<PAGE>
As filed with the Securities and Exchange Commission on June , 1999
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-4
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
----------------
Building One Services Corporation
(Exact name of Registrant as specified in its charter)
Delaware 7600 52-2054952
(State or other (Primary Standard (IRS Employer
jurisdiction of Industrial Identification No.)
incorporation or Classification Number)
organization)
800 Connecticut Avenue, N.W., Suite 1111
Washington, DC 20006
(202) 261-6000
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
----------------
Joseph M. Ivey
President and Chief Executive Officer
Building One Services Corporation
800 Connecticut Avenue, N.W., Suite 1111
Washington, DC 20006
(202) 261-6000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
----------------
Copies to:
F. Traynor Beck, Esquire Linda L. Griggs, Esquire
Executive Vice President, General Morgan, Lewis and Bockius LLP
Counsel and Secretary 1800 M Street, N.W.
800 Connecticut Avenue, N.W., Suite Washington, DC 20036
1111 (202) 467-7000
Washington, DC 20006
(202) 261-6000
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. [_]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
CALCULATION OF REGISTRATION FEE
<TABLE>
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<CAPTION>
Proposed
Title of each class of maximum Proposed maximum Amount of
securities to be Amount to be offering price aggregate offering registration
registered registered per unit(1) price(1) fee
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<S> <C> <C> <C> <C>
10 1/2% Senior
Subordinated Notes due
2009.................. $200,000,000 100% $200,000,000 $55,600
- -------------------------------------------------------------------------------------
Subsidiary Guarantees of
10 1/2% Senior
Subordinated Notes due
2009.................. $200,000,000 -- -- (2)
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(f)(2) under the Securities Act of 1933, as amended.
(2) Pursuant to Rule 457(n) under the Securities Act, no separate fee is
payable for the subsidiary guarantees of the notes. The subsidiaries of
the registrant issuing these guarantees are listed on Table 1 to this
Registration Statement Cover Page.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
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<PAGE>
TABLE 1
BUILDING ONE SERVICES CORPORATION; SUBSIDIARY GUARANTORS
<TABLE>
<CAPTION>
Federal ID
Subsidiary Number
- --------------------------------------------------------------------- ----------
<S> <C>
Advent Electric Co., Inc.
(a Tennessee corporation)............................................ 62-1775021
American Air Co., Inc.
(a California corporation)........................................... 94-2233668
Appearance Management Services, Inc.
(a Georgia corporation).............................................. 68-2130882
Barnes Ivey Mechanical Company, L.L.C.
(a North Carolina corporation)....................................... 64-0849022
Beltline Mechanical Services, Inc.
(a Texas corporation)................................................ 75-2198127
Boxberger, Inc.
(a North Carolina corporation)....................................... 66-1680974
Brazosport Management, Inc.
(a Texas corporation)................................................ 75-0554372
Brick, Inc.
(a Tennessee corporation)............................................ 58-2166611
Building One Mechanical Services, Inc.
(a Mississippi corporation).......................................... 52-2125884
Building One Service Solutions, Inc.
(a Virginia corporation)............................................. 54-1732370
BUYR, Inc.
(a Delaware corporation)............................................. 62-2073333
Center Services, Inc.
(a California corporation)........................................... 33-0524339
Chambers Electronic Communications, Inc.
(an Arizona corporation)............................................. 86-0919799
Consolidated Electrical Group, Inc.
(a Delaware corporation)............................................. 52-2054952
Cramar Electric, Inc.
(a Kansas corporation)............................................... 48-1181737
Crest International, LLC
(a Wisconsin corporation)............................................ 39-1832516
DFW Mechanical Services, Inc.
(a Texas corporation)................................................ 75-1767390
Electrical Design & Construction, Inc.
(an Oklahoma corporation)............................................ 73-1061381
Engineering Design Group, Inc.
(an Oklahoma corporation)............................................ 73-0785554
Flor-Shin, Inc.
(a South Carolina corporation)....................................... 57-0735264
Fred Clark Electrical Contractors, Inc.
(a Texas corporation)................................................ 73-1291869
G.S. Financial, Inc.
(a Nevada corporation)............................................... 76-0194729
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Federal ID
Subsidiary Number
- --------------------------------------------------------------------- ----------
<S> <C>
G.S. Group, Inc.
(a Nevada corporation)............................................... 88-0394187
Gamewell Mechanical, Inc.
(a North Carolina corporation)....................................... 56-2116919
Garfield-Indecon Electrical Services, Inc.
(an Ohio corporation)................................................ 31-1589024
G.S.I. of California, Inc.
(a California corporation)........................................... 76-0266448
Gulf States, Inc.
(a Texas corporation)................................................ 74-1652173
Hunt Electric, Inc.
(a Utah corporation)................................................. 87-0436108
Ivey Mechanical Company, Inc.
(a Mississippi corporation).......................................... 64-8900367
Ivey Mechanical Services, L.L.C.
(a Texas corporation)................................................ 75-2721989
Lexington/Ivey Mechanical Company, LLC
(a Kentucky corporation)............................................. 31-1559756
McIntosh Mechanical, Inc.
(a South Carolina corporation)....................................... 58-2423622
Mountain View Electric, Inc.
(a Colorado corporation)............................................. 84-0757008
National Network Services, Inc.
(a Delaware corporation)............................................. 84-1476279
Oil Capital Electric, Inc.
(an Oklahoma corporation)............................................ 73-0942941
Omni Mechanical Company
(an Oklahoma corporation)............................................ 94-2233668
Omni Mechanical Services
(an Oklahoma corporation)............................................ 73-1289880
Perimeter Maintenance Corporation
(a Georgia corporation).............................................. 68-1616500
Potter Electric Co., Inc.
(a Nevada corporation)............................................... 88-0109547
Pro Wire Security Systems, Inc.
(a Kansas corporation)............................................... 48-1206187
Regency Electric Company Atlanta Office
(a Georgia corporation).............................................. 58-1821158
Regency Electric Company Charlotte Office, Inc.
(a North Carolina corporation)....................................... 56-1871003
Regency Electric Company Jacksonville Office, Inc.
(a Florida corporation).............................................. 59-2899507
Regency Electric Company Memphis Office, Inc.
(a Tennessee corporation)............................................ 59-3553585
Regency Electric Company Orlando Office, Inc.
(a Florida corporation).............................................. 59-3074515
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Federal ID
Subsidiary Number
- --------------------------------------------------------------------- ----------
<S> <C>
Regency Electric Company Projects Group, Inc.
(a Florida corporation).............................................. 59-3372744
Regency Electric Company South Florida, Inc.
(a Florida corporation).............................................. 59-3534202
Regency Electric Company, Inc.
(a Florida corporation).............................................. 59-3534683
Reliable Paper Service Company, Inc.
(a Georgia corporation).............................................. 58-1684623
Riviera Electric Construction Co.
(a Colorado corporation)............................................. 84-1451102
Riviera Electric of California, Inc.
(a Colorado corporation)............................................. 93-1170983
Robinson Mechanical Company
(a Colorado corporation)............................................. 84-0758337
Sanders Bros., Inc.
(a South Carolina corporation)....................................... 57-0521391
SKC Electric, Inc.
(a Kansas corporation)............................................... 48-0925068
SKCE, Inc.
(a Kansas corporation)............................................... 48-1090186
Spann Building Maintenance Company
(a Missouri corporation)............................................. 43-0758063
Spann Management Group, Inc.
(a Missouri corporation)............................................. 43-1735563
Taylor Electric, Inc.
(a Utah corporation)................................................. 87-0619446
Tess Holdings, Inc.
(a Wisconsin corporation)............................................ 39-1739469
Testronics, Inc.
(a Texas corporation)................................................ 76-0066345
The Lewis Companies, Inc.
(an Oklahoma corporation)............................................ 73-1061382
Town & Country Electric, Inc.
(a Wisconsin corporation)............................................ 39-1923036
Tri-City Electrical Contractors, Inc.
(a Florida corporation).............................................. 59-0944060
Tri-M Holding Corp.
(a Pennsylvania corporation)......................................... 23-2973688
Tri-M Corporation
(a Pennsylvania corporation)......................................... 23-2706546
Tri-M Electrical Construction Corp.
(a Pennsylvania corporation)......................................... 23-1886824
Tri-M Building Automation Systems Corp.
(a Pennsylvania corporation)......................................... 23-2705680
Tri-M Information Systems Corp.
(a Pennsylvania corporation)......................................... 23-2705681
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Federal ID
Subsidiary Number
- --------------------------------------------------------------------- ----------
<S> <C>
Tri-M Integrated Systems Solutions Corp.
(a Pennsylvania corporation)......................................... 23-2829286
Walker Engineering, Inc.
(a Texas corporation)................................................ 75-2763689
Warren Electrical Construction Corp.
(a Maryland corporation)............................................. 23-2427069
Watson Electric Construction Co.
(a North Carolina corporation)....................................... 66-0734692
Wilson Electric Company, Inc.
(an Arizona corporation)............................................. 86-0906188
</TABLE>
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the +
+Securities and Exchange Commission is effective. This prospectus is not an +
+offer to sell these securities and is not soliciting an offer to buy these +
+securities in any state where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject to completion, dated June , 1999
Prospectus
$200,000,000
(LOGO) BUILDING ONE APPEARS HERE
Offer to exchange all outstanding 10 1/2% Senior Subordinated Notes due 2009
that were
originally issued on April 30, 1999 for new identical 10 1/2% Senior
Subordinated Notes due 2009
-----------
Building One Services Corporation offers to exchange up to $200,000,000 of
its 10 1/2% Senior Subordinated Notes due 2009, the "original notes," for new
identical 10 1/2% Senior Subordinated Notes due 2009, the "exchange notes."
. The exchange notes will have the same terms as the original notes that
were issued in a private offering on April 30, 1999, except that the
exchange notes will be registered with the Securities and Exchange
Commission and, except as set forth below, you will be able to offer and
sell them freely to any potential buyer. This is beneficial to you because
the original notes were not registered and may not be offered or sold
unless they are registered or your offer or sale is exempt from
registration under the federal securities laws.
. The exchange notes mature on May 1, 2009. We will pay interest on the
exchange notes on May 1 and November 1 of each year, commencing on
November 1, 1999.
. The exchange notes will be unsecured and subordinated to all of our
existing and future senior debt. Our subsidiaries will guarantee the
exchange notes with unconditional guarantees that will be unsecured and
subordinated to their existing and future senior debt.
. The exchange offer expires at 5:00 p.m., New York City time, on , 1999
and is subject to customary terms and conditions, as specified in this
prospectus and the accompanying letter of transmittal.
. You may withdraw your tender of notes at any time prior to , 1999, the
expiration date of this exchange offer. We will exchange all original
notes that are validly tendered and not withdrawn before this exchange
offer expires.
. Each broker-dealer that receives exchange notes for its own account
pursuant to the exchange offer must deliver a prospectus in connection
with any resale of the exchange notes. This prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer
in connection with resales of exchange notes received in exchange for
original notes acquired by the broker-dealer as a result of market-making
activities or other trading activities. See "Plan of Distribution."
--------------------------------------------------------
Please carefully consider the "Risk Factors" beginning on page 10 of this
prospectus.
--------------------------------------------------------
Because we issued the original notes in a transaction that did not require
registration under the Securities Act of 1933, as amended, their transfer is
restricted. In connection with our issuance of the original notes, we entered
into a registration rights agreement to furnish holders of the original notes
with the right to exchange their notes for notes that are freely tradable. We
are making this exchange offer to satisfy your registration rights, as holders
of the original notes, requiring us to either provide you with exchange notes
or to register your original notes for resale. If we do not fulfill these
obligations, we must make certain penalty interest payments to you, described
under "Exchange Offer--Purpose and Effect of the Exchange Offer."
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. It is illegal for any person to tell
you otherwise.
The date of this prospectus is June , 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Where You Can Find More Information........................................ 1
Prospectus Summary......................................................... 3
Use of Proceeds............................................................ 9
Ratio of Earnings to Fixed Charges......................................... 9
Risk Factors............................................................... 10
Exchange Offer............................................................. 19
Capitalization............................................................. 27
Selected Financial Data.................................................... 28
Description of the Exchange Notes.......................................... 31
Description of the Convertible Junior Subordinated Debentures.............. 65
United States Federal Tax Consequences..................................... 69
Plan of Distribution....................................................... 72
Legal Matters.............................................................. 72
Experts.................................................................... 72
</TABLE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements, and other
information with the SEC. You may read and, for a set fee, copy any of the
information we file at the following SEC public reference facilities:
. 450 Fifth Street, N.W.
Washington, DC 20549
. Seven World Trade Center
Suite 1300
New York, New York 10048
. Citicorp Center
Suite 1400
500 West Madison Avenue
Chicago, Illinois 60661
Please call the SEC at 800/SEC-0330 for further information on these public
reference facilities. Our SEC filings are also available to the public over
the Internet at the SEC's web site (http://www.sec.gov).
The SEC allows us to "incorporate by reference" the information in documents
that we file with them. This means that we can disclose important information
to you by referring you to those documents. The information incorporated by
reference is an important part of this prospectus, and information in
documents that we file later with the SEC will automatically update and may
supersede this information.
We incorporate by reference the documents listed below and any future
filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended, prior to the date the exchange
offer expires:
. Annual Report on Form 10-K for the year ended December 31, 1998 (file no.
000-23421);
. The financial statements of the following acquired businesses included in
the Prospectus Supplement dated May 17, 1999 to the Prospectus dated
March 16, 1999, filed pursuant to Rule 424(b)(3): Service Management USA,
Inc., Tri-City Electrical Contractors, Inc., Wilson Electric Company,
Inc., SKC Electric, Inc. and Affiliate, Riviera Electric Construction
Co., Town & Country Electric Inc., Garfield Electric Company, Indecon,
Inc. and Taylor Electric, Inc. (file no. 333-60053);
1
<PAGE>
. Our pro forma financial statements included in the Prospectus Supplement
dated May 17, 1999 to the Prospectus dated March 16, 1999, filed pursuant
to Rule 424(b)(3) (file no. 333-60053);
. Current Reports on Form 8-K dated February 10, 1999, February 18, 1999,
March 23, 1999, April 9, 1999 and June 28, 1999 (file no. 000-23421); and
. Quarterly Report on Form 10-Q for the quarterly period ended March 31,
1999 (file no.000-23421).
You may request a copy of these filings, at no charge, by writing or
telephoning us at the following address:
Building One Services Corporation
800 Connecticut Avenue, N.W., Suite 1111
Washington, DC 20006
202/261-6000
In making your investment decision, you should rely only on the information
provided in this prospectus or on any information incorporated by reference.
We have not authorized anyone else to provide you with different information.
In addition, you should not assume that the information in this prospectus or
any other document is accurate as of any date other than the date on the front
of those documents.
2
<PAGE>
PROSPECTUS SUMMARY
This summary highlights selected information from this prospectus and may not
contain all of the information that is important to you. You are encouraged to
read the entire prospectus.
The Company
Building One Services Corporation is a leading provider of integrated
facilities services in the United States. We provide many of the services and
related products necessary for the routine maintenance and operation of
commercial and industrial buildings. Our Building One Mechanical and Electrical
Group provides mechanical and electrical systems installation and maintenance
services and our Building One Service Solutions Group provides janitorial and
maintenance management services. Based on pro forma revenues, we believe that
our company is the second largest provider of mechanical and electrical
contracting and maintenance services in the United States and the largest
provider of janitorial and maintenance management services to the retail
industry in the United States. On a pro forma basis for the year ended December
31, 1998, our revenues were $1,467.3 million.
Since our initial public offering in December 1997 and through June 25, 1999,
we have grown primarily through acquisitions, having acquired 38 businesses
that have average revenues of approximately $41 million and an average
operating history of 22 years. We currently have 128 locations that provide
facilities services to over 8,800 commercial, industrial and institutional
customers in 48 states. The presidents of our operating companies have an
average of over 25 years of experience in the facilities services industry. The
businesses that we have acquired have demonstrated strong internal growth.
Our goal is to become the preeminent single-source provider of facilities
services in the United States. To achieve this goal, we intend to capitalize on
favorable industry dynamics such as the trend by our customers to outsource
significant portions of facilities services requirements to third-party
providers and the trend of building managers to seek a single-source provider
of facilities services. In addition, we believe that the recent combination of
our mechanical and electrical groups further enhances our ability to offer
combined services to existing customers and to attract new clients seeking to
reduce the number of vendors with which they do business. We believe our highly
skilled workforce, rigorous hiring and training programs, breadth of service
offerings, geographic coverage and reputation provide us with a competitive
advantage in achieving our goal.
Recent Developments
Tender Offer. On May 11, 1999, we announced our purchase from stockholders of
24,618,856 shares of our common stock at a price of $22.50 per share for cash
and 881,144 shares of our common stock underlying options at a price in cash of
$22.50 per share less the exercise price per share of the options. We spent a
total of $560.1 million to pay for the shares using the net proceeds of $195.5
million from the sale in a private placement of the original notes that we are
offering to exchange for the exchange notes in this exchange offer and $100
million from the sale to Boss Investment LLC, an affiliate of Apollo
Management, L.P., of our 7 1/2% convertible junior subordinated debentures,
approximately $120 million of available cash and borrowings of $144.6 million
under a credit facility.
In connection with our sale of the convertible junior subordinated debentures
to Boss Investment, we increased the size of our board of directors to ten
persons and, effective April 30, 1999, appointed three designees of Boss
Investment, Andrew Africk, Michael Gross and Brooks Newmark, to the board.
Effective April 30, 1999, Thomas Heule and David Ledecky resigned from the
board.
3
<PAGE>
Exchange Offer
The following summary describes the terms of the exchange offer. For a more
detailed explanation of the exchange offer you should refer to the section in
this prospectus entitled "Exchange Offer."
The Exchange Offer.......... We are offering to exchange $200,000,000
principal amount of our 10 1/2% senior
subordinated notes due 2009, which are registered
under this registration statement, for
$200,000,000 principal amount of our 10 1/2%
senior subordinated notes due 2009 that were
issued on April 30, 1999 in a private offering.
You have the right to exchange your original
notes for exchange notes with substantially
identical terms.
In order for your original notes to be exchanged,
you must properly tender them prior to the
expiration date. All validly tendered original
notes will be exchanged. We will issue the
exchange notes promptly after the expiration of
the exchange offer.
Termination of Registration We sold the original notes to the initial
Rights..................... purchasers, BT Alex. Brown, Incorporated, Bear,
Stearns & Co. Inc., Goldman, Sachs & Co., Salomon
Smith Barney Inc., Friedman, Billings, Ramsey &
Co., Inc., Jefferies & Company, Inc. and Fleet
Securities, Inc. on April 30, 1999. At that time,
we signed a registration rights agreement with
these initial purchasers, which requires us to
conduct this exchange offer.
After the exchange offer is complete, you will no
longer be entitled to registration rights with
respect to any original notes that you are
entitled to exchange for exchange notes but
choose not to exchange.
Failure to Exchange
Outstanding Notes.......... If you do not exchange your original notes for
exchange notes in this exchange offer, you will
continue to be subject to the restrictions on
transfer that are contained in the terms of the
original notes and the indenture governing those
notes. In general, those restrictions prohibit
you from offering or selling your original notes
unless the original notes are:
. registered under the federal securities laws;
or
. sold in a transaction that is exempt from or
not subject to the registration requirements of
the federal securities laws and applicable
state securities laws.
Expiration of the Exchange The exchange offer will expire at 5:00 p.m., New
Offer...................... York City time, on , 1999, unless we decide
to extend the expiration date.
Tender of Original Notes.... If you wish to tender your original notes for
exchange, you must:
. complete and sign the enclosed letter of
transmittal by following the related
instructions; and
4
<PAGE>
. send the letter of transmittal, as directed in
the instructions, together with any other
required documents, to IBJ Whitehall Bank &
Trust Company, the exchange agent, either with
the original notes to be tendered or in
compliance with the procedures for guaranteed
delivery of the original notes.
Brokers, dealers, commercial banks, trust
companies and other nominees may also effect
tenders by book-entry transfer.
Please do not send your letter of transmittal or
the certificates representing your original notes
to Building One. Those documents should only be
sent to the exchange agent. Questions regarding
how to tender and requests for information should
be directed to IBJ Whitehall Bank & Trust
Company. See "Exchange Offer--Exchange Agent."
Special Procedures for
Beneficial Owners.......... If your original notes are registered in the name
of a broker, dealer, commercial bank, trust
company or other nominee, we urge you to contact
that person promptly if you wish to tender you
original notes in the exchange offer. See
"Exchange Offer--Procedures for Tendering."
Withdrawal Rights........... You may withdraw the tender of your original
notes at any time prior to the expiration of the
exchange offer by delivering a written notice of
withdrawal to the exchange agent. You must follow
the withdrawal procedures described under the
heading "Exchange Offer--Withdrawal of Tenders."
Resale of the Exchange We believe that you will be able to offer for
Notes...................... resale, resell or otherwise transfer the exchange
notes without compliance with the registration
and prospectus delivery provisions of the federal
securities laws, as long as:
. you will acquire the exchange notes in the
ordinary course of business;
. you have no arrangement or understanding with
any person to participate in the distribution
of the exchange notes in violation of the
Securities Act;
. you are not an affiliate of Building One
Services Corporation as defined in Rule 405
under the Securities Act or, if you are an
affiliate, you will comply with the applicable
registration and prospectus delivery
requirements of the Securities Act;
. if you are not a broker-dealer, you are not
engaged, and do not intend to engage in, the
distribution of the exchange notes; and
. if you are a broker-dealer who will receive the
exchange notes for your own account in exchange
for original notes that were acquired as a
result of market-making or other trading
activities, you will deliver a prospectus in
connection with any resale of the exchange
notes.
5
<PAGE>
Our belief that the exchange notes will be freely
tradable is based upon interpretations by the
staff of the Securities and Exchange Commission
set forth in a series of no-action letters issued
to third parties who are unrelated to Building
One. The SEC staff has not considered this
exchange offer in the context of a no-action
letter. We cannot assure you that the SEC staff
would make a similar determination with respect
to this exchange offer.
If our belief is not accurate and you transfer an
exchange note without delivering a prospectus
that meets the requirements of the federal
securities laws or without an exemption from
these laws, you may incur liability under the
federal securities laws. We do not and will not
assume or indemnify you against this liability.
Certain Federal Tax
Consequences............... With respect to the exchange of initial notes for
exchange notes:
. the exchange should not constitute a taxable
exchange for federal income tax purposes; and
. you should not recognize gain or loss upon
receipt of the exchange notes.
You must include interest on the exchange notes
in gross income to the same extent as the
original notes.
The Exchange Agent.......... The exchange agent for this exchange offer is IBJ
Whitehall Bank & Trust Company. You may contact
the exchange agent at 212/858-2103. See "Exchange
Offer--Exchange Agent."
6
<PAGE>
The Exchange Notes
The terms of the exchange notes and the original notes are identical in all
material respects, except that the transfer restrictions and registration
rights relating to the original notes do not apply to the exchange notes. The
summary below describes the principal terms of the exchange notes. Certain of
the terms and conditions described below are subject to important limitations
and exceptions. The section in this prospectus entitled "Description of the
Exchange Notes" contains a more detailed description of the terms and
conditions of the exchange notes.
Securities Offered.......... $200,000,000 aggregate principal amount of our 10
1/2% senior subordinated notes due 2009.
Maturity.................... May 1, 2009.
Interest Rate............... 10 1/2% per year (calculated using a 360-day
year).
Interest Payment Dates...... May 1 and November 1, beginning on November 1,
1999. Interest on the exchange note will accrue
from the last date on which interest was paid on
the original notes, or if no such interest has
been paid, from April 30, 1999.
Guarantees.................. The exchange notes will be unconditionally
guaranteed by our subsidiaries. If we create or
acquire a new domestic subsidiary, it will
guarantee the exchange notes unless we designate
the subsidiary as an "unrestricted subsidiary"
under the indenture or the subsidiary does not
have significant assets.
Ranking..................... The exchange notes will be our unsecured senior
subordinated obligations and will rank junior to
our existing and future senior debt. The
guarantees by our subsidiaries will be
subordinated to all of their existing and future
senior debt. Because the exchange notes are
subordinated, in the event of bankruptcy,
liquidation or dissolution, holders of the
exchange notes would not receive any payment
until holders of senior debt and senior debt of
the guarantors have been paid in full.
As of June 25, 1999, we had approximately $215.0
million of senior debt.
Optional Redemption......... We may redeem the exchange notes, in whole or in
part, at any time on or after May 1, 2004, at the
redemption prices listed in the "Description of
the Exchange Notes" section under the heading
"Redemption--Optional Redemption," plus accrued
interest.
Optional Redemption after
Equity Offerings........... At any time, which may be more than once, before
May 1, 2002, we may redeem up to 35% of the
outstanding exchange notes with money that we
raise in one or more equity offerings, as long
as:
. we pay 110.875% of the face amount of the
exchange notes, plus accrued interest;
7
<PAGE>
. we buy the exchange notes back within 90 days
of completing the equity offering; and
. at least 65% of the total principal amount of
the exchange notes remains outstanding after
the redemption.
Change of Control Offer.....
If a change of control in our company occurs, we
must give holders of the exchange notes the
opportunity to sell us their exchange notes at
101% of their face amount, plus accrued interest.
We might not be able to pay you the required
price for the exchange notes you present to us
upon a change in control because:
. we might not have enough funds at that time; or
. the terms of our senior debt might prevent us
from paying.
Certain Indenture The indenture governing the exchange notes will
Provisions................. contain covenants that, among other things, limit
our ability and the ability of our restricted
subsidiaries to:
. incur additional debt;
. pay dividends or distributions on capital stock
or repurchase capital stock;
. issue preferred stock of subsidiaries;
. make certain investments;
. create liens on our assets to secure debt;
. enter into transactions with affiliates;
. merge or consolidate with another company; and
. transfer or sell assets or enter into sale and
leaseback transactions.
These covenants are subject to important
exceptions and qualifications, which are
described in the section "Description of the
Exchange Notes" under the heading "Certain
Covenants" in this prospectus.
Use of Proceeds.............
We will not receive any proceeds from this
exchange offer.
We are a Delaware corporation. Our executive offices are located at 800
Connecticut Avenue, N.W., Suite 1111, Washington, DC 20006, and our telephone
number is 202/261-6000.
8
<PAGE>
USE OF PROCEEDS
We will not receive any cash proceeds from the issuance of the exchange
notes. The proceeds from the issuance and sale of the original notes were,
along with proceeds from the sale of $100 million of convertible junior
subordinated debentures to Boss Investment LLC, an affiliate of Apollo
Management, L.P., and borrowings under a credit facility, used to fund a
portion of our recently completed issuer tender offer.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Three months ended
Year ended December 31, March 31,
---------------------------------------------------- -------------------------
Pro Forma Pro Forma
1994 1995 1996 1997 1998 1998 1999 1999
---- ---- ---- ---- ---- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
2.3x -- (1) 2.0x 5.8x 24.3x 2.5x 17.1x 2.2x
</TABLE>
- --------
. For purposes of computing the ratio of earnings to fixed charges: (1)
"earnings" consists of income from continuing operations before income
taxes and fixed charges; and (2) "fixed charges" consists of interest,
amortization of debt issuance costs, the commitment fee on the unused
portion of the credit facility and the estimated interest component of
rental expense.
(1) Earnings were inadequate to cover fixed charges for the year ended
December 31, 1995 by $195,000.
9
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RISK FACTORS
Before you tender your original notes in this exchange offer, you should
consider carefully the following risks and all of the information included in
this prospectus. Unless otherwise indicated, references to the "notes"
describe risks associated with both the original notes and the exchange notes.
This prospectus contains some forward-looking statements. Forward-looking
statements give our current expectations or forecasts of future events. You
can identify these statements by the fact that they do not relate strictly to
historical or current facts. They use words like "believe," "may," "will,"
"expect," "intend," "plan," "anticipate," "estimate" or "continue" and other
words and terms of similar meaning. In particular, these include statements
relating to future actions, our acquisition program, the integration of
acquired businesses, our growth in revenues and earnings, our achievement of
operating efficiencies, the trading of our stock and our plans with respect to
potential new products or services. From time to time, we also may provide
oral or written forward-looking statements in other materials.
Any or all of our forward-looking statements in this prospectus 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. Many factors mentioned below will be important in determining
our future results. Consequently, no forward-looking statement can be
guaranteed. Actual results could differ significantly.
Risk Factors Related to Our Company
We have a high level of debt on our balance sheet as a result of the tender
offer.
We borrowed approximately $455.0 million and used cash in the amount of
$120.0 million to finance the tender offer and its related fees and expenses
to date. We have approximately $511.0 million of outstanding debt as of June
25, 1999. This debt level and our use of our cash have the following
consequences:
. a substantial portion of our cash flow will be used to pay interest
expense on our debt, which will reduce the funds that would otherwise be
available to us for our operations, capital expenditures and future
business opportunities and will require us to borrow under our new
revolving credit agreement which provides for borrowings of $225.0
million, of which approximately $142.5 million is available as of June
25, 1999;
. a substantial decrease in our net operating cash flows or an increase in
our expenses could make it difficult for us to meet our debt service
requirements and force us to modify our operations;
. we may have more debt than our competitors, which may place us at a
competitive disadvantage; and
. our high level of debt may make us more vulnerable in a downturn in our
business or the economy in general.
We are subject to restrictive debt covenants that may limit our flexibility
in operating our business.
The credit facility and the indentures governing the notes and the
convertible junior subordinated debentures we issued to finance our tender
offer contain a number of significant covenants that impose restrictions on us
and our subsidiaries. These covenants include restrictions on:
. indebtedness;
. liens;
. voluntary prepayments of the notes and other indebtedness;
. amendments of organizational, corporate and other documents;
. mergers, acquisitions and dispositions of assets;
. sale-leaseback transactions, capital lease payments and maintenance of
material properties;
10
<PAGE>
. dividends and other payments in respect of capital stock;
. advances, credit extensions, capital contributions, investments and
capital expenditures;
. transactions with affiliates and the formation of subsidiaries and joint
ventures;
. changes in business; and
. entry into a change of control without offering to redeem the notes.
In addition, we are required to comply with financial covenants with respect
to the amount of our debt as compared to our earnings before interest expense,
taxes, depreciation and amortization expense ("EBITDA") and the amount of our
EBITDA as compared to our interest expense. Our indebtedness under the credit
facility and the notes is guaranteed by each of our subsidiaries and our
indebtedness under the credit facility is secured by a first priority lien on
substantially all of our properties and assets and those of our subsidiaries,
now owned or acquired later. If we should be unable to borrow under our
revolving credit facility due to a default, we would be left without
sufficient liquidity.
Your right to receive payments on the notes is subordinated to our existing
indebtedness and possibly our future indebtedness.
The notes and the guarantees of our subsidiaries are unsecured and are
contractually subordinated to all of our existing and future senior
indebtedness and that of our guarantors, including all indebtedness under the
credit facility. Please refer to the section entitled "Description of the
Exchange Notes--Subordination."
The notes and the guarantees are effectively subordinated to all of our
existing and future secured indebtedness and that of our subsidiaries to the
extent of the value of the assets securing that indebtedness. Indebtedness
under the credit facility is secured by liens against substantially all of our
assets and those of our subsidiaries. In the event of our default on that
indebtedness or our bankruptcy, liquidation, dissolution, reorganization or
similar proceeding, our assets, and those of our subsidiaries, would be
available to satisfy our obligations on that secured debt before we can make
any payments on the notes. In addition, to the extent that those assets cannot
fully satisfy the secured indebtedness, the holders of that indebtedness would
have a claim for any shortfall that would rank, subject to any contractual
subordination, equally in right of payment (or effectively senior if the
indebtedness were issued by a subsidiary that is not a guarantor) with the
notes. Accordingly, there might only be a limited amount of assets available
to satisfy your claims as a holder of the notes upon an acceleration of the
majority of the notes.
After giving pro forma effect to the tender offer and its related fees and
expenses, we would have had approximately $134.9 million of secured
indebtedness outstanding as of March 31, 1999, excluding unused commitments of
approximately $220.0 million. Our assets and those of our subsidiaries may not
be sufficient to repay in full this indebtedness.
Under specific circumstances, the notes and guarantees may be voided.
Federal and state statutes allow courts, under specific circumstances, to
void the notes and the guarantees and require noteholders to return payments
they receive under the terms of the notes.
Under federal bankruptcy law and comparable provisions of state fraudulent
transfer laws, the notes and the guarantees could be voided, or claims in
respect of the notes or the guarantees could be subordinated to all of our
other debts or those of our guarantors if, when the indebtedness evidenced by
the notes was incurred, we or such guarantor, among other things:
. received less than the reasonably equivalent value or fair consideration
for the incurrence of the indebtedness;
. were insolvent or rendered insolvent by reason of such incurrence;
. were engaged in a business or transaction for which our remaining assets
or those of our subsidiaries constituted unreasonably small capital; or
11
<PAGE>
. intended to incur, or believed that we would incur, debts beyond our
ability pay.
In addition, any payment we make, or any payment by one of our guarantors,
pursuant to the notes or the guarantee could be voided and required to be
returned to us or the guarantor or to a fund for the benefit of our creditors
or those of our guarantors.
The measures of insolvency for purposes of these fraudulent transfer laws
will vary depending upon the law applied in any proceeding to determine
whether a fraudulent transfer has occurred. Generally, however, we or a
guarantor would be considered insolvent if:
. the sum of our debts or those of the guarantors, including contingent
liabilities, is greater than the fair saleable value of all of our assets
or those of our guarantors;
. if the present fair saleable value of our assets or those of the
guarantors is less than the amount that would be required to pay our
probable liability on our existing debts or those of the guarantors,
including contingent liabilities, as they become absolute and mature; or
. we, or the guarantors, could not pay debts as they come due.
We may not have the ability to raise the funds necessary to finance any
change of control offer required by the indenture relating to the notes.
If certain change of control events occur, we are required by the indenture
relating to the notes to offer to repurchase all of the outstanding notes at
101% of their face value, plus any accrued interest. However, it is possible
that we will not have sufficient funds at the time of the change of control to
make the required repurchase of notes or that restrictions in the credit
facility will not allow the repurchases. In addition, certain important
corporate events, such as a leveraged recapitalization, that would increase
the level of our indebtedness would not constitute a "change of control" under
the indenture. Please refer to the section entitled "Description of the
Exchange Notes--Change of Control."
An active trading market for the exchange notes may not develop.
We do not intend to apply for listing of the exchange notes on any
securities exchange or for quotation through the National Association of
Securities Dealers Automated Quotation system. The initial purchasers have
informed us that they intend to make a market in the exchange notes. However,
the initial purchasers are not obligated to do so and may discontinue any such
market making at any time without notice.
The liquidity of any market for the exchange notes will depend upon various
factors, including:
. the number of holders of the notes;
. the interest of securities dealers in making a market for the notes;
. the overall market for high-yield securities;
. our financial performance or prospects; and
. the prospects for companies in our industry generally.
Accordingly, we cannot assure you that a market or liquidity will develop
for the exchange notes.
Historically, the market for non-investment grade debt has been subject to
disruptions that have caused substantial volatility in the prices of
securities that are similar to the exchange notes. We cannot assure you that
any market for the exchange notes will not be subject to similar disruptions.
Any such disruptions may affect you as a holder of the exchange notes.
We are subject to restrictive debt covenants that may restrict our ability to
make acquisitions.
We have financed, and intend to continue to finance, most of our
acquisitions with a combination of cash and shares of our common stock. We
have approximately $142.5 million available under our revolving credit
12
<PAGE>
facility to use for acquisitions and general corporate purposes, including
working capital requirements and contingent payments that are required by
certain acquisition agreements with respect to previously completed
acquisitions. We have paid approximately $23.5 million in cash to date
relating to those contingent payments. We expect that the remaining cash
portion of those contingent payments will be approximately $33.5 million in
1999.
The ability to borrow funds under the revolving credit facility is subject
to various conditions, such as continued compliance with the financial
covenants, maximum individual and total purchase price requirements for
acquisitions, adequate remaining availability under the facility and the
nature of the particular business to be acquired. The restrictive covenants
contained in the indentures relating to the notes and the convertible junior
subordinated debentures may also limit our ability to make future
acquisitions. Depending on the pace of our acquisitions, we may need
additional debt or equity financing in order to continue to acquire
businesses. That financing may not be available if and when additional cash is
needed or it may not be available on terms that we think are acceptable. If we
do not have sufficient cash to pay the cash consideration for acquisitions, or
cannot otherwise finance acquisitions, we will be unable meet our acquisition
objectives.
Boss Investment LLC, together with our management, could significantly
influence the election of directors and other matters that require the
approval of our stockholders.
As of June 25, 1999, our directors, executive officers and Boss Investment
owned beneficially approximately 33.6% of our outstanding shares of common
stock.
The terms of the convertible junior subordinated debentures that we have
issued to Boss Investment provide certain voting rights to the holders of the
convertible junior subordinated debentures, subject to the adoption of
amendments to our restated certificate of incorporation. We are seeking
stockholder approval at our next annual meeting of an amendment to our
restated certificate of incorporation which would authorize the holders of the
convertible junior subordinated debentures to vote together with the holders
of our common stock on all of the matters submitted to our stockholders for a
vote. In addition, we are seeking stockholder approval of an amendment to our
restated certificate of incorporation which would authorize the holders of the
convertible junior subordinated debentures to elect, as a class, three of our
ten directors. Assuming adoption of the amendment to the restated certificate
of incorporation, the holders of the convertible junior subordinated
debentures will be entitled to cast the number of votes that they would be
entitled to cast if they converted the convertible junior subordinated
debentures into shares of our common stock. Based upon a conversion price of
$22.50 per share and assuming all of the interest on the convertible junior
subordinated debentures is paid in cash, Boss Investment would have the right
to cast 4,444,444 votes, or votes equivalent to approximately 16.8% of the
votes based upon our currently outstanding shares of common stock.
If the amendments to our restated certificate of incorporation are not
adopted within specified time periods, the conversion price will be reduced by
up to a maximum reduction of $4.00, which would increase the voting power of
Boss Investment.
Our directors, executive officers and Boss Investment, if acting together,
may be able to significantly influence the election of directors and other
matters requiring the approval of our stockholders. If we default on any of
our indebtedness or materially and intentionally breach our agreement with
Boss Investment, Boss Investment has the right, among other remedies available
to a holder of indebtedness, to elect a majority of our directors, subject to
our prior right to cure any default or breach.
Risk Factors Relating to Our Company's Business
A downturn in commercial and industrial construction could hurt our business.
Approximately 57% of our pro forma revenues in 1998 and the revenues of the
businesses we acquired involved the installation of mechanical and electrical
systems in newly constructed commercial and industrial
13
<PAGE>
buildings. Our ability to maintain or increase our revenues from new
installation services depends on the levels of new construction starts in the
geographic areas where we operate. Because the construction industry is
cyclical, our revenues from year to year may fluctuate.
The level of new construction starts is affected by local economic
conditions, changes in interest rates and other related factors. A downturn in
levels of new construction would have a material adverse effect on our
business.
Our mechanical and electrical installation services are subject to the
seasonal variations in operations and demands that affect the construction
business. Specifically, the demand for construction services may be lower
during the winter months as a result of inclement weather conditions.
Accordingly, our revenues and operating results may be lower in the first
quarter.
Adverse changes in economic conditions can adversely affect our business.
Our success will depend upon the economic conditions in the geographic areas
in which a substantial number of our operating companies are located. In
addition, our success will depend upon occupancy levels at office buildings
for which we do business. Higher vacancy rates could have a material adverse
effect on, among other sectors of the facilities services industry, janitorial
and maintenance management services.
Fixed price contracts with our customers could expose us to losses if our
estimates of project costs are too low.
A substantial portion of our mechanical and electrical installation
contracts are "fixed price" contracts. The terms of these contracts require us
to guarantee the price of the services we provide and assume the risk that our
costs to perform the services and provide the materials will be greater than
anticipated.
Our profitability in this market is therefore dependent on our ability to
accurately predict the costs associated with our services. These costs may be
affected by a variety of factors, some of which may be beyond our control. If
we are unable to accurately predict the costs of fixed price contracts,
certain projects could have lower margins than anticipated, which could have a
material adverse effect on our business.
Our short operating history may make it difficult to evaluate our future
prospects.
Since our initial public offering in December 1997 and through June 25,
1999, we have acquired 38 businesses. Therefore, our combined company has a
short history of generating revenues, which may make it difficult to evaluate
our future prospects.
Our ability to generate revenues and earnings in the future will be
dependent upon, among other factors:
. the operating results of the businesses we have acquired;
. the operating results of any future businesses we acquire; and
. the successful integration and consolidation of those businesses.
Boss Investment has certain rights over our operations.
Under our agreement with Boss Investment, we are precluded from entering
into various types of transactions or making certain changes in our capital
structure, board size or management without the consent of Boss Investment. In
addition, Boss Investment has the right to acquire 50% of the shares of our
common stock or convertible securities that we offer to sell in a private
placement. Finally, Boss Investment and any other holders of the convertible
junior subordinated debentures have certain rights to require us to register
the shares of common stock that they acquire upon conversion of the
convertible junior subordinated debentures for sale under the Securities Act
of 1933, as amended, the "Securities Act."
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<PAGE>
Risks Factors Related to Our Acquisition Strategy
The integration of our acquired businesses may result in substantial costs,
delays or other problems.
We may not be able to successfully integrate our acquisitions without
substantial costs, delays or other problems. We will have to continue to
expend substantial managerial, operating, financial and other resources to
integrate our businesses. The costs of this integration could have an adverse
effect on short-term operating results.
The integration of newly-acquired businesses may also lead to diversion of
our management team away from other ongoing business concerns. In addition,
the rapid pace of our acquisitions of other businesses may adversely affect
our efforts to integrate acquisitions and manage those acquisitions
profitably. We may seek to recruit additional managers to supplement the
incumbent management of the acquired businesses, but we may not have the
ability to recruit additional candidates with the necessary skills.
Our growth strategy will be impacted by our ability to acquire additional
businesses.
Our business strategy depends, in part, upon our ability to compete in the
facilities services industry by expanding into new markets and our ability to
broaden the services we provide by identifying and acquiring other businesses.
We may not be able to identify, attract or acquire additional businesses. In
addition, certain acquisitions may require the approval of Boss Investment. We
may also be unable to make appropriate acquisitions because of competition for
the acquisition. In pursuing acquisitions, we compete against other facilities
services providers, some of which are larger than we are and have greater
financial and other resources than we have. We compete for potential
acquisitions based on a number of factors, including price, terms and
conditions, size and ability to offer cash, stock or other forms of
consideration. In addition, the negotiation of potential acquisitions may
require members of management to divert their time and resources away from our
operations.
Once we acquire a business, we are faced with certain additional risks,
including:
. the possibility that it will be difficult to integrate the operations
into our other operations;
. the possibility that we have acquired substantial undisclosed
liabilities;
. the risks of entering markets or offering services for which we have no
prior experience; and
. the potential loss of customers or employees as a result of changes in
management.
We may not be successful in overcoming these risks.
The consolidation of our industry may adversely affect our acquisition
program.
Many of our acquisitions are subject to the requirements of the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, which could adversely affect the
pace of our acquisitions in one or more sectors of the facilities services
industry. Under the Hart-Scott-Rodino Act, we may be required to divest a
portion of our then-existing operations or those of the acquired business,
which may render a given acquisition disadvantageous. In addition, if we
acquire businesses in regulated industries, we would be subject to regulatory
requirements. Those regulatory requirements could limit our flexibility in
growing and operating our businesses.
We believe that the facilities services industry will continue to undergo
considerable consolidation and changes during the next several years. This
consolidation could increase the competition we face to acquire facilities
services businesses and increase the prices we must pay for the businesses
that we acquire.
In response to this consolidation, we consider from time to time additional
strategies to enhance stockholder value. One such strategy that we pursued is
the tender offer. Other strategies include, among others, strategic alliances
and joint ventures, purchase, sale and merger transactions with other large
companies and other similar transactions. In considering any of these
strategies, we evaluate the consequences of the strategies, including,
15
<PAGE>
among other things, the potential for high levels of debt that would result
from such a transaction, the tax effects of the transaction and the accounting
consequences of the transaction. In addition, these strategies could have
various other significant consequences, including changes in management,
control or operational or acquisition strategies. In view of the completed
tender offer, we may determine not to pursue any of these strategies, but, if
any of these are pursued, they may not be completed successfully.
Risks from Competition
Our business is highly competitive, which could cause us to lower our prices,
resulting in reduced revenues and profit margins.
We face a competitive environment in the market for facilities services. We
compete against both large national and international organizations providing
a wide variety of facilities services to their customers and numerous smaller
companies providing a single service or fewer services in limited geographic
areas.
Other types of companies are also beginning to offer facilities services.
For example, property management companies and real estate investment trusts
(REITS) are beginning to offer facilities services for the properties that
they own or manage. Also, large heating, ventilation and air conditioning
manufacturers, such as Carrier Corporation and Honeywell, Inc., and some
public utilities, are active in certain sectors of the facilities services
industry.
Barriers to entry to the markets for certain facilities services, such as
janitorial services, are low, and we compete against numerous small service
providers, many of which may have more experience in and knowledge of the
local market for such services. These smaller service providers may also have
lower overhead cost structures and may be able to provide their services at
lower rates than we can.
In these same markets, we face large competitors that offer multiple
services and that are willing to accept lower profit margins in order to
capture market share. In addition, we face competition from both large and
small companies that offer only one of the services that we offer and may face
competition in the future from companies that enter the markets that we are
in.
In some geographic regions, we may not be eligible to compete for certain
contracts if our employees are not subject to collective bargaining
arrangements. As a result of this requirement, we may lose customers or have
difficulty acquiring new customers.
We may have trouble hiring the employees we need and our employment needs may
increase our costs.
Our ability to increase productivity and profitability will depend upon our
ability to recruit, train and retain large numbers of hourly wage and skilled
employees necessary to meet our service requirements. Competition for these
employees has led to increased wage levels and employee turnover. Inability to
recruit, train and retain these employees at competitive wage rates could
increase our operating costs.
In addition, many companies that require skilled employees, such as
mechanical and electrical installation and maintenance and heating,
ventilation and air conditioning companies, are currently experiencing
shortages of qualified employees. We may not be able to maintain an adequate
labor force necessary to efficiently operate our business. Also, our labor
expenses may increase as a result of a shortage in the supply of hourly wage
or skilled employees. As a result, we may have to curtail our planned growth
and margins may decline.
Although fewer than 10% of our employees are members of unions, many sectors
of the facilities services industry involve unionized employees. Union
activity at our companies may be disruptive to our business and may increase
our costs. To the extent any of our union contracts expire or we acquire
businesses that are unionized, we may be required to renegotiate union
contracts in an environment of increasing wage rates. We may not be able to
renegotiate union contracts on terms favorable to us or without experiencing a
work stoppage.
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<PAGE>
Other Business Risks
We depend on subcontractors to perform a majority of our janitorial services,
which reduces our ability to directly control our workforce and the quality
of services that we provide.
We depend, in part, on subcontractors to provide janitorial services to our
customers. This reliance reduces our ability to directly control both our
workforce and the quality of services that we provide. We may not be able to
control our subcontractors and the quality of services they provide.
Many of our contracts may be terminated on short notice.
Many of our janitorial services contracts have termination clauses
permitting the customer to cancel the contract on 30 to 90 days' notice. While
we maintain long-standing relationships with many of our customers, we may not
be able to keep customers if they exercise their rights to terminate their
contracts prior to expiration.
We may have potential environmental liabilities.
The nature of the facilities services industry often involves the transport,
storage, use and disposal of cleaning solvents, lubricants, chemicals,
gasoline, refrigerants and other hazardous materials by employees. These
activities are subject to stringent and changing federal, state and local
regulation and present the potential for liability for the actions of our
employees in handling these materials. In addition, the exposure of any
employees to these materials may give rise to claims by employees against us.
Compliance with governmental regulations or liability related to hazardous
materials may have a material adverse effect on our business.
We are subject to government regulation.
Due to the nature of the facilities services industry, our operations are
subject to a variety of federal, state, county and municipal laws, regulations
and licensing requirements, including labor, employment, immigration, health
and safety, consumer protection and environmental regulations. If we fail to
comply with applicable regulations, we may be subject to substantial fines or
revocation of our licenses.
Changes in these laws, regulations and licensing requirements may constrain
our ability to provide services to customers or increase the costs of our
services. In addition, competitive pricing conditions in the industry may
constrain our ability to adjust our billing rates to reflect any such
increased costs.
The Year 2000 issue could disrupt our business and adversely affect our
financial condition.
The Year 2000 issue refers to a number of date-related problems that may
affect information technology and non-information technology systems,
including codes embedded in chips and other hardware devices. These problems
include systems that identify a year by two digits and not four so that a date
using "00" would be recognized as the year "1900" rather than "2000." This
could result in system failures, miscalculations or errors causing disruptions
of operations or other business problems, including, among others, a temporary
inability to process transactions, send invoices or engage in normal business
activities. The Year 2000 issue is a significant issue for most, if not all
companies, with far reaching implications, some of which cannot be anticipated
or predicted with any degree of certainty.
We expect to complete our evaluation of our potential Year 2000 exposure and
to complete the development of a plan to address Year 2000 issues during the
second quarter of 1999. If we are unable to address these issues, our business
may be negatively impacted.
If we were to lose key members of our management, our business would suffer.
Our success depends principally upon the efforts of our executive management
team, the presidents of our operating companies and certain other members of
the senior management of the businesses we have acquired or will acquire in
the future. The loss of a substantial portion of this management could have a
material adverse effect on the company.
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<PAGE>
Risks Related to a Failure to Participate in the Exchange Offer
Any market for the original notes is likely to decline after the completion
of the exchange offer.
After original notes are tendered and accepted in the exchange offer, the
principal amount of original notes remaining after the completion of the
exchange offer will decrease. This decrease will reduce the liquidity of the
trading market for the original notes. We cannot assure you that any trading
market that has developed for the original notes will continue to exist after
the completions of the exchange offer. Please refer to the section entitled
"Exchange Offer--Consequences of Failure to Exchange."
If you do not exchange your original notes for exchange notes, you will
remain subject to transfer restrictions.
We have not registered the original notes under the federal securities laws.
Original notes that are not exchanged after the completion of this exchange
offer will remain subject to the transfer restrictions under applicable
securities laws. This means that you will not be able to transfer, sell or
trade your original notes except based upon an exemption from the registration
requirements of the federal securities laws. Please refer to the section
entitled "Exchange Offer--Consequences of a Failure to Exchange Original
Notes."
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<PAGE>
EXCHANGE OFFER
The summary below of certain provisions of the registration rights agreement
is subject to, and is qualified in its entirety by, all the provisions of the
registration rights agreement, a copy of which is filed as an exhibit to the
exchange offer registration statement, of which this prospectus is a part.
Purpose and Effect of the Exchange Offer
On April 30, 1999, we sold $200,000,000 in principal amount at maturity of
the original notes in a private placement through the initial purchasers, BT
Alex. Brown, Incorporated, Bear, Stearns & Co., Inc., Goldman, Sachs & Co.,
Salomon Smith Barney Inc., Friedman, Billings, Ramsey & Co., Inc., Jefferies &
Company, Inc. and Fleet Securities, Inc. The initial purchasers resold the
original notes to qualified institutional buyers in reliance on, and subject
to the restrictions imposed under, Rule 144A under the Securities Act.
In connection with the private offering of the original notes, we entered
into a registration rights agreement dated April 30, 1999 with the initial
purchasers, in which we agreed, among other things:
. to file a registration statement with the SEC on or before June 29, 1999
relating to an exchange offer for the original notes;
. to use our commercially reasonable best efforts to cause the registration
statement to become effective under the Securities Act on or before
September 27, 1999;
. to offer to each holder of original notes the opportunity to exchange
their notes for an equal principal amount of exchange notes upon the
effectiveness of the registration statement;
. to keep the exchange offer open for not less than 30 days, or longer if
required by applicable law, after the notice of the exchange offer is
mailed to holders of original notes; and
. to use our commercially reasonable best efforts to complete the exchange
offer on or before November 11, 1999.
Based on several no-action letters issued by the staff of the SEC to third
parties in unrelated transactions, we believe that you may offer for resale,
resell or otherwise transfer any exchange notes that we issue to you in the
exchange offer without registration of your exchange notes or the delivery of
a prospectus, if you can represent to us in the accompanying letter of
transmittal that:
. you will acquire the exchange notes in the ordinary course of business;
. you have no arrangement or understanding with any person to participate
in the distribution of the exchange notes in violation of the Securities
Act;
. you are not an affiliate of Building One Services Corporation as defined
in Rule 405 under the Securities Act or, if you are an affiliate, you
will comply with the applicable registration and prospectus delivery
requirements of the Securities Act;
. if you are not a broker-dealer, that you are not engaged, and do not
intend to engage in, the distribution of the exchange notes; and
. if you are a broker-dealer who will receive the exchange notes for you
own account in exchange for original notes that were acquired as a result
of market-making or other trading activities, that you will deliver a
prospectus in connection with any resale of the exchange notes.
In exchange for properly tendered original notes, we will issue the exchange
notes without a restrictive legend and a holder of those notes may resell the
exchange notes without the restrictions and limitations that are currently
imposed on the original notes by the Securities Act. If you do not tender your
original notes for exchange in this exchange offer they will remain
outstanding, however, you will not keep any of your rights under the
registration rights agreement, including your right to receive incremental
interest on the original notes in the event that we do not file a registration
statement or a registration statement does not become effective
19
<PAGE>
within specified time periods. In addition, if you do not tender your original
notes for exchange, they will remain subject to the transfer restrictions
imposed by the Securities Act. For more information, see "--Consequences of a
Failure to Exchange Original Notes."
If you are an affiliate of our company, one of the initial purchasers to
whom we sold the original notes, or if you cannot make the representations
required by the letters of transmittal:
. you will not be able to rely on the interpretations of the staff of the
SEC in connection with any offer for resale, resale or other transfer of
the exchange notes; and
. you must comply with the registration and prospectus delivery
requirements of the Securities Act, or have an exemption available to
you.
We are required to keep the registration statement effective and to amend and
supplement this prospectus in order to permit the use of the registration
statement and prospectus for a period of time not to exceed 150 days. See
"Plan of Distribution." In addition, if our conclusion regarding the resale of
the exchange notes is inaccurate and you transfer exchange notes in violation
of the prospectus delivery requirements of the Securities Act and do not have
an exemption from registration available to you, you may incur liability. We
will not assume, or indemnify you against, this liability.
Shelf Registration Statement
If:
. changes in the law or the applicable interpretations of the staff of the
SEC do not permit us to complete this exchange offer;
. this exchange offer is not completed on or before November 11, 1999;
. certain holders of exchange notes so request; or
. you do not receive exchange notes that you can resell by delivery of this
prospectus
we will file a shelf registration statement covering the resale of the notes.
We will use our commercially reasonable best efforts to keep the shelf
registration statement continuously effective for a period of at least two
years following April 30, 1999, the date on which the original notes were
issued, or a shorter period that will terminate when all notes covered by the
shelf registration statement have been sold under the shelf registration
statement or have ceased to be outstanding or subject to registration rights.
Registration Defaults; Additional Interest
If either the exchange offer registration statement or the shelf
registration statement is not timely filed or declared effective, or if the
exchange offer has not been completed on or prior to the 45th day following
the effective date of the registration statement, the interest rate on the
original notes will be increased by one-quarter of one percent per year for
the first 90-day period immediately following the default. The interest rate
will increase by an additional one-quarter of one percent per year at the
beginning of each subsequent 90-day period until all the defaults have been
cured. The total amount of required additional interest may not exceed 1.0%
per year. Following the cure of all such defaults, the accrual of additional
interest on the notes will cease. We will pay any additional interest in cash
on May 1 and November 1 of each year.
Special Rules for Broker-Dealers
Each broker-dealer that receives exchange notes for its own account in
exchange for original notes that it acquired as a result of market-making
activities or other trading activities must agree that it will deliver a
prospectus in connection with any resale of its exchange notes. This delivery
will not be an admission by the broker-dealer that it is an underwriter within
the meaning of the Securities Act. To facilitate the disposition of exchange
notes by broker-dealers participating in the exchange offer, we have agreed,
subject to specific
20
<PAGE>
conditions, to make this prospectus, as it may be amended or supplemented,
available for delivery by those broker-dealers to satisfy their prospectus
delivery obligations under the Securities Act.
Terms of the Exchange Offer
. If the terms and conditions described in this prospectus and in the
accompanying letter of transmittal are met, we will accept any and all
original notes that are validly tendered and not withdrawn prior to 5:00
p.m., New York City time, on the expiration date.
. This prospectus, together with the letter of transmittal, is being sent
to the registered holders of the original notes.
. We are not conditioning the exchange offer upon the tender of any minimum
amount of original notes.
Expiration Date; Extensions; Amendments
The exchange offer will expire at 5:00 p.m., New York City time, on ,
1999, unless we, in our sole discretion, extend it. We may extend the exchange
offer at any time and from time to time by giving oral or written notice to
the exchange agent and by timely public announcement. We may also accept all
properly tendered original notes as of the expiration date and extend the
expiration date with respect to the remaining original notes.
We may, in our sole discretion, but subject to the terms of the registration
rights agreement:
. amend the terms of the exchange offer;
. delay acceptance of, or refuse to accept, any original notes not
previously accepted;
. extend the exchange offer; or
. terminate the exchange offer.
We will give prompt notice of any amendment to the terms of the exchange
offer to the registered holders of the original notes. If we materially amend
the exchange offer, we will promptly disclose the amendment in a manner
reasonably calculated to inform you of the amendment and we will extend the
exchange offer to the extent required by law.
Procedures for Tendering
To tender original notes in this exchange offer, you must:
. complete, sign and date the letter of transmittal or a facsimile of it;
. have the signatures on the letter of transmittal guaranteed if required
by the letter of transmittal; and
. mail or otherwise deliver an original or facsimile of the letter of
transmittal and any other required documents to the exchange agent prior
to 5:00 p.m., New York City time, on the expiration date.
Prior to the expiration date, you must send to the exchange agent timely
confirmation of a book-entry transfer of tendered original notes into its
account at The Depository Trust Company, "DTC," as required by the procedures
for book-entry transfer as provided for in this prospectus and in the related
letter of transmittal or you must comply with the guaranteed delivery
procedures described below under "--Guaranteed Delivery Procedures."
Any financial institution that is a participant in DTC's system may make
book-entry delivery of the original notes by causing DTC to transfer the
original notes into the exchange agent's account in accordance with DTC's
procedures. Although book-entry transfer into the exchange agent's account at
DTC will effect delivery of the original notes, you must deliver an original
or a facsimile of the letter of transmittal, with any required signature
guarantees and any other required documents, to the exchange agent at its
address set forth under "--Exchange Agent" prior to 5:00 p.m., New York City
time, on the expiration date.
21
<PAGE>
Delivery of documents to DTC in accordance with DTC's procedures does NOT
constitute delivery to the exchange agent.
Your tender of original notes will constitute an agreement between you, our
company and the exchange agent that is in accordance with the terms and
subject to the conditions specified in this prospectus and in the letter of
transmittal. If you tender less than all of the original notes that you hold,
you should fill in the amount of original notes being tendered for exchange in
the appropriate box on the letter of transmittal. The exchange agent will deem
the entire amount of original notes delivered to it to have been tendered
unless you have indicated otherwise.
The method of delivery of the letter of transmittal and all other required
documents to the exchange agent is at your election and risk. Instead of
delivery by mail, we recommend that you use an overnight or hand delivery
service. In all cases, you should allow sufficient time to ensure delivery to
the exchange agent prior to the expiration date. Do not send your letter of
transmittal or other required documents to us.
Signature Requirements and Signature Guarantee
You must arrange for an "eligible institution" to guarantee the signatures
on a letter of transmittal or a notice of withdrawal. The following are
eligible institutions:
. a member firm of a registered national securities exchange or of the
National Association of Securities Dealers, Inc.;
. a commercial bank or trust company having an office or correspondent in
the United States; or
. an "eligible guarantor institution" within the meaning of Rule 17Ad-15
under the Exchange Act.
A signature guarantee is not required with respect to original notes that are
tendered for the account of an eligible institution.
If trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, sign or endorse any required documents, they should indicate the
capacity in which they are signing, and unless waived by us, submit evidence,
together with the letter of transmittal, that is satisfactory to us of their
authority to act as fiduciary or representative.
Conditions to the Exchange Offer
We will determine all questions as to the validity, form, eligibility,
including time of receipt, acceptance and withdrawal of the tendered original
notes in our sole discretion. Our determination will be final and binding. We
may reject any and all original notes that are not properly tendered or any
original notes of which our acceptance would, in the opinion of our counsel,
be unlawful. We also may waive any irregularities or conditions of tender as
to particular original notes. Our interpretation of the terms and conditions
of the exchange offer, including the instructions in the letter of
transmittal, will be final and binding on all parties. Unless waived, you must
cure any defects or irregularities in connection with tenders of original
notes within the time we determine.
Although we intend to notify tendering holders of defects or irregularities
with respect to tenders of the original notes, neither we nor anyone else has
any duty to notify these holders. Neither we nor anyone else will incur
liability for failure to give this notification. Your original notes will not
be deemed tendered until you have cured or we have waived any irregularities.
As soon as practicable following the expiration date, the exchange agent will
return any original notes that we reject due to improper tender or otherwise
unless we permit you to cure and you do cure all defects or irregularities or
we waive them.
We reserve the right in our sole discretion:
. to purchase or make offers for any original notes that remain outstanding
after the expiration date of the exchange offer;
22
<PAGE>
. to terminate the exchange offer, as set forth below; and
. to the extent permitted by applicable law, to purchase original notes in
the open market, in privately negotiated transactions, or otherwise.
The terms of purchases or offers by us may differ from the terms of the
exchange offer.
We will not be required to accept for exchange, or to issue exchange notes
for, any original notes and we may terminate or amend the exchange offer
before the acceptance of original notes if, [in our judgment], any of the
following conditions has occurred or exists or has not been satisfied:
. the exchange offer, or your exchange of your original notes, violates the
applicable law or the applicable interpretations of the SEC staff;
. a person has initiated or threatened an action or proceeding in any court
or by or before any governmental agency or body that might materially
impair our ability to complete the exchange offer;
. all governmental approvals necessary for the completion of the exchange
offer have been obtained;
. there has not been a material change or development involving a
prospective material change in our business or financial affairs that can
reasonably be expected to materially impair our ability to complete the
exchange offer; or
. a legislative or regulatory body has adopted or enacted any law, statute,
rule or regulation that can reasonably be expected to materially impair
our ability to complete the exchange offer or have a material adverse
effect on us when the exchange offer is completed.
If we determine that we may terminate the exchange offer for any of these
reasons, we may:
. refuse to accept any original notes and return any original notes that
have been tendered to us;
. extend the exchange offer and retain all original notes tendered to us
prior to the expiration date of the exchange offer, subject to the
holders' withdrawal rights; or
. waive the termination event with respect to the exchange offer and accept
the properly tendered original notes that have not been withdrawn.
If we determine that this waiver constitutes a material change in the exchange
offer, we will promptly disclose the change in a manner reasonably calculated
to inform you of the change and we will extend the exchange offer to the
extent required by law.
We may assert or waive any of these conditions in our complete discretion.
Book-Entry Transfer
The exchange agent will make a request promptly after the date of this
prospectus to establish accounts with respect to the original notes at DTC.
Subject to the establishment of these accounts, any financial institution that
is a participant in DTC's system may make book-entry delivery of original
notes by causing DTC to transfer them into the exchange agent's account with
respect to the original notes. The institution must do this in accordance with
DTC's Automated Tender Offer Program procedures for book-entry transfer.
However, the exchange agent will only exchange the tendered original notes
after timely confirmation of their book-entry transfer into the exchange
agent's account, and timely receipt of an Agent's Message and any other
documents required by the letter of transmittal.
The term "Agent's Message" means a message transmitted by DTC and received
by the exchange agent and forming part of the confirmation of a book-entry
transfer, which states that:
. DTC has received an express acknowledgment from a participant tendering
original notes;
. the participant has received the letter of transmittal and agrees to be
bound by its terms; and
. we may enforce the agreement against the participant.
23
<PAGE>
Although you may effect delivery of the original notes through DTC into the
exchange agent's account at DTC, you must provide the exchange agent with a
completed and executed letter of transmittal with any required signature
guarantee and all other required documents prior to the expiration date. If
you comply with the guaranteed delivery procedures described below, you must
provide the letter of transmittal to the exchange agent within the time period
provided. Delivery of documents to DTC without confirmation or compliance does
not constitute delivery to the exchange agent.
Guaranteed Delivery Procedures
If you wish to tender your original notes, and cannot deliver the letter of
transmittal or any other required documents to the exchange agent before the
expiration date, or cannot complete the procedure for book-entry transfer on a
timely basis, you may instead effect a tender if:
. you make the tender through an eligible institution;
. prior to the expiration date, the exchange agent receives from the
eligible institution (1) an original or facsimile of the properly
competed and duly executed letter of transmittal and (2) notice of
guaranteed delivery by facsimile transmittal, mail or hand delivery
specifying the name and address of the holder and the principal amount of
the original notes tendered, stating that the tender is being made, and
guaranteeing that, within three Nasdaq Stock Market trading days after
the date of execution of the notice of guaranteed delivery, a
confirmation of book-entry transfer into the exchange agent's account at
DTC and any other documents required by the letter of transmittal, will
be deposited by the eligible institution with the exchange agent; and
. the exchange agent receives confirmation of a book-entry transfer into
its account at DTC and all other documents required by the letter of
transmittal within three Nasdaq Stock Market trading days after the date
of execution of the notice of guaranteed delivery.
Withdrawal of Tenders
Except as otherwise provided in this prospectus, you may withdraw tendered
original notes at any time before 5:00 p.m., New York City time, on the
expiration date.
To do so, you must provide the exchange agent with a written or facsimile
transmission notice of withdrawal prior to 5:00 p.m., New York City time, on
the expiration date.
A notice of withdrawal must:
. identify the original notes to be withdrawn, including the principal
amount of those original notes, and the name and number of the account at
DTC to be credited; and
. be signed by you in the same manner as the original signature on your
letter of transmittal, including any required signature guarantee, or be
accompanied by documents of transfer sufficient to permit the registrar
to register the transfer of the withdrawn original notes into your name.
We will determine all questions as to the validity, form and eligibility,
including time of receipt, of withdrawal notices. Our determination will be
final and binding on all parties. We will not deem any properly withdrawn
original notes to be validly tendered for purposes of the exchange offer and
will not issue exchange notes with respect to them unless the holder of the
properly withdrawn original notes validly retenders them. You may retender
withdrawn original notes by following one of the procedures described above
under "--Procedures for Tendering" at any time before the expiration date.
Exchange Agent
We have appointed IBJ Whitehall Bank & Trust Company, which also acts as
trustee under the indenture, as exchange agent for the exchange offer. In this
capacity, the exchange agent has no fiduciary duties and will be
24
<PAGE>
acting solely on the basis of our directions. You should direct all
communications with the exchange agent, including requests for assistance or
for additional copies of this prospectus or of the letter of transmittal as
follows:
Facsimile Transmission By Hand/Overnight By Mail:
Number: Delivery:
IBJ Whitehall Bank &
(for eligible IBJ Whitehall Bank & Trust Company
institutions only) Trust Company P.O. Box 84
212/858-2611 One State Street Bowling Green Station
To confirm facsimile New York, NY 10004 New York, NY 10274-0084
transmissions call Attn.: Securities Attn.: Reorganization
212/858-2103 Processing Window, Operations
Subcellar One, (SC-1)
Delivery to an address or facsimile number other than those listed above and
will not constitute a valid delivery.
Fees and Expenses
We will bear all expenses of the exchange offer. We are making the principal
solicitation describing the exchange offer by mail. Our officers and regular
employees and our affiliates may also make solicitations in person, by
telegraph, telephone or facsimile transmission.
We have not retained any dealer-manager in connection with the exchange
offer and will not make any payments to brokers, dealers or other persons
soliciting acceptances of the exchange offer. We will, however, pay the
exchange agent reasonable and customary fees for its services and will
reimburse its reasonable out-of-pocket costs and expenses and will indemnify
the exchange agent for all losses and claims incurred by it as a result of the
exchange offer. We may also pay brokerage houses and other custodians,
nominees and fiduciaries the reasonable out-of-pocket expenses incurred by
them in forwarding copies of this prospectus, letters of transmittal and
related documents to the beneficial owners of the original notes and in
handling or forwarding tenders for exchange.
Transfer Taxes
We will pay any transfer taxes applicable to the exchange of original notes
in response to the exchange offer. If, however, a transfer tax is imposed for
any reason other than the exchange of original notes in response to the
exchange offer, then the amount of these transfer taxes, whether imposed on
the registered holder of the original notes or any other person, will be
payable by the tendering holder. For example, the tendering holder will pay
transfer taxes, if:
. exchange notes for principal amounts not tendered, or accepted for
exchange are to be registered or issued in the name of any person other
than the registered holder of the original notes tendered; or
. tendered original notes are registered in the name of any person other
than the person signing the letter of transmittal.
If you do not submit satisfactory evidence of payment of taxes for which you
are liable or exemption from them with your letter of transmittal, we will
bill you for the amount of these transfer taxes directly.
Accounting Treatment
We will record the exchange notes at the same carrying value as the original
notes. Accordingly, we will not recognize any gain or loss for accounting
purposes. We will capitalize the expense of the exchange offer for accounting
purposes. We will classify these expenses as prepaid expenses and include them
in other assets on our balance sheet. We will amortize these expenses over the
period until 2009.
Consequences of a Failure to Exchange Original Notes
Any original notes tendered in the exchange offer will reduce the total
principal amount of original notes outstanding. Following the completion of
the exchange offer, holders who did not tender their original notes generally
will not have any further registration rights under the registration rights
agreement. Additionally, original notes that
25
<PAGE>
are not tendered in the exchange offer will continue to be subject to
restrictions on transfer under the federal securities laws. Accordingly, the
liquidity of the market for the original notes could be adversely affected.
The original notes are currently eligible for sale pursuant to Rule 144A
through the PORTAL market. We anticipate that most holders will elect to
exchange their original notes for exchange notes in the exchange offer because
of the absence of restrictions on the resale of exchange notes under the
federal securities laws (except for restrictions on a holder of exchange notes
who is our affiliate, an initial purchaser, and persons who cannot make the
representations required by the letter of transmittal). Therefore, we expect
that the liquidity of the market for any original notes remaining after the
completion of the exchange offer may be substantially limited.
As a result of our making this exchange offer, we will have fulfilled most
of our obligations under the registration rights agreement. If a holder of
original notes does not tender those original notes in the exchange offer
then, except for certain instances involving the initial purchasers and
certain other holders, that holder will not have:
. any further registration rights under the registration rights agreement;
or
. the right to receive any additional interest because of our failure to
file the required registration statement, have such registration
statement declared effective, or complete the exchange offer as required
by the registration rights agreement.
The original notes that are not exchanged for exchange notes in the exchange
offer will remain restricted securities within the meaning of the federal
securities laws. Accordingly, after the completion of the exchange offer, you
will only be able to offer for sale, sell or otherwise transfer untendered
original notes as follows:
. to us or any of our subsidiaries;
. in connection with a registration statement that has been declared
effective under the Securities Act;
. for so long as the original notes are eligible for resale under Rule 144A
of the Securities Act to a person who you reasonably believe is a
qualified institutional buyer within the meaning of Rule 144A that
purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that the transfer is being
made in reliance on the exemption from the registration requirements of
the Securities Act provided by Rule 144A;
. in connection with offers and sales that occur outside the United States
to foreign persons in transactions complying with the provisions of
Regulation S under the Securities Act; or
. under any other available exemption from the registration requirements of
the Securities Act.
26
<PAGE>
CAPITALIZATION
The following table sets forth:
. our historical consolidated capitalization as of March 31, 1999; and
. our pro forma capitalization as of March 31, 1999, after giving effect to
the recently completed tender offer and the acquisition of the businesses
we acquired after March 31, 1999.
For a description of the pro forma adjustments, you should refer to the
unaudited pro forma financial statements and the related notes, incorporated
by reference from our prospectus supplement dated May 17, 1999 to the
prospectus dated March 16, 1999.
<TABLE>
<CAPTION>
As of March 31, 1999
------------------------
Actual Pro Forma
----------- ------------
(dollars in thousands)
<S> <C> <C>
Cash and cash equivalents.............................. $ 174,273 $ 9,638
=========== ===========
Total debt:
Credit facility (1).................................. $ -- $ 125,000
Other secured debt................................... 9,851 9,851
10 1/2% senior subordinated notes, net of discount... -- 195,492
----------- -----------
Subtotal........................................... 9,851 330,343
7 1/2% convertible junior subordinated debentures.... -- 100,000
----------- -----------
Total debt......................................... 9,851 430,343
----------- -----------
Stockholders' equity................................... 894,338 333,692
----------- -----------
Total capitalization................................. $ 904,189 $ 764,035
=========== ===========
</TABLE>
27
<PAGE>
INTRODUCTION TO
SELECTED FINANCIAL DATA
The statement of operations data for the years ended December 31, 1996, 1997
and 1998 and the balance sheet data at December 31, 1997 and 1998 (except pro
forma combined amounts) have been derived from our audited financial
statements, which are incorporated by reference into this prospectus from our
annual report on Form 10-K for the fiscal year ended December 31, 1998. The
statement of operations data for the years ended December 31, 1994 and 1995
and the balance sheet data at December 31, 1994, 1995 and 1996 have been
derived from our unaudited financial statements, which have not been included
in or incorporated by reference into this prospectus. Our consolidated
financial statements give retroactive effect to the three business
combinations accounted for under the pooling-of-interests method during the
year ended December 31, 1998 and include the results of the businesses
acquired in business combinations accounted for under the purchase method from
their respective acquisition dates. The financial statements for periods prior
to the fiscal year ended December 31, 1998 reflect only the operating results
of the three business combinations accounted for under the pooling-of-
interests method of accounting.
The statement of operations data for the three months ended March 31, 1999
and 1998 have been derived from our unaudited interim consolidated financial
statements, which are incorporated by reference into this prospectus from our
quarterly report on Form 10-Q for the quarter ended March 31, 1999. The
unaudited interim consolidated financial statements have been prepared on the
same basis as the audited financial statements and, in the opinion of
management, contain all adjustments, consisting only of normal adjustments,
necessary for a fair presentation of our financial position and results of
operations for the periods presented.
