following provisions:
(i) the Company shall not be obligated to file more
than three registration statements in total pursuant to this Section,
subject to paragraph (c) below;
(ii) the Company shall not be obligated to file any
registration statement during any period in which (A) any other
registration statement (other than on Form S-4 or Form S-8 promulgated
under the Securities Act or any successor forms thereto) pursuant to
which Primary Shares are to be or were sold has been filed and not
withdrawn or has been declared effective within the prior 90 days or
(B) the Company has determined in good faith that the filing of a
registration statement would require the disclosure of material
information that the Company has a bona fide business purpose for
preserving as confidential, such filing to be delayed until the date
which is 90 days after such request for registration pursuant to this
Section 4(a); provided that the Company may only so delay the filing or
--------
effectiveness of a registration statement pursuant to this Section
5(a)(ii)(B) on one occasion during any twelve month period;
(iii) with respect to the registration pursuant to this
Section, the Company may include in such registration any Primary
Shares or Other Shares; provided, however, that if the managing
-------- -------
underwriter advises the Company in writing that the inclusion of all
Restricted Shares, Primary Shares and Other Shares proposed to be
included in such registration would interfere with the successful
marketing (including pricing) of all such securities, then the number
of Restricted Shares, Primary Shares and Other Shares proposed to be
included in such registration shall be included in the following order:
(A) First, the Restricted Shares held by all
-----
Investors, pro rata based upon the number of Restricted Shares
owned by each such Investor at the time of such registration;
(B) Second, the Primary Shares; and
------
9
<PAGE>
(C) Third, the Other Shares.
-----
(b) The Investors requesting a registration pursuant to this
Section may, in the notice delivered pursuant to paragraph (a) above, elect that
such registration cover an underwritten offering. Upon such election, such
Investors shall select one or more nationally recognized firms of investment
banks to act as the managing underwriters and shall select any additional
investment banks to be used in connection with such offering, provided that such
investment banks must be reasonably satisfactory to the Company. The Company
shall, together with all Investors proposing to sell Restricted Shares in such
offering, enter into a customary underwriting agreement with such underwriters.
(c) A requested registration under this Section may be rescinded
by written notice to the Company by the Investors holding a majority of the
Restricted Shares to be included in such registration under the following
circumstances:
(A) If such registration statement is rescinded prior to
the filing date, such rescinded registration shall not count
as a registration statement initiated pursuant to this Section
for purposes of paragraph (a) above;
(B) If such registration statement is rescinded after
the filing date but prior to its effective date, such
rescinded registration shall not count as a registration
statement initiated pursuant to this Section for purposes of
paragraph (a) above if the participating Investors (x) have
reimbursed the Company for all out-of-pocket expenses incurred
by the Company in connection with such rescinded registration
or (y) (1) reasonably believed that the registration statement
contained an untrue statement of material fact or omitted to
state a material fact required to be stated therein or
necessary to make the statements made therein not misleading,
(2) notified the Company of such fact and requested that the
Company correct such alleged misstatement or omission and
(3) the Company has refused to correct such alleged
misstatement or omission; and
(C) A registration shall not count as a registration
statement initiated pursuant to this Section for purposes of
paragraph (a) above unless it becomes effective and the
participating Investors are able to sell at least 80% of the
Restricted Shares sought to be included in such registration
statement.
SECTION 6. PIGGYBACK REGISTRATION.
----------------------
If at any time the Company proposes for any reason to register
Primary Shares or Other Shares under the Securities Act (other than on Form S-4
or Form S-8 promulgated under the Securities Act or any successor forms thereto
or any registration statement filed in connection with the exercise of demand
registration rights pursuant to either the Warrant dated November 25, 1997 held
by Friedman, Billings, Ramsey & Co., Inc. or the Warrant dated November 25, 1997
held by Jonathan Ledecky (collectively, the "Existing Warrants") if the
-----------------
applicable Warrant does not permit the exercise of any piggyback registration
rights on any exercise of demand registration rights thereunder and, after using
its best efforts, the Company is not able to obtain a consent for the inclusion
of Restricted Shares in such registration), it shall
10
<PAGE>
promptly give written notice to each Investor of its intention to so register
the Primary Shares or Other Shares and, upon the written request, given within
15 days after delivery of any such notice by the Company, of any Investor to
include in such registration Restricted Shares held by such Investor (which
request shall specify the number of Restricted Shares proposed to be included in
such registration), the Company shall use its best efforts to cause all such
Restricted Shares to be included in such registration on the same terms and
conditions as the securities otherwise being sold in such registration;
provided, however, that if the managing underwriter advises the Company that the
- -------- -------
inclusion of all Restricted Shares or Other Shares proposed to be included in
such registration would interfere with the successful marketing (including
pricing) of the Primary Shares proposed to be registered by the Company, then
the number of Primary Shares, Restricted Shares and Other Shares proposed to be
included in such registration shall be included in the following order:
(a) first, the Primary Shares; and
-----
(b) second, the Other Shares (other than those shares of Common
------
Stock which are not subject to any registration rights agreement) and the
Restricted Shares requested to be included in such registration, pro rata based
upon the number of Shares of Common Stock (based upon Common Stock Equivalents)
owned by each such seller at the time of such registration.
SECTION 7. S-3 REGISTRATIONS.
-----------------
If at any time (i) the Investors holding at least 20% of the of
the total number of outstanding Restricted Shares (assuming conversion of all
Debentures) request that the Company file a registration statement on Form S-3
or any successor thereto for a public offering of all or any portion of the
Restricted Shares held by such Investors, and (ii) the Company is a registrant
entitled to use Form S-3 or any successor thereto to register such shares, then
the Company shall use its best efforts to register under the Securities Act on
Form S-3 or any successor thereto, for public sale in accordance with the method
of disposition specified in such notice, the number of shares of Restricted
Shares specified in such notice. Whenever the Company is required by this
Section 7 to use its best efforts to effect the registration of Restricted
Shares, each of the procedures and requirements of Section 5 (including but not
limited to the requirement that the Company notify all holders of Restricted
Shares from whom notice has not been received and provide them with the
opportunity to participate in the offering) shall apply to such registration.
Notwithstanding anything to the contrary contained herein, no request may be
made under this Section 7 within three months after the effective date of a
registration statement filed by the Company covering a firm commitment
underwritten public offering in which the holders of Restricted Shares shall
have been entitled to join pursuant to Section 5 or 6 in which there shall have
been effectively registered all Restricted Shares as to which registration shall
have been requested. There is no limitation on the number of registrations
pursuant to this Section 7 that the Company is obligated to effect.
SECTION 8. EXPENSES.
--------
The Company shall bear the expense of any registrations effected
pursuant to Sections 5, 6 and 7 including, without limitation, all registration
and filing fees (including all expenses incident to filing with the NASD), fees
and expenses of complying with securities and
11
<PAGE>
blue sky laws, printing expenses, and fees and expenses of the Company's counsel
and accountants, and the fees and expenses of the Selling Investors' Counsel (as
defined below), but excluding any underwriters' or brokers' discounts or
commissions, transfer taxes (to the extent that such taxes are required by law
to be paid by the Selling Investors) and the fees of any counsel to any Selling
Investor, other than the Selling Investors' Counsel (it being understood that
the fees and expenses of any underwriter and such underwriter's counsel shall be
the responsibility of such underwriter).
SECTION 9. PREPARATION AND FILING.
----------------------
If and whenever the Company is under an obligation pursuant to
the provisions of this Agreement to use its best efforts to effect the
registration of any Restricted Shares, the Company shall, as expeditiously as
practicable:
(a) with respect to a registration under Sections 5, 6 and 7,
use its best efforts to cause a registration statement that registers such
Restricted Shares to become and remain effective for a period of 180 days or
until all of such Restricted Shares have been disposed of (if earlier);
(b) furnish, at least five business days before filing a
registration statement that registers such Restricted Shares, a prospectus
relating thereto or any amendments or supplements relating to such a
registration statement or prospectus, to each holder of Restricted Shares, to
any counsel to any seller of Restricted Shares (the "Selling Investor") and to
----------------
one counsel selected by the holders of a majority of such Restricted Shares (the
"Selling Investors' Counsel"), copies of all such documents proposed to be filed
--------------------------
(it being understood that such five-business-day period need not apply to
successive drafts of the same document proposed to be filed so long as such
successive drafts are supplied to such counsel in advance of the proposed filing
by a period of time that is customary and reasonable under the circumstances);
(c) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
at least the periods set forth in Section 9(a) or until all of such Restricted
Shares have been disposed of (if earlier) and to comply with the provisions of
the Securities Act with respect to the sale or other disposition of such
Restricted Shares;
(d) notify in writing any counsel to any Selling Investor and
the Selling Investors' Counsel promptly (i) of the receipt by the Company of any
notification with respect to any comments by the Commission with respect to such
registration statement or prospectus or any amendment or supplement thereto or
any request by the Commission for the amending or supplementing thereof or for
additional information with respect thereto, (ii) of the receipt by the Company
of any notification with respect to the issuance by the Commission of any stop
order suspending the effectiveness of such registration statement or prospectus
or any amendment or supplement thereto or the initiation or threatening of any
proceeding for that purpose and (iii) of the receipt by the Company of any
notification with respect to the suspension of the qualification of such
Restricted Shares for sale in any jurisdiction or the initiation or threatening
of any proceeding for such purposes;
12
<PAGE>
(e) use its best efforts to register or qualify such Restricted
Shares under such other securities or blue sky laws of such jurisdictions as any
seller of Restricted Shares reasonably requests and do any and all other acts
and things which may be reasonably necessary or advisable to enable such seller
of Restricted Shares to consummate the disposition in such jurisdictions of the
Restricted Shares owned by such seller; provided, however, that the Company will
-------- -------
not be required to qualify generally to do business, subject itself to general
taxation or consent to general service of process in any jurisdiction where it
would not otherwise be required so to do but for this paragraph (e);
(f) furnish to each seller of such Restricted Shares such number
of copies of a summary prospectus or other prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and such
other documents as such seller of Restricted Shares may reasonably request in
order to facilitate the public sale or other disposition of such Restricted
Shares;
(g) use its best efforts to cause such Restricted Shares to be
registered with or approved by such other governmental agencies or authorities
as may be necessary by virtue of the business and operations of the Company to
enable the seller or sellers thereof to consummate the disposition of such
Restricted Shares;
(h) notify on a timely basis each seller of such Restricted
Shares at any time when a prospectus relating to such Restricted Shares is
required to be delivered under the Securities Act within the appropriate period
mentioned in paragraph (a) of this Section, of the happening of any event as a
result of which the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing and, at the
request of such seller, prepare and furnish to such seller a reasonable number
of copies of a supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the offerees of such shares, such
prospectus shall not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing;
(i) make available for inspection by any counsel to any Selling
Investor and the Selling Investors' Counsel or any underwriter participating in
any disposition pursuant to such registration statement and any attorney,
accountant or other agent retained by any such underwriter (collectively, the
"Inspectors"), all pertinent financial and other records, pertinent corporate
----------
documents and properties of the Company (collectively, the "Records"), as shall
-------
be reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors and employees to
supply all information (together with the Records, the "Information") reasonably
-----------
requested by any such Inspector in connection with such registration statement.
Any of the Information which the Company determines in good faith to be
confidential, and of which determination the Inspectors are so notified, shall
not be disclosed by the Inspectors unless (i) the disclosure of such Information
is necessary to avoid or correct a misstatement or omission in the registration
statement, (ii) the release of such Information is ordered pursuant to a
subpoena or other order from a court of competent jurisdiction or (iii) such
Information has been made generally available to the public. The seller of
Restricted Shares
13
<PAGE>
agrees that it will, upon learning that disclosure of such Information is sought
in a court of competent jurisdiction, give notice to the Company and allow the
Company, at the Company's expense, to undertake appropriate action to prevent
disclosure of the Information deemed confidential;
(j) use its best efforts to obtain from its independent
certified public accountants "comfort" letters in customary form and at
customary times and covering matters of the type customarily covered by comfort
letters;
(k) use its best efforts to obtain from its counsel an opinion
or opinions in customary form;
(l) provide a transfer agent and registrar (which may be the
same entity and which may not be the Company) for such Restricted Shares;
(m) issue to any underwriter to which any seller of Restricted
Shares may sell shares in such offering certificates evidencing such Restricted
Shares; provided, however, that the Company shall have the right to approve any
-------- -------
such underwriter with such approval not to be unreasonably withheld;
(n) list such Restricted Shares on any national securities
exchange on which any shares of the Common Stock are listed or on NASDAQ if then
included, or if the Common Stock is not listed on a national securities
exchange, use its best efforts to qualify such Restricted Shares for inclusion
on such national securities exchange or NASDAQ as the holders of a majority of
such Restricted Shares shall request;
(o) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission and make available to its
securityholders, as soon as reasonably practicable, earnings statements (which
need not be audited) covering a period of 12 months beginning within three
months after the effective date of the registration statement, which earnings
statements shall satisfy the provisions of Section 11(a) of the Securities Act;
and
(p) use its best efforts to take all other steps necessary to
effect the registration of such Restricted Shares contemplated hereby.
SECTION 10. INDEMNIFICATION.
---------------
(a) In connection with any registration of any Restricted Shares
under the Securities Act pursuant to this Agreement, the Company shall indemnify
and hold harmless the seller of such Restricted Shares, its officers and
directors, each underwriter, broker or any other person acting on behalf of such
seller and each other person, if any, who controls any of the foregoing persons
within the meaning of the Securities Act against any losses, claims, damages or
liabilities, joint or several, (or actions in respect thereof) to which any of
the foregoing persons may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in the registration statement under which
such Restricted Shares were registered under the Securities Act, any preliminary
14
<PAGE>
prospectus or final prospectus contained therein or otherwise filed with the
Commission, any amendment or supplement thereto or any document incident to
registration or qualification of any Restricted Shares, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and shall reimburse such seller, such officer or director, such
underwriter, such broker or such other person acting on behalf of such seller
and each such controlling person for any legal or other expenses reasonably
incurred by any of them in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that the Company
-------- -------
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in said
registration statement, preliminary prospectus, final prospectus, amendment,
supplement or document incident to registration or qualification of any
Restricted Shares in reliance upon and in conformity with written information
furnished to the Company through an instrument duly executed by such seller or
underwriter specifically for use in the preparation thereof; provided, further,
-------- -------
that with respect to any preliminary prospectus, the foregoing indemnity shall
not inure to the benefit of (a) any underwriter or, in the case of a
registration statement filed with respect to an offering which is not an
underwritten offering, any Selling Investor, from who the person asserting any
losses, claims, damages and liabilities and judgments purchased Restricted
Shares or (b) any person controlling such underwriter or Selling Investor, if
(i) a copy of the prospectus (as then amended or supplemented if the Company
shall have furnished any amendments or supplements thereto) was required by law
to have been delivered by such underwriter or Selling Investor (as applicable),
(ii) the prospectus had not been sent or given by or on behalf of such
underwriter or Selling Investor (as applicable) to such person with or prior to
a written confirmation of the sale of the Restricted Shares to such person,
(iii) the prospectus (as so amended and supplemented) would have cured the
defect giving rise to such loss, claim, damage, liability or judgment and (iv)
such failure to deliver the prospectus (as so amended and supplemented) was not
the result of noncompliance by the Company with Section 6(f) hereof.
(b) In connection with any registration of Restricted Shares
under the Securities Act pursuant to this Agreement, each seller of Restricted
Shares shall indemnify and hold harmless (in the same manner and to the same
extent as set forth in the preceding paragraph of this Section) the Company,
each director of the Company, each officer of the Company who shall sign such
registration statement, each underwriter, broker or other person acting on
behalf of such seller, each person who controls any of the foregoing persons
within the meaning of the Securities Act and each other seller of Restricted
Shares under such registration statement with respect to any statement or
omission from such registration statement, any preliminary prospectus or final
prospectus contained therein or otherwise filed with the Commission, any
amendment or supplement thereto or any document incident to registration or
qualification of any Restricted Shares, if such statement or omission was made
in reliance upon and in conformity with written information furnished to the
Company or such underwriter through an instrument duly executed by such seller
specifically for use in connection with the preparation of such registration
statement, preliminary prospectus, final prospectus, amendment, supplement or
document; provided, however, that the obligation to indemnify will be several,
not joint and several, among such sellers of Restricted Shares, and the maximum
amount of liability in respect of such indemnification shall be in proportion to
and limited to, in the case of each seller of
15
<PAGE>
Restricted Shares, an amount equal to the net proceeds actually received by such
seller from the sale of Restricted Shares effected pursuant to such
registration.
(c) The indemnification required by this Section 10 will be made
by periodic payments during the course of the investigation or defense, as and
when bills are received or expenses incurred, subject to prompt refund in the
event any such payments are determined not to have been due and owing hereunder.
(d) Promptly after receipt by an indemnified party of notice of
the commencement of any action involving a claim referred to in the preceding
paragraphs of this Section, such indemnified party will, if a claim in respect
thereof is made against an indemnifying party, give written notice to the latter
of the commencement of such action (it being understood that no delay in
delivering or failure to deliver such notice shall relieve the indemnifying
persons from any liability or obligation hereunder unless (and then solely to
the extent that) the indemnifying person is prejudiced by such delay and/or
failure). In case any such action is brought against an indemnified party, the
indemnifying party will be entitled to participate in and to assume the defense
thereof, jointly with any other indemnifying party similarly notified to the
extent that it may wish, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be responsible for any legal or other expenses
subsequently incurred by the latter in connection with the defense thereof;
provided, however, that if any indemnified party shall have reasonably concluded
- -------- -------
that there may be one or more legal or equitable defenses available to such
indemnified party which are additional to or conflict with those available to
the indemnifying party, or that such claim or litigation involves or could have
an effect upon matters beyond the scope of the indemnity agreement provided in
this Section, the indemnifying party shall not have the right to assume the
defense of such action on behalf of such indemnified party and such indemnifying
party shall reimburse such indemnified party and any person controlling such
indemnified party for that portion of the fees and expenses of any counsel
retained by the indemnified party which is reasonably related to the matters
covered by the indemnity agreement provided in this Section.
(e) The indemnification provided for under this Agreement will
remain in full force and effect regardless of any investigation made by or on
behalf of the indemnified party or any officer, director or controlling person
of such indemnified party and will survive the transfer of securities.
(f) If the indemnification provided for in this Section 10 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, claim, damage, liability or action referred to
herein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amounts paid or payable by such
indemnified party as a result of such loss, claim, damage, liability or action
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions which resulted in such loss, claim,
damage or liability as well as any other relevant equitable considerations. The
relative fault of the indemnifying party and of the indemnified party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to
16
<PAGE>
information supplied by the indemnifying party or by the indemnified party and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company and the sellers of
Restricted Shares agree that it would not be just and equitable if contributions
pursuant to this paragraph were determined by pro rata allocation or by any
other method of allocation which did not take into account the equitable
considerations referred to herein. The amount paid or payable to an indemnified
party as a result of the losses, claims, damages, liabilities or expenses
referred to above shall be deemed to include, subject to the limitation set
forth in the fourth paragraph of this Section 10, any legal or other expenses
reasonably incurred in connection with investigating or defending the same.
Notwithstanding the foregoing, in no event shall the amount contributed by a
seller of Restricted Shares exceed the aggregate net offering proceeds received
by such seller from the sale of its Restricted Shares.
SECTION 11. UNDERWRITING AGREEMENT.
----------------------
Notwithstanding the provisions of Sections 9 and 10, to the
extent that the Company and the holders selling Restricted Shares in a proposed
registration shall enter into an underwriting or similar agreement, which
agreement contains provisions covering one or more issues addressed in such
Sections, the provisions contained in such Sections addressing such issue or
issues shall be superseded with respect to such registration by such other
agreement.
SECTION 12. INFORMATION BY INVESTOR.
-----------------------
Each Investor selling Restricted Shares in a proposed
registration shall furnish to the Company such written information regarding
such Investor and the distribution proposed by such Investor as the Company may
reasonably request in writing and as shall be reasonably required in connection
with any registration, qualification or compliance referred to in this
Agreement.
SECTION 13. EXCHANGE ACT COMPLIANCE.
-----------------------
The Company shall comply with all of the reporting requirements
of the Exchange Act and with all other public information reporting requirements
of the Commission which are conditions to the availability of Rule 144 for the
sale of the Common Stock. The Company shall cooperate with each Investor in
supplying such information as may be necessary for such Investor to complete and
file any information reporting forms presently or hereafter required by the
Commission as a condition to the availability of Rule 144.
SECTION 14. NO CONFLICT OF RIGHTS.
---------------------
The Company represents and warrants to the Investors that the
registration rights granted to the Investors hereby do not conflict with any
other registration rights granted by the Company. The Company shall not, after
the date hereof, grant any registration rights which conflict with the
registration rights granted hereby.
17
<PAGE>
SECTION 15. ADDITIONAL COVENANTS OF THE COMPANY.
-----------------------------------
(a) The Company hereby agrees to submit the Restated Certificate
to the stockholders of the Company on or prior to the Charter Amendment Deadline
(as defined in the Indenture) and to recommend the approval of such Restated
Certificate by the holders of Common Stock of the Company.
(b) In the event that the Restated Certificate is approved by a
majority of the holders of Common Stock of the Company, the Company hereby
agrees to (i) file such Restated Certificate with the Secretary of State of the
State of Delaware and (ii) amend the by-laws of the Company to provide for the
rights granted to the Investors hereunder to designate nominees for election as
directors, to designate persons to fill vacancies on the Board, to include
directors designated by the Investors on the Board's committees, and to limit
the size of the Board.
SECTION 16. PROTECTIVE PROVISIONS.
---------------------
As long as Boss Investment holds at least 50% of the outstanding
Debentures issued on the Original Issuance Date, the Company shall not, and
shall not permit any Subsidiary to, without the prior written consent of Boss
Investment:
(a) merge, consolidate, or amalgamate with any person or entity,
except that any wholly-owned Subsidiary of the Company may be merged or
consolidated with or into the target entity in connection with any Permitted
Acquisition;
(b) effect, approve or authorize any Liquidation or any
recapitalization or reorganization of the Company or any Subsidiary;
(c) directly or indirectly declare or pay any dividend, or make
any payment on account of, or set apart assets for a sinking or other analogous
fund for, the purchase, redemption, defeasance, retirement or other acquisition
of, any shares of any class of capital stock or indebtedness of the Company
ranking junior to the Debentures, or any warrants or options to purchase any
such capital stock or indebtedness, or make any other distribution in respect
thereof, either directly or indirectly, whether in cash or property or in
obligations of the Company or any Subsidiary; provided, however, that the
Company may declare or pay any dividend on the Common Stock if such dividend,
when combined with any other dividends declared or paid on the Common Stock in
the preceding twelve-month period, does not exceed 5% of the aggregate Fair
Market Value of the Common Stock at the time of the declaration or payment of
such dividend;
(d) agree to, or permit any Subsidiary to agree to, any
provision in any agreement that would impose any restriction on the ability of
the Company to honor the exercise of any rights of the holders of the
Debentures;
(e) enter into any transaction, including, without limitation,
any purchase, sale, lease or exchange of property, the rendering of any service
or the payment of any management, advisory or similar fees, with any Affiliate
unless such transaction is (a) in the ordinary course of business of the Company
and its Subsidiaries, and (b) upon fair and reasonable terms no less
18
<PAGE>
favorable to the Company and its Subsidiaries than they would obtain in a
comparable arm's length transaction with a Person which is not an Affiliate;
(f) materially alter or change the business of the Company or
any Subsidiary;
(g) increase the size of the Board above ten (10) directors;
provided, however, that the Company may increase the size of the Board beyond
ten (10) directors if designees of Boss Investment continue to represent at
least 30% of the entire Board;
(h) hire or fire, or amend the employment terms of, the Chief
Executive Officer or the Chief Operating Officer of the Company; (i) directly or
indirectly create, incur, assume, guarantee, acquire, become liable,
contingently or otherwise, with respect to, or otherwise become responsible for
payment of Indebtedness prohibited by the terms and conditions of the Indenture;
(j) amend, supplement, waive or restate any of the terms or
conditions of any Share Retention Agreement (as such term is defined in the
Securities Purchase Agreement);
(k) acquire or dispose of any business or assets in a single
transaction or a series of related transactions with an aggregate value in such
transaction or series of related transactions in excess of $100 million
(including all assumed debt, all cash payments, and the fair market value of all
securities or other property issued as consideration); or
(l) agree or otherwise commit to take any of the actions set
forth above.
SECTION 17. MISCELLANEOUS.
-------------
(a) Restrictive Legends.
-------------------
(i) Each certificate for Restricted Shares (unless
otherwise permitted by the provisions of Section 17(a) (ii)) shall
include a legend in substantially the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS AND MAY NOT BE OFFERED OR SOLD
EXCEPT IN COMPLIANCE THEREWITH. THIS SECURITY IS
SUBJECT TO RESTRICTIONS ON TRANSFER AS SET FORTH IN
THE INVESTORS' RIGHTS AGREEMENT DATED AS OF MARCH
22, 1999."
