<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 17, 1999.
REGISTRATION NO. 333-50031
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
POST-EFFECTIVE
AMENDMENT NO. 3
TO FORM S-1
ON
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------
INTEGRATED ELECTRICAL SERVICES, INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 76-0542208
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
</TABLE>
515 POST OAK BOULEVARD, SUITE 450
HOUSTON, TEXAS 77027-9408
(713) 860-1500
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
---------------------
JOHN F. WOMBWELL
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
515 POST OAK BOULEVARD, SUITE 450
HOUSTON, TEXAS 77027-9408
(713) 860-1500
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
---------------------
copy to:
DAVID P. OELMAN
ANDREWS & KURTH L.L.P.
600 TRAVIS, SUITE 4200
HOUSTON, TEXAS 77002
(713) 220-4200
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the Registration Statement becomes effective.
---------------------
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to rule 415 under the Securities Act of
1933, check the following box. [X]
If any of the securities being registered on this Form are to be 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. [ ]
---------------------
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.
THIS REGISTRATION STATEMENT CONTAINS A COMBINED PROSPECTUS PURSUANT TO RULE
429 UNDER THE SECURITIES ACT, WHICH RELATES TO THE COMPANY'S EARLIER
REGISTRATION STATEMENT NO. 333-45479.
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- --------------------------------------------------------------------------------
<PAGE> 2
EXPLANATORY NOTE
This registration statement contains two forms of prospectus: one to be
used in connection with the acquisition of the assets or the securities of
businesses by Integrated Electrical Services, Inc. and one to be used by persons
or entities who have received stock of Integrated Electrical Services, Inc. in
exchange for the assets or the securities of a business and who wish to sell
such stock. These prospectuses are identical except that they contain different
front cover pages and different descriptions of the plan of distribution. The
form of prospectus to be used in connection with acquisitions is included first
and is followed by those pages to be used in the prospectus to be used by
selling stockholders which differ from those used in the acquisition prospectus.
Each of the pages for the selling stockholder prospectus included herein is
labeled "Alternate Page for Selling Stockholder Prospectus."
<PAGE> 3
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 MARCH 17, 1999.
PROSPECTUS
[INTEGRATED ELECTRICAL SERVICES LOGO]
21,000,000 SHARES
COMMON STOCK
---------------------
THE COMPANY:
- - Our company is the third largest provider of electrical contracting and
maintenance services in the United States.
- - Our address is:
Integrated Electrical Services, Inc.
515 Post Oak Boulevard
Suite 450
Houston, Texas 77027-9408
(713) 860-1500
THE OFFERING:
- - 21,000,000 shares of common stock.
- - All of the common stock we are offering by way of this prospectus will be
offered, from time to time, to acquire the securities or assets of other
businesses.
- - Our common stock trades under the symbol "IEE." The last reported sale price
of the common stock on March 15, 1999 was $13 7/16.
THIS INVESTMENT INVOLVES RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 5.
---------------------
Neither the SEC nor any state securities commission has determined whether this
prospectus is truthful or complete. Nor have they made, nor will they make, any
determination as to whether anyone should buy these securities. Any
representation to the contrary is a criminal offense.
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C>
Where You Can Find More Information......................... 2
The Company................................................. 4
Risk Factors................................................ 5
Securities Covered by this Prospectus....................... 9
Legal Matters............................................... 10
Experts..................................................... 10
</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 copy any reports, statements or other
information we file at the SEC's public reference rooms in Washington, D.C., New
York, New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference rooms. Our SEC filings are also
available to the public from commercial document retrieval services and at the
Internet world wide web site maintained by the SEC at www.sec.gov.
We filed a registration statement on Form S-4 to register with the SEC the
common stock to be issued. This prospectus is a part of that registration
statement.
As allowed by SEC rules, this prospectus does not contain all the
information you can find in the registration statement or the exhibits to the
registration statement.
The SEC allows us to "incorporate by reference" information into this
prospectus, which means that we can disclose important information to you by
referring you to another document filed separately with the SEC. The information
incorporated by reference is deemed to be part of this prospectus, except for
any information superseded by information contained directly in this prospectus.
This prospectus incorporates by reference the documents set forth below that we
have previously filed with the SEC. These documents contain important
information about our company and its financial condition.