The unaudited pro forma combined financial data give effect to:
. our purchase in the tender offer of 25.5 million shares of common stock,
consisting of 24,618,856 shares at a price of $22.50 per share and
881,144 shares underlying stock options at a price of $22.50 per share
less the exercise price for the purchase of employee stock options for a
total purchase price of $560.1 million;
. the financing of the tender offer from the proceeds of the sale of the
original notes and the convertible junior subordinated debentures,
borrowings under a new credit facility and our available cash; and
. the 26 acquisitions completed during the year ended December 31, 1998
which were accounted for under the purchase method of accounting (the
"1998 Acquisitions") and six acquisitions completed after December 31,
1998 (the "1999 Acquisitions"), in each case as if they had been acquired
on January 1, 1998.
The selected unaudited pro forma combined financial data are not necessarily
indicative of operating results or financial position that would have been
achieved had the events described above been completed and should not be
construed as representative of future operating results or financial position.
The selected financial data should be read in conjunction with the unaudited
pro forma combined financial statements and our consolidated financial
statements, which are incorporated by reference into this prospectus.
28
<PAGE>
SELECTED FINANCIAL DATA
(Dollars in thousands, except share and per share data)
<TABLE>
<CAPTION>
For the Year Ended December 31,
-----------------------------------------------------------------
1998
1994 1995 1996 1997 1998 Pro Forma
--------- --------- --------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Statement of
Operations Data:
Revenues.......... $ 45,106 $ 57,287 $ 63,202 $ 70,101 $ 809,601 $1,467,336
Cost of revenues.. 37,634 48,783 53,664 58,857 636,225 1,174,347
--------- --------- --------- --------- ---------- ----------
Gross profit...... 7,472 8,504 9,538 11,244 173,376 292,989
Selling, general
and
administrative... 6,635 8,468 8,803 11,776 100,539 168,865
Goodwill
amortization..... -- -- -- -- 7,653 13,425
--------- --------- --------- --------- ---------- ----------
Operating income
(loss)........... 837 36 735 (532) 65,184 110,699
Other (income)
expense
Interest
income......... (41) -- -- (2,056) (19,373) --
Interest
expense........ 329 239 224 208 1,054 43,892
Other income,
net (1)........ (43) (8) 83 (221) (80) (3,635)
--------- --------- --------- --------- ---------- ----------
Income (loss)
before income
taxes............ 592 (195) 428 1,537 83,583 70,442
Provision
(benefit) for
income taxes..... (5) 13 94 36,120 33,157
--------- --------- --------- --------- ---------- ----------
Net income
(loss)........... $ 592 $ (190) $ 415 $ 1,443 $ 47,463 $ 37,285
========= ========= ========= ========= ========== ==========
Net income (loss)
per share--
Basic............ $ 0.48 $ (0.15) $ 0.32 $ 0.25 $ 1.19 $ 1.73
========= ========= ========= ========= ========== ==========
Net income (loss)
per share--
Diluted.......... $ 0.44 $ (0.15) $ 0.30 $ 0.25 $ 1.16 $ 1.58
========= ========= ========= ========= ========== ==========
Weighted average
shares
outstanding--
Basic............ 1,238,444 1,238,444 1,290,724 5,683,464 39,908,364 21,578,216
========= ========= ========= ========= ========== ==========
Weighted average
shares
Outstanding--
Diluted.......... 1,353,560 1,238,444 1,405,840 5,865,550 40,928,452 26,604,814
========= ========= ========= ========= ========== ==========
<CAPTION>
For the Three Months Ended March 31,
-----------------------------------------------
Pro Forma Pro Forma
1998 1999 1998 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Statement of
Operations Data:
Revenues.......... $ 54,610 $ 350,842 $ 336,111 $ 373,258
Cost of revenues.. 44,233 280,692 275,515 298,940
----------- ----------- ----------- -----------
Gross profit...... 10,377 70,150 60,596 74,318
Selling, general
and
administrative... 7,918 42,714 39,397 45,702
Goodwill
amortization..... 324 3,469 3,308 3,654
----------- ----------- ----------- -----------
Operating income
(loss)........... 2,135 23,967 17,891 24,962
Other (income)
expense
Interest
income......... (6,656) (2,508) -- (17)
Interest
expense........ 99 96 10,973 10,829
Other income,
net (1)........ (111) (281) (2,326) (497)
----------- ----------- ----------- -----------
Income (loss)
before income
taxes............ 8,803 26,660 9,244 14,647
Provision
(benefit) for
income taxes..... 3,722 11,927 4,872 7,196
----------- ----------- ----------- -----------
Net income
(loss)........... $ 5,081 $ 14,733 $ 4,372 $ 7,451
=========== =========== =========== ===========
Net income (loss)
per share--
Basic............ $ 0.15 $ 0.32 $ 0.20 $ 0.34
=========== =========== =========== ===========
Net income (loss)
per share--
Diluted.......... $ 0.15 $ 0.31 $ 0.20 $ 0.31
=========== =========== =========== ===========
Weighted average
shares
outstanding--
Basic............ 32,987,273 45,973,455 21,578,216 21,910,397
=========== =========== =========== ===========
Weighted average
shares
Outstanding--
Diluted.......... 34,075,876 47,740,958 21,578,216 27,997,422
=========== =========== =========== ===========
</TABLE>
29
<PAGE>
<TABLE>
<CAPTION>
As of December 31, March 31,
------------------------------------- -------------------
1999 Pro
1994 1995 1996 1997 1998 1999 Forma(2)
----- ----- ----- -------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance Sheet Data:
Working capital....... $ 300 $ (30) $ 67 $528,235 $ 307,390 $ 251,969 $ 89,815
Total assets.......... 8,063 8,132 9,629 539,159 1,043,922 1,162,120 1,019,485
Long term debt, net of
current maturities.... 1,734 1,589 1,890 1,679 3,287 4,783 425,275
Stockholders'
equity................ 1,496 1,299 1,578 529,480 837,537 894,338 333,692
</TABLE>
- ----
(1) Other income, net consists primarily of realized gains on the sale of
marketable securities, dividend income on certain investments and gains on
the sale of equipment.
(2) Does not give effect to an estimated $57 million of contingent cash earn-
out payments expected to be made in 1999 in connection with previously
consummated acquisitions.
30
<PAGE>
DESCRIPTION OF THE EXCHANGE NOTES
We are offering, in exchange for the original notes, a total of $200 million
total principal amount of exchange notes. The original notes were issued under
a document called the "indenture." The indenture is a contract between us, the
guarantors and IBJ Whitehall Bank & Trust Company, as trustee. The exchange
notes will be governed by the same indenture that governs the original notes.
The following is a summary of the material provisions of the indenture. The
indenture and its associated documents contain the full legal text of the
matters described in this section. We urge you to read the indenture because
it defines your rights. The terms of the exchange notes include those stated
in the indenture as well as those made part of the indenture by reference to
the Trust Indenture Act of 1939, as amended. You may obtain a copy of the
indenture from us. You can find definitions of certain capitalized terms used
in this description under "--Certain Definitions." For purposes of this
section, references to "we" and "us" include only Building One Services
Corporation and not its subsidiaries.
The indenture and the exchange notes are governed by New York law. The
exchange notes will be our unsecured obligations, ranking subordinate in right
of payment to all of our Senior Debt.
We will issue the exchange notes in fully registered form in denominations
of $1,000 and integral multiples thereof. The trustee will initially act as
paying agent and registrar for the exchange notes. The exchange notes may be
presented for registration or transfer and exchange at the offices of the
paying agent. We may replace the paying agent and registrar without notice to
the holders of the exchange notes. We will pay principal and any premium on
the exchange notes at the trustee's corporate office in New York, New York. At
our option, interest may be paid at the trustee's corporate trust office or by
check mailed to the registered address of holders. Any original notes that
remain outstanding after the completion of the exchange offer, together with
the exchange notes issued in connection with the exchange offer, will be
treated as a single class of securities under the indenture. Unless otherwise
specified, the following summary describes both the original notes issued on
April 30, 1999 and the notes that will be issued in accordance with this
exchange offer.
Principal, Maturity and Interest
The notes are limited in total principal amount to $400 million, of which
$200 million was issued in a private offering on April 30, 1999. The notes
will mature on May 1, 2009. Additional notes may be issued from time to time,
subject to the limitations set forth under "--Certain Covenants--Limitation on
Incurrence of Additional Indebtedness." Interest on the notes will accrue at
the rate of 10 1/2% per year. Interest is payable semiannually in cash on each
May 1 and November 1, commencing on November 1, 1999, to the registered
holders of the notes at the close of business on the April 15 and October 15
immediately preceding the applicable interest payment date. Interest on the
notes will accrue from the most recent date to which interest has been paid
or, if no interest has been paid, from and including the date of issuance.
The notes are not entitled to the benefit of any mandatory sinking fund.
The initial offering price of the notes was 97.746%. If a bankruptcy case is
commenced by or against us under applicable bankruptcy law, the claim of a
holder of the notes with respect to the principal amount thereof may be
limited to an amount equal to the sum of:
. the initial offering price; and
. the portion of the original issue discount that had been amortized as of
any such bankruptcy filing.
Redemption
Optional Redemption. Except as described below, the notes are not redeemable
before May 1, 2004. Thereafter, we may redeem the notes at our option, in
whole or in part. We must give at least 30 days, but not more than 60 days,
notice of redemption. We may redeem the notes at the following redemption
prices
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<PAGE>
(expressed as percentages of the principal amount) if we redeem the notes
during the twelve-month period commencing on May 1 of the years set forth
below:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2004.............................. 105.438%
2005.............................. 104.350%
2006.............................. 103.263%
2007.............................. 102.175%
2008.............................. 101.088%
2009.............................. 100.000%
</TABLE>
In addition, we must pay accrued and unpaid interest on the notes we redeem.
Optional Redemption upon Equity Offerings. At any time on or prior to May 1,
2002, we may, at our option, use the net cash proceeds of one or more "equity
offerings" to redeem up to 35% of the total principal amount of the notes
issued under the indenture at a redemption price of 110.875% of the principal
amount, plus any accrued and unpaid interest to the date of redemption.
However:
. at least 65% of the total principal amount of notes issued under the
indenture must remain outstanding immediately after the redemption; and
. we must redeem the notes within 90 days of the completion of the equity
offering.
An "equity offering" is a public or private offering of our Qualified
Capital Stock (other than public offerings with respect to our common stock on
Form S-8) in which we receive total net cash proceeds of at least $20 million.
Selection and Notice of Redemption
If we choose to redeem less than all of the notes, the trustee will select
the notes for redemption either:
. in compliance with the requirements of any principal national securities
exchange on which the notes are listed; or
. on a pro rata basis, by lot or by a method that the trustee deems fair
and appropriate.
If we partially redeem the notes, we will not redeem any notes with a
principal amount of $1,000 or less. If we make a partial redemption with the
net cash proceeds of an equity offering, as discussed above, the trustee will
select the notes only on a pro rata basis or on as nearly a pro rata basis as
is practicable. The trustee's selection is subject to the procedures of The
Depository Trust Company, "DTC". We will mail any notice of redemption by
first-class mail at least 30 days, but not more than 60 days, before the
redemption date to each holder of notes to be redeemed at its registered
address. On and after the redemption date, interest will cease to accrue on
the notes (or portions thereof) called for redemption if we have deposited
sufficient funds with the paying agent.
Subordination
Our payment of our obligations relating to the notes, which include payment
of principal, any premium, interest or any other liabilities under the
indenture, is subordinated in right of payment to the prior payment in full in
cash or Cash Equivalents of all obligations relating to our Senior Debt,
including the obligations with respect to the credit facility. However, any
payments and distributions made relating to the notes under the terms of the
trust described under "--Legal Defeasance and Covenant Defeasance" will not be
subordinated in right of payment.
The holders of Senior Debt are entitled to receive payment in full in cash
or Cash Equivalents of all obligations relating to our Senior Debt, including
specified post-bankruptcy interest whether or not an allowed
32
<PAGE>
claim, before the holders of notes receive any payment or distribution for any
obligations relating to the notes if we make a distribution to our creditors:
. in a liquidation or dissolution of our company;
. in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to us or our property;
. in an assignment for the benefit of creditors; or
. in any marshalling of our assets and liabilities.
We may not make any payment or distribution to satisfy any obligations
relating to the notes or acquire any notes for cash or property or otherwise
if:
. a payment default on any Senior Debt occurs and is continuing; or
. any other default occurs and is continuing on Designated Senior Debt that
permits holders of the Designated Senior Debt to accelerate its maturity
and the trustee receives a notice of such default, a "payment blockage
notice," from the Representative of any Designated Senior Debt.
Payments on and distributions with respect to any obligations relating to
the notes will be resumed:
. in the case of a payment default, upon the date on which the default is
cured or waived; and
. in case of a nonpayment default, upon the earliest of (1) the date on
which all nonpayment defaults are cured or waived if no other event of
default exists; (2) 180 days after the date on which the applicable
payment blockage notice is received; or (3) the date on which the trustee
receives notice from the Representative for the Designated Senior Debt
rescinding the payment blockage notice, unless the maturity of any
Designated Senior Debt has been accelerated.
No new payment blockage notice may be delivered within 360 days of the
effectiveness of the immediately prior payment blockage notice.
A nonpayment default that existed or was continuing on the date of delivery
of a payment blockage notice to the trustee may not be the basis for a
subsequent payment blockage notice unless that default has been cured or
waived for a period of at least 90 consecutive days. Any subsequent action, or
any breach of any financial covenants for a period commencing after the date
of delivery of the initial payment blockage notice that would give rise to a
default under any provisions under which a default previously existed or was
continuing will constitute a new default for this purpose.
We must promptly notify holders of Senior Debt if payment of the notes is
accelerated because of an Event of Default. Refer to the section below
entitled "--Events of Default."
As a result of the subordination provisions described above, in the event of
a bankruptcy, liquidation or reorganization of our company, holders of the
notes may recover less ratably than our creditors who are holders of Senior
Debt.
Guarantees
The guarantors, which include all of our current subsidiaries and will
include all future Restricted Subsidiaries, jointly and severally guarantee
our obligations under the indenture and the notes on a senior subordinated
basis. Each guarantee is subordinated in right of payment to the prior payment
in full in cash or Cash Equivalents of Guarantor Senior Debt on the same basis
as the notes are subordinated to Senior Debt. The obligations of each
guarantor under its guarantee is limited as necessary to prevent the guarantee
from constituting a fraudulent conveyance or fraudulent transfer under
applicable law.
Each guarantor may consolidate with, merge into, or sell its assets to us,
another guarantor that is our Wholly Owned Restricted Subsidiary, or other
Persons as set forth in the indenture. See "--Certain Covenants--
33
<PAGE>
Merger, Consolidation and Sale of Assets." If we sell all of the Capital Stock
of a guarantor and the sale complies with the provisions set forth in "--
Certain Covenants--Limitation on Asset Sales," the guarantor's guarantee will
be released.
Change of Control
If a Change of Control occurs, each holder of the notes has the right to
require that we purchase all or a portion of their notes in a "change of
control offer," at a purchase price equal to 101% of the principal amount of
the notes plus accrued interest to the date of purchase.
Within 30 days following the date upon which the Change of Control occurred,
we must send, by first-class mail, notice to each holder, with a copy to the
trustee. The notice will govern the terms of the change of control offer and
must state, among other things, the purchase date, or "change of control
payment date." The change of control payment date must be at least 30 days,
but no more than 60 days, from the date the notice is mailed, unless otherwise
required by law. If you are a holder who elects to have your note purchased in
a change of control offer, you will be required to surrender the note to the
paying agent at the address specified in the notice before the close of
business on the third business day prior to the change of control payment
date. You must remember to complete the form entitled "Option of Holder to
Elect Purchase" on the reverse of the note.
Before we mail the notice of change of control, and in any event within 30
days following any Change of Control, we have agreed to:
. repay in full and terminate all commitments under Indebtedness under the
Credit Agreement and all other Senior Debt, 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
Agreement and all other such Senior Debt and to repay the Indebtedness
owed to each lender which has accepted such offer; or
. obtain the required consents under the Credit Agreement and all other
Senior Debt to permit the repurchase of the notes as provided below.
We must first comply with the covenant in the immediately preceding sentence
before we would be required to repurchase notes. Otherwise, with notice and
lapse of time, our failure to do so constitutes an Event of Default described
in clause (3) of the section below entitled "--Events of Default." However,
that failure would not be an Event of Default as described in clause (2) of
that section.
If we make a change of control offer, we cannot assure you that we will have
available funds sufficient to pay the Change of Control purchase price for all
the notes that might be delivered by holders seeking to accept that offer. If
we are required to purchase outstanding notes in a change of control offer, we
expect that we would seek third-party financing to the extent we do not have
available funds to meet our purchase obligations. However, we cannot assure
you that we would be able to obtain that financing.
Neither the board of directors nor the trustee may waive the covenant
relating to a holder's right to redemption upon a Change of Control.
Restrictions in the indenture on our ability and the ability of our Restricted
Subsidiaries to incur additional Indebtedness, to grant liens on property, to
make Restricted Payments and to make Asset Sales may also make more difficult
or discourage a takeover of our company, whether favored or opposed by our
management. In certain circumstances, the completion of a transaction may
require our redemption or repurchase of the notes. We cannot assure you that
we or the acquiring party will have sufficient financial resources to complete
that redemption or repurchase. These restrictions, together with the
restrictions on transactions with Affiliates, may make more difficult or
discourage any leveraged buyout of our company or any of our Subsidiaries by
our management. While these restrictions cover a wide variety of arrangements
that have traditionally been used in highly leveraged transactions, the
indenture may not, in every circumstance, provide protection to the holders
from the adverse aspects of a highly leveraged transaction, reorganization,
restructuring, merger or similar transaction.
34
<PAGE>
We will comply with the requirements of Rule 14e-1 under the Exchange Act
and any other securities laws and regulations that apply in connection with
the repurchase of notes in a change of control offer. If the provisions of any
securities laws or regulations conflict with the Change of Control provisions
in the indenture, we will comply with the applicable securities laws and
regulations and will not be deemed to have breached our obligations under the
"Change of Control" provisions of the indenture.
Certain Covenants
The indenture contains, among others, the following covenants:
Limitation on Additional Indebtedness. Generally, we will not, and will not
permit any of our Restricted Subsidiaries to incur any Indebtedness other than
Permitted Indebtedness. However, in certain circumstances, we may acquire
Indebtedness. If no Event of Default has occurred and is continuing at the
time of or as a consequence of the incurrence of the Indebtedness:
. we or any of our Restricted Subsidiaries that are or, upon such
incurrence, become guarantors may incur Indebtedness, including Acquired
Indebtedness; and
. our Restricted Subsidiaries that are not and will not become guarantors
as a result of the incurrence, may incur Acquired Indebtedness.
In each case, however, as of the date on which we incurred the Indebtedness
and after giving effect to that incurrence, our Consolidated Fixed Charge
Coverage Ratio must be greater than 2.25 to 1.0 if the Indebtedness was
acquired on or prior to November 1, 2000 and 2.5 to 1.0 if acquired
thereafter.
Limitation on Restricted Payments. We will not, and will not permit our
Restricted Subsidiaries to make a restricted payment that is:
. the declaration or payment of any dividend or any distribution, other
than dividends or distributions payable in our Qualified Capital Stock,
relating to shares of our Capital Stock to holders of that Capital Stock;
. the purchase, redemption or other acquisition or retirement for value any
of our Capital Stock or any warrants, rights or options to purchase or
acquire shares of any class of our Capital Stock;
. a principal payment on, or the purchase, defeasance, redemption,
prepayment, decrease or other acquisition or retirement for value, prior
to any scheduled final maturity, scheduled repayment or scheduled sinking
fund payment, of any of our Indebtedness that is subordinate or junior in
right of payment to the notes, including our convertible junior
subordinated debentures (except a conversion of the debentures into
Qualified Capital Stock);
. a cash interest payment on the convertible junior subordinated
debentures; or
. an Investment, other than Permitted Investments;
if, immediately after giving effect to that restricted payment:
. a default or an Event of Default occurs and is continuing;
. we are not able to incur at least $1.00 of additional Indebtedness, other
than Permitted Indebtedness, in compliance with the "Limitation on
Incurrence of Additional Indebtedness" covenant; or
. the total amount of restricted payments, including any proposed
restricted payments, made after the Issue Date exceeds the sum of:
. 50% of our cumulative Consolidated Net Income, or if cumulative
Consolidated Net Income is a loss, less 100% of that loss, that is
earned after the Issue Date but before the date on which the
restricted payment is made, the "reference date" (treating such
period as a single accounting period); plus
. 100% of (1) the total net cash proceeds we received from any Person
(other than one of our Subsidiaries) from the issuance and sale of
our Qualified Capital Stock after the Issue Date but on
35
<PAGE>
or prior to the reference date and (2) the fair market value (as
determined in good faith by senior management or, in the case of a fair
market value in excess of $5 million, by the board of directors) of
shares of our Qualified Capital Stock issued after the Issue Date but
on or prior to the reference date in connection with Asset Acquisitions
and other acquisitions of property after the Issue Date; plus
. without duplication of any amounts included in the immediately
preceding clause, 100% of the total net cash proceeds and the fair
market value of property other than cash (as determined in good faith
by senior management or, in the case of a fair market value in excess
of $5 million, by the board of directors) of any equity contribution
we receive from a holder of our Capital Stock after the Issue Date but
on or prior to the reference date; plus
. without duplication of any of the above three clauses, the sum of:
(1) the total amount returned in cash on or with respect to
Investments, other than Permitted Investments, made after the Issue
Date, whether through interest payments, principal payments,
dividends or other distributions or payments;
(2) the net cash proceeds we or any of our Restricted Subsidiaries
receive from the disposition of all or any portion of such
Investments, other than to one of our Subsidiaries; and
(3) upon the redesignation of an Unrestricted Subsidiary as a
Restricted Subsidiary, the fair market value of that Subsidiary.
However, the sum of clauses (1), (2) and (3) above must not exceed
the total amount of all the Investments made after the Issue Date.
To calculate the total amount of restricted payments made after the Issue
Date, the amounts expended under clauses (1), (2)(ii), (4) and (5) of the
paragraph below should be included. Any payment made, if other than in cash,
would be valued at the fair market value of the property as determined
reasonably and in good faith by senior management or, in the case of any
property in excess of $5 million, by the board of directors.
The provisions set forth above do not prohibit:
(1) our payment of any dividend within 60 days after the date of
declaration of that dividend if the dividend would have been permitted on
the date of declaration;
(2) if no Event of Default has occurred and is continuing, our
acquisition of any shares of our Capital Stock, either (i) solely in
exchange for shares of our Qualified Capital Stock or (ii) through the
application of the net proceeds of a substantially concurrent sale for cash
(other than to one of our Subsidiaries) of shares of our Qualified Capital
Stock;
(3) if no Event of Default has occurred and is continuing, our
acquisition of any Indebtedness that is subordinate or junior in right of
payment to the notes either solely in exchange for shares of our Qualified
Capital Stock, or through the application of the net proceeds of a
substantially concurrent sale for cash (other than one of our Subsidiaries)
of (i) shares of our Qualified Capital Stock or (ii) Refinancing
Indebtedness;
(4) so long as no Event of Default has occurred and is continuing, our
repurchase of our common stock from our employees or any of our
Subsidiaries or their authorized representatives upon the death, disability
or termination of employment of those employees, in a total amount that
does not exceed $5 million in any calendar year;
(5) so long as no Event of Default has occurred or is continuing, our
declaration and payment of dividends to holders of any class or series of
our preferred stock, other than Disqualified Capital Stock, issued after
the Issue Date, provided that after giving effect to that issuance on a pro
forma basis, we would be permitted to incur at least $1.00 of additional
Indebtedness, other than Permitted Indebtedness, according to the
"Limitation on Incurrence of Additional Indebtedness" covenant;
36
<PAGE>
(6) cash payments in lieu of our payment of fractional convertible junior
subordinated debentures made in lieu of cash interest on those debentures
or fractional shares of our common stock upon conversion of the convertible
junior subordinated notes; and
(7) other restricted payments that do not exceed a total of $2 million.
Before we make any restricted payment we will deliver an officers'
certificate to the trustee stating that the restricted payment complies with
the indenture and setting forth, in reasonable detail, the basis upon which
the required calculations were computed. Those calculations may be based upon
our latest available internal quarterly financial statements.
Limitation on Asset Sales. We will not, and will not permit any of our
Restricted Subsidiaries to, complete an Asset Sale unless:
(1) we or the applicable Restricted Subsidiary receive consideration at
the time of that Asset Sale that is at least equal to the fair market value
of the assets disposed of (as determined in good faith by senior management
or, in the case of an Asset Sale in excess of $5 million, by the board of
directors);
(2) at least 75% of the consideration from that Asset Sale is in the form
of cash or Cash Equivalents and is received at the time of disposition. The
following amounts will be deemed to be cash for purposes of this provision:
. liabilities as shown on our balance sheet and the balance sheets of
our Restricted Subsidiaries that are assumed by the transferee of any
such assets, other than liabilities that are subordinated to the
notes; and
. the amount of any notes or other obligations we or the Restricted
Subsidiary receive from the transferee that is converted into cash
within 180 days after the Asset Sale; and
(3) after the completion of an Asset Sale, we apply (or cause our
Restricted Subsidiary to apply), within 360 days of receipt, the Net Cash
Proceeds relating to that Asset Sale either:
. to prepay any Senior Debt or Guarantor Senior Debt and, in the case
of any Senior Debt or Guarantor Senior Debt under any revolving
credit facility, effect a permanent reduction in the availability
under such revolving credit facility;
. to make an Investment in "replacement assets," which are properties
and assets that replace the subject of the Asset Sale or properties
and assets that will be used in our business and the business of our
Restricted Subsidiaries or in businesses reasonably related thereto;
and/or
. a combination of prepayment and investment permitted by the above two
clauses.
We (or our Restricted Subsidiary) must offer to purchase from all of the
holders of notes, on a pro rata basis, a specified amount of the notes if we
have not applied the Net Cash Proceeds as required by clause (3) above by the
"net proceeds offer trigger date," which is the earlier of:
. the 361st day after an Asset Sale; or
. the date, if any, on which our senior management or our board of
directors (or the board of the Restricted Subsidiary) determines not to
apply the Net Cash Proceeds relating to the Asset Sale as set forth in
clause (3) of the preceding paragraph.
We (or our Restricted Subsidiary) must offer to purchase an amount of notes
that is equal to the total Net Cash Proceeds that have not been applied as
required by clause (3) on or before the net proceeds offer trigger date, the
"net proceeds offer amount." We must make the net proceeds offer at least 30
but not more than 60 days after the net proceeds offer trigger date. We will
purchase those notes at a price equal to 100% of their principal amount, plus
any accrued and unpaid interest to the date of purchase. If at any time we (or
any Restricted Subsidiary) convert, sell or otherwise dispose of for cash, any
non-cash consideration that we or any Restricted Subsidiary receive in
connection with any Asset Sale (other than interest received with respect to
that non-cash consideration), then the conversion or disposition will
constitute an Asset Sale and the Net Cash Proceeds will be applied in
accordance with this covenant.
37
<PAGE>
We may defer the net proceeds offer until there is a total unutilized net
proceeds offer amount equal to or in excess of $10 million resulting from one
or more Asset Sales. In that case, the entire unutilized net proceeds offer
amount, and not just the amount in excess of $10 million, must be applied as
required pursuant to this covenant.
If we transfer substantially all of our property and assets and those of our
Restricted Subsidiaries as an entirety to a Person in a transaction permitted
under "--Merger, Consolidation and Sale of Assets," and the transfer is not a
Change of Control, the successor corporation will be deemed to have sold our
properties and assets and those of our Restricted Subsidiaries that were not
so transferred for purposes of this covenant. The successor corporation must
comply with the provisions of this covenant with respect to such deemed sale
as if it were an Asset Sale. In addition, the fair market value of the
properties and assets deemed to be sold will be deemed to be Net Cash Proceeds
for purposes of this covenant.
Notwithstanding clauses (1) and (2) above, we and our Restricted
Subsidiaries will be permitted to complete an Asset Sale without complying
with those clauses to the extent that:
. at least 75% of the consideration for the Asset Sale constitutes
Replacement Assets; and
. the Asset Sale is for fair market value. However, any consideration that
does not constitute Replacement Assets that we or any of our Restricted
Subsidiaries receive in connection with any Asset Sale that is permitted
to be completed under this paragraph will be Net Cash Proceeds and will
be subject to the provisions of clauses (1) and (2).
We will mail each net proceeds offer to record holders within 30 days
following the net proceeds offer trigger date, with a copy to the trustee.
Each net proceeds offer must comply with the procedures set forth in the
indenture. Upon receiving notice of the net proceeds offer, you, as a holder
of a note, may elect to tender your notes in whole or in part in integral
multiples of $1,000 in exchange for cash. If you properly tender your notes in
an amount that exceeds the net proceeds offer amount, your notes will be
purchased on a pro rata basis (based on the total amount tendered). A net
proceeds offer will remain open for a period of 20 business days or a longer
period if required by law.
We will comply with the requirements of Rule 14e-1 under the Exchange Act
and any other securities laws and regulations thereunder if those laws and
regulations apply in connection with the repurchase of notes in a net proceeds
offer. If the provisions of any securities laws or regulations conflict with
the Asset Sale provisions of the indenture, we will comply with the applicable
securities laws and regulations and will not be deemed to have breached our
obligations under the "Asset Sale" provisions of the indenture.
Limitation on Dividends and Other Payment Restrictions Affecting Restricted
Subsidiaries. We will not, and will not cause or permit any of our Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or permit
to exist or become effective any encumbrance or restriction on the ability of
any of our Restricted Subsidiaries to:
. pay dividends or make any other distributions regarding its Capital
Stock;
. make loans or advances or pay any Indebtedness or other obligation it
owes us or any other of our Restricted Subsidiaries; or
. transfer any of its property or assets to us or any other of our
Restricted Subsidiaries.
However, we will permit an encumbrance or restriction on the ability of any
of our Restricted Subsidiaries that exists under or by reason of:
(a) applicable law;
(b) the indenture;
(c) customary non-assignment provisions of any contract of, any lease
governing a leasehold interest of, or any license held by, any of our
Restricted Subsidiaries;
38
<PAGE>
(d) any instrument governing Acquired Indebtedness, which encumbrance or
restriction is not applicable to any Person, or the properties or assets of
any Person, other than the Person or the properties or assets of the Person
so acquired;
(e) the Credit Agreement;
(f) agreements existing on the Issue Date to the extent and in the manner
those agreements are in effect on that date;
(g) an agreement governing Indebtedness incurred to Refinance the
Indebtedness issued, assumed or incurred under an agreement referred to in
clauses (b), (d), (e) and (f) above and (h) and (j) below. However, the
provisions relating to the encumbrance or restriction contained in any such
Indebtedness must be no less favorable to us in any material respect (as
determined by the board of directors or senior management in its reasonable
and good faith judgment) than the provisions relating to the encumbrance or
restriction contained in agreements referred to in clauses (b), (d), (e),
(f), (h) and (j);
(h) purchase money obligations for property acquired in the ordinary
course of business that impose restrictions on transfer of the property
acquired;
(i) contracts for the sale of assets, including customary restrictions
with respect to a Restricted Subsidiary under an agreement that has been
entered into for the sale or disposition of the Capital Stock or assets of
that Restricted Subsidiary;
(j) secured Indebtedness that we may incur in compliance with the
"Limitation on Incurrence of Additional Indebtedness" covenant and the
"Limitation on Liens" covenant and that limits the right of the debtor to
dispose of the assets securing such Indebtedness;
(k) customary provisions in joint venture agreements, licenses and leases
and other similar agreements entered into in the ordinary course of
business;
(l) net worth provisions in leases and other agreements; and
(m) an agreement governing Indebtedness (including any Credit Facilities)
that we may incur in compliance with the "Limitation on Incurrence of
Additional Indebtedness" covenant. However, the provisions relating to the
encumbrance or restriction contained in that Indebtedness must be no less
favorable to us in any material respect (as determined by our senior
management in its reasonable and good faith judgment) than the provisions
contained in the Credit Agreement as in effect on the Issue Date.
Limitation on Liens. We will not, and will not cause or allow any of our
Restricted Subsidiaries to, directly or indirectly, create, incur, assume or
permit to exist any Liens of any kind on any of our property or assets or
those of our Restricted Subsidiaries, whether owned on the Issue Date or
thereafter acquired, or on any proceeds from those properties or assets, or
assign or otherwise convey any right to receive income or profits from those
properties or assets unless:
. in the case where Liens secure Indebtedness that is expressly subordinate
or junior in right of payment to the notes, the notes are secured by a
Lien on the property, assets or proceeds that are senior in priority to
the Liens; and
. in all other cases, the notes are equally and ratably secured, except
for:
. Liens existing on the Issue Date, to the extent and in the manner
those Liens are in effect on that date;
. Liens securing Senior Debt and Liens securing Guarantor Senior Debt;
. Liens securing the notes and the Guarantees;
. our Liens or the Liens of one of our Wholly Owned Restricted
Subsidiaries on assets of any of our Restricted Subsidiaries;
. Liens securing Refinancing Indebtedness that is incurred to Refinance
any Indebtedness which has been secured by a Lien permitted under the
indenture and which has been incurred in accordance with the
provisions of the indenture. These Liens must:
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(i) be no less favorable to the holders and no more favorable to
the lienholders with respect to such Liens than the Liens in respect
of the Indebtedness being Refinanced; and
(ii) not extend to or cover any of our property or assets or those
of our Restricted Subsidiaries not securing the Indebtedness so
Refinanced; and
. Permitted Liens.
Prohibition on Incurrence of Senior Subordinated Debt. We will not, and will
not permit any Restricted Subsidiary that is a Guarantor to, incur
Indebtedness that is:
. senior in right of payment to the notes or that Guarantor's guarantee;
and
. subordinate in right of payment to any other of our Indebtedness or the
Indebtedness of that Guarantor.
Merger, Consolidation and Sale of Assets. We will not, in a single
transaction or series of related transactions, consolidate or merge with or
into any Person, or sell, assign, transfer, lease, convey or otherwise dispose
of (or cause or permit any of our Restricted Subsidiaries to sell, assign,
transfer, lease, convey or otherwise dispose of) all or substantially all of
our assets (determined on a consolidated basis for us and our Restricted
Subsidiaries) whether as an entirety or substantially as an entirety to any
Person unless:
(1) either:
(a) we will be the surviving or continuing corporation; or
(b) the Person (if other than our company) formed by the
consolidation or into which we are merged or the Person which acquires
by sale, assignment, transfer, lease, conveyance or other disposition
our properties and assets and those of our Restricted Subsidiaries
substantially as an entirety, the "surviving entity:"
(x) will be a corporation, partnership, trust or a limited
liability company that is organized and validly existing under the
laws of the United States or any State thereof or the District of
Columbia; and
(y) will expressly assume, by supplemental indenture (in form and
substance satisfactory to the trustee), executed and delivered to
the trustee, the due and punctual payment of the principal of, any
premium, and interest on all of the notes and the performance of
every covenant of the notes, the indenture and the registration
rights agreement on the part of the company to be performed or
observed. If, at any time, we or the surviving entity is a limited
liability company, partnership or trust, there must be a co-issuer
of the notes that is our Restricted Subsidiary and that is a
corporation organized and existing under the laws of the United
States or any State thereof or the District of Columbia;
(2) immediately after giving effect to the transaction and the assumption
contemplated by clause (1)(b)(y) above (including giving effect to any
Indebtedness and Acquired Indebtedness incurred or anticipated to be
incurred in connection with that transaction), we or the surviving entity
will be able to incur at least $1.00 of additional Indebtedness, other than
Permitted Indebtedness, under the "Limitation on Incurrence of Additional
Indebtedness" covenant;
(3) immediately before and immediately after giving effect to the
transaction and the assumption contemplated by clause (1)(b)(y) above
(including giving effect to any Indebtedness and Acquired Indebtedness
incurred or anticipated to be incurred and any Lien granted in connection
with the transaction), no Event of Default has occurred or is continuing;
and
(4) we or the surviving entity have delivered to the trustee an officers'
certificate and an opinion of counsel. These documents must state that the
consolidation, merger, sale, assignment, transfer, lease, conveyance or
other disposition and, if required, supplemental indenture comply with the
provisions of the indenture and that all of the conditions precedent in the
indenture relating to the transaction have been satisfied.
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Notwithstanding the foregoing, we may merge with an Affiliate that is
incorporated solely for the purpose of our reincorporation in another
jurisdiction.
For purposes of the foregoing, the transfer (by lease, assignment, sale or
otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more of our Restricted
Subsidiaries, the Capital Stock of which constitutes all or substantially all
of our properties and assets, will be a transfer of all or substantially all
of our properties and assets.
The indenture provides that any consolidation, combination or merger or any
transfer of all or substantially all of our assets in accordance with the
foregoing in which we are not the continuing corporation, the successor Person
formed by that consolidation or into which we are merged or to which the
conveyance, lease or transfer is made may exercise every right and power of
our company under the indenture and the notes.
Each Guarantor, other than any Guarantor whose guarantee is to be released
in accordance with the terms of the guarantee and the indenture in connection
with any transaction complying with the provisions of "--Limitation on Asset
Sales," will not, and we will not cause or permit any Guarantor to,
consolidate with or merge with or into any Person other than our company or
any other Guarantor unless:
. the entity formed by or surviving the consolidation or merger, if other
than the Guarantor, is a corporation, partnership, trust or limited
liability company organized and existing under the laws of the United
States or any State thereof or the District of Columbia;
. that entity assumes all of the obligations of the Guarantor on the
guarantee by supplemental indenture;
. immediately after giving effect to the transaction, no Event of Default
would occur and be continuing; and
. immediately after giving effect to the transaction and the use of any net
proceeds from the transaction on a pro forma basis, we could satisfy the
provisions of clause (2) above.
If a Guarantor merges or consolidates with or into us, where we are the
surviving entity, or another Guarantor that is our Wholly Owned Restricted
Subsidiary, that Guarantor need only comply with clause (4) above.
Limitations on Transactions with Affiliates. We will not, and will not
permit any of our Restricted Subsidiaries to, directly or indirectly, enter
into or permit to exist any transaction or series of related transactions
(including the purchase, sale, lease or exchange of any property or the
rendering of any service) with, or for the benefit of, any of our Affiliates,
each an "affiliate transaction," other than:
. certain permitted affiliate transactions described below; and
. affiliate transactions on terms that are no less favorable than those
that might reasonably have been obtained in a comparable transaction at
that time on an arm's-length basis from a Person that is not our
Affiliate or such Restricted Subsidiary.
All affiliate transactions, including each series of related affiliate
transactions which are similar or part of a common plan, that involve total
payments or other property with a fair market value in excess of $3.0 million
must be approved by our board of directors or the board of the Restricted
Subsidiary. This approval must be evidenced by a Board Resolution stating that
the relevant board of directors has determined that the transaction complies
with the foregoing provisions. If we or any of our Restricted Subsidiaries
enter into an affiliate transaction, or a series of related affiliate
transactions related to a common plan, that involves a total fair market value
of more than $10.0 million, we or the Restricted Subsidiary will, prior to the
completion of the transaction, obtain a favorable opinion as to the fairness
of the transaction or series of related transactions to us or the relevant
Restricted Subsidiary from a financial point of view, from an Independent
Financial Advisor and file that opinion with the trustee.
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The following affiliate transactions are permitted without regard to the
approval procedures described above:
. reasonable fees and compensation paid to and indemnity provided on behalf
of our officers, directors, employees, consultants or investment bankers
or those of our Restricted Subsidiaries as determined in good faith by
our board of directors or senior management;
. transactions exclusively between or among us and any of our Wholly Owned
Restricted Subsidiaries or exclusively between or among our Wholly Owned
Restricted Subsidiaries, if those transactions are not otherwise
prohibited by the indenture;
. any agreement as in effect as of the Issue Date, any amendment to that
agreement, any transaction contemplated by that agreement (including
under any amendment to the agreement) or any replacement agreement, if
that amendment or replacement agreement is not more disadvantageous to
the holders in any material respect than the original agreement as in
effect on the date of issuance;
. Restricted Payments permitted by the indenture;
. transactions in which we or any of our Restricted Subsidiaries deliver a
fairness opinion to the trustee from an Independent Financial Advisor
that states that the transaction is fair to us or the Restricted
Subsidiary from a financial point of view or meets the requirements of
the first sentence in this section;
. the existence of, or our performance or that of our Restricted
Subsidiaries of the obligations under the terms of, the Investors' Rights
Agreement, the Securities Purchase Agreement, any stockholders' agreement
to which it is a party as of the Issue Date, including any related
registration rights agreement or purchase agreement, and any similar
agreements which it may enter into thereafter. The existence of, or the
performance by us or any of our Restricted Subsidiaries of obligations
under, any future amendment to any of these existing agreement or under
any similar agreement entered into after the Issue Date will only be
permitted by this clause to the extent that the terms of the amendment or
new agreement are not otherwise disadvantageous to the holders of the
notes in any material respect;
. the issuance of securities or other payments, awards or grants, in cash,
securities or otherwise, pursuant to, or the funding of, employment
arrangements, stock options and stock ownership plans approved by the
board of directors in good faith and loans to our employees and those of
our Subsidiaries which are approved by our senior management in good
faith;
. transactions with customers, clients, suppliers, purchasers or sellers of
goods or services in the ordinary course of business and otherwise in
compliance with the terms of the indenture, which are fair to us or our
Restricted Subsidiaries, in the reasonable determination of our senior
management, or are on terms at least as favorable as might reasonably
have been obtained at the time of the transaction from an unaffiliated
party; and
. transactions reasonably related to the exercise of rights and remedies
with respect to the convertible junior subordinated notes or the
conversion or exchange of the convertible junior subordinated notes, each
to the extent not otherwise prohibited by the indenture.
Additional Subsidiary Guarantees. If we or any of our Restricted
Subsidiaries transfer, in one transaction or a series of related transactions,
any property to any Domestic Restricted Subsidiary that is not a Guarantor, or
if we or any of our Restricted Subsidiaries organize, acquire or otherwise
invest in another Domestic Restricted Subsidiary that has total assets with a
book value in excess of $1 million, then the transferee or acquired or other
Restricted Subsidiary must:
. execute and deliver to the trustee a supplemental indenture in a form
that is reasonably satisfactory to the trustee under which the Restricted
Subsidiary unconditionally guarantees all of our obligations under the
notes and the indenture on the terms set forth in the indenture; and
. deliver to the trustee an opinion of counsel that such supplemental
indenture has been duly authorized, executed and delivered by the
Restricted Subsidiary and constitutes its legal, valid, binding and
enforceable obligation. Thereafter, the Restricted Subsidiary will be a
Guarantor for all purposes of the indenture.
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Conduct of Business. Neither we nor our Restricted Subsidiaries will engage
in any businesses which are not substantially related, ancillary or
complementary to the businesses in which we and our Restricted Subsidiaries
were engaged in on the Issue Date.
Reports to Holders. The indenture provides that, whether or not required by
the rules and regulations of the SEC, so long as any notes are outstanding, we
will furnish to the holders of notes:
. all quarterly and annual financial information that would be required to
be contained in a filing with the SEC on Forms 10-Q and 10-K if we were
required to file such Forms, including a "Management's Discussion and
Analysis of Financial Condition and Results of Operations" that describes
our financial condition and results of operations and those of our
consolidated Subsidiaries (showing in reasonable detail, either on the
face of the financial statements or in the footnotes thereto, our
financial condition and results of operations and those of our Restricted
Subsidiaries separately from any of our Unrestricted Subsidiaries'
financial condition and results of operations) and, with respect to the
annual information only, a report thereon by our certified independent
accountants; and
. all current reports that would be required to be filed with the SEC on
Form 8-K if we were required to file such reports, in each case within
two days after the time periods specified in the SEC's rules and
regulations.
In addition, after we complete this exchange offer, we will file a copy of
all of such information and reports with the SEC for public availability
within the time periods specified in the SEC's rules and regulations (unless
the SEC will not accept such a filing) and make that information available to
securities analysts and prospective investors upon request. In addition, we
have agreed that, for so long as any notes remain outstanding and are
"restricted securities" within the meaning of Rule 144, we will furnish to the
holders and to securities analysts and prospective investors, upon their
request, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act.
Events of Default
The following events are defined in the indenture as "Events of Default:"
(1) the failure to pay interest on any notes when it becomes due and
payable, whether or not that payment is prohibited by the subordination
provisions of the indenture, and the continuation of that failure for a
period of 30 days;
(2) the failure to pay the principal on any notes when it becomes due and
payable, at maturity, upon redemption or otherwise, including the failure
to make a payment to purchase notes tendered pursuant to a change of
control offer or a net proceeds offer on the date specified for such
payment in the applicable offer to purchase, whether or not that payment is
prohibited by the subordination provisions of the indenture;
(3) a default in the observance or performance of any other covenant or
agreement contained in the indenture that continues for a period of 30 days
after we receive written notice specifying the default and demanding that
we remedy the default from the trustee or the holders of at least 25% of
the outstanding principal amount of the notes;
(4) the failure to pay at final maturity (giving effect to any applicable
grace periods and any extensions of those grace periods) the principal
amount of any of our Indebtedness or the Indebtedness of any of our
Significant Subsidiaries that continues for at least 20 days, or the
acceleration of the final stated maturity of any of our Indebtedness or the
Indebtedness of any of our Significant Subsidiaries that is not rescinded,
annulled or otherwise cured within 20 days of receipt of notice if the
total principal amount of that Indebtedness, together with the principal
amount of any other such Indebtedness in default for failure to pay
principal at final maturity or which has been accelerated (in each case
with respect to which the 20-day period described above has passed), totals
$10 million or more at any time;
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(5) the rendering of one or more judgments against us or one of our
Significant Subsidiaries that total more than $10 million (exclusive of
amounts covered by insurance) and remain undischarged, unpaid or unstayed
for a period of 60 days after becoming final and non-appealable;
(6) certain events of bankruptcy that affect us or any of our Significant
Subsidiaries; or
(7) any of the following events:
. the guarantee of a Significant Subsidiary ceases to be in full
force and effect, is declared null and void and unenforceable or
is found to be invalid; or
. any Guarantor of a Significant Subsidiary denies its liability
under its guarantee other than by reason of a release in
accordance with the terms of the indenture.
If an Event of Default, other than as specified in clause (6) above, occurs
and is continuing, the trustee or the holders of at least 25% in principal
amount of outstanding notes may declare the principal of and accrued interest
on all the notes to be due and payable by notice in writing to us and the
trustee specifying the Event of Default and stating that it is an
"acceleration notice." In that case, the principal and the accrued interest:
. will become immediately due and payable; or
. if there are any amounts outstanding under the Credit Agreement, will
become immediately due and payable upon the earlier of an acceleration
under the Credit Agreement or 5 business days after we and the
Representative under the Credit Agreement receive the acceleration notice
but only if the Event of Default is then continuing.
If an Event of Default specified in clause (6) above occurs and is
continuing, then all of the unpaid principal of, and any premium and accrued
and unpaid interest on, all of the outstanding notes will be immediately due
and payable without any declaration or other act on the part of the trustee or
any holder.
The indenture provides that, at any time after a declaration of acceleration
with respect to the notes as described in the preceding two paragraphs, the
holders of a majority in principal amount of the notes may rescind and cancel
that declaration and its consequences:
. if the rescission would not conflict with any judgment or decree;
. if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of
the acceleration;
. if interest on overdue installments of interest and overdue principal,
which has become due otherwise than by the declaration of acceleration,
has been paid to the extent that the payment of that interest is lawful;
. if we have paid the trustee its reasonable compensation and reimbursed
the trustee for its expenses, disbursements and advances; and
. in the event of the cure or waiver of an Event of Default of the type
described in clause (6) above, if the trustee has received an officers'
certificate and an opinion of counsel that the Event of Default has been
cured or waived. Rescission will not affect any subsequent default or
impair any right consequent thereto.
The holders of a majority in principal amount of the outstanding notes may
waive any existing Event of Default under the indenture and its consequences.
However, they may not waive a default in the payment of the principal of or
interest on any notes.
Holders of the notes may not enforce the indenture or the notes except as
provided in the indenture and under the Trust Indenture Act. Subject to all of
the provisions of the indenture that relate to the duties of the trustee, the
trustee is under no obligation to exercise any of its rights or powers under
the indenture at the request, order or direction of any of the holders, unless
those holders have offered reasonable indemnity to the trustee. Subject to all
provisions of the indenture and applicable law, the holders of a majority in
total principal amount of the then outstanding notes 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.
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We are required to provide an officers' certificate to the trustee promptly
when an officer obtains knowledge of any Event of Default that has occurred
and, if applicable, describe that Event of Default and its status.
No Personal Liability of Directors, Officers, Employees and Stockholders
Our directors, officers, employees and stockholders and those of our
Subsidiaries will not have any liability for any of our obligations under the
notes, the indenture or the guarantees or for any claim based on those
obligations or their creation. Each holder, by accepting a note, waives and
releases all of such liability. The waiver and release are part of the
consideration for issuance of the notes.
Legal Defeasance and Covenant Defeasance
We may, at our option and at any time, elect to have our obligations and the
obligations of the Guarantors discharged with respect to the outstanding notes
("legal defeasance"). Legal defeasance means that we will be deemed to have
paid and discharged the entire indebtedness represented by the outstanding
notes, except for:
. the rights of holders of outstanding notes to receive payments in respect
of the principal of, any premium, and interest on the notes when payment
is due;
. our obligations with respect to the notes that concern the issuance of
temporary notes, registration of notes, mutilated, destroyed, lost or
stolen notes and the maintenance of an office or agency for payments;
. the rights, powers, trusts, duties and immunities of the trustee and our
obligations in connection therewith; and
. the legal defeasance provisions of the indenture.
In addition, we may, at our option and at any time, elect to have our
obligations released with respect to certain covenants that are described in
the indenture ("covenant defeasance"). Thereafter, any omission to comply with
those obligations will not be an Event of Default with respect to the notes.
If covenant defeasance occurs, certain events, other than nonpayment,
bankruptcy, receivership, reorganization and insolvency events, described
under "Events of Default" will no longer constitute an Event of Default with
respect to the notes.
To exercise either legal defeasance or covenant defeasance:
(1) we must irrevocably deposit with the trustee, in a trust for the
benefit of the holders, cash in U.S. dollars and/or non-callable U.S.
government obligations in amounts that will be sufficient, in the opinion
of a nationally recognized firm of independent public accountants, to pay
the principal of, any premium, and interest on the notes on the stated
dates for payment or on the applicable redemption date;
(2) in the case of legal defeasance, we must deliver an opinion of
counsel in the U.S. to the trustee that is reasonably acceptable to the
trustee and confirms that:
. we have received from, or there has been published by, the Internal
Revenue Service a ruling; or
. since the date of the indenture, there has been a change in the
applicable federal income tax law.
In either case, the opinion of counsel must confirm that the holders will
not recognize income, gain or loss for federal income tax purposes as a
result of the legal defeasance and will be subject to federal income tax on
the same amounts, in the same manner and at the same times as would have
been the case if the legal defeasance had not occurred;
(3) in the case of covenant defeasance, we must deliver an opinion of
counsel in the U.S. to the trustee that is reasonably acceptable to the
trustee and confirms that the holders will not recognize income, gain or
loss for federal income tax purposes as a result of the covenant defeasance
and will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if the covenant
defeasance had not occurred;
(4) no Event of Default has occurred and is continuing on the date of
such deposit or, in the case of an Event of Default from bankruptcy or
insolvency, at any time in the period ending on the 91st day after the date
of deposit;
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(5) the legal defeasance or covenant defeasance must not result in a
breach under the indenture, the Credit Agreement or any other material
agreement or instrument to which we or any of our Subsidiaries is a party
or by which we or any of our Subsidiaries is bound;
(6) we must deliver to the trustee an officers' certificate stating that
we did not make the deposit with the intent of preferring the holders over
any of our other creditors or with the intent of defeating, hindering,
delaying or defrauding any of our other creditors or others;
(7) we must deliver to the trustee an officers' certificate and an
opinion of counsel, each stating that all of the conditions precedent
provided for or relating to the legal defeasance or the covenant defeasance
have been complied with;
(8) we must deliver to the trustee an opinion of counsel to the effect
that:
. the trust funds will not be subject to any rights of holders of
Senior Debt, including those arising under the indenture; and
. assuming we do not file for bankruptcy between the date of deposit
and the 91st day following the date of deposit and that no holder is
an insider of our company, after the 91st day following the date of
deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally; and
(9) certain other customary conditions precedent are satisfied.
The opinion of counsel required by clause (2) above with respect to a legal
defeasance need not be delivered if all of the notes not theretofore delivered
to the trustee for cancellation:
. have become due and payable; or
. will become due and payable on the maturity date within one year under
arrangements satisfactory to the trustee for the giving of notice of
redemption by the trustee in our name and at our expense.
Satisfaction and Discharge
The indenture will be discharged and will cease to be of further effect
(except as to surviving rights of registration of transfer or exchange of the
notes, as expressly provided for in the indenture) as to all of the
outstanding notes when:
. either:
. all of the notes that have been authenticated and delivered (except
lost, stolen or destroyed notes which have been replaced or paid and
notes for whose payment money has been deposited in trust or
segregated and held in trust by us and thereafter repaid to us or
discharged from such trust) have been delivered to the trustee for
cancellation; or
. all of the notes that have not been delivered to the trustee for
cancellation have become due and payable and we have irrevocably
deposited with the trustee funds in an amount sufficient to pay and
discharge the entire Indebtedness on the notes not theretofore
delivered to the trustee for cancellation for principal of, any
premium, and interest on the notes to the date of deposit together
with irrevocable instructions from us directing the trustee to apply
those funds to the payment of the notes at maturity or redemption;
. we have paid all of the other sums payable by us under the indenture; and
. we have delivered to the trustee an officers' certificate and an opinion
of counsel stating that all of the conditions precedent under the
indenture that relate to the satisfaction and discharge of the indenture
have been complied with.
Modification of the Indenture
From time to time, we, the Guarantors and the trustee may amend the
indenture for certain specified purposes without consent from the holders,
including to cure ambiguities, defects or inconsistencies. However,
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such change must not, in the opinion of the trustee, adversely affect the
rights of any of the holders in any material respect. In formulating its
opinion, the trustee will be entitled to rely on evidence it deems
appropriate, including, solely on an opinion of counsel. Other modifications
and amendments of the indenture may be made with the consent of the holders of
a majority in principal amount of the then outstanding notes issued under the
indenture. However, we may not make any of the following changes unless each
holder of notes who is affected by such change gives its specific consent:
. changes that reduce the percentage of principal amount held by holders
required to amend the indenture;
. changes that reduce the rate of interest or change the time for payment
of interest, including defaulted interest, on any notes;
. changes that reduce the principal of or change the fixed maturity of any
notes, or change the date on which any notes may be subject to redemption
or reduce the redemption price of the notes;
. changes in the currency in which the notes are payable;
. changes in the provisions of the indenture that protect the right of each
holder to receive payment of principal of and interest on or after its
due date or to bring suit to enforce that payment or that permit holders
of a majority in principal amount of notes to waive defaults or Events of
Default;
. after our obligation to purchase notes arises thereunder, material
changes relating to our obligation to make and complete a change of
control offer in the event of a Change of Control or make and complete a
net proceeds offer with respect to any Asset Sale that has been completed
or, after such Change of Control has occurred or such Asset Sale has been
completed, modify any of the provisions or definitions with respect
thereto;
. changes in any of the provisions of the indenture, including the
definitions, that affect the subordination or ranking of the notes or any
guarantee in a manner which adversely affects the holders; or
. changes that release any Guarantor that is a Significant Subsidiary from
any of its obligations under its guarantee or the indenture otherwise
than in accordance with the terms of the indenture.
The Trustee
The trustee has two main roles. First, the trustee can enforce your rights
as a holder of notes against us if we default. Second, the trustee performs
administrative duties for us, such as sending you interest payments,
transferring your notes to a new buyer if you sell and sending you notices.
The indenture provides that, except during the continuance of an Event of
Default, the trustee will perform only the duties that are specifically set
forth in the indenture. During an Event of Default, the trustee will exercise
the rights and powers vested in it by the indenture, and use the same degree
of care and skill in its exercise as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs.
If the trustee becomes one of our creditors, the indenture and the
provisions of the Trust Indenture Act contain certain limitations on the
trustee's rights to obtain payments of claims in certain cases or to realize
on certain property that it received in respect of any such claim as security
or otherwise. Subject to the Trust Indenture Act, the trustee will be
permitted to engage in other transactions. However, if the trustee acquires
any conflicting interest as described in the Trust Indenture Act, it must
eliminate that conflict or resign.
Certain Definitions
Set forth below is a summary of the definitions of certain terms used in the
indenture. You should refer to the indenture for the full definition of these
terms, as well as any other terms used in this section for which we do not
provide a definition.
"Acquired Indebtedness" means the Indebtedness of a Person or any of its
Restricted Subsidiaries that exists at the time that Person becomes our
Restricted Subsidiary or at the time it merges or consolidates with or
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into our company or any of our Subsidiaries or is assumed in connection with
the acquisition of assets from such Person and in each case whether or not
incurred by such Person in connection with, or in anticipation or
contemplation of, such Person becoming our Restricted Subsidiary or such
acquisition, merger or consolidation.
"Affiliate" means, with respect to any specified Person, any other Person
that directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such specified Person. The
term "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative of the
foregoing.
"Asset Acquisition" means (1) an Investment by us or any of our Restricted
Subsidiaries in any other Person pursuant to which that Person will become our
Restricted Subsidiary or the Restricted Subsidiary of any of our Restricted
Subsidiaries, or will be merged with or into us or any of our Restricted
Subsidiaries, or (2) our acquisition or that of our Restricted Subsidiaries of
the assets of any Person (other than one of our Restricted Subsidiaries) which
constitute all or substantially all of the assets of that Person or comprises
any operating unit, division or line of business of that Person or any other
properties or assets of that 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 us or any of
our Restricted Subsidiaries (including any Sale and Leaseback Transaction) to
any Person other than us or one of our Wholly Owned Restricted Subsidiaries of
. any Capital Stock of any of our Restricted Subsidiaries; or
. any other of our property or assets or those of our Restricted
Subsidiaries other than in the ordinary course of business.
Asset Sales do not include:
. a transaction or series of related transactions for which we or our
Restricted Subsidiaries receive total consideration of less than $1.5
million;
. the sale, lease, conveyance, disposition or other transfer of all or
substantially all of our assets as permitted under "Merger, Consolidation
and Sale of Assets;"
. any Restricted Payment permitted under "Limitations on Restricted
Payments" or that constitutes a Permitted Investment;
. sales of damaged, worn-out or obsolete equipment or assets that, in our
reasonable judgment, are no longer either used or useful in our business
or the business of our Restricted Subsidiaries; or
. the sale of accounts receivable pursuant to a Qualified Receivables
Transaction.
"Board Resolution" means, with respect to any Person, a copy of a resolution
certified by the Secretary or an Assistant Secretary of that Person to have
been duly adopted by the board of directors of that Person and to be in full
force and effect on the certification date, and delivered to the trustee.
"Capital Stock" means:
. 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 (but shall not include, prior to
any conversion thereof, the convertible junior subordinated debentures);
and
. with respect to any Person that is not a corporation, any and all
partnership, membership or other equity interests of such Person.
"Capitalized Lease Obligation" means, as to any Person, the obligations of
that Person under a lease that are required to be classified and accounted for
as capital lease obligations under GAAP and, for purposes of this
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definition, the amount of those obligations at any date will be the
capitalized amount of those obligations at that date, determined in accordance
with GAAP.
"Cash Equivalents" means:
(1) marketable direct obligations that mature within one year from the
date of their acquisition and are issued by, or unconditionally guaranteed
by, the United States Government or issued by any United States agency and
backed by the full faith and credit of the United States;
(2) marketable direct obligations issued by any state of the United
States of America or any political subdivision or any public
instrumentality of any state that mature within one year from the date of
their acquisition and, at the time of acquisition, have one of the two
highest ratings obtainable from either Standard & Poor's Ratings Group
("S&P") or Moody's Investors Service, Inc. ("Moody's");
(3) commercial paper that matures no more than one year from the date of
its creation and, at the time of acquisition, has a rating of at least A-1
from S&P or at least P-1 from Moody's;
(4) certificates of deposit or bankers' acceptances that mature within
one year from the date of their acquisition and are 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
which have combined capital and surplus of at least $250 million at the
date of their acquisition;
(5) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (1) above entered
into with any bank meeting the qualifications specified in clause (4)
above; and
(6) investments in money market funds that invest substantially all of
their assets in securities of the types described in clauses (1) through
(5) above.
"Change of Control" means the occurrence of one or more of the following
events:
. any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all or substantially all of our assets
to any Person or group of related Persons for purposes of Section 13(d)
of the Exchange Act (a "Group"), together with any Affiliates thereof
(whether or not otherwise in compliance with the provisions of the
indenture), other than to the Permitted Holders;
. the approval by the holders of our Capital Stock of any plan or proposal
for the liquidation or dissolution of our company whether or not
otherwise in compliance with the provisions of the indenture;
. any Person or Group, other than the Permitted Holders, becomes the owner,
directly or indirectly, beneficially or of record, of shares representing
more than 50% of the total ordinary voting power represented by our
issued and outstanding Capital Stock; or
. the replacement of a majority of our board of directors over a two-year
period from the directors who constituted our board of directors at the
beginning of that period, where that replacement was not approved by the
Permitted Holders or a vote of at least a majority of our board of
directors then still in office who either were members of such board at
the beginning of such period or whose election as a member of such board
was previously so approved.
"Consolidated EBITDA" means, with respect to any Person, for any period, the
sum (without duplication) of:
. Consolidated Net Income; and
. to the extent Consolidated Net Income has been reduced thereby:
. all income taxes of that Person and its Restricted Subsidiaries, other
than income taxes attributable to extraordinary, unusual or nonrecurring
gains, that are paid or accrued in accordance with GAAP for that period;
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. Consolidated Interest Expense; and
. Consolidated Non-cash Charges less any non-cash items that increase
Consolidated Net Income for that period, all as determined on a
consolidated basis for that Person and its Restricted Subsidiaries in
accordance with GAAP.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to any
Person, the ratio of Consolidated EBITDA of that Person during the four full
fiscal quarters (the "Four Quarter Period") ending prior to the date of the
transaction that gives rise to the need to calculate the Consolidated Fixed
Charge Coverage Ratio for which financial statements are available (the
"Transaction Date") to Consolidated Fixed Charges of such Person for the Four
Quarter Period. In addition to and without limitation of the foregoing, for
purposes of this definition, "Consolidated EBITDA" and "Consolidated Fixed
Charges" must be calculated after giving effect on a pro forma basis for the
period of such calculation to:
. the incurrence or repayment of any Indebtedness of that Person or any of
its Restricted Subsidiaries (and the application of the proceeds thereof)
giving rise to the need to make such calculation and any incurrence or
repayment of other Indebtedness (and the application of the proceeds
thereof), other than the incurrence or repayment of Indebtedness in the
ordinary course of business for working capital purposes pursuant to
working capital facilities, 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 incurrence or repayment, as
the case may be (and the application of the proceeds thereof), occurred
on the first day of the Four Quarter Period; and
. any asset sales or other dispositions or Asset Acquisitions 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 other disposition or Asset Acquisition (including the
incurrence, assumption or liability for any such Acquired Indebtedness)
occurred on the first day of the Four Quarter Period.
The calculation must include any Asset Acquisition giving rise to the need
to make such calculation as a result of that Person or one of its Restricted
Subsidiaries (including any Person who becomes a Restricted Subsidiary as a
result of the Asset Acquisition) incurring, assuming or otherwise being liable
for Acquired Indebtedness. In addition, it must include any Consolidated
EBITDA attributable to the assets that are the subject of the Asset
Acquisition or asset sale or other disposition during the Four Quarter Period.
That EBITDA must include any pro forma expense and cost reductions,
adjustments and other operating improvements or synergies both achieved by
such Person during such period and to be achieved by such Person and with
respect to the acquired assets, all as determined in good faith by a
responsible financial or accounting officer of our company and as reported on
or otherwise confirmed, consistent with applicable standards of the American
Institute of Certified Public Accountants, to us by an independent public
accounting firm.
If that Person or any of its Restricted Subsidiaries directly or indirectly
guarantees Indebtedness of a third Person, the preceding sentence will give
effect to the incurrence of the guaranteed Indebtedness as if that Person or
its Restricted Subsidiary had directly incurred or otherwise assumed the
guaranteed Indebtedness.
Furthermore, in calculating "Consolidated Fixed Charges" for purposes of
determining the denominator (but not the numerator) of this "Consolidated
Fixed Charge Coverage Ratio":
. interest on outstanding Indebtedness determined on a fluctuating basis as
of the Transaction Date and which will continue to be so determined
thereafter will be deemed to have accrued at a fixed rate per year equal
to the rate of interest on such Indebtedness in effect on the Transaction
Date; and
. notwithstanding the above clause, interest on Indebtedness determined on
a fluctuating basis, to the extent such interest is covered by agreements
relating to Interest Swap obligations, will accrue at the rate per year
resulting after giving effect to the operation of those agreements.
"Consolidated Fixed Charges" means, with respect to any Person for any
period, the sum, without duplication, of:
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. Consolidated Interest Expense (excluding amortization or write-off of
deferred financing costs, interest paid on convertible junior
subordinated debentures in the form of convertible junior subordinated
debentures or Qualified Capital Stock and one-time accelerated interest
payments due upon the conversion of the convertible junior subordinated
debentures prior to May 1, 2004); plus
. the product of (x) the amount of all dividend payments on any series of
preferred stock of that Person (other than dividends paid in Qualified
Capital Stock) paid, accrued or scheduled to be paid or accrued during
such period times (y) a fraction, the numerator of which is one and the
denominator of which is one minus the then current effective consolidated
federal, state and local tax rate of that Person, expressed as a decimal.
"Consolidated Interest Expense" means, with respect to any Person for any
period, the sum of, without duplication:
. the total of the interest expense of that Person and its Restricted
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
. the interest component of Capitalized Lease obligations paid, accrued
and/or scheduled to be paid or accrued by that Person and its Restricted
Subsidiaries during such period as determined on a consolidated basis in
accordance with GAAP, minus interest income for such period.
"Consolidated Net Income" means, with respect to any Person, for any period,
the total net income (or loss) of that Person and its Restricted Subsidiaries
for such period on a consolidated basis, determined in accordance with GAAP.
Excluded from this calculation are:
. after-tax gains or losses from Asset Sales (without regard to the $1.5
million limitation set forth in the definition of Asset Sales) or
abandonments or reserves relating thereto;
. items classified as extraordinary, nonrecurring or unusual gains or
losses on an after-tax basis (including, but not limited to, non-cash
charges related to the acceleration of the vesting of options);
. the net income of any Person acquired in a "pooling-of-interests"
transaction accrued prior to the date it becomes a Restricted Subsidiary
of the referent Person or is merged or consolidated with the referent
Person or any Restricted Subsidiary of the referent Person;
. the net income (but not loss) of any Restricted Subsidiary of the
referent Person to the extent that the declaration of dividends and the
making of loans or advances or similar distributions, loans or advances
by that Restricted Subsidiary of that income is restricted by a contract,
operation of law or otherwise;
. the net income of any Person, other than a Restricted Subsidiary of the
referent Person, except to the extent of cash dividends or distributions
paid to the referent Person or to a Wholly Owned Restricted Subsidiary of
the referent Person by such Person;
. 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; and
. the effect of changes in accounting principles after the Issue Date.
For purposes of the "Limitation on Restricted Payments" covenant only,
"Consolidated Net Income" will be calculated without taking into account cash
interest payments (and the related tax effects) on the convertible junior
subordinated debentures.
"Consolidated Non-cash Charges" means, with respect to any Person, for any
period, the total depreciation, amortization and other non-cash expenses of
that Person and its Restricted Subsidiaries reducing
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Consolidated Net Income of that Person and its Restricted Subsidiaries for
such period, determined on a consolidated basis in accordance with GAAP.
"Credit Agreement" means the Credit Agreement dated as of the Issue Date,
between us, the lenders party thereto in their capacities as lenders
thereunder, Goldman Sachs & Co., as documentation agent, Salomon Smith Barney
Inc., as syndication agent and Bankers Trust Company, as administrative agent,
together with the related documents thereto, in each case as those agreements
may be amended, 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
borrowings thereunder or adding our Restricted Subsidiaries 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.
"Credit Facilities" means one or more debt facilities, including the Credit
Agreement, or commercial paper facilities with banks or other institutional
lenders that provide for revolving credit loans, term loans, receivables
financing (including through the sale of receivables to those lenders or to
special purpose entities formed to borrow from those lenders against the
receivables) and/or letters of credit or banker's acceptances.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed to protect us or
our Restricted Subsidiaries against fluctuations in currency values.
"Designated Senior Debt" means:
. Indebtedness relating to the Credit Agreement; and
. any other Indebtedness that constitutes Senior Debt which, at the time of
determination, has a total principal amount of at least $25 million and
which we specifically designated in the instrument evidencing that Senior
Debt as "Designated Senior Debt."
"Disqualified Capital Stock" means the 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 at the option of the holder of that security), or
upon the occurrence of any event (other than an event which would constitute a
Change of Control or Asset Sale), matures or is mandatorily redeemable,
according to a sinking fund obligation or otherwise, or is redeemable at the
sole option of the holder (except, in each case, upon the occurrence of a
Change of Control or Asset Sale) on or prior to the final maturity date of the
notes.
"Domestic Restricted Subsidiary" means a Restricted Subsidiary incorporated
or otherwise organized or existing under the laws of the United States, or any
state, territory or possession of the United States.
"fair market value" means, with respect to any asset or property, the price
which could be negotiated in an arm's-length, free market transaction between
a willing seller and a willing and able buyer, neither of whom is under undue
pressure or compulsion to complete the transaction.
"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 other statements by another
entity as may be approved by a significant segment of the accounting
profession of the United States, which are in effect as of the Issue Date.
"Guarantor" means:
. each of our Restricted Subsidiaries as of the Issue Date; and
. each of our Restricted Subsidiaries that in the future executes a
supplemental indenture in which that Restricted Subsidiary agrees to be
bound by the terms of the indenture as a Guarantor.
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Any Person that is a Guarantor as described above will no longer be a
Guarantor when its respective Guarantee is released in accordance with the
terms of the indenture.
"Guarantor Senior Debt" means, with respect to any Guarantor: the principal
of, any premium, and interest (including any post-bankruptcy interest at the
rate provided for in the documentation with respect to the filing, whether or
not that interest is an allowed claim under applicable law) on any of that
Guarantor's Indebtedness, whether outstanding on the Issue Date or thereafter
created, incurred or assumed, unless, in the case of any particular
Indebtedness, the instrument creating or evidencing or pursuant to which the
Indebtedness is outstanding expressly provides that the Indebtedness will not
be senior in right of payment to the guarantee of that Guarantor. Without
limiting the generality of the foregoing, Guarantor Senior Debt also includes
the principal of, any premium, interest (including any post-bankruptcy
interest at the rate provided for in the documentation with respect to the
filing, whether or not that interest is an allowed claim under applicable law)
on, and all other amounts owing in respect of:
. all monetary obligations of every nature of that Guarantor under, or with
respect to, the Credit Agreement, including obligations to pay principal
and interest, reimbursement obligations under letters of credit, fees,
expenses and indemnities (including guarantees thereof);
. all Interest Swap obligations (and guarantees thereof); and
. all obligations (and guarantees thereof) under Currency Agreements;
in each case whether outstanding on the Issue Date or thereafter incurred.
Notwithstanding the foregoing, Guarantor Senior Debt does not include:
(1) any Indebtedness of the Guarantor to its Subsidiary;
(2) Indebtedness to, or guaranteed on behalf of, any stockholder,
director, officer or employee of the Guarantor or any of its Subsidiaries,
including amounts owed for compensation, unless that stockholder is also a
lender or an Affiliate of a lender under the Credit Facilities, including
the Credit Agreement;
(3) Indebtedness to trade creditors and other amounts incurred in
connection with obtaining goods, materials or services;
(4) Indebtedness represented by Disqualified Capital Stock;
(5) any liability for federal, state, local or other taxes owed or owing
by the Guarantor;
(6) the portion of any Indebtedness that is incurred in violation of the
indenture provisions described under "Limitation on Incurrence of
Additional Indebtedness." However, no violation will exist for purposes of
this clause if the holder(s) of the obligation or their representative have
received an officers' certificate to the effect that the incurrence of the
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 the
related indenture provisions;
(7) Indebtedness which, when incurred and without respect to any election
under Section 1111(b) of Title 11, United States Code, is without recourse
to us; and
(8) any Indebtedness which is, by its express terms, subordinated in
right of payment to any other Indebtedness of the Guarantor.
"Indebtedness" means with respect to any Person, without duplication:
(1) all obligations of that Person for borrowed money, including Senior
Debt;
(2) all obligations of that Person evidenced by bonds, debentures, notes
or other similar instruments;
(3) all Capitalized Lease obligations of that Person;
(4) all obligations of that Person issued or assumed as the deferred
purchase price of property, all conditional sale obligations and all
obligations under any title retention agreement. This does not include
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trade accounts payable and other accrued liabilities arising in the
ordinary course of business that are not overdue by 90 days or more or are
being contested in good faith by appropriate proceedings that have been
promptly instituted and diligently conducted;
(5) all obligations for the reimbursement of any obligor on any letter of
credit, banker's acceptance or similar credit transaction;
(6) guarantees and other contingent obligations in connection with
Indebtedness referred to in clauses (1) through (5) above and clause (8)
below;
(7) all obligations of any other Person of the type referred to in
clauses (1) through (6) which are secured by any lien on any property or
asset of that Person. The amount of that Obligation will be the lesser of
the fair market value of the property or asset or the amount of the
Obligation so secured;
(8) all obligations under currency agreements and interest swap
agreements of that Person; and
(9) all Disqualified Capital Stock that Person issues. The amount of
Indebtedness represented by that Disqualified Capital Stock is equal to the
greater of its voluntary or involuntary liquidation preference and its
maximum fixed repurchase price, but excludes any accrued dividends.
Notwithstanding anything to the contrary contained in this definition,
Indebtedness will not include any of our contingent purchase price obligations
or other earn-out obligations or those of our Restricted Subsidiaries in
connection with acquisitions, if those obligations are not required to be
included as indebtedness on the face of our consolidated balance sheet in
accordance with GAAP. For purposes of this definition, the "maximum fixed
repurchase price" of any Disqualified Capital Stock which does not have a
fixed repurchase price will be calculated in accordance with the terms of that
Disqualified Capital Stock as if it were purchased on any date on which
Indebtedness would be required to be determined pursuant to the indenture. If
that price is based upon, or measured by, the fair market value of the
Disqualified Capital Stock, the fair market value will be determined
reasonably and in good faith by the board of directors of the issuer of the
Disqualified Capital Stock.