(ii) Subject to Section 17(b), any holders of Restricted
Shares registered pursuant to the Securities Act and qualified under
applicable state securities laws may exchange such Restricted Shares on
transfer for new securities that shall not bear the legend set forth in
paragraph (i) of this Section 17(a).
19
<PAGE>
(b) Compliance with Securities Laws. Upon any proposed transfer
-------------------------------
of Restricted Shares, the Company shall register the transfer of such Restricted
Shares on the stock transfer books of the Company if the Company shall have
received (i) to the extent required to ensure compliance with the Securities
Act, an opinion of counsel reasonably satisfactory to the Company, to the effect
that the proposed transfer of Restricted Shares may be effected without
registration under the Securities Act and (ii) representation letters in form
and substance reasonably satisfactory to the Company to ensure compliance with
the provisions of the Securities Act. Each certificate evidencing Restricted
Shares transferred as above provided shall bear the legend set forth in Section
17(a)(i), except that such certificate shall not bear such legend if neither
such legend nor the restrictions on transfer in Sections 17(a) and 17(b) are
required in order to ensure compliance with the provisions of the Securities
Act.
(c) Severability. Whenever possible, each provision of this
------------
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, and such invalid, void or
otherwise unenforceable provisions shall be null and void. It is the intent of
the parties, however, that any invalid, void or otherwise unenforceable
provisions be automatically replaced by other provisions which are as similar as
possible in terms to such invalid, void or otherwise unenforceable provisions
but are valid and enforceable to the fullest extent permitted by law.
(d) Entire Agreement. This Agreement, together with the
----------------
Indenture and Securities Purchase Agreement, contains the entire agreement among
the parties with respect to the subject matter hereof and supersedes all prior
arrangements or understandings with respect hereto.
(e) Successors and Assigns. This Agreement shall bind and inure
----------------------
to the benefit of the Company and the Investors and their respective successors
and permitted assigns; provided, however, that each such person or entity shall,
-------- -------
as a condition to the effectiveness of such assignment, be required to execute a
counterpart to this Agreement whereupon such person or entity shall have the
benefits of, and shall be subject to the restrictions contained in, this
Agreement with respect to such Restricted Shares; provided, further, that Boss
-------- -------
Investment shall not be entitled to assign its rights under Sections 3(a), 3(b),
4(a), 4(b) or 16 without the consent of the Company other than to an Affiliate
of Boss Investment.
(f) Counterparts. This Agreement may be executed simultaneously
------------
in two or more counterparts, any one of which need not contain the signatures of
more than one party, but all such counterparts taken together will constitute
one and the same agreement. It shall not be necessary in making proof of this
Agreement to produce or account for more than one such counterpart. The failure
of any Investor to execute this Agreement does not make it invalid as against
any other Investor.
(g) Remedies. (i) Each Investor shall have all rights and
--------
remedies reserved for such Investor pursuant to this Agreement and the
Certificate of Incorporation and the By-laws of the Company and all rights and
remedies which such Investor has been granted at any time under any other
agreement or contract and all of the rights which such holder has under any law
or equity. Any person having any rights under any provision of this Agreement
will be entitled to
20
<PAGE>
enforce such rights specifically, to recover damages by reason of any breach of
any provision of this Agreement and to exercise all other rights granted by law
or equity.
(ii) The parties hereto agree that if any parties seek
to resolve any dispute arising under this Agreement pursuant to a legal
proceeding, the prevailing parties to such proceeding shall be entitled
to receive reasonable fees and expenses (including reasonable
attorneys' fees and expenses) incurred in connection with such
proceedings.
(iii) It is acknowledged that it will be impossible to
measure in money the damages that would be suffered if the parties fail
to comply with any of the obligations herein imposed on them and that
in the event of any such failure, an aggrieved person will be
irreparably damaged and will not have an adequate remedy at law. Any
such person shall, therefore, be entitled to injunctive relief,
including specific performance, to enforce such obligations, and if any
action should be brought in equity to enforce any of the provisions of
this Agreement, none of the parties hereto shall raise the defense that
there is an adequate remedy at law.
(h) Notices. All notices, requests, consents and other
-------
communications hereunder to any party shall be deemed to be sufficient if
contained in a written instrument and shall be deemed to have been duly given
when delivered in person, by telecopy, by nationally-recognized overnight
courier, or by first class registered or certified mail, postage prepaid,
addressed to such party at the address set forth below or such other address as
may hereafter be designated in writing by the addressee to the addressor:
(i) if to the Company, to:
Building One Services Corporation
800 Connecticut Avenue, NW
Suite 1111
Washington, DC 20006
Phone: (202) 261-6000
Fax: (202) 261-6020
Attention: Chief Executive Officer
with copies to:
Morgan, Lewis & Bockius LLP
1701 Market Street
Philadelphia, PA 19103
Phone: (215)
Fax: (215) 963-5299
Attention: N. Jeffrey Klauder
(ii) if to the Investors, to:
Boss Investment LLC
c/o Apollo Management, L.P.
21
<PAGE>
1301 Avenue of the Americas, 38th Floor
New York, N.Y. 10019
Phone: (212) 261-4064
Fax: (212) 261-4012
Attention: Michael Gross
with copies to:
O'Sullivan Graev & Karabell, LLP
30 Rockefeller Plaza
New York, New York 10112
Phone: (212) 408-2400
Fax: (212) 408-2420
Attention: John J. Suydam
All such notices, requests, consents and other communications shall be deemed to
have been delivered (a) in the case of personal delivery or delivery by
telecopy, on the date of such delivery, (b) in the case of nationally-recognized
overnight courier, on the next business day and (c) in the case of mailing, on
the third business day following such mailing if sent by certified mail, return
receipt requested.
(i) Governing Law; Jurisdiction; Venue; Process. This Agreement
-------------------------------------------
shall be governed by and construed in accordance with the laws of the State of
Delaware applicable to agreements made and to be performed in the State of
Delaware and shall be construed without regard to (i) any choice of law or
conflict of law provision or rule (whether of the State of Delaware or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Delaware and (ii) any presumption or other rule
requiring the construction of an agreement against the party causing it to be
drafted. Any legal action in a proceeding brought in accordance with this
Section shall be brought in the courts of the State of Delaware or of the United
States District Court for the Southern District of New York, and by execution
and delivery of this Agreement, the parties hereby accept for themselves and in
respect of their property, generally and unconditionally, the exclusive
jurisdiction of the aforesaid courts. The parties hereby irrevocably waive any
objection which they may now or hereafter have to laying of venue of any actions
or proceedings arising out of or in connection with this Agreement brought in
the courts referred to above and hereby further irrevocably waive and agree, not
to plead or claim in any such court that any such action or proceeding has been
brought in an inconvenient forum. The parties further agree that the mailing by
certified or registered mail, return receipt requested, of any process required
by any such court shall constitute valid and lawful service of process against
them, without necessity for service by any other means provided by statute or
rule of court.
(j) Further Assurances. Each party hereto shall do and perform
------------------
or cause to be done and performed all such further acts and things and shall
execute and deliver all such other agreements, certificates, instruments, and
documents as any other party hereto reasonably may request in order to carry out
the provisions of this Agreement and the consummation of the transactions
contemplated hereby.
22
<PAGE>
(k) Modifications; Amendments; Waivers. The terms and provisions
----------------------------------
of this Agreement may not be modified, amended or waived, except pursuant to a
writing signed by the Company, the holders of a majority of the principal amount
of the Debentures outstanding and a majority of the shares of Common Stock
issued upon conversion of the Debentures.
(l) Headings. The headings of the various sections of this
--------
Agreement have been inserted for convenience of reference only and shall not be
deemed to be a part of this Agreement.
(m) Waiver. No course of dealing between the Company and the
------
Investors (or any of them) or any delay in exercising any rights hereunder will
operate as a waiver of any rights of any party to this Agreement. The failure of
any party to enforce any of the provisions of this Agreement will in no way be
construed as a waiver of such provisions and will not affect the right of such
party thereafter to enforce each and every provision of this Agreement in
accordance with its terms.
(n) Mutual Waiver of Jury Trial. BECAUSE DISPUTES ARISING IN
---------------------------
CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY
RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE
STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES
DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS.
THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL
SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS OR
REMEDIES UNDER THIS AGREEMENT OR ANY DOCUMENTS RELATED HERETO.
SECTION 18. EFFECTIVENESS.
-------------
This Agreement shall become effective as of the Closing (except with
respect to Sections 3(a) and 3(b), which shall be effective as of the date
hereof). In the event that the Securities Purchase Agreement is terminated
pursuant to its terms and the Closing does not occur, this Agreement shall be
null and void and of no further force and effect.
23
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Investors
Rights Agreement on the date first written above.
BUILDING ONE SERVICES CORPORATION
By: _______________________________
Name:
Title:
BOSS INVESTMENT LLC
By: _______________________________
Name:
Title:
24
<PAGE>
Schedule I
----------
(1) (2)
Investor Debentures Stock Equivalent
- -------- ---------- ----------------
Boss Investment LLC
c/o Apollo Management, L.P.
1301 Avenue of the Americas, 38th Floor
New York, NY 10019
25
<PAGE>
Exhibit 99.3
AMENDMENT NO.1 dated as of April 6, 1999
(this "Amendment") to the INVESTORS'
RIGHTS AGREEMENT) (the "Original
Agreement" and, as amended, this
"Agreement"), dated as of March 22,
1999, between BOSS INVESTMENT LLC, a
Delaware limited liability company
("Investor") and BUILDING ONE SERVICES
CORPORATION, a Delaware corporation (the
"Company"). Capitalized terms used but
not defined herein shall have the
meanings ascribed to them in the
Original Agreement.
In consideration of the premises and the mutual benefits to be derived from
this Amendment and the representations, warranties, covenants, agreements and
conditions hereinafter set forth, the parties hereto hereby agree as follows:
ARTICLE I
AMENDMENT
1.1 Dividends.
---------
Section 16(c) of the Original Agreement is hereby amended by deleting
therefrom the following "provided, however, that the Company may declare or pay
any dividend on the Common Stock if such dividend, when combined with any other
dividends declared or paid on the Common Stock in the preceding twelve-month
period, does not exceed 5% of the aggregate Fair Market Value of the Common
Stock at the time of the declaration or payment of such dividend".
ARTICLE II
MISCELLANEOUS PROVISIONS
2.1 Agreement.
---------
Except as modified by this Amendment, the Original Agreement shall remain
in full force and effect, enforceable in accordance with its terms. This
Amendment is not a consent to any waiver or modification of any other terms or
conditions of the Agreement or any of the instruments or documents referred to
in the Agreement and shall not prejudice any right or rights which the parties
thereto may now or hereafter have under or in connection with the Agreement or
any of the instruments or documents referred to therein.
<PAGE>
2.2 Counterparts.
------------
This Amendment may be executed in any number of counterparts, and each such
counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute one agreement.
2.3 Governing Law.
-------------
This Amendment shall be governed and construed in accordance with the laws
of the State of Delaware.
* * *
2
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
date first written above.
BOSS INVESTMENT LLC
By: ____________________
Name:
Title:
BUILDING ONE SERVICES CORPORATION
By:_____________________________
Name:
Title:
<PAGE>
Exhibit 99.4
================================================================================
BUILDING ONE SERVICES CORPORATION,
as Issuer
AND
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
______________________________________________
INDENTURE
Dated as of April 30, 1999
_______________________________________________
$100,000,000
7 1/2% Convertible junior subordinated
debentures due 2012
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION....................................... 1
SECTION 101. Definitions.............................................................................. 1
SECTION 102. Compliance Certificates and Opinions..................................................... 18
SECTION 103. Form of Documents Delivered to Trustee................................................... 18
SECTION 104. Acts of Holders; Record Dates............................................................ 19
SECTION 105. Notices, Etc., to Trustee and Company.................................................... 20
SECTION 106. Notice to Holders; Waiver................................................................ 20
SECTION 107. Conflict with Trust Indenture Act........................................................ 20
SECTION 108. Effect of Headings and Table of Contents................................................. 21
SECTION 109. Successors and Assigns................................................................... 21
SECTION 110. Separability Clause...................................................................... 21
SECTION 111. Benefits of Indenture.................................................................... 21
SECTION 112. Governing Law............................................................................ 21
SECTION 113. Legal Holidays........................................................................... 21
SECTION 114. No Security Interest Created............................................................. 21
SECTION 115. Limitation on Individual Liability....................................................... 22
ARTICLE II SECURITY FORMS............................................................................... 22
SECTION 201. Forms Generally.......................................................................... 22
SECTION 202. Form of Face of Security................................................................. 23
SECTION 203. Form of Reverse of Security.............................................................. 25
SECTION 204. Form of Trustee's Certificate of Authentication.......................................... 30
ARTICLE III THE SECURITIES.............................................................................. 30
SECTION 301. Title and Terms.......................................................................... 30
SECTION 302. Denominations............................................................................ 31
SECTION 303. Execution, Authentication, Delivery and Dating........................................... 31
SECTION 304. Temporary Securities..................................................................... 32
SECTION 305. Registration, Registration of Transfer and Exchange...................................... 32
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities......................................... 35
SECTION 307. Payment of Interest; Interest Rights Preserved........................................... 35
SECTION 308. Persons Deemed Owners.................................................................... 37
SECTION 309. Cancellation............................................................................. 37
SECTION 310. Computation of Interest.................................................................. 37
SECTION 311. CUSIP Number............................................................................. 37
SECTION 312. Restrictions on Transfer................................................................. 37
SECTION 313. Restrictive Legends...................................................................... 38
SECTION 314. Notice of Proposed Transfers............................................................. 38
ARTICLE IV SATISFACTION AND DISCHARGE................................................................... 38
SECTION 401. Satisfaction and Discharge of Indenture.................................................. 38
SECTION 402. Application of Trust Money............................................................... 40
SECTION 403. Reinstatement............................................................................ 40
ARTICLE V REMEDIES...................................................................................... 40
SECTION 501. Events of Default........................................................................ 40
SECTION 502. Acceleration of Maturity; Rescission and Annulment....................................... 42
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.......................... 43
SECTION 504. Trustee May File Proofs of Claim......................................................... 44
SECTION 505. Trustee May Enforce Claims Without Possession of Securities.............................. 44
SECTION 506. Application of Money Collected........................................................... 45
SECTION 507. Limitation on Suits...................................................................... 45
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest and to Convert.................................................................. 45
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
SECTION 509. Restoration of Rights and Remedies....................................................... 46
SECTION 510. Rights and Remedies Cumulative........................................................... 46
SECTION 511. Delay or Omission Not Waiver............................................................. 46
SECTION 512. Control by Holders....................................................................... 46
SECTION 513. Waiver of Past Defaults.................................................................. 47
SECTION 514. Undertaking for Costs.................................................................... 47
SECTION 515. Waiver of Stay or Extension Laws......................................................... 47
ARTICLE VI THE TRUSTEE.................................................................................. 48
SECTION 601. Certain Duties and Responsibilities...................................................... 48
SECTION 602. Notice of Defaults....................................................................... 48
SECTION 603. Certain Rights of Trustee................................................................ 48
SECTION 604. Not Responsible for Recitals or Issuance of Securities................................... 49
SECTION 605. May Hold Securities...................................................................... 49
SECTION 606. Money Held in Trust...................................................................... 50
SECTION 607. Compensation and Reimbursement........................................................... 50
SECTION 608. Disqualification; Conflicting Interests.................................................. 50
SECTION 609. Corporate Trustee Required; Eligibility.................................................. 51
SECTION 610. Resignation and Removal; Appointment of Successor........................................ 51
SECTION 611. Acceptance of Appointment by Successor................................................... 52
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.............................. 52
SECTION 613. Preferential Collection of Claims Against Company........................................ 53
SECTION 614. Appointment of Authenticating Agent...................................................... 53
ARTICLE VII HOLDERS' LIST AND REPORTS BY TRUSTEE AND COMPANY............................................ 55
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders and the
Representative under the Credit Facility................................................. 55
SECTION 702. Preservation of Information; Communication to Holders.................................... 55
SECTION 703. Reports by Trustee....................................................................... 55
SECTION 704. Reports by Company....................................................................... 56
SECTION 705. Certain Notices.......................................................................... 56
ARTICLE VIII CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE....................................... 56
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms..................................... 56
SECTION 802. Successor Substituted.................................................................... 57
ARTICLE IX SUPPLEMENTAL INDENTURES...................................................................... 57
SECTION 901. Supplemental Indentures Without Consent of Holders....................................... 57
SECTION 902. Supplemental Indentures with Consent of Holders.......................................... 58
SECTION 903. Execution of Supplemental Indentures..................................................... 59
SECTION 904. Effect of Supplemental Indentures........................................................ 59
SECTION 905. Conformity with Trust Indenture Act...................................................... 59
SECTION 906. Reference in Securities to Supplemental Indentures....................................... 59
SECTION 907. Notice of Supplemental Indenture......................................................... 59
SECTION 908. Effect on Senior Indebtedness............................................................ 59
ARTICLE X COVENANTS..................................................................................... 60
SECTION 1001. Payment of Principal, Premium and Interest............................................... 60
SECTION 1002. Maintenance of Office or Agency.......................................................... 60
SECTION 1003. Money for Security Payments to Be Held in Trust.......................................... 60
SECTION 1004. Statement by Officers as to Default...................................................... 61
SECTION 1005. Existence................................................................................ 62
SECTION 1006. Waiver of Certain Covenants.............................................................. 62
SECTION 1007. Limitation on Incurrence of Indebtedness................................................. 62
SECTION 1008. Compliance With Investor Rights Agreement................................................ 62
SECTION 1009. Limitation on Restricted Payments........................................................ 63
</TABLE>
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<TABLE>
<CAPTION>
<S> <C>
ARTICLE XI REDEMPTION OF SECURITIES..................................................................... 63
SECTION 1101. Right of Redemption...................................................................... 63
SECTION 1102. Applicability of Article................................................................. 63
SECTION 1103. Election to Redeem; Notice to Trustee.................................................... 64
SECTION 1104. [Reserved.].............................................................................. 64
SECTION 1105. Notice of Redemption..................................................................... 64
SECTION 1106. Deposit of Redemption Price.............................................................. 64
SECTION 1107. Securities Payable on Redemption Date.................................................... 65
SECTION 1108. [Reserved.].............................................................................. 65
SECTION 1109. Conversion Arrangements on Call for Redemption........................................... 65
ARTICLE XII SUBORDINATION OF SECURITIES................................................................. 66
SECTION 1201. Securities Subordinated to Senior Indebtedness........................................... 66
SECTION 1202. Payment Over of Proceeds Upon Dissolution, Etc........................................... 66
SECTION 1203. No Payment When Senior Indebtedness in Default........................................... 67
SECTION 1204. Subrogation to Rights of Holders of Senior Indebtedness.................................. 69
SECTION 1205. Provisions Solely to Define Relative Rights.............................................. 69
SECTION 1206. Trustee to Effectuate Subordination...................................................... 69
SECTION 1207. No Waiver of Subordination Provisions.................................................... 70
SECTION 1208. Notice to Trustee........................................................................ 70
SECTION 1209. Reliance on Judicial Order or Certificate of Liquidating Agent........................... 71
SECTION 1210. Trustee Not Fiduciary for Holders of Senior Indebtedness................................. 71
SECTION 1211. Rights of Trustee as Holder of Senior Indebtedness; Preservation of
Trustee's Rights......................................................................... 71
SECTION 1212. Reserved................................................................................. 72
SECTION 1213. Rights with respect to Conversion and Certain Payments................................... 72
SECTION 1214. Payments May Be Paid Prior to Dissolution................................................ 72
ARTICLE XIII CONVERSION OF SECURITIES................................................................... 72
SECTION 1301. Conversion Privilege and Conversion Price................................................ 72
SECTION 1302. Exercise of Conversion Privilege......................................................... 73
SECTION 1303. Fractions of Shares...................................................................... 73
SECTION 1304. Adjustment of Conversion Price........................................................... 74
SECTION 1305. Notice of Adjustments of Conversion Price................................................ 79
SECTION 1306. Notice of Certain Corporate Action....................................................... 79
SECTION 1307. Company to Reserve Common Stock.......................................................... 80
SECTION 1308. Taxes on Conversions..................................................................... 80
SECTION 1309. Covenant as to Common Stock.............................................................. 80
SECTION 1310. Cancellation of Converted Securities..................................................... 81
SECTION 1311. Provisions as to Consolidation, Merger or Sale of Assets................................. 81
SECTION 1312. Disclaimer of Responsibility for Certain Matters......................................... 82
ARTICLE XIV RIGHT TO REQUIRE REPURCHASE................................................................. 82
SECTION 1401. Right to Require Repurchase.............................................................. 82
SECTION 1402. Notice; Method of Exercising Repurchase Right............................................ 83
SECTION 1403. Deposit of Repurchase Price.............................................................. 84
SECTION 1404. Securities Not Repurchased on Repurchase Date............................................ 84
SECTION 1405. Securities Repurchased in Part........................................................... 84
ARTICLE XV VOTING RIGHTS................................................................................ 84
SECTION 1501. General.................................................................................. 84
SECTION 1502. No Changes to Voting Rights.............................................................. 85
SECTION 1503. Stockholder Approval Required............................................................ 85
SECTION 1504. Effectiveness of this Article XV......................................................... 85
</TABLE>
iii
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INDENTURE, dated as of April 30, 1999 between BUILDING ONE SERVICES
CORPORATION, a corporation duly organized and existing under the laws of the
State of Delaware (herein called the "Company"), having its principal executive
offices at 800 Connecticut Avenue, N.W., Washington, D.C. 20006, and UNITED
STATES TRUST COMPANY OF NEW YORK, a banking and trust company organized under
the New York banking law, as Trustee (herein called the "Trustee"), having an
office at 114 West 47th Street, 25th Floor, New York, New York 10036-1532.
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of its 71/2%
Convertible Junior Subordinated Debentures Due 2012 (herein called 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.
All things necessary to make the Securities, when executed by the
Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Indenture a
valid agreement of the Company, 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 thereof, it is mutually 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 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) 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;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with United States generally accepted
accounting principles, and, except as otherwise herein expressly provided, the
term "generally accepted accounting principles" with respect to any computation
required and permitted hereunder shall mean United States accounting principles
as are generally accepted at the date of this Indenture; and
<PAGE>
(d) 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.
Certain terms used in either Article XII or XIII are defined in such
Article.
"Acquired Indebtedness" means Indebtedness of a Person or any of its
Subsidiaries existing at the time such Person becomes a Subsidiary of the
Company or at the time it merges or consolidates with the Company or any of its
Subsidiaries or is assumed by the Company or any of its Subsidiaries in
connection with the acquisition of assets from such Person and in each case not
incurred by such Person in connection with, or in anticipation or contemplation
of, such Person becoming a Subsidiary of the Company or such acquisition,
merger or consolidation.
"Act", when used with respect to any Holder, has the meaning specified
in Section 104.
"Additional Securities" has the meaning specified in Section 202.
"Affiliate " of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"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 the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent Member" means any member of, or participant in, the Depositary.
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Global Security or beneficial interest therein, the
rules and procedures of the Depositary for such Global Security to the extent
applicable to such transaction and as in effect from time to time.
"Apollo Stockholders" means Boss Investment LLC and any Affiliate
thereof (including without limitation, Apollo Management, L.P., Apollo
Management IV, L.P., Apollo Advisors, L.P., Apollo Advisors IV, L.P., Apollo
Investment Fund IV, L.P., Apollo Overseas Partners IV, L.P. and each of their
respective Affiliates), and all accounts managed by any of them for so long as
any of them holds the power of disposition and voting with respect thereto.
"Appraisal Procedure" if applicable, shall mean the following
procedure to determine the fair market value, as to any security, for purposes
of the definition of "Fair Market Value" or the fair market value, as to any
other property (in either case, the "valuation amount"). So long as the Apollo
Stockholders constitute the Requisite Holders, the valuation amount shall be
determined in good faith jointly by the Board of Directors and the Requisite
Holders; provided, however, that if such parties are not able to agree on the
valuation amount within a reasonable period of time (not to exceed twenty (20)
days) the valuation amount shall be determined by an investment banking firm of
national recognition, which firm shall be reasonably acceptable to the Board of
Directors and the Requisite Holders. If the Board of
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Directors and the Requisite Holders are unable to agree upon an acceptable
investment banking firm within ten (10) days after the date either party
proposed that one be selected, the investment banking firm will be selected by
an arbitrator located in New York City, New York, selected by the American
Arbitration Association (or if such organization ceases to exist, the arbitrator
shall be chosen by a court of competent jurisdiction). The arbitrator shall
select the investment banking firm (within ten (10) days of his appointment)
from a list, jointly prepared by the Board of Directors and the Requisite
Holders, of not more than six investment banking firms of national standing in
the United States, of which no more than three may be named by the Board of
Directors and no more than three may be named by the Requisite Holders. The
arbitrator may consider, within the ten-day period allotted, arguments from the
parties regarding which investment banking firm to choose, but the selection by
the arbitrator shall be made in its sole discretion from the list of six. The
Board of Directors and the Requisite Holders shall submit to the investment
banking firm their respective determinations of the valuation amount, and any
supporting arguments and other data as they may desire, within ten (10) days of
the appointment of the investment banking firm, and the investment banking firm
shall as soon as practicable thereafter make its own determination of the
valuation amount. The final valuation amount for purposes hereof shall be the
average of the two valuation amounts closest together, as determined by the
investment banking firm, from among the valuation amounts submitted by the
Company and the Requisite Holders and the valuation amount calculated by the
investment banking firm. The determination of the final valuation amount by such
investment-banking firm shall be final and binding upon the parties. The Company
shall pay the fees and expenses of the investment banking firm and arbitrator
(if any) used to determine the valuation amount. If required by any such
investment banking firm or arbitrator, the Company shall execute a retainer and
engagement letter containing reasonable terms and conditions, including, without
limitation, customary provisions concerning the rights of indemnification and
contribution by the Company in favor of such investment banking firm or
arbitrator and its officers, directors, partners, employees, agents and
Affiliates. If the Apollo Stockholders no longer constitute the Requisite
Holders, the valuation amount shall be determined in good faith by the Board of
Directors.