<TABLE>
<CAPTION>
SEC FILINGS (FILE NO. 1-13783) PERIOD
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<S> <C>
Annual Report on Form 10-K Year ended September 30, 1998 (as amended on
January 22, 1999 and March 17, 1999)
Quarterly Report on Form 10-Q Quarter ended December 31, 1998 (as amended
on March 17, 1999)
Current Report on Form 8-K Filed on February 4, 1999 (as amended on
March 17, 1999)
Proxy Statement Dated December 29, 1998
Registration Statement on Form 8-A Filed on January 14, 1998
</TABLE>
We also incorporate by reference into this prospectus additional documents
that may be filed with the SEC from the date of this prospectus to the date of
the termination of the offerings of common stock by way of this prospectus.
These include periodic reports, such as Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on Forms 8-K, as well as proxy
statements.
2
<PAGE> 5
Documents incorporated by reference are available from us without charge,
excluding all exhibits unless we have specifically incorporated by reference an
exhibit in this prospectus. You may obtain documents incorporated by reference
in this prospectus by requesting them in writing or by telephone from us at the
following address:
Integrated Electrical Services, Inc.
515 Post Oak Boulevard
Suite 450
Houston, Texas 77027-9408
Attention: Corporate Secretary
(713) 860-1500
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT FROM WHAT IS CONTAINED IN THIS PROSPECTUS. THIS
PROSPECTUS IS DATED MARCH 17, 1999. YOU SHOULD NOT ASSUME THAT THE INFORMATION
CONTAINED IN THE PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN THAT DATE. ANY
INFORMATION IN THIS PROSPECTUS OR IN A DOCUMENT INCORPORATED BY REFERENCE IN
THIS PROSPECTUS SHALL BE DEEMED TO BE MODIFIED OR SUPERSEDED FOR PURPOSES OF
THIS PROSPECTUS TO THE EXTENT THAT A STATEMENT CONTAINED IN THIS PROSPECTUS OR
IN ANY SUBSEQUENTLY FILED DOCUMENT WHICH ALSO IS INCORPORATED BY REFERENCE
CHANGES SUCH STATEMENT.
3
<PAGE> 6
THE COMPANY
In late 1997, we recognized an opportunity for a well-capitalized company
with a nationwide presence to realize substantial competitive advantages by
capitalizing on the fragmented nature of the electrical services industry. We
began operations on January 30, 1998 with the acquisition of 16 electrical
businesses, each of which had a strong identity and presence in its local
markets, in order to create a nationwide provider of electrical services and to
lead the consolidation of our industry.
According to U.S. Census data, the electrical contracting industry
generated annual revenues in excess of $40 billion in 1992. This data also
indicates that the electrical contracting industry is highly fragmented with
more than 54,000 companies, most of which are small, owner-operated businesses.
Government sources indicate that total construction industry revenues have grown
at an average compound rate of approximately 6% from 1995 through 1998. Over the
same period, our revenues, calculated as if all the companies we have acquired
were operating under common ownership for the entire period, increased at a
compound annual rate of approximately 13%. We believe this growth in revenues is
primarily due to the fact that our companies have been in business an average of
21 years, have strong relationships with customers, have effectively employed
industry best practices and have focused on larger, higher margin projects.
We serve a broad range of markets, including the commercial, industrial,
residential and power line markets. In addition, we have recently entered into
the data communication market, which includes the installation of wiring for
computer networks and fiber optic telecommunications systems. Our revenues are
generated from a mix of new construction, renovation, maintenance and
specialized services. We focus on higher margin, larger projects that require
special expertise, such as design-and-build projects that utilize the
capabilities of our in-house engineers, as well as service, maintenance and
certain renovation and upgrade work which tends to either be recurring, have
lower sensitivity to economic cycles, or both.
4
<PAGE> 7
RISK FACTORS
You should carefully consider the following factors and other information
in this prospectus before deciding to invest in the common stock.
DOWNTURNS IN CONSTRUCTION COULD ADVERSELY AFFECT OUR BUSINESS
Presently, more than half of our business is the installation of electrical
systems in newly constructed and renovated buildings, plants and residences.