"Independent Financial Advisor" means a firm:
. which does not, and whose directors, officers and employees or Affiliates
do not, have a direct or indirect financial interest in us; and
. which, in the judgment of our board of directors, is otherwise
independent and qualified to perform the task for which it is to be
engaged.
"Interest Swap obligations" means the obligations of any Person according to
any arrangement with any other Person, whereby, directly or indirectly, that
Person is entitled to receive periodic payments that are calculated by
applying either a floating or a fixed rate of interest on a stated notional
amount in exchange for periodic payments made by the other Person calculated
by applying a fixed or a floating rate of interest on the same notional
amount. Interest Swap obligations include interest rate swaps, caps, floors,
collars and similar agreements.
"Investment" means, with respect to any Person, any direct or indirect loan
or other extension of credit (including, without limitation, a guarantee) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition by such Person of any Capital Stock,
bonds, notes, debentures or other securities or evidences of Indebtedness
issued by, any other Person. The definition of Investment does not include our
extensions of trade credit and those of our Restricted Subsidiaries on
commercially reasonable terms in accordance with our normal trade practices or
those of such Restricted Subsidiary.
For purposes of the "Limitation on Restricted Payments" covenant:
. ""Investment'' includes and is valued at the fair market value of the net
assets of any of our Restricted Subsidiaries when that Restricted
Subsidiary is designated as our Unrestricted Subsidiary and excludes the
fair market value of the net assets of any of our Unrestricted
Subsidiaries when that Unrestricted Subsidiary is designated as our
Restricted Subsidiary; and
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. the amount of any Investment is the original cost of that Investment plus
the cost of all additional Investments by us or any of our Restricted
Subsidiaries, without any adjustments for increases or decreases in
value, or write-ups, write-downs or write-offs with respect to that
Investment, reduced by the payment of dividends or distributions in
connection with that Investment or any other amounts received in respect
of that Investment. However, no payment of dividends or distributions or
receipt of any such other amounts will reduce the amount of any
Investment if that payment of dividends or distributions or receipt of
any such amounts would be included in Consolidated Net Income.
If we or any of our Restricted Subsidiaries sell or otherwise dispose of any
common stock of any of our direct or indirect Restricted Subsidiaries and as a
result no longer own, directly or indirectly, 100% of the outstanding common
stock of that Restricted Subsidiary, we will be deemed to have made an
Investment on the date of that sale or disposition. The Investment will be
equal to the fair market value of the common stock of the Restricted
Subsidiary that is not sold or disposed of.
"Investors' Rights Agreement" means the Investors' Rights Agreement, dated
March 22, 1999, among us and certain of our investors.
"Issue Date" means the date of original issuance of the notes.
"Lien" means any lien, mortgage, deed of trust, pledge, security interest,
charge or encumbrance of any kind. A lien includes any conditional sale or
other title retention agreement, any lease in the nature thereof and any
agreement to give any security interest.
"Net Cash Proceeds" means the proceeds of any Asset Sale in the form of cash
or Cash Equivalents, including payments in respect of deferred payment
obligations when received in the form of cash or Cash Equivalents (other than
the portion of any such deferred payment constituting interest) that we or any
of our Restricted Subsidiaries receives net of:
. reasonable out-of-pocket expenses and fees relating to the Asset Sale,
including legal, accounting and investment banking fees and sales
commissions;
. taxes paid or payable after taking into account any reduction in
consolidated tax liability due to available tax credits or deductions and
any tax sharing arrangements;
. repayment of Indebtedness that is required to be repaid in connection
with the Asset Sale;
. appropriate amounts that we or any of our Restricted Subsidiaries provide
as a reserve, in accordance with GAAP, against any liabilities associated
with the Asset Sale and that we or any Restricted Subsidiary retain after
the Asset Sale. These amounts include pension and other post-employment
benefit liabilities, liabilities related to environmental matters and
liabilities under any indemnification obligations associated with the
Asset Sale; and
. all distributions and other payments required to be made to minority
interest holders in Restricted Subsidiaries or joint ventures as a result
of the Asset Sale.
"Permitted Holders" means Apollo Management, L.P. and its Affiliates and our
management.
"Permitted Indebtedness" means, without duplication, each of the following:
(1) Indebtedness under the notes and the guarantees in a total principal
amount not to exceed $200 million;
(2) Indebtedness incurred pursuant to the Credit Agreement in a total
principal amount at any time outstanding not to exceed $375 million, less
the amount of all repayments and permanent commitment reductions under the
Credit Agreement with the Net Cash Proceeds of an Asset Sale applied as
required by the "Limitation on Asset Sales" covenant. The amount of
Indebtedness that may be incurred under the Credit Agreement in accordance
with this clause (2) will be in addition to any Indebtedness that may be
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incurred under the Credit Agreement in accordance with clause (16) below.
The total principal amount of Indebtedness that may be incurred under this
clause (2) will be reduced dollar for dollar by any Indebtedness
outstanding under clause (15) below;
(3) Indebtedness under the convertible junior subordinated debentures
reduced by any principal payments or conversions of those debentures;
(4) our other Indebtedness and the Indebtedness of our Restricted
Subsidiaries that is outstanding on the Issue Date, reduced by the amount
of any scheduled amortization payments or mandatory prepayments when
actually paid or permanent reductions of those amounts;
(5) our Interest Swap obligations or those of any of our Restricted
Subsidiaries that cover our Indebtedness or the Indebtedness of any of our
Restricted Subsidiaries. The Interest Swap obligations must be entered into
to protect us and our Restricted Subsidiaries from fluctuations in interest
rates on outstanding Indebtedness to the extent the notional principal
amount of the Interest Swap Obligation does not, at the time it is
incurred, exceed the principal amount of the Indebtedness to which that
Interest Swap Obligation relates;
(6) Indebtedness under Currency Agreements. If a Currency Agreement
relates to Indebtedness, that Currency Agreements must not increase our
Indebtedness and the Indebtedness of our Restricted Subsidiaries
outstanding other than as a result of fluctuations in foreign currency
exchange rates or by reason of fees, indemnities and compensation payable
under the Currency Agreement;
(7) Indebtedness of one of our Restricted Subsidiaries to us or to one of
our Wholly Owned Restricted Subsidiaries for so long as that Indebtedness
is held by us, one of our Wholly Owned Restricted Subsidiaries or the
lenders or collateral agent under the Credit Agreement, in each case
subject to no Lien held by a Person other than us, one of our Wholly Owned
Restricted Subsidiaries or the lenders or collateral agent under the Credit
Agreement. If, as of any date, any Person other than us, one of our Wholly
Owned Restricted Subsidiaries or the lenders or collateral agent under the
Credit Agreement owns or holds any such Indebtedness or holds a Lien
relating to that Indebtedness, that date will be deemed the incurrence of
Indebtedness not constituting Permitted Indebtedness by the issuer of that
Indebtedness;
(8) our Indebtedness to one of our Wholly Owned Restricted Subsidiaries
or the lenders or collateral agent under the Credit Agreement for so long
as that Indebtedness is held by the Wholly Owned Restricted Subsidiary or
the lenders or collateral agent under the Credit Agreement, in each case
subject to no Lien. However, our Indebtedness to any of our Wholly Owned
Restricted Subsidiaries must be unsecured and subordinated, pursuant to a
written agreement, to our obligations under the indenture and the notes.
If, as of any date, any Person other than one of our Wholly Owned
Restricted Subsidiaries or the lenders or collateral agent under the Credit
Agreement owns or holds any such Indebtedness or any Person holds a Lien
other than a Lien in favor of the lenders or collateral agent under the
Credit Agreement relating to that Indebtedness, that date will be deemed
our incurrence of Indebtedness not constituting Permitted Indebtedness;
(9) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument inadvertently (except
in the case of daylight overdrafts) drawn against insufficient funds in the
ordinary course of business. That Indebtedness must be extinguished within
two business days of incurrence;
(10) our Indebtedness or the Indebtedness of any of our Restricted
Subsidiaries represented by letters of credit for our account or that of
the Restricted Subsidiary, in order to provide security for workers'
compensation claims, payment obligations in connection with self-insurance
or similar requirements in the ordinary course of business;
(11) Indebtedness represented by our Capitalized Lease obligations and
Purchase Money Indebtedness and that of our Restricted Subsidiaries
incurred in the ordinary course of business that does not exceed $20
million at any one time outstanding. All or a portion of the $20 million
permitted to be incurred according to this clause (11) may, at our option,
be incurred under the Credit Agreement instead of pursuant to Capitalized
Lease obligations or Purchase Money Indebtedness;
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(12) Indebtedness arising from our agreements or the agreements of our
Restricted Subsidiaries that provide for indemnification, adjustment of
purchase price or similar obligations and is incurred or assumed in
connection with the disposition of any business, assets or a Subsidiary.
This Indebtedness does not include guarantees of Indebtedness incurred by
any Person acquiring all or any portion of the business, assets or a
Subsidiary for the purpose of financing the acquisition. The Indebtedness
will not be reflected on our balance sheet or the balance sheet of any of
our Restricted Subsidiaries (contingent obligations referred to in a
footnote to financial statements and not otherwise reflected on the balance
sheet will not be deemed to be reflected on the balance sheet for purposes
of this clause (a)). The maximum assumable liability relating to all of
that Indebtedness will not exceed the gross proceeds, including noncash
proceeds (the fair market value of such noncash proceeds being measured at
the time it is received and without giving effect to any subsequent changes
in value), actually received by us and our Restricted Subsidiaries in
connection with the disposition;
(13) our Indebtedness or the Indebtedness of any of our Restricted
Subsidiaries relating to performance bonds, bankers' acceptances, workers'
compensation claims, surety or appeal bonds, payment obligations in
connection with self-insurance or similar obligations, and bank overdrafts
(and letters of credit in respect thereof);
(14) Refinancing Indebtedness;
(15) the incurrence by a Receivables Subsidiary of Indebtedness in a
Qualified Receivables Transaction that is without recourse to us or to any
of our Restricted Subsidiaries or their assets (other than that Receivables
Subsidiary and its assets) and is not guaranteed by any such Person. Any
outstanding Indebtedness incurred under this clause (15) will reduce the
total amount permitted to be incurred under clause (2) above to the extent
set forth in clause (2); and
(16) our additional Indebtedness and that of our Restricted Subsidiaries
in a total principal amount not to exceed $20 million at any one time
outstanding. This amount may, but need not, be incurred in whole or in part
under the Credit Agreement.
For purposes of determining compliance with the "Limitation on Incurrence of
Additional Indebtedness" covenant, if an item of Indebtedness meets the
criteria of more than one of the categories of Permitted Indebtedness
described in clauses (1) through (16) above or is entitled to be incurred
under the Consolidated Fixed Charge Coverage Ratio provisions of that
covenant, we will, in our sole discretion, classify or later reclassify the
item of Indebtedness in any manner that complies with this covenant. Accrual
of interest, accretion or amortization of original issue discount, the payment
of interest on any Indebtedness in the form of additional Indebtedness with
the same terms, and the payment of dividends on Disqualified Capital Stock in
the form of additional shares of the same class of Disqualified Capital Stock
will not be deemed to be an incurrence of Indebtedness or an issuance of
Disqualified Capital Stock for purposes of the "Limitation on Incurrence of
Additional Indebtedness" covenant.
"Permitted Investments" means:
(1) our Investments or those of any of our Restricted Subsidiaries in any
Person that is or will become our Wholly Owned Restricted Subsidiary
immediately after that Investment or that will merge or consolidate into us
or one of our Wholly Owned Restricted Subsidiaries;
(2) Investments by one of our Restricted Subsidiaries in our company. Any
Indebtedness evidencing that Investment must be unsecured and subordinated,
pursuant to a written agreement, to our obligations under the notes and the
indenture;
(3) Investments in cash and Cash Equivalents;
(4) loans and advances to our employees and officers and those of our
Restricted Subsidiaries in the ordinary course of business for bona fide
business purposes. These loans outstanding may not exceed $5 million at any
one time;
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(5) Currency Agreements and Interest Swap obligations entered into in the
ordinary course of our business or that of our Restricted Subsidiaries and
otherwise in compliance with the indenture;
(6) additional Investments, including joint ventures, not to exceed $10
million at any one time outstanding;
(7) Investments in securities of trade creditors or customers received
under any plan of reorganization or similar arrangement upon the bankruptcy
or insolvency of those trade creditors or customers;
(8) our Investments or the Investments of our Restricted Subsidiaries
made as a result of consideration received in connection with an Asset Sale
that is made in compliance with the "Limitation on Asset Sales" covenant or
any Investment that we or any of our Restricted Subsidiaries makes in
connection with a transaction that would be an Asset Sale if it involved
total consideration of $1.5 million or more;
(9) Investments of a Person or any of its Subsidiaries in compliance with
the indenture that exist at the time that Person becomes our Restricted
Subsidiary or at the time that Person merges or consolidates with us or any
of our Restricted Subsidiaries. However, these Investments must not have
been made by the Person in connection with, or in anticipation or
contemplation of, that Person becoming our Restricted Subsidiary or the
merger or consolidation;
(10) repurchases of our Capital Stock that occur upon the exercise of
stock options if that Capital Stock represents a portion of the exercise
price of the options;
(11) our Investments or those of any of our Restricted Subsidiaries made
in connection with purchase price adjustments, contingent purchase price
payments or other earn-out payments required in connection with Investments
otherwise permitted under the indenture;
(12) Investments in securities received in settlement of trade
obligations in the ordinary course of business; and
(13) Investments in the notes.
"Permitted Liens" means the following types of Liens:
(1) Liens for taxes, assessments or governmental charges or claims
either:
. not delinquent; or
. contested in good faith by appropriate proceedings and as to which we
or our Restricted Subsidiaries have set aside on our books any
reserves required under GAAP;
(2) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, suppliers, materialmen, repairmen and other Liens imposed by law
that are incurred in the ordinary course of business for sums not yet
delinquent or being contested in good faith, if a reserve or any other
appropriate provision required by GAAP has been made in respect thereof;
(3) Liens incurred or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other
types of social security, including any Lien securing letters of credit
issued in the ordinary course of business consistent with past practice in
connection therewith, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government contracts,
performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money);
(4) judgment Liens not giving rise to an Event of Default. However, the
Lien must be adequately bonded and any appropriate legal proceedings that
have been initiated for the review of the judgment must not have been
finally terminated or the period within which review proceedings may be
initiated must not have expired;
(5) easements, rights-of-way, zoning restrictions and other similar
charges or encumbrances relating to real property that do not interfere in
any material respect with the ordinary conduct of the our business or the
business of our Restricted Subsidiaries;
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(6) any interest or title of a lessor under any Capitalized Lease
Obligation. These Liens may not extend to any property or asset that is not
leased property subject to the Capitalized Lease Obligation;
(7) Liens securing Capitalized Lease obligations and Purchase Money
Indebtedness permitted under clause (11) of the definition of "Permitted
Indebtedness." In the case of Purchase Money Indebtedness:
. the Indebtedness must not exceed the cost of the property or assets
and must not be secured by any of our property or assets or those of
any of our Restricted Subsidiaries other than the property and assets
acquired; and
. the Lien securing the Indebtedness must be created within 180 days of
the acquisition or construction or, in the case of a refinancing of
any Purchase Money Indebtedness, within 180 days of the refinancing;
(8) Liens upon specific items of inventory or other goods and proceeds of
any Person securing that Person's obligations relating to bankers'
acceptances issued or created for the account of that Person to facilitate
the purchase, shipment or storage of the inventory or other goods;
(9) Liens securing reimbursement obligations relating to commercial
letters of credit which encumber documents and other property relating to
those letters of credit and products and proceeds thereof;
(10) Liens encumbering deposits made to secure obligations arising from
our statutory, regulatory, contractual, or warranty requirements or those
of our Restricted Subsidiaries, including rights of offset and set-off;
(11) Liens securing Interest Swap obligations that relate to Indebtedness
that is otherwise permitted under the indenture;
(12) Liens in the ordinary course of business that do not exceed $5
million at any one time outstanding that:
. are not incurred in connection with the borrowing of money; and
. do not materially detract from the value of the property or
materially impair its use;
(13) Liens by reason of judgments or decrees that do not otherwise result
in an Event of Default;
(14) Liens securing Indebtedness under Currency Agreements permitted
under the indenture;
(15) Liens securing Acquired Indebtedness incurred in accordance with the
"Limitation on Incurrence of Additional Indebtedness" covenant; provided
that:
. these Liens secured the Acquired Indebtedness at the time of and
prior to the incurrence of the Acquired Indebtedness by us or one of
our Restricted Subsidiaries and were not granted in connection with,
or in anticipation of, the incurrence of the Acquired Indebtedness by
us or one of our Restricted Subsidiaries; and
. these Liens do not extend to or cover any of our property or assets
or those of any of our Restricted Subsidiaries other than the
property or assets that secured the Acquired Indebtedness prior to
the time the Indebtedness became our Acquired Indebtedness or the
Acquired Indebtedness of one of our Restricted Subsidiaries and are
no more favorable to the lienholders than those securing the Acquired
Indebtedness prior to our incurrence or that of our Restricted
Subsidiaries of such Acquired Indebtedness; and
(16) Liens securing Indebtedness permitted to be incurred pursuant to
clause (16) of the definition of "Permitted Indebtedness."
"Person" means an individual, partnership, corporation, limited liability
company, unincorporated organization, trust or joint venture, or a
governmental agency or political subdivision thereof.
"Purchase Money Indebtedness" means Indebtedness that we or our Restricted
Subsidiaries incur in the normal course of business for the purpose of
financing all or any part of the purchase price, or the cost of installation,
construction or improvement, of property or equipment and any Refinancings of
that Indebtedness.
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"Qualified Capital Stock" means any Capital Stock that is not Disqualified
Capital Stock.
"Qualified Receivables Transaction" means any transaction or series of
transactions that we or any of our Restricted Subsidiaries enter into in which
we or any of those Restricted Subsidiaries sell, convey or otherwise transfer
to:
. in the case of a transfer by us or our Restricted Subsidiary, a
Receivables Subsidiary; and
. in the case of a transfer by a Receivables Subsidiary, any other Person
or grant a security interest in, any of our accounts receivable or those of
any of our Restricted Subsidiaries (whether now existing or arising in the
future), and any assets related to the accounts receivable, including all
collateral securing those accounts receivable, all contracts and all
guarantees or other obligations relating to the accounts receivable, proceeds
of the accounts receivable and other assets which are customarily transferred
or in respect of which security interests are customarily granted in
connection with asset securitization transactions involving accounts
receivable.
"Receivables Subsidiary" means our Wholly Owned Restricted Subsidiary that
does not engage in any activities other than in connection with the financing
of accounts receivable and that is designated by our board of directors (as
provided below) as a Receivables Subsidiary. No portion of the Indebtedness or
any other obligations, contingent or otherwise, of the Wholly Owned Restricted
Subsidiary:
. may be guaranteed by us or any of our Restricted Subsidiaries, except for
guarantees of obligations (other than the principal of, and interest on,
Indebtedness) under representations, warranties, covenants and
indemnities entered into in the ordinary course of business in connection
with a Qualified Receivables Transaction;
. may be recourse to or obligate us or any of our Restricted Subsidiaries
in any way other than under representations, warranties, covenants and
indemnities entered into in the ordinary course of business in connection
with a Qualified Receivables Transaction; or
. may subject any of our property or assets or those of our Restricted
Subsidiaries, directly or indirectly, contingently or otherwise, to the
satisfaction thereof, other than under representations, warranties,
covenants and indemnities entered into in the ordinary course of business
in connection with a Qualified Receivables Transaction.
Neither we nor any of our Restricted Subsidiaries may have any material
contract, agreement, arrangement or understanding with the Wholly Owned
Restricted Subsidiary unless it is:
. on terms at least as favorable to us or the Restricted Subsidiary as
those terms that might be obtained at the time from Persons who are not
our Affiliates, and
. unless it is for fees payable in the ordinary course of business in
connection with servicing accounts receivable.
Neither we nor any of our Restricted Subsidiaries have any obligation to
maintain or preserve the Wholly Owned Restricted Subsidiary's financial
condition or cause the Wholly Owned Restricted Subsidiary to achieve certain
levels of operating results. Any designation as a Receivables Subsidiary by
our board of directors will be evidenced to the trustee by:
. filing with the trustee a Board Resolution giving effect to the
designation; and
. an officers' certificate certifying that the designation complied with
the foregoing conditions.
"Refinance" means, in respect of any security or Indebtedness, to refinance,
extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue a
security or Indebtedness in exchange or replacement for, that security or
Indebtedness in whole or in part. "Refinanced" and "Refinancing" have
correlative meanings.
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"Refinancing Indebtedness" means any Refinancing by us or any of our
Restricted Subsidiaries of Indebtedness that is incurred in accordance with
the "Limitation on Incurrence of Additional Indebtedness" covenant, other than
according to clauses (2), (5), (6), (7), (8), (9), (10), (11), (12), (13),
(15) or (16) of the definition of Permitted Indebtedness. The Refinancing may
not:
. result in an increase in the total principal amount of Indebtedness of
the Person as of the date of the proposed Refinancing plus the amount of
any premium required to be paid under the terms of the instrument
governing the Indebtedness and plus the amount of reasonable expenses we
incur in connection with the Refinancing; or
. create Indebtedness with a Weighted Average Life to Maturity that is less
than the Weighted Average Life to Maturity of the Indebtedness being
Refinanced or with a final maturity earlier than the final maturity of
the Indebtedness being Refinanced.
If the Indebtedness being Refinanced is our Indebtedness, then that
Refinancing Indebtedness will solely be our Indebtedness. In addition, if the
Indebtedness being Refinanced is subordinate or junior to the notes, then that
Refinancing Indebtedness will be subordinate to the notes at least to the same
extent and in the same manner as the Indebtedness being Refinanced.
"Registration Rights Agreement" means the registration rights agreement
dated as of the Issue Date among the us, the Guarantors and the Initial
Purchasers.
"Representative" means the indenture trustee or other trustee, agent or
representative relating to any Designated Senior Debt. If, and for so long as,
any Designated Senior Debt lacks such a representative, then the
Representative for that Designated Senior Debt will be the holders of a
majority in outstanding principal amount of the Designated Senior Debt.
"Restricted Subsidiary" of any Person means any Subsidiary of that Person
which, at the time of determination, is not an Unrestricted Subsidiary.
"Sale and Leaseback Transaction" means any direct or indirect arrangement
with any Person or to which any Person is a party, which provides for the
leasing to us or one of our Restricted Subsidiaries of any property, whether
owned by us or any of our Restricted Subsidiaries at the Issue Date or later
acquired, which we or the Restricted Subsidiary have or will sell or transfer
to the Person or to any other Person from whom funds have been or are to be
advanced by the Person on the security of that property.
"Securities Purchase Agreement" means the Securities Purchase Agreement,
dated as of March 22, 1999, between us and Boss Investment LLC.
"Senior Debt" means the principal of, premium, if any, and interest
(including any post-bankruptcy interest accruing at the rate provided for in
the documentation relating to the bankruptcy, whether or not that interest is
an allowed claim under applicable law) on our Indebtedness, whether
outstanding on the Issue Date or thereafter created, incurred or assumed,
unless the instrument creating or evidencing the Indebtedness or under which
the Indebtedness is outstanding expressly provides that the Indebtedness will
not be senior in right of payment to the notes. Senior Debt also includes the
principal of, premium, if any, interest (including any post-bankruptcy
interest accruing at the rate provided for in the documentation relating to
the bankruptcy, whether or not that interest is an allowed claim under
applicable law) on, and all other amounts owed that relate to:
. all of our monetary obligations of every nature under the Credit
Agreement, including obligations to pay principal and interest,
reimbursement obligations under letters of credit, fees, expenses and
indemnities;
. all Interest Swap obligations, including guarantees of the Interest Swap
obligations; and
. all obligations under Currency Agreements, including guarantees of the
Currency Agreements.
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Notwithstanding the foregoing, Senior Debt does not include:
(1) our Indebtedness to one of our Subsidiaries;
(2) Indebtedness to, or guaranteed on behalf of, any of our stockholders,
directors, officers or employees or those of any of our Subsidiaries,
including amounts owed for compensation, other than a stockholder who is a
lender or an Affiliate of a lender under the Credit Facilities, including
the Credit Agreement;
(3) Indebtedness to trade creditors and other amounts incurred in
connection with obtaining goods, materials or services;
(4) Indebtedness represented by Disqualified Capital Stock;
(5) any liability for federal, state, local or other taxes that we owe;
(6) that portion of any Indebtedness incurred in violation of the
indenture provisions set forth under "Limitation on Incurrence of
Additional Indebtedness." However, this clause (6) will not be violated if
the holder(s) of the obligation or their representative have received an
officers' certificate of our company to the effect that the incurrence of
the Indebtedness, or, in the case of revolving credit indebtedness, that
the incurrence of the entire committed amount of that revolving credit
indebtedness at the date on which the initial borrowing thereunder is made,
does not violate the provisions of the indenture;
(7) Indebtedness represented by the convertible junior subordinated
debentures;
(8) Indebtedness which, when incurred and without respect to any election
under Section 1111(b) of Title 11, United States Code, is without recourse
to us; and
(9) any Indebtedness which is, by its express terms, subordinated in
right of payment to any other of our Indebtedness.
"Significant Subsidiary", with respect to any Person, means any Restricted
Subsidiary of that Person that satisfies the criteria for a "significant
subsidiary" set forth in Rule 1.02(w) of Regulation S-X under the Exchange Act
based upon the most recent pro forma annual financial information we file with
the SEC.
"Subsidiary", with respect to any Person, means:
. 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 is owned, directly or indirectly, by that
Person; or
. 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 that Person.
"Unrestricted Subsidiary" of any Person means:
. any Subsidiary of that Person that at the time of determination is or
will continue to be designated an Unrestricted Subsidiary by the board of
directors of that Person in the manner provided below; and
. any Subsidiary of an Unrestricted Subsidiary.
The board of directors may designate any Subsidiary, including any newly
acquired or newly formed Subsidiary, as an Unrestricted Subsidiary unless that
Subsidiary owns any of our Capital Stock or owns or holds any Lien on any of
our property or the property of any of our other Subsidiaries that is not a
Subsidiary of the Subsidiary to be so designated. In addition:
. we must certify to the trustee that the designation complies with the
"Limitation on Restricted Payments" covenant; and
. each Subsidiary to be so designated and each of its Subsidiaries has not,
at the time of designation, and does not thereafter, create, incur,
issue, assume, guarantee or otherwise become directly or indirectly
liable with respect to any Indebtedness under which the lender has
recourse to any of our assets or those of any of our Restricted
Subsidiaries.
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The board of directors may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary only if:
. immediately after giving effect to the designation, we are able to incur
at least $1.00 of additional Indebtedness, other than Permitted
Indebtedness, in compliance with the "Limitation on Incurrence of
Additional Indebtedness" covenant; and
. immediately before and immediately after giving effect to such
designation, no Event of Default has occurred and is continuing.
Any such designation by the board of directors must be evidenced to the
trustee by promptly filing with the trustee a copy of the Board Resolution
that gives effect to the designation and an officers' certificate that
certifies that the designation complies with the foregoing provisions.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (a) the then outstanding
total principal amount of the Indebtedness into (b) the sum of the total of
the products obtained by multiplying:
. the amount of each then remaining installment, sinking fund, serial
maturity or other required payment of principal, including payment at
final maturity, in respect thereof, by
. the number of years (calculated to the nearest one-twelfth) which will
elapse between the applicable date and the making of such payment.
"Wholly Owned Restricted Subsidiary" of any Person means any Wholly Owned
Subsidiary of that Person which, at the time of determination, is a Restricted
Subsidiary of that Person.
"Wholly Owned Subsidiary" of any Person means any Subsidiary of that Person
of which all of 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 that Person or any Wholly Owned Subsidiary of that Person.
Book-Entry; Delivery And Form
The exchange notes may be issued in the form of one or more registered notes
in global form without coupons, each a "global note." Each global note will be
deposited with, or on behalf of, The Depository Trust Company, "DTC," and
registered in the name of Cede & Co., as nominee of DTC, or will remain in the
custody of IBJ Whitehall Bank & Trust Company, as trustee under the indenture,
pursuant to an agreement between DTC and the trustee.
DTC has advised us that it is:
. a limited purpose trust company organized under the laws of the State of
New York;
. a "banking organization" within the meaning of the New York Banking Law;
. a member of the Federal Reserve System;
. a "clearing corporation" within the meaning of the Uniform Commercial
Code; and
. a "clearing agency" registered pursuant to Section 17A of the Exchange
Act.
DTC holds securities that its participants deposit with it and records
settlements of securities transactions (such as transfers and pledges) in such
deposited securities among DTC participants. DTC keeps computerized records of
DTC participants' accounts, which eliminates the need to issue certificates.
DTC participants include securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations. Other
organizations, including securities brokers and dealers, banks and trust
companies also use DTC's book-entry system, as indirect DTC participants.
Investors who are not participants may beneficially own securities held by or
on behalf of DTC only through participants or indirect participants.
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We expect that pursuant to procedures established by DTC, ownership of the
exchange notes will be shown on, and the transfer of such ownership will be
effected only through:
. records maintained by DTC, with respect to interests of participants; and
. records of participants and the indirect participants, with respect to
the interests of persons other than participants.
The laws of some jurisdictions may require that certain purchasers of
securities take physical delivery of those securities in definitive form.
Accordingly, the ability to transfer interests in the exchange notes
represented by a global security to such persons may be limited. DTC can act
only on behalf of its participants, who in turn act on behalf of persons who
hold interests through participants. Therefore, the ability of a person with
an interest in exchange notes represented by a global security to pledge or
transfer that interest to persons or entities that do not participate in DTC's
system, or to otherwise take actions regarding that interest, may be affected
by the lack of a physical definitive security representing that interest.
So long as DTC or its nominee is the registered owner of a global security,
DTC or its nominee will be considered the sole owner or holder of the exchange
notes represented by the global security for all purposes under the indenture.
No beneficial owner of an interest in the exchange notes represented by a
global security will be able to transfer that interest except in accordance
with DTC's procedures, in addition to those provided for under the indenture.
The trustee will make payments of the principal of, any premium, and
interest (including any additional interest) on any exchange notes represented
by a global security registered in the name of DTC or its nominee on the
applicable record date to or at the direction of DTC or its nominee, as the
registered holders. We are only responsible for payments of principal, any
premium and interest to DTC. Neither we nor the trustee has any responsibility
or liability for the payment of such amounts to owners of beneficial interests
in a global security. DTC is responsible for the disbursement of those
payments to DTC participants. DTC participants and indirect DTC participants
are responsible for payments to their clients. Customary practices between the
participants and their clients will govern these payments.
Transfers between participants in DTC will be done in the ordinary way
through DTC's same-day funds system in accordance with DTC rules and will be
settled in same day funds. If a holder requires physical delivery of
certificates, the holder must transfer its interest in the exchange notes
represented by the global security according to DTC's normal procedures and
the procedures set forth in the indenture.
We have been advised by DTC that it will take any action that a holder of
exchange notes may take, but only at the direction of one or more participants
whose accounts are credited with an interest in the global note. Additionally,
DTC will only take action as to that portion of the total amount of exchange
notes represented by the global security as to which the participants have
given such direction. However, if there is an event of default under the
indenture, DTC will exchange the global notes for exchange notes represented
by certificates, which it will distribute to its participants.
DTC may discontinue providing its services to us at any time if they give us
reasonable notice. Neither we nor the trustee have any responsibility for the
performance of DTC or its participants or indirect participants of their
obligations under the rules and procedures that governs their operations.
Book-entry exchange notes represented by a global note will be exchangeable
for exchange notes represented by certificates with the same terms in
authorized denominations if:
. requested by a holder of an interest in the exchange notes represented by
the global security; or
. DTC notifies us that it is unwilling or unable to continue as a
depository and a successor depository is not appointed by us within 90
days.
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DESCRIPTION OF THE CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES
On April 30, 1999, Boss Investment acquired a total principal amount of our
7 1/2% convertible junior subordinated debentures. The convertible junior
subordinated debentures will mature on April 30, 2012. We will pay interest
quarterly. We will pay interest in additional convertible debentures, or at
our option, in cash through the fifth anniversary of the issuance of the
notes. However, from and after the third anniversary through the fifth
anniversary of issuance, we will pay interest in cash if requested by a
majority of the holders of the convertible junior subordinated debentures.
Thereafter, we will only pay interest in cash. Our payment of interest in cash
may be restricted by the terms of our other financing arrangements.
The convertible junior subordinated debentures are convertible at an initial
conversion price of $22.50 per $1,000 principal amount. The conversion price
is subject to customary antidilution adjustments and to the possible reduction
of the conversion price, as discussed below. Upon conversion of the
convertible junior subordinated debentures a holder will receive a number of
shares of common stock equal to the principal amount of the convertible junior
subordinated debentures being converted plus any accrued interest divided by
the conversion price then in effect. If the convertible junior subordinated
debentures are converted prior to the fifth anniversary of their issuance, the
number of shares of common stock issuable upon conversion will also give
effect to the amount of interest that would have been paid on the convertible
junior subordinated debentures through the fifth anniversary of their
issuance. This is subject, however, to a maximum of 30 months of additional
interest unless such conversion is in connection with a change of control of
our company.
Provided that we obtain stockholder approval of amendments to our restated
certificate of incorporation, holders of the convertible junior subordinated
debentures will be entitled to elect as a class three directors to our board
of directors (or if the board has more than ten directors, no less than 30% of
the board) and otherwise to vote on an as converted basis with the common
stock on all matters submitted to the holders of common stock. We are seeking
stockholder approval of the amendments to our restated certificate of
incorporation at our annual meeting on July 8, 1999.
If we do not obtain stockholder approval of the amendments by July 25, 1999,
the interest rate on the convertible junior subordinated debentures will
increase to 12 1/2% per year until we obtain such approval. In addition, if we
do not obtain stockholder approval by October 24, 1999, the conversion price
will be permanently reduced by $1.00 and will be further permanently reduced
by $1.00 every 90 days thereafter if we do not obtain stockholder approval
during that 90-day period. The permanent reduction of the conversion price is
subject to a maximum reduction of $4.00.
If we default in the payment of any of our indebtedness or default in a
manner that gives rise to an acceleration of any of our indebtedness or if we
materially and intentionally breach the agreements relating to the investment
by Boss Investment, holders of the convertible junior subordinated debentures
will be entitled to elect a majority of the board of directors until we cure
the default or breach. However, before the holders' can exercise this right,
they must provide notice and a time period in which to cure the default or
breach.
We have nominated three persons designated by Boss Investment for election
to the board of directors at our 1999 annual meeting. If the amendment to the
restated certificate of incorporation is not adopted at our 1999 annual
meeting, we must give Boss Investment the right to designate three nominees
for election at each annual meeting thereafter as long as Boss Investment owns
at least 1,481,479 shares on an as converted basis.
Certain of our significant corporate actions will require the prior consent
of Boss Investment for so long as Boss Investment owns 50% of the outstanding
convertible junior subordinated debentures. Those actions that require consent
include:
. mergers, unless in connection with a "permitted acquisition;"
. a recapitalization, liquidation or reorganization of our business or a
material change in our business;
. acquisitions or dispositions with a total value of over $100 million;
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. payment of dividends;
. acquisitions of capital stock or indebtedness junior to the convertible
junior subordinated debentures;
. the hiring, firing or amendment of the employment terms of our Chief
Executive Officer;
. any increase in the size of the board of directors above ten directors
unless designees of Boss Investment continue to comprise at least 30% of
the board;
. transactions with affiliates not in the ordinary course of business; and
. any agreement that would restrict our ability to honor the rights of the
holders of the convertible junior subordinated debentures.
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DESCRIPTION OF THE CREDIT FACILTY
The credit facility consists of a $125.0 million term loan used as a part of
the consideration paid in the tender offer and a $225.0 million revolving
credit facility, in each case maturing five years from the date of the
borrowing. A portion of the revolving credit facility was used to finance a
portion of the tender offer and its related expenses. The revolving credit
facility can also be used for acquisitions and general corporate purposes,
including working capital requirements and contingent payments that are
required by certain acquisition agreements with respect to previously
completed acquisitions.
As of June 25, 1999, we had $142.5 million of availability under the credit
facility.
Subject to certain limited exceptions, the credit facility requires
mandatory repayments and mandatory commitment reductions with the proceeds
from the following:
. assets sales;
. the issuance of debt and preferred stock; and
. insurance and condemnation claims.
In the case of asset sales or the issuance of debt and preferred stock, the
percentage of net proceeds that we are required to use to permanently repay
term loans and reduce the commitments under the credit facility will be
reduced to 75% based on our achievement of certain levels of financial
performance. We may voluntarily prepay the credit facility at any time,
subject to certain notice requirements and to the payment of certain losses
and expenses suffered by the lenders as a result of our prepayment of
eurodollar rate loans prior to the end of the applicable interest period.
The credit facility bears interest at the sum of the applicable margin and,
at our option, either the "base rate" or the "eurodollar rate" (as defined in
the credit facility). The base rate will be the higher of:
. the rate that Bankers Trust Company announces from time to time as its
prime lending rate, as in effect from time to time; and
. 1/2 of 1% in excess of the overnight federal funds rate.
The applicable margin will be a percentage per year equal to:
. in the case of term loans maintained as base rate loans, 2.00%;
. in the case of term loans maintained as eurodollar rate loans, 3.00%;
. in the case of revolving loans maintained as base rate loans, 1.50%; and
. in the case of revolving loans maintained as eurodollar rate loans,
2.50%.
In each case, the applicable margin is subject to step-downs to be determined
based on certain levels of financial performance. We will pay a commitment fee
in an amount equal to 0.50% per year on the daily average unused portion of
the credit facility, subject to step-downs to be determined based on certain
levels of financial performance. Additionally, the then applicable commitment
fee percentage will be increased by 0.25% whenever the total unutilized
commitments under the revolving credit facility exceed 75% of the sum of the
total revolving commitment then in effect under the credit facility plus the
total outstanding principal amount of the term loans.
The credit facility contains certain financial covenants as well as
covenants that, among other things, restrict:
. indebtedness and liens;
. the sale of assets;
. mergers, acquisitions and other business combinations;
. the voluntary prepayment of certain of our debt (including the exchange
notes and the convertible junior subordinated debentures);
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. transactions with affiliates;
. capital expenditures;
. loans and investments;
. the payment of cash dividends to stockholders; and
. the repurchase or redemption of stock from stockholders.
The credit facility contains customary events of default, including:
. payment defaults;
. breaches of representations and warranties;
. covenant defaults;
. cross-default and cross-acceleration to certain other indebtedness;
. certain events of bankruptcy and insolvency;
. certain events under the Employee Retirement Income Security Act of 1974,
as amended;
. material judgments;
. actual or asserted failure of any guaranty or security document that
supports the credit facility to be in full force and effect; and
. a change of control of our company.
If such a default occurs, the lenders under the credit facility would be
entitled to take various actions, including any actions that could be taken by
a secured creditor, the acceleration of amounts due under the credit facility
and requiring that all such amounts be immediately paid in full.
All obligations under the credit facility are jointly and severally
guaranteed by each of our direct and indirect subsidiaries. The indebtedness
under the credit facility is secured by a pledge of our subsidiaries' capital
stock (but not to exceed 65% of the voting stock of foreign subsidiaries) and
a perfected lien and security interest in substantially all of our tangible
and intangible assets and those of our direct and indirect subsidiaries. Our
future domestic subsidiaries will guarantee the credit facility and secure
that guarantee with certain of their real property and substantially all of
their tangible and intangible personal property.
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UNITED STATES FEDERAL TAX CONSEQUENCES
The following is a general discussion of the material U.S. federal income
tax consequences associated with the exchange of original notes for exchange
notes and the ownership and disposition of the notes. This summary applies
only to the beneficial owner of a note who acquired the notes for cash at the
initial offering, from the initial purchaser and for the original offering
price of the notes. This discussion is based upon the U.S. federal tax law now
in effect, which is subject to change, possibly retroactively. We urge you to
consult your tax advisor regarding the U.S. federal tax consequences of
acquiring, holding, and disposing of the notes, as well as any tax
consequences that may arise under the laws of any foreign, state, local, or
other taxing jurisdiction.
We have not requested, and will not request, a ruling from the Internal
Revenue Services with respect to any of the U.S. federal income tax
consequences described below. Therefore, we cannot assure you that the IRS
will not disagree with or challenge any of the conclusions set forth in this
discussion. This discussion does not address the tax consequences to
subsequent purchasers of the notes and is limited to investors who hold the
notes as capital assets within the meaning of Section 1221 of the Internal
Revenue Code. Furthermore, this discussion does not address all aspects of
U.S. federal income taxation that may be applicable to investors in light of
their particular circumstances, or to investors subject to special treatment
under U.S. federal income tax law. Such investors include, among others,
certain financial institutions, insurance companies, tax-exempt entities,
dealers in securities or foreign currency, persons who have acquired notes as
part of a straddle, hedge, conversion transaction, constructive sale, or other
integrated investment, investors in pass-through entities or persons whose
functional currency is not the U.S. dollar.
As used in this section, a "U.S. holder" means a beneficial owner of an
exchange note that is, for U.S. federal income tax purposes:
. an individual citizen or resident of the U.S.;
. a corporation created or organized in or under the laws of the U.S. or of
any political subdivision of the U.S.;
. an estate, the income of which is subject to U.S. federal income tax
regardless of its source;
. a trust, if a U.S. court is able to exercise primary supervision over the
administration of the trust and one or more U.S. persons have the
authority to control all substantial decisions of the trust; or
. a person whose worldwide income and gain is otherwise subject to U.S.
federal income taxation on a net income basis.
As used in this section, the term "non-U.S. holder" means a beneficial owner
of notes that not a U.S. holder.
Summary of Tax Treatment
- -------------------------------------------------------------------------------
Exchange Offer . no gain or loss realized
. tacking of holding periods
. same basis
- -------------------------------------------------------------------------------
Interest on Notes . taxable as ordinary income
- -------------------------------------------------------------------------------
Disposition of Notes . excess of amount realized over basis is
a capital gain
. excess of basis over amount realized is
a capital loss
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Exchange of Original Notes for Exchange Notes
Neither participation in the exchange offer nor the filing of a shelf
registration statement should result in a taxable exchange to any holder of an
original note.
When we complete the exchange offer, there should be no taxable exchange
because the exchange would be conducted according to the terms of the original
notes and the exchange would not result in a material alteration of the terms
of the original notes. Accordingly, the exchange notes would be treated as
continuations of the corresponding original notes, and there should be no U.S.
federal income tax consequences to holders who elect to exchange original
notes for exchange notes. Consequently:
. no gain or loss will be realized by a U.S. holder upon receipt of an
exchange note;
. the holding period of the exchange notes will include the holding period
of the original notes that were exchanged for them; and
. the adjusted tax basis of the exchange notes will be the same as the
adjusted tax basis of the original notes immediately before they were
exchanged.
The exchange offer would not result in any federal income tax consequences
to holders of original notes who do not exchange their notes for exchange
notes.
If we file a shelf registration statement in connection with the original
notes, there should be no taxable exchange because the shelf registration
statement would be filed according to the terms of the original notes and that
filing would not result in a material alteration of the terms of the original
notes. Therefore, there should be no U.S. federal income tax consequences to
any holders of the notes from the filing of a shelf registration statement.
Payments of Interest
Interest on the exchange notes will be taxable as ordinary income for U.S.
federal income tax purposes when received by a U.S. holder in accordance with
its method of accounting for tax purposes.
Original Issue Discount
We intend to take the position (which generally will be binding on holders)
that the notes are not issued with original issue discount. Accordingly, the
holders of notes will include stated interest in gross income in accordance
with their methods of accounting for tax purposes. This position is based in
part upon our conclusion that, as of the date of this prospectus, the
likelihood of making additional interest payments as described under "Exchange
Offer--Registration Defaults; Additional Interest" should be "remote" within
the meaning of applicable Treasury regulations. The Internal Revenue Service
may or may not agree with this conclusion.
Disposition
In general, a holder of notes will recognize gain or loss upon the sale,
exchange, redemption or other taxable disposition of the notes measured by the
difference between:
. the amount of cash and fair market value of property received; and
. the holder's tax basis in the notes.
Any such gain or loss will generally be long-term capital gain or loss,
provided the notes were a capital asset in the hands of the holder and had
been held for more than one year.
Non-U.S. Holders
Under present U.S. federal income and estate tax law, assuming certain
certification requirements are satisfied (which include identification of the
beneficial owner of the instrument) and subject to the discussion of backup
withholding below:
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. payments of interest on the notes to any non-U.S. holder will not be
subject to U.S. federal income or withholding tax, provided that:
. the holder does not own 10% or more of the total combined voting
power of all of the classes of our stock entitled to vote;
. the holder is not a bank receiving interest under a loan agreement
entered into in the ordinary course of its trade or business or a
controlled foreign corporation that is related to us through stock
ownership; and
. those interest payments are not effectively connected with the
conduct of a U.S. trade or business of the holder.
. a holder of notes who is a non-U.S. holder will not be subject to the
U.S. federal income tax on gain realized on the sale, exchange, or other
disposition of notes, unless:
. that holder is an individual who is present in the U.S. for 183 days
or more during the taxable year and certain other requirements are
met; or
. the gain is effectively connected with the conduct of a U.S. trade or
business of the holder.
If interest on the notes is exempt from withholding of U.S. federal income
tax under the rules described above (without regard to the certification
requirement), the notes will not be included in the estate of a deceased non-
U.S. holder for U.S. federal estate tax purposes.
The certification referred to above may be made on an Internal Revenue
Service Form W-8 or a substantially similar substitute form.
Information Reporting and Backup Withholding
We will, where required, report to the holders of notes and the IRS the
amount of any interest paid on the notes in each calendar year and the amounts
of any federal tax withheld with respect to those payments. A noncorporate
U.S. holder may be subject to information reporting and to backup withholding
at a rate of 31% with respect to payments of principal and interest made on
notes, or on proceeds of the disposition of notes before maturity, unless that
U.S. holder provides a correct taxpayer identification number or proof of an
applicable exemption, and otherwise complies with applicable requirements of
the information reporting and backup withholding rules.
Subject to certification rules, U.S. information reporting requirements and
backup withholding tax will generally not apply to interest paid on the notes
to a non-U.S. holder at an address outside the U.S. Payments by a U.S. office
of a broker of the proceeds of a sale of the notes are subject to both backup
withholding at a rate of 31% and information reporting unless the holder
certifies its non-U.S. holder status under penalties of perjury and provides
its name and address or otherwise establishes an exemption. Information
reporting requirements (but not backup withholding) will also apply to
payments of the proceeds of sales of the notes by foreign offices of U.S.
brokers, or foreign brokers with certain types of relationships to the U.S.,
unless the broker has documentary evidence in its records that the holder is a
non-U.S. holder and certain other conditions are met, or the holder otherwise
establishes an exemption.
Backup withholding is not an additional tax. Any amount withheld under the
backup withholding rules will be refunded or credited against the non-U.S.
holder's U.S. federal income tax liability, provided that the required
information is furnished to the IRS.
The U.S. Treasury Department has issued final Treasury regulations governing
information reporting and the certification procedures regarding withholding
and backup withholding on certain amounts paid to non-U.S. holders after
December 31, 2000. The new Treasury regulations would alter the procedures for
claiming the benefits of an income tax treaty and may change the certification
procedures relating to the receipt by intermediaries of payments on behalf of
a beneficial owner of notes. You should consult your tax advisor concerning
the effect, if any, of such new Treasury regulations on an investment in the
notes.
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PLAN OF DISTRIBUTION
Each broker-dealer that receives exchange notes for its own account by
accepting the exchange offer must acknowledge that it will deliver a
prospectus in connection with any resale of the exchange notes. A broker-
dealer may use this prospectus, as it may be amended or supplemented from time
to time, in connection with resales of exchange notes received in exchange for
original notes, where the exchange notes were acquired as a result of market-
making or other trading activities. We have agreed that, for a period of 150
days after the expiration date, we will make this prospectus, as amended or
supplemented, available to any broker-dealer for use in connection with any
resale of its exchange notes.
We will not receive any proceeds from any sale of exchange notes by broker-
dealers. Broker-dealers may sell from time to time exchange notes they receive
for their own account pursuant to the exchange offer:
. in one or more transactions in the over-the-counter market;
. in negotiated transactions;
. through the writing of options on the exchange notes; or
. through a combination of these methods of resale.
Broker-dealers may sell at:
. market prices prevailing at the time of resale;
. prices related to prevailing market prices; or
. negotiated prices.
Any broker-dealer may resell directly to purchasers or to or through brokers
or dealers who may receive compensation in the form of commissions or
concessions from the broker-dealer or the purchasers of the exchange notes.
Any broker-dealer that resells exchange notes that it received for its own
account by accepting the exchange offer and any broker or dealer that
participates in a distribution of the exchange notes may be an "underwriter"
within the meaning of the Securities Act. Any profit on any underwriter's
resale of exchange notes and any commission or concessions received by any
underwriter may be underwriting compensation under the Securities Act. The
letter of transmittal states that, a broker-dealer does not admit that it is
an "underwriter" within the meaning of the Securities Act by acknowledging
that it will deliver or by delivering a prospectus.
For a period of 150 days after the expiration date we will promptly send
additional copies of this prospectus and any amendment or supplement to this
prospectus to any broker-dealer that requests them in the letter of
transmittal. We have agreed to pay all expenses incident to the exchange
offer, including the expenses of one counsel for the initial purchasers, other
than commissions or concessions of any broker-dealers and will indemnify the
holders of the original notes, including any broker-dealers, against
liabilities under the Securities Act.
LEGAL MATTERS
Morgan, Lewis & Bockius LLP, Washington, DC has passed upon the validity of
the exchange notes offered hereby.
EXPERTS
The historical financial statements incorporated by reference in this
prospectus, except as they relate to the unaudited interim periods, have been
audited by various independent accountants. The companies and periods covered
by these audits are indicated in the individual accountants' reports. Such
financial statements have been so incorporated by reference in reliance on the
reports of the various independent accountants given on the authority of such
firms as experts in auditing and accounting.
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- -------------------------------------------------------------------------------
We have not authorized any person to give any information or make any repre-
sentations other than those contained in this prospectus, and, if give or
made, you must not rely on any such information or representations as having
been authorized by us. This prospectus does not constitute an offer to sell or
the solicitation of an offer to buy any securities other than the securities
to which it relates or an offer to sell or the solicitation of an offer to buy
such securities in any circumstances in which such offer or solicitation is
unlawful. Neither the delivery of this prospectus nor any sale made hereunder
shall, under any circumstances, create any implication that there has been no
change in the affairs of our company since the date hereof or that the infor-
mation contained herein is correct as of any time subsequent to its date.
---------------
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- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Building One
Services Corporation
---------------
PROSPECTUS
---------------
Offer to Exchange 10 1/2% Senior
Subordinated Notes Due 2009 for 10 1/2%
Senior Subordinated Notes Due 2009
June , 1999
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers.
Section 102(b)(7) of the Delaware General Corporation Law (the "DGCL")
permits a corporation, in its certificate of incorporation, to limit or
eliminate, subject to certain statutory limitations, the liability of
directors to the corporation or its stockholders for monetary damages for
breaches of fiduciary duty, except for liability (a) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (b) for
acts or omissions not in good faith or which involve intentional misconduct or
a knowing violation of law, (c) under Section 174 of the DGCL, or (d) for any
transaction from which the director derived an improper personal benefit.
Article 10 of the Company's Restated Certificate of Incorporation provides
that the personal liability of directors of the Company is eliminated to the
extent permitted by Section 102(b)(7) of the DGCL.
Section 145 of the DGCL (i) requires a corporation to indemnify for
expenses, including attorney's fees, incurred by a director or officer who has
been successful in defending any claim or proceeding in which the director or
officer is involved because of his or her position with the corporation, (ii)
permits indemnification (a) for judgments, fines, expenses and amounts paid in
settlement in the case of a claim by a party other than the corporation or in
the right of the corporation, even where a director or officer has not been
successful, in cases where the director or officer acted in good faith and in
a manner that he or she reasonably believed was in or not opposed to the best
interests of the corporation provided, in the case of a criminal proceeding,
that the director or officer had no reason to believe his or her conduct was
unlawful or (b) for expenses in the case of a claim or proceeding by or in the
right of the corporation, including a derivative suit (but not judgments,
fines or amounts in settlement), if the director or officer acted in good
faith and in a manner he or she reasonably believed to be in or not opposed to
the best interests of the corporation and has not been adjudged liable to the
corporation unless a court determines that, despite such adjudication but in
view of all of the circumstances, he or she is entitled to indemnification,
and (iii) permits the advancement of expenses to directors and officers who
are defending an action, lawsuit or proceeding upon receipt of an undertaking
for the repayment of such advance if it is ultimately determined that the
director or officer has not met the applicable standard of conduct and is,
therefore, not entitled to be indemnified. Section 145 also provides that the
permissive indemnification described above is to be made upon a determination
that the director or officer has met the required standard of conduct by (a) a
majority of disinterested directors, (b) a committee of disinterested
directors designated by a majority of such directors, (c) independent legal
counsel or (d) the stockholders.
The Company has entered into Indemnity Agreements because the Board believes
that the Company's directors' and officers' insurance does not fully protect
the directors and executive officers and that the absence of Indemnity
Agreements may threaten the quality and stability of the governance of the
Company by reducing the Company's ability to attract and retain qualified
persons to serve as directors and executive officers of the Company, and by
deterring such persons in the making of entrepreneurial decisions for fear of
later legal challenge. In addition, the Board of Directors believes that the
Indemnity Agreements complement the indemnification rights and liability
protections currently provided directors and executive officers of the Company
under the Amended and Restated Bylaws. These rights and protections were
designed to enhance the Company's ability to attract and retain highly
qualified individuals to serve as directors and executive officers in view of
the high incidence of litigation, often involving large amounts, against
publicly-held companies and the need to provide such persons with reliable
knowledge of the legal risks to which they are exposed. The Indemnity
Agreements complement these rights and protections by providing directors and
executive officers with contractual rights to indemnification, regardless of
any amendment to or repeal of the indemnification provisions in the Bylaws.
The Company's Amended and Restated Bylaws provide that the Company shall
indemnify to the fullest extent authorized or permitted by law directors and
officers of the Company who have been made or threatened to be made a party to
any threatened, pending or completed action, suit or proceeding by reason of
the fact that he or she is or was a director or officer of the Company.
II-1
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The Indemnity Agreements are predicated upon Section 145(f), which
recognizes the validity of additional indemnity rights granted by contractual
agreement. The Indemnity Agreements alter or clarify statutory indemnity
provisions, in a manner consistent with the Company's Amended and Restated
Bylaws, in the following respects: (i) indemnification is mandatory, rather
than optional, to the full extent permitted by law, including partial
indemnification under appropriate circumstances, except that the Company is
not obligated to indemnify an indemnitee with respect to a proceeding
initiated by the indemnitee (unless the Board should conclude otherwise),
payments made by an indemnitee in a settlement effected without the Company's
written consent, payments that are found to violate the law, conduct found to
constitute bad faith or active and deliberate dishonesty or short-swing profit
liability under Section 16(b) of the Exchange Act or to the extent that
indemnification has been determined to be unlawful in an arbitration
proceeding conducted pursuant to the provisions of the Indemnity Agreement;
(ii) prompt payment of litigation expenses in advance is mandatory, rather
than optional, provided the indemnitee undertakes to repay such amounts if it
is ultimately determined that the indemnitee is not entitled to be indemnified
and provided the indemnitee did not initiate the proceeding; (iii) any dispute
arising under the Indemnity Agreement is to be resolved through an arbitration
proceeding, which will be paid for by the Company unless the arbitrator finds
that the indemnitee's claims or defenses were frivolous or in bad faith,
unless such arbitration is inconsistent with an undertaking given by the
Company, such as to the Securities and Exchange Commission, that the Company
will submit to a court the question of indemnification for liabilities under
the Securities Act of 1933, as amended, and be governed by the final
adjudication of such issue; and (iv) mandatory indemnification shall be paid
within 45 days of the Company's receipt of a request for indemnification
unless a determination is made that the indemnitee has not met the relevant
standards for indemnification by the Board of Directors, or if a quorum of the
directors is not obtainable, at the election of the Company, either by
independent legal counsel or a panel of arbitrators.
The Company maintains a directors' and officers' liability insurance policy
covering certain liabilities which may be incurred by directors and officers
in connection with the performance of their duties. The entire premium for
such insurance is paid by the Company.
Item 21. Exhibits and Financial Statement Schedules
(a) The following exhibits, as required by Item 601 of Regulation S-K, are
filed as part of this Registration Statement:
<TABLE>
<C> <S>
4.01 Indenture, dated as of April 30, 1999, for up to $400,000,000 10 1/2%
Senior Subordinated Notes between Building One Services Corporation,
the Subsidiary Guarantors named therein, and IBJ Whitehall Bank &
Trust Company, as Trustee.
4.02 Registration Rights Agreement, dated as of April 30, 1999, among
Building One Services Corporation, the Guarantors named therein, and
the initial purchasers, BT Alex.Brown Incorporated, Bear, Stearns &
Co., Inc., Goldman, Sachs & Co., Salomon Smith Barney Inc., Friedman,
Billings, Ramsey & Co., Inc., Jefferies & Company, Inc. and Fleet
Securities, Inc.
4.03 Form of Exchange Note.
5.01* Opinion of Morgan, Lewis & Bockius LLP as to the legality of the
securities being registered.
12.01 Statement regarding Computation of Ratio of Earnings to Fixed
Charges.
23.01* Consent of Morgan, Lewis & Bockius LLP (contained in Exhibit 5.01).
23.02 Consent of PricewaterhouseCoopers LLP.
23.03 Consent of Baird, Kurtz & Dobson.
23.04 Consent of Grant Thornton.
23.05 Consent of KPMG LLP.
23.06 Consent of Barry & Moore, P.C.
23.07 Consent of Leverich, Phillips, Rasmuson & Company.
</TABLE>
II-2
<PAGE>
<TABLE>
<C> <S>
23.08 Consent of Harbeson, Beckerleg & Fletcher.
23.09 Consent of Frazier & Deeter, LLC.
23.10 Consent of Shinners, Hucovski & Company, S.C.
24.01 Powers of Attorney (contained on signature page).
25.01 Statement of Eligibility of IBJ Whitehall Bank & Trust Company, as
Trustee, on Form T-1.
99.01 Form of Letter of Transmittal regarding the offer to exchange 10 1/2%
Senior Subordinated Notes due 2009 which have been registered under
the Securities Act for 10 1/2% Senior Subordinated Notes due 2009.
99.02 Form of Notice of Guaranteed Delivery.
</TABLE>
- --------
* To be filed by pre-effective amendment.
Item 22. Undertakings.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
(2) That for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment may be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
II-3
<PAGE>
(4) That for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(5) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of this
Form, within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means.
This includes information contained in documents filed subsequent to the
effective date of the registration statement through the date of responding
to the request.
(6) To supply by means of post-effective amendment, Rule 424(c)
supplement or information incorporated by reference, all information
concerning a material transaction, and the company being acquired involved
therein, that was not the subject of and included in the registration
statement when it became effective.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Washington, District of
Columbia, on June 28, 1999.
Building One Services Corporation
/s/ Joseph M. Ivey
By: _________________________________
Name: Joseph M. Ivey
Title: President and Chief
Executive Officer
Each person whose signature appears below hereby appoints Joseph M. Ivey and
F. Traynor Beck, and both of them, either of whom may act without the joinder
of the other, as his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments to this
Registration Statement on Form S-4, and to file the same, with all exhibits
thereto and all other documents in connection therewith, with the Commission,
granting unto said attorneys-in-fact and agents full power and authority to
perform each and every act and thing appropriate or necessary to be done, as
fully and for all intents and purposes as he might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents or
their substitute or substitutes may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Joseph M. Ivey President and Chief June 21, 1999
______________________________________ Executive Officer
Joseph M. Ivey (Principal Executive
Officer) and Director
/s/ Jonathan J. Ledecky Chairman of the Board June 25, 1999
______________________________________
Jonathan J. Ledecky
/s/ Timothy C. Clayton Executive Vice President, June 24, 1999
______________________________________ Chief Financial Officer
Timothy C. Clayton and Treasurer (Principal
Financial and Accounting
Officer)
/s/ Andrew Africk Director June 25, 1999
______________________________________
Andrew Africk
/s/ Mary K. Bush Director June 24, 1999
______________________________________
Mary K. Bush
/s/ Vincent E. Eades Director June 28, 1999
______________________________________
Vincent E. Eades
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Michael Gross Director June 21, 1999
______________________________________
Michael Gross
/s/ William P. Love, Jr. Director June 22, 1999
______________________________________
William P. Love, Jr.
/s/ Brooks Newmark Director June 21, 1999
______________________________________
Brooks Newmark
/s/ W. Russell Ramsey Director June 25, 1999
______________________________________
W. Russell Ramsey
/s/ M. Jude Reyes Director June 21, 1999
______________________________________
M. Jude Reyes
</TABLE>
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<C> <S>
4.01 Indenture, dated as of April 30, 1999, for up to $400,000,000 10 1/2%
Senior Subordinated Notes between Building One Services Corporation,
the Subsidiary Guarantors named therein, and IBJ Whitehall Bank & Trust
Company, as Trustee.
4.02 Registration Rights Agreement, dated as of April 30, 1999, among
Building One Services Corporation, the Guarantors named therein, and
the initial purchasers, BT Alex.Brown Incorporated, Bear, Stearns &
Co., Inc., Goldman, Sachs & Co., Salomon Smith Barney Inc., Friedman,
Billings, Ramsey & Co., Inc., Jefferies & Company, Inc. and Fleet
Securities, Inc.
4.03 Form of Exchange Note.
5.01* Opinion of Morgan, Lewis & Bockius LLP as to the legality of the
securities being registered.
12.01 Statement regarding Computation of Ratio of Earnings to Fixed Charges.
23.01* Consent of Morgan, Lewis & Bockius LLP (contained in Exhibit 5.01).
23.02 Consents of PricewaterhouseCoopers LLP.
23.03 Consent of Baird, Kurtz & Dobson.
23.04 Consents of Grant Thornton.
23.05 Consent of KPMG LLP.
23.06 Consent of Barry & Moore, P.C.
23.07 Consent of Leverich, Phillips, Rasmuson & Company.
23.08 Consent of Harbeson, Beckerleg & Fletcher.
23.09 Consent of Frazier & Deeter, LLC.
23.10 Consent of Shinners, Hucovski & Company, S.C.
24.01 Powers of Attorney (contained on signature page).
25.01 Statement of Eligibility of IBJ Whitehall Bank & Trust Company, as
Trustee, on Form T-1.
99.01 Form of Letter of Transmittal regarding the offer to exchange 10 1/2%
Senior Subordinated Notes due 2009 which have been registered under the
Securities Act for 10 1/2% Senior Subordinated Notes due 2009.
99.02 Form of Notice of Guaranteed Delivery.
</TABLE>
- --------
* To be filed by pre-effective amendment.
<PAGE>
Exhibit 4.01
================================================================================
BUILDING ONE SERVICES CORPORATION,
as Issuer,
the GUARANTORS named herein,
as Guarantors,
and
__________________
IBJ WHITEHALL BANK & TRUST COMPANY,
as Trustee
__________________
INDENTURE
Dated as of April 30, 1999
up to $400,000,000
__________________
10 1/2% Senior Subordinated Notes due 2009
================================================================================
<PAGE>
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
TIA Indenture
Section Section
- ------- ---------
<S> <C>
310(a)(1).................................................................. 7.10
(a)(2)............................................................... 7.10
(a)(3)............................................................... N.A.
(a)(4)............................................................... N.A.
(a)(5)............................................................... 7.08; 7.10
(b).................................................................. 7.08; 7.10; 13.02
(c).................................................................. N.A.
311(a)..................................................................... 7.11
(b).................................................................. 7.11
(c).................................................................. N.A.
312(a)............................................................... 2.05
(b).................................................................. 13.03
(c).................................................................. 13.03
313(a)..................................................................... 7.06
(b)(1)............................................................... 7.06
(b)(2)............................................................... 7.06
(c).................................................................. 7.06; 13.02
(d).................................................................. 7.06
314(a)..................................................................... 4.08; 4.10; 13.02
(b).................................................................. N.A.
(c)(1)............................................................... 7.02; 13.04; 13.05
(c)(2)............................................................... 7.02; 13.04; 13.05
(c)(3)............................................................... N.A.
(d).................................................................. N.A.
(e).................................................................. 13.05
(f).................................................................. N.A.
315(a)..................................................................... 7.01(b)
(b).................................................................. 7.05
(c).................................................................. 7.01
(d).................................................................. 6.05; 7.01(c)
(e).................................................................. 6.11
316(a)(last sentence)...................................................... 2.09
(a)(1)(A)............................................................ 6.05
(a)(1)(B)............................................................ 6.04
(a)(2)............................................................... 9.05
(b).................................................................. 6.07
(c).................................................................. 9.05
</TABLE>
______________________
N.A. means Not Applicable
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of the Indenture
<PAGE>
<TABLE>
<S> <C>
317(a)(1).................................................................. 6.08
(a)(2)............................................................... 6.09
(b).................................................................. 2.04
318(a)..................................................................... 13.01
(c).................................................................. 13.01
</TABLE>
______________________
N.A. means Not Applicable
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of the Indenture
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions......................................................................1
SECTION 1.02. Incorporation by Reference of TIA...............................................33
SECTION 1.03. Rules of Construction...........................................................34
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating.................................................................34
SECTION 2.02. Execution and Authentication....................................................35
SECTION 2.03. Registrar and Paying Agent......................................................36
SECTION 2.04. Paying Agent To Hold Assets in Trust............................................37
SECTION 2.05. Holder Lists....................................................................37
SECTION 2.06. Transfer and Exchange...........................................................37
SECTION 2.07. Replacement Securities..........................................................38
SECTION 2.08. Outstanding Securities..........................................................39
SECTION 2.09. Treasury Securities.............................................................39
SECTION 2.10. Temporary Securities............................................................40
SECTION 2.11. Cancellation....................................................................40
SECTION 2.12. Defaulted Interest..............................................................40
SECTION 2.13. CUSIP Number....................................................................41
SECTION 2.14. Deposit of Moneys...............................................................41
SECTION 2.15. Book-Entry Provisions for Global Securities.....................................41
SECTION 2.16. Special Transfer Provisions.....................................................43
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee..............................................................46
SECTION 3.02. Selection of Securities To Be Redeemed..........................................46
SECTION 3.03. Notice of Redemption............................................................47
</TABLE>
-i-
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 3.04. Effect of Notice of Redemption..................................................48
SECTION 3.05. Deposit of Redemption Price.....................................................48
SECTION 3.06. Securities Redeemed in Part.....................................................48
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities...........................................................49
SECTION 4.02. Maintenance of Office or Agency.................................................49
SECTION 4.03. Limitation on Restricted Payments...............................................50
SECTION 4.04. Limitation on Incurrence of Additional Indebtedness.............................52
SECTION 4.05. Corporate Existence.............................................................53
SECTION 4.06. Payment of Taxes and Other Claims...............................................53
SECTION 4.07. Maintenance of Properties and Insurance.........................................53
SECTION 4.08. Compliance Certificate; Notice of Default.......................................54
SECTION 4.09. Compliance with Laws............................................................55
SECTION 4.10. Reports to Holders..............................................................55
SECTION 4.11. Waiver of Stay, Extension or Usury Laws.........................................56
SECTION 4.12. Limitations on Transactions with Affiliates.....................................57
SECTION 4.13. Limitation on Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries.................................................................59
SECTION 4.14. Limitation on Liens.............................................................60
SECTION 4.15. Change of Control...............................................................61
SECTION 4.16. Limitation on Asset Sales.......................................................63
SECTION 4.17. Prohibition on Incurrence of Senior Subordinated Debt...........................67
SECTION 4.18. Additional Subsidiary Guarantees................................................67
SECTION 4.19. Conduct of Business.............................................................68
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. Merger, Consolidation and Sale of Assets........................................68
SECTION 5.02. Successor Corporation Substituted...............................................70
</TABLE>
-ii-
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default...............................................................70
SECTION 6.02. Acceleration....................................................................72
SECTION 6.03. Other Remedies..................................................................73
SECTION 6.04. Waiver of Past Defaults.........................................................74
SECTION 6.05. Control by Majority.............................................................74
SECTION 6.06. Limitation on Suits.............................................................74
SECTION 6.07. Rights of Holders To Receive Payment............................................75
SECTION 6.08. Collection Suit by Trustee......................................................75
SECTION 6.09. Trustee May File Proofs of Claim................................................75
SECTION 6.10. Priorities......................................................................76
SECTION 6.11. Undertaking for Costs...........................................................77
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee...............................................................77
SECTION 7.02. Rights of Trustee...............................................................78
SECTION 7.03. Individual Rights of Trustee....................................................80
SECTION 7.04. Trustee's Disclaimer............................................................80
SECTION 7.05. Notice of Default...............................................................80
SECTION 7.06. Reports by Trustee to Holders...................................................81
SECTION 7.07. Compensation and Indemnity......................................................81
SECTION 7.08. Replacement of Trustee..........................................................82
SECTION 7.09. Successor Trustee by Merger, Etc................................................83
SECTION 7.10. Eligibility; Disqualification...................................................84
SECTION 7.11. Preferential Collection of Claims Against Company...............................84
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Termination of the Company's Obligations........................................84
SECTION 8.02. Legal Defeasance and Covenant Defeasance........................................86
SECTION 8.03. Conditions to Legal Defeasance or Covenant Defeasance...........................88
SECTION 8.04. Application of Trust Money......................................................90
</TABLE>
-iii-
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 8.05. Repayment to the Company........................................................90
SECTION 8.06. Reinstatement...................................................................91
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders......................................................91
SECTION 9.02. With Consent of Holders.........................................................92
SECTION 9.03. Effect on Senior Debt...........................................................94
SECTION 9.04. Compliance with TIA.............................................................94
SECTION 9.05. Revocation and Effect of Consents...............................................94
SECTION 9.06. Notation on or Exchange of Securities...........................................95
SECTION 9.07. Trustee To Sign Amendments, Etc.................................................95
ARTICLE TEN
SUBORDINATION OF SECURITIES
SECTION 10.01. Securities Subordinated to Senior Debt..........................................96
SECTION 10.02. Suspension of Payment When Senior Debt Is in Default............................96
SECTION 10.03. Securities Subordinated to Prior Payment of All Senior Debt on Dissolution,
Liquidation or Reorganization of Company.....................................98
SECTION 10.04. Payments May Be Paid Prior to Dissolution......................................100
SECTION 10.05. Holders To Be Subrogated to Rights of Holders of Senior Debt...................100
SECTION 10.06. Obligations of the Company Unconditional.......................................101
SECTION 10.07. Notice to Trustee..............................................................101
SECTION 10.08. Reliance on Judicial Order or Certificate of Liquidating Agent.................102
SECTION 10.09. Trustee's Relation to Senior Debt..............................................102
SECTION 10.10. Subordination Rights Not Impaired by Acts or Omissions of the Company
or Holders of Senior Debt...................................................103
SECTION 10.11. Securityholders Authorize Trustee To Effectuate Subordination of Securities....103
</TABLE>
-iv-
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 10.12. This Article Ten Not To Prevent Events of Default..............................104
SECTION 10.13. Trustee's Compensation Not Prejudiced..........................................104
ARTICLE ELEVEN
GUARANTEE OF SECURITIES
SECTION 11.01. Unconditional Guarantee........................................................105
SECTION 11.02. Limitations on Guarantees......................................................106
SECTION 11.03. Execution and Delivery of Guarantee............................................107
SECTION 11.04. Release of a Guarantor.........................................................107
SECTION 11.05. Waiver of Subrogation..........................................................108
SECTION 11.06. Immediate Payment..............................................................109
SECTION 11.07. No Set-Off.....................................................................109
SECTION 11.08. Obligations Absolute...........................................................109
SECTION 11.09. Obligations Continuing.........................................................110
SECTION 11.10. Obligations Not Reduced........................................................110
SECTION 11.11. Obligations Reinstated.........................................................110
SECTION 11.12. Obligations Not Affected.......................................................111
SECTION 11.13. Waiver.........................................................................112
SECTION 11.14. No Obligation To Take Action Against the Company...............................112
SECTION 11.15. Dealing with the Company and Others............................................113
SECTION 11.16. Default and Enforcement........................................................113
SECTION 11.17. Amendment, Etc.................................................................114
SECTION 11.18. Acknowledgment.................................................................114
SECTION 11.19. Costs and Expenses.............................................................114
SECTION 11.20. No Merger or Waiver; Cumulative Remedies.......................................114
SECTION 11.21. Survival of Obligations........................................................114
SECTION 11.22. Guarantee in Addition to Other Obligations.....................................115
SECTION 11.23. Severability...................................................................115
SECTION 11.24. Successors and Assigns.........................................................115
ARTICLE TWELVE
SUBORDINATION OF GUARANTEE
SECTION 12.01. Guarantee Obligations Subordinated to Guarantor Senior Debt....................115
</TABLE>
-v-
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 12.02. Suspension of Guarantee Obligations When GuarantorSenior Debt Is in Default....116
SECTION 12.03. Guarantee Obligations Subordinated to Prior Payment of All Guarantor
Senior Debt on Dissolution, Liquidation or Reorganization of Such Guarantor.117
SECTION 12.04. Payments May Be Paid Prior to Dissolution......................................118
SECTION 12.05. Holders of Guarantee Obligations To Be Subrogated to Rights of
Holders of Guarantor Senior Debt............................................119
SECTION 12.06. Obligations of the Guarantors Unconditional....................................119
SECTION 12.07. Notice to Trustee..............................................................120
SECTION 12.08. Reliance on Judicial Order or Certificate of Liquidating Agent.................121
SECTION 12.09. Trustee's Relation to Guarantor Senior Debt....................................121
SECTION 12.10. Subordination Rights Not Impaired by Acts or Omissions of the Guarantors
or Holders of Guarantor Senior Debt.........................................122
SECTION 12.11. Holders Authorize Trustee To Effectuate Subordination of
Guarantee Obligations.......................................................122
SECTION 12.12. This Article Twelve Not To Prevent Events of Default...........................123
SECTION 12.13. Trustee's Compensation Not Prejudiced..........................................123
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. TIA Controls...................................................................123
SECTION 13.02. Notices........................................................................124
SECTION 13.03. Communications by Holders with Other Holders...................................125
SECTION 13.04. Certificate and Opinion as to Conditions Precedent.............................125
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 13.05. Statements Required in Certificate or Opinion..................................125
SECTION 13.06. Rules by Trustee, Paying Agent, Registrar......................................126
SECTION 13.07. Legal Holidays.................................................................126
SECTION 13.08. Governing Law..................................................................126
SECTION 13.09. No Adverse Interpretation of Other Agreements..................................127
SECTION 13.10. No Recourse Against Others.....................................................127
SECTION 13.11. Successors.....................................................................127
SECTION 13.12. Duplicate Originals............................................................127
SECTION 13.13. Severability...................................................................127
Signatures........................................................................................S-1
</TABLE>
Exhibit A - Form of Note
Exhibit B - Form of Legends
Exhibit C - Form of Certificate To Be Delivered in Connection with Transfers
to Non-QIB Accredited Investors
Exhibit D - Form of Certificate To Be Delivered in Connection with Transfers
Pursuant to Regulation S
Exhibit E - Form of Guarantee
Note: This Table of Contents shall not, for any purpose, be deemed to be part
of the Indenture
-vii-
<PAGE>
INDENTURE dated as of April 30, 1999 among BUILDING ONE SERVICES
CORPORATION, a Delaware corporation (the "Company"), as Issuer, each of the
-------
Guarantors named herein, as Guarantors, and IBJ WHITEHALL BANK & TRUST COMPANY,
a New York banking corporation, as Trustee (the "Trustee").