"Asset Acquisition" means (a) an Investment by the Company or any
Subsidiary of the Company in any other Person pursuant to which such Person
shall become a Subsidiary of the Company or any Subsidiary of the Company, or
shall be merged with or into the Company or any Subsidiary of the Company, or
(b) the acquisition by the Company or any Subsidiary of the Company of the
assets of any Person (other than a Subsidiary of the Company) which constitute
all or substantially all of the assets of such Person or comprises any division
or line of business of such Person or any other properties or assets of such
Person other than in the ordinary course of business.
"Asset Sale" means any direct or indirect sale, issuance, conveyance,
transfer, lease (other than operating leases entered into in the ordinary course
of business), assignment or other transfer for value by the Company or any of
its Subsidiaries (including any Sale and Leaseback Transaction) to any Person
other than the Company or a Wholly Owned Subsidiary of the Company of (a) any
Capital Stock of any Subsidiary of the Company; or (b) any other property or
assets of the Company or any Subsidiary of the Company other than in the
ordinary course of business.
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"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities.
The term "Beneficial Owner" is determined in accordance with Rule 13d-
3 promulgated by the Commission under the Exchange Act.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York, New York or
the city in which the Corporate Trust Office is located are authorized or
obligated to close by law or executive order.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, including
each class of Common Stock and Preferred Stock of such Person and (ii) with
respect to any Person that is not a corporation, any and all partnership or
other equity interests of such Person.
"Capitalized Lease Obligation" means, as to any Person, the
obligations of such Person under a lease that are required to be classified and
accounted for as capital lease obligations under GAAP and, for purposes of this
definition, the amount of such obligations at any date shall be the capitalized
amount of such obligations at such date, determined in accordance with GAAP.
"Cash Equivalents" means (i) marketable direct obligations issued by,
or unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof; (ii)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either Standard & Poor's Ratings Services ("S&P") or Moody's
Investors Service, Inc. ("Moody's"); (iii) commercial paper maturing no more
than one year from the date of creation thereof and, at the time of acquisition,
having a rating of at least A-1 from S&P or at least P-1 from Moody's; (iv)
certificates of deposit or bankers' acceptances maturing within one year from
the date of acquisition thereof issued by any bank organized under the laws of
the United States of America or any state thereof or the District of Columbia or
any U.S. branch of a foreign bank having at the date of acquisition thereof
combined capital and surplus of not less than $250.0 million; provided, that
instruments issued by banks not having one of the two highest ratings obtainable
from either S&P or Moody's shall not constitute "Cash Equivalents" for purposes
of the subordination provisions of this Indenture; (v) repurchase obligations
with a term of not more than seven days for underlying securities of the types
described in clause (i) above entered into
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<PAGE>
with any bank meeting the qualifications specified in clause (iv) above; and
(vi) investments in money market funds which invest substantially all their
assets in securities of the types described in clauses (i) through (v) above.
"Change of Control" means the occurrence of any of the following
events (each a "Change of Control"):
(i) the Sale of the Company,
(ii) the adoption of a plan relating to a Liquidation,
(iii) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act), other than
one or more Permitted Holders, is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5
under the Exchange Act), directly or indirectly, of
Voting Stock entitled to cast a majority of the votes
entitled to be cast by the holders of the outstanding
Voting Stock of the Company,
(iv) (A) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act), other than
one or more Permitted Holders, is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5
under the Exchange Act), directly or indirectly, of Voting
Stock entitled to cast more than 40% of the votes entitled
to be cast by the holders of the outstanding Voting Stock
of the Company and (B) the Permitted Holders beneficially
own, directly or indirectly, Voting Stock entitled to cast
in the aggregate a lesser percentage of the votes entitled
to be cast by the outstanding Voting Stock of the Company
than such other person or group, or
(v) the first day on which a majority of the Common Stock
Directors are not Continuing Directors.
"Charter Amendment" means an amended and restated certificate of
incorporation of the Company substantially in the form of Exhibit A to the
Investors' Rights Agreement.
"Charter Amendment Deadline" means July 25, 1999, or, if later, 60
days after the Original Issuance Date.
"Close of Business" means 5:00 p.m. in New York, New York.
"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" includes any stock of any class of the Company which
has no preference in respect of dividends or of amounts payable in the event of
any voluntary or involuntary liquidation, dissolution or winding-up of the
Company and which is not subject to
5
<PAGE>
redemption by the Company. However, subject to the provisions of Section 1311,
shares issuable on conversion of Securities shall include only shares of the
class designated as Common Stock of the Company at the date of this Indenture or
shares of any class or classes resulting from any reclassification or
reclassifications thereof and which have no preference in respect of dividends
or of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding-up of the Company and which are not subject to redemption
by the Company; provided, that if at any time there shall be more than one such
resulting class, the shares of each such class then so issuable shall be
substantially in the proportion which the total number of shares of such class
resulting from all such reclassifications bears to the total number of shares of
all such classes resulting from all such reclassifications.
"Common Stock Directors" means those directors of the Company who have
not been elected by the holders of the Securities pursuant to the separate class
vote granted to the Holders of the Securities to elect directors pursuant to the
Charter Amendment.
"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.
"Company Request" or "Company Order" means a written request or order
delivered to the Trustee and signed in the name of the Company by (a) the
Chairman of the Board, the President or any Vice President of the Company and
(b) the Treasurer, any Assistant Treasurer, the Secretary or any Assistant
Secretary of the Company.
"Consolidated EBITDA" means, with respect to any Person, for any
period, the sum (without duplication) of (i) Consolidated Net Income and (ii) to
the extent Consolidated Net Income has been reduced thereby, (A) all income
taxes of such Person and Subsidiaries paid or accrued in accordance with GAAP
for such period (other than income taxes attributable to extraordinary, unusual
or nonrecurring gains or losses), (B) Consolidated Interest Expense and (C)
depreciation and amortization less any non-cash items increasing Consolidated
Net Income for such period, all as determined on a consolidated basis for such
Person and its Subsidiaries in accordance with GAAP.
"Consolidated Indebtedness" means with respect to any Person, as of
the date of determination, the aggregate amount of all Indebtedness of such
Person and its Subsidiaries on a consolidated basis included on the face of the
balance sheet of such Person (determined in accordance with GAAP) plus any
Indebtedness included on the face of the balance sheet of any other Person
(determined in accordance with GAAP) as to which such Person and/or any of its
Subsidiaries has created a guarantee or other contingent obligation (to the
extent of such guarantee or other contingent obligation).
"Consolidated Interest Expense" means, with respect to any Person for
any period, the sum of, without duplication (i) the aggregate of the interest
expense of such Person and its Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP, including without limitation, (a)
any amortization of debt discount and amortization or write-off of deferred
financing costs (including the amortization of costs relating to interest rate
caps or other similar agreements), (b) the net costs under Interest Swap
Obligations, (c) all capitalized interest and (d) the interest portion of any
deferred payment obligation; and (ii) the
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interest component of Capitalized Lease Obligations paid, accrued and/or
scheduled to be paid or accrued by such Person and its Subsidiaries during such
period as determined on a consolidated basis in accordance with GAAP, minus
interest income for such period.
"Consolidated Leverage Ratio" means, with respect to any Person, the
ratio of Consolidated Indebtedness of such Person on the date of the transaction
giving rise to the need to calculate the Consolidated Leverage Ratio (the
"Transaction Date") to Consolidated EBITDA of such Person for the four full
fiscal quarters (the "Four Quarter Period") most recently ending on or prior to
the Transaction Date for which quarterly consolidated financial statements of
the Company and its Subsidiaries have been distributed to Holders. In addition
to and without limitation of the foregoing, for purposes of this definition,
"Consolidated EBITDA" and "Consolidated Indebtedness" shall be calculated after
giving effect on a pro forma basis, determined in accordance with Article 11 of
Regulation S-X promulgated by the Commission, for the period of such calculation
to any Asset Sales or Asset Acquisitions (including, without limitation, any
Asset Acquisition giving rise to the need to make such calculation as a result
of such Person or one of its Subsidiaries (including any Person who becomes a
Subsidiary as a result of the Asset Acquisition) incurring, assuming or
otherwise being liable for Acquired Indebtedness and also including any
Consolidated EBITDA attributable to the assets which are the subject of the
Asset Acquisition but excluding the Consolidated EBITDA attributable to the
assets which are the subject of the Asset Sale) occurring during the Four
Quarter Period or at any time subsequent to the last day of the Four Quarter
Period and on or prior to the Transaction Date, as if such Asset Sale or Asset
Acquisition (including the incurrence, assumption or liability for any such
Acquired Indebtedness) occurred on the first day of the Four Quarter Period. If
such Person or any of its Subsidiaries directly or indirectly guarantees
Indebtedness of a third Person, the preceding sentence shall give effect to the
incurrence of such guaranteed Indebtedness as if such Person or any Subsidiary
of such Person had directly incurred or otherwise assumed such guaranteed
Indebtedness.
"Consolidated Net Income" means, with respect to any Person, for any
period, the aggregate net income (or loss) of such Person and its Subsidiaries
for such period on a consolidated basis, determined in accordance with GAAP;
provided that there shall be excluded therefrom (a) after-tax gains or losses
from Asset Sales or abandonments or reserves relating thereto, (b) after-tax
items classified as extraordinary or nonrecurring gains or losses, (c) the net
income of any Person acquired in a "pooling of interests" transaction accrued
prior to the date it becomes a Subsidiary of the referent Person or is merged or
consolidated with the referent Person or any Subsidiary of the referent Person,
(d) the net income (but not loss) of any Subsidiary of the referent Person to
the extent that the declaration of dividends or similar distributions by that
Subsidiary of that income is by a contract, operation of law or otherwise
prohibited, (e) the net income of any Person, other than a Subsidiary of the
referent Person, except to the extent of cash dividends or distributions paid to
the referent Person or to a Wholly Owned Subsidiary of the referent Person by
such Person, and (f) in the case of a successor to the referent Person by
consolidation or merger or as a transferee of the referent Person's assets, any
earnings of the successor corporation prior to such consolidation, merger or
transfer of assets.
"Continuing Directors" means (a) the Common Stock Directors in office
immediately after the Original Issuance Date, (b) the directors of the Company
designated by the Holders and (c) any directors of the Company nominated to the
Board of Directors by a majority
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of the directors included in clause (a) and clause (b) of this definition
(voting together as one board) or by a majority of Company directors who are
Continuing Directors.
"Conversion Date" has the meaning specified in Section 1302.
"Conversion Price" shall mean $22.50 per share of Common Stock,
subject to adjustment pursuant to the terms of the Indenture.
"Conversion Price Reduction Date" has the meaning specified in Section
1304.
"Converted Amount" means, with respect to any Security being
converted, the principal amount of such Security or, if less than the entire
principal amount of such Security is being converted, such portion of the
principal amount thereof as is being converted.
"Corporate Trust Office" means the office of the Trustee in New York,
New York, which initially shall be United States Trust Company of New York, 114
West 47th Street, New York, New York 10036-1532.
"Corporation" means a corporation, association, company, joint-stock
company or business trust.
"Credit Facility" means the Credit Agreement to be dated as of the
Original Issuance Date, between the Company, the lenders party thereto in their
capacities as lenders thereunder, Goldman Sachs Partners, L.P., as documentation
agent, Salomon Smith Barney, Inc., as syndication agent, and Bankers Trust
Company, as administrative agent, together with the related documents thereto
(including, without limitation, any guarantee agreements and security
documents), in each case as such agreements may be amended (including any
amendment and restatement thereof), supplemented or otherwise modified from time
to time, including any agreement extending the maturity of, refinancing,
replacing or otherwise restructuring (including increasing the amount of
available borrowing 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 agent, lender or group of lenders.
"Currency Agreement" means any foreign contract, currency swap
agreement or other similar agreement or arrangement designed to protect the
Company or any significant subsidiary of the Company against fluctuations in
currency values.
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" means, with respect to any Global Securities, a clearing
agency that is registered as such under the Exchange Act and is designated by
the Company to act as a Depositary for such Global Securities (or any successor
securities clearing agency so registered).
"Designated Senior Indebtedness" means (i) Indebtedness under or in
respect of the Credit Facility and (ii) any other Indebtedness constituting
Senior Indebtedness which, at the time of determination, has an aggregate
principal amount of at least $25.0 million and is specifically designated in the
instrument evidencing or creating such Senior Indebtedness as
8
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"Designated Senior Indebtedness" by the Company; provided, that for purposes of
clause (y) of Section 1203(a), the Obligations under, or with respect to, the
Senior Subordinated Notes and the Senior Subordinated Note Indenture shall be
deemed not to be Designated Senior Indebtedness so long as the Credit Facility
is still in effect.
"DTC" means The Depository Trust Company, a New York corporation.
"Disqualified Capital Stock" means that portion of any Capital Stock
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the sole option of the holder
thereof, on or prior to the Maturity of the Securities.
"Duly Adopted" means, with respect to the Charter Amendment, duly
adopted in accordance with the General Corporation Law of the State of Delaware
and duly filed with the Secretary of State of Delaware.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Excluded Stock" means (i) shares of Common Stock issuable upon
exercise of any warrants or options of the Company outstanding on the Original
Issuance Date, (ii) shares of Common Stock issued as consideration pursuant to
any acquisition by the Company or any Subsidiary of any business or assets for
which the consent or approval of certain Holders is required pursuant to the
Investors' Rights Agreement and has been obtained, (iii) shares of Common Stock
issued pursuant to the conversion of the Securities, (iv) shares of Common Stock
issued as consideration pursuant to any Asset Acquisition by the Company or any
Subsidiary of any business or assets if (x) the total consideration paid in such
Asset Acquisition is less than $25 million (based on the total cash
consideration, total Indebtedness assumed by the Company and its Subsidiaries
and the Fair Market Value of the shares of Common Stock issued and the other
property paid) and (y) the Consolidated Net Income per outstanding share of
Common Stock for the immediately preceding full twelve month period giving pro
forma effect to such acquisition, the Acquired Indebtedness arising out of such
acquisition, the Indebtedness incurred and the shares of Common Stock issued in
connection with such acquisition, in each case, as if such Asset Acquisition was
consummated at the beginning of such period is greater than the actual
Consolidated Net Income per outstanding share of Common Stock for such period,
(v) shares of Securities issued as dividends to the Holders, (vi) shares of
Common Stock or options issued pursuant to any Company employee incentive or
benefit arrangement existing on the date hereof pursuant to the terms thereof on
the date hereof, (vii) shares of Common Stock issued pursuant to obligations to
pay earnouts with respect to the nine Asset Acquisitions described on Schedule I
hereto in accordance with the agreements relating thereto as in effect on the
date of the Investors' Rights Agreement, and (viii) up to 1,500,000 shares of
Common Stock to be issued pursuant to the long term equity incentive plan
described on Schedule 3.14 to the Securities Purchase Agreement. So long as
Apollo Stockholders constitute Requisite Holders, Apollo Stockholders may by
written consent delivered to the Company include any Common Stock or options
with respect thereto issued pursuant to any Company employee incentive or
benefit arrangement now existing or hereafter created within the definition of
"Excluded Stock".
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"Fair Market Value" means, as to any security, the Twenty Day Average
of the average closing prices of such security's sales on all domestic
securities exchanges on which such security may at the time be listed, or, if
there have been no sales on any such exchange on any day, the average of the
highest bid and lowest asked prices on all such exchanges at the end of such
day, or, if on any day such security is not so listed, the average of the
representative bid and asked prices quoted in the NASDAQ Stock Market as of 4:00
P.M., New York City time, on such day, or, if on any day such security is not
quoted in the NASDAQ Stock Market, the average of the highest bid and lowest
asked prices on such day in the domestic over-the-counter market as reported by
the National Quotation Bureau, Incorporated, or any similar or successor
organization (and in each such case excluding any trades that are not bona fide,
arm's length transactions). If at any time such security is not listed on any
domestic securities exchange or quoted in the NASDAQ Stock Market or the
domestic over-the-counter market, the "Fair Market Value" of such security shall
be the fair market value thereof as determined in accordance with the Appraisal
Procedure, using an appropriate valuation method, assuming an arms-length sale
to an independent party. In determining the fair market value of any class or
series of Common Stock, a sale of all of the issued and outstanding Common Stock
of the Corporation will be assumed, without giving regard to the lack of
liquidity of such stock due to any restrictions (contractual or otherwise)
applicable thereto or any discount for minority interests and assuming the
conversion or exchange of all securities then outstanding that are convertible
into or exchangeable for Common Stock and the exercise of all rights and
warrants then outstanding and exercisable to purchase shares of such stock or
securities convertible into or exchangeable for shares of such stock; provided,
however that such assumption will not include those securities, rights and
warrants convertible into Common Stock where the conversion, exchange or
exercise price per share is greater than the fair market value; provided,
further, however, that fair market value shall be determined with regard to the
relative priority of each class or series of Common Stock (if more than one
class or series exists.) "Fair Market Value" means with respect to property
other than securities, the "fair market value" determined in accordance with the
Appraisal Procedure.
"First Redemption Date" means the fifth anniversary of the Original
Issuance Date, i.e., April 30, 2004.
"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, which are in effect as of the Original Issuance
Date.
"Global Security" means a Security that is registered in the Security
Register in the name of a Depositary or nominee thereof.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indebtedness" means with respect to any Person, without duplication,
(i) all Obligations of such Person for borrowed money, (ii) all Obligations of
such Person evidenced by
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bonds, debentures, notes or other similar instruments, (iii) all Capitalized
Lease Obligations of such Person, (iv) all Obligations of such Person issued or
assumed as the deferred purchase price of property, all conditional sale
obligations and all Obligations under any title retention agreement (but
excluding trade accounts payable and other accrued liabilities arising in the
ordinary course of business), (v) all Obligations for the reimbursement of any
obligor on any letter of credit, banker's acceptance or similar credit
transaction, (vi) guarantees and other contingent obligations in respect of
Indebtedness referred to in clauses (i) through (v) above and clause (viii)
below, (vii) all Obligations of any other Person of the type referred to in
clauses (i) through (vi) which are secured by any lien on any property or asset
of such Person, 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, (viii) all Obligations under currency agreements and interest swap
agreements of such Person and (ix) all Disqualified Capital Stock issued by such
Person with the amount of Indebtedness represented by such Disqualified Capital
Stock being equal to the greater of its voluntary or involuntary liquidation
preference and its maximum fixed repurchase price, but excluding accrued
dividends, if any. For purposes hereof, the "maximum fixed repurchase price" of
any Disqualified Capital Stock which does not have a fixed repurchase price
shall be calculated in accordance with the terms of such Disqualified Capital
Stock as if such Disqualified Capital Stock were purchased on any date on which
Indebtedness shall be required to be determined pursuant to this Indenture, and
if such price is based upon, or measured by, the fair market value of such
Disqualified Capital Stock, such fair market value shall be determined
reasonably and in good faith by the Board of Directors of the issuer of such
Disqualified Capital Stock. For purposes hereof, "Indebtedness" shall exclude
all (i) contingent payment obligations incurred in the ordinary course of the
Company and its Subsidiaries' business with respect to surety bonds, performance
bonds and similar instruments, to the extent they are not secured by any lien on
assets of the Company or its Subsidiaries and do not secure other Indebtedness
of the Company and (ii) earnout obligations with respect to Asset Acquisitions
payable in the form of Common Stock of the Company that is not Disqualified
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.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.
"Interest Swap Obligations" means the obligations of any Person
pursuant to 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 other
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.
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"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), 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 Person. "Investment" shall exclude extensions of trade credit by the
Company and its Subsidiaries on commercially reasonable terms in accordance with
normal trade practices of the Company or such Subsidiary, as the case may be.
"Investors' Rights Agreement" means the Investors' Rights Agreement
dated as of March 22, 1999, as amended by Amendment No. 1 to the Investors'
Rights Agreement dated as of April 6, 1999 among the Company and Boss Investment
LLC, as the same may be amended from time to time.
"Liquidation" means any voluntary or involuntary liquidation,
dissolution, or winding up of the affairs of the Company, other than any
dissolution, liquidation or winding up in connection with any reincorporation of
the Company in another jurisdiction.
"Management Group" means those individuals listed on Schedule II
attached hereto.
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity thereof or by declaration of
acceleration, redemption or otherwise.
"NASD" means the National Association of Securities Dealers, Inc.
"Nasdaq Stock Market" means the stock exchange regulated by the NASD.
"Notice of Default" has the meaning specified in Section 501.
"Obligations" means all obligations for principal, premium, interest,
penalties, fees, indemnifications, reimbursements, damages and other liabilities
payable under the documentation governing any Indebtedness.
"Officers' Certificate" means a certificate delivered to the Trustee
and signed by (a) the Chairman of the Board, the Chief Executive Officer, the
President or any Vice President of the Company and (b) the Treasurer, any
Assistant Treasurer, the Secretary or any Assistant Secretary of the Company.
One of the officers signing an Officers' Certificate given pursuant to Section
1004 shall be the principal executive, financial or accounting officer of the
Company.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for or an employee of the Company, and who shall be reasonably
acceptable to the Trustee.
"Original Issuance Date" means the first date of issuance of the
Securities; i.e., April 30, 1999.
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"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 canceled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities, or portions thereof, for the payment or
redemption of which moneys in the necessary amount have
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, or portions
thereof, 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; and
(iii) Securities which have been paid pursuant to Section 306 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; provided, however, that in
determining whether the Holders of the requisite principal
amount of the Outstanding Securities have given any
request, demand, authorization, direction, notice, consent
or waiver hereunder, Securities owned by the Company or
any other obligor upon the Securities or any Affiliate of
the Company or of such other obligor shall be disregarded
and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in
relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Securities
which the Trustee 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.
"Payment Blockage Period" has the meaning specified in Section 1203.
"Permitted Holders" means the Apollo Stockholders and the Management
Group.
"Permitted Junior Securities" means the Securities, and, any other
debt or equity securities of the Company or any successor corporation issued
pursuant to a plan of reorganization or readjustment of the Company that are
subordinated to the payment of all then outstanding Senior Indebtedness of the
Company at least to the same extent that the Securities are subordinated to the
payment of all Senior Indebtedness of the Company on the Original Issuance Date,
so long as (a) the effect of the use of this defined term in the subordination
provisions contained in Article XII is not to cause the Securities to be treated
as part of: (1) the same class of claims as the Senior Indebtedness of the
Company; or (2) any class of claims pari passu with, or senior to, the Senior
Indebtedness of the Company for any payment or distribution
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in any case or proceeding or similar event relating to the liquidation,
insolvency, bankruptcy, dissolution, winding up or reorganization of the
Company; and (b) to the extent that any Senior Indebtedness of the Company
outstanding on the date of consummation of any such plan of reorganization or
readjustment is not paid in full in cash on such date, either: (1) the holders
of any such Senior Indebtedness not so paid in full in cash have consented to
the terms of such plan or reorganization or readjustment; or (2) such holders
receive securities which constitute Senior Indebtedness of the Company (which
are guaranteed on the same basis as the theretofore outstanding Senior
Indebtedness) and which have been determined by the relevant court to constitute
satisfaction in full in money or money's worth of any Senior Indebtedness of the
Company (and any related guaranties) not paid in full in cash.
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Preferred Stock" of any Person means any Capital Stock of such Person
that has preferential rights to any other Capital Stock of such Person with
respect to dividends or upon liquidation.
"Record Date" means either a Regular Record Date or a Special Record
Date, as applicable.
"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" has the meaning specified in Section 203.
"Regular Record Date", for the interest payable on any Interest
Payment Date means the April 15, July 15, October 15 or January 15, (whether or
not a Business Day), as the case may be, next preceding such Interest Payment
Date.
"Representative" means the indenture trustee or other trustee, agent
or representative in respect of any Designated Senior Indebtedness; provided
that if, and for so long as, any Designated Senior Indebtedness lacks such a
representative, then the Representative for such Designated Senior Indebtedness
shall at all times constitute the holders of a majority in outstanding principal
amount of such Designated Senior Indebtedness in respect of any Designated
Senior Indebtedness.
"Repurchase Date" has the meaning specified in Section 1401.