Additionally, a majority of our business is concentrated in the southeastern and
southwestern portion of the United States. Downturns in levels of construction
or housing starts could have a material adverse effect on our business,
financial condition and results of operations. Our ability to maintain or
increase revenues from new installation services will depend on the number of
new construction starts and renovations. Our revenue growth from year to year is
likely to reflect the cyclical nature of the construction industry. The number
of new building starts will be affected by local economic conditions, changes in
interest rates and other related factors. The housing industry is similarly
affected by changes in general and local economic conditions, such as the
following:
- employment and income levels;
- interest rates and other factors affecting the availability and cost of
financing;
- tax implications for home buyers;
- consumer confidence; and
- housing, demand.
OUR GROWTH COULD BE DIFFICULT TO MANAGE
If we are unable to manage our growth, or if we are unable to attract and
retain additional qualified management, there could be a material adverse effect
on our financial condition and results of operations. As we continue to grow,
there can be no assurance that our management group will be able to oversee the
company and effectively implement our operating or growth strategies. We expect
to grow both internally and through acquisitions. We expect to expend time and
effort in evaluating, completing and integrating acquisitions and opening new
facilities. We cannot guarantee that our systems, procedures and controls will
be adequate to support our expanding operations, including the timely receipt of
financial information from acquired companies. This future growth will impose
added responsibilities on our senior management, such as the need to identify,
recruit and integrate new senior managers and executives.
THERE IS CURRENTLY A SHORTAGE OF QUALIFIED ELECTRICIANS
Our ability to increase productivity and profitability has been limited by
our ability to employ, train and retain skilled electricians who meet our
requirements. There can be no assurance that, among other things:
- we will be able to maintain the skilled labor force necessary to operate
efficiently;
- our labor expenses will not increase as a result of a shortage in the
skilled labor supply; or
- we will not have to curtail internal growth as a result of labor
shortages.
INTEGRATION OF ACQUIRED COMPANIES MAY PROVE DIFFICULT
The combined financial results of recently acquired companies incorporated
by reference in this prospectus cover periods during which they were not under
the same management and, therefore, may not be indicative of our future
financial or operating results. Our success will depend on our management's
ability to integrate future acquisitions.
5
<PAGE> 8
ACQUIRED COMPANIES MAY ADVERSELY AFFECT OUR OPERATIONS
We expect to grow through acquisitions. We cannot guarantee that we will be
able to acquire additional businesses or integrate and manage them successfully.
We cannot assure you that the businesses we acquire will achieve sales and
profitability that justify our investment. Such acquisitions may involve a
number of issues, including:
- adverse short-term effects on our financial results;
- diversion of our management's attention;
- dependence on retention, hiring and training of key personnel; and
- risks associated with unanticipated problems or legal liabilities.
In addition, if industry consolidation becomes more prevalent, the prices
for acquisition candidates may increase and the number of available candidates
may decrease. These competitors may have greater financial resources to finance
acquisition and internal growth opportunities and might be willing to pay higher
prices than we are willing to pay for the same acquisition opportunities.
INABILITY TO OBTAIN FINANCING COULD LIMIT OUR GROWTH
We use our common stock as at least part of the consideration paid for
companies we acquire. If the common stock does not maintain a sufficient value
or company owners will not accept common stock as consideration for their
businesses, we may be required to use more of our cash to pursue our acquisition
program. If we do not have sufficient cash or borrowing capacity, our growth
could be limited unless we are able to obtain additional cash from the sale of
debt or common stock in the public market.
OUR OPERATIONS ARE SUBJECT TO THE NUMEROUS HAZARDS ASSOCIATED WITH THE
CONSTRUCTION OF ELECTRICAL SYSTEMS
Hazards related to our industry include, but are not limited to,
electrocutions, fires, mechanical failures or transportation accidents. These
hazards can cause personal injury and loss of life, severe damage to or
destruction of property and equipment and may result in suspension of
operations. We maintain insurance coverage in the amounts and against the risks
we believe are in accordance with industry practice, but this insurance does not
cover all types or amounts of liabilities. No assurance can be given either that
(i) this insurance will be adequate to cover all losses or liabilities we may
incur in our operations or (ii) we will be able to maintain insurance of the
types or at levels that are adequate or at reasonable rates.