-------
The Company has duly authorized the creation of an issue of 10 1/2%
Senior Subordinated Notes due 2009 and, to provide therefor, the Company has
duly authorized the execution and delivery of this Indenture. All things
necessary to make the Securities, when duly issued and executed by the Company
and authenticated and delivered hereunder, the valid and binding obligations of
the Company and to make this Indenture a valid and binding agreement of the
Company have been done.
Each party hereto agrees as follows for the benefit of each other
party and for the equal and ratable benefit of the Holders of the Securities:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
-----------
"Acquired Indebtedness" means Indebtedness of a Person or any of its
---------------------
Restricted Subsidiaries existing at the time such Person becomes a Restricted
Subsidiary of the Company or at the time it merges or consolidates with or into
the Company or any of its Subsidiaries or is assumed in connection with the
acquisition of assets from such Person and in each case whether or not incurred
by such Person in connection with, or in anticipation or contemplation of, such
Person becoming a Restricted Subsidiary of the Company or such acquisition,
merger or consolidation.
"Affiliate" means, with respect to any specified Person, any other
---------
Person who directly or indirectly through one or more intermediaries controls,
or is controlled by, or is under common control with, such specified Person.
The term "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of
<PAGE>
a Person, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative of the foregoing.
"Affiliate Transaction" has the meaning set forth in Section 4.12.
---------------------
"Agent" means any Registrar, Paying Agent or co-Registrar.
-----
"Asset Acquisition" means (a) an Investment by the Company or any
-----------------
Restricted Subsidiary of the Company in any other Person pursuant to which such
Person shall become a Restricted Subsidiary of the Company or any Restricted
Subsidiary of the Company, or shall be merged with or into the Company or any
Restricted Subsidiary of the Company, or (b) the acquisition by the Company or
any Restricted Subsidiary of the Company of the assets of any Person (other than
a Restricted Subsidiary of the Company) which constitute all or substantially
all of the assets of such Person or comprises any operating unit, 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 Restricted Subsidiaries (including any Sale and Leaseback Transaction) to
any Person other than the Company or a Wholly Owned Restricted Subsidiary of the
Company of (a) any Capital Stock of any Restricted Subsidiary of the Company; or
(b) any other property or assets of the Company or any Restricted Subsidiary of
the Company other than in the ordinary course of business; provided, however,
-------- -------
that Asset Sales shall not include: (i) a transaction or series of related
transactions for which the Company or its Restricted Subsidiaries receive
aggregate consideration of less than $1.5 million; (ii) the sale, lease,
conveyance, disposition or other transfer of all or substantially all of the
assets of the Company as permitted under Section 5.01; (iii) any Restricted
Payment permitted by Section 4.03 or that constitutes a Permitted Investment;
(iv) sales of
-2-
<PAGE>
damaged, worn-out or obsolete equipment or assets that, in the Company's
reasonable judgment, are no longer either used or useful in the business of the
Company or its Restricted Subsidiaries; and (v) the sale of accounts receivable
pursuant to a Qualified Receivables Transaction.
"Bankruptcy Law" means Title 11, U.S. Code or any similar Federal,
--------------
state or foreign law for the relief of debtors.
"Board of Directors" means, as to any Person, the board of directors
------------------
of such Person or any duly authorized committee thereof.
"Board Resolution" means, with respect to any Person, a copy of a
----------------
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means any day other than a Saturday, Sunday or any
------------
other day on which banking institutions in the City of New York are required or
authorized by law or other governmental action to be closed.
"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 (but shall not
include, prior to any conversion thereof, the Convertible Subordinated Notes),
and (ii) with respect to any Person that is not a corporation, any and all
partnership, membership 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
-3-
<PAGE>
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 Group ("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; (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 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 one or more of the
-----------------
following events: (i) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially all of
the assets of the Company to any Person or group of related Persons for purposes
of Section 13(d) of the Exchange Act (a "Group"), together with any Affiliates
-----
thereof (whether or not otherwise in compliance with the provisions of this
Indenture), other than to the Permitted Holders; (ii) the approval by the
holders of Capital Stock of the Company of any plan or proposal for the
liquida-
-4-
<PAGE>
tion or dissolution of the Company (whether or not otherwise in compliance with
the provisions of this Indenture); (iii) any Person or Group (other than the
Permitted Holders) shall become the owner, directly or indirectly, beneficially
or of record, of shares representing more than 50% of the aggregate ordinary
voting power represented by the issued and outstanding Capital Stock of the
Company; or (iv) the replacement of a majority of the Board of Directors of the
Company over a two-year period from the directors who constituted the Board of
Directors of the Company at the beginning of such period, and such replacement
shall not have been approved by the Permitted Holders or a vote of at least a
majority of the Board of Directors of the Company then still in office who
either were members of such Board of Directors at the beginning of such period
or whose election as a member of such Board of Directors was previously so
approved.
"Change of Control Date" has the meaning set forth in Section 4.15.
----------------------
"Change of Control Offer" has the meaning set forth in Section 4.15.
-----------------------
"Change of Control Payment Date" has the meaning set forth in Section
------------------------------
4.15.
"Commission" means the Securities and Exchange Commission.
----------
"Common Stock" of any Person means any and all shares, interests or
------------
other participations in, and other equivalents (however designated and whether
voting or non-voting) of such Person's common stock, whether outstanding on the
Issue Date or issued after the Issue Date, and includes, without limitation, all
series and classes of such common stock.
"Company" means the party named as such in this Indenture until a
-------
successor replaces it pursuant to this Indenture and thereafter shall mean such
successor corporation.
"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
-5-
<PAGE>
Income has been reduced thereby, (A) all income taxes of such Person and its
Restricted Subsidiaries paid or accrued in accordance with GAAP for such period
(other than income taxes attributable to extraordinary, unusual or nonrecurring
gains), (B) Consolidated Interest Expense and (C) Consolidated Non-cash Charges
less any non-cash items increasing Consolidated Net Income for such period, all
- ----
as determined on a consolidated basis for such Person and its Restricted
Subsidiaries in accordance with GAAP.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to any
----------------------------------------
Person, the ratio of Consolidated EBITDA of such Person during the four full
fiscal quarters (the "Four Quarter Period") ending prior to the date of the
-------------------
transaction giving rise to the need to calculate the Consolidated Fixed Charge
Coverage Ratio for which financial statements are available (the "Transaction
-----------
Date") to Consolidated Fixed Charges of such Person for the Four Quarter Period.
- ----
In addition to and without limitation of the foregoing, for purposes of this
definition, "Consolidated EBITDA" and "Consolidated Fixed Charges" shall be
calculated after giving effect on a pro forma basis for the period of such
---------
calculation to (i) the incurrence or repayment of any Indebtedness of such
Person or any of its Restricted Subsidiaries (and the application of the
proceeds thereof) giving rise to the need to make such calculation and any
incurrence or repayment of other Indebtedness (and the application of the
proceeds thereof), other than the incurrence or repayment of Indebtedness in the
ordinary course of business for working capital purposes pursuant to working
capital facilities, 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 incurrence or repayment, as the case may be (and
the application of the proceeds thereof), occurred on the first day of the Four
Quarter Period and (ii) any Asset Sales or other dispositions 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
Restricted Subsidiaries (including any Person who becomes a Restricted
Subsidiary as a result of the Asset Acquisition) incurring, assuming or
otherwise being liable for Acquired Indebtedness and also including any
Consolidated EBITDA (including any pro forma expense and cost
--- -----
-6-
<PAGE>
reductions, adjustments and other operating improvements or synergies both
achieved by such Person during such period and to be achieved by such Person and
with respect to the acquired assets, all as determined in good faith by a
responsible financial or accounting officer of the Company and as reported on or
otherwise confirmed, consistent with applicable standards of the American
Institute of Certified Public Accountants, to the Company by an independent
public accounting firm) attributable to the assets which are the subject of the
Asset Acquisition or Asset Sale or other disposition during the Four Quarter
Period) 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 other disposition 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
Restricted 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 Restricted Subsidiary of such
Person had directly incurred or otherwise assumed such guaranteed Indebtedness.
Furthermore, in calculating "Consolidated Fixed Charges" for purposes of
determining the denominator (but not the numerator) of this "Consolidated Fixed
Charge Coverage Ratio," (1) interest on outstanding Indebtedness determined on a
fluctuating basis as of the Transaction Date and which will continue to be so
determined thereafter shall be deemed to have accrued at a fixed rate per annum
equal to the rate of interest on such Indebtedness in effect on the Transaction
Date; and (2) notwithstanding clause (1) above, interest on Indebtedness
determined on a fluctuating basis, to the extent such interest is covered by
agreements relating to Interest Swap Obligations, shall be deemed to accrue at
the rate per annum resulting after giving effect to the operation of such
agreements.
"Consolidated Fixed Charges" means, with respect to any Person for any
--------------------------
period, the sum, without duplication, of (i) Consolidated Interest Expense
(excluding (x) amortization or write-off of deferred financing costs, (y)
interest paid on Convertible Subordinated Notes in the form of Convertible
Subordinated Notes or Qualified Capital Stock and (z) one-time ac-
-7-
<PAGE>
celerated interest payments due upon the conversion of the Convertible
Subordinated Notes prior to May 1, 2004) plus (ii) the product of (x) the amount
of all dividend payments on any series of Preferred Stock of such Person (other
than dividends paid in Qualified Capital Stock) paid, accrued or scheduled to be
paid or accrued during such period times (y) a fraction, the numerator of which
is one and the denominator of which is one minus the then current effective
consolidated federal, state and local tax rate of such Person, expressed as a
decimal.
"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 Restricted 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 interest component of
Capitalized Lease Obligations paid, accrued and/or scheduled to be paid or
accrued by such Person and its Restricted Subsidiaries during such period as
determined on a consolidated basis in accordance with GAAP, minus interest
income for such period.
"Consolidated Net Income" means, with respect to any Person, for any
-----------------------
period, the aggregate net income (or loss) of such Person and its Restricted
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 (without regard to the $1.5 million limitation set
forth in the definition thereof) or abandonments or reserves relating thereto,
(b) items classified as extraordinary, nonrecurring or unusual gains or losses
on an after-tax basis (including, but not limited to, fees and expenses related
to the Transactions and non-cash charges related to the acceleration of the
vesting of options), (c) the net income of any Person acquired in a "pooling of
interests" transaction accrued prior to the date it becomes a Restricted
Subsidiary of the referent Person or is merged or consolidated
-8-
<PAGE>
with the referent Person or any Restricted Subsidiary of the referent Person,
(d) the net income (but not loss) of any Restricted Subsidiary of the referent
Person to the extent that the declaration of dividends and the making of loans
or advances or similar distributions, loans or advances by that Restricted
Subsidiary of that income is restricted by a contract, operation of law or
otherwise, (e) the net income of any Person, other than a Restricted Subsidiary
of the referent Person, except to the extent of cash dividends or distributions
paid to the referent Person or to a Wholly Owned Restricted Subsidiary of the
referent Person by such Person, (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 and (g) the effect of changes in accounting
principles after the Issue Date.
For purposes of Section 4.03 only, "Consolidated Net Income" shall be
calculated without taking into account cash interest payments (and the related
tax effects) on the Convertible Subordinated Notes.
"Consolidated Non-cash Charges" means, with respect to any Person, for
-----------------------------
any period, the aggregate depreciation, amortization and other non-cash expenses
of such Person and its Restricted Subsidiaries reducing Consolidated Net Income
of such Person and its Restricted Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP.
"Convertible Subordinated Notes" means the $100 million aggregate
------------------------------
principal amount of the Company's 7 1/2% Convertible Junior Subordinated Notes
due 2012 and any additional Convertible Subordinated Notes issued in lieu of
cash interest thereon in accordance with the terms of the Convertible
Subordinated Notes as in effect on the Issue Date.
"Covenant Defeasance" has the meaning set forth in Section 8.02.
-------------------
"Credit Agreement" means the Credit Agreement dated as of the Issue
----------------
Date, between the Company, the lenders party thereto in their capacities as
lenders thereunder, Goldman,
-9-
<PAGE>
Sachs Credit 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 borrowings thereunder or adding Restricted
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.
"Credit Facilities" means one or more debt facilities (including,
-----------------
without limitation, the Credit Agreement) or commercial paper facilities with
banks or other institutional lenders providing for revolving credit loans, term
loans, receivables financing (including through the sale of receivables to such
lenders or to special purpose entities formed to borrow from such lenders
against such receivables) and/or letters of credit or banker's acceptances.
"Currency Agreement" means any foreign exchange contract, currency
------------------
swap agreement or other similar agreement or arrangement designed to protect the
Company or any Restricted Subsidiary of the Company against fluctuations in
currency values.
"Custodian" means any receiver, trustee, assignee, liquidator,
---------
sequestrator or similar official under any Bankruptcy Law.
"Default" means an event or condition the occurrence of which is, or
-------
with the lapse of time or the giving of notice or both would be, an Event of
Default.
"Depository" shall mean The Depository Trust Company, New York, New
----------
York, or a successor thereto registered under the Exchange Act or other
applicable statute or regulation.
-10-
<PAGE>
"Designated Senior Debt" means (i) Indebtedness under or in respect of
----------------------
the Credit Agreement and (ii) any other Indebtedness constituting Senior Debt
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
such Senior Debt as "Designated Senior Debt" by the Company.
"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 at the option of the holder
thereof), or upon the happening of any event (other than an event which would
constitute a Change of Control or Asset Sale), matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the sole option of the holder thereof (except, in each case, upon the
occurrence of a Change of Control or Asset Sale), on or prior to the Maturity
Date of the Securities.
"Domestic Restricted Subsidiary" means a Restricted Subsidiary
------------------------------
incorporated or otherwise organized or existing under the laws of the United
States, any state thereof or any territory or possession of the United States.
"Equity Offering" means a public or private offering of Qualified
---------------
Capital Stock (other than public offerings with respect to the Company's Common
Stock on Form S-8 or any replacement form for such Form S-8) of the Company for
aggregate net cash proceeds to the Company of at least $20 million.
"Event of Default" has the meaning set forth in Section 6.01.
----------------
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
------------
or any successor statute or statutes thereto.
"Exchange Securities" means securities issued in exchange for the
-------------------
Securities pursuant to the terms of the Registration Rights Agreement, or, in
the case of Securities issued after the Issue Date, any other registration
rights agreement.
-11-
<PAGE>
"fair market value" means, with respect to any asset or property, the
-----------------
price which could be negotiated in an arm's-length, free market transaction
between a willing seller and a willing and able buyer, neither of whom is under
undue pressure or compulsion to complete the transaction.
"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 Issue Date.
"Global Security" shall mean one or more IAI Global Securities,
---------------
Regulation S Global Securities and 144A Global Securities.
"Guarantee Obligations" has the meaning set forth in Section 12.01.
---------------------
"Guarantees" means the guarantees of the Securities by the Guarantors.
----------
"Guarantor" means (i) each of the Company's Restricted Subsidiaries as
---------
of the Issue Date and (ii) each of the Company's Restricted Subsidiaries that in
the future executes a supplemental indenture in which such Restricted Subsidiary
agrees to be bound by the terms of this Indenture as a Guarantor; provided that
--------
any Person constituting a Guarantor as described above shall cease to constitute
a Guarantor when its respective Guarantee is released in accordance with the
terms of this Indenture.
"Guarantor Senior Debt" means with respect to any Guarantor, the
---------------------
principal of, premium, if any, and interest (including any interest accruing
subsequent to the filing of a petition of bankruptcy at the rate provided for in
the documentation with respect thereto, whether or not such interest is an
allowed claim under applicable law) on any Indebtedness of such Guarantor,
whether outstanding on the Issue Date or thereafter
-12-
<PAGE>
created, incurred or assumed, unless, in the case of any particular
Indebtedness, the instrument creating or evidencing the same or pursuant to
which the same is outstanding expressly provides that such Indebtedness shall
not be senior in right of payment to the Guarantee of such Guarantor. Without
limiting the generality of the foregoing, "Guarantor Senior Debt" shall also
include the principal of, premium, if any, interest (including any interest
accruing subsequent to the filing of a petition of bankruptcy at the rate
provided for in the documentation with respect thereto, whether or not such
interest is an allowed claim under applicable law) on, and all other amounts
owing in respect of, (x) all monetary obligations of every nature of such
Guarantor under, or with respect to, the Credit Agreement, including, without
limitation, obligations to pay principal and interest, reimbursement obligations
under letters of credit, fees, expenses and indemnities (including guarantees
thereof), (y) all Interest Swap Obligations (and guarantees thereof) and (z) all
obligations (and guarantees thereof) under Currency Agreements, in each case
whether outstanding on the Issue Date or thereafter incurred. Notwithstanding
the foregoing, "Guarantor Senior Debt" shall not include (i) any Indebtedness of
such Guarantor to a Subsidiary of such Guarantor, (ii) Indebtedness to, or
guaranteed on behalf of, any shareholder, director, officer or employee of such
Guarantor or any Subsidiary of such Guarantor (including, without limitation,
amounts owed for compensation) other than a shareholder who is also a lender (or
an Affiliate of a lender) under the Credit Facilities (including the Credit
Agreement), (iii) Indebtedness to trade creditors and other amounts incurred 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 such Guarantor, (vi) that portion of any
Indebtedness incurred in violation of the provisions of Section 4.04 (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 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
such provisions of this
-13-
<PAGE>
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 and (viii) any Indebtedness which is, by its express
terms, subordinated in right of payment to any other Indebtedness of such
Guarantor.
"incur" has the meaning set forth in Section 4.04.
-----
"Indebtedness" means with respect to any Person, without duplication,
------------
(i) all Obligations of such Person for borrowed money (including, without
limitation, Senior Debt), (ii) all Obligations of such Person evidenced by
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 that are not overdue by 90 days or more or are being
contested in good faith by appropriate proceedings promptly instituted and
diligently conducted), (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.
Notwithstanding anything to the contrary in this definition, Indebtedness shall
not include any contingent purchase price obligations or other earnout
obligations of the Company and its Restricted Subsidiaries in connection with
acquisitions, which
-14-
<PAGE>
obligations are not required to be included as indebtedness on the face of the
Company's consolidated balance sheet in accordance with GAAP. 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.
"Indenture" means this Indenture, as amended or supplemented from time
---------
to time in accordance with the terms hereof.
"Independent Financial Advisor" means a firm (i) which does not, and
-----------------------------
whose directors, officers and employees or Affiliates do not, have a direct or
indirect financial interest in the Company and (ii) which, in the judgment of
the Board of Directors of the Company, is otherwise independent and qualified to
perform the task for which it is to be engaged.
"Initial Purchasers" means BT Alex. Brown Incorporated, Bear, Stearns
------------------
& Co. Inc., Goldman, Sachs & Co., Salomon Smith Barney Inc., Friedman Billings
Ramsey & Co. Inc., Jefferies & Company, Inc. and Fleet Securities, Inc.
"Institutional Accredited Investor" or "IAI" means an institution that
--------------------------------- ---
is an "accredited investor" as that term is defined in Rule 501(a)(1), (2), (3)
or (7) under the Securities Act.
"Interest Payment Date" means 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 apply-
-15-
<PAGE>
ing 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.
"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 Restricted Subsidiaries on commercially reasonable terms in
accordance with normal trade practices of the Company or such Restricted
Subsidiary, as the case may be.
For purposes of Section 4.03: (1) "Investment" shall include and be
valued at the fair market value of the net assets of any Restricted Subsidiary
of the Company at the time that such Restricted Subsidiary is designated an
Unrestricted Subsidiary of the Company and shall exclude the fair market value
of the net assets of any Unrestricted Subsidiary of the Company at the time that
such Unrestricted Subsidiary is designated a Restricted Subsidiary of the
Company; and (2) the amount of any Investment shall be the original cost of such
Investment plus the cost of all additional Investments by the Company or any of
its Restricted Subsidiaries, without any adjustments for increases or decreases
in value, or write-ups, write-downs or write-offs with respect to such
Investment, reduced by the payment of dividends or distributions in connection
with such Investment or any other amounts received in respect of such
Investment; provided that no such payment of dividends or distributions or
--------
receipt of any such other amounts shall reduce the amount of any Investment if
such payment of dividends or distributions or receipt of any such amounts would
be included in Consolidated Net Income.
-16-
<PAGE>
If the Company or any Restricted Subsidiary of the Company sells or
otherwise disposes of any Common Stock of any direct or indirect Restricted
Subsidiary of the Company such that, after giving effect to any such sale or
disposition, the Company no longer owns, directly or indirectly, 100% of the
outstanding Common Stock of such Restricted Subsidiary, the Company shall be
deemed to have made an Investment on the date of any such sale or disposition
equal to the fair market value of the Common Stock of such Restricted Subsidiary
not sold or disposed of.
"Investors' Rights Agreement" means the Investors' Rights Agreement,
---------------------------
dated March 22, 1999, among the Company and certain of its investors.
"Issue Date" means April 30, 1999, the date of original issuance of
----------
any Securities under this Indenture.
"Legal Defeasance" has the meaning set forth in Section 8.02.
----------------
"Lien" means any lien, mortgage, deed of trust, pledge, security
----
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof and any
agreement to give any security interest).
"Maturity Date" means May 1, 2009.
-------------
"Net Cash Proceeds" means, with respect to any Asset Sale, the
-----------------
proceeds in the form of cash or Cash Equivalents including payments in respect
of deferred payment obligations when received in the form of cash or Cash
Equivalents (other than the portion of any such deferred payment constituting
interest) received by the Company or any of its Restricted Subsidiaries from
such Asset Sale net of (a) reasonable out-of-pocket expenses and fees relating
to such Asset Sale (including, without limitation, legal, accounting and
investment banking fees and sales commissions), (b) taxes paid or payable after
taking into account any reduction in consolidated tax liability due to available
tax credits or deductions and any tax sharing arrangements, (c) repayment of
Indebtedness that is re-
-17-
<PAGE>
quired to be repaid in connection with such Asset Sale, (d) appropriate amounts
to be provided by the Company or any Restricted Subsidiary, as the case may be,
as a reserve, in accordance with GAAP, against any liabilities associated with
such Asset Sale and retained by the Company or any Restricted Subsidiary, as the
case may be, after such Asset Sale, including, without limitation, pension and
other post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
such Asset Sale, and (e) all distributions and other payments required to be
made to minority interest holders in Restricted Subsidiaries or joint ventures
as a result of such Asset Sale.
"Net Proceeds Offer" has the meaning set forth in Section 4.16.
------------------
"Net Proceeds Offer Amount" has the meaning set forth in Section 4.16.
-------------------------
"Net Proceeds Offer Payment Date" has the meaning set forth in Section
-------------------------------
4.16.
"Net Proceeds Offer Trigger Date" has the meaning set forth in Section
-------------------------------
4.16.
"Non-payment Default" has the meaning set forth in Section 10.02.
-------------------
"Non-U.S. Person" has the meaning assigned to such term in Regulation
---------------
S.
"Obligations" means all obligations for principal, premium, interest,
-----------
penalties, fees, indemnifications, reimbursements, damages and other liabilities
payable under the documentation governing any Indebtedness.
"Officer" means, with respect to any Person, the Chairman of the
-------
Board, the Chief Executive Officer, the President, any Vice President, the Chief
Financial Officer, the Controller, or the Secretary of such Person.
-18-
<PAGE>
"Officers' Certificate" means a certificate signed by two Officers of
---------------------
the Company.
"144A Global Security" means a permanent global security in registered
--------------------
form representing the aggregate principal amount of Securities sold in reliance
on Rule 144A under the Securities Act.
"Opinion of Counsel" means a written opinion from legal counsel which
------------------
opinion and counsel are reasonably acceptable to the Trustee.
"Participants" has the meaning set forth in Section 2.15.
------------
"Paying Agent" has the meaning set forth in Section 2.03.
------------
"Payment Blockage Notice" has the meaning set forth in Section 10.02.
-----------------------
"Payment Blockage Period" has the meaning set forth in Section 10.02.
-----------------------
"Payment Default" has the meaning set forth in Section 10.02.
---------------
"Permitted Holders" means Apollo Management, L.P. and its Affiliates
-----------------
and management of the Company.
"Permitted Indebtedness" means, without duplication, each of the
----------------------
following:
(i) Indebtedness under the Securities and the Guarantees issued on
the Issue Date in an aggregate principal amount not to exceed $200 million;
(ii) Indebtedness incurred pursuant to the Credit Agreement in an
aggregate principal amount at any time outstanding not to exceed $375.0
million less the amount of all repayments and permanent commitment
reductions under the Credit Agreement with the Net Cash Proceeds of an
Asset Sale applied thereto as required by Section 4.16;
-19-
<PAGE>
provided that the amount of Indebtedness permitted to be incurred pursuant
--------
to the Credit Agreement in accordance with this clause (ii) shall be in
addition to any Indebtedness permitted to be incurred pursuant to the
Credit Agreement in reliance on and in accordance with clause (xvi) below;
provided, further, that the aggregate principal amount of Indebtedness
-------- -------
permitted to be incurred under this clause (ii) shall be reduced dollar for
dollar by any Indebtedness outstanding under clause (xv) below;
(iii) Indebtedness under the Convertible Subordinated Notes reduced
by any principal payments or conversions thereof;
(iv) other Indebtedness of the Company and its Restricted
Subsidiaries outstanding on the Issue Date reduced by the amount of any
scheduled amortization payments or mandatory prepayments when actually paid
or permanent reductions thereon;
(v) Interest Swap Obligations of the Company or any Restricted
Subsidiary of the Company covering Indebtedness of the Company or any of
its Restricted Subsidiaries; provided, however, that such Interest Swap
-------- -------
Obligations are entered 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;
(vi) Indebtedness under Currency Agreements; provided that in the
--------
case of Currency Agreements which relate to Indebtedness, such Currency
Agreements do not increase the Indebtedness of the Company and its
Restricted Subsidiaries outstanding other than as a result of fluctuations
in foreign currency exchange rates or by reason of fees, indemnities and
compensation payable thereunder;
(vii) Indebtedness of a Restricted Subsidiary of the Company to the
Company or to a Wholly Owned Restricted
-20-
<PAGE>
Subsidiary of the Company for so long as such Indebtedness is held by the
Company, a Wholly Owned Restricted Subsidiary of the Company or the lenders
or collateral agent under the Credit Agreement, in each case subject to no
Lien held by a Person other than the Company, a Wholly Owned Restricted
Subsidiary of the Company or the lenders or collateral agent under the
Credit Agreement; provided that if as of any date any Person other than the
--------
Company, a Wholly Owned Restricted Subsidiary of the Company or the lenders
or collateral agent under the Credit Agreement owns or holds any such
Indebtedness or holds a Lien in respect of such Indebtedness, such date
shall be deemed the incurrence of Indebtedness not constituting Permitted
Indebtedness by the issuer of such Indebtedness;
(viii) Indebtedness of the Company to a Wholly Owned Restricted
Subsidiary of the Company or the lenders or collateral agent under the
Credit Agreement for so long as such Indebtedness is held by a Wholly Owned
Restricted Subsidiary of the Company or the lenders or collateral agent
under the Credit Agreement in each case subject to no other Lien; provided
--------
that (a) any Indebtedness of the Company to any Wholly Owned Restricted
Subsidiary of the Company is unsecured and subordinated, pursuant to a
written agreement, to the Company's obligations under this Indenture and
the Securities and (b) if as of any date any Person other than a Wholly
Owned Restricted Subsidiary of the Company or the lenders or collateral
agent under the Credit Agreement owns or holds any such Indebtedness or any
Person holds a Lien (other than a Lien in favor of the lenders or
collateral agent under the Credit Agreement) in respect of such
Indebtedness, such date shall be deemed the incurrence of Indebtedness not
constituting Permitted Indebtedness by the Company;
(ix) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
(except in the case of daylight overdrafts) drawn against insufficient
funds in the ordinary course of business; provided, however, that such
-------- -------
Indebtedness is extinguished within two business days of incurrence;
-21-
<PAGE>
(x) Indebtedness of the Company or any of its Restricted
Subsidiaries represented by letters of credit for the account of the
Company or such Restricted Subsidiary, as the case may be, in order to
provide security for workers' compensation claims, payment obligations in
connection with self-insurance or similar requirements in the ordinary
course of business;
(xi) Indebtedness represented by Capitalized Lease Obligations and
Purchase Money Indebtedness of the Company and its Restricted Subsidiaries
incurred in the ordinary course of business not to exceed $20.0 million at
any one time outstanding; provided that all or a portion of the $20 million
--------
permitted to be incurred pursuant to this clause (xi) may, at the option of
the Company, be incurred under the Credit Agreement instead of pursuant to
Capitalized Lease Obligations or Purchase Money Indebtedness;
(xii) Indebtedness arising from agreements of the Company or a
Restricted Subsidiary of the Company providing for indemnification,
adjustment of purchase price or similar obligations, in each case, incurred
or assumed in connection with the disposition of any business, assets or a
Subsidiary, other than guarantees of Indebtedness incurred by any Person
acquiring all or any portion of such business, assets or a Subsidiary for
the purpose of financing such acquisition; provided, however, that (a) such
-------- -------
Indebtedness is not reflected on the balance sheet of the Company or any
Restricted Subsidiary of the Company (contingent obligations referred to in
a footnote to financial statements and not otherwise reflected on the
balance sheet will not be deemed to be reflected on such balance sheet for
purposes of this clause (a)) and (b) the maximum assumable liability in
respect of all such Indebtedness shall at no time exceed the gross proceeds
including non-cash proceeds (the fair market value of such non-cash
proceeds being measured at the time it is received and without giving
effect to any subsequent changes in value) actually received by the Company
and its Restricted Subsidiaries in connection with such disposition;
-22-
<PAGE>
(xiii) Indebtedness of the Company or any of its Restricted
Subsidiaries in respect of performance bonds, bankers' acceptances,
workers' compensation claims, surety or appeal bonds, payment obligations
in connection with self-insurance or similar obligations, and bank
overdrafts (and letters of credit in respect thereof);
(xiv) Refinancing Indebtedness;
(xv) the incurrence by a Receivables Subsidiary of Indebtedness in
a Qualified Receivables Transaction that is without recourse to the Company
or to any Restricted Subsidiary of the Company or their assets (other than
such Receivables Subsidiary and its assets), and is not guaranteed by any
such Person; provided that any outstanding Indebtedness incurred under this
--------
clause (xv) shall reduce the aggregate amount permitted to be incurred
under clause (ii) above to the extent set forth therein; and
(xvi) additional Indebtedness of the Company and its Restricted
Subsidiaries in an aggregate principal amount not to exceed $20.0 million
at any one time outstanding (which amount may, but need not, be incurred in
whole or in part under the Credit Agreement).
For purposes of determining compliance with Section 4.04, in the event
that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Indebtedness described in clauses (i) through (xvi)
above or is entitled to be incurred pursuant to the Consolidated Fixed Charge
Coverage Ratio provisions of Section 4.04, the Company shall, in its sole
discretion, classify (or later reclassify) such item of Indebtedness in any
manner that complies with Section 4.04. Accrual of interest, accretion or
amortization of original issue discount, the payment of interest on any
Indebtedness in the form of additional Indebtedness with the same terms, and the
payment of dividends on Disqualified Capital Stock in the form of additional
shares of the same class of Disqualified Capital Stock will not be deemed to be
an incurrence of Indebtedness or an issuance of Disqualified Capital Stock for
purposes of Section 4.04.
-23-
<PAGE>
"Permitted Investments" means:
---------------------
(i) Investments by the Company or any Restricted Subsidiary of the
Company in any Person that is or will become immediately after such Investment a
Wholly Owned Restricted Subsidiary of the Company or that will merge or
consolidate into the Company or a Wholly Owned Restricted Subsidiary of the
Company;
(ii) Investments in the Company by any Restricted Subsidiary of the
Company; provided that any Indebtedness evidencing such Investment is unsecured
--------
and subordinated, pursuant to a written agreement, to the Company's obligations
under the Securities and this Indenture;
(iii) Investments in cash and Cash Equivalents;
(iv) loans and advances to employees and officers of the Company and
its Restricted Subsidiaries in the ordinary course of business for bona fide
business purposes not in excess of $5.0 million at any one time outstanding;
(v) Currency Agreements and Interest Swap Obligations entered into
in the ordinary course of the Company's or its Restricted Subsidiaries'
businesses and otherwise in compliance with this Indenture;
(vi) additional Investments (including joint ventures) not to exceed
$10.0 million at any one time outstanding;
(vii) Investments in securities of trade creditors or customers
received pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of such trade creditors or customers;
(viii) Investments made by the Company or its Restricted Subsidiaries
as a result of consideration received in connection with an Asset Sale made in
compliance with Section 4.16 or any Investment made by the Company or any
Restricted Subsidiary in connection with a transaction that would be an Asset
Sale if it involved aggregate consideration of $1.5 million or more;
-24-
<PAGE>
(ix) Investments of a Person or any of its Subsidiaries existing at
the time such Person becomes a Restricted Subsidiary of the Company or at the
time such Person merges or consolidates with the Company or any of its
Restricted Subsidiaries, in either case in compliance with this Indenture;
provided that such Investments were not made by such Person in connection with,
- --------
or in anticipation or contemplation of, such Person becoming a Restricted
Subsidiary of the Company or such merger or consolidation;
(x) repurchases of Capital Stock of the Company deemed to occur
upon the exercise of stock options if such Capital Stock represents a portion of
the exercise price thereof;
(xi) Investments made by the Company or any Restricted Subsidiary in
connection with purchase price adjustments, contingent purchase price payments
or other earnout payments required in connection with Investments otherwise
permitted under this Indenture;
(xii) Investments in securities received in settlement of trade
obligations in the ordinary course of business; and
(xiii) Investments in the Securities.
"Permitted Liens" means the following types of Liens:
---------------
(i) Liens for taxes, assessments or governmental charges or claims
either (a) not delinquent or (b) contested in good faith by appropriate
proceedings and as to which the Company or its Restricted Subsidiaries
shall have set aside on its books such reserves as may be required pursuant
to GAAP;
(ii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, suppliers, materialmen, repairmen and other Liens
imposed by law incurred in the ordinary course of business for sums not yet
delinquent or being contested in good faith, if such reserve or other
appropriate provision, if any, as shall be required by GAAP shall have been
made in respect thereof;
-25-
<PAGE>
(iii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, including any Lien securing letters of
credit issued in the ordinary course of business consistent with past
practice in connection therewith, or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, government
contracts, performance and return-of-money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed money);
(iv) judgment Liens not giving rise to an Event of Default so long
as such Lien is adequately bonded and any appropriate legal proceedings
which may have been duly initiated for the review of such judgment shall
not have been finally terminated or the period within which such
proceedings may be initiated shall not have expired;
(v) easements, rights-of-way, zoning restrictions and other
similar charges or encumbrances in respect of real property not interfering
in any material respect with the ordinary conduct of the business of the
Company or any of its Restricted Subsidiaries;
(vi) any interest or title of a lessor under any Capitalized Lease
Obligation; provided that such Liens do not extend to any property or asset
--------
which is not leased property subject to such Capitalized Lease Obligation;
(vii) Liens securing Capitalized Lease Obligations and Purchase
Money Indebtedness permitted pursuant to clause (xi) of the definition of
"Permitted Indebtedness" above; provided, however, that in the case of
-------- -------
Purchase Money Indebtedness (a) the Indebtedness shall not exceed the cost
of such property or assets and shall not be secured by any property or
assets of the Company or any Restricted Subsidiary of the Company other
than the property and assets so acquired and (b) the Lien securing such
Indebtedness shall be created within 180 days of such acquisition or
construction or, in the case of a refinancing of any Pur-
-26-
<PAGE>
chase Money Indebtedness, within 180 days of such refinancing;
(viii) Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect of
bankers' acceptances issued or created for the account of such Person to
facilitate the purchase, shipment or storage of such inventory or other
goods;
(ix) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other property
relating to such letters of credit and products and proceeds thereof;
(x) Liens encumbering deposits made to secure obligations arising
from statutory, regulatory, contractual, or warranty requirements of the
Company or any of its Restricted Subsidiaries, including rights of offset
and set-off;
(xi) Liens securing Interest Swap Obligations which Interest Swap
Obligations relate to Indebtedness that is otherwise permitted under this
Indenture;
(xii) Liens in the ordinary course of business not exceeding $5
million at any one time outstanding that (a) are not incurred in connection
with borrowing of money and (b) do not materially detract from the value of
the property or materially impair its use;
(xiii) Liens by reason of judgment or decree not otherwise
resulting in an Event of Default;
(xiv) Liens securing Indebtedness under Currency Agreements
permitted under this Indenture;
(xv) Liens securing Acquired Indebtedness incurred in accordance
with Section 4.04; provided that: (a) such Liens secured such Acquired
--------
Indebtedness at the time of and prior to the incurrence of such Acquired
Indebtedness by the Company or a Restricted Subsidiary of the Company and
were not granted in connection with, or in anticipa-
-27-
<PAGE>
tion of, the incurrence of such Acquired Indebtedness by the Company or a
Restricted Subsidiary of the Company; and (b) such Liens do not extend to
or cover any property or assets of the Company or any of its Restricted
Subsidiaries other than the property or assets that secured the Acquired
Indebtedness prior to the time such Indebtedness became Acquired
Indebtedness of the Company or a Restricted Subsidiary of the Company and
are no more favorable to the lienholders than those securing the Acquired
Indebtedness prior to the incurrence of such Acquired Indebtedness by the
Company or a Restricted Subsidiary of the Company; and
(xvi) Liens securing Indebtedness permitted to be incurred pursuant
to clause (xvi) of the definition of "Permitted Indebtedness."
"Person" means an individual, partnership, corporation, limited
------
liability company, unincorporated organization, trust or joint venture, or a
governmental agency or political subdivision thereof.
"Physical Securities" shall have the meaning provided in Section 2.01.
-------------------
"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 redemptions or upon liquidation.
"principal" of any Indebtedness (including the Securities) means the
---------
principal amount of such Indebtedness plus the premium, if any, on such
Indebtedness.
"Private Placement Legend" means the legends initially set forth on
------------------------
the Securities in the form set forth in Exhibit B.
---------
"Purchase Money Indebtedness" means Indebtedness of the Company and
---------------------------
its Restricted Subsidiaries incurred in the normal course of business for the
purpose of financing all or any part of the purchase price, or the cost of
installation,
-28-
<PAGE>
construction or improvement, of property or equipment and any Refinancings
thereof.
"Qualified Capital Stock" means any Capital Stock that is not
-----------------------
Disqualified Capital Stock.
"Qualified Institutional Buyer" or "QIB" shall have the meaning
----------------------------- ---
specified in Rule 144A under the Securities Act.
"Qualified Receivables Transaction" means any transaction or series of
---------------------------------
transactions that may be entered into by the Company or any of its Restricted
Subsidiaries pursuant to which the Company or any of its Restricted Subsidiaries
may sell, convey or otherwise transfer to (i) a Receivables Subsidiary (in the
case of a transfer by the Company or any of its Restricted Subsidiaries) and
(ii) any other Person (in the case of transfer by a Receivables Subsidiary), or
may grant a security interest in, any accounts receivable (whether now existing
or arising in the future) of the Company or any of its Restricted Subsidiaries,
and any assets related thereto, including, without limitation, all collateral
securing such accounts receivable, all contracts and all guarantees or other
obligations in respect of such accounts receivable, proceeds of such accounts
receivable and other assets which are customarily transferred or in respect of
which security interests are customarily granted in connection with asset
securitization transactions involving accounts receivable.
"Receivables Subsidiary" means a Wholly Owned Restricted Subsidiary of
----------------------
the Company that engages in no activities other than in connection with the
financing of accounts receivable and that is designated by the Board of
Directors of the Company (as provided below) as a Receivables Subsidiary (a) no
portion of the Indebtedness or any other Obligations (contingent or otherwise)
of which (i) is guaranteed by the Company or any Restricted Subsidiary of the
Company (excluding guarantees of Obligations (other than the principal of, and
interest on, Indebtedness) pursuant to representations, warranties, covenants
and indemnities entered into in the ordinary course of business in connection
with a Qualified Receivables Transaction), (ii) is recourse to or obligates the
Company or any Restricted Subsidiary of the Company in any way other than
-29-
<PAGE>
pursuant to representations, warranties, covenants and indemnities entered into
in the ordinary course of business in connection with a Qualified Receivables
Transaction, or (iii) subjects any property or asset of the Company or any
Restricted Subsidiary of the Company, directly or indirectly, contingently or
otherwise, to the satisfaction thereof, other than pursuant to representations,
warranties, covenants and indemnities entered into in the ordinary course of
business in connection with a Qualified Receivables Transaction, (b) with which
neither the Company nor any Restricted Subsidiary of the Company has any
material contract, agreement, arrangement or understanding other than on terms
no less favorable to the Company or such Restricted Subsidiary than those that
might be obtained at the time from Persons who are not Affiliates of the
Company, other than fees payable in the ordinary course of business in
connection with servicing accounts receivable, and (c) with which neither the
Company nor any Restricted Subsidiary of the Company has any obligation to
maintain or preserve such Restricted Subsidiary's financial condition or cause
such Restricted Subsidiary to achieve certain levels of operating results. Any
such designation by the Board of Directors of the Company shall be evidenced to
the Trustee by filing with the Trustee a Board Resolution giving effect to such
designation and an Officers' Certificate certifying that such designation
complied with the foregoing conditions.
"Record Date" means the applicable Record Date specified in the
-----------
Securities; provided that if any such date is not a Business Day, the Record
--------
Date shall be the first day immediately preceding such specified day that is a
Business Day.
"Redemption Date," when used with respect to any Security to be
---------------
redeemed, means the date fixed for such redemption pursuant to this Indenture
and the Securities.
"Redemption Price," when used with respect to any Security to be
----------------
redeemed, means the price fixed for such redemption, payable in immediately
available funds, pursuant to this Indenture and the Securities.
"Reference Date" has the meaning set forth in Section 4.03.
--------------
-30-
<PAGE>
"Refinance" means, in respect of any security or Indebtedness, to
---------
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue a security or Indebtedness in exchange or replacement for, such
security or Indebtedness in whole or in part. "Refinanced" and "Refinancing"
shall have correlative meanings.
"Refinancing Indebtedness" means any Refinancing by the Company or any
------------------------
Restricted Subsidiary of the Company of Indebtedness incurred or existing in
accordance with Section 4.04 (other than pursuant to clause (ii), (v), (vi),
(vii), (viii), (ix), (x), (xi), (xii), (xiii), (xv) or (xvi) of the definition
of "Permitted Indebtedness"), in each case that does not (1) result in an
increase in the aggregate principal amount of Indebtedness of such Person as of
the date of such proposed Refinancing (plus the amount of any premium required
to be paid under the terms of the instrument governing such Indebtedness and
plus the amount of reasonable expenses incurred by the Company in connection
with such Refinancing) or (2) create Indebtedness with (A) a Weighted Average
Life to Maturity that is less than the Weighted Average Life to Maturity of the
Indebtedness being Refinanced or (B) a final maturity earlier than the final
maturity of the Indebtedness being Refinanced; provided that (x) if such
--------
Indebtedness being Refinanced is Indebtedness of the Company, then such
Refinancing Indebtedness shall be Indebtedness solely of the Company and (y) if
such Indebtedness being Refinanced is subordinate or junior to the Securities,
then such Refinancing Indebtedness shall be subordinate to the Securities at
least to the same extent and in the same manner as the Indebtedness being
Refinanced.
"Registrar" has the meaning set forth in Section 2.03.
---------
"Registration Rights Agreement" means the Registration Rights
-----------------------------
Agreement dated as of the Issue Date among the Company, the Guarantors and the
Initial Purchasers.
"Regulation S" means Regulation S under the Securities Act.
------------
-31-
<PAGE>
"Regulation S Global Security" means a permanent global security in
----------------------------
registered form representing the aggregate principal amount of Securities sold
in reliance on Regulation S under the Securities Act.
"Replacement Assets" has the meaning set forth in Section 4.16.
------------------
"Representative" means the indenture trustee or other trustee, agent
--------------
or representative in respect of any Designated Senior Debt; provided that if,
--------
and for so long as, any Designated Senior Debt lacks such a representative, then
the Representative for such Designated Senior Debt shall at all times constitute
the holders of a majority in outstanding principal amount of such Designated
Senior Debt in respect of any Designated Senior Debt.
"Responsible Officer" means, when used with respect to the Trustee,
-------------------
any officer in the Corporate Trust Office of the Trustee including any vice
president, assistant vice president, assistant secretary, treasurer, assistant
treasurer, or any other officer of the Trustee who customarily performs
functions similar to those performed by the Persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of such officer's knowledge of and familiarity with the particular
subject.
"Restricted Payment" has the meaning set forth in Section 4.03.
------------------
"Restricted Security" means a Security that constitutes a "Restricted
-------------------
Security" within the meaning of Rule 144(a)(3) under the Securities Act;
provided, however, that the Trustee shall be entitled to request and
- -------- -------
conclusively rely on an Opinion of Counsel with respect to whether any Security
constitutes a Restricted Security.
"Restricted Subsidiary" of any Person means any Subsidiary of such
---------------------
Person which at the time of determination is not an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act.
---------
-32-
<PAGE>
"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 Restricted Subsidiary of any property,
whether owned by the Company or any Restricted Subsidiary at the Issue Date or
later acquired, which has been or is to be sold or transferred by the Company or
such Restricted 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.
"Securities" means, collectively, the Company's 10 1/2% Senior
----------
Subordinated Notes due 2009 issued in accordance with Section 2.02 (whether on
the Issue Date or thereafter) treated as a single class of securities under this
Indenture, as amended or supplemented from time to time in accordance with the
terms of this Indenture.
"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, between Boss Investment, LLC and the
Company.
"Securityholder" or "Holder" means the Person in whose name a Security
-------------- ------
is registered on the Registrar's books.
"Senior Debt" means the principal of, premium, if any, and interest
-----------
(including any interest accruing subsequent to the filing of a petition of
bankruptcy at the rate provided for in the documentation with respect thereto,
whether or not such interest is an allowed claim under applicable law) on any
Indebtedness of the Company, whether outstanding on the Issue Date or thereafter
created, incurred or assumed, unless, in the case of any particular
Indebtedness, the instrument creating or evidencing the same or pursuant to
which the same is outstanding expressly provides that such Indebtedness shall
not be senior in right of payment to the Securities. Without limiting the
generality of the foregoing, "Senior Debt" shall also include the principal of,
premium, if any, interest (including any interest accruing subsequent to the
filing of a petition of bankruptcy at the rate provided for in the documentation
with
-33-
<PAGE>
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,
(i) all monetary obligations of every nature of the Company under, or with
respect to, the Credit Agreement, including, without limitation, obligations to
pay principal and interest, reimbursement obligations under letters of credit,
fees, expenses and indemnities, (ii) all Interest Swap Obligations (including
guarantees thereof) and (iii) all obligations under Currency Agreements
(including guarantees thereof), in each case whether outstanding on the Issue
Date or thereafter incurred. Notwithstanding the foregoing, "Senior Debt" shall
not include (i) any Indebtedness of the Company to a Subsidiary of the Company,
(ii) Indebtedness to, or guaranteed on behalf of, any shareholder, 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 Facilities (including
the Credit Agreement), (iii) Indebtedness to trade creditors and other amounts
incurred 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 4.04 (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 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
such provisions of this Indenture), (vii) Indebtedness represented by the
Convertible Subordinated Notes, (viii) 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 and (ix) any Indebtedness which is, by
its express terms, subordinated in right of payment to any other Indebtedness of
the Company.
"Significant Subsidiary," with respect to any Person, means any
----------------------
Restricted Subsidiary of such Person that satisfies
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<PAGE>
the criteria for a "significant subsidiary" set forth in Rule 1.02(w) of
Regulation S-X under the Exchange Act based upon the most recent pro forma
--- -----
annual financial information filed by the Company with the Commission.
"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.
"Surviving Entity" has the meaning set forth in Section 5.01.
----------------
"Tender Offer" means (i) the purchase of the Company's common stock,
------------
including shares underlying certain options, pursuant to the Company's offer to
purchase dated February 19, 1999, as amended through the Issue Date or (ii) to
the extent that the Company has not purchased an aggregate of 25.5 million
shares of its common stock, including shares underlying options, pursuant to the
offer to purchase described in clause (i), any other purchase of the Company's
common stock or shares underlying options to purchase the Company's common stock
within 180 days of the Issue Date, provided that the aggregate amount expended
--------
pursuant to clauses (i) and (ii) shall not exceed $573.75 million.
"TIA" means the Trust Indenture act of 1939 (15 U.S.C. (S)(S) 77aaa-
---
77bbbb), as amended, as in effect on the date of the execution of this Indenture
until such time as this Indenture is qualified under the TIA, and thereafter as
in effect on the date on which this Indenture is qualified under the TIA, except
as otherwise provided in Section 9.03.
"Trust Officer" means any officer or assistant officer of the Trustee
-------------
assigned by the Trustee to administer its corporate trust matters or, in the
case of a successor trustee, an officer assigned to the department, division or
group performing the corporate trust work of such successor.
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<PAGE>
"Trustee" means the party named as such in this Indenture until a
-------
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"Unrestricted Securities" means one or more Securities that do not and
-----------------------
are not required to bear the Private Placement Legend in the form set forth in
Exhibit B, including, without limitation, the Exchange Securities.
- ---------
"Unrestricted Subsidiary" of any Person means (i) any Subsidiary of
-----------------------
such Person that at the time of determination shall be or continue to be
designated an Unrestricted Subsidiary by the Board of Directors of such Person
in the manner provided below and (ii) any Subsidiary of an Unrestricted
Subsidiary. The Board of Directors may designate any Subsidiary (including any
newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary
unless such Subsidiary owns any Capital Stock of, or owns or holds any Lien on
any property of, the Company or any other Subsidiary of the Company that is not
a Subsidiary of the Subsidiary to be so designated; provided that (x) the
--------
Company certifies to the Trustee that such designation complies with Section
4.03 and (y) each Subsidiary to be so designated and each of its Subsidiaries
has not at the time of designation, and does not thereafter, create, incur,
issue, assume, guarantee or otherwise become directly or indirectly liable with
respect to any Indebtedness pursuant to which the lender has recourse to any of
the assets of the Company or any of its Restricted Subsidiaries. The Board of
Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary only if (x) immediately after giving effect to such designation, the
Company is able to incur at least $1.00 of additional Indebtedness (other than
Permitted Indebtedness) in compliance with Section 4.04 and (y) immediately
before and immediately after giving effect to such designation, no Default or
Event of Default shall have occurred and be continuing. Any such designation by
the Board of Directors shall be evidenced to the Trustee by promptly filing with
the Trustee a copy of the Board Resolution giving effect to such designation and
an Officers' Certificate certifying that such designation complied with the
foregoing provisions.
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<PAGE>
"U.S. Government Obligations" means direct obligations of, and
---------------------------
obligations guaranteed by, the United States of America for the payment of which
the full faith and credit of the United States of America is pledged and which
are not callable or redeemable at the issuer's option.
"U.S. Legal Tender" means such coin or currency of the United States
-----------------
of America as at the time of payment shall be legal tender for the payment of
public and private debts.
"Weighted Average Life to Maturity" means, when applied to any
---------------------------------
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding aggregate principal amount of such Indebtedness into (b) the sum of
the total of the products obtained by multiplying (i) the amount of each then
remaining installment, sinking fund, serial maturity or other required payment
of principal, including payment at final maturity, in respect thereof, by (ii)
the number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
"Wholly Owned Restricted Subsidiary" of any Person means any Wholly
----------------------------------
Owned Subsidiary of such Person which at the time of determination is a
Restricted Subsidiary of such Person.
"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 1.02. Incorporation by Reference of TIA.
---------------------------------
Whenever this Indenture refers to a provision of the TIA, such
provision is incorporated by reference in, and made a part of, this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Securities.
--------------------
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<PAGE>
"indenture security holder" means a Holder or a Securityholder.
-------------------------
"indenture to be qualified" means this Indenture.
-------------------------
"indenture trustee" or "institutional trustee" means the Trustee.
----------------- ---------------------
"obligor" on the indenture securities means the Company, any Guarantor
-------
or any other obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by Commission rule
and not otherwise defined herein have the meanings assigned to them therein.
SECTION 1.03. Rules of Construction.
---------------------
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the
plural include the singular;
(5) provisions apply to successive events and transactions; and
(6) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or
other subdivision.
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<PAGE>
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating.
---------------
The Securities and the Trustee's certificate of authentication shall
be substantially in the form of Exhibit A hereto. The Securities may have
---------
notations, legends or endorsements required by law, stock exchange rule or
usage. The Company shall approve the form of the Securities and any notation,
legend or endorsement on them. Each Security shall be dated the date of its
issuance and show the date of its authentication. Each Security shall have an
executed Guarantee from each of the Guarantors endorsed thereon substantially in
the form of Exhibit E.
---------
The terms and provisions contained in the Securities and the
Guarantees shall constitute, and are hereby expressly made, a part of this
Indenture and, to the extent applicable, the Company, the Guarantors and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.
Securities offered and sold in reliance on Rule 144 and Securities
offered and sold in reliance on Regulation S shall be issued initially in the
form of one or more Global Securities, substantially in the form set forth in
Exhibit A, deposited with the Trustee, as custodian for the Depository, duly
- ---------
executed by the Company (and having an executed Guarantee from each of the
Guarantors endorsed thereon) and authenticated by the Trustee as hereinafter
provided and shall bear the legends set forth in Exhibit B. The aggregate
---------
principal amount of the Global Securities may from time to time be increased or
decreased by adjustments made on the records of the Trustee, as custodian for
the Depository, as hereinafter provided.
Securities issued in exchange for interests in a Global Security
pursuant to Section 2.16 may be issued in the form of permanent certificated
Securities in registered form in
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<PAGE>
substantially the form set forth in Exhibit A (the "Physical Securities").
--------- -------------------
SECTION 2.02. Execution and Authentication.
----------------------------
Two Officers, or an Officer and an Assistant Secretary, shall sign, or
one Officer shall sign and one Officer or an Assistant Secretary (each of whom
shall, in each case, have been duly authorized by all requisite corporate
actions) shall attest to, the Securities for the Company by manual or facsimile
signature.
If an Officer whose signature is on a Security or Guarantee, as the
case may be, was an Officer at the time of such execution but no longer holds
that office at the time the Trustee authenticates the Security, the Security
shall nevertheless be valid.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate Securities for original issue on the
Issue Date in the aggregate principal amount of $200,000,000 upon a written
order of the Company in the form of an Officers' Certificate. In addition, the
Trustee shall authenticate Securities for original issue after the Issue Date in
the aggregate principal amount of up to $200,000,000 upon a written order of the
Company in the form of an Officers' Certificate. Each such Officers'
Certificate shall specify the amount of Securities to be authenticated and the
date on which the Securities are to be authenticated. The aggregate principal
amount of Securities outstanding at any time may not exceed $400,000,000, except
as provided in Section 2.07.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate Securities. Unless otherwise provided in the
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
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<PAGE>
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Company and Affiliates of the Company.
The Securities shall be issuable only in registered form without
coupons in denominations of $1,000 and integral multiples thereof.
SECTION 2.03. Registrar and Paying Agent.
--------------------------
The Company shall maintain an office or agency in the Borough of
Manhattan, The City of New York, where (a) Securities may be presented or
surrendered for registration of transfer or for exchange ("Registrar"), (b)
---------
Securities may be presented or surrendered for payment ("Paying Agent") and (c)
------------
notices and demands to or upon the Company in respect of the Securities and this
Indenture may be served. 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 the Borough of Manhattan, The City of New York, for such purposes. The
Company may act as its own Registrar, Paying Agent or Calculation Agent except
that for the purposes of Articles Three and Eight and Sections 4.15 and 4.16,
neither the Company nor any Affiliate of the Company shall act as Paying Agent.
The Registrar shall keep a register of the Securities and of their transfer and
exchange. The Company, upon notice to the Trustee, may have one or more co-
Registrars and one or more additional paying agents reasonably acceptable to
the Trustee. The term "Paying Agent" includes any additional paying agent. The
Company initially appoints the Trustee as Registrar and Paying Agent until such
time as the Trustee has resigned or a successor has been appointed.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, which agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall
notify the Trustee, in advance, of the name and address of any such Agent. If
the
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<PAGE>
Company fails to maintain a Registrar or Paying Agent, the Trustee shall act
as such.
SECTION 2.04. Paying Agent To Hold Assets in Trust.
------------------------------------
The Company shall require each Paying Agent other than the Trustee to
agree in writing that, subject to Article Four and Article Twelve, each Paying
Agent shall hold in trust for the benefit of Holders or the Trustee all assets
held by the Paying Agent for the payment of principal of, or interest on, the
Securities (whether such assets have been distributed to it by the Company or
any other obligor on the Securities), and shall notify the Trustee of any
Default by the Company (or any other obligor on the Securities) in making any
such payment. If the Company or a Subsidiary acts as Paying Agent, it shall
segregate such assets and hold them as a separate trust fund. The Company at
any time may require a Paying Agent to distribute all assets held by it to the
Trustee and account for any assets disbursed and the Trustee may at any time
during the continuance of any payment Default, upon written request to a Paying
Agent, require such Paying Agent to distribute all assets held by it to the
Trustee and to account for any assets distributed. Upon distribution to the
Trustee of all assets that shall have been delivered by the Company to the
Paying Agent, the Paying Agent shall have no further liability for such assets.
SECTION 2.05. Holder Lists.
------------
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders. If the Trustee is not the Registrar, the Company shall furnish to the
Trustee on or before each Interest Payment Date and at such other times as the
Trustee may request in writing a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Holders, which
list may be conclusively relied upon by the Trustee.
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<PAGE>
SECTION 2.06. Transfer and Exchange.
---------------------
Subject to Sections 2.15 and 2.16, when Securities are presented to
the Registrar or a co-Registrar with a request to register the transfer of such
Securities or to exchange such Securities for an equal principal amount of
Securities of other authorized denominations, the Registrar or co-Registrar
shall register the transfer or make the exchange as requested if its
requirements for such transaction are met; provided, however, that the
-------- -------
Securities surrendered for transfer or exchange shall be duly endorsed or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Registrar or co-Registrar, duly executed by the Holder thereof
or his attorney duly authorized in writing. To permit registrations of
transfers and exchanges, the Company shall execute and the Trustee shall
authenticate Securities at the Registrar's or co-Registrar's request. No
service charge shall be made for any registration of transfer or exchange, but
the Company may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith. The Registrar or
co-Registrar shall not be required to register the transfer of or exchange of
any Security (i) during a period beginning at the opening of business 15 days
before the mailing of a notice of redemption of Securities and ending at the
close of business on the day of such mailing, (ii) selected for redemption in
whole or in part pursuant to Article Three, except the unredeemed portion of any
Security being redeemed in part, and (iii) during a Change of Control Offer or
an Net Proceeds Offer if such Security is tendered pursuant to such Change of
Control Offer or Net Proceeds Offer and not withdrawn.
Any Holder of a beneficial interest in a Global Security shall, by
acceptance of such beneficial interest, agree that transfers of beneficial
interests in such Global Securities may be effected only through a book entry
system maintained by the Holder of such Global Security (or its agent), and that
ownership of a beneficial interest in the Security shall be required to be
reflected in a book entry system.
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<PAGE>
SECTION 2.07. Replacement Securities.
----------------------
If a mutilated Security is surrendered to the Trustee or if the Holder
of a Security claims that the Security has been lost, destroyed or wrongfully
taken, the Company shall issue and the Trustee shall authenticate a replacement
Security if the Trustee's requirements are met. If required by the Trustee or
the Company, such Holder must provide an indemnity bond or other indemnity,
sufficient in the judgment of both the Company and the Trustee, to protect the
Company, the Trustee or any Agent from any loss which any of them may suffer if
a Security is replaced. The Company may charge such Holder for its reasonable
out-of-pocket expenses in replacing a Security pursuant to this Section 2.07,
including reasonable fees and expenses of counsel.
Every replacement Security is an additional obligation of the Company
and every replacement Guarantee shall constitute an additional obligation of the
Guarantors.
SECTION 2.08. Outstanding Securities.
----------------------
Securities outstanding at any time are all the Securities that have
been authenticated by the Trustee except those cancelled by it, those delivered
to it for cancellation and those described in this Section as not outstanding.
A Security does not cease to be outstanding because the Company, the Guarantors
or any of their respective Affiliates holds the Security (subject to the
provisions of Section 2.09).
If a Security is replaced pursuant to Section 2.07 (other than a
mutilated Security surrendered for replacement), it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Security
is held by a protected purchaser. A mutilated Security ceases to be outstanding
upon surrender of such Security and replacement thereof pursuant to Section
2.07. If the principal amount of any Security is considered paid under Section
4.01, it ceases to be outstanding and interest ceases to accrue.
If on a Redemption Date or the Maturity Date the Paying Agent (other
than the Company or a Subsidiary) holds U.S.
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<PAGE>
Legal Tender or U.S. Government Obligations sufficient to pay all of the
principal and interest due on the Securities payable on that date, then on and
after that date such Securities cease to be outstanding and interest on them
ceases to accrue.
SECTION 2.09. Treasury Securities.
-------------------
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, Securities owned
by the Company, any of its Subsidiaries or any of their respective Affiliates
shall be disregarded, except that, for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Securities that the Trustee knows or has reason to know are so owned shall
be disregarded.
SECTION 2.10. Temporary Securities.
--------------------
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of definitive Securities but may
have variations that the Company considers appropriate for temporary Securities.
Without unreasonable delay, the Company shall prepare and the Trustee shall
authenticate definitive Securities in exchange for temporary Securities. Until
such exchange, temporary Securities shall be entitled to the same rights,
benefits and privileges as definitive Securities. Notwithstanding the
foregoing, so long as the Securities are represented by a Global Security, such
Global Security may be in typewritten form.
SECTION 2.11. Cancellation.
------------
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for transfer, exchange or payment. The
Trustee, or at the direction of the Trustee, the Registrar or the Paying Agent
(other than the Company or a Subsidiary), and no one else, shall cancel and, at
the written direction of the Company, shall dispose of all Securities
surrendered for transfer, ex-
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<PAGE>
change, payment or cancellation. Subject to Section 2.07, the Company may not
issue new Securities to replace Securities that it has paid or delivered to the
Trustee for cancellation. If the Company or any Guarantor shall acquire any of
the Securities, such acquisition shall not operate as a redemption or
satisfaction of the Indebtedness represented by such Securities unless and until
the same are surrendered to the Trustee for cancellation pursuant to this
Section 2.11.
SECTION 2.12. Defaulted Interest.
------------------
If the Company defaults in a payment of interest on the Securities, it
shall, unless the Trustee fixes another record date pursuant to Section 6.10,
pay the defaulted interest, plus (to the extent lawful) any interest payable on
the defaulted interest, in any lawful manner. The Company may pay the defaulted
interest to the persons who are Holders on a subsequent special record date,
which date shall be the fifteenth day next preceding the date fixed by the
Company for the payment of defaulted interest or the next succeeding Business
Day if such date is not a Business Day. At least 15 days before any such
subsequent special record date, the Company shall mail to each Holder, with a
copy to the Trustee, a notice that states the subsequent special record date,
the payment date and the amount of defaulted interest, and interest payable on
such defaulted interest, if any, to be paid.
SECTION 2.13. CUSIP Number.
------------
The Company in issuing the Securities may use a "CUSIP" number, and if
so, the Trustee shall use the CUSIP number in notices of redemption or exchange
as a convenience to Holders; provided, however, that any 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.
SECTION 2.14. Deposit of Moneys.
-----------------
Prior to 11:00 a.m. New York City time on each Interest Payment Date,
Maturity Date, Redemption Date, Change of
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<PAGE>
Control Payment Date and Net Proceeds Offer Payment Date, the Company shall have
deposited with the Paying Agent in immediately available funds money sufficient
to make cash payments, if any, due on such Interest Payment Date, Maturity Date,
Redemption Date, Change of Control Payment Date and Net Proceeds Offer Payment
Date, as the case may be, in a timely manner which permits the Paying Agent to
remit payment to the Holders on such Interest Payment Date, Maturity Date,
Redemption Date, Change of Control Payment Date and Net Proceeds Offer Payment
Date, as the case may be.
SECTION 2.15. Book-Entry Provisions for Global Securities.
-------------------------------------------
(a) The Global Securities initially shall (i) be registered in the
name of the Depository or the nominee of such Depository, (ii) be delivered to
the Trustee as custodian for such Depository and (iii) bear legends as set forth
in Exhibit B.
---------
Members of, or participants in, the Depository ("Participants") shall
------------
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depository, or the Trustee as its custodian, or under the
Global Security, and the Depository may be treated by the Company, the Trustee
and any agent of the Company or the Trustee as the absolute owner of the Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depository or impair, as between the Depository
and Participants, the operation of customary practices governing the exercise of
the rights of a Holder of any Security.
(b) Transfers of Global Securities shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the Global Securities may be
transferred or exchanged for Physical Securities in accordance with the rules
and procedures of the Depository and the provisions of Section 2.16. In
addition, Physical Securities shall be transferred to all beneficial owners in
exchange for their beneficial inter-
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<PAGE>
ests in Global Securities if (i) the Depository notifies the Company that it is
unwilling or unable to continue as Depository for any Global Security and a
successor Depository is not appointed by the Company within 90 days of such
notice or (ii) an Event of Default has occurred and is continuing and the
Registrar has received a written request from the Depository to issue Physical
Securities.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in a Global Security to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more Physical Securities are to be
issued) reflect on its books and records the date and a decrease in the
principal amount of such Global Security in an amount equal to the principal
amount of the beneficial interest in the Global Security to be transferred, and
the Company shall execute, and the Trustee shall authenticate and deliver, one
or more Physical Securities of authorized denominations in an aggregate
principal amount equal to the principal amount of the beneficial interest in the
Global Security so transferred.
(d) In connection with the transfer of a Global Security as an
entirety to beneficial owners pursuant to paragraph (b) of this Section 2.15,
such Global Security shall be deemed to be surrendered to the Trustee for
cancellation, and the Company shall execute, the Guarantors shall execute
Guarantees on and the Trustee shall upon written instructions from the Company
authenticate and deliver, to each beneficial owner identified by the Depository
in exchange for its beneficial interest in such Global Security, an equal
aggregate principal amount of Physical Securities of authorized denominations.
(e) Any Physical Security constituting a Restricted Security delivered
in exchange for an interest in a Global Security pursuant to paragraph (b) or
(c) of this Section 2.15 shall, except as otherwise provided by Section 2.16,
bear the Private Placement Legend.
(f) The Holder of any Global Security may grant proxies and otherwise
authorize any Person, including Participants and Persons that may hold interests
through Participants,
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<PAGE>
to take any action which a Holder is entitled to take under this Indenture or
the Securities.
SECTION 2.16. Special Transfer Provisions.
---------------------------
(a) Transfers to Non-QIB Institutional Accredited Investors and Non-
---------------------------------------------------------------
U.S. Persons. The following additional provisions shall apply with respect to
- ------------
the registration of any proposed transfer of a Restricted Security to any
Institutional Accredited Investor which is not a QIB or to any Non-U.S. Person:
(i) the Registrar shall register the transfer of any Restricted
Security, whether or not such Security bears the Private Placement Legend,
if (x) the requested transfer is after the second anniversary of the Issue
Date; provided, however, that neither the Company nor any Affiliate of the
-------- -------
Company has held any beneficial interest in such Security, or portion
thereof, at any time on or prior to the second anniversary of the Issue
Date or (y) (1) in the case of a transfer to an Institutional Accredited
Investor which is not a QIB (excluding Non-U.S. Persons), the proposed
transferee has delivered to the Registrar a certificate substantially in
the form of Exhibit C hereto and any legal opinions and certifications
---------
required thereby and (2) in the case of a transfer to a Non-U.S. Person,
the proposed transferor has delivered to the Registrar a certificate
substantially in the form of Exhibit D hereto;
---------
(ii) if the proposed transferee is a Participant and the Securities
to be transferred consist of Physical Securities which after transfer are
to be evidenced by an interest in the IAI Global Security or Regulation S
Global Security, as the case may be, upon receipt by the Registrar of (x)
written instructions given in accordance with the Depository's and the
Registrar's procedures and (y) the appropriate certificate, if any,
required by clause (y) of paragraph (i) above, the Registrar shall register
the transfer and reflect on its books and records the date and an increase
in the principal amount of the IAI Global Security or Regulation S Global
Security, as the case may be, in an amount equal to the principal amount of
Physical
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<PAGE>
Securities to be transferred, and the Registrar shall cancel the Physical
Securities so transferred; and
(iii) if the proposed transferor is a Participant seeking to
transfer an interest in a Global Security, upon receipt by the Registrar of
(x) written instructions given in accordance with the Depository's and the
Registrar's procedures and (y) the appropriate certificate, if any,
required by clause (y) of paragraph (i) above, the Registrar shall register
the transfer and reflect on its books and records the date and (A) a
decrease in the principal amount of the Global Security from which such
interests are to be transferred in an amount equal to the principal amount
of the Securities to be transferred and (B) an increase in the principal
amount of the IAI Global Security or the Regulation S Global Security, as
the case may be, in an amount equal to the principal amount of the
Securities to be transferred.
(b) Transfers to QIBs. The following provisions shall apply with
-----------------
respect to the registration of any proposed transfer of a Restricted Security to
a QIB:
(i) the Registrar shall register the transfer of any Restricted
Security, whether or not such Security bears the Private Placement Legend,
if (x) the requested transfer is after the second anniversary of the Issue
Date; provided, however, that neither the Company nor any Affiliate of the
-------- -------
Company has held any beneficial interest in such Security, or portion
thereof, at any time on or prior to the second anniversary of the Issue
Date or (y) such transfer is being made by a proposed transferor who has
checked the box provided for on the form of Security stating, or has
otherwise advised the Company and the Registrar in writing, that the sale
has been made in compliance with the provisions of Rule 144A to a
transferee who has signed the certification provided for on the form of
Security stating, or has otherwise advised the Company and the Registrar in
writing, that it is purchasing the Security for its own account or an
account with respect to which it exercises sole investment discretion and
that it and any such account is a QIB within the meaning of Rule 144A, and
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<PAGE>
is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as
it has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon
its foregoing representations in order to claim the exemption from
registration provided by Rule 144A;
(ii) if the proposed transferee is a Participant and the
Securities to be transferred consist of Physical Securities which after
transfer are to be evidenced by an interest in the 144A Global Security,
upon receipt by the Registrar of written instructions given in accordance
with the Depository's and the Registrar's procedures, the Registrar shall
register the transfer and reflect on its book and records the date and an
increase in the principal amount of the 144A Global Security in an amount
equal to the principal amount of Physical Securities to be transferred, and
the Registrar shall cancel the Physical Securities so transferred; and
(iii) if the proposed transferor is a Participant seeking to
transfer an interest in the IAI Global Security or the Regulation S Global
Security, upon receipt by the Registrar of written instructions given in
accordance with the Depository's and the Registrar's procedures, the
Registrar shall register the transfer and reflect on its books and records
the date and (A) a decrease in the principal amount of the IAI Global
Security or the Regulation S Global Security, as the case may be, in an
amount equal to the principal amount of the Securities to be transferred
and (B) an increase in the principal amount of the 144A Global Security in
an amount equal to the principal amount of the Securities to be
transferred.
(c) Restrictions on Transfer and Exchange of Global Securities.
----------------------------------------------------------
Notwithstanding any other provisions of this Indenture, a Global Security may
not be transferred as a whole except by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
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<PAGE>
(d) Private Placement Legend. Upon the transfer, exchange or
------------------------
replacement of Securities not bearing the Private Placement Legend, the
Registrar or co-Registrar shall deliver Securities that do not bear the Private
Placement Legend. Upon the transfer, exchange or replacement of Securities
bearing the Private Placement Legend, the Registrar or co-Registrar shall
deliver only Securities that bear the Private Placement Legend unless (i) there
is delivered to the Trustee an Opinion of Counsel reasonably satisfactory to the
Company and the Trustee to the effect that neither such legend nor the related
restrictions on transfer are required in order to maintain compliance with the
provisions of the Securities Act or (ii) such Security has been sold pursuant to
an effective registration statement under the Securities Act.
(e) General. By its acceptance of any Security bearing the Private
-------
Placement Legend, each Holder of such a Security acknowledges the restrictions
on transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security only as provided
in this Indenture.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.15 or this Section 2.16.
The Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Registrar.
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.
------------------
If the Company elects to redeem Securities pursuant to Paragraph 6 or
Paragraph 7 of the Securities, it shall notify the Trustee in writing of the
Redemption Date, the Redemption Price and the principal amount of Securities to
be redeemed. The Company shall give notice of redemption to the Paying Agent
and Trustee at least 45 days but not more than 60
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<PAGE>
days before the Redemption Date (unless a shorter notice shall be agreed to by
the Trustee in writing), together with an Officers' Certificate stating that
such redemption will comply with the conditions contained herein.
SECTION 3.02. Selection of Securities To Be Redeemed.
--------------------------------------
In the event that less than all of the Securities are to be redeemed
at any time, selection of such Securities for redemption will be made by the
Trustee in compliance with the requirements of the principal national securities
exchange, if any, on which such Securities are listed or, if such Securities are
not then listed on a national securities exchange, on a pro rata basis, by lot
--- ----
or by such method as the Trustee shall deem fair and appropriate; provided,
--------
however, that no Securities of a principal amount of $1,000 or less shall be
- -------
redeemed in part; and provided, further, that if a partial redemption is made
-------- -------
with the net cash proceeds of an Equity Offering, selection of the Securities or
portions thereof for redemption shall be made by the Trustee only on a pro rata
--- ----
basis or on as nearly a pro rata basis as is practicable (subject to the
--- ----
procedures of the Depository), unless such method is otherwise prohibited.
SECTION 3.03. Notice of Redemption.