"Repurchase Price" has the meaning specified in Section 1401.
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"Requisite Holders" means Holders of a majority in principal amount of
the Outstanding Securities.
"Sale and Leaseback Transaction" means any direct or indirect
arrangement with any Person or to which any such Person is a party, providing
for the leasing to the Company or a Subsidiary of any property, whether owned by
the Company or any Subsidiary at the Original Issuance Date or later acquired,
which has been or is to be sold or transferred by the Company or such Subsidiary
to such Person or to any other Person from whom funds have been or are to be
advanced by such Person on the security of such property.
"Sale of the Company" shall mean (i) the sale or other disposition,
directly or indirectly, of all or substantially all of the Company's assets in
one transaction or a series of transactions or (ii) the merger or consolidation
of the Company with or into another Person, in the case of clause (ii) only,
under circumstances in which the holders of Voting Stock entitled to cast a
majority of the votes entitled to be cast by the holders of the Voting Stock of
the Company, immediately prior to the merger or consolidation, own Voting Stock
entitled to cast less than a majority of the votes entitled to be cast by the
holders of the Voting Stock of the Company or the surviving or resulting Person
or acquirer, as the case may be, immediately following such merger or
consolidation. A sale (or sales) of one or more Subsidiaries of the Company
(whether by way of merger, consolidation, reorganization or sale of all or
substantially all assets or securities) which constitutes all or substantially
all of the consolidated assets of the Company shall be deemed a Sale of the
Company.
"Securities" has the meaning specified in the Recitals hereof.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor statute or statutes thereto.
"Securities Purchase Agreement" means the Securities Purchase
Agreement dated as of March 22, 1999 among the Company and Boss Investment, LLC,
as the same may be amended from time to time.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Senior Credit Facility Indebtedness" means all Obligations of the
Company under the Credit Facility (including obligations to pay principal and
interest (including any interest accruing subsequent to the filing of a petition
of bankruptcy at the rate provided in the Credit Facility, whether or not such
interest is an allowed claim under applicable law), reimbursement obligations
under letters of credit, fees, expenses and indemnities).
"Senior Indebtedness" means principal of, premium, if any, and accrued
and unpaid interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company at the rate
provided for in the documentation with respect thereto, whether or not such
interest is an allowed claim under applicable law) on any Indebtedness of the
Company, whether outstanding on the Original Issuance Date or thereafter,
created, incurred or assumed. Without limiting the generality of the foregoing,
"Senior Indebtedness" shall include (i) the principal of, premium, if any,
interest (including any interest
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accruing subsequent to the filing of a petition of bankruptcy at the rate
provided for in the documentation with respect thereto, whether or not such
interest is an allowed claim under applicable law) on, and all other amounts
owing by the Company in respect of, all Obligations of every nature of the
Company under (x) the Credit Facility, including, without limitation,
obligations to pay principal and interest, reimbursement obligations under
letters of credit, fees, expenses and indemnities, (y) all Interest Swap
Obligations (including guarantees thereof) and (z) all obligations under
Currency Agreements (including guarantees thereof), in each case whether
outstanding on the Original Issuance Date or thereafter incurred and (ii)
Indebtedness of the Company and its Subsidiaries incurred under the Senior
Subordinated Notes and the Senior Subordinated Notes Indenture in an aggregate
principal amount not to exceed $200.0 million less the amount of any repayments
of principal thereof after the Original Issuance Date. Notwithstanding the
foregoing, "Senior Indebtedness" shall not include (i) any Indebtedness of the
Company to a Subsidiary of the Company, (ii) Indebtedness to, or guaranteed on
behalf of, any director, officer or employee of the Company or any Subsidiary of
the Company (including, without limitation, amounts owed for compensation) other
than a shareholder who is a lender (or an Affiliate of a lender) under the
Credit Facility, (iii) liabilities to trade creditors incurred in the ordinary
course of business consistent with past practice in connection with obtaining
goods, materials or services, (iv) Indebtedness represented by Disqualified
Capital Stock, (v) any liability for federal, state, local or other taxes owed
or owing by the Company, (vi) that portion of any Indebtedness incurred in
violation of Section 1007 (except Senior Credit Facility Indebtedness not to
exceed $350 million in aggregate principal amount, and all related interest,
fees and indemnities) (but, as to any such obligation, no such violation shall
be deemed to exist for purposes of this clause (vi) if the holder(s) of such
obligation or their representative shall have received an officers' certificate
of, or a representation and warranty from, the Company to the effect that the
incurrence of such Indebtedness does not (or, in the case of revolving credit
Indebtedness, that the incurrence of the entire committed amount thereof at the
date on which the initial borrowing thereunder is made would not) violate
Section 1007 of this Indenture), (vii) 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 or any Subsidiary of the Company and
(viii) any Indebtedness which is, by its express terms or the terms of any
instrument creating, evidencing or governing the same, subordinated or junior in
right of payment to, the Securities.
"Senior Subordinated Notes" means the Company's 101/2 % Senior
Subordinated Notes due 2009 issued pursuant to the Senior Subordinated Notes
Indenture, as in effect on the Original Issuance Date.
"Senior Subordinated Notes Indenture" means the Indenture dated as of
April 30, 1999, among the Company and IBJ Whitehall Bank & Trust Company, as
Trustee, relating to the Company's 101/2 % Senior Subordinated Notes due 2009.
"Significant Subsidiary" has the meaning ascribed to it under
Regulation S-X promulgated under the Exchange Act; provided, that, for purposes
of Section 501 hereof, the term "Significant Subsidiary" shall not include any
Subsidiary designated as an "Unrestricted Subsidiary", as defined in the Senior
Subordinated Notes Indenture.
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"Special Interest" in respect of a repurchase of a Security (or a
portion thereof) upon a Change of Control or a conversion of a Security (or
portion thereof) means the amount of interest that would have accrued on such
Security (or portion thereof being converted or repurchased) from the Repurchase
Date or Conversion Date, as applicable, through the First Redemption Date, as if
such Security (or portion thereof) had not been repurchased or converted,
provided that the aggregate amount of Special Interest payable in respect of a
conversion shall not exceed 30 months of interest unless such conversion is in
connection with a Change of Control.
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any
installment of interest thereon, means 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.
"Subsidiary", with respect to any Person, means (i) any corporation of
which the outstanding Capital Stock having at least a majority of the votes
entitled to be cast in the election of directors under ordinary circumstances
shall at the time be owned, directly or indirectly, by such Person or (ii) any
other Person of which at least a majority of the voting interest under ordinary
circumstances is at the time, directly or indirectly, owned by such Person.
"Total Conversion Amount" means the sum of (i) the Converted Amount
plus (ii) unless converted after any Regular Record Date and on or prior to the
next succeeding Interest Payment Date in which case the provisions of the last
paragraph of Section 307 shall apply, accrued and unpaid interest on the
Converted Amount through the Conversion Date plus (iii) if the Conversion Date
is prior to the First Redemption Date, an amount equal to Special Interest on
the Converted Amount.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as amended
and 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.
"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.
"Twenty Day Average" means, with respect to any prices and in
connection with the calculation of Fair Market Value, the average of such prices
over the twenty Business Days ending on the Business Day immediately prior to
the day as of which "Fair Market Value" is being determined.
"Vice President", when used with respect to the Company means any vice
president, whether or not designated by a number or a word or words added before
or after the title "vice president".
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"Voting Stock" of a Person means any class or all classes of capital
stock or other interests (including partnership interests) or Indebtedness of
such Person then outstanding and normally entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof.
"Wholly Owned Subsidiary" of any Person means any Subsidiary of such
Person of which all the outstanding voting securities (other than in the case of
a foreign Subsidiary, directors' qualifying shares or an immaterial amount of
shares required to be owned by other Persons pursuant to applicable law) are
owned by such Person or any Wholly Owned Subsidiary of such Person.
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company 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 Officers' Certificate, if to be given by an officer of the Company, 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:
(a) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein relating
thereto; (b) 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; (c) 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
(b) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 103. 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 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 may be based,
insofar as it relates to legal matters, upon a certification or Opinion of
Counsel unless such officer knows, or in the exercise of reasonable care should
know, that the certificate or opinion 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 of
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public officials or upon a certificate or opinion of, or representations by, an
officer or officers of the Company stating that the information with respect to
such factual matters is in the possession of the Company, 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 104. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided 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 agents 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. Such
instrument or instruments (and the action 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 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may be proved in any
manner which the Trustee deems sufficient.
(c) The Company may, in the circumstances permitted by the Trust
Indenture Act, fix any day as the record date for the purpose of determining the
Holders entitled to give or take any request, demand, authorization, direction,
notice, consent, waiver or other action, or to vote on any action, authorized or
permitted to be given or taken by Holders. If not set by the Company prior to
the first solicitation of a Holder made by any Person in respect of any such
action, or, in the case of any such vote, prior to such vote, the record date
for any such action or vote shall be the 30th day (or, if later, the date of the
most recent list of Holders required to be provided pursuant to Section 701)
prior to such first solicitation or vote, as the case may be. With regard to any
record date, only the Holders on such date (or their duly designated proxies)
shall be entitled to give or take, or vote on, the relevant action.
Notwithstanding the foregoing, the Company shall not set a record date for, and
the provisions of this paragraph shall not apply with respect to, any Act by the
Holders pursuant to Section 501, 502 or 512.
(d) The ownership of Securities shall be proved by the Security
Register.
(e) Any 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 therefor or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Security.
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(f) Without limiting the foregoing, a Holder entitled hereunder to
give or 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 different part of such principal amount.
SECTION 105. Notices, Etc., to Trustee and Company.
Any Act of Holders or other documents provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,
(a) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing to or
with the Trustee at the address specified in the first paragraph of this
Indenture or such other address as previously furnished in writing by the
Trustee, or
(b) the Company 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, addressed to it
at the address of its principal executive offices specified in the first
paragraph of this instrument or at any other address previously furnished in
writing to the Trustee by the Company.
SECTION 106. 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, 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 any notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. 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 107. 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 such Act to be a part of and
govern this Indenture, the latter provision shall control. If any provision of
this Indenture modifies or excludes any provision of
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the Trust Indenture Act that may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or to be
excluded, as the case may be.
SECTION 108. 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 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 110. 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 111. 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, the holders of Senior Indebtedness and the Holders of Securities, any
benefit or any legal or equitable right, remedy or claim under this Indenture.
SECTION 112. Governing Law.
This Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New York, but without regard to the
principles of conflicts of laws of such State.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security or the last date on which a Holder has the right to
convert his Securities 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, or conversion of the Securities need not be made
on such date, but may be made on the next succeeding Business Day with the same
force and effect as if made on the Interest Payment Date or Redemption Date, or
at the Stated Maturity, or on such last day for conversion; provided, that no
interest shall accrue for the period from and after such Interest Payment Date,
Redemption Date, Stated Maturity or last day for conversion, as the case may be.
SECTION 114. No Security Interest Created.
Nothing in this Indenture or in the Securities, express or implied,
shall be construed to constitute a security interest under the Uniform
Commercial Code or similar
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legislation, as now or hereafter enacted and in effect in any jurisdiction where
property of the Company or its Subsidiaries is or may be located.
SECTION 115. Limitation on Individual Liability.
No recourse under or upon any obligation, covenant or agreement
contained in this Indenture or in any Security, or for any claim based thereon
or otherwise in respect thereof, shall be had against any incorporator,
shareholder, officer or director, as such, past, present or future, of the
Company or any successor corporation, either directly or through the Company,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being expressly
understood that this Indenture and the obligations issued hereunder are solely
corporate obligations, and that no such personal liability whatever shall attach
to, or is or shall be incurred by, the incorporators, shareholders, officers or
directors, as such, of the Company or any successor Person, or any of them,
because of the creation of the indebtedness hereby authorized, or under or by
reason of the obligations, covenants or agreements contained in this Indenture
or in any Security or implied therefrom; and that any and all such personal
liability of every name and nature, either at common law or in equity or by
constitution or statute, of, and any and all such rights and claims against,
every such incorporator, shareholder, officer or director, as such, because of
the creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any
Security or implied therefrom, are hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Indenture and
the issuance of such Security.
ARTICLE II
SECURITY FORMS
SECTION 201. Forms Generally.
The Securities and the Trustee's certificates of authentication shall
be in substantially the forms set forth in this Article, 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 any law or with the rules of any securities exchange on
which the Securities are listed or as may, consistently herewith, be determined
by the officers executing such Securities, as evidenced by their execution of
the Securities.
The definitive Securities (other than a Global Security) shall be
printed, lithographed or engraved or produced by any combination of these
methods on steel engraved borders or may be produced in any other manner
permitted by the rules of any securities exchange on which the Securities may be
listed, all as determined by the officers executing such Securities, as
evidenced by their execution of such Securities. A Global Security may be in
the foregoing form or may be in typewritten form.
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SECTION 202. Form of Face of Security.
A legend in substantially the following form shall appear on the face
of each Security (unless otherwise permitted by the provisions of Section
313(b)):
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED OR SOLD EXCEPT
IN COMPLIANCE THEREWITH. THIS SECURITY IS SUBJECT TO RESTRICTIONS ON TRANSFER
AS SET FORTH IN THE INDENTURE DATED AS OF APRIL 30, 1999.
THIS SECURITY IS ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID"), AS
DEFINED IN SECTION 1273 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, AND
THE REGULATIONS THEREUNDER. FOR INFORMATION ABOUT THE ISSUE PRICE OF THIS DEBT
INSTRUMENT, THE AMOUNT OF OID, THE ISSUE DATE, AND THE YIELD TO MATURITY,
CONTACT THE CHIEF FINANCIAL OFFICER OF THE COMPANY AT 800 CONNECTICUT AVENUE,
N.W., SUITE 1111, WASHINGTON, D.C. 20006.
A legend in substantially the following form shall appear on the face
of each Global Security:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
REFERRED TO BELOW AND IS REGISTERED IN THE NAME OF THE DEPOSITARY OR A NOMINEE
OF THE DEPOSITARY, WHICH MAY BE TREATED BY THE COMPANY, THE TRUSTEE AND ANY
AGENT THEREOF AS THE OWNER AND HOLDER OF THIS SECURITY FOR ALL PURPOSES.
A legend in substantially the following form shall also appear on the
face of each Global Security for which the Depository Trust Company is to be the
Depositary:
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.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR REGISTERED
SECURITIES IN DEFINITIVE REGISTERED FORM, THIS GLOBAL SECURITY MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY
OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY
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OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE
OF SUCH SUCCESSOR DEPOSITARY.
BUILDING ONE SERVICES CORPORATION
7 1/2% Convertible Junior Subordinated Debentures Due 2012
No. ________ $___________
BUILDING ONE SERVICES CORPORATION, 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, upon presentment and
surrender hereof, the principal sum of ________________ Dollars on _______,
2012, and to pay interest thereon from and including the date of the initial
issuance of Securities under this Indenture or from and including the most
recent Interest Payment Date to which interest has been paid or duly provided
for, quarterly on February 1, May 1, August 1 and November 1, in each year,
commencing August 1, 1999 at the rate of 7 1/2% per annum (provided, that, if
the Charter Amendment has not been Duly Adopted by the Charter Amendment
Deadline, the interest rate applicable to the principal sum of the Securities
shall be increased to 12 1/2% from and after the Charter Amendment Deadline
until the date the Charter Amendment is Duly Adopted, whereupon it shall revert
to 7 1/2% for the periods thereafter), until the principal hereof is paid or
made available for payment. 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 April 15, July 15, October 15 or January
15 (whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. On any Interest Payment Date occurring on or prior to the
third anniversary of the Original Issuance Date, the Company shall pay interest
on this Security through the issuance of additional Securities ("Additional
Securities"), provided that the Company may, at its option, pay such interest in
whole in cash. On any Interest Payment Date occurring after the third
anniversary and on or prior to the fifth anniversary of the Original Issuance
Date, the Company shall pay interest on this Security through the issuance of
Additional Securities, provided that at the option of either the Requisite
Holders or the Company, the Company shall pay such interest in whole in cash.
Such Additional Securities shall be in an aggregate principal amount equal to
the amount of interest that would be payable with respect to this Security on
such Interest Payment Date (less all cash payments, if any, made in respect of
interest payable on such Interest Payment Date) and such Additional Securities
shall be identical to the Securities otherwise issued. Such Additional
Securities shall be issued only in denominations of $1,000 and multiples
thereof, except as provided in Section 302. Any interest due and payable in
Additional Securities which cannot be paid in Securities because such portion of
the payment would require the issuance of a Security in a denomination other
than a multiple of $1,000 shall be paid in cash, except as provided in Section
302. For purposes of the foregoing sentence, all Securities owned of record by a
Holder shall be aggregated. Except as expressly provided herein, the term
"Securities" shall include all
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Additional Securities that may be issued pursuant to this paragraph. From and
after the fifth anniversary of the Original Issuance Date, all interest on this
Security shall be paid in cash. Payment of the principal of and premium, if any,
and interest on this Security payable in cash will be made at the office or
agency of the Company maintained for that purpose pursuant to Section 1002 of
the Indenture, 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 in cash
may be made by check mailed to the address of the Person entitled thereto as
such address shall appear in the Security Register.
Upon a conversion of this Security or upon a repurchase of this
Security upon a Change of Control, the Holder shall be paid additional interest
equal to the Special Interest with respect thereto, as set forth in this
Security and in this Indenture.
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, as
applicable, 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 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. Notice of a Special Record Date shall be
given to Holders of Securities not less than ten days prior to such Special
Record Date.
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.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: _________________ BUILDING ONE SERVICES CORPORATION
Attest: By _________________________
{Title}
___________________
{Title}
SECTION 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of Securities of the
Company designated as its 71/2% Convertible Junior Subordinated Debentures Due
2012 (herein called the "Securities"), limited in aggregate principal
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amount to $100,000,000 plus the aggregate principal amount of all Additional
Securities issued under the Indenture, dated as of April 30, 1999 (herein called
the "Indenture"), between the Company and United States Trust Company of New
York, as Trustee (herein called the "Trustee", which term includes any successor
trustee under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee, the holders of Senior Indebtedness and the Holders of the Securities
and of the terms upon which the Securities are, and are to be, authenticated and
delivered.
Subject to and upon compliance with the provisions of the Indenture,
the Holder of this Security is entitled, at his option, at any time to convert
this Security (or any portion of the principal amount hereof which is $1,000 or
an integral multiple thereof), into a number of fully paid and non-assessable
shares (calculated as to each conversion to the nearest 1/100th of a share) of
Common Stock of the Company calculated by dividing the Total Conversion Amount
of this Security (or if less than the entire principal amount of the Security is
being converted, the Total Conversion Amount of the portion being converted) by
the Conversion Price in effect at the Close of Business on the Conversion Date.
Conversion shall be effected by surrender of this Security, duly
endorsed or assigned to the Company or in blank, to the Company at its office or
agency maintained for that purpose pursuant to Section 1002 of the Indenture,
accompanied by written notice to the Company in the form provided in this
Security (or such other notice as is acceptable to the Company) that the Holder
hereof elects to convert this Security, or if less than the entire principal
amount hereof is to be converted, the portion hereof to be converted, except in
case this Security or a portion hereof is called for redemption, then this
Security or such portion hereof may be converted until and including, but
(unless the Company defaults in making the payment due upon redemption) not
after, the Close of Business on the Business Day immediately preceding the
Redemption Date.
No fractional shares or scrip representing fractions of shares will be
issued on conversion, but instead of any fractional share the Company shall pay
a cash adjustment as provided in the Indenture. The Conversion Price is subject
to adjustment as provided in the Indenture. In addition, the Indenture provides
that in case of certain consolidations, mergers or statutory exchanges of
securities with another corporation to which the Company is a party or the sale
or conveyance of the assets of the Company substantially as an entirety, the
Indenture shall be amended, without the consent of any Holders of Securities, so
that this Security, if then outstanding, will be convertible thereafter, during
the period this Security shall be convertible as specified above, only into the
kind and amount of securities, cash and other property receivable upon the
consolidation, merger, statutory exchange or transfer by a holder of the number
of shares of Common Stock into which this Security was convertible immediately
prior to such consolidation, merger, statutory exchange or transfer (assuming
such holder of Common Stock failed to exercise any rights of election and
received per share the kind and amount of consideration received per share by a
plurality of non-electing shares).
The Securities are subject to redemption upon not less than 30 and not
more than 60 days' notice by mail, at any time on or after the First Redemption
Date, as a whole and not less than in whole, at the election of the Company, at
103% of the sum of (a) the principal amount thereof plus (b) accrued interest
to the Redemption Date (the "Redemption Price"),
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provided that interest installments whose Maturity is on or prior to such
Redemption Date will be payable to the Holders of such Securities, or one or
more Predecessor Securities, of record at the Close of Business on the relevant
Record Dates, all as provided in the Indenture.
If all accrued interest on the Securities has not been paid, the
Company may not purchase or acquire any Security otherwise than pursuant to a
purchase or exchange offer made on the same terms to all holders of the
Securities.
In certain circumstances involving the occurrence of a Change in
Control (as defined in the Indenture), the Holder hereof shall have the right to
require the Company to repurchase this Security (or any portion of the principal
amount hereof which is $1,000 or an integral multiple thereof) at 100% of the
principal amount hereof (or of such portion), together with accrued interest to
the Repurchase Date plus, if applicable, Special Interest, all of which shall be
paid in cash but interest installments whose Stated Maturity is on or prior to
such Repurchase Date will be payable to the Holders of such Securities, or one
or more Predecessor Securities, of record at the Close of Business on the
relevant Record Dates, all as provided in the Indenture.
In the event of conversion or repurchase of this Security in part only,
a new Security or Securities for the unconverted or unpurchased portion hereof
will be issued in the name of the Holder hereof upon the cancellation hereof.
Any Securities called for redemption, unless surrendered for conversion
by the Close of Business on the Business Day immediately preceding the date
fixed for redemption, are subject to being purchased from the Holder of such
Securities at the redemption price by one or more investment banking firms or
other purchasers who may agree with the Company to purchase such Securities and
convert them into Common Stock.
The indebtedness evidenced by this Security is, to the extent provided
in the Indenture, subordinate and subject in right of payment to the prior
payment in full in cash or Cash Equivalents of all Senior Indebtedness, and this
Security is issued subject to the provisions of the Indenture with respect
thereto. Each Holder of this Security, by accepting the same, (a) agrees to and
shall be bound by such provisions, (b) authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to effectuate the
subordination so provided, and (c) appoints the Trustee his attorney-in-fact for
any and all such purposes.
If an Event of Default shall occur and be continuing, the principal of
all the Securities may be declared due and payable 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 not
less than 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
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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.
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 or to convert this Security as provided herein and
in the Indenture.
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 any place where the principal of and premium,
if any, and interest on this Security are payable, 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, in each case, with an appropriate signature
guarantee, 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.
The Securities are issuable only in fully 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 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 except as provided in the Indenture. 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, except as provided in this Security, 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.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
{FORM OF CONVERSION NOTICE}
TO BUILDING ONE SERVICES CORPORATION:
The undersigned registered owner of this Security hereby irrevocably
exercises the option to convert this Security, or the portion hereof (which is
$1,000 or a multiple thereof) designated below, into shares of Common Stock in
accordance with the terms of the Indenture referred to in this Security, and
directs that the shares issuable and deliverable upon the
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conversion, together with any check in payment for a fractional share and any
Security representing any unconverted principal amount hereof, be issued and
delivered to the registered owner hereof unless a different name has been
provided below. If shares or any portion of this Security not converted are to
be issued in the name of a person other than the undersigned, the undersigned
will pay all transfer taxes payable with respect thereto.
Dated: _________________________
-------------------------
-------------------------
Signature(s)
Signature(s) must be guaranteed by an Eligible Guarantor Institution
with membership in an approved signature guarantee program pursuant to Rule
17Ad-15 under the Exchange Act.
______________________________
Signature Guarantee
Fill in for registration of shares of Common Stock if they are to be
delivered, or Securities if they are to be issued, other than to and in the name
of the registered owner:
______________________________
(Name)
______________________________
(Street Address)
______________________________
(City, State and Zip code)
(Please print name and address)
Register: _____ Common Stock
_____ Securities
(Check appropriate line(s)).
Principal amount to be converted (if less than all):
$__________.000
______________________________
Social Security or other Taxpayer
Identification Number of owner
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{Form of Option of Holder to Elect Purchase}
If you want to elect to have this Security purchased by the Company
pursuant to Section 1401 of the Indenture, check this box [_].
If you want to elect to have only part of the Security purchased by
the Company pursuant to Section 1401 of the Indenture, state the amount you
elect to have purchased: $ _____
Date:____________ Your Signature ____________________________________________
(Sign exactly as your name appears on the Security)
Tax Identification No.: _______________________
______________________
Signature Guarantee
SECTION 204. Form of Trustee's Certificate of Authentication.
The Trustee's certificate of authentication shall be in substantially
the following form:
This is one of the Securities referred to in the within-mentioned
Indenture.
_____________________, as Trustee
By ____________________________
Authorized Signatory
ARTICLE III
THE SECURITIES
SECTION 301. Title and Terms.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to $100,000,000,
except for Securities authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Securities pursuant to Section 304,
305, 306, 906, 1302 or 1405 and except for Additional Securities.
The Securities shall be known and designated as the "7 1/2%
Convertible Junior Subordinated Debentures Due 2012" of the Company. Their
Stated Maturity shall be April 30, 2012 and they shall bear interest at the rate
of 7 1/2% per annum (provided, that, if the Charter Amendment has not been Duly
Adopted by the Charter Amendment Deadline, the interest rate
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applicable to the principal amount of the Securities shall be increased to
121/2% from and after the Charter Amendment Deadline until the date the Charter
Amendment is Duly Adopted, whereupon it shall revert to 71/2% for the periods
thereafter), from and including the Original Issuance Date or from and including
the most recent Interest Payment Date to which interest has been paid or duly
provided for, as the case may be, payable quarterly on February 1, May 1, August
1, and November 1, commencing August 1, 1999, until the principal thereof is
paid or made available for payment. Each payment of interest shall include
interest accrued to but excluding the Interest Payment Date on which payment is
to be made. The Holders of the Securities shall also be entitled to receive
Special Interest from time to time to the extent provided in the Securities.
The principal of and premium, if any, and interest on the Securities
shall be payable at the office or agency of the Company maintained for such
purpose pursuant to Section 1002; provided, however, that at the option of the
Company payment of interest in cash may be made by check mailed to the address
of the Person entitled thereto as such address shall appear in the Security
Register.
The Securities shall be redeemable as provided in Article XI.
The Securities shall be subordinated in right of payment to the prior
payment in full in cash or Cash Equivalents of all Obligations on or relating to
Senior Indebtedness as provided in Article XII.
The Securities shall be convertible as provided in Article XIII.
The Securities shall be subject to repurchase at the option of the
Holder as provided in Article XIV.
SECTION 302. Denominations.
The Securities shall be issuable only in fully registered form without
coupons and only in denominations of $1,000 and any integral multiple thereof;
provided that the Company may issue fractional Securities to the extent that it
- --------
is prohibited under the Credit Facility from paying cash in lieu of issuing such
fractional Securities.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its President or one of its Vice Presidents, under its
corporate seal or a facsimile thereof reproduced thereon 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 to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
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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 either at one time or from time to time pursuant
to such instructions as may be described therein 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 duly
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 and is entitled to the
benefits of the Indenture.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities, the Company may
execute, and upon receipt of a 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. Every such temporary Security
shall be executed by the Company and shall be authenticated and delivered by the
Trustee upon the same conditions and in substantially the same manner, and with
the same effect, as the definitive Security or Securities in lieu of which it is
issued.
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 1002, 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 one or more definitive Securities of a like
principal amount of authorized denominations. Until so exchanged the temporary
Securities shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities.
For purposes of this Section 304 each Global Security shall be
considered a definitive Security.
SECTION 305. Registration, Registration of Transfer and Exchange.
(a) The Company shall cause to be kept at the Corporate Trust Office
of the Trustee a register (the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Trustee is hereby
appointed "Security Registrar" for the purpose of registering
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Securities and transfers of Securities as herein provided. At all reasonable
times the Security Register shall be open for inspection by the Company.
Upon surrender for registration of transfer of any Security at an
office or agency of the Company designated pursuant to Section 1002 for such
purpose, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of any authorized denominations and of a like aggregate principal
amount.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denominations and of a like aggregate principal
amount, upon surrender of the Securities to be exchanged at the office or agency
maintained for that purpose. 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.
(b) 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, and, in the case of a transfer, with an
appropriate guarantee of signature.
No service charge shall be made for any registration of transfer or
exchange of Securities except as provided in Section 306. 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 304, 906, 1302
or 1405 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
pursuant to Section 1105 and ending at the Close of Business on the day of such
mailing, (ii) to register the transfer of or exchange of any Security to be
redeemed or (iii) to register the transfer or exchange of any Securities
surrendered for conversion or repurchase upon the occurrence of a Change in
Control.
The provisions of clauses (1), (2), (3), (4) and (5) below shall apply
only to Global Securities;
(1) Each Global Security authenticated under this Indenture
shall be registered in the name of the Depositary designated for such
Global Security or a nominee thereof and delivered to such Depositary or a
nominee thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.
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(2) Notwithstanding any other provision in this Indenture, no
Global Security may be exchanged in whole or in part for Securities
registered, and no transfer of a Global Security in whole or in part may be
registered, in the name of any Person other than the Depositary for such
Global Security or a nominee thereof unless (i) such Depositary (A) has
notified the Company that it is unwilling or unable to continue as
Depositary for such Global Security or (B) has ceased to be a clearing
agency registered under the Exchange Act or (ii) the Company at any time in
its sole discretion determines not to have Global Securities and shall so
notify the Depositary and Trustee.
(3) Subject to Clause (2) above, any exchange of a Global
Security for other Securities may be made in whole or in part, and all
Securities issued in exchange for a Global Security or any portion thereof
shall be registered in such names as the Depositary for such Global
Security shall direct.
(4) Every Security authenticated and delivered upon
registration of transfer of, or in exchange for or in lieu of, a Global
Security or any portion thereof, whether pursuant to this Article III or
otherwise, shall be authenticated and delivered in the form of, and shall
be, a Global Security, unless such Security is registered in the name of a
Person other than the Depositary for such Global Security or a nominee
thereof.
(5) The Depositary or its nominee, as registered owner of a
Global Security, shall be the Holder of such Global Security for all
purposes under this Indenture and the Securities, and owners of beneficial
interests in a Global Security shall hold such interests pursuant to the
Applicable Procedures. Accordingly, any such owner's beneficial interest in
a Global Security will be shown only on, and the transfer of such interest
shall be effected only through records maintained by the Depositary or its
nominee or its Agent Members and such owners of beneficial interests in a
Global Security will not be considered the owners or holders thereof.
Neither the Company nor the Trustee will have any responsibility or
obligation to the Depositary or any of its Agent Members with respect to
(i) the accuracy of any records maintained by the Depositary (ii) the
payment by the Depositary or any Agent Members of any amount due to any
owner of beneficial interests in a Global Security in respect of any
Securities, (iii) the delivery of any notice by the Depositary or any Agent
Member, or (iv) any other action taken by the Depositary or any Agent
Members.
(c) Nothing contained in this Section 305 shall be deemed to impair
the Holders' rights to convert the Securities.
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SECTION 306. 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 (a) evidence
to their satisfaction of the destruction, loss or theft of any Security and (b)
such security or indemnity as may be required by them to save each of them and
any agent of either 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 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, 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 307. Payment of Interest; 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. At the
option of the Company, cash interest on any Security may be paid by mailing
checks to the addresses of the Holders thereof as such addresses appear in the
Securities Register.
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 Clauses (a) or (b) below:
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(a) 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, which payment date shall be at least 30 calendar days after
such notice is delivered by the Company to the Trustee (or such shorter period
as is satisfactory to the Trustee), 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 10 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 of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder at his address as it appears
in the Security Register, 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 (b).
(b) 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.
In the case of any Security which is converted after any Regular Record
Date and on or prior to the next succeeding Interest Payment Date (other than
any Security whose Maturity is prior to such Interest Payment Date), interest
whose Stated Maturity is on such Interest Payment Date shall be payable on such
Interest Payment Date notwithstanding such conversion, and such interest
(whether or not punctually paid or duly provided for) 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 such Regular Record Date; provided,
however, that Securities so surrendered for conversion shall (except in the case
of Securities or portions thereof (i) which have been called for redemption or
(ii) as to which there exists a default in the payment of interest thereon) be
accompanied by, at the option of the Holder of this Security, either (i) payment
in funds acceptable to the Company of an amount equal to the interest payable on
such
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Interest Payment Date on the principal amount being surrendered for conversion
or (ii) the delivery of Securities to the Company for surrender having a
principal amount equal to the interest payable on such Interest Payment Date on
the principal amount being surrendered for conversion.
SECTION 308. 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 307) 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 309. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer, exchange or conversion shall, if surrendered to any Person other than
the Trustee, be delivered to the Trustee and shall be promptly canceled by it.
The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and all Securities so delivered
shall be promptly canceled by the Trustee. No Securities shall be authenticated
in lieu of or in exchange for any Securities canceled as provided in this
Section, except as expressly permitted by this Indenture. All canceled
Securities held by the Trustee shall be disposed of as directed by a Company
Order.
SECTION 310. Computation of Interest.
Interest on the Securities shall be computed on the basis of a 360-day
year of twelve 30-day months.
SECTION 311. CUSIP Number.
The Company in issuing the Securities may use a "CUSIP" number and, if
it does so, the Trustee shall use the CUSIP number in notices of redemption or
exchange as a convenience to Holders; provided that such notice may state that
no representation is made as to the correctness or accuracy of the CUSIP number
printed in the notice or on the Securities and that reliance may be placed only
on the other identification numbers printed on the Securities. The Company shall
promptly notify the Trustee of any change in the CUSIP number.
SECTION 312. Restrictions on Transfer.
From and after the Original Issuance Date and their respective dates
of issuance, as the case may be, neither the Securities, any Additional
Securities nor any interest therein shall be transferable except upon the
conditions specified in Sections 312 through 314, which conditions are intended
to ensure compliance with the provisions of the Securities Act in respect
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of the transfer of any of the Securities, any Additional Securities or any
interest therein. Each Holder will cause any proposed transferee of its
Securities and any Additional Securities (or any interest therein) to agree that
any transfer thereof shall be subject to the provisions and upon the conditions
specified in Sections 312 through 314.
SECTION 313. Restrictive Legends.
(a) Each certificate of Securities shall (unless otherwise permitted
by the provisions of Section 313(b) and Section 314) include a legend in
substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED OR SOLD
EXCEPT IN COMPLIANCE THEREWITH. THIS SECURITY IS SUBJECT TO
RESTRICTIONS ON TRANSFER AS SET FORTH IN THE INDENTURE DATED AS OF APRIL
30, 1999.
(b) Subject to Section 314, any holders of Securities registered
pursuant to the Securities Act and qualified under applicable state securities
laws may exchange such Securities on transfer for new Securities that shall not
bear the legend set forth in paragraph (a) of this Section 313.
SECTION 314. Notice of Proposed Transfers.
Upon any proposed transfer of Securities, the Company and the Trustee
shall register the transfer of such Securities if the Company and the Trustee
shall have received (i) to the extent required to ensure compliance with the
Securities Act, an opinion of counsel reasonable satisfactory to the Company,
addressed to the Company, to the effect that the proposed transfer of the
Securities may be effected without registration under the Securities Act, and
(ii) representation letters in form and substance reasonably satisfactory to the
Company to ensure compliance with the provisions of the Securities Act. Each
certificate evidencing the Securities transferred as above provided shall bear
the legend set forth in Section 313(a) except that such certificate shall not
bear such legend if the opinion of counsel referred to above is to the further
effect that neither such legend nor the restrictions on transfer in Sections 312
through 314 are required in order to ensure compliance with the provisions of
the Securities Act.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further
effect (except as to rights of conversion or registration of transfer or
exchange of Securities herein expressly provided for), and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
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(a) either
(i) all Securities theretofore authenticated and delivered
(other than (A) Securities which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 306 and (B)
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 1003) have
been delivered to the Trustee for cancellation; or
(ii) all such Securities not theretofore delivered to the
Trustee for cancellation
(A) have become due and payable, or
(B) will become due and payable at their Stated
Maturity within one year, or
(C) 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, or
(D) are delivered to the Trustee for conversion in
accordance with Article XIII;
and the Company, in the case of (A), (B), (C) or (D) above, has
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 to the date of such 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;
(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company, including but not limited to all amounts due to the
Trustee under Section 607 hereof;
(c) no Default or Event of Default with respect to this Indenture or
the Notes shall have occurred and be continuing on the date of any such deposit
or shall occur as a result of such deposit and such deposit will not result in a
breach or violation of, or constitute a default under, any other material
agreement or instrument (including the Credit Facility) to which the Company is
a party or by which it is bound; and
(d) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, 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, the obligations of the Company to the Trustee under Section 607, the
obligations of the Trustee to any Authenticating Agent under Section 614 and, if
money shall have been deposited with the Trustee pursuant to subclause (ii) of
Clause (a) of this
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Section, the obligations of the Trustee under Section 402 and the last paragraph
of Section 1003 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 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. All moneys deposited with the Trustee pursuant to Section 401 (and held
by it or any Paying Agent) for the payment of Securities subsequently converted
shall be returned to the Company upon Company Request.
SECTION 403. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article IV by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to this Article IV until such time as the Trustee or Paying Agent is
permitted to apply all money held in trust with respect to the Securities;
provided, however, that if the Company makes any payment of principal of or any
premium or interest on any Security following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of the
Securities to receive such payment from the money so held in trust.
ARTICLE V
REMEDIES
SECTION 501. 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 occasioned by the provisions of Article XII or be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) default in the payment of any interest upon any Security, when it
becomes due and payable, whether or not such payment is prohibited by the
provisions of Article XII, and continuance of such default for a period of 30
days; or
(b) default in the payment of the principal of or premium, if any, on
any Security at its Maturity, whether or not such payment is prohibited by the
provisions of Article XII (including the failure to make a payment to purchase
Securities tendered pursuant to a Change of Control on the date specified for
such payment in the offer to repurchase); or
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(c) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture (other than a covenant or warranty a default in
whose performance or whose breach is elsewhere in this Section specifically
dealt with), and continuance of such default or breach for a period of 45 days
after there has been given, by registered or certified mail, to the Company by
the Trustee or to the Company and the Trustee by the Holders of at least 25% in
principal amount of the Outstanding Securities a written notice specifying such
default or breach and requiring it to be remedied and stating that such notice
is a "Notice of Default" hereunder; or
(d) the failure to pay at final stated maturity (giving effect to any
applicable grace periods and any extensions thereof) the principal amount of any
Indebtedness of the Company or any Significant Subsidiary of the Company which
failure continues for at least 20 days, or the acceleration of the final stated
maturity of any such Indebtedness if the aggregate principal amount of such
Indebtedness (which acceleration is not rescinded, annulled or otherwise cured
within 20 days of receipt by the Company or such Significant Subsidiary of
notice of any such acceleration), together with the principal amount of any
other such Indebtedness in default for failure to pay principal at final stated
maturity or which has been accelerated (in each case with respect to which the
20 day period described above has passed), aggregates $10.0 million or more at
any time;
(e) a final judgment or final judgments for the payment of money
against the Company or any Significant Subsidiary the entry by a court or courts
of competent jurisdiction of which remain undischarged for a period (during
which execution shall not be effectively stayed, the posting of any required
bond not being deemed an execution for purposes hereof) of 60 days, provided
that the aggregate amount of all such judgments exceeds $10.0 million (net of
amounts to which the Company or such Significant Subsidiary is entitled pursuant
to insurance policies which can reasonably be expected to be paid in the
ordinary course); or
(f) the entry by a court having jurisdiction in the premises of (i) a
decree or order for relief in respect of the Company or any Significant
Subsidiary in an involuntary case or proceeding under any applicable Federal or
state bankruptcy, insolvency, reorganization or other similar law or (ii) a
decree or order adjudging the Company or any Significant Subsidiary a bankrupt
or insolvent, or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company or any
Significant Subsidiary under any applicable Federal or State 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 its property, or ordering the winding up or liquidation of
its affairs, and the continuance of any such decree or order for relief or any
such other decree or order unstayed and in effect for a period of 90 consecutive
days; or
(g) the commencement by the Company or any Significant Subsidiary of a
voluntary case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or of any other case or
proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to
the entry of a decree or order for relief in respect of the Company or any
Significant Subsidiary in an involuntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other similar law or
to the commencement of any bankruptcy or insolvency case or proceeding against
it, or the filing by it
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of a petition or answer or consent seeking reorganization or relief under any
applicable Federal or State law, or the consent by it to the filing of such
petition or to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official 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.
Upon receipt by the Trustee of any Notice of Default pursuant to this
Section 501, a record date shall automatically and without any other action by
any Person be set for the purpose of determining the Holders of Outstanding
Securities entitled to join in such Notice of Default, which record date shall
be the Close of Business on the day the Trustee receives such Notice of Default.
The Holders of Outstanding Securities on such record date (or their duly
appointed agents), and only such Persons, shall be entitled to join in such
Notice of Default, whether or not such Holders remain Holders after such record
date: provided, that unless such Notice of Default shall have become effective
by virtue of the Holders of the requisite principal amount of Outstanding
Securities on such record date (or their duly appointed agents) having joined
therein on or prior to the 90th day after such record date, such Notice of
Default shall automatically and without any action by any Person be canceled and
of no further force or effect.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in
Section 501(f) or (g) with respect to the Company) occurs and is continuing,
then and in every such case the Trustee or the Holders of not less than 25% in
principal amount of the Outstanding Securities may declare the principal of all
the Securities to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by Holders), specifying the respective
Event of Default and stating that it is a "notice of acceleration" (the
"Acceleration Notice"), and the same (i) shall become immediately due and
payable or (ii) if there are any amounts outstanding under the Credit Facility,
shall become immediately due and payable upon the first to occur of an
acceleration under the Credit Facility or 5 Business Days after receipt by the
Company and the Representative under the Credit Facility of such Acceleration
Notice unless all Events of Default specified in the respective Acceleration
Notice have been cured within said five Business Day period. In the case of an
Event of Default specified in Section 501(f) or (g) with respect to the Company,
all unpaid principal of and accrued interest on the Securities then outstanding
shall be due and payable immediately without any declaration or other act on the
part of the Trustee or the holders of Securities.
At any time after such a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this Article provided, the Holders of a majority
in principal amount of the Outstanding Securities, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if:
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay (i) all overdue interest on all Securities, (ii) the principal
of and premium, if any, on any Securities which have become due otherwise than
by such declaration of acceleration and interest thereon
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at the rate borne by the Securities, (iii) to the extent that payment of such
interest is lawful, interest upon overdue interest at the rate borne by the
Securities, and (iv) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel;
and
(b) all Events of Default, other than the nonpayment of the principal
of Securities which has become due solely by such declaration of acceleration,
have been cured or waived as provided in Section 513.
No such rescission and waiver shall affect any subsequent default or
impair any right consequent thereon.
Upon receipt by the Trustee of any declaration of acceleration, or any
rescission and annulment of any such declaration, pursuant to this Section 502,
a record date shall automatically and without any other action by any Person be
set for the purpose of determining the Holders of Outstanding Securities
entitled to join in such declaration, or rescission and annulment, as the case
may be, which record date shall be the Close of Business on the day the Trustee
receives such declaration, or rescission and annulment, as the case may be. The
Holders of Outstanding Securities on such record date (or their duly appointed
agents), and only such Persons, shall be entitled to join in such declaration,
or rescission and annulment, as the case may be, whether or not such Holders
remain Holders after such record date; provided, that unless such declaration,
or rescission and annulment, as the case may be, shall have become effective by
virtue of Holders of the requisite principal amount of Outstanding Securities on
such record date (or their duly appointed agents) having joined therein on or
prior to the 90th day after such record date, such declaration, or rescission
and annulment, as the case may be, shall automatically and without any action by
any Person be canceled and of no further force or effect.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(a) 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
(b) default is made in the payment of the principal of or premium, if
any, on any Security at the Maturity thereof,
the Company will, subject to Article XII of the Indenture, 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 borne 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.
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If an Event of Default specified in Section 503(a) or (b) occurs and
is continuing with respect to the Securities, the Trustee may recover judgment
in its own name and as trustee of an express trust against the Company for the
collection of such sums due and unpaid.
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 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company (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, including filing proofs of claim in federal bankruptcy proceedings,
to take any and all actions authorized under the Trust Indenture Act in order to
have the 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 securities or property payable or deliverable upon the conversion or
exchange of the Securities or upon any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due 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 607.
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; provided,
however, that the Trustee may, on behalf of the Holders, vote for the election
of a trustee in bankruptcy or similar official and may be a member of the
Creditors' Committee.
SECTION 505. 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,
disbursements 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.
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SECTION 506. Application of Money Collected.
Subject to Article XII, 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 payment of all amounts due the Trustee under Section 607;
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; and
THIRD: The balance, if any, to the Company.
SECTION 507. Limitation on Suits.
No Holder of any Security shall have any 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
(a) such Holder has previously given written notice to the Trustee of a
continuing Event of Default; (b) 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; (c) 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; (d) the Trustee for 60 days after its
receipt of such notice, request and offer of indemnity has failed to institute
any such proceeding; and (e) 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 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest and to Convert.
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
307) 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 repurchase pursuant to Article XIV, on the Repurchase Date) and to
convert such Security in accordance with Article XIII and to institute suit for
the enforcement of
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any such payment and right to convert, and such rights shall not be impaired
without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in Section 306, 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 511. 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 512. Control by Holders.
The Requisite Holders shall have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee
or exercising any trust or power conferred on the Trustee; provided, that
(a) such direction shall not be in conflict with any rule of law or
with this Indenture; and
(b) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction; and
(c) subject to the provisions of Section 601, the Trustee shall have
the right to decline to follow any such direction if the Trustee in good faith
shall determine that the action so
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directed would involve the Trustee in personal liability or would be unduly
prejudicial to Holders not joining in such direction.
Upon receipt by the Trustee of any such direction, a record date shall
automatically and without any other action by any Person be set for the purpose
of determining the Holders of Outstanding Securities entitled to join in such
direction, which record date shall be the Close of Business on the day the
Trustee receives such direction. The Holders of Outstanding Securities on such
record date (or their duly appointed agents), and only such Persons, shall be
entitled to join in such direction, whether or not such Holders remain Holders
after such record date; provided, that unless such direction shall have become
effective by virtue of Holders of the requisite principal amount of Outstanding
Securities on such record date (or their duly appointed agents) having joined
therein on or prior to the 90th day after such record date, such direction shall
automatically and without any action by any Person be canceled and of no further
force or effect.
SECTION 513. Waiver of Past Defaults.
The Requisite Holders may on behalf of the Holders of all the
Securities waive any past default hereunder and its consequences, except a
default
(a) in the payment of the principal of or premium, if any, or interest
on any Security, or, without the consent of the Holder of the Security affected,
in the repurchase of any Security or part thereof in accordance with Article
XIV, or
(b) 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 514. 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 in its discretion may require any party
litigant in such suit to file an undertaking to pay the costs of such suit, and
may assess reasonable costs against any such party litigant, including
reasonable attorneys' fees, in the manner and to the extent provided in the
Trust Indenture Act if the Trustee receives actual notice of any such default;
provided, that this Section shall not 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 in any suit for the enforcement of the right to convert any
Security in accordance with Article XIII.
SECTION 515. Waiver of Stay or Extension Laws.
The Company 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
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advantage of, any 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 (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 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as provided by
the Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. Whether or not 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.
SECTION 602. Notice of Defaults.
The Trustee shall give the Holders notice of any default hereunder in
the manner and to the extent provided by the Trust Indenture Act if the Trustee
receives actual notice of any such default; provided, however, that in the case
of any default of the character specified in Section 501(c), no such notice to
Holders shall be given until at least 30 days after the occurrence thereof. For
the purpose of this Section, the term "default" means any event which is, or
after notice or lapse of time or both would become, an Event of Default.
Notwithstanding the foregoing, the Trustee shall be entitled to withhold notice
of any default hereunder to the extent permitted by Section 315(b) of the Trust
Indenture Act.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document believed by it
to be genuine and to have been signed or presented by the proper 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 may be sufficiently evidenced by a Board Resolution;
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(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 Officers' Certificate;
(d) the Trustee may consult with counsel satisfactory to it and the
written 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 to examine the
books, records and premises of the Company, personally or by agent or attorney;
(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 and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder; and
(h) the Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the
Trustee's certificate of authentication, shall be taken as the statements of the
Company, and the Trustee and any Authenticating Agent assume 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 and any
Authenticating Agent shall not be accountable for the use or application by the
Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
608 and 613, may otherwise deal with the
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Company with the same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Security Registrar or such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee or any Paying Agent in trust hereunder need
not be segregated from other funds except to the extent required by law. The
Trustee or any Paying Agent shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees:
(a) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder as may be mutually agreed upon in
writing by the Company and the Trustee (which compensation shall not be limited
by any provision of law in regard to the compensation of a trustee of an express
trust);
(b) except as otherwise expressly provided herein, to 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 to the extent any such expense,
disbursement or advance may be attributable to its negligence or bad faith; and
(c) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of this
trust, including the costs and expenses of enforcing this Indenture against the
Company (including this Section 607) and of defending itself against any claim
(whether asserted by Holder or by the Company) or liability in connection with
the exercise or performance of any of its powers or duties hereunder.
(d) As security for the performance of the obligations of the Company
under this Section 607, the Trustee shall have a lien prior to the Securities
upon all property and funds held or collected by the Trustee as such, except
funds held in trust for the benefit of the Holders of particular Securities.
SECTION 608. Disqualification; 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.