--------------------
At least 30 days but not more than 60 days before a Redemption Date,
the Company shall mail a notice of redemption by first class mail, postage
prepaid, to each Holder whose Securities are to be redeemed at its registered
address. At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. Each notice for
redemption shall identify the Securities to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price and the amount of accrued interest, if
any, to be paid;
(3) the name and address of the Paying Agent;
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<PAGE>
(4) that Securities called for redemption must be surrendered to
the Paying Agent to collect the Redemption Price plus accrued interest, if
any;
(5) that, unless the Company defaults in making the redemption
payment, interest on Securities called for redemption ceases to accrue on
and after the Redemption Date, and the only remaining right of the Holders
of such Securities is to receive payment of the Redemption Price upon
surrender to the Paying Agent of the Securities redeemed;
(6) if any Security is being redeemed in part, the portion of the
principal amount of such Security to be redeemed and that, after the
Redemption Date, and upon surrender of such Security, a new Security or
Securities in aggregate principal amount equal to the unredeemed portion
thereof will be issued;
(7) if fewer than all the Securities are to be redeemed, the
identification of the particular Securities (or portion thereof) to be
redeemed, as well as the aggregate principal amount of Securities to be
redeemed and the aggregate principal amount of Securities to be outstanding
after such partial redemption; and
(8) the Paragraph of the Securities pursuant to which the
Securities are to be redeemed.
The notice, if mailed in a manner herein provided, shall be
conclusively presumed to have been given, whether or not the Holder receives
such notice. In any case, failure to give such notice by mail or any defect in
the notice to the Holder of any Security designated for redemption in whole or
in part shall not affect the validity of the proceedings for the redemption of
any other Security.
SECTION 3.04. Effect of Notice of Redemption.
------------------------------
Once notice of redemption is mailed in accordance with Section 3.03,
Securities called for redemption become due and payable on the Redemption Date
and at the Redemption Price plus accrued interest, if any. Upon surrender to
the Trustee
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<PAGE>
or Paying Agent, such Securities called for redemption shall be paid at the
Redemption Price (which shall include accrued interest thereon to the Redemption
Date), but installments of interest, the maturity of which is on or prior to the
Redemption Date, shall be payable to Holders of record at the close of business
on the relevant Record Dates.
SECTION 3.05. Deposit of Redemption Price.
---------------------------
On or before 11:00 a.m. New York time on the Redemption Date, the
Company shall deposit with the Paying Agent U.S. Legal Tender sufficient to pay
the Redemption Price plus accrued interest, if any, of all Securities to be
redeemed on that date.
If the Company complies with the preceding paragraph, then, unless the
Company defaults in the payment of such Redemption Price plus accrued interest,
if any, interest on the Securities to be redeemed will cease to accrue on and
after the applicable Redemption Date, whether or not such Securities are
presented for payment.
SECTION 3.06. Securities Redeemed in Part.
---------------------------
Upon surrender of a Security that is to be redeemed in part only, the
Trustee shall upon written instruction from the Company authenticate for the
Holder a new Security or Securities in a principal amount equal to the
unredeemed portion of the Security surrendered.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities.
---------------------
The Company shall pay the principal of and interest on the Securities
in the manner provided in the Securities. An installment of principal of or
interest on the Securities shall be considered paid on the date it is due if the
Trustee or Paying Agent holds on that date U.S. Legal Tender designated for
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<PAGE>
and sufficient to pay the installment. Interest on the Securities will be
computed on the basis of a 360-day year comprised of twelve 30-day months.
SECTION 4.02. Maintenance of Office or Agency.
-------------------------------
The Company shall maintain in the Borough of Manhattan, The City of
New York, the office or agency required under Section 2.03. The Company shall
give prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the address of the Trustee set forth in Section 13.02.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations. 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.
The Company hereby initially designates the Corporate Trust Office of
the Trustee located in the Borough of Manhattan, The City of New York, as such
office of the Company in accordance with Section 2.03.
SECTION 4.03. Limitation on Restricted Payments.
---------------------------------
The Company shall not, and shall not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, (a) declare or pay any
dividend or make any distribution (other than dividends or distributions payable
in Qualified Capital Stock of the Company) on or in respect of shares of the
Company's Capital Stock to holders of such Capital Stock, (b) 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, (c) make (i) any principal payment on, purchase, defease, redeem,
prepay, decrease or otherwise acquire or retire
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<PAGE>
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, including, without
limitation, the Convertible Subordinated Notes (except a conversion thereof into
Qualified Capital Stock) and (ii) any cash interest payments on the Convertible
Subordinated Notes or (d) make any Investment (other than Permitted Investments)
(each of the foregoing actions set forth in clauses (a), (b), (c) and (d) being
referred to as a Restricted Payment"), if immediately after giving effect to the
------------------
Restricted Payment, (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 (other than Permitted Indebtedness) in compliance with
Section 4.04 or (iii) the aggregate amount of Restricted Payments (including
such proposed Restricted Payment) made subsequent to the Issue 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 senior management
or, in the case of any such property in excess of $5 million, 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 Issue
Date and on or prior to the date the Restricted Payment occurs (the "Reference
---------
Date") (treating such period as a single accounting period); plus (x) 100% of
- ----
(1) 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 Issue Date and on or prior to the Reference Date of Qualified Capital
Stock of the Company and (2) the fair market value (as determined in good faith
by senior management or, in the case of a fair market value in excess of $5
million, by the Board of Directors of the Company) of shares of Qualified
Capital Stock of the Company issued subsequent to the Issue Date and on or prior
to the Reference Date in connection with Asset Acquisitions and other
acquisitions of property after the Issue Date; plus (y) without duplication of
any amounts included in clause (iii)(x) above, 100% of (1) the aggregate net
cash proceeds and (2) the fair market value of property other than cash (as
determined in good faith by senior management or, in the case of a fair market
value in excess of $5 million, by
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<PAGE>
the Board of Directors of the Company), in each case of any equity contribution
received by the Company from a holder of the Company's Capital Stock subsequent
to the Issue Date and on or prior to the Reference Date; plus (z) without
duplication, the sum of (1) the aggregate amount returned in cash on or with
respect to Investments (other than Permitted Investments) made subsequent to the
Issue Date whether through interest payments, principal payments, dividends or
other distributions or payments, (2) the net cash proceeds received by the
Company or any of its Restricted Subsidiaries from the disposition of all or any
portion of such Investments (other than to a Subsidiary of the Company) and (3)
upon redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary, the
fair market value of such Subsidiary; provided, however, that the sum of clauses
-------- -------
(1), (2) and (3) above shall not exceed the aggregate amount of all such
Investments made subsequent to the Issue Date.
Notwithstanding the foregoing, the provisions set forth in the
immediately preceding paragraph do not prohibit: (1) the payment of any
dividend within 60 days after the date of declaration of such dividend if the
dividend would have been permitted on the date of declaration; (2) if no Default
or Event of Default shall have occurred and be continuing, the acquisition of
any shares of Capital Stock of the Company, either (i) solely in exchange for
shares of Qualified Capital Stock of the Company or (ii) through the application
of net proceeds of a substantially concurrent sale for cash (other than to a
Subsidiary of the Company) of shares of Qualified Capital Stock of the Company;
(3) if no Default or Event of Default shall have occurred and be continuing, the
acquisition of any Indebtedness of the Company that is subordinate or junior in
right of payment to the Securities either (i) solely in exchange for shares of
Qualified Capital Stock of the Company, or (ii) through the application of net
proceeds of a substantially concurrent sale for cash (other than to a Subsidiary
of the Company) of (A) shares of Qualified Capital Stock of the Company or (B)
Refinancing Indebtedness; (4) so long as no Default or Event of Default shall
have occurred and be continuing, repurchases by the Company of Common Stock of
the Company from employees of the Company or any of its Subsidiaries or their
authorized representatives upon the death, disability or termination of
employment of such employees, in an aggregate amount not to exceed $5 million in
any calendar year; (5) the consummation of the Tender Offer; (6) so long as no
Default or Event of Default shall have occurred or be continuing, the
declaration and pay-
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<PAGE>
ment of dividends to holders of any class or series of Preferred Stock of the
Company (other than Disqualified Capital Stock) issued after the Issue Date,
provided that after giving effect to such issuance on a pro forma basis, the
--- -----
Company would be permitted to incur at least $1.00 of additional Indebtedness
(other than Permitted Indebtedness) pursuant to Section 4.04; (7) cash payments
in lieu of payment of (i) fractional Convertible Subordinated Notes in lieu of
cash interest thereon or (ii) fractional shares of Common Stock of the Company
upon conversion of Convertible Subordinated Notes; and (8) other Restricted
Payments in an aggregate amount not to exceed $2.0 million. In determining the
aggregate amount of Restricted Payments made subsequent to the Issue Date in
accordance with clause (4)(iii) of the immediately preceding paragraph, amounts
expended pursuant to clauses (1), (2)(ii), (4) and (6) above shall be included
in such calculation.
Not later than the date of making any Restricted Payment, the Company
shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment complies with this Indenture and setting forth in reasonable
detail the basis upon which the required calculations were computed, which
calculations may be based upon the Company's latest available internal quarterly
financial statements.
SECTION 4.04. Limitation on Incurrence of Additional Indebtedness.
---------------------------------------------------
The Company shall not, and shall not permit any of its Restricted
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
-----
(other than Permitted Indebtedness); provided, however, that if no Default or
-------- -------
Event of Default shall have occurred and be continuing at the time of or as a
consequence of the incurrence of any such Indebtedness, the Company or any of
its Restricted Subsidiaries that is or, upon such incurrence, becomes a
Guarantor may incur Indebtedness (including, without limitation, Acquired
Indebtedness) and any Restricted Subsidiary of the Company that is not and will
not, upon such incurrence, become a Guarantor may incur Acquired Indebtedness,
in each case if on the date of the incurrence of such Indebtedness, after giving
effect to the incurrence thereof, the Consolidated Fixed Charge Coverage Ratio
of the Company is greater than 2.25 to 1.0 if such incur-
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<PAGE>
rence is on or prior to November 1, 2000 and 2.5 to 1.0 if such incurrence is
thereafter.
SECTION 4.05. Corporate Existence.
-------------------
Except as otherwise permitted by Article Five, the Company shall do or
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence and the corporate, partnership or other existence
of each of its Restricted Subsidiaries in accordance with the respective
organizational documents of each such Restricted Subsidiary and the rights
(charter and statutory) and material franchises of the Company and each of its
Restricted Subsidiaries; provided, however, that the Company shall not be
-------- -------
required to preserve any such right, franchise or corporate existence with
respect to each such Restricted Subsidiary if the Board of Directors of the
Company shall determine that the loss thereof is not, and will not be, adverse
in any material respect to the Holders.
SECTION 4.06. Payment of Taxes and Other Claims.
---------------------------------
The Company shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) all material taxes, assessments and
governmental charges levied or imposed upon it or any of its Subsidiaries or
upon the income, profits or property of it or any of its Restricted Subsidiaries
and (b) all lawful claims for labor, materials and supplies which, in each case,
if unpaid, might by law become a material liability or Lien upon the property of
it or any of its Restricted Subsidiaries; provided, however, that the Company
-------- -------
shall not be required to pay or discharge or cause to be paid or discharged any
such tax, assessment, charge or claim whose amount, (i) the applicability or
validity is being contested in good faith by appropriate proceedings and for
which appropriate provision has been made or (ii) where the failure to effect
such payment or discharge is not adverse in any material respect to the Holders.
SECTION 4.07. Maintenance of Properties and Insurance.
---------------------------------------
(a) The Company shall cause all material properties owned by or
leased by it or any of its Restricted Subsidiaries
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used or useful to the conduct of its business or the business of any of its
Restricted Subsidiaries to be maintained and kept in normal condition, repair
and working order and supplied with all necessary equipment and shall cause to
be made all repairs, renewals, replacements, and betterments thereof, all as in
its judgment may be necessary, so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
--------
however, that nothing in this Section 4.07 shall prevent the Company or any of
- -------
its Restricted Subsidiaries from discontinuing the use, operation or maintenance
of any of such properties, or disposing of any of them, if such discontinuance
or disposal is, in the judgment of the Board of Directors of the Company or any
such Restricted Subsidiary desirable in the conduct of the business of the
Company or any such Restricted Subsidiary, and if such discontinuance or
disposal is not adverse in any material respect to the Holders; provided,
--------
further, that nothing in this Section 4.07 shall prevent the Company or any of
- -------
its Restricted Subsidiaries from discontinuing or disposing of any properties to
the extent otherwise permitted by this Indenture.
(b) The Company shall maintain, and shall cause its Restricted
Subsidiaries to maintain, insurance with responsible carriers against such risks
and in such amounts, and with such deductibles, retentions, self-insured amounts
and co-insurance provisions, as are customarily carried by similar businesses of
similar size, including property and casualty loss, workers' compensation and
interruption of business insurance.
SECTION 4.08. Compliance Certificate; Notice of Default.
-----------------------------------------
(a) The Company shall deliver to the Trustee, within 120 days after
the close of each fiscal year (which on the date hereof is December 31) an
Officers' Certificate stating that a review of the activities of the Company has
been made under the supervision of the signing officers with a view to
determining whether it has kept, observed, performed and fulfilled its
obligations under this Indenture and further stating, as to each such Officer
signing such certificate, that to the best of such Officer's knowledge, the
Company during such preceding fiscal year has kept, observed, performed and
fulfilled each and every such covenant and no Default or Event of Default
occurred dur-
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ing such year and at the date of such certificate there is no Default or Event
of Default that has occurred and is continuing or, if such signers do know of
such Default or Event of Default, the certificate shall describe its status with
particularity. The Officers' Certificate shall also notify the Trustee should
the Company elect to change the manner in which it fixes its fiscal year end.
(b) The annual financial statements delivered pursuant to Section
4.10 shall be accompanied by a written report of the Company's independent
accountants (who shall be a firm of established national reputation) that in
conducting their audit of such financial statements nothing has come to their
attention that would lead them to believe that the Company has violated any
provisions of Article Four, Five or Six of this Indenture insofar as they relate
to accounting matters or, if any such violation has occurred, specifying the
nature and period of existence thereof, it being understood that such
accountants shall not be liable directly or indirectly to any Person for any
failure to obtain knowledge of any such violation.
(c) The Company shall deliver to the Trustee, forthwith upon becoming
aware of any Default or Event of Default in the performance of any covenant,
agreement or condition contained in this Indenture, an Officers' Certificate
specifying the Default or Event of Default and describing its status with
particularity.
SECTION 4.09. Compliance with Laws.
--------------------
The Company shall comply, and shall cause each of its Subsidiaries to
comply, with all applicable statutes, rules, regulations, orders and
restrictions of the United States, all states and municipalities thereof, and of
any governmental department, commission, board, regulatory authority, bureau,
agency and instrumentality of the foregoing, in respect of the conduct of their
respective businesses and the ownership of their respective properties, except
for such noncompliances as would not in the aggregate have a material adverse
effect on the financial condition or results of operations of the Company and
its Subsidiaries taken as a whole.
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SECTION 4.10. Reports to Holders.
------------------
Whether or not required by the rules and regulations of the
Commission, so long as any Securities are outstanding, the Company shall furnish
the Holders of Securities:
(1) all quarterly and annual financial information that would be
required to be contained in a filing with the Commission on Forms 10-Q and
10-K if the Company were required to file such Forms, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" that describes the financial condition and results of
operations of the Company and its consolidated Subsidiaries (showing in
reasonable detail, either on the face of the financial statements or in the
footnotes thereto, the financial condition and results of operations of the
Company and its Restricted Subsidiaries separate from the financial
condition and results of operations of the Unrestricted Subsidiaries of the
Company, if any) and, with respect to the annual information only, a report
thereon by the Company's certified independent accountants; and
(2) all current reports that would be required to be filed with the
Commission on Form 8-K if the Company were required to file such reports,
in each case within two days after the time periods specified in the
Commission's rules and regulations.
In addition, following the consummation of the exchange offer
contemplated by the Registration Rights Agreement, whether or not required by
the rules and regulations of the Commission, the Company will file a copy of all
such information and reports with the Commission for public availability within
the time periods specified in the Commission's rules and regulations (unless the
Commission will not accept such a filing) and make such information available to
securities analysts and prospective investors upon request. In addition, for so
long as any Securities remain outstanding, the Company shall furnish to the
Holders and to securities analysts and prospective investors, upon their
request, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities
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Act. The Company will also comply with the other provisions of TIA (S) 314(a).
SECTION 4.11. Waiver of Stay, Extension or Usury Laws.
---------------------------------------
Each of the Company and each Guarantor covenants (to the extent that
it may lawfully do so) that it will not at any time insist upon, plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law that would prohibit or forgive the
Company or such Guarantor from paying all or any portion of the principal of
and/or interest on the Securities or the Guarantee of any such Guarantor as
contemplated herein, wherever enacted, now or at any time hereafter in force, or
which may affect the covenants or the performance of this Indenture, and (to the
extent that it may lawfully do so) each 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.
SECTION 4.12. Limitations on Transactions with Affiliates.
-------------------------------------------
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or permit to exist any
transaction or series of related transactions (including, without limitation,
the purchase, sale, lease or exchange of any property or the rendering of any
service) with, or for the benefit of, any of its Affiliates (each an "Affiliate
---------
Transaction"), other than (x) Affiliate Transactions permitted under paragraph
- -----------
(b) below and (y) Affiliate Transactions on terms that are no less favorable
than those that might reasonably have been obtained in a comparable transaction
at such time on an arm's-length basis from a Person that is not an Affiliate of
the Company or such Restricted Subsidiary. All Affiliate Transactions (and each
series of related Affiliate Transactions which are similar or part of a common
plan) involving aggregate payments or other property with a fair market value in
excess of $3.0 million shall be approved by the Board of Directors of the
Company or such Restricted Subsidiary, as the case may be, such approval to be
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evidenced by a Board Resolution stating that such Board of Directors has
determined that such transaction complies with the foregoing provisions. If the
Company or any Restricted Subsidiary of the Company enters into an Affiliate
Transaction (or a series of related Affiliate Transactions related to a common
plan) that involves an aggregate fair market value of more than $10.0 million,
the Company or such Restricted Subsidiary, as the case may be, shall, prior to
the consummation thereof, obtain a favorable opinion as to the fairness of such
transaction or series of related transactions to the Company or the relevant
Restricted Subsidiary, as the case may be, from a financial point of view, from
an Independent Financial Advisor and file the same with the Trustee.
(b) The restrictions set forth in clause (a) shall not apply to (i)
reasonable fees and compensation paid to and indemnity provided on behalf of,
officers, directors, employees, consultants or investment bankers of the Company
or any Restricted Subsidiary of the Company as determined in good faith by the
Company's Board of Directors or senior management; (ii) transactions exclusively
between or among the Company and any of its Wholly Owned Restricted Subsidiaries
or exclusively between or among such Wholly Owned Restricted Subsidiaries,
provided such transactions are not otherwise prohibited by this Indenture; (iii)
- --------
any agreement as in effect as of the Issue Date or any amendment thereto or any
transaction contemplated thereby (including pursuant to any amendment thereto)
or any replacement agreement thereto so long as any such amendment or
replacement agreement is not more disadvantageous to the Holders in any material
respect than the original agreement as in effect on the Issue Date; (iv)
Restricted Payments permitted by this Indenture; (v) transactions in which the
Company or any of its Restricted Subsidiaries, as the case may be, delivers to
the Trustee a letter from an Independent Financial Advisor stating that such
transaction is fair to the Company or such Restricted Subsidiary from a
financial point of view or meets the requirements of the first sentence of this
Section 4.12; (vi) the existence of, or the performance by the Company or any of
its Restricted Subsidiaries of its obligations under the terms of, the
Investors' Rights Agreement, the Securities Purchase Agreement, any
stockholders' agreement (including any registration rights agreement or purchase
agreement related
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thereto) to which it is a party as of the Issue Date and any similar agreements
which it may enter into thereafter; provided, however, that the existence of, or
-------- -------
the performance by the Company or any of its Restricted Subsidiaries of
obligations under, any future amendment to any such existing agreement or under
any similar agreement entered into after the Issue Date shall only be permitted
by this clause (vi) to the extent that the terms of any such amendment or new
agreement are not otherwise disadvantageous to the Holders of the Securities in
any material respect; (vii) the issuance of securities or other payments, awards
or grants, in cash, securities or otherwise, pursuant to, or the funding of,
employment arrangements, stock options and stock ownership plans approved by the
Board of Directors of the Company in good faith and loans to employees of the
Company and its Subsidiaries which are approved by senior management of the
Company in good faith; (viii) the payment of all fees and expenses related to
the Transactions; (ix) transactions with customers, clients, suppliers,
purchasers or sellers of goods or services, in each case in the ordinary course
of business and otherwise in compliance with the terms of this Indenture, which
are fair to the Company or its Restricted Subsidiaries, in the reasonable
determination of senior management of the Company, or are on terms at least as
favorable as might reasonably have been obtained at such time from an
unaffiliated party; and (x) transactions reasonably related to (x) the exercise
of rights and remedies with respect to the Convertible Subordinated Notes or (y)
the conversion or exchange of the Convertible Subordinated Notes (each to the
extent not otherwise prohibited in this Indenture).
SECTION 4.13. Limitation on Dividend and Other Payment Restrictions Affecting
---------------------------------------------------------------
Restricted Subsidiaries.
-----------------------
The Company shall not, and shall not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
permit to exist or become effective any encumbrance or restriction on the
ability of any Restricted Subsidiary of the Company to (a) pay dividends or make
any other distributions on or in respect of its Capital Stock; (b) make loans or
advances or to pay any Indebtedness or other obligation owed to the Company or
any other Restricted Subsidi-
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<PAGE>
ary of the Company; or (c) transfer any of its property or assets to the Company
or any other Restricted Subsidiary of the Company, except, with respect to each
of clauses (a), (b) or (c), for such encumbrances or restrictions existing under
or by reason of: (1) applicable law; (2) this Indenture; (3) customary non-
assignment provisions of any contract or any lease governing a leasehold
interest of, or any license held by, any Restricted Subsidiary of the Company;
(4) any instrument governing Acquired Indebtedness, which encumbrance or
restriction is not applicable to any Person, or the properties or assets of any
Person, other than the Person or the properties or assets of the Person so
acquired; (5) the Credit Agreement; (6) agreements existing on the Issue Date to
the extent and in the manner such agreements are in effect on the Issue Date;
(7) an agreement governing Indebtedness incurred to Refinance the Indebtedness
issued, assumed or incurred pursuant to an agreement referred to in clauses (2),
(4), (5) or (6) above and (8) and (10) below; provided, however, that the
-------- -------
provisions relating to such encumbrance or restriction contained in any such
Indebtedness are no less favorable to the Company in any material respect as
determined by the Board of Directors of the Company or senior management in its
reasonable and good faith judgment than the provisions relating to such
encumbrance or restriction contained in agreements referred to in such clause
(2), (4), (5), (6), (8) and (10); (8) purchase money obligations for property
acquired in the ordinary course of business that impose restrictions of the
nature discussed in clause (c) above on the property so acquired; (9) contracts
for the sale of assets, including without limitation, customary restrictions
with respect to a Restricted Subsidiary of the Company pursuant to an agreement
that has been entered into for the sale or disposition of the Capital Stock or
assets of such Restricted Subsidiary; (10) secured Indebtedness otherwise
permitted to be incurred pursuant to Sections 4.04 and 4.14 that limits the
right of the debtor to dispose of the assets securing such Indebtedness; (11)
customary provisions in joint venture agreements, licenses and leases and other
similar agreements entered into in the ordinary course of business; (12) net
worth provisions in leases and other agreements entered into by the Company or
any Restricted Subsidiary; and (13) an agreement governing Indebtedness
(including any Credit Facilities) permitted to be incurred pursuant to Section
4.04; provided that provi-
--------
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sions relating to such encumbrance or restriction contained in such Indebtedness
are no less favorable to the Company in any material respect as determined by
senior management of the Company in its reasonable and good faith judgment than
the provisions contained in the Credit Agreement as in effect on the Issue Date.
SECTION 4.14. Limitation on Liens.
-------------------
The Company shall not, and shall not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, assume or
permit or suffer to exist any Liens of any kind against or upon any property or
assets of the Company or any of its Restricted Subsidiaries whether owned on the
Issue Date or acquired after the Issue Date, or any proceeds therefrom, or
assign or otherwise convey any right to receive income or profits therefrom
unless (i) in the case of Liens securing Indebtedness that is expressly
subordinate or junior in right of payment to the Securities, the Securities are
secured by a Lien on such property, assets or proceeds that is senior in
priority to such Liens and (ii) in all other cases, the Securities are equally
and ratably secured, except for (A) Liens existing as of the Issue Date to the
extent and in the manner such Liens are in effect on the Issue Date; (B) Liens
securing Senior Debt and Liens securing Guarantor Senior Debt; (C) Liens
securing the Securities and the Guarantees; (D) Liens of the Company or a Wholly
Owned Restricted Subsidiary of the Company on assets of any Restricted
Subsidiary of the Company; (E) Liens securing Refinancing Indebtedness which is
incurred to Refinance any Indebtedness which has been secured by a Lien
permitted under this Indenture and which has been incurred in accordance with
the provisions of this Indenture; provided, however, that such Liens (x) are no
-------- -------
less favorable to the Holders and are not more favorable to the lienholders with
respect to such Liens than the Liens in respect of the Indebtedness being
Refinanced and (y) do not extend to or cover any property or assets of the
Company or any of its Restricted Subsidiaries not securing the Indebtedness so
Refinanced; and (F) Permitted Liens.
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<PAGE>
SECTION 4.15. Change of Control.
-----------------
(a) Upon the occurrence of a Change of Control, the Company shall be
obligated to make an offer to purchase (the "Change of Control Offer"), and
-----------------------
shall purchase, on a Business Day (the "Change of Control Payment Date") as
------------------------------
described below, all of the then outstanding Securities at a purchase price
equal to 101% of the principal amount thereof, plus accrued and unpaid interest,
if any, thereon to the Change of Control Payment Date. The Change of Control
Offer shall remain open for at least 20 Business Days and until the close of
business on the Change of Control Payment Date.
(b) 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 Agreement and all other Senior Debt 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 Agreement and all other such Senior Debt
and to repay the Indebtedness owed to each lender which has accepted such offer
or (ii) obtain the requisite consents under the Credit Agreement and all other
Senior Debt to permit the repurchase of the Securities as provided below. The
Company shall first comply with the covenant in the immediately preceding
sentence before it shall be required to repurchase Securities pursuant to the
provisions described below. The Company's failure to comply with the covenant
described in the second preceding sentence (and any failure to send the notice
referred to in clause (c) below because same is prohibited by the second
preceding sentence) may (with notice and lapse of time) constitute an Event of
Default described in clause (c) of Section 6.01 but shall not constitute an
Event of Default described in clause (b) of Section 6.01.
(c) Within 30 days following the date upon which a Change of Control
occurs (the "Change of Control Date"), the Company shall send, by first class
----------------------
mail, a notice to each Holder, with a copy to the Trustee, which notice shall
govern the terms of the Change of Control Offer. The notice to the Holders
shall contain all instructions and materials necessary
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to enable such Holders to tender Securities pursuant to the Change of Control
Offer. Such notice shall state:
(1) that the Change of Control Offer is being made pursuant to this
Section 4.15 and that all Securities tendered and not withdrawn will be
accepted for payment;
(2) the purchase price (including the amount of accrued interest)
and the Change of Control Payment Date, which shall be a Business Day, that
is not earlier than 30 days or later than 60 days from the date such notice
is mailed;
(3) that any Security not tendered will continue to accrue
interest;
(4) that, unless the Company defaults in making payment therefor,
any Security accepted for payment pursuant to the Change of Control Offer
shall cease to accrue interest after the Change of Control Payment Date;
(5) that Holders electing to have a Security purchased pursuant to
a Change of Control Offer will be required to surrender the Security, with
the form entitled "Option of Holder to Elect Purchase" on the reverse of
the Security completed, to the Paying Agent at the address specified in the
notice prior to the close of business on the third Business Day prior to
the Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the second Business Day prior to the
Change of Control Payment Date, a telegram, telex, facsimile transmission
or letter setting forth the name of the Holder, the principal amount of the
Securities the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Security purchased;
(7) that Holders whose Securities are purchased only in part will
be issued new Securities in a principal amount equal to the unpurchased
portion of the Securities surrendered; and
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<PAGE>
(8) the circumstances and relevant facts regarding such Change of
Control.
On or before the Change of Control Payment Date, the Company shall (i)
accept for payment Securities or portions thereof tendered pursuant to the
Change of Control Offer, (ii) deposit with the Paying Agent U.S. Legal Tender
sufficient to pay the purchase price plus accrued interest, if any, of all
Securities so tendered and (iii) deliver to the Trustee Securities so accepted
together with an Officers' Certificate stating the Securities or portions
thereof being purchased by the Company. The Paying Agent shall promptly mail to
the Holders of Securities so accepted payment in an amount equal to the purchase
price plus accrued interest, if any, and upon written order of the Company the
Trustee shall promptly authenticate and mail to such Holders new Securities
equal in principal amount to any unpurchased portion of the Securities
surrendered. Any Securities not so accepted shall be promptly mailed by the
Company to the Holder thereof. For purposes of this Section 4.15, the Trustee
shall act as the Paying Agent.
Any amounts remaining with the Paying Agent after the purchase of
Securities pursuant to a Change of Control Offer shall be returned by the
Trustee to the Company.
The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Securities pursuant to a Change of Control Offer. To the extent
the provisions of any securities laws or regulations conflict with the
provisions of this Section 4.15, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under this Section 4.15 by virtue thereof.
SECTION 4.16. Limitation on Asset Sales.
-------------------------
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless (i) the Company or the
applicable Restricted Subsidiary, as the case may be, receives consideration at
the time of such Asset Sale at least equal to the fair market value of the
assets sold
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<PAGE>
or otherwise disposed of (as determined in good faith by senior management or,
in the case of an Asset Sale in excess of $5 million, by the Company's Board of
Directors); (ii) at least 75% of the consideration received by the Company or
the Restricted Subsidiary, as the case may be, from such Asset Sale shall be in
the form of cash or Cash Equivalents and is received at the time of such
disposition; provided that the amount of (a) any liabilities (as shown on the
--------
Company's or such Restricted Subsidiary's most recent balance sheet) of the
Company or any Restricted Subsidiary (other than liabilities that are by their
terms subordinated to the Securities) that are assumed by the transferee of any
such assets, and (b) any notes or other obligations received by the Company or
any such Restricted Subsidiary from such transferee that are converted by the
Company or such Restricted Subsidiary into cash within 180 days after such Asset
Sale (to the extent of the cash received) shall be deemed to be cash for the
purposes of this provision; and (iii) upon the consummation of an Asset Sale,
the Company shall apply, or cause such Restricted Subsidiary to apply, the Net
Cash Proceeds relating to such Asset Sale within 360 days of receipt thereof
either (A) to prepay any Senior Debt or Guarantor Senior Debt and, in the case
of any Senior Debt or Guarantor Senior Debt under any revolving credit facility,
effect a permanent reduction in the availability under such revolving credit
facility, (B) to make an Investment in properties and assets that replace the
properties and assets that were the subject of such Asset Sale or in properties
and assets that will be used in the business of the Company and its Restricted
Subsidiaries as existing on the Issue Date or in businesses reasonably related,
complementary or ancillary thereto or a reasonable expansion thereof
("Replacement Assets"), and/or (C) a combination of prepayment and investment
------------------
permitted by the foregoing clauses (iii)(A) and (iii)(B). On the 361st day after
an Asset Sale or such earlier date, if any, as the senior management or Board of
Directors, as the case may be, of the Company or of such Restricted Subsidiary
determines not to apply the Net Cash Proceeds relating to such Asset Sale as set
forth in clauses (iii)(A), (iii)(B) and (iii)(C) of the next preceding sentence
(each, a "Net Proceeds Offer Trigger Date"), such aggregate amount of Net Cash
-------------------------------
Proceeds which have not been applied on or before such Net Proceeds Offer
Trigger Date as permitted in clauses (iii)(A), (iii)(B) and (iii)(C) of the next
preceding sentence (each a "Net Proceeds Offer Amount") shall be applied by the
-------------------------
Company or such Restricted Subsidiary to make an offer to purchase (the "Net
---
Proceeds Offer") on a date (the "Net Proceeds Offer Payment Date") not less than
- -------------- -------------------------------
30 nor more than 60 days following the applicable Net
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<PAGE>
Proceeds Offer Trigger Date, from all Holders on a pro rata basis, that amount
--- ----
of Securities equal to the Net Proceeds Offer Amount at a price equal to 100% of
the principal amount of the Securities to be purchased, plus accrued and unpaid
interest thereon, if any, to the date of purchase; provided, however, that if at
-------- -------
any time any non-cash consideration received by the Company or any Restricted
Subsidiary of the Company, as the case may be, in connection with any Asset Sale
is converted into or sold or otherwise disposed of for cash (other than interest
received with respect to any such non-cash consideration), then such conversion
or disposition shall be deemed to constitute an Asset Sale hereunder and the Net
Cash Proceeds thereof shall be applied in accordance with this Section 4.16. The
Company may defer the Net Proceeds Offer until there is an aggregate unutilized
Net Proceeds Offer Amount equal to or in excess of $10.0 million resulting from
one or more Asset Sales (at which time, the entire unutilized Net Proceeds Offer
Amount, and not just the amount in excess of $10.0 million, shall be applied as
required pursuant to this paragraph).
In the event of the transfer of substantially all (but not all) of the
property and assets of the Company and its Restricted Subsidiaries as an
entirety to a Person in a transaction permitted under Section 5.01, which
transaction does not constitute a Change of Control, the successor corporation
shall be deemed to have sold the properties and assets of the Company and its
Restricted Subsidiaries not so transferred for purposes of this Section 4.16,
and shall comply with the provisions of this Section 4.16 with respect to such
deemed sale as if it were an Asset Sale. In addition, the fair market value of
such properties and assets of the Company or its Restricted Subsidiaries deemed
to be sold shall be deemed to be Net Cash Proceeds for purposes of this Section
4.16.
Notwithstanding the first two paragraphs of this Section 4.16, the
Company and its Restricted Subsidiaries will be permitted to consummate an Asset
Sale without complying with such paragraphs to the extent that:
(1) at least 75% of the consideration for such Asset Sale constitutes
Replacement Assets; and
(2) such Asset Sale is for fair market value;
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<PAGE>
provided that any consideration not constituting Replacement Assets received by
- --------
the Company or any of its Restricted Subsidiaries in connection with any Asset
Sale permitted to be consummated under this paragraph shall constitute Net Cash
Proceeds subject to the provisions of the first two paragraphs of this Section
4.16.
Notice of each Net Proceeds Offer pursuant to this Section 4.16 shall
be mailed or caused to be mailed, by first class mail, by the Company within 30
days following the applicable Net Proceeds Offer Trigger Date to all Holders at
their last registered addresses, with a copy to the Trustee. A Net Proceeds
Offer shall remain open for a period of 20 Business Days or such longer period
as may be required by law. The notice shall contain all instructions and
materials necessary to enable such Holders to tender Securities pursuant to the
Net Proceeds Offer and shall state the following terms:
(1) that the Net Proceeds Offer is being made pursuant to this
Section 4.16 and that all Securities tendered will be accepted for payment;
provided, however, that if the principal amount of Securities tendered in
-------- -------
the Net Proceeds Offer exceeds the aggregate amount of Net Proceeds Offer
Amount, the Company shall select the Securities to be purchased on a pro
rata basis;
(2) the purchase price (including the amount of accrued interest, if
any) and the purchase date (which shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed, other than as may
be required by applicable law);
(3) that any Security not tendered will continue to accrue interest;
(4) that, unless the Company defaults in making payment therefor, any
Security accepted for payment pursuant to the Net Proceeds Offer shall
cease to accrue interest after the Net Proceeds Offer Payment Date;
(5) that Holders electing to have a Security purchased pursuant to
the Net Proceeds Offer will be required
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<PAGE>
to surrender the Security, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Security completed, to the Paying
Agent at the address specified in the notice prior to the close of business
on the Net Proceeds Offer Payment Date;
(6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the second Business Day prior to the
Net Proceeds Offer Payment Date, a facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the Security the
Holder delivered for purchase and a statement that such Holder is
withdrawing his election to have such Security purchased; and
(7) that Holders whose Securities are purchased only in part will be
issued new Securities in a principal amount at maturity equal to the
unpurchased portion of the Securities surrendered.
On or before the Net Proceeds Offer Payment Date, the Company shall
(i) accept for payment Securities or portions thereof tendered pursuant to the
Net Proceeds Offer, (ii) deposit with the Paying Agent U.S. Legal Tender
sufficient to pay the purchase price, plus accrued interest, if any, of all
Securities to be purchased and (iii) deliver to the Trustee Securities so
accepted together with an Officers' Certificate stating the Securities or
portions thereof being purchased by the Company. The Paying Agent shall
promptly mail to the Holders of Securities so accepted payment in an amount
equal to the purchase price, plus accrued interest, if any, thereon set forth in
the notice of such Net Proceeds Offer. Any Security not so accepted shall be
promptly mailed by the Company to the Holder thereof. For purposes of this
Section 4.16, the Trustee shall act as the Paying Agent. Any amounts remaining
after the purchase of Securities pursuant to a Net Proceeds Offer shall be
returned by the Trustee to the Company.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Securities
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<PAGE>
pursuant to a Net Proceeds Offer. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of this Section
4.16, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
Section 4.16 by virtue thereof.
SECTION 4.17. Prohibition on Incurrence of Senior Subordinated Debt.
-----------------------------------------------------
The Company shall not, and shall not permit any Restricted Subsidiary
that is a Guarantor to, incur or suffer to exist Indebtedness that is senior in
right of payment to the Securities or such Guarantor's Guarantee, as the case
may be, and subordinate in right of payment to any other Indebtedness of the
Company or such Guarantor, as the case may be.
SECTION 4.18. Additional Subsidiary Guarantees.
--------------------------------
If the Company or any of its Restricted Subsidiaries transfers or
causes to be transferred, in one transaction or a series of related
transactions, any property to any Domestic Restricted Subsidiary that is not a
Guarantor, or if the Company or any of its Restricted Subsidiaries shall
organize, acquire or otherwise invest in another Domestic Restricted Subsidiary
having total assets with a book value in excess of $1 million, then such
transferee or acquired or other Restricted Subsidiary shall (i) execute and
deliver to the Trustee a supplemental indenture pursuant to which such
Restricted Subsidiary shall unconditionally guarantee all of the Company's
obligations under the Securities and this Indenture on the terms set forth in
this Indenture and (ii) deliver to the Trustee an Opinion of Counsel that such
supplemental indenture has been duly authorized, executed and delivered by such
Restricted Subsidiary and constitutes a legal, valid, binding and enforceable
obligation of such Restricted Subsidiary. Thereafter, such Restricted
Subsidiary shall be a Guarantor for all purposes of this Indenture.
SECTION 4.19. Conduct of Business.
-------------------
The Company and its Restricted Subsidiaries shall not engage in any
businesses which are not substantially related, ancillary or complementary to
the businesses in which the Com-
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<PAGE>
pany and its Restricted Subsidiaries are engaged on the Issue Date or a
reasonable expansion thereof.
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. Merger, Consolidation and Sale of Assets.
----------------------------------------
(a) The Company shall not, in a single transaction or series of
related transactions, consolidate or merge with or into any Person, or sell,
assign, transfer, lease, convey or otherwise dispose of (or cause or permit any
Restricted Subsidiary of the Company to sell, assign, transfer, lease, convey or
otherwise dispose of) all or substantially all of the Company's assets
(determined on a consolidated basis for the Company and the Company's Restricted
Subsidiaries) whether as an entirety or substantially as an entirety to any
Person unless: (i) either (1) the Company shall be the surviving or continuing
corporation or (2) the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or the Person which acquires
by sale, assignment, transfer, lease, conveyance or other disposition the
properties and assets of the Company and of the Company's Restricted
Subsidiaries substantially as an entirety (the "Surviving Entity"); (x) shall be
----------------
a corporation, partnership, trust or a limited liability company organized and
validly existing under the laws of the United States or any State thereof or the
District of Columbia and (y) shall expressly assume, by supplemental indenture,
executed and delivered to the Trustee, the due and punctual payment of the
principal of, and premium, if any, and interest on all of the Securities and the
performance of every covenant of the Securities, this Indenture and the
Registration Rights Agreement on the part of the Company to be performed or
observed; provided that if at any time the Company or the Surviving Entity is a
--------
limited liability company, partnership or trust, there shall be a co-issuer of
the Securities that is a Restricted Subsidiary of the Company and that is a
corporation organized and existing under the laws of the United States or any
State thereof or
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<PAGE>
the District of Columbia; (ii) immediately after giving effect to such
transaction and the assumption contemplated by clause (i)(2)(y) above (including
giving effect to any Indebtedness and Acquired Indebtedness incurred or
anticipated to be incurred in connection with or in respect of such
transaction), the Company or such Surviving Entity, as the case may be shall be
able to incur at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) pursuant to Section 4.04; (iii) immediately before and immediately
after giving effect to such transaction and the assumption contemplated by
clause (i)(2)(y) above (including, without limitation, giving effect to any
Indebtedness and Acquired Indebtedness incurred or anticipated to be incurred
and any Lien granted in connection with or in respect of the transaction), no
Default or Event of Default shall have occurred or be continuing; and (iv) the
Company or the Surviving Entity shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger, sale, assignment, transfer, lease, conveyance or other disposition and,
if a supplemental indenture is required in connection with such transaction,
such supplemental indenture comply with the applicable provisions of this
Indenture and that all conditions precedent in this Indenture relating to such
transaction have been satisfied. Notwithstanding the foregoing, the merger of
the Company with an Affiliate incorporated solely for the purpose of
reincorporating the Company in another jurisdiction shall be permitted.
(b) For purposes of the foregoing paragraph (a), the transfer (by
lease, assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all of the properties or assets of one or
more Restricted Subsidiaries of the Company the Capital Stock of which
constitutes all or substantially all of the properties and assets of the
Company, shall be deemed to be the transfer of all or substantially all of the
properties and assets of the Company.
(c) Each Guarantor (other than any Guarantor whose Guarantee is to be
released in accordance with the terms of the Guarantee and this Indenture in
connection with any transaction complying with the provisions of Section 4.16)
shall not, and the Company shall not cause or permit any Guarantor to,
con-
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<PAGE>
solidate with or merge with or into any Person other than the Company or any
other Guarantor unless: (i) the entity formed by or surviving any such
consolidation or merger (if other than the Guarantor) is a corporation,
partnership, trust or limited liability company organized and existing under the
laws of the United States or any State thereof or the District of Columbia; (ii)
such entity assumes by supplemental indenture all of the obligations of the
Guarantor on the Guarantee; (iii) immediately after giving effect to such
transaction, no Default or Event of Default shall have occurred and be
continuing; and (iv) immediately after giving effect to such transaction and the
use of any net proceeds therefrom on a pro forma basis, the Company could
--- -----
satisfy the provisions of clause (a) (ii) of this Section 5.01. Any merger or
consolidation of a Guarantor with and into the Company (with the Company being
the surviving entity) or another Guarantor that is a Wholly Owned Restricted
Subsidiary of the Company need only comply with clause (a) (iv) of Section 5.01.
SECTION 5.02. Successor Corporation Substituted.
---------------------------------
Upon any consolidation, combination or merger or any transfer of all
or substantially all of the assets of the Company in accordance with Section
5.01 in which the Company is not the continuing corporation, the successor
Person formed by such consolidation or into which the Company is merged or to
which such conveyance, lease or transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture and the Securities with the same effect as if such Surviving
Entity had been named as such.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.
-----------------
Each of the following shall be an "Event of Default":
----------------
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(a) the failure to pay interest on any Securities when the same
becomes due and payable and the default continues for a period of 30 days
(whether or not such payment shall be prohibited by Article Ten or Article
Twelve of this Indenture);
(b) the failure to pay the principal on any Securities, when such
principal becomes due and payable, at maturity, upon redemption or
otherwise (including the failure to make a payment to purchase Securities
tendered pursuant to a Change of Control Offer or a Net Proceeds Offer on
the date specified for such payment in the applicable offer to purchase)
(whether or not such payment shall be prohibited by Article Ten or Article
Twelve of this Indenture);
(c) a default in the observance or performance of any other covenant
or agreement contained in this Indenture, which default continues for a
period of 30 days after the Company receives written notice specifying the
default (and demanding that such default be remedied) from the Trustee or
the Holders of at least 25% of the outstanding principal amount of the
Securities;
(d) the failure to pay at final 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 (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) if the aggregate principal amount of such Indebtedness,
together with the principal amount of any other such Indebtedness in
default for failure to pay principal at final 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;
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(e) one or more judgments in an aggregate amount in excess of $10.0
million (exclusive of amounts covered by insurance) shall have been
rendered against the Company or any of its Significant Subsidiaries and
such judgments remain undischarged, unpaid or unstayed for a period of 60
days after such judgment or judgments become final and non-appealable;
(f) the Company or any of its Significant Subsidiaries (i) commences
a voluntary case or proceeding under any Bankruptcy Law with respect to
itself, (ii) consents to the entry of a judgment, decree or order for
relief against it in an involuntary case or proceeding under any Bankruptcy
Law, (iii) consents to the appointment of a custodian of it or for
substantially all of its property, (iv) consents to or acquiesces in the
institution of a bankruptcy or an insolvency proceeding against it, (v)
makes a general assignment for the benefit of its creditors or (vi) takes
any corporate action to authorize or effect any of the foregoing;
(g) a court of competent jurisdiction enters a judgment, decree or
order for relief in respect of the Company or any of its Significant
Subsidiaries in an involuntary case or proceeding under any Bankruptcy Law,
which shall (i) approve as properly filed a petition seeking
reorganization, arrangement, adjustment or composition in respect of the
Company or any of its Significant Subsidiaries, (ii) appoint a Custodian of
the Company or any of its Significant Subsidiaries or for substantially all
of any of its property or (iii) order the winding-up or liquidation of its
affairs; and such judgment, decree or order shall remain unstayed and in
effect for a period of 60 consecutive days; or
(h) any Guarantee of a Significant Subsidiary ceases to be in full
force and effect or any Guarantee of a Significant Subsidiary is declared
to be null and void and unenforceable or any Guarantee of a Significant
Subsidiary is found to be invalid or any Guarantor that is a Significant
Subsidiary denies its liability under its Guarantee
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(other than by reason of release of a Guarantor in accordance with the
terms of this Indenture).
SECTION 6.02. Acceleration.
------------
If an Event of Default (other than an Event of Default specified in
either clause (f) or (g) of Section 6.01 above with respect to the Company)
shall occur and be continuing, the Trustee or the Holders of at least 25% in
principal amount of outstanding Securities may declare the principal of and
accrued interest on all the Securities to be due and payable by notice in
writing to the Company (and the Trustee if given by the Holders) specifying the
respective Event of Default and 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 Agreement,
shall become immediately due and payable upon the first to occur of an
acceleration under the Credit Agreement or 5 business days after receipt by the
Company and the Representative under the Credit Agreement of such Acceleration
Notice but only if such Event of Default is then continuing. If an Event of
Default specified in either clause (f) or (g) of Section 6.01 above with respect
to the Company occurs and is continuing, then all unpaid principal of, and
premium, if any, and accrued and unpaid interest on all of the outstanding
Securities shall ipso facto become and be immediately due and payable without
---- -----
any declaration or other act on the part of the Trustee or any Holder.
At any time after a declaration of acceleration with respect to the
Securities as described in the preceding paragraph, the Holders of a majority in
principal amount of the Securities may rescind and cancel such declaration and
its consequences (i) if the rescission would not conflict with any judgment or
decree, (ii) if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of the
acceleration, (iii) to the extent the payment of such interest is lawful,
interest on overdue installments of interest and overdue principal, which has
become due otherwise than by such declaration of acceleration, has been paid,
(iv) if the Company has paid the Trustee its reasonable compensation and
reimbursed the Trustee
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for its expenses, disbursements and advances and (v) in the event of the cure or
waiver of an Event of Default of the type described in either clause (f) or (g)
of Section 6.01, the Trustee shall have received an Officers' Certificate and an
Opinion of Counsel that such Event of Default has been cured or waived. No such
rescission shall affect any subsequent Default or impair any right consequent
thereto.
SECTION 6.03. Other Remedies.
--------------
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
SECTION 6.04. Waiver of Past Defaults.
-----------------------
Subject to Sections 2.09, 6.07 and 9.02, the Holders of not less than
a majority in principal amount of the outstanding Securities by notice to the
Trustee may waive an existing Default or Event of Default and its consequences,
except a Default in the payment of principal of or interest on any Security as
specified in clauses (a) and (b) of Section 6.01. The Company shall deliver to
the Trustee an Officers' Certificate stating that the requisite percentage of
Holders have consented to such waiver and attaching copies of such consents.
When a Default or Event of Default is waived, it is cured and ceases.
SECTION 6.05. Control by Majority.
-------------------
The Holders of not less than a majority in principal amount of the
outstanding Securities may direct the time,
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method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on it. Subject to Section
7.01, however, the Trustee may refuse to follow any direction that conflicts
with any law or this Indenture, that the Trustee determines may be unduly
prejudicial to the rights of another Securityholder, or that may involve the
Trustee in personal liability; provided that the Trustee may take any other
--------
action deemed proper by the Trustee which is not inconsistent with such
direction.
In the event the Trustee takes any action or follows any direction
pursuant to this Indenture, the Trustee shall be entitled to indemnification
satisfactory to it in its sole discretion against any loss or expense caused by
taking such action or following such direction.
SECTION 6.06. Limitation on Suits.
-------------------
A Securityholder may not pursue any remedy with respect to this
Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(2) the Holder or Holders of at least 25% in principal amount of the
outstanding Securities make a written request to the Trustee to pursue the
remedy;
(3) such Holder or Holders offer and, if requested, provide to the
Trustee indemnity satisfactory to the Trustee against any loss, liability
or expense;
(4) the Trustee does not comply with the request within 45 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(5) during such 45-day period the Holder or Holders of a majority
in principal amount of the outstanding Securities do not give the Trustee a
direction which, in the opinion of the Trustee, is inconsistent with the
request.
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A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over such other
Securityholder.
SECTION 6.07. Rights of Holders To Receive Payment.
------------------------------------
Notwithstanding any other provision of this Indenture, the right of
any Holder to receive payment of principal of and interest on a Security, on or
after the respective due dates expressed in such Security, or to bring suit for
the enforcement of any such payment on or after such respective dates, shall not
be impaired or affected without the consent of the Holder.
SECTION 6.08. Collection Suit by Trustee.
--------------------------
If an Event of Default in payment of principal or interest specified
in clause (a) or (b) of Section 6.01 occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company or any other obligor on the Securities for the whole amount of principal
and accrued interest and fees remaining unpaid, together with interest on
overdue principal and, to the extent that payment of such interest is lawful,
interest on overdue installments of interest, in each case at the rate per annum
--- -----
borne by the Securities and such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09. Trustee May File Proofs of Claim.
--------------------------------
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Securityholders allowed in any judicial proceedings relating to the Company, its
creditors or its property and shall be entitled and empowered to collect and
receive any monies or other property payable or deliverable on any such claims
and to distribute the same, and any Custodian in any such judicial proceedings
is
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hereby authorized by each Securityholder 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 Securityholders, to pay to the Trustee any amount due to it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agent and counsel, and any other amounts due the Trustee under
Section 7.07. Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Securityholder
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 Securityholder in any such proceeding.
SECTION 6.10. Priorities.
----------
If the Trustee collects any money or property pursuant to this Article
Six, it shall pay out the money or property in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to Holders for interest accrued on the Securities, ratably,
without preference or priority of any kind, according to the amounts due
and payable on the Securities for interest;
Third: to Holders for principal amounts due and unpaid on the
Securities, ratably, without preference or priority of any kind, according
to the amounts due and payable on the Securities for principal; and
Fourth: to the Company or, if applicable, the Guarantors, as their
respective interests may appear.
The Trustee, upon prior notice to the Company, may fix a record date
and payment date for any payment to Securityholders pursuant to this Section
6.10.
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SECTION 6.11. Undertaking for Costs.
---------------------
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07, or a suit by a Holder or Holders of more than 10% in
principal amount of the outstanding Securities.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.
-----------------
(a) If a Default or an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture and use the same degree of care and skill in their exercise
as a prudent person would exercise or use under the circumstances in the conduct
of his or her own affairs.
(b) Except during the continuance of a Default or an Event of
Default:
(1) The Trustee need perform only those duties as are specifically
set forth herein or in the TIA and no duties, covenants, responsibilities
or obligations shall be implied in this Indenture against the Trustee.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates (including Officers'
Certifi-
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cates) or opinions (including Opinions of Counsel) furnished to the Trustee
and conforming to the requirements of this Indenture. However, the Trustee
shall examine the certificates and opinions to determine whether or not
they conform to the requirements of this Indenture.
(c) Notwithstanding anything to the contrary herein, the Trustee may
not be relieved from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of
this Section 7.01.
(2) The Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) 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 to take or omit to take any action
under this Indenture or take any action at the request or direction of Holders
if it shall have reasonable grounds for believing that repayment of such funds
is not assured to it.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to this Section 7.01.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
(g) In the absence of bad faith, negligence or willful misconduct on
the part of the Trustee, the Trustee shall
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not be responsible for the application of any money by any Paying Agent other
than the Trustee.
SECTION 7.02. Rights of Trustee.
-----------------
Subject to Section 7.01:
(a) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper Person. The Trustee
need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate and an Opinion of Counsel, which shall conform to
the provisions of Section 13.05. The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on such
certificate or opinion.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent (other
than an agent who is an employee of the Trustee) appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it reasonably believes to be authorized or
within its rights or powers.
(e) The Trustee may consult with counsel and the advice or opinion of
such counsel as to matters of law shall be full and complete authorization
and protection from liability in respect of any action taken, omitted or
suffered by it hereunder in good faith and in accordance with the advice or
opinion of such counsel.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders pursuant to the provisions of this
Indenture, unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which may
be incurred therein or thereby.
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<PAGE>
(g) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate (including any
Officers' Certificate), statement, instrument, opinion (including any
Opinion of Counsel), notice, request, direction, consent, order, bond,
debenture, 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, upon reasonable notice to
the Company, to examine the books, records, and premises of the Company,
personally or by agent or attorney.
(h) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
(i) The permissive rights of the Trustee to do things enumerated in
this Indenture shall not be construed as duties.
SECTION 7.03. Individual Rights of Trustee.
----------------------------
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company, its
Subsidiaries, or their respective Affiliates with the same rights it would have
if it were not Trustee. Any Agent may do the same with like rights. However,
the Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer.
--------------------
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture or the Securities, it shall not
be accountable for the Company's use of the proceeds from the Securities, and it
shall not be responsible for any statement of the Company in this Indenture or
any document issued in connection with the sale of Securities or any statement
in the Securities other than the Trustee's certificate of authentication. The
Trustee makes no
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representations with respect to the effectiveness or adequacy of this Indenture.
SECTION 7.05. Notice of Default.
-----------------
If a Default or an Event of Default occurs and is continuing and the
Trustee receives actual notice of such Default or Event of Default, the Trustee
shall mail to each Securityholder notice of the uncured Default or Event of
Default within 60 days after such Default or Event of Default occurs. Except in
the case of a Default or an Event of Default in payment of principal of, or
interest on, any Security, including an accelerated payment and the failure to
make payment on the Change of Control Payment Date pursuant to a Change of
Control Offer or the Net Proceeds Offer Payment Date pursuant to a Net Proceeds
Offer, the Trustee may withhold the notice if and so long as the Board of
Directors, the executive committee, or a trust committee of directors and/or
Responsible Officers, of the Trustee in good faith determines that withholding
the notice is in the interest of the Securityholders.
SECTION 7.06. Reports by Trustee to Holders.
-----------------------------
Within 60 days after each May 15, beginning with the first May 15
following the date of this Indenture, the Trustee shall, to the extent that any
of the events described in TIA (S) 313(a) occurred within the previous twelve
months, but not otherwise, mail to each Securityholder a brief report dated as
of such date that complies with TIA (S) 313(a). The Trustee also shall comply
with TIA (S)(S) 313(b), 313(c) and 313(d).
A copy of each report at the time of its mailing to Securityholders
shall be mailed to the Company and filed with the Commission and each securities
exchange, if any, on which the Securities are listed.
The Company shall notify the Trustee if the Securities become listed
on any securities exchange or of any delisting thereof and the Trustee shall
comply with TIA (S) 313(d).
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<PAGE>
SECTION 7.07. Compensation and Indemnity.
--------------------------
The Company shall pay to the Trustee from time to time reasonable
compensation for its services hereunder. The Trustee's compensation shall not
be limited by any law on compensation of a trustee of an express trust. The
Company shall reimburse the Trustee upon request for all reasonable
disbursements, expenses and advances (including reasonable fees and expenses of
counsel) incurred or made by it in addition to the compensation for its
services, except any such disbursements, expenses and advances as may be
attributable to the Trustee's negligence, bad faith or willful misconduct. Such
expenses shall include the reasonable fees and expenses of the Trustee's agents
and counsel.
The Company shall indemnify the Trustee and its agents, employees,
officers, stockholders and directors for, and hold them harmless against, any
loss, liability or expense incurred by them except for such actions to the
extent caused by any negligence, bad faith or willful misconduct on their part,
arising out of or in connection with the acceptance or administration of this
trust including the reasonable costs and expenses of defending themselves
against or investigating any claim or liability in connection with the exercise
or performance of any of the Trustee's rights, powers or duties hereunder. The
Trustee shall notify the Company promptly of any claim asserted against the
Trustee or any of its agents, employees, officers, stockholders and directors
for which it may seek indemnity. The Company may, subject to the approval of
the Trustee, defend the claim and the Trustee shall cooperate in the defense.
The Trustee and its agents, employees, officers, stockholders and directors
subject to the claim may have separate counsel and the Company shall pay the
reasonable fees and expenses of such counsel; provided, however, that the
-------- -------
Company will not be required to pay such fees and expenses if, subject to the
approval of the Trustee, it assumes the Trustee's defense and there is no
conflict of interest between the Company and the Trustee and its agents,
employees, officers, stockholders and directors subject to the claim in
connection with such defense as reasonably determined by the Trustee. The
Company need not pay for any settlement made without its written consent. The
Company need not reimburse any expense or in-
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demnify against any loss or liability to the extent incurred by the Trustee
through its negligence, bad faith or willful misconduct.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a senior claim prior to the Securities against all money or
property held or collected by the Trustee, in its capacity as Trustee. The
obligations of the Company and the Guarantors under this Section shall not be
subordinated to the payment of Senior Debt pursuant to Article Ten or Article
Twelve except assets or money held in trust to pay principal of or interest on
particular Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in clause (f) or (g) of Section 6.01 occurs, such expenses and
the compensation for such services shall be paid to the extent allowed under any
Bankruptcy Law.
Notwithstanding any other provision in this Indenture, the foregoing
provisions of this Section 7.07 shall survive the satisfaction and discharge of
the Indenture or the appointment of a successor Trustee.
SECTION 7.08. Replacement of Trustee.
----------------------
The Trustee may resign at any time by so notifying the Company in
writing. The Holders of a majority in principal amount of the outstanding
Securities may remove the Trustee by so notifying the Company and the Trustee
and may appoint a successor Trustee. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee becomes incapable of acting.
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If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall notify each Holder of such
event and shall promptly appoint a successor Trustee. Within one year after the
successor Trustee takes office, the Holders of a majority in principal amount of
the Securities may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer, after payment of all sums then owing to the
Trustee pursuant to Section 7.07, all property held by it as Trustee to the
successor Trustee, subject to the Lien provided in Section 7.07, the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. A successor Trustee shall mail notice of its succession to each
Securityholder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the outstanding Securities may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, Etc.
--------------------------------
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if
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such resulting, surviving or transferee corporation is otherwise eligible
hereunder, be the successor Trustee; provided that such corporation shall be
--------
otherwise qualified and eligible under this Article Seven.
SECTION 7.10. Eligibility; Disqualification.
-----------------------------
This Indenture shall always have a Trustee who satisfies the
requirement of TIA (S)(S) 310(a)(1), 310(a)(2) and 310(a)(5). The Trustee shall
have a combined capital and surplus of at least $50,000,000 as set forth in its
most recent published annual report of condition. In addition, if the Trustee
is a corporation included in a bank holding company system, the Trustee,
independently of the bank holding company, shall meet the capital requirements
of TIA (S) 310(a)(2). The Trustee shall comply with TIA (S) 310(b); provided,
--------
however, that there shall be excluded from the operation of TIA (S) 310(b)(1)
- -------
any indenture or indentures under which other securities, or certificates of
interest or participation in other securities, of the Company are outstanding,
if the requirements for such exclusion set forth in TIA (S) 310(b)(1) are met.
The provisions of TIA (S) 310 shall apply to the Company and any other obligor
of the Securities.
SECTION 7.11. Preferential Collection of Claims Against Company.
-------------------------------------------------
The Trustee, in its capacity as Trustee hereunder shall comply with
TIA (S) 311(a), excluding any creditor relationship listed in TIA (S) 311(b). A
Trustee who has resigned or been removed shall be subject to TIA (S) 311(a) to
the extent indicated.
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Termination of the Company's Obligations.
----------------------------------------
The Company may terminate its obligations under the Securities and
this Indenture, except those obligations re-
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ferred to in the penultimate paragraph of this Section 8.01, if all Securities
previously authenticated and delivered (other than destroyed, lost or stolen
Securities which have been replaced or paid or Securities for whose payment U.S.
Legal Tender has theretofore been deposited with the Trustee or the Paying Agent
in trust or segregated and held in trust by the Company and thereafter repaid to
the Company, as provided in Section 8.05) have been delivered to the Trustee for
cancellation and the Company has paid all sums payable by it hereunder, or if:
(a) either (i) pursuant to Article Three, the Company shall have
given notice to the Trustee and mailed a notice of redemption to each
Holder of the redemption of all of the Securities in accordance with the
provisions hereof or (ii) all Securities have otherwise become due and
payable hereunder;
(b) the Company shall have irrevocably deposited or caused to be
deposited with the Trustee or a trustee satisfactory to the Trustee, under
the terms of an irrevocable trust agreement in form and substance
satisfactory to the Trustee, as trust funds in trust solely for the benefit
of the Holders of that purpose, U.S. Legal Tender in such amount as is
sufficient without consideration of reinvestment of such interest, to pay
principal of, premium, if any, and interest on the outstanding Securities
to maturity or redemption; provided that the Trustee shall have been
--------
irrevocably instructed to apply such U.S. Legal Tender to the payment of
said principal, premium, if any, and interest with respect to the
Securities and provided, further, that from and after the time of deposit,
-------- -------
the money deposited shall not be subject to the rights of holders of Senior
Debt or Guarantor Senior Debt pursuant to the provisions of Article Ten or
Twelve, as the case may be;
(c) no Default or Event of Default with respect to this Indenture or
the Securities shall have occurred and be continuing on the date of 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, the
Indenture, the Credit Agreement, any other ma-
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terial agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which it is bound;
(d) the Company shall have paid all other sums payable by it
hereunder; and
(e) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent providing for or relating to the termination of the Company's
obligations under the Securities and this Indenture have been complied
with. Such Opinion of Counsel shall also state that such satisfaction and
discharge does not result in a default under the Credit Agreement or any
other material agreement or instrument then known to such counsel that
binds or affects the Company.
Subject to the next sentence and notwithstanding the foregoing
paragraph, the Company's obligations in Sections 2.05, 2.06, 2.07, 2.08, 4.01,
4.02, 7.07, 8.05 and 8.06 shall survive until the Securities are no longer
outstanding pursuant to the last paragraph of Section 2.08. After the
Securities are no longer outstanding, the Company's obligations in Sections
7.07, 8.05 and 8.06 shall survive.
After such delivery or irrevocable deposit, the Trustee upon request
shall acknowledge in writing the discharge of the Company's obligations under
the Securities and this Indenture except for those surviving obligations
specified above.
SECTION 8.02. Legal Defeasance and Covenant Defeasance.
----------------------------------------
(a) The Company may, at its option by Board Resolution of the Board
of Directors of the Company, at any time, elect to have either paragraph (b) or
(c) below be applied to all outstanding Securities upon compliance with the
conditions set forth in Section 8.03.
(b) Upon the Company's exercise under paragraph (a) hereof of the
option applicable to this paragraph (b), the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.03, be deemed to have been
discharged from its obligations with respect to all outstanding Securities on
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the date the conditions set forth below are satisfied (hereinafter, "Legal
-----
Defeasance"). For this purpose, Legal Defeasance means that the Company shall
- ----------
be deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Securities, which shall thereafter be deemed to be "outstanding"
only for the purposes of Section 8.04 hereof and the other Sections of this
Indenture referred to in (i) and (ii) below, and to have satisfied all its other
obligations under such Securities and this Indenture (and the Trustee, on demand
of and at the expense of the Company, shall execute proper instruments
acknowledging the same), and Holders of the Securities and any amounts deposited
under Section 8.03 hereof shall cease to be subject to any obligations to, or
the rights of, any holder of Senior Debt under Article Ten or otherwise, except
for the following provisions, which shall survive until otherwise terminated or
discharged hereunder: (i) the rights of Holders of outstanding Securities to
receive solely from the trust fund described in Section 8.04 hereof, and as more
fully set forth in such Section, payments in respect of the principal of
premium, if any, and interest on such Securities when such payments are due,
(ii) the Company's obligations with respect to such Securities under Article Two
and Section 4.02 hereof, (iii) the rights, powers, trusts, duties and immunities
of the Trustee hereunder and the Company's obligations in connection therewith
and (iv) this Article Eight. Subject to compliance with this Article Eight, the
Company may exercise its option under this paragraph (b) notwithstanding the
prior exercise of its option under paragraph (c) hereof.
(c) Upon the Company's exercise under paragraph (a) hereof of the
option applicable to this paragraph (c), the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.03 hereof, be released
from its obligations under the covenants contained in Sections 4.03, 4.04 and
Sections 4.12 through 4.19 and Article Five hereof with respect to the
outstanding Securities on and after the date the conditions set forth below are
satisfied (hereinafter, "Covenant Defeasance"), and the Securities shall
-------------------
thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes
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<PAGE>
hereunder (it being understood that such Securities shall not be deemed
outstanding for accounting purposes) and Holders of the Securities and any
amounts deposited under Section 8.03 hereof shall cease to be subject to any
obligations to, or the rights of, any holder of Senior Debt under Article Ten or
otherwise. For this purpose, such Covenant Defeasance means that, with respect
to the outstanding Securities, the Company may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of Default under
Section 6.01(c) hereof, but, except as specified above, the remainder of this
Indenture and such Securities shall be unaffected thereby. In addition, upon the
Company's exercise under paragraph (a) hereof of the option applicable to this
paragraph (c), subject to the satisfaction of the conditions set forth in
Section 8.03 hereof, Sections 6.01(c), 6.01(d) and 6.01(e) shall not constitute
Events of Default.
SECTION 8.03. Conditions to Legal Defeasance or Covenant Defeasance.
-----------------------------------------------------
The following shall be the conditions to the application of either
Section 8.02(b) or 8.02(c) hereof to the outstanding Securities:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, U.S. Legal Tender or U.S. Government
Obligations or a combination thereof which through the scheduled payment of
principal and interest in respect thereof in accordance with their terms,
will provide, not later than one day before the due date of any payment on
the Securities, U.S. Legal Tender in such amounts as will be sufficient, in
the opinion of a nationally recognized firm of independent public
accountants, to pay the principal of, premium, if any, and
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interest on the Securities on the stated date for payment thereof or on the
applicable redemption date, as the case may be;
(b) in the case of an election under Section 8.02(b) hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Trustee confirming that (A) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (B) since the date of this Indenture, there has
been a change in the applicable federal income tax law, in either case to
the effect that, and based thereon such Opinion of Counsel shall confirm
that, the Holders will not recognize income, gain or loss for federal
income tax purposes as a result of such Legal Defeasance and will be
subject to federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such Legal Defeasance had
not occurred;
(c) in the case of an election under Section 8.02(c) hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Trustee confirming that the
Holders of the Securities will not recognize income, gain or loss for
federal income tax purposes as a result of such Covenant Defeasance and
will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of
Default resulting from the incurrence of Indebtedness all or a portion of
the proceeds of which will be used to defease the Securities pursuant to
this Article Eight concurrently with such incurrence) or insofar as
Sections 6.01(f) and 6.01(g) hereof are concerned, at any time in the
period ending on the 91st day after the date of such deposit;
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<PAGE>
(e) such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute a default under this Indenture, the
Credit Agreement or any other material agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which the Company or
any of its Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders over any other creditors of the Company or
with the intent of defeating, hindering, delaying or defrauding any other
creditors of the Company or others;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with; and
(h) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that (i) the trust funds will not be subject to any
rights of any holders of Senior Debt, including, without limitation, those
arising under this Indenture, and (ii) assuming no intervening bankruptcy
or insolvency of the Company between the date of deposit and the 91st day
following the deposit and that no Holder is an insider of the Company,
after the 91st day following the deposit, the trust funds will not be
subject to the effect of any applicable Bankruptcy Law.
Notwithstanding the foregoing, the Opinion of Counsel required by
clause (b) above of this Section 8.03 with respect to a Legal Defeasance need
not be delivered if all Securities not theretofore delivered to the Trustee for
cancellation (i) have become due and payable or (ii) will become due and payable
on the Maturity Date 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.
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SECTION 8.04. Application of Trust Money.
--------------------------
The Trustee or Paying Agent shall hold in trust U.S. Legal Tender or
U.S. Government Obligations deposited with it pursuant to this Article Eight,
and shall apply the deposited U.S. Legal Tender and the money from U.S.
Government Obligations in accordance with this Indenture to the payment of
principal of and interest on the Securities. The Trustee shall be under no
obligation to invest said U.S. Legal Tender or U.S. Government Obligations
except as it may agree with the Company.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Legal Tender or U.S.
Government Obligations deposited pursuant to Section 8.03 hereof or the
principal and interest received in respect thereof other than any such tax, fee
or other charge which by law is for the account of the Holders of the
outstanding Securities.
Anything in this Article Eight to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the Company's
request any U.S. Legal Tender or U.S. Government Obligations held by it as
provided in Section 8.03 hereof which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, are in excess of the amount thereof that would
then be required to be deposited to effect an equivalent Legal Defeasance or
Covenant Defeasance.
SECTION 8.05. Repayment to the Company.
------------------------
Subject to this Article Eight, the Trustee and the Paying Agent shall
promptly pay to the Company upon request any excess U.S. Legal Tender or U.S.
Government Obligations held by them at any time and thereupon shall be relieved
from all liability with respect to such money. The Trustee and the Paying Agent
shall pay to the Company upon request any money held by them for the payment of
principal or interest that remains unclaimed for two years; provided that the
--------
Trustee or such Paying Agent, before being required to make any payment, may at
the expense of the Company cause to be published once in a newspa-
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per of general circulation in the City of New York or mail to each Holder
entitled to such money notice that such money remains unclaimed and that after a
date specified therein which shall be at least 30 days from the date of such
publication or mailing any unclaimed balance of such money then remaining will
be repaid to the Company. After payment to the Company, Holders entitled to such
money must look to the Company for payment as general creditors unless an
applicable law designates another Person.
SECTION 8.06. Reinstatement.
-------------
If the Trustee or Paying Agent is unable to apply any U.S. Legal
Tender or U.S. Government Obligations in accordance with this Article Eight by
reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Company's obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to this Article Eight until such time as the Trustee or Paying Agent is
permitted to apply all such U.S. Legal Tender or U.S. Government Obligations in
accordance with this Article Eight; provided that if the Company has made any
--------
payment of interest on or principal of any Securities because of the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Securities to receive such payment from the U.S. Legal
Tender or U.S. Government Obligations held by the Trustee or Paying Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders.
--------------------------
Subject to Section 9.03, the Company, the Guarantors and the Trustee,
together, may amend or supplement this Indenture, the Securities or the
Guarantees without notice to or consent of any Securityholder:
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(1) to cure any ambiguity, defect or inconsistency;
(2) to evidence the succession in accordance with Article Five
hereof of another Person to the Company and the assumption by any such
successor of the covenants of the Company herein and in the Securities;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities;
(4) to make any other change that does not adversely affect the
rights of any Securityholders hereunder in any material respect;
(5) to comply with any requirements of the Commission in connection
with the qualification of this Indenture under the TIA; or
(6) to add or release any Guarantor pursuant to the terms of this
Indenture;
provided that the Company has delivered to the Trustee an Opinion of Counsel and
- --------
an Officers' Certificate, each stating that such amendment or supplement
complies with the provisions of this Section 9.01.
SECTION 9.02. With Consent of Holders.
-----------------------
Subject to Sections 6.07 and 9.03, the Company, the Guarantors and the
Trustee, together, with the written consent of the Holder or Holders of at least
a majority in aggregate principal amount of the outstanding Securities, may
amend or supplement this Indenture, the Securities or the Guarantees, without
notice to any other Securityholders. Subject to Sections 6.07 and 9.03, the
Holder or Holders of a majority in aggregate principal amount of the outstanding
Securities may waive compliance by the Company with any provision of this
Indenture, the Securities or the Guarantees without notice to any other
Securityholder. Without the consent of each Securityholder affected, however, no
amendment, supplement or waiver, including a waiver pursuant to Section 6.04,
may:
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(1) reduce the amount of Securities whose Holders must consent to
an amendment, supplement or waiver;
(2) reduce the rate of or change or have the effect of changing the
time for payment of interest, including default interest, on any
Securities;
(3) reduce the principal of or change or have the effect of changing
the fixed maturity of any Securities, or change the date on which any
Securities may be subject to redemption or repurchase, or reduce the
redemption or purchase price therefor;
(4) make any Securities payable in money other than that stated in
the Securities;
(5) make any change in provisions of this Indenture protecting the
right of each Holder to receive payment of principal of and interest on
such Security on or after the due date thereof or to bring suit to enforce
such payment, or permitting Holders of a majority in principal amount of
the Securities to waive Defaults or Events of Default;
(6) modify or change any provision of this Indenture or the related
definitions affecting the subordination or ranking of the Securities or any
Guarantee, in a manner which adversely affects the Holders;
(7) after the Company's obligation to purchase Securities arises
thereunder, amend, modify or change in any material respect the obligation
of the Company to make and consummate a Change of Control Offer in the
event of a Change of Control or make and consummate a Net Proceeds Offer
with respect to any Asset Sale that has been consummated, or modify any of
the provisions or definitions with respect thereto; or
(8) release any Guarantor that is a Significant Subsidiary from any
of its obligations under its Guarantee or this Indenture otherwise than in
accordance with the terms of this Indenture.