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SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, or any State or Territory or the District of Columbia that (a) is
eligible pursuant to the Trust Indenture Act to act as such, (b) has (or, in the
case of a corporation included in a bank holding company system, whose related
bank holding company has) a combined capital and surplus of at least $50,000,000
and (c) has an office in the Borough of Manhattan, The City of New York as
required by Section 1002. If such corporation 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, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. No obligor upon the Securities or Affiliate of such obligor shall
serve as Trustee upon the Securities. 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 610. 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 611.
(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
required by Section 611 shall not have been delivered to 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 an Act of the Holders of
a majority in principal amount of the Outstanding Securities delivered to the
Trustee and to the Company.
(d) If at any time:
(i) the Trustee shall fail to comply with Section 608 after
written request therefor by the Company or by any Holder who has been a
bona fide Holder of a Security for the last six months, or
(ii) the Trustee shall cease to be eligible under Section 609
and shall fail to resign after written request therefor by the Company 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,
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then, in any such case, (A) the Company by a Board Resolution may remove the
Trustee, or (B) subject to Section 514, 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 and
such successor Trustee shall comply with the applicable requirements of Section
611. 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 611 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 the manner required by Section 611, 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 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 106. Each notice shall include the name of the
successor Trustee and the address of its Corporate Trust Office.
SECTION 611. 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 612. 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 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
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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 613. Preferential Collection of Claims Against Company.
The Trustee shall comply with Section 311 of the Trust Indenture Act,
excluding any creditor relationship listed in Section 311(b) of the Trust
Indenture Act. A Trustee who has resigned or been removed shall be subject to
Section 311 of the Trust Indenture Act to the extent indicated therein.
SECTION 614. 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, partial
conversion or partial redemption, 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 Person 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 $50,000,000 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 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 Person into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which such Authenticating Agent shall be
a party, or any Person succeeding to the corporate agency or corporate trust
business of an Authenticating Agent, shall continue to be an Authenticating
Agent, provided such Person 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
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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 mail notice of such appointment by first-class mail, postage
prepaid, to all Holders as their names and addresses appear in the Security
Register. Any successor Authenticating Agent upon acceptance of its appointment
under this Section 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 to act as such under the provisions of this Section.
Any Authenticating Agent by the acceptance of its appointment shall be
deemed to have represented to the Trustee that it is eligible for appointment as
Authenticating Agent under this Section and to have agreed with the Trustee
that: it will perform and carry out the duties of an Authenticating Agent as
herein set forth, including among other things the duties to authenticate
Securities when presented to it in connection with the original issuance and
with exchanges, registrations of transfer or redemptions or conversions thereof
or pursuant to Section 306; it will keep and maintain, and furnish to the
Trustee from time to time as requested by the Trustee, appropriate records of
all transactions carried out by it as Authenticating Agent and will furnish the
Trustee such other information and reports as the Trustee may reasonably
require; and it will notify the Trustee promptly if it shall cease to be
eligible to act as Authenticating Agent in accordance with the provisions of
this Section. Any Authenticating Agent by the acceptance of its appointment
shall be deemed to have agreed with the Trustee to indemnify the Trustee against
any loss, liability or expense incurred by the Trustee and to defend any claim
asserted against the Trustee by reason of any acts or failures to act of such
Authenticating Agent, but such Authenticating Agent shall have no liability for
any action taken by it in accordance with the specific written direction of the
Trustee.
The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 607.
If an appointment is made pursuant to this Section, the Securities may
have endorsed thereon, in lieu of 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.
As Trustee
By_____________________________________
As Authenticating Agent
By_____________________________________
Authorized Officer
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ARTICLE VII
HOLDERS' LIST AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders and the
Representative under the Credit Facility .
The Company will furnish or cause to be furnished to the Trustee:
(a) quarterly not more than 15 days after each Regular Record Date, a
list, in such form as the Trustee may reasonably require containing all the
information in the possession or control of the Company, or any of its Paying
Agents, other than the Trustee, as to the names and addresses of the Holders as
of such Regular Record Date, and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished. Notwithstanding the foregoing, so long as the Trustee is the
Security Registrar, no such list shall be required to be furnished.
(c) the name(s) and address(es) of the Representative(s) under the
Credit Facility who may be entitled to receive an Acceleration Notice pursuant
to Section 502.
SECTION 702. Preservation of Information; Communication 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 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(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.
(c) The Company, the Trustee and any other Person shall have the
protection of Section 312(c) of the Trust Indenture Act.
SECTION 703. Reports by Trustee.
(a) On or prior to July 15 of each year commencing July 15, 1999, the
Trustee shall transmit to Holders such reports dated as of May 15 concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto.
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(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 notify the Trustee when the Securities are listed on any stock exchange.
SECTION 704. 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 such 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, as amended, shall be filed
with the Trustee within 15 days after the same is so required to be filed with
the Commission.
SECTION 705. Certain Notices.
(a) The Company shall notify the Trustee promptly after the Charter
Amendment becomes effective.
(b) The Company shall promptly notify the Trustee and, if the Apollo
Stockholders constitute the Requisite Holders, the Apollo Stockholders that hold
Securities of any officers' certificate or any representation or warranty given
pursuant to clause (vi) of the definition of Senior Indebtedness. Such
notification shall include a copy of such certificate or representation or
warranty. The Trustee and such Apollo Stockholders shall be entitled to rely on
such certificate or representation or warranty as if it was addressed to the
Trustee and such Apollo Stockholders.
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other Person
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person, and the Company shall not permit any Person to
consolidate with or merge into the Company, unless:
(a) in case the Company shall consolidate with or merge into another
Person or convey, transfer or lease its properties and assets substantially as
an entirety to any Person, the Person formed by such consolidation or into which
the Company is merged or the Person which acquires by conveyance or transfer, or
which leases, the properties and assets of the Company substantially as an
entirety shall be a corporation, partnership or trust, shall be organized and
validly existing under the laws of the United States of America, any State
thereof or the District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form satisfactory
to the Trustee, the due and punctual payment of the principal of and premium, if
any, and interest on all the Securities and the performance or observance of
every covenant of this Indenture on the part of the Company to be performed or
observed and shall have provided for conversion rights in accordance with
Section 1311;
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(b) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would become
an Event of Default, shall have happened and be continuing;
(c) such consolidation, merger, conveyance, transfer or lease does not
adversely affect the validity or enforceability of the Securities; and
(d) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required in
connection with such transaction, such supplemental indenture comply with this
Article and that all conditions precedent herein provided for relating to such
transaction have been complied with.
SECTION 802. Successor Substituted.
Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety in accordance with
Section 801, the successor Person formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein, and thereafter, except in the case
of a lease, the predecessor Person shall be relieved of all obligations and
covenants under this Indenture and the Securities.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(a) to evidence the succession of another Person to the Company, or
successive successions, and the assumption by any such successor of the
covenants of the Company herein and in the Securities; or
(b) to add to the covenants of the Company for the benefit of the
Holders or an additional Event of Default, or to surrender any right or power
herein conferred upon the Company; or
(c) to secure the Securities; or
(d) to make provision with respect to the conversion rights of Holders
pursuant to the requirements of Section 1311; or
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(e) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities; or
(f) to cause the Indenture and the Securities to comply with
applicable law, including the Securities Act and Trust Indenture Act; or
(g) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent 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 such action pursuant to this clause (g) shall not
adversely affect the interests of the Holders in any material respect.
SECTION 902. 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, when authorized by a Board
Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto 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 supplemental indenture shall, without the
consent of the Holder of each outstanding Security,
(a) change the Stated Maturity of the principal of, or any installment
of interest on, any Security, or reduce the principal amount thereof or the rate
of interest thereon or any premium payable upon the redemption thereof, or
impair the right to institute suit for the enforcement of any such payment on or
after the Stated Maturity thereof (or, in the case of redemption, on or after
the Redemption Date), or make the principal thereof or any premium or interest
thereon payable in any coin or currency other than that provided for in the form
of Security hereinabove set forth or modify the provisions of this Indenture
with respect to the subordination of the Securities in a manner adverse to the
Holders, or impair the right to convert the Securities into Common Stock or to
require the Company to repurchase the Securities upon the occurrence of a Change
in Control, subject to the terms set forth herein, or
(b) reduce the percentage in principal amount of the Outstanding
Securities, the consent of whose Holders is required for any such supplemental
indenture, or the consent of whose Holders is required for any waiver of
compliance with certain provisions of this Indenture or certain defaults
hereunder and their consequences provided for in this Indenture, or
(c) modify any of the provisions of this Section, Section 513 or
Section 1006, except to increase any such percentage or to provide that certain
other provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Security affected thereby; provided,
however, that this Clause shall not be deemed to require the consent of any
Holder with respect to changes in the references to "the Trustee" and
concomitant changes in this Section and Section 1006, or the deletion of this
proviso, in accordance with the requirements of Section 901(e).
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It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 903. 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 601) shall be fully protected in relying upon, an
Officers' Certificate and 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 (except to the extent required in the case of a
supplemental indenture entered into under Section 901(f)) be obligated to, enter
into any such supplemental indenture which adversely affects in a material way
the Trustee's own rights, duties or immunities under this Indenture or
otherwise.
SECTION 904. 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 905. 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 906. 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. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
SECTION 907. Notice of Supplemental Indenture.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to Section 902, the Company shall transmit to
the Holders a notice setting forth the substance of such supplemental indenture.
SECTION 908. Effect on Senior Indebtedness.
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Notwithstanding the foregoing, no amendment or modification may be
made to Article XII hereof (or the defined terms used therein) without the
consent of each holder of Senior Indebtedness adversely affected thereby.
ARTICLE X
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.
The Company will 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 1002. Maintenance of Office or Agency.
The Company will maintain in New York, New York an office or agency
(which may be the Corporate Trust Office or other office of the Trustee) where
Securities may be presented or surrendered for payment, where Securities may be
surrendered for registration of transfer, where Securities may be surrendered
for exchange, conversion or repurchase in accordance with the terms of this
Indenture and where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served. The Company will give prompt
written notice to the Trustee of the location, and any change in the location,
of any 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 such presentations, surrenders,
notices and demands.
The Company may also from time to time designate one or more other
offices or agencies 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 New
York, New York for such purposes. The Company will 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 1003. Money for Security Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent, on or
before each due date of the principal of and premium, if any, or interest on any
of the Securities, the Company will 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, on or prior
to each due date of the principal of and premium, if any, or interest on any
Securities, the Company
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will deposit with a Paying Agent a sum sufficient to pay the principal and any
premium and 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 will 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 (a) comply with the provisions of the Trust Indenture Act
applicable to it as a Paying Agent and hold all sums held by it for the payment
of principal of or any premium or interest on the Securities in trust for the
benefit of the Persons entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided; and (b) at any time 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 for payment in respect of the Securities.
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 the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent 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 New York, 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 1004. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company (which as of the date hereof is December 31)
ending after the date hereof, an Officers' Certificate stating whether or not to
the best knowledge of the signers thereof the Company is in compliance with all
conditions and covenants under this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and, if the Company
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shall be in default, specifying all such defaults and the nature and status
thereof of which they may have knowledge.
SECTION 1005. Existence.
Subject to Article XIII, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence, rights (charter and statutory) and franchises; provided, however,
that the Company shall not be required to preserve any such right or franchise,
if the Board of Directors 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 1006. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
covenant or condition set forth in Section 1005, 1007 and 1009 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.
SECTION 1007. Limitation on Incurrence of Indebtedness.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume, guarantee, acquire, become
liable, contingently or otherwise, with respect to, or otherwise become
responsible for payment of (collectively, "incur") any Indebtedness; except that
(x) the Company and any of its Subsidiaries may incur any Indebtedness if, at
the time such Indebtedness is incurred and after giving effect to the incurrence
thereof, (i) no Default or Event of Default shall have occurred and be
continuing and (ii) the Consolidated Leverage Ratio of the Company is less than
4.0 to 1.0, (y) the Company and its Subsidiaries may incur Indebtedness under
the Credit Facility that would not be permitted under clause (x) above at the
time of such incurrence; provided, that, at the time of such incurrence and
after giving effect to the incurrence of such Indebtedness, the aggregate
outstanding amount of all Indebtedness incurred pursuant to this clause (y)
shall not exceed $50,000,000 and (z) the Company and its Subsidiaries may incur
Indebtedness evidenced by Interest Swap Obligations if such Interest Swap
Obligations are incurred into to protect the Company and its Restricted
Subsidiaries from fluctuations in interest rates on their outstanding
Indebtedness to the extent the notional principal amount of such Interest Swap
Obligations does not, at the time of the incurrence thereof, exceed the
principal amount of the Indebtedness to which such Interest Swap Obligations
relate.
SECTION 1008. Compliance With Investors' Rights Agreement.
The Company shall comply with the covenants applicable to it under the
Investors' Rights Agreement.
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SECTION 1009. Limitation on Restricted Payments.
The Company shall not, and shall not cause or permit any of its
Subsidiaries to, directly or indirectly, declare or pay any dividend or make any
distribution on or in respect of its Capital Stock to holders of such Capital
Stock other than to the Company or to a Wholly-Owned Subsidiary of the Company.
The Company shall not, and shall not cause or permit any of its Subsidiaries to,
directly or indirectly, (a) purchase, redeem or otherwise acquire or retire for
value any Capital Stock of the Company or any warrants, rights or options to
purchase or acquire shares of any class of such Capital Stock, or (b) make any
principal payment on, purchase, defease, redeem, prepay, decrease or otherwise
acquire or retire for value, prior to any scheduled final maturity, scheduled
repayment or scheduled sinking fund payment, any Indebtedness of the Company
that is subordinate or junior in right of payment to the Securities (each of the
foregoing actions set forth in clauses (a) and (b) being referred to as a
"Restricted Payment"), if at the time of such Restricted Payment or immediately
after giving effect thereto, (i) a Default or an Event of Default shall have
occurred and be continuing or (ii) the Company is not able to incur at least
$1.00 of additional Indebtedness in compliance with Section 1007 or (iii) the
aggregate amount of Restricted Payments (including such proposed Restricted
Payment) made subsequent to the Original Issuance Date (the amount expended for
such purposes, if other than in cash, being the fair market value of such
property as determined reasonably and in good faith by the Board of Directors of
the Company) shall exceed the sum of: (w) 50% of the cumulative Consolidated
Net Income (or if cumulative Consolidated Net Income shall be a loss, minus 100%
of such loss) of the Company earned subsequent to the Original Issuance Date and
to the end of the Company's most recently ended fiscal quarter for which
financial statements are publicly available at the time of such Restricted
Payment (the "Reference Date") (treating such period as a single accounting
period); plus (x) 100% of the aggregate net cash proceeds received by the
Company from any Person (other than a Subsidiary of the Company) from the
issuance and sale subsequent to the Original Issuance Date and on or prior to
the Reference Date of Common Stock of the Company.
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 1101. Right of Redemption.
The Securities may be redeemed at the election of the Company, in
whole but not in part, at any time on or after the First Redemption Date at the
Redemption Price specified in the form of Security hereinbefore set forth;
provided, however, that if all accrued interest (including, without limitation,
Additional Interest and Special Interest) on the Securities has not been paid,
the Company may not redeem any Security other than pursuant to a purchase or
exchange offer to all Holders of the Securities.
SECTION 1102. Applicability of Article.
Redemption of Securities at the election of the Company as permitted
by any provision of this Indenture shall be made in accordance with such
provision and this Article.
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SECTION 1103. Election to Redeem; Notice to Trustee.
The election of the Company to redeem the Securities pursuant to
Section 1101 shall be evidenced by a Board Resolution. In case of any redemption
at the election of the Company, the Company shall, at least 45 days prior to the
Redemption Date fixed by the Company (unless a shorter period shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date and of
the principal amount of Securities to be redeemed.
SECTION 1104. [Reserved.]
SECTION 1105. 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 state:
(a) the Redemption Date,
(b) the Redemption Price,
(c) the CUSIP number (if any),
(d) 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 said date,
(e) the Conversion Price, the date on which the right to convert the
Securities to be redeemed will terminate and the place or places where such
Securities may be surrendered for conversion, and
(f) the place or places where such Securities are to be surrendered
for payment of the Redemption Price. 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.
SECTION 1106. Deposit of Redemption Price.
At or prior to 10:00 am on 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 1003)
an amount of money sufficient to pay on such date the Redemption Price of, and
(except if the Redemption Date shall be an Interest Payment Date) accrued
interest on, all the Securities which are to be redeemed on that date other than
any Securities called for redemption on that date which have been converted
prior to the Redemption Date.
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If any Security called for redemption is converted, any money
deposited with the Trustee or with any Paying Agent or so segregated and held in
trust for the redemption of such Security shall (subject to any right of the
Holder of such Security or any Predecessor Security to receive interest as
provided in the last paragraph of Section 307) be paid to the Company upon
Company Request or, if then held by the Company, shall be discharged from such
trust.
SECTION 1107. 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) such Securities
shall cease to bear interest. Upon surrender of any such Security for redemption
in accordance with said notice, such Security shall be paid for by the Company
at the Redemption Price, on the later of the Redemption Date or the date such
Security is surrendered; provided, however, that installments of interest whose
Maturity is on or prior to the Redemption Date shall be payable to the 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 307.
If any Security called for redemption shall not be so paid for upon
surrender thereof for redemption as provided herein, the principal and premium,
if any, shall, until paid, bear interest from the Redemption Date at the rate
borne by the Security. The Company shall be deemed to have made payment as
provided herein if checks are mailed to the appropriate Persons not later than
the Business Day next subsequent to the Redemption Date.
SECTION 1108. [Reserved.]
SECTION 1109. Conversion Arrangements on Call for Redemption.
In connection with any redemption of Securities, the Company may
arrange for the purchase and conversion of any Securities surrendered for
redemption by an agreement with one or more investment banking firms or other
purchasers to purchase such Securities by paying to the Holders thereof, or to
the Trustee or Paying Agent in trust for such Holders, at or before 10:00 a.m.
on the Redemption Date, an amount not less than the Redemption Price, together
with interest accrued to the Redemption Date, payable by the Company on
redemption of such Securities. Notwithstanding anything to the contrary
contained in this Article XI, the obligation of the Company to pay the
Redemption Price of such Securities, together with interest accrued to the
Redemption Date, shall be satisfied and discharged to the extent such amount is
so paid by such purchasers. Pursuant to such an agreement, any Securities
tendered by the Holder thereof for redemption or not duly surrendered for
conversion by such Holder shall be deemed acquired by such purchasers from such
Holders and simultaneously surrendered by such purchasers for conversion, all as
of immediately prior to the Close of Business on the Redemption Date, subject to
payment of the above amount as aforesaid.
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ARTICLE XII
SUBORDINATION OF SECURITIES
SECTION 1201. Securities Subordinated to Senior Indebtedness.
The Company covenants and agrees, and the Trustee and each Holder of a
Security, by his acceptance thereof, likewise covenants and agrees, and each
Person holding a Security, whether upon original issuance or transfer,
assignment or exchange thereof, accepts and agrees that, to the extent and in
the manner hereinafter set forth in this Article, the indebtedness represented
by the Securities and the payment of all Obligations on each and all of the
Securities, and the amount, if any, of the Repurchase Price payable in respect
of Securities pursuant to Article XIV, are hereby expressly made subordinate and
subject in right of payment to the prior payment in full in cash or Cash
Equivalents, or such payment duly provided for to the satisfaction of the
holders of the Senior Indebtedness of all Obligations on all Senior
Indebtedness, that the subordination is for the benefit of, and shall be
enforceable directly by, the holders of Senior Indebtedness, and that each
holder of Senior Indebtedness whether now outstanding or hereafter created,
incurred, assumed or guaranteed shall be deemed to have acquired Senior
Indebtedness in reliance upon the provisions contained in this Article XII.
SECTION 1202. Payment Over of Proceeds Upon Dissolution, Etc.
(a) Upon any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, to creditors upon
any total or partial liquidation, dissolution, winding-up, reorganization,
assignment for the benefit of creditors or marshaling of assets of the Company
or in a bankruptcy, reorganization, insolvency, receivership or other similar
proceeding relating to the Company or its property, whether voluntary or
involuntary, all Obligations due or to become due upon all Senior Indebtedness
shall first be paid in full in cash or Cash Equivalents, or such payments duly
provided for to the satisfaction of the holders of Senior Indebtedness, before
any payment or distribution of any kind or character is made on account of any
Obligations on the Securities, or for the acquisition of any of the Securities
for cash or property or otherwise. Upon any such dissolution, winding-up,
liquidation, reorganization, receivership or similar proceeding, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, to which the Holders of the Securities or the Trustee
under this Indenture would be entitled, except for the provisions hereof, shall
be paid by the Company or by any receiver, trustee in bankruptcy, liquidating
trustee, agent or other Person making such payment or distribution, or by the
Holders or by the Trustee under this Indenture if received by them, directly to
the holders of Senior Indebtedness (pro rata to such holders on the basis of the
respective amounts of Senior Indebtedness held by such holders) or their
respective Representatives, or to the trustee or trustees under any indenture
pursuant to which any of such Senior Indebtedness may have been issued, as their
respective interest may appear, for application to the payment of Senior
Indebtedness remaining unpaid until all such Senior Indebtedness has been paid
in full in cash or Cash Equivalents after giving effect to any concurrent
payment, distribution or provision therefor to or for the holders of Senior
Indebtedness.
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(b) To the extent any payment on Senior Indebtedness (whether by or on
behalf of the Company, as proceeds of security or enforcement of any right to
setoff or otherwise) is declared to be fraudulent or preferential, set aside or
required to be paid to any receiver, trustee in bankruptcy, liquidating trustee,
agent or other similar Person under any bankruptcy, insolvency, receivership,
fraudulent conveyance or similar law, then, if such payment is recovered by, or
paid over to, such receiver, trustee in bankruptcy, liquidating trustee, agent
or other similar Person, the Senior Indebtedness or part thereof originally
intended to be satisfied shall be deemed to be reinstated and outstanding as if
such payment had not occurred.
(c) In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, shall be received by any Holder when such payment or
distribution is prohibited by Section 1202(a), such payment or distribution
shall be held in trust for the benefit of, and shall be paid over or delivered
to, the holders of Senior Indebtedness (pro rata to such holders on the basis of
the respective amounts of Senior Indebtedness held by such holders) or their
respective Representatives, or to the trustee or trustees under any indenture
pursuant to which any of such Senior Indebtedness may have been issued, as their
respective interests may appear, for application to the payment of Senior
Indebtedness remaining unpaid until all such Senior Indebtedness has been paid
in full in cash or Cash Equivalents, after giving effect to any concurrent
payment, distribution or provision therefor to or for the holders of such Senior
Indebtedness.
(d) The consolidation of the Company with, or the merger of the
Company with or into, another corporation or the liquidation or dissolution of
the Company following the conveyance or transfer of all or substantially all of
its assets, to another corporation upon the terms and conditions provided in
Article VIII hereof and as long as permitted under the terms of the Senior
Indebtedness shall not be deemed a dissolution, winding-up, liquidation or,
reorganization for the purposes of this Section if such other corporation shall,
as a part of such consolidation, merger, conveyance or transfer, assume the
Company's obligations hereunder in accordance with Article VIII hereof.
(e) For purposes of this Article only, the words "cash, property or
securities" shall not be deemed to include Permitted Junior Securities of the
Company issued in accordance with the requirements of the definition thereof.
SECTION 1203. No Payment When Senior Indebtedness in Default.
(a) In the event (i) that during the continuation of any default in
the payment of principal of, premium, if any, interest on, unpaid drawings for
letter of credit in respect of, or regularly accruing fees with respect to, any
Senior Indebtedness, whether at the date of a required payment, maturity, upon
mandatory prepayment, redemption, by declaration or otherwise, or (ii) that any
other default with respect to any Designated Senior Indebtedness that permits
the holder or holders of such Designated Senior Indebtedness to accelerate its
maturity shall have occurred and be continuing, then no payment of any kind or
character (including any payment which may be payable by reason of the payment
of any other indebtedness of the Company being subordinated to the payment of
the Securities) except payments of interest then due and owing on the Securities
through (x) the issuance of additional Securities in an aggregate
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principal amount equal to the interest then due and owing, Qualified Preferred
Stock (as defined in the Credit Facility as in effect on the date hereof) with a
liquidation preference equal to the interest then due and owing or Common Stock
and/or (y) options, warrants or other rights to acquire any such Qualified
Preferred Stock and/or Common Stock, shall be made by, or on behalf of, the
Company or any other Person on its or their behalf with respect to or on account
of the Obligations on the Securities or on account of the purchase, redemption
or other acquisition of Securities (A) in the case of any default described in
subclause (i) above, unless and until such default shall have been cured or
waived or shall have ceased to exist and (B) in the case of any default
specified in clause (ii) above, during the period ("Payment Blockage Period")
commencing on the date the Company or the Trustee receives written notice of
such default (a "Senior Default Notice") from the Representative of the
Designated Senior Indebtedness to which such default relates and ending on the
earliest of (X) 180 days after such date, (Y) the date, if any, on which all
defaults of the type described in clause (ii) above with respect to then
outstanding Designated Senior Indebtedness shall have been cured or waived or
shall have ceased to exist and (Z) the date, if any, on which the Trustee shall
have received a notice from the Representative for such Designated Senior
Indebtedness rescinding the Senior Default Notice. Notwithstanding anything
herein to the contrary, in no event will a Payment Blockage Period extend beyond
180 days from the date the payment on the Securities was due and only one such
Payment Blockage Period may be commenced within any 360 consecutive days. No
event of default which existed or was continuing on the date of the commencement
of any Payment Blockage Period with respect to the Designated Senior
Indebtedness shall be, or be made, the basis for the commencement of a second
Payment Blockage Period by the Representative of such Designated Senior
Indebtedness whether or not within a period of 360 consecutive days, unless such
event of default shall have been cured or waived for a period of not less than
90 consecutive days (it being acknowledged that any subsequent action, or any
breach of any financial covenants for a period commencing after the date of
commencement of such Payment Blockage Period that, in either case, would give
rise to an event of default pursuant to any provisions under which an event of
default previously existed or was continuing shall constitute a new event of
default for this purpose).
(b) In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee or any Holder when such payment is prohibited
by Section 1203(a), such payment shall be held in trust for the benefit of, and
shall be paid over or delivered to, thc holders of Senior Indebtedness (pro rata
to such holders on the basis of the respective amounts of Senior Indebtedness
held by such holders) or their respective Representatives, as their respective
interests may appear. The Trustee shall be entitled to rely on information
regarding amounts then due and owing on the Senior Indebtedness, if any,
received from the holders of Senior Indebtedness (or their Representatives) or,
if such information is not received from such holders or their Representatives,
from the Company and only amounts included in the information provided to the
Trustee shall be paid to the holders of Senior Indebtedness.
The provisions of this Section shall not apply to any payment with
respect to which Section 1202 would be applicable.
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SECTION 1204. Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the payment in full of all amounts due on or in respect of
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 (equally and ratably
with the holders of all indebtedness of the Company which by its express terms
is subordinated to other indebtedness of the Company to substantially the same
extent as the Securities are subordinated and is entitled to like rights of
subrogation) to the rights of the holders of such Senior Indebtedness to receive
payments and distributions of cash, property and securities applicable to the
Senior Indebtedness until the principal of and 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, and no payments
over pursuant to the provisions of this Article 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 1205. Provisions Solely to Define Relative Rights.
The provisions of this Article 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 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 and premium, if any, and interest on the
Securities as and when the same shall become due and payable in accordance with
their terms; or (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 Security
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article of the
holders of Senior Indebtedness to receive cash, property and securities
otherwise payable or deliverable to the Trustee or such Holder.
SECTION 1206. Trustee to Effectuate Subordination.
Each Holder of a Security by his acceptance thereof authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article and
appoints the Trustee his attorney-in-fact for any and all such purposes,
including, in the event of any dissolution, winding-up, liquidation or
reorganization of the Company (whether in bankruptcy, insolvency, receivership,
reorganization or similar proceedings or upon an assignment for the benefit of
creditors or otherwise) tending towards liquidation of the business and assets
of the Company, the filing of a claim for the unpaid balance of its Securities
and accrued interest in the form required in those proceedings.
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If the Trustee does not file a proper claim or proof of debt in the
form required in such proceeding prior to 30 days before the expiration of the
time to file such claim or claims, then the holders of the Senior Indebtedness
or their Representative are or is hereby authorized to have the right to file
and are or is hereby authorized to file an appropriate claim for and on behalf
of the Holders of said Securities. Nothing herein contained shall be deemed to
authorize the Trustee or the holders of Senior Indebtedness or their
Representative 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 or the holders of Senior Indebtedness or their Representative to
vote in respect of the claim of any Holder in any such proceeding.
SECTION 1207. 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 by any such holder or by any noncompliance 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 Trustee or the Holders of
the Securities and without impairing or releasing the subordination provided in
this Article 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 1208. 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; provided, that, any failure or failures to
provide such notices shall have no effect on the provisions of Article XII.
Notwithstanding the provisions of this Article 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 Company or a holder of Senior Indebtedness or
from a Representative therefor; and, prior to the receipt of any such written
notice, the Trustee, subject to the provisions of Section 601 and in the absence
of actual knowledge to the contrary, shall be entitled in all respects to assume
that no such facts exist.
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Subject to the provisions of Section 601, the Trustee shall be entitled
to rely on the delivery to it of a written notice by a Person representing
himself to be a holder of Senior Indebtedness (or Representative therefor) to
establish that such notice has been given by a holder of Senior Indebtedness (or
Representative therefor). In the event that the Trustee determines in good
faith that further evidence is required with respect to the right of any Person
as a holder of Senior Indebtedness to participate in any payment or distribution
pursuant to this Article, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article, and if such evidence
is not furnished, the Trustee may defer any payment to such Person pending
judicial determination as to the right of such Person to receive such payment.
SECTION 1209. Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets of the Company referred to
in this Article XII, the Trustee, subject to the provisions of Section 601, 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 the Senior Indebtedness and other indebtedness of
the Company, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Article
XII.
SECTION 1210. 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 and in the absence of gross negligence mistakenly pay over
or distribute to Holders of Securities or to the Company or to any other Person
cash, property or securities to which holders of Senior Indebtedness shall be
entitled by virtue of this Article or otherwise; provided, that, any such
payments to Holders shall be and remain subject to the applicable provisions of
this Article XII.
SECTION 1211. 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 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 shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 607.
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SECTION 1212. Reserved.
SECTION 1213. Rights with respect to Conversion and Certain Payments.
Nothing contained in this Article or elsewhere in this Indenture, or in
any of the Securities, shall prevent (x) conversion of Securities into Common
Stock of the Company pursuant to Article XII or (y) payment as described in
Section 1202 in the form of Permitted Junior Securities issued in accordance
with the definition thereof.
SECTION 1214. Payments May Be Paid Prior to Dissolution .
Nothing contained in this Article XII or elsewhere in this Indenture
shall prevent (i) the Company, except under the conditions described in Sections
1202 and 1203, from making payments at any time for the purpose of making
payments on the Securities, or from depositing with the Trustee any moneys for
such payments, or (ii) in the absence of actual knowledge by the Trustee that a
given payment would be prohibited by Sections 1202 or 1203, the application by
the Trustee of any moneys deposited with it for the purpose of making such
payments to the Holders entitled thereto unless at least two Business Days prior
to the date upon which such payment would otherwise become due and payable an
officer of the Trustee shall have actually received the Senior Default Notice as
provided for in Section 1203 or the written notice provided for in Section 1208
(provided that, notwithstanding the foregoing, such application shall otherwise
be subject to the provisions of Section 1202 and Section 1203(a)). The Company
shall give prompt written notice to the Trustee of any dissolution, winding-up,
liquidation or reorganization of the Company; provided, that, any such failure
to provide such notice shall have no effect on the provisions of this Article
XII.
ARTICLE XIII
CONVERSION OF SECURITIES
SECTION 1301. Conversion Privilege and Conversion Price.
Subject to and upon compliance with the provisions of this Article
XIII, the Holders shall be entitled, at their option, at any time to convert any
Security (or any portion of the principal amount thereof which is $1,000 or an
integral multiple thereof), into a number of fully paid and non-assessable
shares (calculated as to each conversion to the nearest 1/100th of a share) of
Common Stock of the Company calculated by dividing the Total Conversion Amount
of such Security (or if less than the entire principal amount of such Security
is being converted, the Total Conversion Amount of the portion being converted)
by the Conversion Price in effect at the Close of Business on the Conversion
Date. In case a Security is called for redemption, such conversion right in
respect of the Security called shall expire at the Close of Business on the
Business Day immediately preceding the Redemption Date, unless the Company
defaults in making the payment due upon redemption.
The Conversion Price shall be adjusted in certain instances as provided
in Sections 203 and 1304.
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SECTION 1302. Exercise of Conversion Privilege.
In order to exercise the conversion privilege, the Holder of any
Security shall surrender such Security, duly endorsed or assigned to the Company
or in blank, at any office or agency of the Company maintained pursuant to
Section 1002, accompanied by written notice to the Company in the form provided
in the Security (or such other notice as is acceptable to the Company) at such
office or agency that the Holder elects to convert such Security or, if less
than the entire principal amount thereof is to be converted, the portion thereof
to be converted.
Securities shall be deemed to have been converted immediately prior to
the Close of Business on the day (the "Conversion Date") of surrender of such
Securities for conversion in accordance with the foregoing provisions, and at
such time the rights of the Holders of such Securities as Holders shall cease,
and the Person or Persons entitled to receive the Common Stock issuable upon
conversion shall be treated for all purposes as the record holder or holders of
such Common Stock as and after such time. As promptly as practicable on or after
the Conversion Date, the Company shall issue and shall deliver at any office or
agency of the Company maintained pursuant to Section 1002 a certificate or
certificates for the number of full shares of Common Stock issuable upon
conversion, together with payment in lieu of any fraction of a share, as
provided in Section 1303. The shares of Common Stock issued upon conversion
shall be subject to the restrictions on transfer set forth in the Investors'
Rights Agreement and the certificates for the shares of Common Stock shall bear
the transfer restriction legend required by the Investors' Rights Agreement. If
the shares of Common Stock to be issued upon conversion of a Security are to be
registered in a name other than that of the Holder of such Security, then the
Person in whose name such shares of Common Stock are to be registered must
deliver the opinion of counsel and certificate required by Section 314 hereof.
Neither the Trustee nor any conversion agent or the Registrar shall be required
to register in a name other than that of the Holder of the Security being
converted, the shares of Common Stock issued upon conversion of any such
Security not so accompanied by such opinion and certificate.
In the case of any Security which is converted in part only, upon such
conversion the Company shall execute and the Trustee shall authenticate and
deliver to the Holder thereof, at the expense of the Company, a new Security or
Securities of authorized denominations in aggregate principal amount equal to
the unconverted portion of the principal amount of such Security.
SECTION 1303. Fractions of Shares.
No fractional share of Common Stock shall be issued upon conversion of
Securities. If more than one Security shall be surrendered for conversion at one
time by the same Holder, the number of full shares which shall be issuable upon
conversion thereof shall be computed on the basis of the aggregate Total
Conversion Amount of the Securities (or specified portions thereof) so
surrendered. Instead of any fractional share of Common Stock which would
otherwise be issuable upon conversion of any Security or Securities (or
specified portions thereof), the Company shall pay a cash adjustment in respect
of such fractional share in an amount equal to the product of such fraction
multiplied by the Fair Market Value of one share of Common Stock on the
Conversion Date.
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SECTION 1304. Adjustment of Conversion Price.
The Conversion Price shall be subject to adjustment from time to time
as follows:
(a) If the Company shall, at any time or from time to time after the
Original Issuance Date, issue any shares of Common Stock, options to purchase or
rights to subscribe for Common Stock, securities by their terms convertible into
or exchangeable for Common Stock, or options to purchase or rights to subscribe
for such convertible or exchangeable securities, other than Excluded Stock,
without consideration or for a consideration per share less than either (x) the
Conversion Price or (y) the Fair Market Value of the Common Stock, in effect
immediately prior to the issuance of such Common Stock or securities, then such
Conversion Price, as in effect immediately prior to each such issuance, shall
forthwith be lowered to a price equal to the price obtained by multiplying:
(1) the Conversion Price at which Securities were theretofore
convertible by
(2) a fraction of which (x) the denominator shall be the number
of shares of Common Stock outstanding on a fully-diluted basis immediately
after such issuance and (y) the numerator shall be the sum of (i) the
number of shares of Common Stock outstanding on a fully-diluted basis
immediately prior to the date of such issuance and (ii) the number of
additional shares of Common Stock which the aggregate consideration of the
number of shares of Common Stock so offered would purchase at the greater
of the Conversion Price or the Fair Market Value per share of Common Stock.
For purposes of this Section 1304, "fully diluted basis" shall be
determined in accordance with the treasury method of GAAP.
(b) If the Company shall, at any time or from time to time after the
Original Issuance Date, directly or indirectly, redeem, purchase or otherwise
acquire any shares of Common Stock, options to purchase or rights to subscribe
for Common Stock, securities by their terms convertible into or exchangeable for
Common Stock, or options to purchase or rights to subscribe for such convertible
or exchangeable securities, for a consideration per share greater than the Fair
Market Value (plus, in the case of such options, rights, or securities, the
additional consideration required to be paid to the Company upon exercise,
conversion or exchange) for shares of Common Stock in effect immediately prior
to such event, then the Conversion Price, as in effect immediately prior to each
such event, shall forthwith be lowered to a price equal to the price obtained by
multiplying:
(1) the Conversion Price at which Securities were theretofore
convertible by
(2) a fraction of which (x) the denominator shall be the Fair
Market Value per share of Common Stock immediately prior to such event and
(y) the numerator shall be the result of dividing:
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i) (1) the product of (A) the number of shares of
Common Stock outstanding on a fully-diluted basis
and (B) the Fair Market Value per share of Common
Stock, in each case immediately prior to such
event, minus (2) the aggregate consideration paid
by the Company in such event (plus, in the case of
such options, rights, or convertible or
exchangeable securities, the aggregate additional
consideration to be paid by the Company upon
exercise, conversion or exchange), by
ii) the number of shares of Common Stock outstanding on
a fully-diluted basis immediately after such
redemption.
(c) For the purposes of any adjustment of a Conversion Price pursuant
to Sections 1304(a) or 1304(b) above, the following provisions shall be
applicable:
(1) In the case of the issuance of Common Stock for cash in a
public offering or private placement, the consideration shall be deemed to
be the amount of cash paid therefor before deducting therefrom any
discounts, commissions or placement fees payable by the Company to any
underwriter or placement agent in connection with the issuance and sale
thereof.
(2) In the case of the issuance of Common Stock for a
consideration in whole or in part other than cash, the consideration other
than cash shall be deemed to be the Fair Market Value thereof as determined
in accordance with the Appraisal Procedure.
(3) In the case of the issuance of options to purchase or
rights to subscribe for Common Stock, securities by their terms convertible
into or exchangeable for Common Stock, or options to purchase or rights to
subscribe for such convertible or exchangeable securities, except for
options to acquire Excluded Stock:
i) the aggregate maximum number of shares of Common
Stock deliverable upon exercise of such options to
purchase or rights to subscribe for Common Stock
shall be deemed to have been issued at the time
such options or rights were issued and for a
consideration equal to the consideration
(determined in the manner provided in Sections
1304(c)(1) and 1304(c)(2) above), if any, received
by the Company upon the issuance of such options or
rights plus the minimum purchase price provided in
such options or rights for the Common Stock covered
thereby;
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ii) the aggregate maximum number of shares of Common
Stock deliverable upon conversion of or in exchange
of any such convertible or exchangeable securities
or upon the exercise of options to purchase or
rights to subscribe for such convertible or
exchangeable securities and subsequent conversion
or exchange thereof shall be deemed to have been
issued at the time such securities, options, or
rights were issued and for a consideration equal to
the consideration received by the Company for any
such securities and related options or rights
(excluding any cash received on account of accrued
interest or accrued dividends), plus the additional
consideration, if any, to be received by the
Company upon the conversion or exchange of such
securities or the exercise of any related options
or rights (the consideration in each case to be
determined in the manner provided in Sections
1304(c)(1) and 1304(c)(2) above); and
iii) on any change in the number of shares or exercise
price of Common Stock deliverable upon exercise of
any such options or rights or conversions of or
exchanges for such securities, other than a change
resulting from the antidilution provisions thereof,
the applicable Conversion Price shall forthwith be
readjusted to such Conversion Price as would have
been obtained had the adjustment made upon the
issuance of such options, rights or securities not
converted prior to such change or options or rights
related to such securities not converted prior to
such change been made upon the basis of such
change.
iv) No further adjustment of the Conversion Price
adjusted upon the issuance of any such options,
rights, convertible securities or exchangeable
securities shall be made as a result of the actual
issuance of Common Stock on the exercise of any
such rights or options or any conversion or
exchange of any such securities.
(4) All calculations under Section 1304(a) or (b) will be made
to the nearest one-hundredth of a cent or to the nearest whole share, as
the case may be. No adjustment to the Conversion Price in connection with
an Asset Acquisition will be required unless such adjustment would result
in an increase or decrease of at least one percent (1%) of the Conversion
Price; provided, however, that any adjustments which by reason of this
clause (4) are
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not required to be made will be carried forward and taken into account in
a subsequent adjustment, if any.
(d) If, at any time after the Original Issuance Date, the number of
shares of Common Stock outstanding is increased by a stock dividend payable in
shares of Common Stock or by a subdivision or split-up of shares of Common
Stock, then, following the record date for the determination of holders of
Common Stock entitled to receive such stock dividend, subdivision or split-up,
the Conversion Price shall be appropriately decreased so that the number of
shares of Common Stock issuable on conversion of Securities shall be increased
in proportion to such increase in outstanding shares.
(e) If, at any time after the Original Issuance Date, the number of
shares of Common Stock outstanding is decreased by a combination of the
outstanding shares of Common Stock, then, following the record date for such
combination, the Conversion Price shall be appropriately increased so that the
number of shares of Common Stock issuable on conversion of each Security shall
be decreased in proportion to such decrease in outstanding shares.
(f) In the event of any capital reorganization of the Company, any
reclassification of the stock of the Company (other than a change in par value
or from par value to no par value or from no par value to par value or as a
result of a stock dividend or subdivision, split-up or combination of shares),
or any consolidation or merger of the Company, each Security shall after such
reorganization, reclassification, consolidation, or merger be convertible into
the kind and number of shares of stock or other securities or property of the
Company or of the Company resulting from such consolidation or surviving such
merger to which the holder of the number of shares of Common Stock deliverable
(immediately prior to the time of such reorganization, reclassification,
consolidation or merger) upon conversion of such Security would have been
entitled upon such reorganization, reclassification, consolidation or merger.
The provisions of this clause shall similarly apply to successive
reorganizations, reclassifications, consolidations, or mergers.
(g) In any case in which the provisions of this Section 1304 shall
require that an adjustment shall become effective immediately after a record
date of an event, the Company may defer until the occurrence of such event (1)
issuing to the Holder of any Security converted after such record date and
before the occurrence of such event the shares of capital stock issuable upon
such conversion by reason of the adjustment required by such event and issuing
to such Holder only the shares of capital stock issuable upon such conversion
before giving effect to such adjustments, and (2) paying to such Holder any
amount in cash in lieu of a fractional share of capital stock pursuant to
Section 1303 above; provided, however, that the Company shall deliver to such
Holder an appropriate instrument or due bills evidencing such holder's right to
receive such additional shares and such cash.
(h) If the Company shall propose to take any action of the types
described in clauses d, e, or f of this Section 1304, the Company shall give
notice to each Holder, in the manner set forth in Section 1305, which notice
shall specify the record date, if any, with respect to any such action and the
date on which such action is to take place. Such notice shall also set forth
such facts with respect thereto as shall be reasonably necessary to indicate the
effect of such action (to the extent such effect may be known at the date of
such notice) on the Conversion
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Price and the number, kind or class of shares or other securities or property
which shall be deliverable or purchasable upon the occurrence of such action or
deliverable upon conversion of Securities. In the case of any action which would
require the fixing of a record date, such notice shall be given at least 20 days
prior to the date so fixed, and in case of all other action, such notice shall
be given at least 30 days prior to the taking of such proposed action. Failure
to give such notice, or any defect therein, shall not affect the legality or
validity of any such action.
(i) Without duplication of any other adjustment provided for in this
Section 1304 at any time the Company makes or fixes a record date for the
determination of holders of Common Stock entitled to receive a dividend or other
distribution payable in securities of the Company other than shares of Common
Stock, provision shall be made so that each Holder shall have the option to (i)
receive as part of such dividend or distribution the number of securities of the
Company which such Holder would have received had its Securities been converted
into shares of Common Stock immediately prior to the date of such event or (ii)
receive upon conversion thereof, in addition to the shares of Common Stock
receivable thereupon, the number of securities of the Company which such Holder
would have received had its Securities been converted at the Total Conversion
Amount into shares of Common Stock on the date of such event and had such holder
thereafter, during the period from the date of such event to and including the
date of conversion, retained such securities receivable by it pursuant to this
paragraph during such period, subject to the sum of all other adjustments called
for during such period under this Section 1304 with respect to the rights of
such Holder.
(j) If the Company has issued or issues any securities prior to, on or
after the Original Issuance Date containing provisions protecting the holder or
holders thereof against dilution in any manner more favorable to such holder or
holders thereof than those set forth in this Section 1304, such provisions (or
any more favorable portion thereof) shall be deemed to be incorporated herein as
if fully set forth in this Indenture and, to the extent inconsistent with any
provision of this Indenture, shall be deemed to be substituted therefor.
(k) In any case in which the provisions of this Section 1304 shall
necessitate that the Appraisal Procedure be utilized for purposes of determining
an adjustment to the Conversion Price, the Company may defer until the
completion of the Appraisal Procedure and the determination of the adjustment
(1) issuing to the Holder of any Security converted after the date of the event
that requires the adjustment and before completion of the Appraisal Procedure
and the determination of the adjustment, the shares of capital stock issuable
upon such conversion by reason of the adjustment required by such event and
issuing to such Holder only the shares of capital stock issuable upon such
conversion before giving effect to such adjustment and (2) paying to such Holder
any amount in cash in lieu of a fractional share of capital stock pursuant to
Section 1303 above; provided, however, that the Company shall deliver to such
Holder an appropriate instrument or due bills evidencing such Holder's right to
receive such additional shares and such cash.
(l) The Conversion Price shall be permanently reduced by $1.00 on the
date (the "Conversion Price Reduction Date") 90 days after the Charter Amendment
Deadline if the Charter Amendment has not been Duly Adopted by the Conversion
Price Reduction Date and shall be further permanently reduced by successive
decrements of $1.00 at the end of every three month period thereafter (a "Three
Month Period"), unless the Charter Amendment shall have
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been Duly Adopted during such Three Month Period; provided, that, the maximum
reduction in the Conversion Price pursuant to this sentence shall be limited to
$4.00. In the event the Conversion Price is increased pursuant to Section
1304(e), the $1.00 per share Conversion Price adjustment and $4.00 per share
maximum adjustment referred to in the prior sentence shall each be increased by
the same percentage as the Conversion Price.
SECTION 1305. Notice of Adjustments of Conversion Price.
Whenever the Conversion Price is adjusted as herein provided:
(a) the Company shall compute the adjusted Conversion Price in
accordance with this Indenture and shall prepare a certificate signed by the
Treasurer or Chief Financial Officer of the Company setting forth the adjusted
conversion price and showing in reasonable detail the facts upon which such
adjustment is based, and such certificate shall forthwith be filed (with a copy
to the Trustee) at each office or agency maintained for the purpose of
conversion of Securities pursuant to Section 1002; and
(b) a notice stating that the Conversion Price has been adjusted and
setting forth the adjusted Conversion Price shall forthwith be prepared, and as
soon as practicable after it is prepared, such notice shall be furnished by the
Company to the Trustee and mailed by the Company at its expense to all Holders
at their last addresses as they shall appear in the Security Register. Where
appropriate such notice may be given in advance and may be included as part of
any notice required to be mailed under Section 1304(h).
SECTION 1306. Notice of Certain Corporate Action.
In case:
(a) the Company shall take an action or an event shall occur, that
would require a Conversion Price adjustment pursuant to this Indenture; or
(b) the Company shall grant to the holders of its Common Stock rights
or warrants to subscribe for or purchase any shares of capital stock of any
class except Excluded Stock; or
(c) of any reclassification of the Common Stock (other than a
subdivision or combination of the outstanding shares of Common Stock), or of any
consolidation, merger or share exchange to which the Company is a party and for
which approval of any stockholders of the Company is required, or of the sale or
transfer of all or substantially all of the assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(e) the Company or any Subsidiary shall commence a tender offer for
all or a portion of the outstanding shares of Common Stock (or shall amend any
such tender offer to change the maximum number of shares being sought or the
amount or type of consideration being offered therefor);
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then the Company shall cause to be filed at each office or agency maintained
pursuant to Section 1002, and shall cause to be mailed to all Holders at their
last addresses as they shall appear in the Security Register, at least 20 days
(or 10 days in any case specified in clause (a), (b) or (e) above) prior to the
applicable record, effective or expiration date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution or granting of rights or warrants, or, if a record is not
to be taken, the date as of which the holders of Common Stock of record who will
be entitled to such dividend, distribution, rights or warrants are to be
determined, (y) the date on which such reclassification, consolidation, merger,
share exchange, sale, transfer, dissolution, liquidation or winding up is
expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, share exchange, sale, transfer,
dissolution, liquidation or winding up, or (z) the date on which such tender
offer commenced, the date on which such tender offer is scheduled to expire
unless extended, the consideration offered and the other material terms thereof
(or the material terms of any amendment thereto). Neither the failure to give
any such notice nor any defect therein shall affect the legality or validity of
any action described in clauses (a) through (e) of this Section 1306.
SECTION 1307. Company to Reserve Common Stock.
The Company shall at all times reserve and keep available, free from
preemptive rights, out of the authorized but unissued Common Stock or out of the
Common Stock held in treasury, for the purpose of effecting the conversion of
Securities, the full number of shares of Common Stock then issuable upon the
conversion of all outstanding Securities.