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<PAGE>
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such supplemental indenture.
SECTION 9.03. Effect on Senior Debt.
---------------------
No amendment of, or supplement or waiver to, this Indenture shall
adversely affect the rights of any holder of Senior Debt or Guarantor Senior
Debt under Article Ten or Article Twelve, as the case may be, of this Indenture,
without the consent of such holder.
SECTION 9.04. Compliance with TIA.
-------------------
From the date on which this Indenture is qualified under the TIA,
every amendment, waiver or supplement of this Indenture, the Securities or the
Guarantees shall comply with the TIA as then in effect.
SECTION 9.05. Revocation and Effect of Consents.
---------------------------------
Until an amendment, waiver or supplement becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security, even if notation of the consent is not made on
any Security. However, any such Holder or subsequent Holder may revoke the
consent as to his Security or portion of his Security by notice to the Trustee
or the Company received before the date on which the Trustee receives an
Officers' Certificate certifying that the Holders of the requisite principal
amount of Securities have consented (and not theretofore revoked such consent)
to the amendment, supplement or waiver.
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<PAGE>
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver which record date shall be at least 30 days prior to the
first solicitation of such consent. If a record date is fixed, then
notwithstanding the last sentence of the immediately preceding paragraph, those
Persons who were Holders at such record date (or their duly designated proxies),
and only those Persons, shall be entitled to revoke any consent previously
given, whether or not such Persons continue to be Holders after such record
date. No such consent shall be valid or effective for more than 90 days after
such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Securityholder, unless it makes a change described in any of clauses
(1) through (9) of Section 9.02, in which case, the amendment, supplement or
waiver shall bind only each Holder of a Security who has consented to it and
every subsequent Holder of a Security or portion of a Security that evidences
the same debt as the consenting Holder's Security; provided that any such waiver
--------
shall not impair or affect the right of any Holder to receive payment of
principal of and interest on a Security, on or after the respective due dates
expressed in such Security, or to bring suit for the enforcement of any such
payment on or after such respective dates without the consent of such Holder.
SECTION 9.06. Notation on or Exchange of Securities.
-------------------------------------
If an amendment, supplement or waiver changes the terms of a Security,
the Company may require the Holder of the Security to deliver it to the Trustee.
The Company shall provide the Trustee with an appropriate notation on the
Security about the changed terms and cause the Trustee to return it to the
Holder at the Company's expense. Alternatively, if the Company or the Trustee
so determines, the Company in exchange for the Security shall issue and the
Trustee shall authenticate a new Security that reflects the changed terms.
Failure to make the appropriate notation or issue a new Security shall not
affect the validity and effect of such amendment, supplement or waiver.
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<PAGE>
SECTION 9.07. Trustee To Sign Amendments, Etc.
-------------------------------
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article Nine; provided that the Trustee may, but
--------
shall not be obligated to, execute any such amendment, supplement or waiver
which affects the Trustee's own rights, duties or immunities under this
Indenture. The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel and an Officers' Certificate
each stating that the execution of any amendment, supplement or waiver
authorized pursuant to this Article Nine is authorized or permitted by this
Indenture and constituted the legal, valid and binding obligations of the
Company enforceable in accordance with its terms. Such Opinion of Counsel shall
be at the expense of the Company.
ARTICLE TEN
SUBORDINATION OF SECURITIES
SECTION 10.01. Securities Subordinated to Senior Debt.
--------------------------------------
Anything herein to the contrary notwithstanding, the Company, for
itself and its successors, and each Holder, by his or her acceptance of
Securities, agrees that the payment of all Obligations owing to the Holders in
respect of the Securities is subordinated, to the extent and in the manner
provided in this Article Ten, to the prior payment in full in cash or Cash
Equivalents, or such payment duly provided for to the satisfaction of the
holders of Senior Debt, of all Obligations on Senior Debt (including the
Obligations with respect to the Credit Agreement). Notwithstanding the
foregoing, payments and distributions made relating to the Notes pursuant to the
trust described under Article Eight shall not, so long as the conditions
specified in Article Eight (without any waiver or modification of the
requirement that the deposits pursuant thereto do not conflict with the terms of
the Credit Agreement or any other Senior Debt or Guarantor Senior Debt) are
satisfied on
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the date of any deposit pursuant to said trust, be so subordinated in right of
payment.
This Article Ten shall constitute a continuing offer to all Persons
who become holders of, or continue to hold, Senior Debt, and such provisions are
made for the benefit of the holders of Senior Debt and such holders are made
obligees hereunder and any one or more of them may enforce such provisions.
SECTION 10.02. Suspension of Payment When Senior Debt Is in Default.
----------------------------------------------------
(a) If any default occurs and is continuing in the payment when due,
whether at maturity, upon any redemption, by declaration or otherwise, of any
principal of, interest on, unpaid drawings for letters of credit issued in
respect of, or regularly accruing fees with respect to, any Senior Debt (a
"Payment Default"), then no payment or distribution of any kind or character
- ----------------
shall be made by or on behalf of the Company or any other Person on its or their
behalf with respect to any Obligations on or relating to the Securities or to
acquire any of the Securities for cash or property or otherwise.
(b) If any other event of default (other than a Payment Default)
occurs and is continuing with respect to any Designated Senior Debt (as such
event of default is defined in the instrument creating or evidencing such
Designated Senior Debt) permitting the holders of such Designated Senior Debt
then outstanding to accelerate the maturity thereof (a "Non-payment Default")
-------------------
and if the Representative for the respective issue of Designated Senior Debt
gives notice of the event of default to the Trustee stating that such notice is
a payment blockage notice (a "Payment Blockage Notice"), then, unless and until
-----------------------
all events of default have been cured or waived or have ceased to exist or the
Trustee receives notice thereof from the Representative for the respective issue
of Designated Senior Debt terminating the Payment Blockage Period (as defined
below), during the 180 days after the delivery of such Payment Blockage Notice
(the "Payment Blockage Period"), neither the Company nor any other Person on its
-----------------------
behalf shall (x) make any payment of any kind or character with respect to any
Obligations on or with
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<PAGE>
respect to the Securities or (y) acquire any of the Securities for cash or
property or otherwise. Notwithstanding anything herein to the contrary, (x) in
no event will a Payment Blockage Period extend beyond 180 days from the date the
applicable Payment Blockage Notice is received by the Trustee and (y) only one
such Payment Blockage Period may be commenced within any 360 consecutive days.
For all purposes of this Section 10.02(b), 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 Debt shall be, or be made, the basis for
the commencement of a second Payment Blockage Period by the Representative of
such Designated Senior Debt 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).
(c) In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee or any Holder when such payment is prohibited
by the foregoing provisions of this Section 10.02, such payment shall be held in
trust for the benefit of, and shall be paid over or delivered to, the holders of
Senior Debt (pro rata to such holders on the basis of the respective amount of
Senior Debt 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 Debt, if any,
received from the holders of Senior Debt (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 Debt.
Nothing contained in this Article Ten shall limit the right of the
Trustee or the Holders of Securities to take any action to accelerate the
maturity of the Securities pursuant to
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Section 6.02 or to pursue any rights or remedies hereunder; provided that all
--------
Senior Debt thereafter due or declared to be due shall first be paid in full in
cash or Cash Equivalents before the Holders are entitled to receive any payment
of any kind or character with respect to Obligations on the Securities.
SECTION 10.03. Securities Subordinated to Prior Payment of All Senior Debt on
Dissolution, Liquidation or Reorganization of Company.
-----------------------------------------------------
(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 Debt shall
first be paid in full in cash or Cash Equivalents, or such payment duly provided
for to the satisfaction of the holders of Senior Debt, before any payment or
distribution of any kind or character is made on account of any Obligations on
or relating to 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 Debt (pro rata to such holders on the basis of the
respective amounts of Senior Debt held by such holders) or their respective
Representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Senior Debt may have been issued, as their respective
interests may appear, for application to the payment of Senior Debt remaining
unpaid until all such Senior Debt has been paid in full in cash
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<PAGE>
or Cash Equivalents after giving effect to any concurrent payment, distribution
or provision therefor to or for the holders of Senior Debt.
(b) To the extent any payment of Senior Debt (whether by or on behalf
of the Company, as proceeds of security or enforcement of any right of setoff or
otherwise) is declared to be fraudulent or preferential, set aside or required
to be paid to any receiver, trustee in bankruptcy, liquidating trustee, agent or
other similar Person under any bankruptcy, insolvency, receivership, fraudulent
conveyance or similar law, then, if such payment is recovered by, or paid over
to, such receiver, trustee in bankruptcy, liquidating trustee, agent or other
similar Person, the Senior Debt 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 this Section 10.03, 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 Debt (pro rata to such holders on the basis of the
respective amount of Senior Debt held by such holders) or their respective
Representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Senior Debt may have been issued, as their respective
interests may appear, for application to the payment of Senior Debt remaining
unpaid until all such Senior Debt 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 Debt.
(d) The consolidation of the Company with, or the merger of the
Company with or into, another corporation, partnership, trust or limited
liability company or the liquidation or dissolution of the Company following the
conveyance or transfer of all or substantially all of its assets, to another
corporation, partnership, trust or limited liability company upon the terms and
conditions provided in Article Five hereof and as long as permitted under the
terms of the Senior Debt
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<PAGE>
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 Five hereof.
SECTION 10.04. Payments May Be Paid Prior to Dissolution.
-----------------------------------------
Nothing contained in this Article Ten or elsewhere in this Indenture
shall prevent (i) the Company, except under the conditions described in Sections
10.02 and 10.03, from making payments at any time for the purpose of making
payments of principal of and interest 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 Section
10.02 or 10.03, the application by the Trustee of any moneys deposited with it
for the purpose of making such payments of principal of, and interest on, the
Securities 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
a Trust Officer shall have actually received the written notice provided for in
the first sentence of Section 10.02(b) or in Section 10.07 (provided that,
---------
notwithstanding the foregoing, the Holders receiving any payments made in
contravention of Section 10.02 and/or 10.03 (and the respective such payments)
shall otherwise be subject to the provisions of Section 10.02 and Section
10.03). The Company shall give prompt written notice to the Trustee of any
dissolution, winding-up, liquidation or reorganization of the Company, although
any delay or failure to give any such notice shall have no effect on the
subordination provisions contained herein.
SECTION 10.05. Holders To Be Subrogated to Rights of Holders of Senior Debt.
------------------------------------------------------------
Subject to the payment in full in cash or Cash Equivalents of all
Senior Debt, the Holders of the Securities shall be subrogated to the rights of
the holders of Senior Debt to receive payments or distributions of cash,
property or securities of the Company applicable to the Senior Debt until the
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Securities shall be paid in full; and, for the purposes of such subrogation, no
such payments or distributions to the holders of the Senior Debt by or on behalf
of the Company, or by or on behalf of the Holders by virtue of this Article Ten,
which otherwise would have been made to the Holders shall, as between the
Company and the Holders, be deemed to be a payment by the Company to or on
account of the Senior Debt, it being understood that the provisions of this
Article Ten are and are intended solely for the purpose of defining the relative
rights of the Holders, on the one hand, and the holders of Senior Debt, on the
other hand.
SECTION 10.06. Obligations of the Company Unconditional.
----------------------------------------
Nothing contained in this Article Ten or elsewhere in this Indenture
or in the Securities is intended to or shall impair, as among the Company, its
creditors other than the holders of Senior Debt, and the Holders, the obligation
of the Company, which is absolute and unconditional, to pay to the Holders the
principal of and any interest on the Securities as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the Holders and creditors of the Company
other than the holders of the Senior Debt, nor shall anything herein or therein
prevent the Holder of any Security or the Trustee on its behalf from exercising
all remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, in respect of cash, property or
securities of the Company received upon the exercise of any such remedy.
SECTION 10.07. 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 pursuant to the provisions of this
Article Ten, although any delay or failure to give any such notice shall have no
effect on the subordination provisions contained herein. Regardless of anything
to the contrary contained in this Article Ten or elsewhere in this Indenture,
the Trustee shall not be charged with knowledge of the existence of any default
or event of default with respect to any Senior Debt or of
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any other facts which would prohibit the making of any payment to or by the
Trustee unless and until the Trustee shall have received notice in writing from
the Company, or from a holder of Senior Debt or a Representative therefor and,
prior to the receipt of any such written notice, the Trustee shall be entitled
to assume (in the absence of actual knowledge to the contrary) that no such
facts exist. The Trustee shall be entitled to rely on the delivery to it of any
notice pursuant to this Section 10.07 to establish that such notice has been
given by a holder of Senior Debt (or a trustee thereof).
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Senior Debt to participate in any payment or distribution pursuant to this
Article Ten, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amounts of Senior Debt 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 Ten, 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 10.08. Reliance on Judicial Order or Certificate of Liquidating Agent.
--------------------------------------------------------------
Upon any payment or distribution of assets of the Company referred to
in this Article Ten, the Trustee, subject to the provisions of Article Seven
hereof, and the Holders of the Securities shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction in which any
insolvency, bankruptcy, receivership, dissolution, winding-up, liquidation,
reorganization or similar case or proceeding is pending, or upon a certificate
of the receiver, trustee in bankruptcy, liquidating trustee, assignee for the
benefit of creditors, agent or other person making such payment or distribution,
delivered to the Trustee or the Holders of the Securities, for the purpose of
ascertaining the persons entitled to participate in such payment or
distribution, the holders of the Senior Debt and other Indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
dis-
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tributed thereon and all other facts pertinent thereto or to this Article Ten.
SECTION 10.09. Trustee's Relation to Senior Debt.
---------------------------------
The Trustee and any agent of the Company or the Trustee shall be
entitled to all the rights set forth in this Article Ten with respect to any
Senior Debt which may at any time be held by it in its individual or any other
capacity to the same extent as any other holder of Senior Debt and nothing in
this Indenture shall deprive the Trustee or any such agent of any of its rights
as such holder.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article Ten, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt.
Whenever a distribution is to be made or a notice given to holders or
owners of Senior Debt, the distribution may be made and the notice may be given
to their Representative, if any.
SECTION 10.10. Subordination Rights Not Impaired by Acts or Omissions of the
Company or Holders of Senior Debt.
---------------------------------
No right of any present or future holders of any Senior Debt to
enforce subordination as provided herein shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms of this Indenture, regardless of any
knowledge thereof which any such holder may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Debt may, at any time and from time to time, without the
consent of or notice to the Trustee, without incurring responsibility to the
Trustee or
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the Holders of the Securities and without impairing or releasing the
subordination provided in this Article Ten or the obligations hereunder of the
Holders of the Securities to the holders of the Senior Debt, 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 Debt, or otherwise amend or
supplement in any manner Senior Debt, or any instrument evidencing the same or
any agreement under which Senior Debt is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing Senior Debt; (iii) release any Person liable in any manner for the
payment or collection of Senior Debt; and (iv) exercise or refrain from
exercising any rights against the Company and any other Person.
SECTION 10.11. Securityholders Authorize Trustee To Effectuate Subordination of
Securities.
-----------
Each Holder of Securities by its acceptance of them authorizes and
expressly directs the Trustee on its behalf to take such action as may be
necessary or appropriate to effectuate, as between the holders of Senior Debt
and the Holders of Securities, the subordination provided in this Article Ten,
and appoints the Trustee its attorney-in-fact for such purposes, including, in
the event of any dissolution, winding-up, liquidation or reorganization of the
Company (whether in bankruptcy, insolvency, receivership, reorganization or
similar proceedings or upon an assignment for the benefit of credits 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.
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 Debt 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 Debt or their Representative to
authorize
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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 Debt or their Representative to vote in respect of the claim of any
Holder in any such proceeding.
SECTION 10.12. This Article Ten Not To Prevent Events of Default.
-------------------------------------------------
The failure to make a payment on account of principal of or interest
on the Securities by reason of any provision of this Article Ten will not be
construed as preventing the occurrence of an Event of Default.
SECTION 10.13. Trustee's Compensation Not Prejudiced.
-------------------------------------
Nothing in this Article Ten will apply to amounts due to the Trustee
pursuant to other sections of this Indenture.
ARTICLE ELEVEN
GUARANTEE OF SECURITIES
SECTION 11.01. Unconditional Guarantee.
-----------------------
Subject to the provisions of this Article Eleven, each of the
Guarantors hereby, jointly and severally, unconditionally and irrevocably
guarantees, on a senior subordinated basis (such guarantees to be referred to
herein as a "Guarantee") to each Holder of a Security authenticated and
---------
delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of this Indenture, the
Securities or the obligations of the Company or any other Guarantors to the
Holders or the Trustee hereunder or thereunder, that: (a) the principal of,
premium, if any, and interest on the Securities shall be duly and punctually
paid in full when due, whether at maturity, upon redemption at the option of
Holders pursuant to the provisions of the Securities relating thereto, by
acceleration or otherwise, and interest on
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the overdue principal and (to the extent permitted by law) interest, if any, on
the Securities and all other obligations of the Company or the Guarantors to the
Holders or the Trustee hereunder or thereunder (including amounts due the
Trustee under Section 7.07 hereof) and all other obligations shall be promptly
paid in full or performed, all in accordance with the terms hereof and thereof;
and (b) in case of any extension of time of payment or renewal of any Securities
or any of such other obligations, the same shall be promptly paid in full when
due or performed in accordance with the terms of the extension or renewal,
whether at maturity, by acceleration or otherwise. Failing payment when due of
any amount so guaranteed, or failing performance of any other obligation of the
Company to the Holders under this Indenture or under the Securities, for
whatever reason, each Guarantor shall be obligated to pay, or to perform or
cause the performance of, the same immediately. An Event of Default under this
Indenture or the Securities shall constitute an event of default under this
Guarantee, and shall entitle the Holders of Securities to accelerate the
obligations of the Guarantors hereunder in the same manner and to the same
extent as the obligations of the Company.
Each of the Guarantors hereby agrees that its obligations hereunder
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Securities or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Securities with
respect to any provisions hereof or thereof, any release of any other Guarantor,
the recovery of any judgment against the Company, any action to enforce the
same, whether or not a Guarantee is affixed to any particular Security, or any
other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a Guarantor. Each of the Guarantors hereby waives the
benefit of diligence, presentment, demand of payment, filing of claims with a
court in the event of insolvency or bankruptcy of the Company, any right to
require a proceeding first against the Company, protest, notice and all demands
whatsoever and covenants that its Guarantee shall not be discharged except by
complete performance of the obligations contained in the Securities, this
Indenture and this Guarantee. This Guarantee is a guarantee of payment and not
of collection. If any Holder or the Trustee is required by any court or
other-
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wise to return to the Company or to any Guarantor, or any custodian, trustee,
liquidator or other similar official acting in relation to the Company or such
Guarantor, any amount paid by the Company or such Guarantor to the Trustee or
such Holder, this Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect. Each Guarantor further agrees that, as
between it, on the one hand, and the Holders of Securities and the Trustee, on
the other hand, (a) subject to this Article Eleven, the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article Six
hereof for the purposes of this Guarantee, notwithstanding any stay, injunction
or other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (b) in the event of any acceleration of such obligations
as provided in Article Six hereof, such obligations (whether or not due and
payable) shall forthwith become due and payable by the Guarantors for the
purpose of this Guarantee.
No stockholder, officer, director, employee or incorporator, past,
present or future, or any Guarantor, as such, shall have any personal liability
under this Guarantee by reason of his, her or its status as such stockholder,
officer, director, employee or incorporator.
Each Guarantor that makes a payment or distribution under its
Guarantee shall be entitled to a contribution from each other Guarantor,
determined in accordance with GAAP.
SECTION 11.02. Limitations on Guarantees.
-------------------------
The obligations of each Guarantor under its Guarantee are limited to
the maximum amount which, after giving effect to all other contingent and fixed
liabilities of such Guarantor (including without limitation, its guarantee of
Obligations pursuant to the Credit Agreement and any other Guarantor Senior
Debt) and after giving effect to any collections from or payments made by or on
behalf of any other Guarantor in respect of the obligations of such other
Guarantor under its Guarantee or pursuant to its contribution obligations under
this Indenture, will result in the obligations of such Guarantor under the
Guarantee not constituting a fraudulent conveyance or fraudulent transfer under
federal or state law. Each Guarantor that
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makes a payment or distribution under a Guarantee shall be entitled to a
contribution from each other Guarantor in an amount pro rata, based on the net
--- ----
assets of each Guarantor, determined in accordance with GAAP.
SECTION 11.03. Execution and Delivery of Guarantee.
-----------------------------------
To further evidence the Guarantee set forth in Section 11.01, each
Guarantor hereby agrees that a notation of such Guarantee, substantially in the
form of Exhibit E hereto, shall be endorsed on each Security authenticated and
---------
delivered by the Trustee. Such Guarantee shall be executed on behalf of each
Guarantor by either manual or facsimile signature of one Officer of each
Guarantor who shall have been duly authorized to so execute by all requisite
corporation action. The validity and enforceability of any Guarantee shall not
be affected by the fact that it is not affixed to any particular Security.
Each of the Guarantors hereby agrees that its Guarantee set forth in
Section 11.01 shall remain in full force and effect notwithstanding any failure
to endorse on each Security a notation of such Guarantee.
If an Officer of a Guarantor whose signature is on this Indenture or a
Guarantee no longer holds that office at the time the Trustee authenticates the
Security on which such Guarantee is endorsed or at any time thereafter, such
Guarantor's Guarantee of such Security shall nevertheless be valid.
The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of any Guarantee set forth in
this Indenture on behalf of each Guarantor.
SECTION 11.04. Release of a Guarantor.
----------------------
(a) Upon the sale or disposition of all of the Capital Stock of a
Guarantor by the Company, in a transaction or series of related transactions
that either (i) does not constitute an Asset Sale or (ii) constitutes an Asset
Sale the Net Cash Proceeds of which are applied in accordance with Section 4.16,
or upon the consolidation or merger of a Guarantor with or into any Person in
compliance with Article Five (in
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each case, other than to the Company or an Affiliate of the Company), or if any
Guarantor is dissolved or liquidated in accordance with this Indenture, such
Guarantor's Guarantee will be automatically discharged and released from all
obligations under this Article Eleven without any further action required on the
part of the Trustee or any Holder. Any Guarantor not so released or the entity
surviving such Guarantor, as applicable, shall remain or be liable under its
Guarantee as provided in this Article Eleven.
(b) The Trustee shall deliver an appropriate instrument evidencing
the release of a Guarantor upon receipt of a request by the Company or such
Guarantor accompanied by an Officers' Certificate and an Opinion of Counsel
certifying as to the compliance with this Section 11.04; provided, however, that
-------- -------
the legal counsel delivering such Opinion of Counsel may rely as to matters of
fact on one or more Officers' Certificates of the Company.
The Trustee shall execute any documents reasonably requested by the
Company or a Guarantor in order to evidence the release of such Guarantor from
its obligations under its Guarantee endorsed on the Securities and under this
Article Eleven.
Except as set forth in Articles Four and Five and this Section 11.04,
nothing contained in this Indenture or in any of the Securities shall prevent
any consolidation or merger of a Guarantor with or into the Company or another
Guarantor or shall prevent any sale or conveyance of the property of a Guarantor
as an entirety or substantially as an entirety to the Company or another
Guarantor.
SECTION 11.05. Waiver of Subrogation.
---------------------
Until this Indenture is discharged and all of the Securities are
discharged and paid in full, each Guarantor hereby irrevocably waives and agrees
not to exercise any claim or other rights which it may now or hereafter acquire
against the Company that arise from the existence, payment, performance or
enforcement of the Company's obligations under the Securities or this Indenture
and such Guarantor's obligations under this
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Guarantee and this Indenture, in any such instance including, without
limitation, any right of subrogation, reimbursement, exoneration, contribution,
indemnification, and any right to participate in any claim or remedy of the
Holders against the Company, whether or not such claim, remedy or right arises
in equity, or under contract, statute or common law, including, without
limitation, the right to take or receive from the Company, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim or other rights. If any amount
shall be paid to any Guarantor in violation of the preceding sentence and any
amounts owing to the Trustee or the Holders of Securities under the Securities,
this Indenture, or any other document or instrument delivered under or in
connection with such agreements or instruments, shall not have been paid in
full, such amount shall have been deemed to have been paid to such Guarantor for
the benefit of, and held in trust for the benefit of, the Trustee or the Holders
and shall forthwith be paid to the Trustee for the benefit of itself or such
Holders to be credited and applied to the obligations in favor of the Trustee or
the Holders, as the case may be, whether matured or unmatured, in accordance
with the terms of this Indenture. Each Guarantor acknowledges that it will
receive direct and indirect benefits from the financing arrangements
contemplated by this Indenture and that the waiver set forth in this Section
11.05 is knowingly made in contemplation of such benefits.
SECTION 11.06. Immediate Payment.
-----------------
Each Guarantor agrees to make immediate payment to the Trustee on
behalf of the Holders of all Obligations owing or payable to the respective
Holders upon receipt of a demand for payment therefor by the Trustee to such
Guarantor in writing.
SECTION 11.07. No Set-Off.
----------
Each payment to be made by a Guarantor hereunder in respect of the
Obligations shall be payable in the currency or currencies in which such
Obligations are denominated, and shall be made without set-off, counterclaim,
reduction or diminution of any kind or nature.
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SECTION 11.08. Obligations Absolute.
--------------------
The obligations of each Guarantor hereunder are and shall be absolute
and unconditional and any monies or amounts expressed to be owing or payable by
each Guarantor hereunder which may not be recoverable from such Guarantor on the
basis of a Guarantee shall be recoverable from such Guarantor as a primary
obligor and principal debtor in respect thereof.
SECTION 11.09. Obligations Continuing.
----------------------
The obligations of each Guarantor hereunder shall be continuing and
shall remain in full force and effect until all the obligations have been paid
and satisfied in full. Each Guarantor agrees with the Trustee that it will from
time to time deliver to the Trustee suitable acknowledgments of this continued
liability hereunder and under any other instrument or instruments in such form
as counsel to the Trustee may advise and as will prevent any action brought
against it in respect of any default hereunder being barred by any statute of
limitations now or hereafter in force and, in the event of the failure of a
Guarantor so to do, it hereby irrevocably appoints the Trustee the attorney and
agent of such Guarantor to make, execute and deliver such written acknowledgment
or acknowledgments or other instruments as may from time to time become
necessary or advisable, in the judgment of the Trustee on the advice of counsel,
to fully maintain and keep in force the liability of such Guarantor hereunder.
SECTION 11.10. Obligations Not Reduced.
-----------------------
The obligations of each Guarantor hereunder shall not be satisfied,
reduced or discharged solely by the payment of such principal, premium, if any,
interest, fees and other monies or amounts as may at any time prior to discharge
of this Indenture pursuant to Article Eight be or become owing or payable under
or by virtue of or otherwise in connection with the Securities or this
Indenture.
SECTION 11.11. Obligations Reinstated.
----------------------
The obligations of each Guarantor hereunder shall continue to be
effective or shall be reinstated, as the case
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may be, if at any time any payment which would otherwise have reduced the
obligations of any Guarantor hereunder (whether such payment shall have been
made by or on behalf of the Company or by or on behalf of a Guarantor) is
rescinded or reclaimed from any of the Holders upon the insolvency, bankruptcy,
liquidation or reorganization of the Company or any Guarantor or otherwise, all
as though such payment had not been made. If demand for, or acceleration of the
time for, payment by the Company is stayed upon the insolvency, bankruptcy,
liquidation or reorganization of the Company, all such Indebtedness otherwise
subject to demand for payment or acceleration shall nonetheless be payable by
each Guarantor as provided herein.
SECTION 11.12. Obligations Not Affected.
------------------------
The obligations of each Guarantor hereunder shall not be affected,
impaired or diminished in any way by any act, omission, matter or thing
whatsoever, occurring before, upon or after any demand for payment hereunder
(and whether or not known or consented to by any Guarantor or any of the
Holders) which, but for this provision, might constitute a whole or partial
defense to a claim against any Guarantor hereunder or might operate to release
or otherwise exonerate any Guarantor from any of its obligations hereunder or
otherwise affect such obligations, whether occasioned by default of any of the
Holders or otherwise, including, without limitation:
(a) any limitation of status or power, disability, incapacity or
other circumstance relating to the Company or any other Person, including
any insolvency, bankruptcy, liquidation, reorganization, readjustment,
composition, dissolution, winding-up or other proceeding involving or
affecting the Company or any other Person;
(b) any irregularity, defect, unenforceability or invalidity in
respect of any indebtedness or other obligation of the Company or any other
Person under this Indenture, the Securities or any other document or
instrument;
(c) any failure of the Company, whether or not without fault on its
part, to perform or comply with any of
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the provisions of this Indenture or the Securities, or to give notice
thereof to a Guarantor;
(d) the taking or enforcing or exercising or the refusal or neglect
to take or enforce or exercise any right or remedy from or against the
Company or any other Person or their respective assets or the release or
discharge of any such right or remedy;
(e) the granting of time, renewals, extensions, compromises,
concessions, waivers, releases, discharges and other indulgences to the
Company or any other Person;
(f) any change in the time, manner or place of payment of, or in any
other term of, any of the Securities, or any other amendment, variation,
supplement, replacement or waiver of, or any consent to departure from, any
of the Securities or this Indenture, including, without limitation, any
increase or decrease in the principal amount of or premium, if any, or
interest on any of the Securities;
(g) any change in the ownership, control, name, objects, businesses,
assets, capital structure or constitution of the Company or a Guarantor;
(h) any merger or amalgamation of the Company or a Guarantor with any
Person or Persons;
(i) the occurrence of any change in the laws, rules, regulations or
ordinances of any jurisdiction by any present or future action of any
governmental authority or court amending, varying, reducing or otherwise
affecting, or purporting to amend, vary, reduce or otherwise affect, any of
the Obligations or the obligations of a Guarantor under its Guarantee; and
(j) any other circumstance, including release of the Guarantor
pursuant to Section 11.04 (other than by complete, irrevocable payment)
that might otherwise constitute a legal or equitable discharge or defense
of the Company under this Indenture or the Securities or of a Guarantor in
respect of its Guarantee hereunder.
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SECTION 11.13. Waiver.
------
Without in any way limiting the provisions of Section 11.01 hereof,
each Guarantor hereby waives notice of acceptance hereof, notice of any
liability of any Guarantor hereunder, notice or proof of reliance by the Holders
upon the obligations of any Guarantor hereunder, and diligence, presentment,
demand for payment on the Company, protest, notice of dishonor or non-payment of
any of the Obligations, or other notice or formalities to the Company or any
Guarantor of any kind whatsoever.
SECTION 11.14. No Obligation To Take Action Against the Company.
------------------------------------------------
Neither the Trustee nor any other Person shall have any obligation to
enforce or exhaust any rights or remedies or to take any other steps under any
security for the Obligations or against the Company or any other Person or any
property of the Company or any other Person before the Trustee is entitled to
demand payment and performance by any or all Guarantors of their liabilities and
obligations under their Guarantees or under this Indenture.
SECTION 11.15. Dealing with the Company and Others.
-----------------------------------
The Holders, without releasing, discharging, limiting or otherwise
affecting in whole or in part the obligations and liabilities of any Guarantor
hereunder and without the consent of or notice to any Guarantor, may
(a) grant time, renewals, extensions, compromises, concessions,
waivers, releases, discharges and other indulgences to the Company or any
other Person;
(b) take or abstain from taking security or collateral from the
Company or from perfecting security or collateral of the Company;
(c) release, discharge, compromise, realize, enforce or otherwise
deal with or do any act or thing in respect of (with or without
consideration) any and all collateral, mortgages or other security given by
the Company or any
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third party with respect to the obligations or matters contemplated by this
Indenture or the Securities;
(d) accept compromises or arrangements from the Company;
(e) apply all monies at any time received from the Company or from
any security upon such part of the Obligations as the Holders may see fit
or change any such application in whole or in part from time to time as the
Holders may see fit; and
(f) otherwise deal with, or waive or modify their right to deal with,
the Company and all other Persons and any security as the Holders or the
Trustee may see fit.
SECTION 11.16. Default and Enforcement.
-----------------------
If any Guarantor fails to pay in accordance with Section 11.06 hereof,
the Trustee may proceed in its name as trustee hereunder in the enforcement of
the Guarantee of any such Guarantor and such Guarantor's obligations thereunder
and hereunder by any remedy provided by law, whether by legal proceedings or
otherwise, and to recover from such Guarantor the obligations.
SECTION 11.17. Amendment, Etc.
--------------
No amendment, modification or waiver of any provision of this
Indenture relating to any Guarantor or consent to any departure by any Guarantor
or any other Person from any such provision will in any event be effective
unless it is signed by such Guarantor and the Trustee.
SECTION 11.18. Acknowledgment.
--------------
Each Guarantor hereby acknowledges communication of the terms of this
Indenture and the Securities and consents to and approves of the same.
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SECTION 11.19. Costs and Expenses.
------------------
Each Guarantor shall pay on demand by the Trustee any and all costs,
fees and expenses (including, without limitation, legal fees on a solicitor and
client basis) incurred by the Trustee, its agents, advisors and counsel or any
of the Holders in enforcing any of their rights under any Guarantee.
SECTION 11.20. No Merger or Waiver; Cumulative Remedies.
----------------------------------------
No Guarantee shall operate by way of merger of any of the obligations
of a Guarantor under any other agreement, including, without limitation, this
Indenture. No failure to exercise and no delay in exercising, on the part of the
Trustee or the Holders, any right, remedy, power or privilege hereunder or under
this Indenture or the Securities, shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, remedy, power or privilege
hereunder or under this Indenture or the Securities preclude any other or
further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges in the Guarantee and
under this Indenture, the Securities and any other document or instrument
between a Guarantor and/or the Company and the Trustee are cumulative and not
exclusive of any rights, remedies, powers and privilege provided by law.
SECTION 11.21. Survival of Obligations.
-----------------------
Without prejudice to the survival of any of the other obligations of
each Guarantor hereunder, the obligations of each Guarantor under Section 11.01
shall survive the payment in full of the Obligations and shall be enforceable
against such Guarantor without regard to and without giving effect to any
defense, right of offset or counterclaim available to or which may be asserted
by the Company or any Guarantor.
SECTION 11.22. Guarantee in Addition to Other Obligations.
------------------------------------------
The obligations of each Guarantor under its Guarantee and this
Indenture are in addition to and not in substitution for any other obligations
to the Trustee or to any of the Holders in relation to this Indenture or the
Securities and any
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guarantees or security at any time held by or for the benefit of any of them.
SECTION 11.23. Severability.
------------
Any provision of this Article Eleven which is prohibited or
unenforceable in any jurisdiction shall not invalidate the remaining provisions
and any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction
unless its removal would substantially defeat the basic intent, spirit and
purpose of this Indenture and this Article Eleven.
SECTION 11.24. Successors and Assigns.
----------------------
Each Guarantee shall be binding upon and inure to the benefit of each
Guarantor and the Trustee and the other Holders and their respective successors
and permitted assigns, except that no Guarantor may assign any of its
obligations hereunder or thereunder.
ARTICLE TWELVE
SUBORDINATION OF GUARANTEE
SECTION 12.01. Guarantee Obligations Subordinated to Guarantor Senior Debt.
-----------------------------------------------------------
Anything herein to the contrary notwithstanding, each of the
Guarantors, for itself and its successors, and each Holder, by his or her
acceptance of Guarantees, agrees that the payment of all Obligations owing to
the Holders in respect of its Guarantee (collectively, as to any Guarantor, its
"Guarantee Obligations") is subordinated, to the extent and in the manner
---------------------
provided in this Article Twelve, to the prior payment in full in cash or Cash
Equivalents, or such payment duly provided for to the satisfaction of the
holders of Guarantor Senior Debt, of all Obligations on Guarantor Senior Debt of
such Guarantor.
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This Article Twelve shall constitute a continuing offer to all Persons
who become holders of, or continue to hold, Guarantor Senior Debt, and such
provisions are made for the benefit of the holders of Guarantor Senior Debt and
such holders are made obligees hereunder and any one or more of them may enforce
such provisions.
SECTION 12.02. Suspension of Guarantee Obligations When Guarantor
Senior Debt Is in Default.
--------------------------------------------------
(a) If any default occurs and is continuing in the payment when due,
whether at maturity, upon any redemption, by declaration or otherwise, of any
principal of, interest on, unpaid drawings for letters of credit issued in
respect of, or regularly accruing fees with respect to, any Guarantor Senior
Debt, then no payment of any kind or character shall be made by or on behalf of
such Guarantor or any other Person on its behalf with respect to any Guarantee
Obligations or to acquire any of the Securities for cash or property or
otherwise and until such Payment Default shall have been cured or waived or
shall have ceased to exist or such Guarantor Senior Debt shall have been
discharged or paid in full in cash or Cash Equivalents.
(b) At any time while any Payment Blockage Period is in existence,
neither any Guarantor nor any other Person on any Guarantor's behalf shall (x)
make any payment of any kind or character with respect to any Obligations on its
Guarantee or (y) acquire any of the Securities for cash or otherwise.
(c) In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee or any Holder when such payment is prohibited
by the foregoing provisions of this Section 12.02, such payment shall be held in
trust for the benefit of, and shall be paid over or delivered to, the holders of
Guarantor Senior Debt (pro rata to such holders on the basis of the respective
amount of Guarantor Senior Debt 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
Guarantor Senior Debt, if any, received from the holders of Guarantor Senior
Debt (or their Representatives) or, if such
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information is not received from such holders or their Representatives, from a
Guarantor and only amounts included in the information provided to the Trustee
shall be paid to the holders of Guarantor Senior Debt.
SECTION 12.03. Guarantee Obligations Subordinated to Prior Payment of All
Guarantor Senior Debt on Dissolution, Liquidation or
Reorganization of Such Guarantor.
----------------------------------------------------------
(a) Upon any payment or distribution of assets of any Guarantor 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 such
Guarantor or in a bankruptcy, reorganization, insolvency, receivership or other
similar proceeding relating to such Guarantor or its property, whether voluntary
or involuntary, all Obligations due or to become due upon all Guarantor Senior
Debt shall first be paid in full in cash or Cash Equivalents, or such payment
duly provided for to the satisfaction of the holders of Guarantor Senior Debt,
before any payment or distribution of any kind or character is made on account
of any Guarantee Obligations 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 such Guarantor of any kind or character, whether in
cash, property or securities, to which the Holders or the Trustee under this
Indenture would be entitled, except for the provisions hereof, shall be paid by
such Guarantor 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 Guarantor Senior Debt (pro rata to such holders on the basis of the
respective amounts of Guarantor Senior Debt held by such holders) or their
respective Representatives, or to the trustee or trustees under any indenture
pursuant to which any of such Guarantor Senior Debt may have been issued, as
their respective interests may appear, for application to the payment of
Guarantor Senior Debt remaining unpaid until all such Guarantor Senior Debt has
been paid in full in cash or
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<PAGE>
Cash Equivalents after giving effect to any concurrent payment, distribution or
provision therefor to or for the holders of Guarantor Senior Debt.
(b) To the extent any payment of Guarantor Senior Debt (whether by or
on behalf of a Guarantor, as proceeds of security or enforcement of any right of
setoff or otherwise) is declared to be fraudulent or preferential, set aside or
required to be paid to any receiver, trustee in bankruptcy, liquidating trustee,
agent or other similar Person under any bankruptcy, insolvency, receivership,
fraudulent conveyance or similar law, then, if such payment is recovered by, or
paid over to, such receiver, trustee in bankruptcy, liquidating trustee, agent
or other similar Person, the Guarantor Senior Debt 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 this Section 12.03, such payment or distribution
shall be held in trust for the benefit of, and shall be paid over or delivered
to, the holders of Guarantor Senior Debt (pro rata to such holders on the basis
of the respective amount of Guarantor Senior Debt held by such holders) or their
respective Representatives, or to the trustee or trustees under any indenture
pursuant to which any of such Guarantor Senior Debt may have been issued, as
their respective interests may appear, for application to the payment of
Guarantor Senior Debt remaining unpaid until all such Guarantor Senior Debt 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 Guarantor Senior Debt.
(d) The consolidation of any Guarantor with, or the merger of any
Guarantor with or into, another corporation or the liquidation or dissolution of
a Guarantor following the conveyance or transfer of all or substantially all of
its assets, to another corporation upon the terms and conditions provided in
Article Five hereof and as long as permitted under the
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<PAGE>
terms of the Guarantor Senior Debt 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, assumes the Guarantee of such Guarantor hereunder in accordance with
Article Five hereof.
SECTION 12.04. Payments May Be Paid Prior to Dissolution.
-----------------------------------------
Nothing contained in this Article Twelve or elsewhere in this
Indenture shall prevent (i) any Guarantor, except under the conditions described
in Sections 12.02 and 12.03, from making payments at any time for the purpose of
making payments on Guarantee Obligations, 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 Section 12.02 or 12.03, the
application by the Trustee of any moneys deposited with it for the purpose of
making such payments on Guarantee Obligations 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 a Trust Officer shall have actually
received the written notice provided for in the first sentence of Section
10.02(b) or in Section 12.07 (provided that, notwithstanding the foregoing, the
--------
Holders receiving any payments made in contravention of Sections 12.02 and/or
12.03 (and the respective such payments) shall otherwise be subject to the
provisions of Section 12.02 and Section 12.03). Each Guarantor shall give prompt
written notice to the Trustee of any dissolution, winding-up, liquidation or
reorganization of such Guarantor, although any delay or failure to give any such
notice shall have no effect on the subordination provisions contained herein.
SECTION 12.05. Holders of Guarantee Obligations To Be Subrogated to Rights of
Holders of Guarantor Senior Debt.
--------------------------------------------------------------
Subject to the payment in full in cash or Cash Equivalents of all
Guarantor Senior Debt, the Holders of Guarantee Obligations of any Guarantor
shall be subrogated to the rights of the holders of Guarantor Senior Debt of
such Guaran-
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<PAGE>
tor to receive payments or distributions of cash, property or securities of such
Guarantor applicable to such Guarantor Senior Debt until all amounts owing on or
in respect of the Guarantee Obligations shall be paid in full; and, for the
purposes of such subrogation, no such payments or distributions to the holders
of such Guarantor Senior Debt by or on behalf of such Guarantor, or by or on
behalf of the Holders by virtue of this Article Twelve, which otherwise would
have been made to the Holders shall, as between such Guarantor and the Holders,
be deemed to be a payment by such Guarantor to or on account of such Guarantor
Senior Debt, it being understood that the provisions of this Article Twelve are
and are intended solely for the purpose of defining the relative rights of the
Holders, on the one hand, and the holders of Guarantor Senior Debt, on the other
hand.
SECTION 12.06. Obligations of the Guarantors Unconditional.
-------------------------------------------
Nothing contained in this Article Twelve or elsewhere in this
Indenture or in the Guarantees is intended to or shall impair, as among the
Guarantors, their creditors other than the holders of Guarantor Senior Debt, and
the Holders, the obligation of the Guarantors, which is absolute and
unconditional, to pay to the Holders all amounts due and payable under the
Guarantees as and when the same shall become due and payable in accordance with
their terms, or is intended to or shall affect the relative rights of the
Holders and creditors of the Guarantors other than the holders of the Guarantor
Senior Debt, nor shall anything herein or therein prevent any Holder or the
Trustee on its behalf from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if any,
in respect of cash, property or securities of the Guarantors received upon the
exercise of any such remedy.
SECTION 12.07. Notice to Trustee.
-----------------
Each Guarantor shall give prompt written notice to the Trustee of any
fact known to such Guarantor which would prohibit the making of any payment to
or by the Trustee in respect of the Guarantees pursuant to the provisions of
this Article Twelve, although any delay or failure to give any such
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<PAGE>
notice shall have no effect on the subordination provisions contained herein.
Regardless of anything to the contrary contained in this Article Twelve or
elsewhere in this Indenture, the Trustee shall not be charged with knowledge of
the existence of any default or event of default with respect to any Guarantor
Senior Debt or of any other facts which would prohibit the making of any payment
to or by the Trustee unless and until the Trustee shall have received notice in
writing from a Guarantor, or from a holder of Guarantor Senior Debt or a
Representative therefor and, prior to the receipt of any such written notice,
the Trustee shall be entitled to assume (in the absence of actual knowledge to
the contrary) that no such facts exist. The Trustee shall be entitled to rely on
the delivery to it of any notice pursuant to this Section 12.07 to establish
that such notice has been given by a holder of Senior Debt (or a trustee
thereof).
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Guarantor Senior Debt to participate in any payment or distribution pursuant to
this Article Twelve, the Trustee may request such Person to furnish evidence to
the reasonable satisfaction of the Trustee as to the amounts of Guarantor Senior
Debt held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article Twelve, and if such evidence is not
furnished the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.
SECTION 12.08. Reliance on Judicial Order or Certificate of Liquidating Agent.
--------------------------------------------------------------
Upon any payment or distribution of assets of a Guarantor referred to
in this Article Twelve, the Trustee, subject to the provisions of Article Seven
hereof, and the Holders shall be entitled to rely upon any order or decree made
by any court of competent jurisdiction in which any insolvency, bankruptcy,
receivership, dissolution, winding-up, liquidation, reorganization or similar
case or proceeding is pending, or upon a certificate of the trustee in
bankruptcy, liquidating trus-
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<PAGE>
tee, receiver, assignee for the benefit of creditors, agent or other person
making such payment or distribution, delivered to the Trustee or the Holders,
for the purpose of ascertaining the persons entitled to participate in such
payment or distribution, the holders of the Guarantor Senior Debt and other
Indebtedness of such Guarantor, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article Twelve.
SECTION 12.09. Trustee's Relation to Guarantor Senior Debt.
-------------------------------------------
The Trustee and any agent of a Guarantor or the Trustee shall be
entitled to all the rights set forth in this Article Twelve with respect to any
Guarantor Senior Debt which may at any time be held by it in its individual or
any other capacity to the same extent as any other holder of Guarantor Senior
Debt and nothing in this Indenture shall deprive the Trustee or any such agent
of any of its rights as such holder.
With respect to the holders of Guarantor Senior Debt, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article Twelve, and no implied covenants
or obligations with respect to the holders of Guarantor Senior Debt shall be
read into this Indenture against the Trustee. The Trustee shall not be deemed
to owe any fiduciary duty to the holders of Guarantor Senior Debt.
Whenever a distribution is to be made or a notice given to holders or
owners of Guarantor Senior Debt, the distribution may be made and the notice may
be given to their Representative, if any.
SECTION 12.10. Subordination Rights Not Impaired by Acts or Omissions of the
Guarantors or Holders of Guarantor Senior Debt.
-------------------------------------------------------------
No right of any present or future holders of any Guarantor Senior Debt
to enforce subordination as provided herein shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of any Guarantor
or by any act or failure to act, in good faith, by any such holder,
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<PAGE>
or by any noncompliance by any Guarantor with the terms of this Indenture,
regardless of any knowledge thereof which any such holder may have or otherwise
be charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Guarantor Senior Debt may, at any time and from time to time,
without the consent of or notice to the Trustee, without incurring
responsibility to the Trustee or the Holders of the Securities and without
impairing or releasing the subordination provided in this Article Twelve or the
obligations hereunder of the Holders of the Securities to the holders of
Guarantor Senior Debt, 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, Guarantor Senior Debt, or otherwise amend or supplement in any manner
Guarantor Senior Debt, or any instrument evidencing the same or any agreement
under which Guarantor Senior Debt is outstanding; (ii) sell, exchange, release
or otherwise deal with any property pledged, mortgaged or otherwise securing
Guarantor Senior Debt; (iii) release any Person liable in any manner for the
payment or collection of Guarantor Senior Debt; and (iv) exercise or refrain
from exercising any rights against the Guarantors and any other Person.
SECTION 12.11. Holders Authorize Trustee To Effectuate Subordination of
Guarantee Obligations.
--------------------------------------------------------
Each Holder of Guarantee Obligations by its acceptance of them
authorizes and expressly directs the Trustee on its behalf to take such action
as may be necessary or appropriate to effectuate, as between the holders of
Guarantor Senior Debt and the Holders, the subordination provided in this
Article Twelve, and appoints the Trustee its attorney-in-fact for such purposes,
including, in the event of any dissolution, winding-up, liquidation or
reorganization of any Guarantor (whether in bankruptcy, insolvency,
receivership, reorganization or similar proceedings or upon an assignment for
the benefit of credits or otherwise) tending towards liquidation of the business
and assets of any Guarantor, the filing of a claim for the unpaid balance under
its Guarantee Obligations and accrued interest in the form required in those
proceedings.
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<PAGE>
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 Guarantor Senior Debt
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 Guarantee Obligations. Nothing herein contained shall be
deemed to authorize the Trustee or the holders of Guarantor Senior Debt 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 Guarantee Obligations or the rights of any Holder thereof, or to
authorize the Trustee or the holders of Guarantor Senior Debt or their
Representative to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 12.12. This Article Twelve Not To Prevent Events of Default.
----------------------------------------------------
The failure to make a payment on account of principal of or interest
on the Guarantees by reason of any provision of this Article Twelve will not be
construed as preventing the occurrence of an Event of Default.
SECTION 12.13. Trustee's Compensation Not Prejudiced.
--------------------------------------
Nothing in this Article Twelve will apply to amounts due to the
Trustee pursuant to other sections of this Indenture.
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. TIA Controls.
------------
If any provision of this Indenture limits, qualifies, or conflicts
with another provision which is required or deemed
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<PAGE>
to be included in this Indenture by the TIA, such required or deemed provision
shall control.
SECTION 13.02. Notices.
-------
Any notices or other communications required or permitted hereunder
shall be in writing, and shall be sufficiently given if made by hand delivery,
by telex, by telecopier or registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
if to the Company or a Guarantor:
Building One Services Corporation
800 Connecticut Avenue, NW
Washington, DC 20006
Attention: Chief Financial Officer
Telephone: (202) 261-6000
Facsimile: (202) 261-6020
with a copy to:
Morgan Lewis & Bockius LLP
1800 M Street, NW
Washington, DC 20036
Attention: Linda L. Griggs
Telephone: (202) 467-7245
Facsimile: (202) 467-7176
if to the Trustee:
IBJ Whitehall Bank & Trust Company
One State Street
New York, NY 10004
Attention: Corporate Trust Administration
Telephone: (212) 858-2657
Facsimile: (212) 858-2592
Each of the Company and the Trustee by written notice to each other
such Person may designate additional or different
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<PAGE>
addresses for notices to such Person. Any notice or communication to the Company
and the Trustee, shall be deemed to have been given or made as of the date so
delivered if personally delivered; when answered back, if telexed; when receipt
is acknowledged, if telecopied; and five (5) calendar days after mailing if sent
by registered or certified mail, postage prepaid (except that a notice of change
of address shall not be deemed to have been given until actually received by the
addressee).
Any notice or communication mailed to a Securityholder shall be mailed
to him by first class mail or other equivalent means at his address as it
appears on the registration books of the Registrar and shall be sufficiently
given to him if so mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 13.03. Communications by Holders with Other Holders.
--------------------------------------------
Securityholders may communicate pursuant to TIA (S) 312(b) with other
Securityholders with respect to their rights under this Indenture, the
Securities or the Guarantees. The Company, the Trustee, the Registrar and any
other Person shall have the protection of TIA (S) 312(c).
SECTION 13.04. Certificate and Opinion as to Conditions Precedent.
--------------------------------------------------
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee at the
request of the Trustee:
(1) an Officers' Certificate, in form and substance satisfactory to
the Trustee, stating that, in the opinion of the signers, all conditions
precedent to be performed or effected by the Company, if any, provided for
in this
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<PAGE>
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, any and all such conditions precedent have been complied with.
SECTION 13.05. Statements Required in Certificate or Opinion.
---------------------------------------------
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture, other than the Officers'
Certificate required by Section 4.08, shall include:
(1) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(2) 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;
(3) a statement that, in the opinion of such Person, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of each such
Person, such condition or covenant has been complied with; provided,
--------
however, that with respect to matters of fact an Opinion of Counsel may
-------
rely on an Officers' Certificate or certificates of public officials.
SECTION 13.06. Rules by Trustee, Paying Agent, Registrar.
-----------------------------------------
The Trustee, Paying Agent or Registrar may make reasonable rules for
its functions.
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<PAGE>
SECTION 13.07. Legal Holidays.
--------------
If a payment date is not a Business Day, payment may be made on the
next succeeding day that is a Business Day.
SECTION 13.08. Governing Law.
-------------
THIS INDENTURE, THE SECURITIES AND THE GUARANTEES WILL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED
TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. Each of the parties hereto agrees to submit to
the jurisdiction of the courts of the State of New York in any action or
proceeding arising out of or relating to this Indenture, the Securities or the
Guarantees.
SECTION 13.09. No Adverse Interpretation of Other Agreements.
---------------------------------------------
This Indenture may not be used to interpret another indenture, loan or
debt agreement of any of the Company or any of its Subsidiaries. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
SECTION 13.10. No Recourse Against Others.
--------------------------
A director, officer, employee, stockholder or incorporator, as such,
of the Company or any of its subsidiaries shall not have any liability for any
obligations of the Company under the Securities, this Indenture or the
Guarantees or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Securityholder by accepting a Security
waives and releases all such liability. Such waiver and release are part of the
consideration for the issuance of the Securities.
SECTION 13.11. Successors.
----------
All agreements of the Company and the Guarantors in this Indenture,
the Securities and the Guarantees shall bind their respective successors. All
agreements of the Trustee in this Indenture shall bind its successor.
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<PAGE>
SECTION 13.12. Duplicate Originals.
-------------------
All parties may sign any number of copies of this Indenture. Each
signed copy or counterpart shall be an original, but all of them together shall
represent the same agreement.
SECTION 13.13. Severability.
------------
In case any one or more of the provisions in this Indenture, in the
Securities or in the Guarantees shall be held invalid, illegal or unenforceable,
in any respect for any reason, the validity, legality and enforceability of any
such provision in every other respect and of the remaining provisions shall not
in any way be affected or impaired thereby, it being intended that all of the
provisions hereof shall be enforceable to the full extent permitted by law.
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<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed all as of the date first written above.
BUILDING ONE SERVICES CORPORATION,
as Issuer
By: _____________________________
Name:
Title:
By: _____________________________
Name:
Title:
ADVENT ELECTRIC CO., INC.
AMERICAN AIR COMPANY, INC.
APPEARANCE MANAGEMENT SERVICES, INC.
BELTLINE MECHANICAL SERVICES, INC.
BOXBERGER, INC.
BRICK, INC.
BUILDING ONE MECHANICAL SERVICES, INC.
BUILDING ONE SERVICE SOLUTIONS, INC.
BUYR, INC.
CENTER SERVICES, INC.
CONSOLIDATED ELECTRICAL GROUP, INC.
D/FW MECHANICAL SERVICES, INC.
FLOR-SHIN, INC.
GAMEWELL MECHANICAL, INC.
GARFIELD-INDECON ELECTRICAL SERVICES,
INC.
G.S. GROUP, INC.
G.S. FINANCIAL, INC.
GULF STATES, INC.
S-1
<PAGE>
G.S.I. OF CALIFORNIA, INC.
TESTRONICS, INC.
BRAZOSPORT MANAGEMENT, INC.
HUNT ELECTRIC, INC.
IVEY MECHANICAL COMPANY, INC.
BARNES IVEY MECHANICAL COMPANY, L.L.C.
LEXINGTON/IVEY MECHANICAL COMPANY, LLC
IVEY MECHANICAL SERVICES, L.L.C.
THE LEWIS COMPANIES, INC.
OIL CAPITAL ELECTRIC, INC.
ENGINEERING DESIGN GROUP, INC.
ELECTRICAL DESIGN & CONSTRUCTION, INC.
FRED CLARK ELECTRICAL CONTRACTOR, INC.
OMNI MECHANICAL COMPANY
OMNI MECHANICAL SERVICES
MCINTOSH MECHANICAL, INC.
NATIONAL NETWORK SERVICES, INC.
PERIMETER MAINTENANCE CORPORATION
POTTER ELECTRIC CO., INC.
REGENCY ELECTRIC COMPANY, INC.
REGENCY ELECTRIC COMPANY JACKSONVILLE
OFFICE, INC.
REGENCY ELECTRIC COMPANY ORLANDO
OFFICE, INC.
REGENCY ELECTRIC COMPANY ATLANTA
OFFICE
REGENCY ELECTRIC COMPANY MEMPHIS
OFFICE, INC.
REGENCY ELECTRIC COMPANY PROJECTS
GROUP, INC.
REGENCY ELECTRIC COMPANY SOUTH
FLORIDA, INC.
REGENCY ELECTRIC COMPANY
CHARLOTTE OFFICE, INC.
RELIABLE PAPER SERVICE COMPANY, INC.
RIVIERA ELECTRIC CONSTRUCTION CO.
S-2
<PAGE>
RIVIERA ELECTRIC OF CALIFORNIA, INC.
ROBINSON MECHANICAL COMPANY
SANDERS BROS., INC.
SKC ELECTRIC, INC.
CRAMAR ELECTRIC, INC.
SKCE, INC.
PRO WIRE SECURITY SYSTEMS, INC.
SPANN BUILDING MAINTENANCE COMPANY
SPANN MANAGEMENT GROUP, INC.
TAYLOR ELECTRIC, INC.
TESS HOLDINGS, INC.
CREST INTERNATIONAL, LLC
TOWN & COUNTRY ELECTRIC, INC.
TRI-CITY ELECTRICAL CONTRACTORS, INC.
TRI-M HOLDING CORP.
TRI-M CORPORATION
TRI-M ELECTRICAL CONSTRUCTION CORP.
TRI-M BUILDING AUTOMATION SYSTEMS CORP.
TRI-M INFORMATION SYSTEMS CORP.
TRI-M INTEGRATED SYSTEM SOLUTIONS CORP.
WALKER ENGINEERING, INC.
WARREN ELECTRICAL CONSTRUCTION CORP.
WATSON ELECTRICAL CONSTRUCTION CO.
WILSON ELECTRIC COMPANY, INC.
CHAMBERS ELECTRONIC COMMUNICATIONS, INC.
By: ____________________________
Name:
Title:
S-3
<PAGE>
IBJ WHITEHALL BANK & TRUST COMPANY,
as Trustee
By: ____________________________
Name:
Title:
S-4
<PAGE>
BUILDING ONE SERVICES CORPORATION
10 1/2% Senior Subordinated Note
due May 1, 2009
CUSIP No.
No. $
BUILDING ONE SERVICES CORPORATION, a Delaware corporation (the
"Company", which term includes any successor corporation), for value received
promises to pay to CEDE & CO. or registered assigns, the principal sum of
on May 1, 2009.
Interest Payment Dates: May 1 and November 1, commencing November 1,
1999.
Record Dates: April 15 and October 15.
Reference is made to the further provisions of this Security contained
herein, which will for all purposes have the same effect as if set forth at this
place.
IN WITNESS WHEREOF, the Company has caused this Security to be signed
manually or by facsimile by its duly authorized officers.
Dated: April 30, 1999
BUILDING ONE SERVICES CORPORATION
By: ______________________
Name:
Title:
By: ______________________
Name
Title:
A-1
<PAGE>
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 10 1/2% Senior Subordinated Notes due 2009
described in the within-mentioned Indenture.
Dated: April 30, 1999 IBJ WHITEHALL BANK & TRUST COMPANY,
as Trustee
By: ____________________________
Authorized Signatory
A-2
<PAGE>
(REVERSE OF SECURITY)
BUILDING ONE SERVICES CORPORATION
10 1/2% Senior Subordinated Note
due May 1, 2009
1. Interest.
--------
BUILDING ONE SERVICES CORPORATION, a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Security at
the rate per annum shown above. The Company will pay interest semi-annually on
May 1 and November 1 of each year (the "Interest Payment Date"), commencing
November 1, 1999. Interest on this Security will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from
April 30, 1999. Interest on this Security will be computed on the basis of a
360-day year of twelve 30-day months.
The Company shall pay interest on overdue principal from time to time
on demand at the rate borne by this Security plus 2% and on overdue installments
of interest (without regard to any applicable grace periods) to the extent
lawful.
2. Method of Payment.
-----------------
The Company shall pay interest on the Securities (except defaulted
interest) to the persons who are the registered Holders at the close of business
on the Record Date immediately preceding the Interest Payment Date even if the
Securities are cancelled on registration of transfer or registration of exchange
after such Record Date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company shall pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts ("U.S. Legal Tender"). However, the Company
may pay principal and interest by wire transfer of Federal funds, or interest by
check payable in such U.S. Legal Tender. The Company may deliver any such
interest payment to the Paying Agent or to a Holder at the Holder's registered
address.
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<PAGE>
3. Paying Agent and Registrar.
--------------------------
Initially, IBJ Whitehall Bank & Trust Company (the "Trustee") will act
as Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or co-Registrar without notice to the Holders. The Company or any of
its Subsidiaries may, subject to certain exceptions, act as Registrar or co-
Registrar.
4. Indenture.
---------
The Company issued the Securities under an Indenture, dated as of
April 30, 1999 (the "Indenture"), among the Company, the Guarantors named
therein and the Trustee. This Security is one of a duly authorized issue of
Securities of the Company designated as its 10 1/2% Senior Subordinated Notes
due 2009 (the "Securities"). The Securities are treated as a single class of
securities under the Indenture unless otherwise specified in the Indenture.
Capitalized terms herein are used as defined in the Indenture unless otherwise
defined herein. The terms of the Securities include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-77bbbb) (the "TIA"), as in effect
on the date of the Indenture until such time as the Indenture is qualified under
the TIA, and thereafter as in effect on the date on which the Indenture is
qualified under the TIA. Notwithstanding anything to the contrary herein, the
Securities are subject to all such terms, and Holders of Securities are referred
to the Indenture and the TIA for a statement of them. The Securities are
general obligations of the Company limited in aggregate principal amount to
$400,000,000.
5. Subordination.
-------------
The Securities are subordinated in right of payment, in the manner and
to the extent set forth in the Indenture, to the prior payment in full in cash
or Cash Equivalents of all Senior Debt of the Company, whether outstanding on
the date of the Indenture or thereafter created, incurred, assumed or
guaranteed. Each Holder by his acceptance hereof agrees to be bound by such
provisions and authorizes and expressly directs the Trustee, on his behalf, to
take such action as may be nec-
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<PAGE>
essary or appropriate to effectuate the subordination provided for in the
Indenture and appoints the Trustee his attorney-in-fact for such purposes.
6. Optional Redemption.
-------------------
The Securities will be redeemable, at the Company's option, in whole
at any time or in part from time to time, on and after May 1, 2004, upon not
less than 30 nor more than 60 days' notice, at the following redemption prices
(expressed as percentages of the principal amount) if redeemed during the
twelve-month period commencing on May 1 of the years set forth below, plus, in
each case, accrued and unpaid interest thereon, if any, to the date of
redemption:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2004............................... 105.438%
2005............................... 104.350%
2006............................... 103.263%
2007............................... 102.175%
2008............................... 101.088%
2009 and thereafter................ 100.000%
</TABLE>
7. Optional Redemption upon Equity Offerings.
--------------------------------------------
At any time, or from time to time, on or prior to May 1, 2002, the
Company may, at its option, use the net cash proceeds of one or more Equity
Offerings to redeem up to 35% aggregate principal amount of the Securities
issued pursuant to the Indenture at a redemption price equal to 110.875% of the
principal amount thereof, plus accrued and unpaid interest thereon, if any, to
the date of redemption; provided that after any such redemption the aggregate
--------
principal amount of Securities outstanding must equal at least 65% of the
aggregate principal amount of the Securities issued pursuant to the Indenture.
In order to effect the foregoing redemption with the net cash proceeds of any
Equity Offering, the Company shall make such redemption not more than 90 days
after the consummation of any such Equity Offering.
As used in the preceding paragraph, "Equity Offering" means a public
or private offering of Qualified Capital Stock
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<PAGE>
(other than public offerings with respect to the Company's Common Stock on Form
S-8 or any replacement form for the Form S-8) of the Company for aggregate net
cash proceeds to the Company of at least $20 million.
8. Notice of Redemption.
--------------------
Notice of redemption will be mailed at least 30 days but not more than
60 days before the Redemption Date to each Holder of Securities to be redeemed
at such Holder's registered address. Securities in denominations of $1,000 may
be redeemed only in whole. The Trustee may select for redemption portions
(equal to $1,000 or any integral multiple thereof) of the principal of
Securities that have denominations larger than $1,000.
If any Security is to be redeemed in part only, the notice of
redemption that relates to such Security shall state the portion of the
principal amount thereof to be redeemed. A new Security in a principal amount
equal to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Security. On and after the Redemption
Date, interest will cease to accrue on Securities or portions thereof called for
redemption.
9. Change of Control Offer.
-----------------------
Upon the occurrence of a Change of Control, the Company will be
required to offer to purchase all of the outstanding Securities at a purchase
price equal to 101% of the principal amount thereof, plus accrued and unpaid
interest, if any, thereon to the date of repurchase.
10. Limitation on Asset Sales.
-------------------------
The Company is, subject to certain conditions, obligated to make an
offer to purchase Securities at 100% of their principal amount, plus accrued and
unpaid interest, if any, thereon to the date of repurchase with certain net cash
proceeds of certain sales or other dispositions of assets in accordance with the
Indenture.
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<PAGE>
11. Denominations; Transfer; Exchange.
---------------------------------
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Securities or portions thereof selected for redemption, except the
unredeemed portion of any security being redeemed in part.
12. Persons Deemed Owners.
---------------------
The registered Holder of a Security shall be treated as the owner of
it for all purposes.
13. Unclaimed Funds.
---------------
If funds for the payment of principal or interest remain unclaimed for
one year, the Trustee and the Paying Agent will repay the funds to the Company
at its request. After that, all liability of the Trustee and such Paying Agent
with respect to such funds shall cease.
14. Discharge Prior to Redemption or Maturity.
-----------------------------------------
The Company and the Guarantors may be discharged from their
obligations under the Indenture, the Securities and the Guarantees except for
certain provisions thereof, and may be discharged from obligations to comply
with certain covenants contained in the Indenture, the Securities and the
Guarantees, in each case upon satisfaction of certain conditions specified in
the Indenture.
15. Amendment; Supplement; Waiver.
-----------------------------
Subject to certain exceptions, the Indenture, the Securities and the
Guarantees may be amended or supplemented with the written consent of the
Holders of at least a majority in aggregate principal amount of the Securities
then outstanding, and any existing Default or Event of Default or compliance
with
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<PAGE>
any provision may be waived with the consent of the Holders of a majority in
aggregate principal amount of the Securities then outstanding. Without notice to
or consent of any Holder, the parties thereto may amend or supplement the
Indenture, the Securities and the Guarantees to, among other things, cure any
ambiguity, defect or inconsistency, provide for uncertificated Securities in
addition to or in place of certificated Securities or comply with any
requirements of the Commission in connection with the qualification of the
Indenture under the TIA, or make any other change that does not materially
adversely affect the rights of any Holder of a Security.
16. Restrictive Covenants.
---------------------
The Indenture contains certain covenants that, among other things,
limit the ability of the Company and its Restricted Subsidiaries to make
restricted payments, to incur indebtedness, to create liens, to sell assets, to
permit restrictions on dividends and other payments by Restricted Subsidiaries
of the Company to the Company, to consolidate, merge or sell all or
substantially all of its assets or to engage in transactions with affiliates.
The limitations are subject to a number of important qualifications and
exceptions. The Company must annually report to the Trustee on compliance with
such limitations.
17. Defaults and Remedies.
---------------------
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable immediately in
the manner and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture, the Securities or the Guarantees except as
provided in the Indenture. The Trustee is not obligated to enforce the
Indenture, the Securities or the Guarantees unless it has received indemnity
satisfactory to it. The Indenture permits, subject to certain limitations
therein provided, Holders of a majority in aggregate principal amount of the
Securities then outstanding to direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from Holders of Securities notice of certain
continuing Defaults or
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<PAGE>
Events of Default if it determines that withholding notice is in their interest.
18. Trustee Dealings with Company.
-----------------------------
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Company, its Subsidiaries or their respective Affiliates as if it were
not the Trustee.
19. No Recourse Against Others.
--------------------------
No stockholder, director, officer, employee or incorporator, as such,
of the Company or any Subsidiary of the Company shall have any liability for any
obligation of the Company under the Securities or the Indenture or for any claim
based on, in respect of or by reason of, such obligations or their creation.
Each Holder of a Security by accepting a Security waives and releases all such
liability. The waiver and release are part of the consideration for the
issuance of the Securities.
20. Authentication.
--------------
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on this Security.
21. Abbreviations and Defined Terms.
-------------------------------
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
22. Governing Law.
-------------
This Security shall be governed by, and construed in accordance with,
the laws of the State of New York without giving effect to applicable principles
of conflicts of laws to the extent that the application of the laws of another
jurisdiction would be required thereby.
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<PAGE>
23. CUSIP Numbers.
-------------
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
24. Registration Rights. ??^^
-------------------
Pursuant to, but subject to the exceptions in, the Registration Rights
Agreement, the Company and the Guarantors will be obligated to consummate an
exchange offer pursuant to which the Holder of this Security shall have the
right to exchange this Security for a 10 1/2% Senior Subordinated Note due 2009
of the Company which shall have been registered under the Securities Act, in
like principal amount and having terms identical in all material respects as
this Security. The Holders shall be entitled to receive certain additional
interest payments in the event such exchange offer is not consummated or the
Securities are not offered for resale and upon certain other conditions, all
pursuant to and in accordance with the terms of the Registration Rights
Agreement.
25. Indenture.
---------
Each Holder, by accepting a Security, agrees to be bound by all of the
terms and provisions of the Indenture, as the same may be amended from time to
time. Capitalized terms used herein and not defined herein have the meanings
ascribed thereto in the Indenture.
26. Guarantees.
----------
This Security will be entitled to the benefits of certain senior
subordinated Guarantees made for the benefit of the Holders. Reference is
hereby made to the Indenture for a
___________________________
??^^ Not applicable to Form of Exchange Securities.
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<PAGE>
statement of the respective rights, limitations of rights, duties and
obligations thereunder of the Guarantors, the Trustee and the Holders.
The Company will furnish to any Holder of a Security upon written
request and without charge a copy of the Indenture. Requests may be made to:
BUILDING ONE SERVICES CORPORATION, 800 Connecticut Avenue, NW, Washington, DC
20006, Attention: Office of General Counsel.
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<PAGE>
ASSIGNMENT FORM
I or we assign and transfer this Security to
_______________________________________________________________________________
_______________________________________________________________________________
(Print or type name, address and zip code of assignee or transferee)
_______________________________________________________________________________
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint _______________________________________ agent to
transfer this Security on the books of the Company. The agent may substitute
another to act for him.
Dated: _________________ Signed: _________________________
(Sign exactly as name
appears on the other
side of this Security)
Signature Guarantee: ______________________________________
Participant in a recognized Signature
Guarantee Medallion Program (or other
signature guarantor program reasonably
acceptable to the Trustee)
In connection with any transfer of this Security occurring prior to
the date which is the earlier of (i) the date of the declaration by the
Commission of the effectiveness of a registration statement under the Securities
Act of 1933, as amended (the "Securities Act") covering resales of this Security
(which effectiveness shall not have been suspended or terminated at the date of
the transfer) and (ii) April 30, 2001 the undersigned confirms that it has not
utilized any general solicitation or general advertising in connection with the
transfer:
[Check One]
---------
<PAGE>
(1) ___ to the Company or a subsidiary thereof; or
(2) ___ pursuant to and in compliance with Rule 144A under the Securities Act
of 1933, as amended; or
(3) ___ to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as
amended) that has furnished to the Trustee a signed letter containing
certain representations and agreements (the form of which letter can
be obtained from the Trustee); or
(4) ___ outside the United States to a "foreign purchaser" in compliance with
Rule 904 of Regulation S under the Securities Act of 1933, as amended;
or
(5) ___ pursuant to the exemption from registration provided by Rule 144 under
the Securities Act of 1933, as amended; or
(6) ___ pursuant to an effective registration statement under the Securities
Act of 1933, as amended; or
(7) ___ pursuant to another available exemption from the registration
statement requirements of the Securities Act of 1933, as amended.
and unless the box below is checked, the undersigned confirms that such Security
is not being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate"):
The transferee is an Affiliate of the Company.
Unless one of the items is checked, the Trustee will refuse to
register any of the Securities evidenced by this certificate in the name of any
person other than the registered Holder thereof; provided, however, that if item
-------- -------
(3), (4), (5) or (7) is checked, the Company or the Trustee may require, prior
to registering any such transfer of the Securities, in their sole discretion,
such written legal opinions, certifications (including an investment letter in
the case of box (3) or (4) and other information as the Trustee or the Company
have
-2-
<PAGE>
reasonably requested to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, as amended.
If none of the foregoing items are checked, the Trustee or Registrar
shall not be obligated to register this Security in the name of any person other
than the Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.16 of the Indenture shall have
been satisfied.
Dated:_______________ Signed:______________________________
(Sign exactly as name appears
on the other side of this
Security)
Signature Guarantee:___________________________________________________________
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated:_______________ ______________________________
NOTICE: To be executed by an
executive officer
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<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.15 or Section 4.16 of the Indenture, check the appropriate
box:
Section 4.15 [ ] Section 4.16 [ ]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.15 or Section 4.16 of the Indenture, state the
amount: $___________
Dated: _________________ Signed: ____________________________
(Sign exactly as name
appears on the other
side of this Security)
Signature Guarantee: ___________________________________________
Participant in a recognized Signature
Guarantee Medallion Program (or other
signature guarantor program reasonably
acceptable to the Trustee)
<PAGE>
EXHIBIT B
---------
FORM OF LEGENDS
Each Global Note and Physical Note that constitutes a Restricted
Security or is sold in compliance with Regulation S shall bear the following
legend (the "Private Placement Legend") on the face thereof until after the
------------------------
second anniversary of the Issue Date, unless otherwise agreed by the Issuer and
the Holder thereof:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING
THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL
ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A)
TO THE COMPANY THEREOF OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES
TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN ACCREDITED INVESTOR (AS
DEFINED IN RULE 501(a)(1), (2), (3), OR (7) UNDER THE SECURITIES ACT (AN
"ACCREDITED INVESTOR") THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED
ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE FOR
THIS SECURITY), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT (IF AVAILABLE), (E) PURSUANT
TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF AVAILABLE), OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS
SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN TWO YEARS
B-1
<PAGE>
AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY, IF THE PROPOSED TRANSFEREE IS AN
ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE
TRUSTEE AND THE COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION
AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING
MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANING GIVEN
TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
Each Global Security authenticated and delivered hereunder shall also
bear the following legend:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS SECURITY IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN
THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER
OF THIS SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE
DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER
NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF
OR SUCH SUCCESSOR'S NOMINEE
B-2
<PAGE>
AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION
2.16 OF THE INDENTURE.
B-3
<PAGE>
EXHIBIT C
---------
Form of Certificate To Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
-----------------------------------------
[ ], [ ]
[ ]
[ ]
[ ]
Ladies and Gentlemen:
In connection with our proposed purchase of 10 1/2% Senior
Subordinated Notes due 2009 (the "Notes") of BUILDING ONE SERVICES CORPORATION,
a Delaware corporation (the "Company"), we confirm that:
1. We have received a copy of the Offering Memorandum (the "Offering
Memorandum"), dated April 23, 1999, relating to the Securities and such other
information as we deem necessary in order to make our investment decision. We
acknowledge that we have read and agreed to the matters stated in the section
entitled "Transfer Restrictions" of such Offering Memorandum, including the
restrictions on duplication and circulation of the Offering Memorandum.