Before taking any action that would cause an adjustment reducing the
conversion price below the then par value (if any) of the shares of Common Stock
deliverable upon conversion of the Securities, the Company will take any
corporate action that may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue fully paid and non-assessable
shares of Common Stock at such adjusted conversion price.
SECTION 1308. Taxes on Conversions.
The Company will pay any and all original issuance, transfer, stamp
and other similar taxes that may be payable in respect of the issue or delivery
of shares of Common Stock on conversion of Securities pursuant hereto. The
Company shall not, however, be required to pay any tax which may be payable in
respect of any transfer involved in the issue and delivery of shares of Common
Stock in a name other than that of the Holder of the Security or Securities to
be converted, and no such issue or delivery shall be made unless and until the
Person requesting such issue has paid to the Company the amount of any such tax,
or has established to the satisfaction of the Company that such tax has been
paid.
SECTION 1309. Covenant as to Common Stock.
The Company covenants that all shares of Common Stock which may be
issued upon conversion of Securities will upon issue be validly issued, fully
paid and nonassessable.
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The Company further covenants that for so long as the Common Stock
shall be listed on the NASDAQ Stock Market or any other national securities
exchange, the Company will, if permitted by the rules of such exchange, list and
keep listed all Common Stock issuable upon conversion of the Securities.
SECTION 1310. Cancellation of Converted Securities .
All Securities delivered for conversion shall be delivered to the
Trustee to be canceled by or at the direction of the Trustee, which shall
dispose of the same as provided in Section 309.
SECTION 1311. Provisions as to Consolidation, Merger or Sale of Assets.
Notwithstanding any other provision herein to the contrary, in case of
any consolidation or merger to which the Company is a party (other than a merger
or consolidation in which the Company is the continuing corporation and in which
the Company's Common Stock outstanding immediately prior to the merger or
consolidation is not exchanged for cash or the securities or other property of
another corporation), or in case of any sale or conveyance to another
corporation of the property of the Company as an entirety or substantially as an
entirety, or in the case of any statutory exchange of securities with another
corporation (other than in connection with a merger or acquisition), the
corporation formed by such consolidation or the corporation whose securities,
cash or other property will immediately after the merger or consolidation be
owned, by virtue of the merger or consolidation by the holders of Common Stock
of the Company immediately prior to the merger, or the corporation that shall
have acquired such assets or securities of the Company, as the case may be,
shall promptly execute and deliver to the Trustee a supplemental indenture
providing that the holder of each Security then outstanding shall have the right
thereafter to convert such Security into the kind and amount of securities, cash
or other property receivable upon such consolidation, merger, statutory
exchange, sale or conveyance by a holder of the number of shares of Common Stock
into which such Security might have been converted immediately prior to such
consolidation, merger, statutory exchange, sale or conveyance assuming such
holder of Common Stock did not exercise its rights of election, if any, as to
the kind or amount of securities, cash or other property receivable upon such
consolidation, merger, statutory exchange, sale or conveyance (provided that, if
the kind or amount of securities, cash or other property receivable upon such
consolidation, merger, statutory exchange, sale or conveyance is not the same
for each share of Common Stock in respect of which such rights of election shall
not have been exercised (a "non-electing share"), then for the purposes of this
Section 1311, the kind and amount of securities, cash or other property
receivable upon such consolidation, merger, statutory exchange, sale or
conveyance for each non-electing share shall be deemed to be the kind and amount
so receivable per share by a plurality of the non-electing shares). Such
supplemental indenture shall provide for appropriate adjustment with respect to
the rights of the holders of the Securities, to the end that the provisions set
forth in this Article XIII shall thereafter correspondingly be made applicable,
as nearly as may reasonably be, in relation to any shares of stock or other
securities or property thereafter deliverable on the conversion of the
Securities. Any such adjustment shall be evidenced by a certificate delivered to
the Trustee and any paying agent.
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The above provisions of this Section 1311 shall similarly apply to
successive consolidations, mergers, statutory exchanges, sales or conveyances.
The Company shall give notice of the execution of such a supplemental
indenture to the holders of Securities in the manner provided in Section 907
within 30 days after the execution thereof; provided, however, that such notice
need not be given if such information has been provided prospectively in the
notice given pursuant to Section 1306. Failure to give such notice, or any
defects therein, shall not affect the legality or validity of any such
supplemental indenture.
SECTION 1312. Disclaimer of Responsibility for Certain Matters.
Neither the Trustee nor any conversion agent shall at any time be
under any duty or responsibility to any holder of Securities to determine
whether any facts exist that may require any adjustment of the conversion price,
or with respect to the nature or extent of any such adjustment when made, or
with respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. Neither the Trustee nor any
conversion agent shall be accountable with respect to the listing referred to in
Section 1309 or the validity or value (or the kind or amount) of any shares of
Common Stock, or of any securities, cash or other property that may at any time
be issued or delivered upon the conversion of any Security; and neither the
Trustee nor any conversion agent makes any representation with respect thereto.
Neither the Trustee nor any conversion agent shall be responsible for any
failure of the Company to issue, transfer or deliver any shares of Common Stock
or stock certificates or other securities or property or to make any cash
payment upon the surrender of any Security for the purpose of conversion or,
subject to the provisions of Section 601, to comply with any of the covenants
contained in this Article XIII.
ARTICLE XIV
RIGHT TO REQUIRE REPURCHASE
SECTION 1401. Right to Require Repurchase.
In the event that there shall occur a Change in Control, then each
Holder shall have the right, at such Holder's option, to require the Company to
purchase, and upon the exercise of such right, the Company shall, subject to the
provisions of this Article XIV and Article XII purchase all (or any portion with
a principal amount equal to $1,000 or an integral multiple thereof) of such
Holder's Securities on the date occurring no earlier than 30 days nor later than
45 days from the date of the mailing of the notice referred to below (which in
any event shall be a date subsequent to any payment dates for the purchase or
other repayment of Senior Indebtedness having similar change of control
provisions) (the "Repurchase Date") at a price (the "Repurchase Price") equal to
100% of the principal amount thereof, together with accrued and unpaid interest
(including, but not limited to, Special Interest) to the Repurchase Date.
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SECTION 1402. Notice; Method of Exercising Repurchase Right.
(a) Prior to the mailing of the notice referred to below, but in any
event within 30 days following any Change of Control, the Company covenants to
(i) repay in full and terminate all commitments under Indebtedness under the
Credit Facility and all other Senior Indebtedness the terms of which require
repayment upon a Change of Control or offer to repay in full and terminate all
commitments under all Indebtedness under the Credit Facility and all other such
Senior Indebtedness and to repay the Indebtedness owed to each lender which has
accepted such offer or (ii) obtain the requisite consents under the Credit
Facility and all other Senior Indebtedness to permit the repurchase of the
Securities as provided in this Article XIV. The Company shall first comply with
the covenant in the first sentence of this paragraph before it shall be required
to repurchase Securities pursuant to the provisions in this Article XIV. The
Company's failure to comply with the covenant described in the first sentence of
this paragraph (and any failure to send the notice referred to in clause (b)
below because such notice is prohibited by the first sentence of this paragraph)
shall constitute an Event of Default described in clause (c) and not in clause
(b) of Section 501.
(b) On or before the 30th day after the occurrence of a Change in
Control, the Company, or at the request of the Company, the Trustee (in the name
and at the expense of the Company), shall give notice of the occurrence of the
Change in Control and of the repurchase right set forth herein arising as a
result thereof by first-class mail, postage prepaid, to each Holder of the
Securities at such Holder's address appearing in the Security Register. The
Company shall also deliver a copy of such notice of a repurchase right to the
Trustee.
Each notice of a repurchase right shall state:
(i) the event constituting the Change in Control and the date
thereof,
(ii) the Repurchase Date,
(iii) the date by which the repurchase right must be exercised,
(iv) the Repurchase Price, and
(v) the instructions a Holder must follow to exercise a
repurchase right.
No failure of the Company to give the foregoing notice shall limit any
Holder's right to exercise a repurchase right. The Trustee shall have no
affirmative obligation to determine if there shall have occurred a Change in
Control.
(c) To exercise a repurchase right, a Holder shall deliver to the
Company (or an agent designated by the Company for such purpose in the notice
referred to in (a) above) and to the Trustee on or before the Close of Business
on the Repurchase Date (i) written notice, substantially in the form set forth
on the reverse of the Securities, of the Holder's exercise of such right, which
notice shall set forth the name of the Holder, the principal amount of the
Security or Securities (or portion of a Security which is $1,000 or an integral
multiple thereof) to be repurchased, and a statement that an election to
exercise the repurchase right is being made thereby, and (ii) the Security or
Securities with respect to which the repurchase right is being
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exercised, duly endorsed for transfer to the Company. Such written notice may be
withdrawn at any time on or before the Close of Business on the Repurchase Date.
If the Repurchase Date falls between any Regular Record Date and the next
succeeding Interest Payment Date, Securities to be repurchased must be
accompanied by payment from the Holder of an amount equal to the interest
thereon which the registered Holder thereof is to receive on such Interest
Payment Date.
(d) In the event a repurchase right shall be exercised in accordance
with the terms hereof, the Company shall on or promptly following the Repurchase
Date, but subject to the provisions of this Article XIV and Article XII, pay or
cause to be paid in cash to the Holder thereof the Repurchase Price of the
Security or Securities as to which the repurchase right had been exercised.
SECTION 1403. Deposit of Repurchase Price.
On or prior to the Close of Business on the Repurchase 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 1003) an amount of money sufficient to pay the Repurchase
Price of the Securities which are to be repaid on or promptly following the
Repurchase Date.
SECTION 1404. Securities Not Repurchased on Repurchase Date.
Interest on any Security surrendered for repurchase shall cease to
accrue from and after the Repurchase Date unless the Company shall default in
the payment of any such Security at the purchase price, together with interest
accrued thereon to the Repurchase Date.
SECTION 1405. Securities Repurchased in Part.
Any Security which is to be repurchased only in part shall be
surrendered at any office or agency of the Company designated for that purpose
pursuant to Section 1002 (with, if the Company or the Trustee so requires, due
endorsement by, or 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 an aggregate principal amount equal to and in exchange for
the repurchased portion of the principal of the Security so surrendered.
ARTICLE XV
VOTING RIGHTS
SECTION 1501. General.
Except as other provided by applicable law, the Holders of the
Securities (i) shall be entitled to vote together with the holders of the Common
Stock as a single class on all matters submitted for a vote of holders of Common
Stock, (ii) voting separately as one class, shall have the exclusive and special
right at all times to elect three (3) of the directors to the Board of
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Directors of the Company (or if the Board of Directors of the Company shall
consist of more than 10 persons, no less than 30% of the total number of
directors of the Board of Directors), (iii) shall have such other voting rights
as are specified in the Amended and Restated Certificate of Incorporation of the
Company or as otherwise provided by Delaware law and (iv) shall be entitled to
notice of any stockholders' meeting in accordance with the Amended and Restated
Certificate of Incorporation and By-Laws of the Company. With respect to any
such vote, each Security shall entitle the Holder thereof to cast that number of
whole votes (and fractions thereof) per $1,000 principal amount of Security as
is equal to the number of votes that such Holder would be entitled to cast had
such Holder converted its Securities into shares of Common Stock as of the
record date for determining the stockholders of the Corporation eligible to vote
on any such matter.
SECTION 1502. No Changes to Voting Rights.
So long as any of the principal amount of the Securities is
outstanding, the Company shall not, without the written consent or affirmative
vote of the Requisite Holders, at a meeting called for that purpose of the
Holders, amend, alter or repeal, whether by merger, consolidation, combination,
reclassification or otherwise, the Amended and Restated Certificate of
Incorporation or By-laws of the Company or of any provision thereof (including
the adoption of a new provision thereof) which would result in an alteration or
circumvention of the voting powers of the Securities.
SECTION 1503. Stockholder Approval Required.
The consent or votes required in Section 1502 above shall be in
addition to any approval of stockholders of the Company which may be required by
law or pursuant to any provision of the Company's Amended and Restated
Certificate of Incorporation or By-Laws, which approval shall be obtained by
vote of the stockholders of the Company in the manner provided in Section 1501
above.
SECTION 1504. Effectiveness of this Article XV.
The provisions of this Article XV shall not become effective until the
Charter Amendment is Duly Adopted.
This instrument may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
BUILDING ONE SERVICES CORPORATION
By:____________________________________
Name:
Title:
Attest:
_____________________________________
Name:
Title:
UNITED STATES TRUST COMPANY OF NEW YORK, as
Trustee
By:______________________________________
Name:
Title:
Attest:
_____________________________________
Name:
Title: Corporate Trust Officer
SCHEDULE I
1. Tri-City Electrical Contractors, Inc.
2. Wilson Electric Corporation, Inc.
3. Town & Country Electric, Inc.
4. Riviera Electric Construction Co.
5. Garfield Electric Corporation
6. Indecon, Inc.
7. SKC Electric, Inc.
8. Walker Engineering, Inc.
9. Service Management U.S.A. Inc
<PAGE>
SCHEDULE II
SCHEDULE II
Management Group
Jonathan J. Ledecky
Charlie F. Walker
James F. and Mary E. Lewis, Joint Tenants with Right of Survivorship
Alan J. Green
W. E. Boyette
Dennis R. Robinson
BLEP, Inc. (Jim Linford)
W. Thomas Musser
Jerry R. Mills
Donald G. White
Joseph M. Ivey
William F. McIntosh
Brickford Faucette
Roland G. Stephenson
Andrew R. & Karen S. Spann, Joint Tenants
William P. Love, Jr.
Diane Love
Helmuth Eidel
Paula Eidel
Larry O. Jones
Larry Terrell
Jerald M. Taylor, as Trustee or Successor of the Jerald Taylor Family Trust U/A
dated 9/13/89
Chad MacDonald
Thomas H. Tess
Garfield W. Hartman
Roxanne Chambers
Stephen J. Gubin
Bradford L. Hanson
Mike Sullivan
<PAGE>
Exhibit 99.5
[BUILDING ONE LOGO APPEARS HERE] PRESS RELEASE
_____________________________________________________________
For immediate release - March 23, 1999 Release No. 99-006
BUILDING ONE SERVICES CORPORATION
(NASDAQ - "BOSS") Company
Contact: Timothy Clayton
Building One Services
Corporation
202-261-6000
[email protected]
Media
Contact: Bill Snethen
RMR & Associates
301-217-0009 ext. 34
[email protected]
BUILDING ONE SERVICES CORPORATION EXTENDS AND ANNOUNCES INTENTION TO MODIFY
TENDER OFFER; APOLLO MANAGEMENT, L.P. AFFILIATE TO INVEST $100 MILLION
. Revised Tender Offer Price of $22.50 Per Share for Approximately 25.5 Million
Shares; Tender Offer Expiration Extended to April 16, 1999
. Executed Definitive Agreement with Apollo Affiliate for Issuance of $100
Million of 7.5% Junior Subordinated Convertible Notes
. Secured New Highly Confident Letter for $200 Million of Bond Financing From
BT Alex. Brown; New Commitment Letter from Bankers Trust Company for $350
Million Credit Facility
. Signed One Year Extensions of Existing Lock-Ups with Key Management
Washington, DC (March 23, 1999) -- Building One Services Corporation (NASDAQ:
BOSS) today announced that it has extended and intends to modify its previously
announced tender offer, which was commenced on February 19, 1999. In addition,
Building One announced that an affiliate of Apollo Management, L. P. has agreed
to invest $100 million in Building One to finance a portion of the tender offer
in exchange for 7.5% Junior Subordinated Convertible Notes. Apollo has
completed its due diligence and the agreement is not subject to due diligence
contingencies.
<PAGE>
BUILDING ONE SERVICES CORPORATION
______________________________________________________________________________
Press Release 99-006
Page 2
"The continued desire of Apollo to be our financial and strategic partner
validates our belief in the prospects of our company," said Joe Ivey, Building
One's President and Chief Executive Officer. "We are pleased to have such a
well-respected firm join our efforts to build the preeminent facilities services
company in the United States. We are also pleased that our key managers have
extended their lock-up agreements, which reflects their commitment to the long-
term success of our company and their confidence in our strategic plans going
forward. Building One is well positioned for profitable growth," said Ivey.
"The modifications that we will make to the tender offer and the financing from
Apollo will permit stockholders to sell an increased number of shares of our
stock, while at the same time improving our financing package and increasing the
capital available to us for growth," said Timothy Clayton, Chief Financial
Officer. "We are now positioned to complete the tender offer, which will enable
us to provide a better return on equity to our stockholders and achieve a more
desirable capital structure," said Clayton.
"In its short history, Building One has built a solid company with a strong
management team and strong fundamentals," said Michael Gross, a partner of
Apollo. "We believe that the tender offer, when combined with our investment,
is an optimal transaction to increase value to Building One stockholders. The
investment underscores our confidence in Building One's ability to achieve its
goal of becoming the leading single-source facilities services company in the
country," said Gross.
In the modified tender offer, Building One will offer to purchase approximately
24.6 million shares of its outstanding shares of common stock at $22.50 per
share, representing approximately 55% of its 45.3 million outstanding shares of
common stock, and approximately 900,000 shares of common stock underlying stock
options with exercise prices below $22.50. The offer will be conditioned upon,
among other things, the receipt of the proposed financing and the valid tender
of at least 21.0 million shares. The tender offer, proration period and
withdrawal rights will now expire, unless further extended, at 5:00 p.m., New
York City time, on April 16, 1999. The tender offer and other transactions will
close as soon as practicable after such date.
In the tender offer, the former owners of businesses that Building One has
acquired who are subject to restrictions on the transfer of their shares will be
permitted to sell up to 50% of their shares. Key members of Building One's
management team holding approximately 6.2 million shares prior to the tender
offer have agreed to extend their lock up agreements applicable to the shares of
stock that they will own after the tender offer for an additional twelve months.
Joe Ivey, Building One's President and Chief
<PAGE>
BUILDING ONE SERVICES CORPORATION
_____________________________________________________________________________
Press Release 99-006
Page 3
Executive Officer, has advised Building One that he does not intend to tender
any of his shares in the offer.
The tender offer will require approximately $600 million of financing (including
fees and expenses), and is expected to be funded with approximately $200 million
of cash on Building One's balance sheet, $200 million in bond financing, $100
million from the purchase of convertible notes by Apollo's affiliate and $100
million from a $350 million revolving credit facility from Bankers Trust
Company.
Under the agreement with the Apollo affiliate, Building One will issue $100
million in 7.5% Junior Subordinated Convertible Notes. The agreement entitles
Apollo's affiliate to convert the notes into shares of Building One's common
stock at a conversion price of $22.50 per share. Interest on the convertible
notes may be paid in additional notes or in cash at the option of Building One.
Assuming conversion of the principal amount of the notes and assuming that all
interest is paid in cash, Apollo's affiliate would acquire approximately 4.4
million shares of common stock, or approximately 18% of the outstanding shares
of common stock after the tender offer. In addition, Building One will submit at
its next annual meeting of stockholders an amendment to its certificate of
incorporation which, if adopted by the stockholders, would entitle the holders
of the convertible notes to elect three of Building One's directors and to vote
with the common stock on an as converted basis. At closing, Building One's
Board will be expanded to 10 directors. The investment by Apollo's affiliate is
subject to the completion of the tender offer, receipt of the other financing
and other customary conditions.
Building One also announced that, in addition to its agreement with Apollo's
affiliate, it has received a new commitment letter and highly confident letter
relating to the financing of the tender offer. The commitment letter from
Bankers Trust Company provides for a $350 million revolving credit facility. At
closing, it is anticipated that approximately $250 million of the revolving
credit facility will be available for future acquisitions, earn out payments and
other capital requirements. The highly confident letter for the high yield bond
financing is from BT Alex. Brown.
Stockholders who want to tender their shares at $22.50 per share may do so by
completing the revised Letter of Transmittal that will be mailed to
stockholders. Building One is preparing a Supplement to its Offer to Purchase
dated February 19, 1999 that describes the modified offer and will be mailed to
stockholders with the revised Letter of Transmittal and will file with the
Securities and Exchange Commission an amended Schedule 13E-4.
<PAGE>
BUILDING ONE SERVICES CORPORATION
________________________________________________________________________
Press Release 99-006
Page 4
The depositary for the tender offer is Harris Trust Company of New York (call
collect: 212/701-7624) and the information agent is MacKenzie Partners, Inc.
(call toll free: 800/322-2885).
Friedman, Billings, Ramsey & Co. acted as financial advisor to Building One.
Apollo Management, L.P. is a private investment firm based in New York and Los
Angeles. Since its inception in 1990, Apollo and its affiliated funds have
invested over $10 billion of capital in response to the needs of its strategic
partners in a broad range of industries.
Building One Services Corporation is a leader in the facilities services
industry and has a corporate goal of becoming a national single-source provider
of facilities services. Facility services companies provide many products and
services needed for the routine operation and maintenance of a building.
Building One currently has annualized revenues of approximately $1.3 billion and
has operations in the electrical, mechanical and janitorial segments of the
facilities services industry.
This press release contains forward-looking statements. Such statements relate
to, among others things, the benefits and timing of the proposed tender offer,
the financing for the tender offer, the growth in earnings of the Company and
the Company's acquisition program. Any or all of our forward-looking statements
in this press release or in any other public statements we make may turn out to
be wrong. They can be affected by inaccurate assumptions we might make or by
known or unknown risks and uncertainties, including, without limitation, the
following: the risks associated with significant indebtedness that we may incur
in our proposed tender offer, the dependence on key personnel of the Company and
hourly wage and technical employees; risks related to the Company's
consolidation strategy, its ability to complete acquisitions and the continuing
consolidation in the industry; the ability to integrate acquisitions; risks
related to acquisition financing, including potential dilution; possible
significant amortization charges; exposure to downturns in commercial and
industrial construction; substantial competition; and other factors affecting
the Company's prospects described in the Company's most recent prospectus filed
with the Securities and Exchange Commission on March 16, 1999 and in its other
public filings.
-END -
<PAGE>
Exhibit 99.6
[LOGO] BUILDING
O N E
SERVICES CORPORATION PRESS RELEASE
- --------------------------------------------------------------------------------
For immediate release - April 30, 1999 Release No. 99-011
BUILDING ONE SERVICES CORPORATION
(NASDAQ - "BOSS") Company
Contact: Timothy Clayton
Building One Services
Corporation
202-261-6000
[email protected]
Media
Contact: Bill Snethen
RMR & Associates
301-217-0009 ext. 34
bsnethen@rmr,com
BUILDING ONE SERVICES CORPORATION ANNOUNCES
PRELIMINARY RESULTS OF TENDER OFFER
Washington, DC (April 30, 1999) Building One Services Corporation (NASADAQ:BOSS)
announced today the results of its tender offer that expired at 11:59 p.m., New
York City time, on April 29, 1999, Pursuant to the tender offer, the Company
will purchase 25.5 million of its own shares (including shares issuable upon the
exercise of options) at a purchase price of $22.50 per share. Stockholders have
tendered for purchase in the tender offer 45,098,110 shares of the Company's
outstanding common stock and 1,481,701 shares underlying employee stock
options. Included in tendered shares are 3,717,600 shared tendered pursuant to
notice of guarantee delivery.
As a result of an oversubscription in the tender offer, the number of shares
purchased from each tendering stockholder (other than persons holding fewer than
100 shares or persons tendering their shares on a conditional basis) is
approximately 54.74% of the amount tendered. Such percentage is not final. The
Company will determine final percentage and make payment for the shares within
seven business days. All shares not purchased due to proration will be promptly
returned to tendering stockholders. As a result of the Company's acceptance for
purchase of 25.5 million shares, all withdrawal rights are terminated.
Building One Services Corporation is a leader in the facilities services
industry and has a corporate goal of becoming a national single-source provider
of facilities services. Facility services companies provide many products
and services needed for the routine operation and maintenance of a building.
Building One currently has annualized revenues of approximately $1.5 billion and
has operations in the electrical mechanical and janitorial segments of the
facilities services industry.
<PAGE>
BUILDING ONE SERVICES CORPORATION
- --------------------------------------------------------------------------------
Press Release 99-011
Page 2
This press release and our other public documents contain forward-looking
statements. Such statements relate to, among others things, the anticipated
closing of the tender offer and the financing related to the tender offer. Any
or all of our forward-looking statments in this press release or in any other
public statements we make may turn out to be wrong. They can be affected by
inaccurate assumptions we might make or by known or unknown risks and
uncertainties, including, without limitation, the following: the volatility of
the financial markets; the risks associated with significant indebtedness that
we may incur in our tender offer, the dependence on key personnel of the Company
and hourly wage and technical employees; risks related to the Company's
consolidation strategy, its ability to complete acquisitions and the continuing
consolidation in the industry; the ability to integrate acquisitions; risks
related to acquisition financing, including potential dilution; possible
significant amortization charges; exposure to downturns in commercial and
industrial construction; substantial competition, and other factors affecting
the Company's prospects described in the Company's annual report on Form 10-K
for the year ended December 31, 1998 filed with the Securities and Exchange
Commission and in its other public filings.
-END-