2. We understand that any subsequent transfer of the Securities is
subject to certain restrictions and conditions set forth in the Indenture
relating to the Securities (the "Indenture") as described in the Offering
Memorandum and the undersigned agrees to be bound by, and not to resell, pledge
or otherwise transfer the Securities except in compliance with, such
restrictions and conditions and the Securities Act of 1933, as amended (the
"Securities Act"), and all applicable State securities laws.
3. We understand that the offer and sale of the Securities have not
been registered under the Securities Act, and that the Securities may not be
offered or sold except as permitted in the following sentence. We agree, on our
own behalf
C-1
<PAGE>
and on behalf of any accounts for which we are acting as hereinafter stated,
that if we should sell any Securities, we will do so only (i) to the Company or
any of its subsidiaries, (ii) inside the United States in accordance with Rule
144A under the Securities Act to a "qualified institutional buyer" (as defined
in Rule 144A under the Securities Act), (iii) inside the United States to an
institutional "accredited investor" (as defined below) that, prior to such
transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to
the Trustee (as defined in the Indenture) a signed letter containing certain
representations and agreements relating to the restrictions on transfer of the
Securities (the form of which letter can be obtained from the Trustee), (iv)
outside the United States in accordance with Rule 904 of Regulation S
promulgated under the Securities Act to non-U.S. persons, (v) pursuant to the
exemption from registration provided by Rule 144 under the Securities Act (if
available), or (vi) pursuant to an effective registration statement under the
Securities Act, and we further agree to provide to any person purchasing any of
the Securities from us a notice advising such purchaser that resales of the
Securities are restricted as stated herein.
4. We are not acquiring the Securities for or on behalf of, and will
not transfer the Securities to, any pension or welfare plan (as defined in
Section 3 of the Employee Retirement Income Security Act of 1974), except as
permitted in the section entitled "Transfer Restrictions" of the Offering
Memorandum.
5. We understand that, on any proposed resale of any Securities, we
will be required to furnish to the Trustee and the Company such certification,
legal opinions and other information as the Trustee and the Company may
reasonably require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Securities purchased by us will
bear a legend to the foregoing effect.
6. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Securities, and we
and any accounts for which we are acting are
C-2
<PAGE>
each able to bear the economic risk of our or their investment, as the case may
be.
7. We are acquiring the Securities purchased by us for our account
or for one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion.
C-3
<PAGE>
You, the Company, the Trustee and others are entitled to rely upon
this letter and are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceeding or
official inquiry with respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By:_____________________________
Name:
Title:
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<PAGE>
EXHIBIT D
---------
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
-----------------------------------
[ ], [ ]
[ ]
[ ]
[ ]
[ ]
Re: Building One Services Corporation (the
"Company") 10 1/2% Senior Subordinated
Notes due 2009 (the "Securities")
--------------------------------------
Ladies and Gentlemen:
In connection with our proposed sale of [$ ] aggregate
principal amount of the Securities, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the U.S. Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Securities was not made to a person in the United
States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been pre-
arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United States in
contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;
D-1
<PAGE>
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer restrictions
applicable to the Securities.
You, the Company and counsel for the Company are entitled to rely upon
this letter and are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered hereby. Terms used in this
certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:____________________
Authorized Signature
D-2
<PAGE>
EXHIBIT E
---------
GUARANTEE
---------
For value received, each of the undersigned hereby unconditionally
guarantees, as principal obligor and not only as a surety, to the Holder of this
Security the cash payments in United States dollars of principal of, premium, if
any, and interest on this Security in the amounts and at the times when due and
interest on the overdue principal, premium, if any, and interest, if any, of
this Security, if lawful, and the payment or performance of all other
obligations of the Company under the Indenture (as defined below) or the
Securities, to the Holder of this Security and the Trustee, all in accordance
with and subject to the terms and limitations of this Security, Article Eleven
of the Indenture and this Guarantee. This Guarantee will become effective in
accordance with Article Eleven of the Indenture and its terms shall be evidenced
therein. The validity and enforceability of any Guarantee shall not be affected
by the fact that it is not affixed to any particular Security.
Capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Indenture dated as of April 30, 1999, among Building One
Services Corporation, a Delaware corporation, as issuer (the "Company"), the
Guarantors named therein and IBJ Whitehall Bank & Trust Company, as trustee (the
"Trustee"), as amended or supplemented (the "Indenture").
The obligations of the undersigned to the Holders of Securities and to
the Trustee pursuant to this Guarantee and the Indenture are expressly set forth
in Article Eleven of the Indenture and reference is hereby made to the Indenture
for the precise terms of the Guarantee and all of the other provisions of the
Indenture to which this Guarantee relates.
This Guarantee is subordinated in right of payment, in the manner and
to the extent set forth in Article Twelve of the Indenture, to the prior payment
in full in cash or Cash Equivalents of all Guarantor Senior Debt of the
Guarantors,
E-1
<PAGE>
whether outstanding on the date of the Indenture or thereafter created,
incurred, assumed or guaranteed.
THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF
CONFLICTS OF LAW. The undersigned Guarantor hereby agrees to submit to the
jurisdiction of the courts of the State of New York in any action or proceeding
arising out of or relating to this Guarantee.
This Guarantee is subject to release upon the terms set forth in the
Indenture.
E-2
<PAGE>
IN WITNESS WHEREOF, each Guarantor has caused its Guarantee to be duly
executed.
Date: April 30, 1999
ADVENT ELECTRIC CO., INC.
AMERICAN AIR COMPANY, INC.
APPEARANCE MANAGEMENT SERVICES, INC.
BELTLINE MECHANICAL SERVICES, INC.
BOXBERGER, INC.
BRICK, INC.
BUILDING ONE MECHANICAL SERVICES, INC.
BUILDING ONE SERVICE SOLUTIONS, INC.
BUYR, INC.
CENTER SERVICES, INC.
CONSOLIDATED ELECTRICAL GROUP, INC.
D/FW MECHANICAL SERVICES, INC.
FLOR-SHIN, INC.
GAMEWELL MECHANICAL, INC.
GARFIELD-INDECON ELECTRICAL SERVICES, INC.
G.S. GROUP, INC.
G.S. FINANCIAL, INC.
GULF STATES, INC.
G.S.I. OF CALIFORNIA, INC.
TESTRONICS, INC.
BRAZOSPORT MANAGEMENT, INC.
HUNT ELECTRIC, INC.
IVEY MECHANICAL COMPANY, INC.
BARNES IVEY MECHANICAL COMPANY, L.L.C.
LEXINGTON/IVEY MECHANICAL COMPANY, LLC
IVEY MECHANICAL SERVICES, L.L.C.
THE LEWIS COMPANIES, INC.
OIL CAPITAL ELECTRIC, INC.
ENGINEERING DESIGN GROUP, INC.
E-3
<PAGE>
ELECTRICAL DESIGN & CONSTRUCTION, INC.
FRED CLARK ELECTRICAL CONTRACTOR, INC.
OMNI MECHANICAL COMPANY
OMNI MECHANICAL SERVICES
MCINTOSH MECHANICAL, INC.
NATIONAL NETWORK SERVICES, INC.
PERIMETER MAINTENANCE CORPORATION
POTTER ELECTRIC CO., INC.
REGENCY ELECTRIC COMPANY, INC.
REGENCY ELECTRIC COMPANY JACKSONVILLE OFFICE, INC.
REGENCY ELECTRIC COMPANY ORLANDO OFFICE, INC.
REGENCY ELECTRIC COMPANY ATLANTA OFFICE
REGENCY ELECTRIC COMPANY MEMPHIS OFFICE, INC.
REGENCY ELECTRIC COMPANY PROJECTS GROUP, INC.
REGENCY ELECTRIC COMPANY SOUTH FLORIDA, INC.
REGENCY ELECTRIC COMPANY CHARLOTTE OFFICE, INC.
RELIABLE PAPER SERVICE COMPANY, INC.
RIVIERA ELECTRIC CONSTRUCTION CO.
RIVIERA ELECTRIC OF CALIFORNIA, INC.
ROBINSON MECHANICAL COMPANY
SANDERS BROS., INC.
SKC ELECTRIC, INC.
CRAMAR ELECTRIC, INC.
SKCE, INC.
PRO WIRE SECURITY SYSTEMS, INC.
SPANN BUILDING MAINTENANCE COMPANY
SPANN MANAGEMENT GROUP, INC.
TAYLOR ELECTRIC, INC.
TESS HOLDINGS, INC.
CREST INTERNATIONAL, LLC
TOWN & COUNTRY ELECTRIC, INC.
E-4
<PAGE>
TRI-CITY ELECTRICAL CONTRACTORS, INC.
TRI-M HOLDING CORP.
TRI-M CORPORATION
TRI-M ELECTRICAL CONSTRUCTION CORP.
TRI-M BUILDING AUTOMATION SYSTEMS CORP.
TRI-M INFORMATION SYSTEMS CORP.
TRI-M INTEGRATED SYSTEM SOLUTIONS CORP.
WALKER ENGINEERING, INC.
WARREN ELECTRICAL CONSTRUCTION CORP.
WATSON ELECTRICAL CONSTRUCTION CO.
WILSON ELECTRIC COMPANY, INC.
CHAMBERS ELECTRONIC COMMUNICATIONS, INC.
By: ____________________________
Name:
Title:
IBJ WHITEHALL BANK & TRUST COMPANY,
as Trustee
By: ____________________________
Name:
Title:
E-5
<PAGE>
Exhibit 4.02
================================================================================
REGISTRATION RIGHTS AGREEMENT
Dated as of April 30, 1999
Among
BUILDING ONE SERVICES CORPORATION
and
THE GUARANTORS NAMED HEREIN,
as Issuers,
and
THE INITIAL PURCHASERS NAMED HEREIN,
10-1/2% Senior Subordinated Notes due 2009
================================================================================
<PAGE>
REGISTRATION RIGHTS AGREEMENT
-----------------------------
This Registration Rights Agreement (this "Agreement") is dated as of
---------
April 30, 1999, among BUILDING ONE SERVICES CORPORATION, a Delaware corporation
(the "Company"), as issuer, and the other entities listed on the signature page
-------
hereto, as guarantors (the "Guarantors" and, together with the Company, the
----------
"Issuers"), and BT Alex. Brown Incorporated, Bear, Stearns & Co. Inc., Goldman,
- --------
Sachs & Co., Salomon Smith Barney Inc., Friedman, Billings, Ramsey & Co. Inc.,
Jefferies & Company, Inc. and Fleet Securities, Inc., as initial purchasers (the
"Initial Purchasers").
------------------
This Agreement is entered into in connection with the Purchase
Agreement, dated as of April 23, 1999, among the Issuers and the Initial
Purchasers (the "Purchase Agreement"), which provides for, among other things,
------------------
the sale by the Company to the Initial Purchasers of $200,000,000 aggregate
principal amount of the Company's 10-1/2% Senior Subordinated Notes due 2009
(the "Notes"), guaranteed by the Guarantors (the "Guarantees"). The Notes and
----- ----------
the Guarantees are collectively referred to herein as the "Securities". In
----------
order to induce the Initial Purchasers to enter into the Purchase Agreement, the
Issuers have agreed to provide the registration rights set forth in this
Agreement for the benefit of the Initial Purchasers and any subsequent holder or
holders of the Securities. The execution and delivery of this Agreement is a
condition to the Initial Purchasers' obligation to purchase the Securities under
the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions
-----------
As used in this Agreement, the following terms shall have the
following meanings:
Additional Interest: See Section 4 hereof.
-------------------
Advice: See the last paragraph of Section 5 hereof.
------
Applicable Period: See Section 2 hereof.
-----------------
Company: See the introductory paragraphs hereto.
-------
Effectiveness Date: The 150th day after the Issue Date; provided,
------------------ --------
however, that with respect to any Shelf Registration, the Effectiveness Date
- -------
shall be the later of the 60th day after the date the Shelf Registration was
filed or the 150th day after the Issue Date.
Effectiveness Period: See Section 3 hereof.
--------------------
<PAGE>
-2-
Event Date: See Section 4 hereof.
----------
Exchange Act: The Securities Exchange Act of 1934, as amended, and
------------
the rules and regulations of the SEC promulgated thereunder.
Exchange Notes: See Section 2 hereof.
--------------
Exchange Offer: See Section 2 hereof.
--------------
Exchange Offer Registration Statement: See Section 2 hereof.
-------------------------------------
Filing Date: (A) If an Exchange Offer Registration Statement is filed
-----------
or a Shelf Registration Statement is filed in lieu of an Exchange Offer
Registration Statement by the Issuers pursuant to this Agreement, the 60th day
after the Issue Date; and (B) with respect to a Shelf Registration Statement,
the 60th day after the delivery of a Shelf Notice as required pursuant to
Section 2(c) hereof.
Guarantees: See the introductory paragraphs hereto.
----------
Guarantors: See the introductory paragraphs hereto.
----------
Holder: Any record holder of a Registrable Note or Registrable Notes.
------
Indemnified Person: See Section 7(c) hereof.
------------------
Indemnifying Person: See Section 7(c) hereof.
-------------------
Indenture: The Indenture, dated as of April 30, 1999, by and among
---------
the Issuers and IBJ Whitehall Bank & Trust Company, as trustee, pursuant to
which the Securities are being issued, as the same may be amended or
supplemented from time to time in accordance with the terms thereof.
Initial Purchasers: See the introductory paragraphs hereto.
------------------
Initial Shelf Registration: See Section 3(a) hereof.
--------------------------
Inspectors: See Section 5(m) hereof.
----------
Issue Date: April 30, 1999, the date of original issuance of the
----------
Notes.
Issuers: See the introductory paragraphs hereto.
-------
NASD: See Section 5(r) hereof.
----
<PAGE>
-3-
Notes: See the introductory paragraphs hereto.
-----
Offering Memorandum: The final offering memorandum of the Company
-------------------
dated April 23, 1999, in respect of the offering of the Securities.
Participant: See Section 7(a) hereof.
-----------
Participating Broker-Dealer: See Section 2 hereof.
---------------------------
Person: An individual, trustee, corporation, partnership, limited
------
liability company, joint stock company, trust, unincorporated association,
union, business association, firm or other legal entity.
Private Exchange: See Section 2 hereof.
----------------
Private Exchange Notes: See Section 2 hereof.
----------------------
Prospectus: The prospectus included in any Registration Statement
----------
(including, without limitation, any prospectus subject to completion and a
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act and any term sheet filed pursuant to Rule
434 under the Securities Act), as amended or supplemented by any prospectus
supplement, and all other amendments and supplements to the Prospectus,
including post-effective amendments, and all material incorporated by reference
or deemed to be incorporated by reference in such Prospectus.
Purchase Agreement: See the introductory paragraphs hereof.
------------------
Records: See Section 5(m) hereof.
-------
Registrable Notes: Each Note upon original issuance (and the related
-----------------
Guarantee) and, at all times subsequent thereto, each Exchange Note (and the
related Guarantee) as to which Section 2(c)(iv) hereof is applicable upon
original issuance and at all times subsequent thereto and each Private Exchange
Note (and the related Guarantee) upon original issuance thereof and at all times
subsequent thereto, until (i) a Registration Statement (other than, with respect
only to any Exchange Note as to which Section 2(c)(iv) hereof is applicable, the
Exchange Offer Registration Statement) covering such Security, Exchange Note or
Private Exchange Note has been declared effective by the SEC and such Security,
Exchange Note or such Private Exchange Note (and the related Guarantees), as the
case may be, has been disposed of in accordance with such effective Registration
Statement, (ii) such Security has been exchanged pursuant to the Exchange Offer
for an Exchange Note or Exchange Notes (and the related Guarantees) and Section
2(c)(iv) is not applicable thereto, (iii) such Security, Exchange Note or
Private Exchange Note (and the related Guarantees), as the case may be,
<PAGE>
-4-
ceases to be outstanding for purposes of the Indenture or (iv) such Security,
Exchange Note or Private Exchange Note (and the related Guarantees), as the case
may be, has been sold, or may be resold without restriction, pursuant to Rule
144 (or any similar provision then in force) under the Securities Act.
Registration Statement: Any registration statement of the Issuers
----------------------
that covers any of the Notes, the Exchange Notes or the Private Exchange Notes
(and the related Guarantees) filed with the SEC under the Securities Act,
including the Prospectus, amendments and supplements to such registration
statement, including post-effective amendments, all exhibits, and all material
incorporated by reference or deemed to be incorporated by reference in such
registration statement.
Rule 144: Rule 144 promulgated under the Securities Act, as such Rule
--------
may be amended from time to time, or any similar rule (other than Rule 144A) or
regulation hereafter adopted by the SEC providing for offers and sales of
securities made in compliance therewith resulting in offers and sales by
subsequent holders that are not affiliates of the issuer of such securities
being free of the registration and prospectus delivery requirements of the
Securities Act.
Rule 144A: Rule 144A promulgated under the Securities Act, as such
---------
Rule may be amended from time to time, or any similar rule (other than Rule 144)
or regulation hereafter adopted by the SEC.
Rule 415: Rule 415 promulgated under the Securities Act, as such Rule
--------
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.
SEC: The Securities and Exchange Commission.
---
Securities: See the introductory paragraphs hereto.
----------
Securities Act: The Securities Act of 1933, as amended, and the rules
--------------
and regulations of the SEC promulgated thereunder.
Shelf Notice: See Section 2 hereof.
------------
Shelf Registration: See Section 3(b) hereof.
------------------
Subsequent Shelf Registration: See Section 3(b) hereof.
-----------------------------
Suspension Period: See Section 3(d) hereof.
-----------------
TIA: The Trust Indenture Act of 1939, as amended.
---
<PAGE>
-5-
Trustee: The trustee under the Indenture and the trustee (if any)
-------
under any indenture governing the Exchange Notes and Private Exchange Notes (and
the related Guarantees).
underwritten registration or underwritten offering: A registration in
--------------------------------------------------
which securities of one or more of the Issuers are sold to an underwriter for
reoffering to the public.
2. Exchange Offer
--------------
(a) To the extent not prohibited by any applicable law or applicable
interpretation of the staff of the SEC, the Issuers shall file with the SEC, no
later than the Filing Date, a Registration Statement (the "Exchange Offer
--------------
Registration Statement") on an appropriate registration form with respect to a
- ----------------------
registered offer (the "Exchange Offer") to exchange any and all of the
--------------
Registrable Notes for a like aggregate principal amount of notes of the Company,
guaranteed by the Guarantors, that are identical in all material respects to the
Securities (the "Exchange Notes"), except that (i) the Exchange Notes shall
--------------
contain no restrictive legend thereon and (ii) interest thereon shall accrue
from the last date on which interest was paid on the Notes or, if no such
interest has been paid, from the Issue Date, and which are entitled to the
benefits of the Indenture or a trust indenture which is identical in all
material respects to the Indenture (other than such changes to the Indenture or
any such identical trust indenture as are necessary to comply with the TIA) and
which, in either case, has been qualified under the TIA. The Exchange Offer
shall comply with all applicable tender offer rules and regulations under the
Exchange Act and other applicable law. The Issuers shall use their commercially
reasonable best efforts to (x) cause the Exchange Offer Registration Statement
to be declared effective under the Securities Act on or before the Effectiveness
Date; (y) keep the Exchange Offer open for at least 30 days (or longer if
required by applicable law) after the date that notice of the Exchange Offer is
mailed to Holders; and (z) consummate the Exchange Offer on or prior to the
195th day after the Issue Date. If, after the Exchange Offer Registration
Statement is initially declared effective by the SEC, the Exchange Offer or the
issuance of the Exchange Notes thereunder is interfered with by any stop order,
injunction or other order or requirement of the SEC or any other governmental
agency or court, the Exchange Offer Registration Statement shall be deemed not
to have become effective for purposes of this Agreement during the period of
such interference, until the Exchange Offer may legally resume.
Each Holder that participates in the Exchange Offer will be required,
as a condition to its participation in the Exchange Offer, to represent to the
Issuers in writing (which may be contained in the applicable letter of
transmittal) that: (i) any Exchange Notes to be received by it will be acquired
in the ordinary course of its business, (ii) such Holder has no arrangement or
understanding with any Person to participate in the distribution of the Exchange
Notes in violation of the provisions of the Securities Act, (iii) such Holder is
not an affiliate of the Company within the meaning of the Securities Act or, if
such Holder is an affiliate, that it will comply with the registration and
prospectus delivery requirements of the
<PAGE>
Securities Act applicable to it, (iv) if such Holder is not a broker-dealer,
such Holder is not engaged in, and does not intend to engage in, the
distribution (within the meaning of the Securities Act) of Exchange Notes, (v)
if such Holder is a broker-dealer that will receive Exchange Notes for its own
account in exchange for Notes that were acquired as a result of market-making or
other trading activities, such Holder will deliver a prospectus in connection
with any resale of such Exchange Notes and (vi) the Holder is not acting on
behalf of any persons or entities who could not truthfully make the foregoing
representations. Such Holder will also be required to make such other
representations as may be necessary under applicable SEC rules, regulations or
interpretations to render available the use of Form S-4 or any other appropriate
form under the Securities Act.
Upon consummation of the Exchange Offer in accordance with this
Section 2, the provisions of this Agreement shall continue to apply solely with
respect to Registrable Notes that are Private Exchange Notes, Exchange Notes as
to which Section 2(c)(iv) is applicable and Exchange Notes held by Participating
Broker-Dealers (as defined), and the Issuers shall have no further obligation to
register Registrable Notes (other than Private Exchange Notes and other than in
respect of any Exchange Notes as to which clause 2(c)(iv) hereof applies)
pursuant to Section 3 hereof.
No securities other than the Exchange Notes shall be included in the
Exchange Offer Registration Statement.
(b) To the extent required by applicable law or SEC policy, the
Issuers shall include within the Prospectus contained in the Exchange Offer
Registration Statement a section entitled "Plan of Distribution," reasonably
acceptable to the Initial Purchasers, which shall contain a summary statement of
the positions taken or policies made by the staff of the SEC (and publicly
disseminated) with respect to the potential "underwriter" status of any broker-
dealer that is the beneficial owner (as defined in Rule 13d-3 under the Exchange
Act) of Exchange Notes received by such broker-dealer in the Exchange Offer (a
"Participating Broker-Dealer") (other than any Notes acquired by it and having
---------------------------
the status of an unsold allotment in the initial distribution). Such "Plan of
Distribution" section shall also expressly permit, to the extent permitted by
applicable policies and regulations of the SEC, the use of the Prospectus by all
Persons subject to the prospectus delivery requirements of the Securities Act,
including, to the extent permitted by applicable policies and regulations of the
SEC, all Participating Broker-Dealers, and include a statement describing the
means by which Participating Broker-Dealers may resell the Exchange Notes in
compliance with the Securities Act.
The Issuers shall use their commercially reasonably best efforts to
keep the Exchange Offer Registration Statement effective and to amend and
supplement the Prospectus contained therein in order to permit such Prospectus
to be lawfully delivered by all Persons subject to the prospectus delivery
requirements of the Securities Act for such period of time as is necessary to
comply with applicable law in connection with any resale of the Exchange
<PAGE>
Notes covered thereby, provided, however, such period shall not be required to
exceed 150 days, or such longer period if extended pursuant to the last sentence
of Section 5 (the "Applicable Period").
-----------------
If, prior to consummation of the Exchange Offer, the Initial
Purchasers hold any Notes acquired by them that have the status of an unsold
allotment in the initial distribution, the Issuers upon the request of the
Initial Purchasers shall simultaneously with the delivery of the Exchange Notes
in the Exchange Offer, issue and deliver to the Initial Purchasers, in exchange
(the "Private Exchange") for such Notes held by the Initial Purchasers, a like
----------------
principal amount of notes (the "Private Exchange Notes") of the Issuers,
----------------------
guaranteed by the Guarantors, that are identical in all material respects to the
Exchange Notes except for the placement of a restrictive legend on such Private
Exchange Notes. The Private Exchange Notes shall be issued pursuant to the same
indenture as the Exchange Notes and bear the same CUSIP number as the Exchange
Notes.
In connection with the Exchange Offer, the Issuers shall:
(1) mail, or cause to be mailed, to each Holder of record entitled
to participate in the Exchange Offer a copy of the Prospectus forming part
of the Exchange Offer Registration Statement, together with an appropriate
letter of transmittal and related documents;
(2) use their best efforts to keep the Exchange Offer open for not
less than 30 days after the date that notice of the Exchange Offer is
mailed to Holders (or longer if required by applicable law);
(3) utilize the services of a depositary for the Exchange Offer with
an address in the Borough of Manhattan, The City of New York;
(4) permit Holders to withdraw tendered Securities at any time prior
to the close of business, New York time, on the last business day on which
the Exchange Offer shall remain open; and
(5) otherwise comply in all material respects with all applicable
laws, rules and regulations.
As soon as practicable after the close of the Exchange Offer and the
Private Exchange, if any, the Issuers shall:
(1) accept for exchange all Registrable Notes validly tendered and not
validly withdrawn pursuant to the Exchange Offer and the Private Exchange,
if any;
<PAGE>
-8-
(2) deliver to the Trustee for cancellation all Registrable Notes so
accepted for exchange; and
(3) cause the Trustee to authenticate and deliver promptly to each
Holder of Securities, Exchange Notes or Private Exchange Notes, as the case
may be, equal in principal amount to the Securities of such Holder so
accepted for exchange.
The Exchange Offer and the Private Exchange shall not be subject to
any conditions, other than that (i) the Exchange Offer or the Private Exchange,
as the case may be, does not violate applicable law or any applicable
interpretation of the staff of the SEC, (ii) no action or proceeding shall have
been instituted or threatened in any court or by any governmental agency which
might materially impair the ability of the Issuers to proceed with the Exchange
Offer or the Private Exchange, (iii) all governmental approvals shall have been
obtained, which approvals the Issuers deem necessary for the consummation of the
Exchange Offer or the Private Exchange, (iv) there has not been any material
change, or development involving a prospective material change, in the business
or financial affairs of the Issuers which, in the reasonable judgment of the
Issuers, would materially impair the Issuers' ability to consummate the Exchange
Offer or the Private Exchange, and (v) there has not been proposed, adopted or
enacted any law, statute, rule or regulation which, in the reasonable judgment
of the Issuers, would materially impair the Issuers' ability to consummate the
Exchange Offer or the Private Exchange or have a material adverse effect on the
Issuers if the Exchange Offer or the Private Exchange was consummated. In the
event that the Issuers are unable to consummate the Exchange Offer or the
Private Exchange due to any event listed in clauses (i) through (v) above, the
Issuers shall not be deemed to have breached any covenant under this Section 2.
The Exchange Notes and the Private Exchange Notes shall be issued
under (i) the Indenture or (ii) an indenture identical in all material respects
to the Indenture and which, in either case, has been qualified under the TIA or
is exempt from such qualification and shall provide that the Exchange Notes
shall not be subject to the transfer restrictions set forth in the Indenture.
The Indenture or such indenture shall provide that the Exchange Notes, the
Private Exchange Notes and the Securities shall vote and consent together on all
matters as one class and that none of the Exchange Notes, the Private Exchange
Notes or the Securities will have the right to vote or consent as a separate
class on any matter.
(c) If (i) because of any change in law or in currently prevailing
interpretations of the staff of the SEC, the Issuers determine in good faith
that they are not permitted to effect the Exchange Offer, (ii) the Exchange
Offer is not consummated within 195 days of the Issue Date, as extended pursuant
to this agreement, (iii) the holder of Private Exchange Notes so requests in
writing to the Issuers within 60 days after the consummation of the Exchange
Offer, or (iv), in the case of any Holder that participates in the Exchange
Offer, such Holder does not receive Exchange Notes on the date of the exchange
that may be sold without deliv-
<PAGE>
-9-
ering a prospectus, and in the reasonable opinion of Issuers' Counsel the
Prospectus included in the Exchange Offer Registration Statement is not legally
available for such resales by such Holder, then in the case of each of clauses
(i) to and including (iv) of this sentence, the Issuers shall promptly deliver
to the Holders and the Trustee written notice thereof (the "Shelf Notice") and
------------
shall file a Shelf Registration pursuant to Section 3 hereof.
3. Shelf Registration
------------------
If at any time a Shelf Notice is delivered as contemplated by Section
2(c) hereof, then:
(a) Shelf Registration. The Issuers shall file with the SEC a
------------------
Registration Statement for an offering to be made on a continuous basis pursuant
to Rule 415 covering all of the Registrable Notes not exchanged in the Exchange
Offer, Private Exchange Notes and Exchange Notes as to which Section 2(c)(iv) is
applicable (the "Initial Shelf Registration"). The Issuers shall use their
--------------------------
commercially reasonable best efforts to file with the SEC the Initial Shelf
Registration on or before the applicable Filing Date. The Initial Shelf
Registration shall be on Form S-1 or another appropriate form permitting
registration of such Registrable Notes for resale by Holders in the manner or
manners designated by them (including, without limitation, one underwritten
offering). The Issuers shall not permit any securities other than the
Registrable Notes to be included in the Initial Shelf Registration or any
Subsequent Shelf Registration (as defined below).
The Issuers shall, subject to applicable law or applicable
interpretations of the staff of the SEC, use their commercially reasonable best
efforts to cause the Initial Shelf Registration to be declared effective under
the Securities Act on or prior to the Effectiveness Date and to keep the Initial
Shelf Registration continuously effective under the Securities Act until the
date which is two years from the Issue Date or such shorter period ending when
(i) all Registrable Notes covered by the Initial Shelf Registration have been
sold in the manner set forth and as contemplated in the Initial Shelf
Registration or cease to be outstanding, (ii) a Subsequent Shelf Registration
covering all of the Registrable Notes covered by and not sold under the Initial
Shelf Registration or an earlier Subsequent Shelf Registration has been declared
effective under the Securities Act or (iii) all outstanding Registrable Notes
cease to be Registrable Notes (the "Effectiveness Period"), provided, however,
-------------------- -------- -------
that the Effectiveness Period in respect of the Initial Shelf Registration shall
be extended to the extent required to permit dealers to comply with the
applicable prospectus delivery requirements of Rule 174 under the Securities Act
and as otherwise provided herein.
No holder of Registrable Notes may include any of its Registrable
Notes in any Shelf Registration Statement pursuant to this Agreement unless and
until such holder furnishes to the Company in writing, within 15 business days
after receipt of a request therefor, such information concerning such Holder
required to be included in any Shelf Registration Statement or Prospectus or
preliminary prospectus included therein. No holder of Registrable
<PAGE>
-10-
Notes shall be entitled to Additional Interest pursuant to Section 4 hereof
unless and until such holder shall have provided all such information. Each
holder of Registrable Notes as to which any Shelf Registration Statement is
being effected agrees to furnish promptly to the Company all information
required to be disclosed in order to make information previously furnished to
the Company by such Holder not materially misleading.
(b) Subsequent Shelf Registrations. If the Initial Shelf Registration
------------------------------
or any Subsequent Shelf Registration ceases to be effective for any reason at
any time during the Effectiveness Period (other than because of the sale of all
of the securities registered thereunder), the Issuers shall use their
commercially reasonable best efforts to obtain the prompt withdrawal of any
order suspending the effectiveness thereof, and in any event shall within 45
days of such cessation of effectiveness use their commercially reasonable best
efforts to amend the Initial Shelf Registration in a manner to obtain the
withdrawal of the order suspending the effectiveness thereof, or file an
additional "shelf" Registration Statement pursuant to Rule 415 covering all of
the Registrable Notes covered by and not sold under the Initial Shelf
Registration or an earlier Subsequent Shelf Registration (each, a "Subsequent
----------
Shelf Registration"). If a Subsequent Shelf Registration is filed, the Issuers
- ------------------
shall use their commercially reasonable best efforts to cause the Subsequent
Shelf Registration to be declared effective under the Securities Act as soon as
practicable after such filing and to keep such subsequent Shelf Registration
continuously effective for a period equal to the number of days in the
Effectiveness Period less the aggregate number of days during which the Initial
Shelf Registration or any Subsequent Shelf Registration was previously
continuously effective. As used herein the term "Shelf Registration" means the
------------------
Initial Shelf Registration and any Subsequent Shelf Registration.
(c) Supplements and Amendments. The Issuers shall promptly supplement
--------------------------
and amend any Shelf Registration if required by the rules, regulations or
instructions applicable to the registration form used for such Shelf
Registration, if required by the Securities Act, or if reasonably requested by
the Holders of a majority in aggregate principal amount of the Registrable Notes
covered by such Registration Statement or by any underwriter of such Registrable
Notes.
(d) Suspension of Shelf Registration Statement. The Issuers'
------------------------------------------
obligation to keep the Shelf Registration Statement effective and usable for
offers and sales of the Registrable Securities may be suspended by the Issuers
in good faith for valid business reasons, including, without limitation, a
pending acquisition or divestiture of assets. Any such period during which the
Issuers fail to keep the Shelf Registration Statement effective and usable for
offers and sales of Registrable Securities is referred to as a "Suspension
Period." A Suspension Period shall commence on and include the date that the
Company gives notice that the Shelf Registration Statement is no longer
effective or the prospectus included therein is not longer usable for offers and
sales of the Registrable Securities and shall end on the date when each Holder
of Registrable Securities covered by such registration statement either receives
<PAGE>
-11-
the copies of the supplemented or amended prospectus contemplated by Section
3(c) hereof or is advised in writing by the Company that the use of the
prospectus may be resumed; provided that no Suspension Period shall exceed 60
--------
days in any period of 365 consecutive days.
4. Additional Interest
-------------------
(a) The Issuers and the Initial Purchasers agree that the Holders will
suffer damages if the Issuers fail to fulfill their obligations under Section 2
or Section 3 hereof and that it would not be feasible to ascertain the extent of
such damages with precision. Accordingly, the Issuers agree to pay, as
liquidated damages, additional interest on the Notes ("Additional Interest")
-------------------
under the circumstances and to the extent set forth below (each of which shall
be given independent effect):
(i) if (A) neither the Exchange Offer Registration Statement nor
the Initial Shelf Registration has been filed on or prior to the applicable
Filing Date or (B) notwithstanding that the Issuers have consummated or
will consummate the Exchange Offer, the Issuers are required to file a
Shelf Registration and such Shelf Registration is not filed on or prior to
the Filing Date applicable thereto, then, commencing on the day after any
such Filing Date, Additional Interest shall accrue on the principal amount
of the Securities at a rate of 0.50% per annum for the first 90 days
immediately following each such Filing Date, and such Additional Interest
rate shall increase by an additional 0.50% per annum at the beginning of
each subsequent 90-day period; or
(ii) if (A) neither the Exchange Offer Registration Statement nor
the Initial Shelf Registration is declared effective by the SEC on or prior
to the relevant Effectiveness Date or (B) notwithstanding that the Issuers
have consummated or will consummate the Exchange Offer, the Issuers are
required to file a Shelf Registration and such Shelf Registration is not
declared effective by the SEC on or prior to the Effectiveness Date in
respect of such Shelf Registration, then, commencing on the day after such
Effectiveness Date, Additional Interest shall accrue on the principal
amount of the Securities at a rate of 0.50% per annum for the first 90 days
immediately following each such Effectiveness Date, and such Additional
Interest rate shall increase by an additional 0.50% per annum at the
beginning of each subsequent 90-day period; or
(iii) if (A) the Issuers have not exchanged Exchange Notes for all
Securities validly tendered in accordance with the terms of the Exchange
Offer on or prior to the 45th day after the effective date of the Exchange
Offer Registration Statement or (B) if applicable, a Shelf Registration has
been declared effective and such Shelf Registration ceases to be effective
at any time during the Effectiveness Period (other than as a result of a
Suspension Period pursuant to Section 3(d)), then Additional Interest shall
accrue on the principal amount of the Securities at a rate of 0.50% per
annum for
<PAGE>
-12-
the first 90 days commencing on the (x) 46th day after the Issue Date, in
the case of (A) above, or (y) the day such Shelf Registration ceases to be
effective in the case of (B) above, and such Additional Interest rate shall
increase by an additional 0.50% per annum at the beginning of each such
subsequent 90-day period;
provided, however, that the Additional Interest rate on the Notes may not accrue
- -------- -------
under more than one of the foregoing clauses (i)-(iii) at any one time and at no
time shall the aggregate amount of Additional Interest exceed 1.00% per annum;
provided, further, however, that (1) upon the filing of the applicable Exchange
- -------- ------- -------
Offer Registration Statement or the applicable Shelf Registration Statement as
required hereunder (in the case of clause (i) above of this Section 4), (2) upon
the effectiveness of the Exchange Offer Registration Statement or the applicable
Shelf Registration Statement as required hereunder (in the case of clause (ii)
of this Section 4), or (3) upon the exchange of the applicable Exchange Notes
for all Securities tendered (in the case of clause (iii)(A) of this Section 4),
or upon the effectiveness of the applicable Shelf Registration Statement which
had ceased to remain effective (in the case of (iii)(B) of this Section 4),
Additional Interest on the Notes in respect of which such events relate as a
result of such clause (or the relevant subclause thereof), as the case may be,
shall cease to accrue.
(b) The Issuers shall notify the Trustee within three business days
after each and every date on which an event occurs in respect of which
Additional Interest is required to be paid (an "Event Date"). Any amounts of
----------
Additional Interest due pursuant to (a)(i), (a)(ii) or (a)(iii) of this Section
4 will be payable in cash semiannually on each May 1 and November 1, (to the
holders of record on the April 15 and October 15 immediately preceding such
dates), commencing with the first such date occurring after any such Additional
Interest commences to accrue. The amount of Additional Interest will be
determined by multiplying the applicable Additional Interest rate by the
principal amount of the Registrable Notes, multiplied by a fraction, the
numerator of which is the number of days such Additional Interest rate was
applicable during such period (determined on the basis of a 360-day year
comprised of twelve 30-day months and, in the case of a partial month, the
actual number of days elapsed), and the denominator of which is 360.
5. Registration Procedures
-----------------------
In connection with the filing of any Registration Statement pursuant
to Sections 2 or 3 hereof, the Issuers shall effect such registrations to permit
the sale of the securities covered thereby in accordance with the intended
method or methods of disposition thereof, and pursuant thereto and in connection
with any Registration Statement filed by the Issuers hereunder each of the
Issuers shall:
(a) Prepare and file with the SEC prior to the applicable Filing
Date, a Registration Statement or Registration Statements as prescribed by
Sections 2 or 3 hereof, and use their commercially reasonable best efforts to
cause each such Registration Statement to
<PAGE>
-13-
become effective and remain effective as provided herein; provided, however,
-------- -------
that, if (1) such filing is pursuant to Section 3 hereof, or (2) a Prospectus
contained in the Exchange Offer Registration Statement filed pursuant to Section
2 hereof is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period relating thereto, before filing any Registration Statement or
Prospectus or any amendments or supplements thereto, the Issuers shall furnish
to and afford the Holders of the Registrable Notes included in such Registration
Statement or each such Participating Broker-Dealer identified to the Issuers, as
the case may be, their counsel and the managing underwriters, if any, a
reasonable opportunity to review copies of all such documents (including copies
of any documents to be incorporated by reference therein and all exhibits
thereto) proposed to be filed (in each case at least five days prior to such
filing, or such later date as is reasonable under the circumstances). The
Issuers shall not file any Registration Statement or Prospectus or any
amendments or supplements thereto if the Holders of a majority in aggregate
principal amount of the Registrable Notes included in such Registration
Statement, or any such Participating Broker-Dealer, as the case may be, their
counsel, or the managing underwriters, if any, shall reasonably object on a
timely basis unless in the opinion of counsel to the Issuers the filing thereof
is required by law.
(b) Use their commercially reasonable best efforts to prepare and
file with the SEC such amendments and post-effective amendments to each Shelf
Registration Statement or the Exchange Offer Registration Statement, as the case
may be, as may be necessary to keep such Registration Statement continuously
effective for the Effectiveness Period or the Applicable Period, as the case may
be; cause the related Prospectus to be supplemented by any Prospectus supplement
required by applicable law, and as so supplemented to be filed pursuant to Rule
424 (or any similar provisions then in force) promulgated under the Securities
Act; and comply with the provisions of the Securities Act and the Exchange Act
applicable to each of them with respect to the disposition of all securities
covered by such Registration Statement as so amended or in such Prospectus as so
supplemented and with respect to the subsequent resale of any securities being
sold by a Participating Broker-Dealer covered by any such Prospectus. The
Issuers shall be deemed to have used their commercially reasonable best efforts
to keep a Registration Statement effective during the Effectiveness Period or
the Applicable Period, as the case may be, relating thereto, even if the Issuers
voluntarily take any action that results in selling Holders of the Registrable
Notes covered thereby or Participating Broker-Dealers seeking to sell Exchange
Notes not being able to sell such Registrable Notes or such Exchange Notes
during that period if such action is required by applicable law or if the
Issuers comply with this Agreement, including Section 3(d) which shall be
applicable to the Exchange Offer Registration Statement during the applicable
period and Section 5(j) and the last paragraph of this Section 5.
(c) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in the Exchange Offer Registration
Statement filed pursuant to Section 2 hereof is required to be delivered under
the Securities Act by any Participating Broker-Dealer
<PAGE>
-14-
who seeks to sell Exchange Notes during the Applicable Period relating thereto
from whom the Issuers have received written notice that it will be a
Participating Broker-Dealer in the Exchange Offer, notify the selling Holders of
Registrable Notes, or each such Participating Broker-Dealer, as the case may be,
their counsel and the managing underwriters, if any, promptly (but in any event
within five business days), and confirm such notice in writing, (i) when a
Prospectus or any Prospectus supplement or post-effective amendment has been
filed, and, with respect to any applicable Registration Statement or any post-
effective amendment, when the same has become effective under the Securities Act
(including in such notice a written statement that any Holder may, upon request
in writing, obtain, at the sole expense of the Issuers, one conformed copy of
such Registration Statement or post-effective amendment including financial
statements and schedules, documents incorporated or deemed to be incorporated by
reference and exhibits), (ii) of the issuance by the SEC of any stop order
suspending the effectiveness of a Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus or the initiation
of any proceedings for that purpose, (iii) if at any time when a prospectus is
required by the Securities Act to be delivered in connection with sales of the
Registrable Notes or resales of Exchange Notes by Participating Broker-Dealers
the representations and warranties of the Issuers contained in any agreement
(including any underwriting agreement) contemplated by Section 5(l) hereof cease
to be true and correct in all material respects, (iv) of the receipt by any
Issuer of any notification with respect to the suspension of the qualification
or exemption from qualification of a Registration Statement or any of the
Registrable Notes or the Exchange Notes to be sold by any Participating Broker-
Dealer for offer or sale in any jurisdiction, or the initiation or threatening
of any proceeding for such purpose, (v) of the happening of any event, the
existence of any condition or any information becoming known that makes any
statement made in such Registration Statement or related Prospectus or any
document incorporated or deemed to be incorporated therein by reference untrue
in any material respect or that requires the making of any changes in or
amendments or supplements to such Registration Statement, Prospectus or
documents so that, in the case of the Registration Statement, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading, and that in the case of the Prospectus, it will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; provided that such
--------
notification need not specifically identify such event if notification of the
occurrence thereof would, in the reasonable judgment of any Issuer, involve the
disclosure of confidential, nonpublic information, and (vi) of the Issuers'
determination that a post-effective amendment to a Registration Statement would
be appropriate.
(d) If (1) a Shelf Registration is filed pursuant to Section 3 hereof,
or (2) a Prospectus contained in the Exchange Offer Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during
the Applicable Period relating thereto from whom
<PAGE>
-15-
the Issuers have received written notice that it will be a Participating Broker-
Dealer in the Exchange Offer, use its commercially reasonable best efforts to
prevent the issuance of any order suspending the effectiveness of a Registration
Statement or of any order preventing or suspending the use of a Prospectus or
suspending the qualification (or exemption from qualification) of any of the
Registrable Notes or the Exchange Notes to be sold by any Participating Broker-
Dealer, for sale in any jurisdiction, and, if any such order is issued, to use
its reasonable best efforts to obtain the withdrawal of any such order at the
earliest possible moment.
(e) If a Shelf Registration is filed pursuant to Section 3 and if
requested by the managing underwriter or underwriters (if any) or the Holders of
a majority in aggregate principal amount of the Registrable Notes being sold in
connection with an underwritten offering, (i) as promptly as practicable
incorporate in a prospectus supplement or post-effective amendment such
information as the managing underwriter or underwriters (if any), or such
Holders or counsel for any of them reasonably request to be included therein,
(ii) make all required filings of such prospectus supplement or such post-
effective amendment as soon as practicable after the Issuers have received
notification of the matters to be incorporated in such prospectus supplement or
post-effective amendment, and (iii) supplement or make amendments to such
Registration Statement; provided that the Issuers shall not be required to take
--------
any action pursuant to this paragraph (e) that would, in the opinion of counsel
to the Issuers, violate applicable law or any agreement to which the Issuers are
then subject.
(f) If (1) a Shelf Registration is filed pursuant to Section 3 hereof,
or (2) a Prospectus contained in the Exchange Offer Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during
the Applicable Period relating thereto from whom the Issuers have received
written notice that it will be a Participating Broker-Dealer in the Exchange
Offer, furnish to each selling Holder of Registrable Notes and to each such
Participating Broker-Dealer who so requests and to their respective counsel and
each managing underwriter, if any, at the sole expense of the Issuers, one
conformed copy of the Registration Statement or Registration Statements and each
post-effective amendment thereto, including financial statements and schedules,
and, if requested in writing, all documents incorporated or deemed to be
incorporated therein by reference and all exhibits.
(g) If (1) a Shelf Registration is filed pursuant to Section 3 hereof,
or (2) a Prospectus contained in the Exchange Offer Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during
the Applicable Period relating thereto from whom the Issuers have received
written notice that it will be a Participating Broker-Dealer in the Exchange
Offer, deliver to each selling Holder of Registrable Notes, or each such
Participating Broker-Dealer, as the case may be, their respective counsel, and
the underwriters, if any, at the sole expense of the Issuers, as many copies of
the Prospectus or Prospectuses (including each form of preliminary prospectus)
and each amendment or supplement thereto and, if requested
<PAGE>
-16-
in writing, any documents incorporated by reference therein as such Persons may
reasonably request; and, subject to the last paragraph of this Section 5, the
Issuers hereby consent to the use of such Prospectus and each amendment or
supplement thereto (provided the manner of such use complies with any
limitations resulting from any applicable state securities "Blue Sky" laws as
provided in writing to such Holders by the Company and subject to the provisions
of this Agreement) by each of the selling Holders of Registrable Notes or each
such Participating Broker-Dealer, as the case may be, and the underwriters or
agents, if any, and dealers (if any), in connection with the offering and sale
of the Registrable Notes covered by, or the sale by Participating Broker-Dealers
of the Exchange Notes pursuant to, such Prospectus and any amendment or
supplement thereto.
(h) Prior to any public offering of Registrable Notes or any delivery
of a Prospectus contained in the Exchange Offer Registration Statement by any
Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period relating thereto from whom the Issuers have received written
notice that it will be a Participating Broker-Dealer in the Exchange Offer, use
its commercially reasonable best efforts to register or qualify, and to
cooperate with the selling Holders of Registrable Notes or each such
Participating Broker-Dealer, as the case may be, the managing underwriter or
underwriters, if any, and their respective counsel in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Registrable Notes for offer and sale under the securities
or Blue Sky laws of such jurisdictions within the United States as any selling
Holder, Participating Broker-Dealer, or the managing underwriter or underwriters
reasonably request in writing; provided, however, that where Exchange Notes held
-------- --------
by Participating Broker-Dealers or Registrable Notes are offered other than
through an underwritten offering, the Issuers agree to cause their counsel to
(i) perform Blue Sky investigations and file registrations and qualifications
required to be filed pursuant to this Section 5(h), (ii) use its commercially
reasonable best efforts to keep each such registration or qualification (or
exemption therefrom) effective during the period such Registration Statement is
required to be kept effective and (iii) do any and all other acts or things
reasonably necessary or advisable to enable the disposition in such
jurisdictions of the Exchange Notes held by Participating Broker-Dealers or the
Registrable Notes covered by the applicable Registration Statement; provided,
--------
however, that no Issuer shall be required to (A) qualify generally to do
- -------
business in any jurisdiction where it is not then so qualified, (B) take any
action that would subject it to general service of process in any such
jurisdiction where it is not then so subject or (C) subject itself to taxation
in excess of a nominal dollar amount in any such jurisdiction where it is not
then so subject.
(i) If a Shelf Registration is filed pursuant to Section 3 hereof,
cooperate with the selling Holders of Registrable Notes and the managing
underwriter or underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Notes to be sold, which
certificates shall not bear any restrictive legends and shall be in a form
eligible for deposit with The Depository Trust Company; and enable such
Registrable
<PAGE>
-17-
Notes to be in such denominations and registered in such names as the managing
underwriter or underwriters, if any, or selling Holders may reasonably request.
(j) If (1) a Shelf Registration is filed pursuant to Section 3 hereof,
or (2) a Prospectus contained in the Exchange Offer Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during
the Applicable Period relating thereto from whom the Issuers have received
written notice that it will be a Participating Broker-Dealer in the Exchange
Offer, upon the occurrence of any event contemplated by paragraph 5(c)(v) or
5(c)(vi) hereof, as promptly as practicable prepare and (subject to Section 3(d)
or Section 5(a) hereof) file with the SEC, at the sole expense of the Issuers, a
supplement or post-effective amendment to the Registration Statement or a
supplement to the related Prospectus or any document incorporated or deemed to
be incorporated therein by reference, or file any other required document so
that, as thereafter delivered to the purchasers of the Registrable Notes being
sold thereunder or to the purchasers of the Exchange Notes to whom such
Prospectus will be delivered by a Participating Broker-Dealer, any such
Prospectus will not contain 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, in light of the circumstances under which they were made,
not misleading. Notwithstanding the foregoing, the Issuers shall not be
required to amend or supplement a Registration Statement, any related Prospectus
or any document incorporated therein by reference, in the event that, and for a
period not to exceed 60 days in any calendar year if, (i) an event occurs and is
continuing as a result of which the Shelf Registration would, in the Issuers'
good faith judgment, contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, and (ii)
(a) the Issuers determine in their good faith judgment that the disclosure of
such event at such time would have a material adverse effect on the business,
operations or prospects of the Issuers or (b) the disclosure otherwise relates
to a pending material business transaction that has not yet been publicly
disclosed.
(k) Prior to the effective date of the first Registration Statement
relating to the Registrable Notes, (i) provide the Trustee with certificates for
the Registrable Notes in a form eligible for deposit with The Depository Trust
Company and (ii) provide a CUSIP number for the Registrable Notes.
(l) In connection with any underwritten offering of Registrable Notes
pursuant to a Shelf Registration, enter into an underwriting agreement as is
customary in underwritten offerings of debt securities similar to the
Registrable Notes in form and substance reasonably satisfactory to the Issuers
and provided that the underwriters are reasonably acceptable to the Issuers and
take all such other actions as are reasonably requested by the managing
underwriter or underwriters in order to expedite or facilitate the registration
or the disposition of such Registrable Notes and, in such connection, if
reasonably requested (i) make such rep-
<PAGE>
-18-
resentations and warranties to, and covenants with, the underwriters with
respect to the business of the Issuers and the subsidiaries of the Issuers
(including any acquired business, properties or entity, if applicable) and the
Registration Statement, Prospectus and documents, if any, incorporated or deemed
to be incorporated by reference therein, in each case, as are customarily made
by issuers to underwriters in underwritten offerings of debt securities similar
to the Registrable Notes, and confirm the same in writing if and when reasonably
requested in form and substance reasonably satisfactory to the Issuers; (ii)
upon the request of Holders of 40% of the Registrable Notes to be sold in such
underwritten offering, use its commercially reasonable best efforts to obtain
the written opinions of counsel to the Issuers and written updates thereof in
form, scope and substance reasonably satisfactory to the managing underwriter or
underwriters, addressed to the underwriters covering the matters customarily
covered in opinions reasonably requested in underwritten offerings and such
other matters as may be reasonably requested by the managing underwriter or
underwriters; (iii) upon the request of Holders of 40% of the Registrable Notes
to be sold in such underwritten offering, use its commercially reasonable best
efforts to obtain "cold comfort" letters and updates thereof in form, scope and
substance reasonably satisfactory to the managing underwriter or underwriters
from the independent public accountants of the Issuers (and, if necessary, any
other independent public accountants of the Issuers, any subsidiary of the
Issuers or of any business acquired by the Issuers for which financial
statements and financial data are, or are required to be, included or
incorporated by reference in the Registration Statement), addressed to each of
the underwriters, such letters to be in customary form and covering matters of
the type customarily covered in "cold comfort" letters in connection with
underwritten offerings of debt securities similar to the Registrable Notes and
such other matters as reasonably requested by the managing underwriter or
underwriters as permitted by the Statement on Auditing Standards No. 72; and
(iv) if an underwriting agreement is entered into, cause the same to contain
indemnification provisions and procedures no less favorable to the sellers and
underwriters, if any, than those set forth in Section 7 hereof (or such other
provisions and procedures acceptable to Holders of a majority in aggregate
principal amount of Registrable Notes covered by such Registration Statement and
the managing underwriter or underwriters or agents, if any). The above shall be
done at each closing under such underwriting agreement, or as and to the extent
required thereunder.
(m) If (1) a Shelf Registration is filed pursuant to Section 3 hereof,
or (2) a Prospectus contained in the Exchange Offer Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during
the Applicable Period relating thereto from whom the Issuers have received
written notice that it will be a Participating Broker-Dealer in the Exchange
Offer, make available for inspection by any selling Holder of such Registrable
Notes being sold, or each such Participating Broker-Dealer, as the case may be,
any underwriter participating in any such disposition of Registrable Notes, if
any, and any attorney, accountant or other agent retained by any such selling
Holder or each such Participating Broker-Dealer, as the case may be, or
underwriter (collectively, the "Inspectors"), at the offices where nor-
----------
<PAGE>
-19-
mally kept, during reasonable business hours, all financial and other records,
pertinent corporate documents and instruments of the Issuers and subsidiaries of
the Issuers (collectively, the "Records") as shall be reasonably necessary to
-------
enable them to exercise any applicable due diligence responsibilities, and cause
the officers, directors and employees of the Issuers and any of their
subsidiaries to supply all information reasonably requested by any such
Inspector in connection with such Registration Statement and Prospectus. The
foregoing inspection and information gathering shall be coordinated on behalf of
the other parties by one counsel designated by such parties as described in
Section 6(b) hereof. Each Inspector shall agree in writing that it will keep
the Records confidential and that it will not disclose any of the Records that
the Issuers determine, in good faith, to be confidential unless (i) the release
of such Records is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction, or (ii) the information in such Records has been made
generally available to the public; provided, however, that prior notice shall be
-------- --------
provided as soon as practicable to the Issuers of the potential disclosure of
any information by such Inspector pursuant to clause (i) of this sentence to
permit the Issuers to obtain a protective order or take other appropriate action
to prevent the disclosure of such information at the Company's sole expense (or
waive the provisions of this paragraph (m)) and that such Inspector shall take
such actions as are reasonably necessary to protect the confidentiality of such
information (if practicable) to the extent such action is otherwise not
inconsistent with, an impairment of or in derogation of the rights and interests
of the Holder or any Inspector.
(n) Provide an indenture trustee for the Registrable Notes or the
Exchange Notes, as the case may be, and cause the Indenture or the trust
indenture provided for in Section 2(a) hereof, as the case may be, to be
qualified under the TIA not later than the effective date of the first
Registration Statement relating to the Registrable Notes; and in connection
therewith, cooperate with the trustee under any such indenture and the Holders
of the Registrable Notes to effect such changes to such indenture as may be
required for such indenture to be so qualified in accordance with the terms of
the TIA; and execute, and use its reasonable best efforts to cause such trustee
to execute, all documents as may be required to effect such changes, and all
other forms and documents required to be filed with the SEC to enable such
indenture to be so qualified in a timely manner.
(o) Comply with all applicable rules and regulations of the SEC and
make generally available to its securityholders with regard to any applicable
Registration Statement, a consolidated earnings statement satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or
any similar rule promulgated under the Securities Act) no later than 60 days
after the end of any fiscal quarter (or 120 days after the end of any 12-month
period if such period is a fiscal year) (i) commencing at the end of any fiscal
quarter in which Registrable Notes are sold to underwriters in a firm commitment
or best efforts underwritten offering and (ii) if not sold to underwriters in
such an offering, commencing on the first day of the first fiscal quarter of the
Issuers after the effective date of a Registration Statement, which statements
shall cover said 12-month periods.
<PAGE>
-20-
(p) Upon consummation of the Exchange Offer or a Private Exchange,
obtain an opinion of counsel to the Issuers, if requested by the Trustee, in a
form customary for underwritten transactions, addressed to the Trustee for the
benefit of all Holders of Registrable Notes participating in the Exchange Offer
or the Private Exchange, as the case may be, that the Exchange Notes or Private
Exchange Notes, as the case may be, the related Guarantee and the related
indenture constitute legal, valid and binding obligations of the Issuers,
enforceable against them in accordance with their respective terms, subject to
customary exceptions and qualifications.
(q) If the Exchange Offer or a Private Exchange is to be consummated,
upon delivery of the Registrable Notes by Holders to the Issuers (or to such
other Person as directed by the Issuers) in exchange for the Exchange Notes or
the Private Exchange Notes, as the case may be, the Issuers shall mark, or cause
to be marked, on such Registrable Notes that such Registrable Notes are being
cancelled in exchange for the Exchange Notes or the Private Exchange Notes, as
the case may be; in no event shall such Registrable Notes be marked as paid or
otherwise satisfied.
(r) Cooperate with each seller of Registrable Notes covered by any
Registration Statement and each underwriter, if any, participating in the
disposition of such Registrable Notes and their respective counsel in connection
with any filings required to be made with the National Association of Securities
Dealers, Inc. (the "NASD").
----
(s) Use their commercially reasonable best efforts to take all other
steps reasonably necessary to effect the registration of the Registrable Notes
covered by a Registration Statement contemplated hereby.
The Issuers may require each seller of Registrable Notes as to which
any registration is being effected to furnish to the Issuers such information
regarding such seller and the distribution of such Registrable Notes as the
Issuers may, from time to time, reasonably request. The Issuers may exclude
from such registration the Registrable Notes of any seller so long as such
seller fails to furnish such information within a reasonable time after
receiving such request. Each seller as to which any Shelf Registration is being
effected agrees to furnish promptly to the Issuers all information required to
be disclosed in order to make the information previously furnished to the
Issuers by such seller not materially misleading.
Each Holder of Registrable Notes and each Participating Broker-Dealer
agrees by its acquisition of such Registrable Notes or Exchange Notes to be sold
by such Participating Broker-Dealer, as the case may be, that, upon actual
receipt of any notice from the Issuers of the happening of any event of the kind
described in Section 5(c)(ii), 5(c)(iv), 5(c)(v) or 5(c)(vi) hereof, such Holder
will forthwith discontinue disposition of such Registrable Notes covered by such
Registration Statement or Prospectus or Exchange Notes to be sold by such Holder
or Participating Broker-Dealer, as the case may be, until such Holder's or
Participating Broker-Dealer's receipt of the copies of the supplemented or
amended Prospectus contem-
<PAGE>
-21-
plated by Section 5(j) hereof, or until it is advised in writing (the "Advice")
by the Issuers that the use of the applicable Prospectus may be resumed, and has
received copies of any amendments or supplements thereto. In the event that the
Issuers shall give any such notice, the Effectiveness Period or the Applicable
Period, as the case may be, shall be extended by the number of days during such
periods from and including the date of the giving of such notice to and
including the date when each seller of Registrable Notes covered by such
Registration Statement or Exchange Notes to be sold by such Participating
Broker-Dealer, as the case may be, shall have received (x) the copies of the
supplemented or amended Prospectus contemplated by Section 5(j) hereof or (y)
the Advice.
6. Registration Expenses
---------------------
(a) All fees and expenses incident to the performance of or compliance
with this Agreement by the Issuers (other than any underwriting discounts or
commissions) shall be borne by the Issuers including, without limitation, (i)
all registration and filing fees (including, without limitation, (A) fees with
respect to filings required to be made with the NASD in connection with an
underwritten offering and (B) reasonable fees and expenses of compliance with
state securities or Blue Sky laws (including, without limitation, reasonable
fees and disbursements of counsel in connection with Blue Sky qualifications of
the Registrable Notes or Exchange Notes and determination of the eligibility of
the Registrable Notes or Exchange Notes for investment under the laws of such
jurisdictions (x) where the holders of Registrable Notes are located, in the
case of the Exchange Notes, or (y) as provided in Section 5(h) hereof, in the
case of Registrable Notes or Exchange Notes to be sold by a Participating
Broker-Dealer during the Applicable Period)), (ii) printing expenses, including,
without limitation, expenses of printing certificates for Registrable Notes or
Exchange Notes in a form eligible for deposit with The Depository Trust Company
and of printing prospectuses if the printing of prospectuses is requested by the
managing underwriter or underwriters, if any, by the Holders of a majority in
aggregate principal amount of the Registrable Notes included in any Registration
Statement or in respect of Registrable Notes or Exchange Notes to be sold by any
Participating Broker-Dealer during the Applicable Period, as the case may be,
(iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Issuers, (v) fees and disbursements of all independent certified
public accountants referred to in Section 5(l)(iii) hereof (including, without
limitation, the expenses of any special audit and "cold comfort" letters
required by or incident to such performance), (vi) Securities Act liability
insurance, if the Issuers desire such insurance, (vii) fees and expenses of all
other Persons retained by the Issuers, (viii) internal expenses of the Issuers
(including, without limitation, all salaries and expenses of officers and
employees of the Issuers performing legal or accounting duties), (ix) the
expense of any annual audit, (x) any fees and expenses incurred in connection
with the listing of the securities to be registered on any securities exchange,
and the obtaining of a rating of the securities, in each case, if applicable,
and (xi) the expenses relating to printing, word processing and distributing all
Registration Statements, underwriting agreements, indentures and any other
documents necessary in order to comply with this
<PAGE>
-22-
Agreement. Anything contained herein to the contrary notwithstanding, the
Issuers shall not have any obligation whatsoever in respect of any underwriters'
discounts or commissions, brokerage commissions, dealers' selling concessions,
transfer taxes or any other selling expenses (other than those expressly
enumerated in clauses (i) through (xi) above) incurred in connection with the
underwriting, offering or sale of Registrable Notes or Exchange Notes by or on
behalf of any Person.
(b) The Issuers shall reimburse the Holders of the Registrable Notes
being registered in a Shelf Registration for the reasonable fees and
disbursements of not more than one counsel (in addition to appropriate local
counsel) chosen by the Holders of a majority in aggregate principal amount of
the Registrable Notes to be included in such Registration Statement. In
addition, the Issuers shall reimburse the Initial Purchasers for the reasonable
fees and expenses of one counsel in connection with the Exchange Offer, which
shall be Cahill Gordon & Reindel, and shall not be required to pay any other
legal expenses in connection therewith.
7. Indemnification
---------------
(a) Each of the Issuers, jointly and severally, agrees to indemnify
and hold harmless each Holder of Registrable Notes and each Participating
Broker-Dealer selling Exchange Notes during the Applicable Period, the
affiliates, officers, directors, representatives, employees and agents of each
such Person, and each Person, if any, who controls any such Person within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act (each, a "Participant"), from and against any and all losses, claims,
-----------
damages, judgments, liabilities and expenses (including, without limitation, the
reasonable legal fees and other expenses actually incurred in connection with
any suit, action or proceeding or any claim asserted) caused by, arising out of
or based upon any untrue statement or alleged untrue statement of a material
fact contained in any Registration Statement (or any amendment thereto) or
Prospectus (as amended or supplemented if the Issuers shall have furnished any
amendments or supplements thereto) or any preliminary prospectus, or caused by,
arising out of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in the case of the Prospectus in light of the circumstances under
which they were made, not misleading, except insofar as such losses, claims,
------
damages or liabilities are caused by any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
information relating to any Participant furnished to the Issuers in writing by
such Participant expressly for use therein and with respect to any preliminary
Prospectus, to the extent that any such loss, claim, damage or liability arises
solely from the fact that any Participant sold Notes to a person to whom (i)
there was not sent or given a copy of the Prospectus (as amended or
supplemented) at or prior to the written confirmation of such sale if the
Issuers shall have previously furnished copies thereof to the Participant in
accordance herewith and the Prospectus (as amended or supplemented) would have
corrected any such untrue statement or omission or
<PAGE>
-23-
(ii) there was delivered a copy of the Prospectus (as amended or supplemented)
after the Holder received written notice at least two business days prior to the
date of delivery of the Prospectus of any event described in Section 5(c)(ii),
5(c)(iii), 5(c)(iv), 5(c)(v) or 5(c)(vi) and failed to discontinue the delivery
of such Prospectus (as amended or supplemented); provided that with respect to
--------
Section 5(c)(iv) such Holder only needs to discontinue the delivery of such
Prospectus (as amended or supplemented) only in the specific jurisdiction
specified in the notice provided pursuant to Section 5(c)(iv).
(b) Each Participant agrees, severally and not jointly, to indemnify
and hold harmless the Issuers, their respective affiliates, officers, directors,
representatives, employees and agents of each Issuer and each Person who
controls each Issuer within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent (but on a several, and not
joint, basis) as the foregoing indemnity from the Issuers to each Participant,
but only with reference to information relating to such Participant furnished to
the Issuers in writing by such Participant expressly for use in any Registration
Statement or Prospectus, any amendment or supplement thereto, or any preliminary
prospectus. The liability of any Participant under this paragraph shall in no
event exceed the proceeds received by such Participant from sales of Registrable
Notes or Exchange Notes giving rise to such obligations.
(c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any Person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such Person (the "Indemnified Person") shall promptly
------------------
notify the Persons against whom such indemnity may be sought (the "Indemnifying
------------
Persons") in writing, and the Indemnifying Persons, upon request of the
- -------
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may reasonably designate in such proceeding and shall pay
the reasonable fees and expenses actually incurred by such counsel related to
such proceeding; provided, however, that the failure to so notify the
-----------------
Indemnifying Persons will not relieve it from any liability under paragraph (a)
or (b) above unless and to the extent such failure results in the forfeiture by
the Indemnifying Person of substantial rights and defenses and the Indemnifying
Person was not otherwise aware of such action or claim. In any such proceeding,
any Indemnified Person shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such Indemnified
Person unless (i) the Indemnifying Persons and the Indemnified Person shall have
mutually agreed to the contrary, (ii) the Indemnifying Persons shall have failed
within a reasonable period of time to retain counsel reasonably satisfactory to
the Indemnified Person or (iii) the named parties in any such proceeding
(including any impleaded parties) include both any Indemnifying Person and the
Indemnified Person and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them.
It is understood that the Indemnifying Persons shall not, in connection with
such proceeding or separate but substantially similar related proceeding in the
same jurisdiction arising out of the same general allegations, be liable for the
fees and ex-
<PAGE>
-24-
penses of more than one separate firm (in addition to any local counsel) for all
Indemnified Persons, and that all such fees and expenses shall be reimbursed
promptly as they are incurred. Any such separate firm for the Participants and
such control Persons of Participants shall be designated in writing by
Participants who sold a majority in interest of Registrable Notes and Exchange
Notes sold by all such Participants and shall be reasonably acceptable to the
Issuers, and any such separate firm for the Issuers, their affiliates, officers,
directors, representatives, employees and agents and such control Persons of
such Issuer shall be designated in writing by the Company and shall be
reasonably acceptable to the Holders.
The Indemnifying Person shall not be liable for any settlement of any
proceeding effected without its prior written consent (which consent shall not
be unreasonably withheld or delayed), but if settled with such consent or if
there be a final non-appealable judgment for the plaintiff for which the
Indemnified Person is entitled to indemnification pursuant to this Agreement,
each Indemnifying Person agrees to indemnify and hold harmless each Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment. No Indemnifying Person shall, without the prior written consent of
the Indemnified Person (which consent shall not be unreasonably withheld or
delayed), effect any settlement or compromise of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party, or indemnity could have been sought hereunder by such Indemnified Person,
unless such settlement (A) includes an unconditional written release of such
Indemnified Person, in form and substance reasonably satisfactory to such
Indemnified Person, from all liability on claims that are the subject matter of
such proceeding and (B) does not include any statement as to an admission of
fault, culpability or failure to act by or on behalf of such Indemnified Person.
(d) If the indemnification provided for in the first and second
paragraphs of this Section 7 is for any reason unavailable to, or insufficient
to hold harmless, an Indemnified Person in respect of any losses, claims,
damages or liabilities referred to therein, then each Indemnifying Person under
such paragraphs, in lieu of indemnifying such Indemnified Person thereunder and
in order to provide for just and equitable contribution, shall contribute to the
amount paid or payable by such Indemnified Person as a result of such losses,
claims, damages or liabilities in such proportion as is appropriate to reflect
the relative fault of the Indemnifying Person or Persons on the one hand and the
Indemnified Person or Persons on the other in connection with the statements or
omissions or alleged statements or omissions that resulted in such losses,
claims, damages or liabilities (or actions in respect thereof) as well as any
other relevant equitable considerations. The relative fault of the parties
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Issuers on the
one hand or such Participant or such other Indemnified Person, as the case may
be, on the other, the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission, and any other
equitable considerations appropriate in the circumstances.
<PAGE>
-25-
(e) The parties agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation
(even if the Participants were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an Indemnified Person as a result of the losses, claims,
damages, judgments, liabilities and expenses referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any reasonable legal or other expenses actually incurred by such
Indemnified Person in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 7, in no event shall a
Participant be required to contribute any amount in excess of the amount by
which proceeds received by such Participant from sales of Registrable Notes or
Exchange Notes, as the case may be, exceeds the amount of any damages that such
Participant has otherwise been required to pay or has paid by reason of such
untrue or alleged untrue statement or omission or alleged omission. No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
(f) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 7 shall be paid by the Indemnifying Person to the Indemnified Person as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 7 and the
representations and warranties of the Issuers set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Holder or any person who controls a
Holder, the Issuers, their directors, officers, employees or agents or any
person controlling an Issuer, and (ii) any termination of this Agreement.
(g) The indemnity and contribution agreements contained in this
Section 7 will be in addition to any liability which the Indemnifying Persons
may otherwise have to the Indemnified Persons referred to above.
8. Rules 144 and 144A
------------------
Each of the Issuers covenants and agrees that it will file the reports
required to be filed by it under the Securities Act and the Exchange Act and the
rules and regulations adopted by the SEC thereunder in a timely manner in
accordance with the requirements of the Securities Act and the Exchange Act and,
for so long as any Registrable Notes remain outstanding, and if the Company is
not required to file such reports, the Company will, upon the request of any
Holder or beneficial owner of Registrable Notes, make available such information
of the type specified in Sections 13 and 15(d) of the Exchange Act. The Company
further covenants and agrees, for so long as any Registrable Notes remain
outstanding, to make available to any Holder or beneficial owner of Registrable
Notes in connection with any sale
<PAGE>
-26-
thereof and any prospective purchaser of such Registrable Notes from such Holder
or beneficial owner the information required by Rule 144A(d)(4) and 144(c) under
the Securities Act in order to permit resales of such Registrable Notes pursuant
to Rule 144A and Rule 144(k).
9. Underwritten Registrations
--------------------------
If any of the Registrable Notes covered by any Shelf Registration are
to be sold in an underwritten offering, the investment banker or investment
bankers and manager or managers that will manage the offering will be selected
by the Holders of a majority in aggregate principal amount of such Registrable
Notes included in such offering and shall be reasonably acceptable to the
Issuers.
No Holder of Registrable Notes may participate in any underwritten
registration hereunder unless such Holder (a) agrees to sell such Holder's
Registrable Notes on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements.
10. Miscellaneous
-------------
(a) No Inconsistent Agreements. The Issuers have not, as of the date
--------------------------
hereof, and the Issuers shall not, after the date of this Agreement, enter into
any agreement with respect to any of their securities that is inconsistent with
the rights granted to the Holders of Registrable Notes in this Agreement or
otherwise conflicts with the provisions hereof. The rights granted to the
Holders hereunder do not in any way conflict with the rights granted to the
holders of the Issuers' other issued and outstanding securities under any such
agreements. The Issuers will not enter into any agreement with respect to any
of their securities which will grant to any Person piggy-back registration
rights with respect to any Registration Statement.
(b) Adjustments Affecting Registrable Notes. The Issuers shall not,
---------------------------------------
directly or indirectly, take any action with respect to the Registrable Notes as
a class that would adversely affect the ability of the Holders of Registrable
Notes to include such Registrable Notes in a registration undertaken pursuant to
this Agreement.
(c) Amendments and Waivers. The provisions of this Agreement may not
----------------------
be amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, otherwise than with the prior written
consent of (I) the Issuers and (II)(A) the Holders of not less than a majority
in aggregate principal amount of the then outstanding Registrable Notes and (B)
in circumstances that would adversely affect the Participating Broker-Dealers,
the Participating Broker-Dealers holding not less than a majority in aggregate
principal amount of the Exchange Notes held by all Participating Broker-Dealers;
provided, however, that Section 7 and this Section 10(c) may not be amended,
- -------- -------
modified or
<PAGE>
-27-
supplemented without the prior written consent of each Holder and each
Participating Broker-Dealer (including any person who was a Holder or
Participating Broker-Dealer of Registrable Notes or Exchange Notes, as the case
may be, disposed of pursuant to any Registration Statement) affected by any such
amendment, modification or supplement. Notwithstanding the foregoing, a waiver
or consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders of Registrable Notes whose
securities are being sold pursuant to a Registration Statement and that does not
directly or indirectly affect, impair, limit or compromise the rights of other
Holders of Registrable Notes may be given by Holders of at least a majority in
aggregate principal amount of the Registrable Notes being sold pursuant to such
Registration Statement.
(d) Notices. All notices and other communications (including, without
-------
limitation, any notices or other communications to the Trustee) provided for or
permitted hereunder shall be made in writing by hand-delivery, registered first-
class mail, next-day air courier or facsimile:
(i) if to a Holder of the Registrable Notes or any Participating
Broker-Dealer, at the most current address of such Holder or Participating
Broker-Dealer, as the case may be, set forth on the records of the
registrar under the Indenture.
(ii) if to the Issuers, at the address as follows:
Building One Services Corporation
800 Connecticut Avenue, NW
Washington, DC 20006
Attention: Chief Financial Officer
with copies to:
Morgan Lewis & Bockius, LLP
1800 M Street, NW
Washington, DC 20036
Attention: Linda L. Griggs
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days
after being deposited in the mail, postage prepaid, if mailed; one business day
after being timely delivered to a next-day air courier; and when transmission is
confirmed, if sent by facsimile.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address and in the manner specified in such Indenture.
<PAGE>
-28-
(e) Successors and Assigns. This Agreement shall inure to the benefit
----------------------
of and be binding upon the successors and assigns of each of the parties hereto,
the Holders and the Participating Broker-Dealers; provided, however, that
-------- -------
nothing herein shall be deemed to permit any assignment, transfer or other
disposition of Registrable Notes in violation of the terms of the Purchase
Agreement or the Indenture.
(f) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(H) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
-------------
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS
MADE AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO
THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(i) Severability. If any term, provision, covenant or restriction of
------------
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.
(j) Securities Held by the Issuers or Their Affiliates. Whenever the
--------------------------------------------------
consent or approval of Holders of a specified percentage of Registrable Notes is
required hereunder, Registrable Notes held by the Issuers or their affiliates
(as such term is defined in Rule 405 under the Securities Act) shall not be
counted in determining whether such consent or approval was given by the Holders
of such required percentage.
(k) Third-Party Beneficiaries. Holders of Registrable Notes and
-------------------------
Participating Broker-Dealers are intended third-party beneficiaries of this
Agreement, and this Agreement may be enforced by such Persons.
<PAGE>
-29-
(l) Entire Agreement. This Agreement, together with the Purchase
----------------
Agreement and the Indenture, is intended by the parties as a final and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein and therein and any and all prior oral or
written agreements, representations, or warranties, contracts, understandings,
correspondence, conversations and memoranda between the Holders on the one hand
and the Issuers on the other, or between or among any agents, representatives,
parents, subsidiaries, affiliates, predecessors in interest or successors in
interest with respect to the subject matter hereof and thereof are merged herein
and replaced hereby.
<PAGE>
S-1
WITNESS the due execution hereof by the respective duly authorized
officers of the undersigned as of the date first written above.
BUILDING ONE SERVICES CORPORATION,
as Issuer
By:_______________________________
Name:
Title:
ADVENT ELECTRIC CO., INC.
AMERICAN AIR COMPANY, INC.
APPEARANCE MANAGEMENT SERVICES, INC.
BELTLINE MECHANICAL SERVICES, INC.
BOXBERGER, INC.
BRICK, INC.
BUILDING ONE MECHANICAL SERVICES, INC.
BUILDING ONE SERVICE SOLUTIONS, INC.
BUYR, INC.
CENTER SERVICES, INC.
CONSOLIDATED ELECTRICAL GROUP, INC.
D/FW MECHANICAL SERVICES, INC.
FLOR-SHIN, INC.
GAMEWELL MECHANICAL, INC.
GARFIELD-INDECON ELECTRICAL SERVICES, INC.
G.S. GROUP, INC.
G.S. FINANCIAL, INC.
GULF STATES, INC.
G.S.I. OF CALIFORNIA, INC.
TESTRONICS, INC.
BRAZOSPORT MANAGEMENT, INC.
HUNT ELECTRIC, INC.
IVEY MECHANICAL COMPANY, INC.
<PAGE>
S-2
BARNES IVEY MECHANICAL COMPANY, L.L.C.
LEXINGTON/IVEY MECHANICAL COMPANY, LLC
IVEY MECHANICAL SERVICES, L.L.C.
THE LEWIS COMPANIES, INC.
OIL CAPITAL ELECTRIC, INC.
ENGINEERING DESIGN GROUP, INC.
ELECTRICAL DESIGN & CONSTRUCTION, INC.
FRED CLARK ELECTRICAL CONTRACTOR INC.
OMNI MECHANICAL COMPANY
OMNI MECHANICAL SERVICES
MCINTOSH MECHANICAL, INC.
NATIONAL NETWORK SERVICES, INC.
PERIMETER MAINTENANCE CORPORATION
POTTER ELECTRIC CO., INC.
REGENCY ELECTRIC COMPANY, INC.
REGENCY ELECTRIC COMPANY JACKSONVILLE
OFFICE, INC.
REGENCY ELECTRIC COMPANY ORLANDO OFFICE, INC.
REGENCY ELECTRIC COMPANY ATLANTA OFFICE
REGENCY ELECTRIC COMPANY MEMPHIS OFFICE, INC.
REGENCY ELECTRIC COMPANY PROJECTS GROUP, INC.
REGENCY ELECTRIC COMPANY SOUTH FLORIDA, INC.
REGENCY ELECTRIC COMPANY CHARLOTTE
OFFICE, INC.
RELIABLE PAPER SERVICE COMPANY, INC.
RIVIERA ELECTRIC CONSTRUCTION CO.
RIVIERA ELECTRIC OF CALIFORNIA, INC.
ROBINSON MECHANICAL COMPANY
SANDERS BROS., INC.
SKC ELECTRIC, INC.
<PAGE>
S-3
CRAMAR ELECTRIC, INC.
SKCE, INC.
PRO WIRE SECURITY SYSTEMS, INC.
SPANN BUILDING MAINTENANCE COMPANY
SPANN MANAGEMENT GROUP, INC.
TAYLOR ELECTRIC, INC.
TESS HOLDINGS, INC.
CREST INTERNATIONAL, LLC
TOWN & COUNTRY ELECTRIC, INC.
TRI-CITY ELECTRICAL CONTRACTORS, INC.
TRI-M HOLDING CORP.
TRI-M CORPORATION
TRI-M ELECTRICAL CONSTRUCTION CORP.
TRI-M BUILDING AUTOMATION SYSTEMS CORP.
TRI-M INFORMATION SYSTEMS CORP.
TRI-M INTEGRATED SYSTEM SOLUTIONS CORP.
WALKER ENGINEERING, INC.
WARREN ELECTRICAL CONSTRUCTION CORP.
WATSON ELECTRICAL CONSTRUCTION CO.
WILSON ELECTRIC COMPANY, INC.
CHAMBERS ELECTRONIC COMMUNICATIONS, INC.
BY:_______________________________
Name:
Title:
<PAGE>
S-4
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
BT ALEX. BROWN INCORPORATED
BEAR, STEARNS & CO. INC.
GOLDMAN, SACHS & CO.
SALOMON SMITH BARNEY INC.
FRIEDMAN, BILLINGS, RAMSEY & CO. INC.
JEFFERIES & COMPANY, INC.
FLEET SECURITIES, INC.
as Initial Purchasers
c/o BT Alex. Brown Incorporated
By:_____________________
Name:
Title:
<PAGE>
Exhibit 4.03
BUILDING ONE SERVICES CORPORATION
10 1/2% Senior Subordinated Note
due May 1, 2009
CUSIP No._________
No. $
BUILDING ONE SERVICES CORPORATION, a Delaware corporation (the "Company",
which term includes any successor corporation), for value received promises to
pay to CEDE & CO. or registered assigns, the principal sum of
on May 1, 2009.
Interest Payment Dates: May 1 and November 1, commencing November 1,
1999.
Record Dates: April 15 and October 15.
Reference is made to the furth
er provisions of this Security contained
herein, which will for all purposes have the same effect as if set forth at this
place.
IN WITNESS WHEREOF, the Company has caused this Security to be signed
manually or by facsimile by its duly authorized officers.
Dated: April 30, 1999
BUILDING ONE SERVICES CORPORATION
By:
----------------------
Name:
Title:
By:
----------------------
Name
Title:
<PAGE>
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 10 1/2% Senior Subordinated Notes due 2009
described in the within-mentioned Indenture.
Dated: April 30, 1999 IBJ WHITEHALL BANK & TRUST COMPANY,
as Trustee
By:
----------------------------
Authorized Signatory
<PAGE>
(REVERSE OF SECURITY)
BUILDING ONE SERVICES CORPORATION
10 1/2% Senior Subordinated Note
due May 1, 2009
1. Interest.
--------
BUILDING ONE SERVICES CORPORATION, a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Security at
the rate per annum shown above. The Company will pay interest semi-annually on
May 1 and November 1 of each year (the "Interest Payment Date"), commencing
November 1, 1999. Interest on this Security will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from
April 30, 1999. Interest on this Security will be comput
ed on the basis of a
360-day year of twelve 30-day months.
The Company shall pay interest on overdue principal from time to time
on demand at the rate borne by this Security plus 2% and on overdue installments
of interest (without regard to any applicable grace periods) to the extent
lawful.
2. Method of Payment.
-----------------
The Company shall pay interest on the Securities (except defaulted
interest) to the persons who are the registered Holders at the close of business
on the Record Date immediately preceding the Interest Payment Date even if the
Securities are cancelled on registration of transfer or registration of exchange
after such Record Date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company shall pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts ("U.S. Legal Tender"). However, the Company
may pay principal and interest by wi
re transfer of Federal funds, or interest by
check payable in such U.S. Legal Tender. The Company may deliver any such
interest payment to the Paying Agent or to a Holder at the Holder's registered
address.
3. Paying Agent and Registrar.
--------------------------
Initially, IBJ Whitehall Bank & Trust Company (the "Trustee") will act
as Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or co-Registrar without notice to the Holders. The Company or any of
its Subsidiaries may, subject to certain exceptions, act as Registrar or co-
Registrar.
4. Indenture.
---------
The Company issued the Securities under an Indenture, dated as of
April 30, 1999 (the "Indenture"), among the Company, the Guarantors named
therein and the Trustee. This Security is one of a duly authorized issue of
Securities of the Company designated as its 10 1/2% Senior
<PAGE>
Subordinated Notes due 2009 (the "Securities"). The Securities are treated as a
single class of securities under the Indenture unless otherwise specified in the
Indenture. Capitalized terms herein are used as defined in the Indenture unless
otherwise defined herein. The terms of the Securities include those stated in
the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-77bbbb) (the "TIA"), as in effect
on the date of the Indenture until such time as the Indenture is qualified under
the TIA, and thereafter as in effect on the date on which the Indenture is
qualified under the TIA. Notwithstanding anything to the contrary herein, the
Securities are subject to all such terms, and Holders of
Securities are referred
to the Indenture and the TIA for a statement of them. The Securities are general
obligations of the Company limited in aggregate principal amount to
$400,000,000.
5. Subordination.
-------------
The Securities are subordinated in right of payment, in the manner and
to the extent set forth in the Indenture, to the prior payment in full in cash
or Cash Equivalents of all Senior Debt of the Company, whether outstanding on
the date of the Indenture or thereafter created, incurred, assumed or
guaranteed. Each Holder by his acceptance hereof agrees to be bound by such
provisions and authorizes and expressly directs the Trustee, on his behalf, to
take such action as may be necessary or appropriate to effectuate the
subordination provided for in the Indenture and appoints the Trustee his
attorney-in-fact for such purposes.
6. Optional Redemption.
-------------------
The Securities will be redeemable, at the Company's option, in whole
at any time or in
part from time to time, on and after May 1, 2004, upon not
less than 30 nor more than 60 days' notice, at the following redemption prices
(expressed as percentages of the principal amount) if redeemed during the
twelve-month period commencing on May 1 of the years set forth below, plus, in
each case, accrued and unpaid interest thereon, if any, to the date of
redemption:
Year Percentage
---- ----------
2004 105.438%
2005 104.350%
2006 103.263%
2007 102.175%
2008 101.088%
2009 and thereafter....... 100.000%
7. Optional Redemption upon Equity Offerings.
--------------------------------------------
At any time, or from time to time, on or prior to May 1, 2002, the
Company may, at
its option, use the net cash proceeds of one or more Equity
Offerings to redeem up to 35% aggregate principal amount of the Securities
issued pursuant to the Indenture at a redemption price equal to 110.875% of the
principal amount thereof, plus accrued and unpaid interest thereon, if any, to
the date of redemption; provided that after any such redemption the aggregate
--------
principal amount of Securities outstanding must equal at least 65% of the
aggregate principal amount of the Securities issued
<PAGE>
pursuant to the Indenture. In order to effect the foregoing redemption with the
net cash proceeds of any Equity Offering, the Company shall make such redemption
not more than 90 days after the consummation of any such Equity Offering.
As used in the preceding paragraph, "Equity Offering" means a public
or private offering of Qualified Capital Stock (other than public offerings with
respect to the Company's Common Stock on Form S-8 or any replacement form for
the Form S-8) of the Company for aggregate net cash proceeds to the Company of
at least $20 million.
8. Notice of Redemption.
--------------------
Notice of redemption will be mailed at least 30 days but not more than
60 days before the Redemption Date to each Holder of Se
curities to be redeemed
at such Holder's registered address. Securities in denominations of $1,000 may
be redeemed only in whole. The Trustee may select for redemption portions
(equal to $1,000 or any integral multiple thereof) of the principal of
Securities that have denominations larger than $1,000.
If any Security is to be redeemed in part only, the notice of
redemption that relates to such Security shall state the portion of the
principal amount thereof to be redeemed. A new Security in a principal amount
equal to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Security. On and after the Redemption
Date, interest will cease to accrue on Securities or portions thereof called for
redemption.
9. Change of Control Offer.
-----------------------
Upon the occurrence of a Change of Control, the Company will be
required to offer to purchase all of the outstanding Securities at a purchase
price equal to 101% of
the principal amount thereof, plus accrued and unpaid
interest, if any, thereon to the date of repurchase.
10. Limitation on Asset Sales.
-------------------------
The Company is, subject to certain conditions, obligated to make an
offer to purchase Securities at 100% of their principal amount, plus accrued and
unpaid interest, if any, thereon to the date of repurchase with certain net cash
proceeds of certain sales or other dispositions of assets in accordance with the
Indenture.
11. Denominations; Transfer; Exchange.
---------------------------------
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection the
rewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Securities or portions thereof selected for redemption, except the
unredeemed portion of any security being redeemed in part.
<PAGE>
12. Persons Deemed Owners.
---------------------
The registered Holder of a Security shall be treated as the owner of
it for all purposes.
13. Unclaimed Funds.
---------------
If funds for the payment of principal or interest remain unclaimed for
one year, the Trustee and the Paying Agent will repay the funds to the Company
at its request. After that, all liability of the Trustee and such Paying Agent
with respect to such funds shall cease.
14. Discharge Prior to Redemption or Maturity.
-----------------------------------------
The Company and the Guarantors may be discharged from their
obligations under the Indenture, the Securities and the Guarantees except for
certain provisions thereof, and may b
e discharged from obligations to comply
with certain covenants contained in the Indenture, the Securities and the
Guarantees, in each case upon satisfaction of certain conditions specified in
the Indenture.
15. Amendment; Supplement; Waiver.
-----------------------------
Subject to certain exceptions, the Indenture, the Securities and the
Guarantees may be amended or supplemented with the written consent of the
Holders of at least a majority in aggregate principal amount of the Securities
then outstanding, and any existing Default or Event of Default or compliance
with any provision may be waived with the consent of the Holders of a majority
in aggregate principal amount of the Securities then outstanding. Without
notice to or consent of any Holder, the parties thereto may amend or supplement
the Indenture, the Securities and the Guarantees to, among other things, cure
any ambiguity, defect or inconsistency, provide for uncertificated Securities in
addition to or in place of certifica
ted Securities or comply with any
requirements of the Commission in connection with the qualification of the
Indenture under the TIA, or make any other change that does not materially
adversely affect the rights of any Holder of a Security.
16. Restrictive Covenants.
---------------------
The Indenture contains certain covenants that, among other things,
limit the ability of the Company and its Restricted Subsidiaries to make
restricted payments, to incur indebtedness, to create liens, to sell assets, to
permit restrictions on dividends and other payments by Restricted Subsidiaries
of the Company to the Company, to consolidate, merge or sell all or
substantially all of its assets or to engage in transactions with affiliates.
The limitations are subject to a number of important qualifications and
exceptions. The Company must annually report to the Trustee on compliance with
such limitations.
17. Defaults and Remedies.
---------------------
If an Event of Default occu
rs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable immediately in
the manner and with the effect provided in the Indenture. Holders of
<PAGE>
Securities may not enforce the Indenture, the Securities or the Guarantees
except as provided in the Indenture. The Trustee is not obligated to enforce the
Indenture, the Securities or the Guarantees unless it has received indemnity
satisfactory to it. The Indenture permits, subject to certain limitations
therein provided, Holders of a majority in aggregate principal amount of the
Securities then outstanding to direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from Holders of Securities notice of certain
continuing Defaults or Events of Default if it determines that withholding
notice is in their interest.
18. Trustee Dealings with Company.
-----------------------------
The Trustee under the Indenture, in
its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Company, its Subsidiaries or their respective Affiliates as if it were
not the Trustee.
19. No Recourse Against Others.
--------------------------
No stockholder, director, officer, employee or incorporator, as such,
of the Company or any Subsidiary of the Company shall have any liability for any
obligation of the Company under the Securities or the Indenture or for any claim
based on, in respect of or by reason of, such obligations or their creation.
Each Holder of a Security by accepting a Security waives and releases all such
liability. The waiver and release are part of the consideration for the
issuance of the Securities.
20. Authentication.
--------------
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on this Security.
21. Abbreviations and Defined Terms.
----------------
- ---------------
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
22. Governing Law.
-------------
This Security shall be governed by, and construed in accordance with,
the laws of the State of New York without giving effect to applicable principles
of conflicts of laws to the extent that the application of the laws of another
jurisdiction would be required thereby.
23. CUSIP Numbers.
-------------
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such
<PAGE>
numbers as printed on the Securities and reliance may be placed only on the
other identification numbers printed hereon.
24. Indenture.
---------
Each Holder, by accepting a Security, agrees to be bound by all of the
terms and provisions of the Indenture, as the same may be amended from time to
time. Capitalized terms used herein and not defined herein have the meanings
ascribed thereto in the Indenture.
25. Guarantees.
----------
This Security will be entitled to the benefits of certain senior
subordinated Guarantees made for the benefit of the Holders. Reference is
hereby made to the Indenture for a statement of the respective rights,
limitations of rights, duties and obligations thereunder of the Guarantors, the
T
rustee and the Holders.
The Company will furnish to any Holder of a Security upon written
request and without charge a copy of the Indenture. Requests may be made to:
BUILDING ONE SERVICES CORPORATION, 800 Connecticut Avenue, NW, Washington, DC
20006, Attention: Office of General Counsel.
<PAGE>
ASSIGNMENT FORM
I or we assign and transfer this Security to
_______________________________________________________________
_______________________________________________________________
(Print or type name, address and zip code of assignee or
transferee)
______________________________________________________________________________
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint _______________________________________ agent to
transfer this Security on the books of the Company. The agent may substitute
another to act for him.
Dated: _________________ Signed: _________________________
(Sign exactly as name
appears on the other
side of this Security)
Signature Guarantee: _______________________________________________
Participant in a recognized Signature Guarantee Medallion
Program (or other signature guarantor program reasonably
acceptable to the Trustee)
In connection with any transfer of this Security occurring prior to
the date which is the earlier of (i) the date of the declaration by the
Commission of the effectiveness of a registration statement under the Securities
Act of 1933, as amended (the "Securities Act") covering resales of this Security
(which effectiveness shall not have been suspended or terminated at the date of
the transfer) and (ii) April 30, 2001 the undersigned confirms that it has not
utilized any general solicitation or general advertising in connection with the
transfer:
[Check One]
---------
(1) ___ to the Company or a subsidiary thereof; or
(2) ___ pursuant to and in compliance with Rule 144A under the Securities Act
of 1933, as amended; or
(3) ___ to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as
amended) that has furnished to the Trustee a signed letter containing
certain representations and agreements (the form of which letter can
be obtained from the Trustee); or
<PAGE>
(4) ___ outside the United States to a "foreign purchaser" in compliance with
Rule 904 of Regulation S under the Securities Act of 1933, as amended;
or
(5) ___ pursuant to the exemption from registration provided by Rule 144 under
the Securities Act of 1933, as amended; or
(6) ___ pursuant to an effective registration statement under the Securities
Act of 1933, as amended; or
(7) ___ pursuant to another available exemption from the registration
statement requirements of the Securities Act of 1933, as amended.
and unless the box below is checked, the undersigned confirms that such Security
is not being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act of
1933, as amended (an "Affiliate"):
The transferee is an Affiliate of the Company.
Unless one of the items is checked, the Trustee will refuse to
register any of the Securities evidenced by this certificate in the name of any
person other than the registered Holder thereof; provided, however, that if item
-------- -------
(3), (4), (5) or (7) is checked, the Company or the Trustee may require, prior
to registering any such transfer of the Securities, in their sole discretion,
such written legal opinions, certifications (including an investment letter in
the case of box (3) or (4) and other information as the Trustee or the Company
have reasonably requested to confirm that such transfer is being made pursuant
to an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, as amended.
If none of the foregoing items are checked, the Trustee or Registra
r
shall not be obligated to register this Security in the name of any person other
than the Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.16 of the Indenture shall have
been satisfied.
Dated: Signed:
-------------- -----------------------
(Sign exactly as name appears on
the other side of this Security)
Signature Guarantee:
------------------------------------------------------------
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Ru
le 144A and
<PAGE>
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:
------------------
NOTICE: To be executed by an executive
officer
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.15 or Section 4.16 of the Indenture, check the appropriate
box:
Section 4.15 [ ] Section 4.16 [ ]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.15 or Section 4.16 of the Indenture, state the
amount: $___________
Dated: _________________ Signed: _________________________
(Sign exactly as name
appears on the other
side of this Security)
Signat
ure Guarantee: ______________________________________
Participant in a recognized Signature Guarantee Medallion
Program (or other signature guarantor program reasonably
acceptable to the Trustee)
<PAGE>
Exhibit 12.01
<TABLE>
<CAPTION>
Building One Services
Tender Offer
Ratio of Earnings to Fixed Charges
Net book value per share support For the years ended December 31,
--------------------------------------------------------------------------------
1994 1995 1996 1997 1998
----------- --------------- -------------- ---------------------------------
<S> <C> <C> <C> <C> <C>
Earnings
Pre-tax income (loss) $ 592 $ (195) $ 428 $ 1,537 $ 83,583
Interest expense 329 239 224 208 1,054
Rental expense component 1/3 144 179 187 113 2,538
----------- --------------- -------------- -------------------------------
Total fixed charges 473 418 411 321 3,592
Earnings before income taxes and fixed charges 1,065 223 839 1,858 87,175
Ratio of earnings to fixed charges 2.3 x -- (1) 2.0 x 5.8 x 24.3 x
<CAPTION>
For the three months ended
March 31,
-------------- -------------------------------
Pro Forma Pro Forma
1998 1999 1999
------------------------------------------------
<S> <C> <C> <C>
Earnings
Pre-tax income (loss) $ 70,442 $ 26,660 $ 14,647
Interest expense 43,892 96 10,829
Rental expense component 1/3 4,441 1,558 1,658
-------------- -------------- ---------------
Total fixed charges 48,333 1,654 12,487
Earnings before income taxes and fixed charges 118,775 28,314 27,134
Ratio of earnings to fixed charges 2.5 x 17.1 x 2.2 x
</TABLE>
- --------------------------------------------------------------
* For purposes of computing the ratio of earnings to fixed charges: (1)
"earnings" consists of income from continuing operations before income taxes
and fixed charges; and (2) "fixed charges" consists of interest, amortization
of debt issuance costs, the commitment fee on the unused portion of the credit
facility and the estimated interest component of rental expense.
(1) Earnings were inadequate to cover fixed charges for the year ended December
31, 1995 by $195,000.
<PAGE>
Exhibit 23.02
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-4 of Building One Services Corporation, of our reports
dated (i) February 12, 1999, except for Note 3, which is as of March 23, 1999,
relating to the consolidated financial statements of Building One Services
Corporation; (ii) February 19, 1998, relating to the combined financial
statements of Service Management USA, Inc. and its affiliates, which appear in
Building One Services Corporation's Prospectus Supplement dated May 17, 1999.
We also consent to the reference to us under the heading "Experts" in such
Prospectus.
/s/ PricewaterhouseCoopers LLP
- ------------------------------
PRICEWATERHOUSECOOPERS LLP
Minneapolis, Minnesota
June 25, 1999
<PAGE>
EXHIBIT 23.02
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-4 of our report dated
February 17, 1998 relating to the financial statements of SKC Electric, Inc. and
Affiliate and Lovecor, Inc., which is incorporated by reference in such
Prospectus. We also consent to the reference to us under the heading "Experts"
in such Prospectus.
/s/ PricewaterhouseCoopers LLP
- ------------------------------
PricewaterhouseCoopers LLP
Kansas City, Missouri
June 25, 1999
<PAGE>
Exhibit 23.03
CONSENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors
Riviera Electric Construction Co.
We consent to the use in the registration statement of Building One Services
Corporation on Form S-4 of our report dated February 18, 1998, with respect to
the balance sheets of Riviera Electric Construction Co. as of December 31, 1997
and 1996, and related statements of income, stockholders' equity and cash
flows for the three years in the period ended December 31, 1997.
/s/ Baird, Kurtz & Dobson
------------------------------
Denver, Colorado
June 24, 1999
<PAGE>
Exhibit 23.04
CONSENT OF INDEPENDENT ACCOUNTANTS
We have issued our report dated February 6, 1998, accompanying financial
statements of Town & Country Electric Inc. contained in Form S-4 for Building
One Services Corporation. We consent to the use of the aforementioned reports in
Form S-4.
/s/ Grant Thornton LLP
-------------------------------
Grant Thornton LLP
Appeleton, Wisconsin
June 23, 1999
<PAGE>
EXHIBIT 23.04
CONSENT OF INDEPENDENT ACCOUNTANTS
We have issued our report dated February 12, 1998, accompanying the financial
statements of Garfield Electric Company contained in the Registration Statement
on Form S-4 for Building One Services Corporation. We consent to the use of the
aforementioned reports in the Registration Statement on Form S-4.
/s/ Grant Thornton LLP
------------------------------
Grant Thornton LLP
Cincinnati, Ohio
June 25, 1999
<PAGE>
EXHIBIT 23.04
CONSENT OF INDEPENDENT ACCOUNTANTS
We have issued our report dated February 12, 1998, accompanying the financial
statements of Indecon, Inc. contained in the Registration Statement on Form S-4
for Building One Services Corporation. We consent to the use of the
aforementioned reports in the Registration Statement on Form S-4.
/s/ Grant Thornton LLP
-------------------------------
Grant Thornton LLP
Cincinnati, Ohio
June 25, 1999
<PAGE>
Exhibit 23.05
The Board of Directors
Tri-City Electrical Contractors, Inc.:
We consent to incorporation by reference of our report dated February 16, 1998
with respect to the consolidated balance sheets of Tri-City Electrical
Contractors, Inc. as of December 31, 1996 and 1997, and the related consolidated
statements of operations, stockholders' equity and cash flows for each of the
years in the three-year period ended December 31, 1997 and to reference our firm
under the heading "Experts" in the Form S-4 of Building One Services Corporation
dated June 25, 1999.
/s/ KPMG LLP
--------------
- -----------------
Orlando, Florida
June 25, 1999
<PAGE>
Exhibit 23.06
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-4 of Building One Services Corporation our report dated
January 30, 1998, relating to the financial statements of Wilson Electric
Company, Inc., which appears in Building One Services Corporation's Prospectus
Supplement dated May 17, 1999. We also consent to the reference to us under the
heading "Experts" in such Registration Statement.
/s/ Barry & Moore, P.C.
----------------------------------
June 25, 1999
<PAGE>
Exhibit 23.07
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-4 of Building One Services Corporation of our report dated
February 20, 1998, relating to the financial statements of Taylor Electric,
Inc., which appears in Building One Services Corporation's Prospectus Supplement
dated May 17, 1999. We also consent to the reference to us under the heading
"Experts" in such Prospectus.
/s/ Leverich, Phillips, Rasmuson & Company
------------------------------------------------
Leverich, P
hillips, Rasmuson & Company
Salt Lake City, Utah
June 23, 1999
<PAGE>
Exhibit 23.08
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form S-4 of our report dated February 18, 1998,
relating to the financial statements of Regency Electric Company, Inc. and
subsidiaries which appears in such Prospectus.
/s/ Harbeson, Beckerleg & Fletcher
---------------------------------------
Harbeson, Beckerleg & Fletcher
Harbeson, Beckerleg & Fletcher
Jacksonville, Florida
June 23, 1999
<PAGE>
Exhibit 23.09
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-4 of Building One Services Corporation, of our report dated
February 19, 1998, relating to the financial statements of Perimeter Maintenance
Corporation which appears in Building One Services Corporation's Prospectus
Supplement dated May 17, 1999. We also consent to the reference to us under the
heading "Experts" in such Registration Statement.
/s/ Frazier & Deeter, LLC
---------------------------------
Frazier & Deeter, LLC
Atlanta, Georgia
June 25, 1999
<PAGE>
Exhibit 23.10
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-4 of Building One Services Corporation, of our report dated
February 17, 1998, relating to the financial statements of Crest International,
LLC which appears in Building One Services Corporation's Prospectus Supplement
dated May 17, 1999. We also consent to the reference to us under the heading
"Experts" in such Registration Statement.
/s/ Shinners, Hucovski & Company, S.C.
-----------------------------------------------
Green Bay, Wisconsin
June 23, 1999
<PAGE>
Exhibit 25.01
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)
---------------
IBJ WHITEHALL BANK & TRUST COMPANY
(Exact name of trustee as specified in its charter)
New York 13-6022258
(Jurisdiction of incorporation (I.R.S. employer
or organization if not a U.S. national bank) identification No.)
One State Street, New York, New York 10004
(Address of principal executive offices) (Zip code)
TERENCE RAWLINS, ASSISTANT VICE PRESIDENT
IBJ WHITEHALL BANK & TRUST COMPANY
One State Street
New York, New York 10004
(212) 858-2000
(Name, address and telephone number of agent for service)
BUILDING ONE SERVICES CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 52-2054952
(State or other jurisdiction of (I.R.S. employer identification No.)
incorporation or organization)
800 Connecticut Avenue, N.W. Suite 1111
Washington, DC 20006
(Address of principal executive offices) (Zip code)
10 1/2% Senior Subordinated Notes Due 2009
(Title of indenture securities)
<PAGE>
Item 1. General information
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department
Two Rector Street
New York, New York
Federal Deposit Insurance Corporation
Washington, D.C.
Federal Reserve Bank of New York
Second District,
33 Liberty Street
New York, New York
(b) Whether it is authorized to exercise corporate
trust powers.
Yes
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
The obligor is not an affiliate of the trustee.
Item 13. Defaults by the Obligor.
(a) State whether there is or has been a default with respect to the
securities under this indenture. Explain the nature of any such
default.
None
2
<PAGE>
(b) If the trustee is a trustee under another indenture under which
any other securities, or certificates of interest or
participation in any other securities, of the obligors are
outstanding, or is trustee for more than one outstanding series
of securities under the indenture, state whether there has been a
default under any such indenture or series, identify the
indenture or series affected, and explain the nature of any such
default.
None
Item 16. List of exhibits.
List below all exhibits filed as part of this statement of
eligibility.
*1. A copy of the Charter of IBJ Whitehall Bank & Trust Company as
amended to date. (See Exhibit 1A to Form T-1, Securities and
Exchange Commission File No 22-18460 and Exhibit 25.1 to Form
T-1, Securities and Exchange Commission File No. 333-46849).
*2. A copy of the Certificate of Authority of the trustee to
Commence Business (Included in Exhibit 1 above).
*3. A copy of the Authorization of the trustee to exercise
corporate trust powers, as amended to date (See Exhibit 4 to Form
T-1, Securities and Exchange Commission File No. 22-19146).
*4. A copy of the existing By-Laws of the trustee, as amended to
date (See Exhibit 25.1 to Form T-1, Securities and Exchange
Commission File No. 333-46849).
5. Not Applicable
6. The consent of United States institutional trustee required by
Section 321(b) of the Act.
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its supervising
or examining authority.
* The Exhibits thus designated are incorporated herein by reference as
exhibits hereto. Following the description of such Exhibits is a reference
to the copy of the Exhibit heretofore filed with the Securities and
Exchange Commission, to which there have been no amendments or changes.
3
<PAGE>
NOTE
----
In answering any item in this Statement of Eligibility which relates to
matters peculiarly within the knowledge of the obligor and its directors or
officers, the trustee has relied upon information furnished to it by the
obligor.
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
trustee of all facts on which to base responsive answers to Item 2, the
answer to said Item is based on incomplete information.
Item 2, may, however, be considered as correct unless amended by an
amendment to this Form T-1.
Pursuant to General Instruction B, the trustee has responded to Items 1, 2
and 16 of this form since to the best knowledge of the trustee as indicated
in Item 13, the obligor is not in default under any indenture under which
the applicant is trustee.
4
<PAGE>
SIGNATURE
---------
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, IBJ Whitehall Bank & Trust Company, a corporation organized and
existing under the laws of the State of New York, has duly caused this statement
of eligibility & qualification to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of New York, and State of New York,
on the 21st day of June, 1999.
IBJ WHITEHALL BANK & TRUST COMPANY
By: __________________________________
Terence Rawlins
Assistant Vice President
<PAGE>
SIGNATURE
---------
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, IBJ Whitehall Bank & Trust Company, a corporation organized and
existing under the laws of the State of New York, has duly caused this statement
of eligibility & qualification to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of New York, and State of New York,
on the 21st day of June, 1999.
IBJ WHITEHALL BANK & TRUST COMPANY
By: /s/ Terence Rawlins
______________________________
Terence Rawlins
Assistant Vice President
<PAGE>
Exhibit 6
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture
Act of 1939, as amended, in connection with the issuance by Building One
Services Corporation, of its 10 1/2% Senior Subordinated Notes due 2009, we
hereby consent that reports of examinations by Federal, State, Territorial, or
District authorities may be furnished by such authorities to the Securities and
Exchange Commission upon request therefor.
IBJ WHITEHALL BANK & TRUST COMPANY
By: /s/ Terence Rawlins
________________________________
Terence Rawlins
Assistant Vice President
Dated: June 21, 1999
<PAGE>
Exhibit 6
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture
Act of 1939, as amended, in connection with the issuance by Building One
Services Corporation, of its 10 1/2% Senior Subordinated Notes due 2009, we
hereby consent that reports of examinations by Federal, State, Territorial, or
District authorities may be furnished by such authorities to the Securities and
Exchange Commission upon request therefor.
IBJ WHITEHALL BANK & TRUST COMPANY
By: ____________________
Terence Rawlins
Assistant Vice President
Dated: June 21, 1999
<PAGE>
EXHIBIT 7
CONSOLIDATED REPORT OF CONDITION OF
IBJ WHITEHALL BANK & TRUST COMPANY
of New York, New York
And Foreign and Domestic Subsidiaries
Report as of March 31, 1999
<TABLE>
<CAPTION>
Dollar Amounts
in Thousands
----------------
<S> <C>
ASSETS
------
1. Cash and balance due from depository institutions:
a. Non-interest-bearing balances and currency and coin.................. $ 21,794
b. Interest-bearing balances............................................ $ 24,039
2. Securities:
a. Held-to-maturity securities.......................................... $ -0-
b. Available-for-sale securities........................................ $ 192,664
3. Federal funds sold and securities purchased under
agreements to resell in domestic offices of the bank
and of its Edge and Agreement subsidiaries and in IBFs
Federal Funds sold and Securities purchased under agreements to resell..... $ 90,207
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income............... $2,045,440
b. LESS: Allowance for loan and lease losses.............. $ 64,777
c. LESS: Allocated transfer risk reserve.................. $ -0-
d. Loans and leases, net of unearned income, allowance, and reserve..... $1,980,663
5. Trading assets held in trading accounts.................................... $ 783
6. Premises and fixed assets (including capitalized leases)................... $ 6,188
7. Other real estate owned.................................................... $ -0-
8. Investments in unconsolidated subsidiaries and associated companies........ $ -0-
9. Customers' liability to this bank on acceptances outstanding............... $ 615
10. Intangible assets.......................................................... $ 12,786
11. Other assets............................................................... $ 61,758
12. TOTAL ASSETS............................................................... $2,391,497
</TABLE>
<PAGE>
<TABLE>
LIABILITIES
-----------
<S> <C>
13. Deposits:
a. In domestic offices........................................................ $ 722,967
(1) Noninterest-bearing....................................... $ 155,445
(2) Interest-bearing.......................................... $ 567,522
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs.............. $1,111,757
(1) Noninterest-bearing...................................... $ 14,819
(2) Interest-bearing......................................... $1,096,938
14. Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of the bank and
of its Edge and Agreement subsidiaries, and in IBFs:
Federal Funds purchased and Securities sold under agreements to repurchase..... $ 105,000
15. a. Demand notes issued to the U.S. Treasury................................... $ 3,000
b. Trading Liabilities........................................................ $ 468
16. Other borrowed money:
a. With a remaining maturity of one year or less.............................. $ 25,002
b. With a remaining maturity of more than one year............................ $ 1,375
c. With a remaining maturity of more than three years......................... $ 3,550
17. Not applicable.
18. Bank's liability on acceptances executed and outstanding....................... $ 615
19. Subordinated notes and debentures.............................................. $ 100,000
20. Other liabilities.............................................................. $ 68,528
21. TOTAL LIABILITIES.............................................................. $2,142,262
22. Limited-life preferred stock and related surplus............................... $ N/A
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus.................................. $ -0-
24. Common stock................................................................... $ 28,958
25. Surplus (exclude all surplus related to preferred stock)....................... $ 210,319
26. a. Undivided profits and capital reserves..................................... $ 9,707
b. Net unrealized gains (losses) on available-for-sale securities............. $ 251
c. Accumulated net gains (losses) on cash flow hedges......................... $ -0-
27. Cumulative foreign currency translation adjustments............................ $ -0-
28. TOTAL EQUITY CAPITAL........................................................... $ 249,235
29. TOTAL LIABILITIES AND EQUITY CAPITAL........................................... $2,391,497
</TABLE>
<PAGE>
Exhibit 99.01
BUILDING ONE SERVICES CORPORATION
LETTER OF TRANSMITTAL
10 1/2% Senior Subordinated Notes due 2009
Issued on April 30, 1999
Exchange Note Cusip: 120114AC7
The exchange offer will expire at 5:00 P.M., New York City time, on ,
1999, unless extended (the "Expiration Date"). Tenders of outstanding notes
may be withdrawn at any time prior to 5:00 p.m. on the Expiration Date.
Exchange Agent: IBJ WHITEHALL BANK & TRUST COMPANY
By Mail: By Hand/Overnight Courier:
- -------------------------------------------------------------------------------
IBJ Whitehall Bank & Trust Company
IBJ Whitehall Bank & Trust Company One State Street
P.O. Box 84 New York, NY 10004
Bowling Green Station Attn.: Securities Processing Window,
New York, NY 10274-0084 Subcellar One, (SC-1)
Attn: Reorganization Operations
By Facsimile Transmission:
(for Eligible Institutions Only)
(212) 858-2611
For Information:
(212) 858-2103
Delivery of this Letter of Transmittal to an address other than as set forth
above does not constitute a valid delivery.
The instructions accompanying this Letter of Transmittal should be read
carefully before this Letter of Transmittal is completed.
HOLDERS WHO WISH TO BE ELIGIBLE TO RECEIVE NEW NOTES (THE "EXCHANGE NOTES")
FOR THEIR OUTSTANDING NOTES (THE "ORIGINAL NOTES") PURSUANT TO THE EXCHANGE
OFFER MUST VALIDLY TENDER (AND NOT WITHDRAW) THEIR ORIGINAL NOTES TO THE
EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE.
The undersigned acknowledges receipt of the prospectus dated , 1999 of
Building One Services Corporation (the "Company") and this Letter of
Transmittal, which together constitute the Company's offer to exchange $1,000
principal amount of its 10 1/2% Senior Subordinated Notes due 2009 (the
"Exchange Notes"), which have been registered under the Securities Act of
1933, as amended, pursuant to a registration statement of which the prospectus
is a part, for each $1,000 principal amount of its outstanding 10 1/2% Senior
Subordinated Notes due 2009 that were issued on April 30, 1999 (the "Original
Notes"), of which $200,000,000 principal amount is outstanding, upon the terms
and conditions set forth in the prospectus.
For each Original Note accepted for exchange and not withdrawn, the holder
of such Original Note will receive an Exchange Note that has a principal
amount equal to that of the surrendered Original Note. Interest on the
Exchange Note will accrue from the last date on which interest was paid on the
Original Notes, or if no such interest has been paid, from April 30, 1999. The
Original Notes accepted for exchange will cease to accrue interest from and
after the date of completion of the exchange offer. The Company reserves the
right, at any time or from time to time, to extend this exchange offer at its
discretion, in which event the term "Expiration
1
<PAGE>
Date" shall mean the latest time and date to which this exchange offer is
extended. The Company shall notify the exchange agent of any extension by oral
(promptly confirmed in writing) or written notice and will make a public
announcement thereof, each prior to 9:00 a.m., New York City time, on the next
business day after the previously scheduled Expiration Date.
This Letter of Transmittal is to be used by holders if:
. the certificates that represent their Original Notes are to be physically
delivered to the exchange agent herewith by holders;
. the tender of their Original Notes is to be made by book-entry transfer
to the exchange agent's account at The Depository Trust Company ("DTC"),
pursuant to the procedures set forth in the prospectus under "Exchange
Offer--Procedures for Tendering" by any financial institution that is a
participant in DTC and whose name appears on a security position listing
as the owner of the Original Notes; or
. the tender of their Original Notes is to be made according to the
guaranteed delivery procedures set forth in the prospectus under
"Exchange Offer--Guaranteed Delivery Procedures."
Delivery of documents to DTC does not constitute delivery to the exchange
agent.
The instructions included with this Letter of Transmittal must be followed.
Questions and requests for assistance or for additional copies of the
prospectus, this Letter of Transmittal and the Notice of Guaranteed Delivery
may be directed to the exchange agent. See Instruction 11 herein.
HOLDERS WHO WISH TO ACCEPT THE OFFER TO EXCHANGE AND TENDER THEIR
OUTSTANDING NOTES MUST COMPLETE THIS LETTER OF TRANSMITTAL IN ITS ENTIRETY.
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL CAREFULLY BEFORE CHECKING ANY
BOXES BELOW.
2
<PAGE>
DESCRIPTION OF 10 1/2% SENIOR SUBORDINATED NOTES DUE 2009 ISSUED APRIL 30,
1999 (OUTSTANDING NOTES)
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, EXACTLY AS NAME(S) APPEAR(S) ON TENDERED CERTIFICATE(S))
DESCRIPTION OF NOTES TENDERED
(See Instructions 3 and 4)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Name(s) and Address(es) of
Registered Holder(s)
(Please Fill in Exactly as
Name(s) Appear(s) on Certificate(s) Enclosed
Certificate(s)) (Attach signed list if necessary)
- --------------------------------------------------------------------------------
Aggregate
Principal Amount Principal Amount
Certificate Represented by Tendered
Number(s)* Certificate(s) (if less than all)**
-------------------------------------------------
<S> <C> <C> <C>
---------------------------------------------
---------------------------------------------
---------------------------------------------
---------------------------------------------
---------------------------------------------
Total
Amount
Tendered
- --------------------------------------------------------------------------------
</TABLE>
* Need not be completed by holders who tender Original Notes by book-entry
transfer.
** Unless otherwise indicated in the column labeled "Principal Amount
Tendered," any tendering holder of Original Notes will be deemed to have
tendered the entire principal aggregate amount represented by the column
labeled "Aggregate Principal Amount Represented by Certificate(s)."
If the space provided above is inadequate, list the certificate numbers and
principal amounts on a separate signed schedule and affix the list to this
Letter of Transmittal.
THE BOXES BELOW ARE TO BE CHECKED BY ELIGIBLE INSTITUTIONS ONLY
[_CHECK]HERE IF TENDERED ORIGINAL NOTES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER TO THE EXCHANGE AGENT'S ACCOUNT AT DTC AND COMPLETE THE FOLLOWING:
Name of Tendering Institution ____________________________________________
DTC Participant Number ___________________________________________________
Transaction Code Number __________________________________________________
[_CHECK]HERE IF TENDERED ORIGINAL NOTES ARE BEING DELIVERED PURSUANT TO A
NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND
COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s) __________________________________________
Window Ticket Number (If Any) ____________________________________________
Date of Execution of Notice of Guaranteed Delivery _______________________
IF DELIVERED BY BOOK-ENTRY TRANSFER, COMPLETE THE FOLLOWING:
Account Number ___________________________________________________________
Transaction Code Number __________________________________________________
[_CHECK]HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name _____________________________________________________________________
Address __________________________________________________________________
3
<PAGE>
Ladies and Gentlemen:
Subject to the terms and conditions of the exchange offer, the undersigned
hereby tenders to Building One Services Corporation, a Delaware corporation
(the "Company"), the principal amount of Original Notes indicated above.
Subject to and effective upon the acceptance for exchange of the principal
amount of Original Notes tendered in accordance with this Letter of
Transmittal, the undersigned sells, assigns and transfers to, or upon the
order of, the Company all right, title and interest in and to the Original
Notes tendered hereby. The undersigned hereby irrevocably constitutes and
appoints the exchange agent its agent and attorney-in-fact (with full
knowledge that the exchange agent also acts as the agent of the Company) with
respect to the tendered Original Notes with full power of substitution to:
. deliver certificates for such Original Notes to the Company, or transfer
ownership of such Original Notes on the account books maintained by DTC
and deliver all accompanying evidence of transfer and authenticity, or
upon the order of, the Company; and
. present such Original Notes for transfer on the books of the Company and
receive all benefits and otherwise exercise all rights of beneficial
ownership of such Original Notes, all in accordance with the terms and
subject to the conditions of the exchange offer.
The power of attorney granted in this paragraph shall be deemed irrevocable
and coupled with an interest.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Original Notes
tendered hereby and that the Company will acquire good and unencumbered title
thereto, free and clear of all liens, restrictions, charges and encumbrances
and not subject to any adverse claim, when the same are acquired by the
Company. The undersigned acknowledges that this exchange offer is being made
in reliance on an interpretation by the staff of the Securities and Exchange
Commission that the Exchange Notes issued in exchange for the Original Notes
pursuant to the exchange offer may be offered for resale, resold and otherwise
transferred by holders thereof (other than any such holder that is an
"affiliate" of the Company or its subsidiaries within the meaning of Rule 405
of the Securities Act of 1933, as amended), without compliance with the
registration and prospectus delivery provisions of the Securities Act of 1933,
as amended, provided that such Exchange Notes are acquired in the ordinary
course of such holders' business and such holders have no arrangements with
any person to participate in the distribution of such Exchange Notes. The
undersigned hereby further represents that:
. it will acquire the Exchange Notes in the ordinary course of business;
. it has no arrangement or understanding with any person to participate in
the distribution of the Exchange Notes in violation of the Securities
Act;
. it is not an affiliate of Building One Services Corporation as defined in
Rule 405 under the Securities Act or, if it is an affiliate, it will
comply with the applicable registration and prospectus delivery
requirements of the Securities Act;
. if it is not a broker-dealer, that it is not engaged, and does not intend
to engage in, the distribution of the Exchange Notes; and
. if it is a broker-dealer that will receive the Exchange Notes for its own
account in exchange for Original Notes that were acquired as a result of
market-making or other trading activities, that it will deliver a
prospectus in connection with any resale of the Exchange Notes. However,
by so acknowledging and delivering a prospectus, the undersigned will not
be deemed to admit that it is an "underwriter" within the meaning of the
Securities Act of 1933, as amended.
The undersigned hereby acknowledges and agrees that any broker-dealer and
any holder using the exchange offer to participate in a distribution of
Exchange Notes cannot not rely on the staff of the Securities and Exchange
Commission's position set forth in certain no-action letters and must comply
with the registration and prospectus delivery requirements of the Securities
Act of 1933, as amended, in connection with a secondary resale transaction.
4
<PAGE>
Such a secondary resale transaction must also be covered by an effective
registration statement containing the selling security holder information
required by Item 507 or Item 508, as applicable, of Regulation S-K.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the exchange agent or the Company to be necessary or
desirable to complete the assignment, transfer and purchase of the Original
Notes tendered hereby. All authority conferred or agreed to be conferred by
this Letter of Transmittal shall survive the death, incapacity or dissolution
of the undersigned and every obligation of the undersigned under this Letter
of Transmittal shall be binding upon the undersigned's heirs, personal
representatives, successors and assigns, trustees in bankruptcy or other legal
representatives of the undersigned. This tender may be withdrawn only in
accordance with the procedures set forth under the caption "Exchange Offer--
Withdrawal of Tenders" in the prospectus.
For purposes of the exchange offer, the Company shall be deemed to have
accepted validly tendered Original Notes when, as and if the Company has given
oral or written notice thereof to the exchange agent.
If any tendered Original Notes are not accepted for exchange pursuant to the
exchange offer for any reason, certificates for any such unaccepted Original
Notes will be returned (except as noted below with respect to tenders through
DTC), without expense, to the undersigned at the address shown below or at a
different address as may be indicated under "Special Delivery Instructions" as
promptly as practicable after the Expiration Date.
The undersigned understands that tenders of Original Notes pursuant to the
procedures described under the caption "Exchange Offer--Procedures for
Tendering" in the prospectus and in the instructions hereto will constitute a
binding agreement between the undersigned and the Company upon the terms and
subject to the conditions of the exchange offer.
Unless otherwise indicated under "Special Payment and Delivery
Instructions," the undersigned understands that the Company will issue the
certificates representing the Exchange Notes issued in exchange for the
Original Notes accepted for exchange and return any Original Notes not
tendered or not exchanged (or in either such event in the case of the Original
Notes tendered by DTC, by credit to the undersigned's account, at DTC).
Similarly, unless otherwise indicated under "Special Payment and Delivery
Instructions," the undersigned understands that the Company will send the
certificates representing the Exchange Notes issued in exchange for the
Original Notes accepted for exchange and any certificates for Original Notes
not tendered or not exchanged (and accompanying documents, as appropriate) to
the undersigned at the address shown below the undersigned's signature(s),
unless, in either event, tender is being made through DTC. In the event that
both "Special Payment Instructions" and "Special Payment and Delivery
Instructions" are completed, the undersigned understands that the Company will
issue the certificates representing the Exchange Notes issued in exchange for
the Original Notes accepted for exchange and return any Original Notes not
tendered or not exchanged in the name(s) of, and send said certificates to,
the person(s) so indicated. The undersigned recognizes that the Company has no
obligation pursuant to the "Special Payment Instructions" and "Special
Delivery Instructions" to transfer any Original Notes from the name of the
registered holder(s) thereof if the Company does not accept for exchange any
of the Original Notes so tendered.
Holders of Original Notes who wish to tender their Original Notes and:
. whose Original Notes are not immediately available;
. who cannot deliver their Original Notes, this Letter of Transmittal or
any other documents required hereby to the exchange agent prior to the
Expiration Date; or
. cannot complete the procedure for book-entry transfer prior to the
Expiration Date
may tender their Original Notes according to the guaranteed delivery
procedures set forth in the prospectus under the caption "Exchange Offer--
Guaranteed Delivery Procedures." See Instruction 1 regarding the completion of
the Letter of Transmittal printed below.
5
<PAGE>
PLEASE SIGN HERE WHETHER OR NOT OUTSTANDING NOTES
ARE BEING PHYSICALLY TENDERED HEREBY
X __________________________________________________ Date __________________
X __________________________________________________ Date __________________
Signature(s) of Registered Holder(s) or Authorized
Signatory
Area Code and Telephone Number ________________________________________________
The above lines must be signed by the registered holder(s) of Original Notes
as their name(s) appear(s) on the Original Notes or, if the Original Notes are
tendered by a participant in DTC, as such participant's name appears on a
security position listing as the owner of Original Notes, or by person(s)
authorized to become registered holder(s) by a properly completed bond power
from the registered holder(s), a copy of which must be transmitted with this
Letter of Transmittal. If Original Notes to which this Letter of Transmittal
relates are held of record by two or more joint holders, then all such holders
must sign this Letter of Transmittal. If signature is by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation or other
person acting in a fiduciary or representative capacity, such person must (1)
set forth his or her full title below and (2) unless waived by the Company,
submit evidence satisfactory to the Company of such person's authority to act.
See Instruction 4 regarding the completion of this Letter of Transmittal
printed below.
Name(s): ______________________________________________________________________
_______________________________________________________________________________
(Please Print)
Capacity: _____________________________________________________________________
Address: ______________________________________________________________________
(Include Zip Code)
SIGNATURE GUARANTEE BY AN ELIGIBLE INSTITUTION
(If required by Instruction 4)
_______________________________________________________________________________
(Authorized Signature)
_______________________________________________________________________________
(Title)
_______________________________________________________________________________
(Name of Firm)
Dated: ________________________________________________________________________
6
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 4, 5 AND 6)
To be completed ONLY if certificates for Original Notes in a principal
amount not tendered or not accepted for exchange, or Exchange Notes issued
in exchange for Original Notes accepted for exchange, are to be issued in
the name of someone other than the undersigned, or if the Original Notes
tendered by book-entry transfer that are not accepted for exchange are to be
credited to an account maintained by DTC.
Issue certificates to:
Name(s): ____________________________________________________________________
(Please Print)
Address: ____________________________________________________________________
(Include Zip Code)
_____________________________________________________________________________
(Tax Identification or Social Security No.)
SIGNATURE
(If Special Payment Instructions are Given)
(See Instruction )
_____________________________________________________________________________
Signature(s) of Payee(s)
Dated , 1999
By signing and completing the form above, under the penalties of perjury,
I/we certify that the above tax identification or social security number(s)
is/are correct.
Note: Failure to complete and sign may result in backup withholding of 31%
of the payments due to you. See Instruction 6.
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 4, 5 AND 6)
To be completed ONLY if certificates for Original Notes in a principal
amount not tendered or not accepted for exchange, or Exchange Notes issued
in exchange for Original Notes accepted for exchange, are to be sent to
someone other than the undersigned or to the undersigned at an address other
than that shown above.
Mail certificates to:
Name(s) _____________________________________________________________________
(Please Print)
Address _____________________________________________________________________
_____________________________________________________________________________
(Include Zip Code)
7
<PAGE>
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Exchange Offer
1. Delivery of this Letter and Notes; Guaranteed Delivery Procedures. This
Letter of Transmittal is to be completed by holders, either if certificates
are to be forwarded herewith or of tenders are to be made pursuant to the
procedures for delivery by book-entry transfer set forth in the "Exchange
Offer--Book-Entry Transfer" section of the prospectus. Certificates for all
physically tendered Original Notes, or transfer confirmation of, book-entry,
as the case may be, as well as a properly completed and duly executed Letter
of Transmittal (or manually signed facsimile) and any other documents required
by this Letter of Transmittal, must be received by the exchange agent at the
address set forth herein on or prior to the Expiration Date, or the tendering
holder must comply with the guaranteed delivery procedures set forth below.
Original Notes tendered hereby must be in denominations of principal amount of
maturity of $1,000 and any integral multiple thereof.
Holders whose certificates for Original Notes are note immediately available
or who cannot deliver their certificates and all other required documents to
the exchange agent on or prior to the expiration date, or who cannot complete
the procedure for book-entry transfer on a timely basis, may tender their
Original Notes pursuant to the guaranteed delivery procedures set forth in the
"Exchange Offer--Guaranteed Delivery Procedures" section of the prospectus.
These procedures require that:
. such tender must be made through an Eligible Institution (as defined in
Instruction 4 below);
. prior to the Expiration Date, the exchange agent must receive from such
Eligible Institution a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) and Notice of Guaranteed Delivery,
substantially in the form provided by the Company (by facsimile
transmission, mail or hand delivery), setting forth the name and address
of the holder of Original Notes and the amount of Original Notes
tendered, stating that the tender is being made thereby and guaranteeing
that within three Nasdaq Stock Market trading days after the date of
execution of the Notice of Guaranteed Delivery, the certificate for all
physically tendered Original Notes, or a transfer confirmation, book-
entry and any other documents required by this Letter of Transmittal will
be deposited by the Eligible Institution with the exchange agent; and
. the certificates for all physically tendered Original Notes, in proper
form for transfer, or transfer confirmation of, book-entry as the case
may be, and all other documents required by this Letter of Transmittal,
are received by the exchange agent within three Nasdaq Stock Market
trading days after the date of execution of the Notice of Guaranteed
Delivery.
The method of delivery of this Letter of Transmittal, the Original Notes and
all other required documents is at the election and risk of the tendering
stockholder. The method of delivery of this Letter of Transmittal, the
Original Notes and all other required documents is at the election and risk of
the tendering holders, but the delivery will be deemed made only when actually
received or confirmed by the exchange agent. If Original Notes are sent by
mail, it is suggested that the mailing be made sufficiently in advance of the
Expiration Date to permit the delivery to the exchange agent prior to 5:00
p.m., New York City time, on the Expiration Date.
See the "Exchange Offer" section in the prospectus for more information.
2. Tender by Holder. Only a holder of Original Notes may tender such
Original Notes in the exchange offer. Any beneficial holder of Original Notes
who is not the registered holder and who wishes to tender should arrange with
the registered holder to execute and deliver this Letter of Transmittal on his
or her behalf or must, prior to completing and executing this Letter of
Transmittal and delivering his or her Original Notes, either make appropriate
arrangements to register ownership of the Original Notes in such holder's name
or obtain a properly completed bond power from the registered holder.
3. Partial Tenders. Tenders of Original Notes will be accepted only in
integral multiples of $1,000. If less than the entire principal amount of any
Original Notes is tendered, the tendering holder should fill in the
8
<PAGE>
principal amount tendered in the fourth column of the box entitled
"Description of 10 1/2% Senior Subordinated Notes due 2009 issued on April 30,
1999 (Original Notes)" above. The entire principal amount of Original Notes
delivered to the exchange agent will be deemed to have been tendered unless
otherwise indicated. If the entire principal amount of all Original Notes is
not tendered, then Original Notes for the principal amount of Original Notes
not tendered and a certificate or certificates representing Exchange Notes
issued in exchange for any Original Notes accepted will be sent to the holder
at his or her registered address, unless a different address is provided in
the appropriate box on this Letter of Transmittal, promptly after the Original
Notes are accepted for exchange.
4. Signatures on This Letter of Transmittal; Powers of Attorney and
Endorsements; Guarantee of Signatures. If this Letter of Transmittal is signed
by the registered holder of the Original Notes tendered hereby, the signature
must correspond exactly with the name as written on the face of the
certificates without any change whatsoever.
If any tendered Original Notes are owned of record by two or more joint
owners, all such owners must sign this Letter of Transmittal.
If any tendered Original Notes are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many
separate copies of this Letter of Transmittal as there are different
registrations of certificates.
When this Letter of Transmittal is signed by the registered holder or
holders of the Original Notes specified herein and tendered hereby, no
endorsements of certificates or separate powers of attorney are required. If,
however, the Exchange Notes are to be issued, or any Original Notes that were
not tendered in the exchange offer are to be reissued, to a person other than
the registered holder, then endorsements of any certificates transmitted
hereby or separate powers of attorney are required. Signatures on such
certificate(s) must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder or holders of any certificate(s) specified herein, such
certificate(s) must be endorsed or accompanied by appropriate powers of
attorney, in either case signed exactly as the name or names on the registered
holder or holders appear(s) on the certificate(s) and signatures on such
certificate(s) must be guaranteed by an Eligible Institution.
If this Letter of Transmittal or any certificates or powers of attorney are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and unless waived by
the Company, proper evidence satisfactory to the Company of their authority to
so act must be submitted.
Endorsements on certificates for Original Notes or signatures on powers of
attorney required by this Instruction 4 must be guaranteed by a firm which is
a participant in a recognized signature guarantee medallion program ("Eligible
Institutions").
Signatures on this Letter of Transmittal must be guaranteed by an Eligible
Institution unless the Original Notes are tendered:
. by a registered holder of Original Notes (which term, for purposes of the
exchange offer, includes any participant in the Book-Entry Transfer
Facility system whose name appears on a security position listing as the
holder of such Original Notes) who has not completed the box entitled
"Special Issuance Instructions" or "Special Delivery Instructions" on
this Letter of Transmittal, or
. for the account of an Eligible Institution.
5. Special Payment and Delivery Instructions. Tendering holders should
indicate, in the applicable box or boxes, the name and address to which
Exchange Notes or substitute Original Notes for principal amounts not
9
<PAGE>
tendered or not accepted for exchange are to be issued or sent, if different
from the name and address of the person signing this Letter of Transmittal (or
in the case of tender of Original Notes through DTC, if different from DTC).
In the case of issuance in a different name, the taxpayer identification or
social security number of the person named must also be indicated. Noteholders
tendering Original Notes by book-entry transfer may request that Original
Notes not exchanged be credited to such account maintained at the Book-Entry
Transfer Facility as such noteholder may designate hereon. If no such
instructions are given, such Original Notes not exchanged will be returned to
the name and address of the person signing this Letter of Transmittal.
6. Tax Identification Number. Federal income tax law requires that a holder
whose offered Original Notes are accepted for exchange must provide the
Company (as payer) with his, her or its correct taxpayer identification number
("TIN"), which, in the case of an exchanging holder who is an individual, is
his or her social security number. If the Company is not provided with the
correct TIN or an adequate basis for exemption, such holder may be subject to
a $50 penalty imposed by the Internal Revenue Service (the "IRS"), and
payments made with respect to Original Notes purchased pursuant to the
exchange offer may be subject to backup withholding at a 31% rate. If
withholding results in an overpayment of taxes, a refund may be obtained.
Exempt holders (including, among others, all corporations and certain foreign
individuals) are not subject to these backup withholding and reporting
requirements. See the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9."
To prevent backup withholding, each exchanging holder must complete the
Substitute Form W-9 enclosed herewith.
In order to satisfy the exchange agent that a foreign individual qualifies
as an exempt recipient, such holder must submit a statement signed under
penalty of perjury attesting to such exempt status. Such statements may be
obtained from the exchange agent.
If the Original Notes are in more than one name or are not in the name of
the actual owner, consult the Substitute Form W-9 for information on which TIN
to report. If you do not provide your TIN to the Company within 60 days,
backup withholding will begin and continue until you furnish your TIN to the
Company.
7. Transfer Taxes. The Company will pay all transfer taxes, if any,
applicable to the exchange of Original Notes pursuant to the exchange offer.
If, however, certificates representing Exchange Notes or Original Notes for
principal amounts not tendered or accepted for exchange are to be delivered
to, or are to be registered or issued in the name of, any person other than
the registered holder of the Original Notes tendered hereby, or if tendered
Original Notes are registered in the name of any person other than the person
signing this Letter of Transmittal, or if a transfer tax is imposed for any
reason other than the exchange of Original Notes pursuant to the exchange
offer, then the amount of any such transfer taxes (whether imposed on the
registered holder or on any other persons) will be payable by the tendering
holder. If satisfactory evidence of payment of such taxes or exemption
therefrom is not submitted herewith, the amount of such transfer taxes will be
billed directly to such tendering holder.
Except as provided in this Instruction 7, it will not be necessary for
transfer tax stamps to be affixed to the Original Notes listed in this Letter
of Transmittal.
8. Waiver of Conditions. The Company reserves the absolute right to amend,
waive or modify specified conditions in the exchange offer in the case of any
Original Notes tendered.
9. No Conditional Transfers. No alternative, conditional, irregular or
contingent tenders will be accepted. All tendering holders of Original Notes,
by execution of this Letter of Transmittal, shall waive any right to receive
notice of the acceptance of their Original Notes for exchange.
Neither the Company, the exchange agent nor any other person is obligated to
give notice of any defect or irregularity with respect to any tender of
Original Notes nor shall any of them incur any liability for failure to give
any such notice.
10
<PAGE>
10. Mutilated, Lost, Stolen or Destroyed Original Notes. Any tendering
holder whose Original Notes have been mutilated, lost, stolen or destroyed
should contact the exchange agent at the address indicated herein for further
instructions.
11. Requests for Assistance or Additional Copies. Questions and requests for
assistance for additional copies of the prospectus, this Letter of Transmittal
and the Notice of Guaranteed Delivery may be directed to the exchange agent at
the address specified in the prospectus.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY. IT MAY NOT BE APPLICABLE TO NON-U.S. NOTEHOLDERS. ALL
NOTEHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISERS AS TO THE SPECIFIC TAX
CONSEQUENCES TO THEM OF THE OFFER.
SUBSTITUTE FORM W-9 OR FORM W-8
Under the U.S. federal income tax laws, the Depositary may be required to
withhold 31% of the amount of any payment made to certain holders pursuant to
the exchange offer. In order to avoid such backup withholding, each tendering
U.S. noteholder must provide the Depositary with such holder's correct TIN by
completing the Substitute Form W-9 set forth below. In general, if a holder is
an individual, the TIN is the Social Security number of such individual. If
the Depositary is not provided with the correct TIN, the holder may be subject
to a penalty imposed by the Internal Revenue Service. Certain holders
(including, among others, all corporations) are not subject to these backup
withholding and reporting requirements, but should nonetheless complete a
Substitute Form W-9 to avoid possible erroneous backup withholding. For
further information regarding backup withholding and instructions for
completing the Substitute Form W-9 (including how to obtain a TIN if you do
not have one and how to complete the Substitute Form W-9 if Shares are held in
more than one name), consult the enclosed Guidelines for Certification of
Taxpayer Identification Number.
In order for a non-U.S. holder to avoid 31% backup withholding, such holder
must submit a statement to the Depositary signed under penalties of perjury
attesting as to its non-U.S. status. Form W-8 and instructions for such
statement are enclosed for such stockholders.
11
<PAGE>
CONSEQUENCES OF FAILURE TO FILE SUBSTITUTE FORM W-9 OR FORM W-8
Failure to complete Substitute Form W-9 or Form W-8 will not, by itself,
cause the Original Notes to be deemed invalidly tendered but may require the
Depositary to withhold 31% of the amount of any payments made pursuant to the
exchange offer. Backup withholding is not an additional federal income tax.
Rather, the federal income tax liability of a person subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, the noteholder may claim a refund from the
Internal Revenue Service.
Part 1--PLEASE PROVIDE YOUR TIN
SUBSTITUTE IN THE BOX AT RIGHT AND CERTIFY
BY SIGNING AND DATING BELOW
Form W-9 ---------------
Social
Security
Number
Department of ------------------------------------------------------
the Treasury Part 2--Check the box if you are NOT subject to
Internal backup withholding under the provisions of section
Revenue Service 3406(a)(1)(C) of the Internal Revenue Code because
(1) you have not been notified that you are subject
to backup withholding as a result of failure to
report all interest or dividends or (2) the
Internal Revenue Service has notified you that you
are no longer subject to backup withholding.
Or ____________
Employer ID
Number
Payer's Request for
Taxpayer
Identification Number
(TIN)
Part 3
Awaiting TIN
------------------------------------------------------
CERTIFICATION: UNDER THE
PENALTIES OF PERJURY, I CERTIFY
THAT THE INFORMATION PROVIDED ON
THIS FORM IS TRUE, CORRECT, AND
COMPLETE.
Signature _______ Date ___________
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE
REVIEW THE "GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER"
FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU ARE AWAITING (OR WILL
SOON APPLY FOR) A TAXPAYER IDENTIFICATION NUMBER.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a Taxpayer Identification Number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a Taxpayer Identification Number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or
(b) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a Taxpayer Identification Number to the
payer, 31% of all reportable payments due to me pursuant to the Offer will be
withheld until I provide a Taxpayer Identification Number to the payer and
that, if I do not provide my Taxpayer Identification Number within 60 days,
such retained amounts shall be remitted to the IRS as backup withholding.
Signature: ____________________________
Date: _________________________________
12
<PAGE>
Exhibit 99.02
NOTICE OF GUARANTEED DELIVERY
FOR
10 1/2% SENIOR SUBORDINATED NOTES DUE 2009
ISSUED ON APRIL 30, 1999
OF
BUILDING ONE SERVICES CORPORATION
Exchange Note Cusip: 120114AC7
As set forth in the prospectus dated , 1999, of Building One Services
Corporation (the "Company") and in the accompanying Letter of Transmittal and
instructions thereto, this form or a substantially equivalent form must be
used to accept the Company's offer to exchange all of its outstanding 10 1/2%
Senior Subordinated Notes due 2009 that were issued on April 30, 1999 (the
"Original Notes") for its 10 1/2% Senior Subordinated Notes due 2009 which
have been registered under the Securities Act of 1933, as amended, if:
. certificates for the Original Notes are not immediately available; or
. if the Original Notes, the Letter of Transmittal or any documents
required thereby cannot be delivered to IBJ Whitehall Bank & Trust
Company, the exchange agent, prior to 5:00 p.m. on the expiration date of
the exchange offer; or
. the procedure for book-entry transfer cannot be completed, prior to 5:00
p.m., New York City time, on the expiration date.
This form may be delivered by an eligible institution (as defined in the
prospectus) by hand or transmitted by facsimile transmission, overnight
courier or mail to the exchange agent as set forth below.
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON ,
1999, UNLESS THE OFFER IS EXTENDED (THE "EXPIRATION DATE"). TENDERS OF
OUTSTANDING NOTES MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M. ON THE
BUSINESS DAY PRIOR TO THE EXPIRATION DATE.
Exchange Agent:
IBJ WHITEHALL BANK & TRUST COMPANY
By Mail: By Hand/Overnight Courier:
IBJ Whitehall Bank & Trust Company IBJ Whitehall Bank & Trust Company
P.O. Box 84 One State Street
Bowling Green Station New York, NY 10004
New York, NY 10274-0084 Attn.: Securities Processing Window,
Attn: Reorganization Operations Subcellar One, (SC-1)
By Facsimile Transmission:
(for Eligible Institutions Only)
(212) 858-2611
For Information:
(212) 858-2103
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS
VIA FACSIMILE, OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE VALID
DELIVERY. ORIGINALS OF ALL DOCUMENTS SENT BY FACSIMILE SHOULD BE
SENT PROMPTLY BY REGISTERED OR CERTIFIED MAIL, BY HAND OR BY
OVERNIGHT DELIVERY.
THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON THE
LETTER OF TRANSMITTAL TO BE USED TO TENDER ORIGINAL NOTES IS REQUIRED TO BE
GUARANTEED BY AN ELIGIBLE INSTITUTION UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE LETTER
OF TRANSMITTAL.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Building One Services Corporation, a
Delaware corporation (the "Company"), upon the terms and subject to the
conditions set forth in the prospectus dated , 1999 and the related
Letter of Transmittal (which together constitute the Company's exchange
offer), receipt of which is hereby acknowledged, Original Notes pursuant to
the guaranteed delivery procedures set forth in Instruction 1 of the Letter of
Transmittal.
The undersigned understands that tenders of Original Notes will be accepted
only in principal amounts equal to $1,000 or integral multiples thereof. The
undersigned understands that tenders of Original Notes pursuant to the
exchange offer may be withdrawn only in accordance with the procedures
described under the caption "Exchange Offer--Withdrawal of Tenders" in the
prospectus.
All authority herein conferred or agreed to be conferred by this Notice of
Guaranteed Delivery shall survive the death, incapacity or dissolution of the
undersigned and every obligation of the undersigned under this Notice of
Guaranteed Delivery shall be binding upon the heirs, personal representatives,
executors, administrators, successors, assigns, trustees in bankruptcy and
other legal representatives of the undersigned.
NOTE: SIGNATURE MUST BE PROVIDED WHERE INDICATED BELOW.
Certificate No(s). for Original
Notes (if available):
_____________________________________
_____________________________________
Address:
_____________________________________
Principal Amount of Original Notes:
_____________________________________
Area Code and Telephone Number:
_____________________________________
Name(s) of Record Holder(s):
_____________________________________
_____________________________________
_____________________________________
Signature(s):
_____________________________________
If Original Notes will be delivered
by book-entry transfer at The Dated: ______________________________
Depository Trust Company, please
check box: [_]
DTC Participant Number: _____________
This Notice of Guaranteed Delivery must be signed by the registered
holder(s) of Original Notes exactly as its (their) name(s) appear on
certificates for Original Notes or on a security position listing as the owner
of the Original Notes, or by person(s) authorized to become registered
holder(s) by endorsements and documents transmitted with this Notice of
Guaranteed Delivery. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, such person must provide the following information:
PLEASE PRINT NAME(S) AND ADDRESS(ES)
NAME(S): ____________________________________________________________________
____________________________________________________________________
CAPACITY: ____________________________________________________________________
ADDRESS(ES):
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
<PAGE>
GUARANTEE
(Not to be Used for Signature Guarantee)
The undersigned, a member firm of a registered national securities exchange
or of the National Association of Securities Dealers, Inc. or a commercial
bank or trust company having an office or correspondent in the United States
or an "eligible guarantor institution" within the meaning of Rule 17Ad-15
under the Securities Exchange of 1934, as amended, hereby:
. represents that the above named person(s) "own(s)" the Original Notes
tendered hereby within the meaning of Rule 14e-4 under the Securities
Exchange Act of 1934, as amended;
. represents that the tender of such Original Notes complies with Rule 14e-
4 under the Securities Exchange Act of 1934, as amended; and
. guarantees that delivery to the exchange agent of certificates for the
Original Notes tendered hereby, in proper form for transfer (or
confirmation of the book-entry transfer of such Original Notes into the
exchange agent's account at The Depository Trust Company, pursuant to the
procedures for book-entry transfer set forth in the prospectus), with
delivery of a properly completed and duly executed Letter of Transmittal
(or manually signed facsimile thereof) with any required signatures and
any other required documents, will be received by the exchange agent at
one of its addresses set forth above within three business days after the
Expiration Date.
THE UNDERSIGNED ACKNOWLEDGES THAT IT MUST DELIVER THE LETTER OF TRANSMITTAL
AND OUTSTANDING NOTES TENDERED HEREBY TO THE EXCHANGE AGENT WITHIN THE TIME
PERIOD SET FORTH AND THAT FAILURE TO DO SO COULD RESULT IN FINANCIAL LOSS TO
THE UNDERSIGNED.
_____________________________________ _____________________________________
Name of Firm: (Please Print)
Authorized Signature:
_____________________________________ _____________________________________
Address: (Include Zip Code)
Name:
_____________________________________ _____________________________________
(Area Code and Telephone Number)
Title:
Dated: ______________________ , 1999
NOTE: DO NOT SEND OUTSTANDING NOTES WITH THIS FORM. OUTSTANDING NOTES
SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL SO THAT THEY ARE
RECEIVED BY THE EXCHANGE AGENT WITHIN THREE NASDAQ STOCK MARKET
TRADING DAYS AFTER THE EXPIRATION DATE.