THE ESTIMATES WE USE IN PLACING BIDS COULD BE MATERIALLY INCORRECT
Depending upon the size of a particular project, variations from estimated
contract costs can have a significant impact on our operating results for any
fiscal quarter or year. We currently generate, and expect to continue to
generate, more than half of our revenues under fixed price contracts. We must
estimate the costs of completing a particular project to bid for such fixed
price contracts. The cost of labor and materials, however, may vary from the
costs we originally estimated. These variations along with other risks inherent
in performing fixed price contracts may result in actual revenue and gross
profits for a project differing from those we originally estimated and could
result in losses on projects.
WE DEPEND ON KEY PERSONNEL
The loss of key personnel or the inability to hire and retain qualified
employees could have an adverse effect on our business, financial condition and
results of operations. Our operations depend on the continued efforts of our
current and future executive officers and senior management and key management
personnel at the companies we have acquired. We cannot guarantee that any key
member of management
6
<PAGE> 9
at the corporate or subsidiary level will continue in such capacity for any
particular period of time. We do not maintain key man life insurance.
OUR INDUSTRY IS HIGHLY COMPETITIVE
Our industry is served by small, owner-operated private companies, public
companies and several large regional companies. We could also face competition
in the future from other competitors entering the market. Some of our
competitors offer a greater range of services, such as mechanical construction,
plumbing and heating, ventilation and air conditioning services. Competition in
the electrical contracting industry depends on a number of factors, including
price. Some of our competitors may have lower overhead cost structures and may,
therefore, be able to provide their services at lower rates.
OUR RESULTS MAY FLUCTUATE FROM PERIOD TO PERIOD
Our business can be subject to seasonal variations in operations and demand
that affect the construction business, particularly in residential construction.
Our quarterly results may also be affected by the timing of acquisitions, the
timing and size of acquisition costs and regional economic conditions.
Accordingly, our performance in any particular quarter may not be indicative of
the results which can be expected for any other quarter or for the entire year.
WE HAVE SUBSTANTIAL DEBT
We have now and, will continue to have a significant amount of debt. As of
March 1, 1999, we had approximately $153.1 million of long-term indebtedness
outstanding. Our substantial indebtedness could have important consequences to
you. For example, it could:
- increase our vulnerability to general adverse economic and industry
conditions;
- limit our ability to fund future working capital, capital expenditures
and other general corporate requirements;
- limit our flexibility in planning for, or reacting to, changes in our
business and the industry in which we operate;
- place us at a disadvantage compared to our competitors that have less
debt; and
- limit, along with the financial and other restrictive covenants in our
indebtedness, among other things, our ability to borrow additional funds.
Additionally, failing to comply with those covenants could result in an
event of default which, if not cured or waived, could have a material
adverse effect on us.
COMPUTER SYSTEMS WE RELY ON MAY FAIL TO RECOGNIZE YEAR 2000
We are dependent on our computer software programs and operating systems in
operating our business. We also depend on the proper functioning of computer
systems of third parties, such as vendors and clients. The failure of any of
these systems to appropriately interpret the upcoming calendar year 2000 could
have a material adverse effect on our financial condition, results of
operations, cash flow and business prospects. We are currently identifying our
own applications that will not be Year 2000 compliant and taking steps to
determine whether third parties are doing the same. In addition, we are
implementing a plan to prepare our computer systems to be Year 2000 compliant by
September 30, 1999.
Our inability to remedy our own Year 2000 problems or the failure of third
parties to do so may cause business interruptions or shutdown, financial loss,
regulatory actions, reputational harm and/or legal liability. We can not assure
you that our Year 2000 program will be effective or that our estimates about the
timing and cost of completing our program will be accurate.
7
<PAGE> 10
ESTIMATED LIFE OF GOODWILL MAY CHANGE
Our balance sheet after we issued debt and acquired the companies described
in our Form 8-K dated February 4, 1999 will have an amount called "goodwill"
that represents 56% of assets and 102% of stockholders' equity. Goodwill is
recorded when we pay more for a business than the fair value of the tangible and
separately measureable intangible net assets. GAAP requires us to amortize this
and all other intangible assets over the period benefited. We have determined
that period to be no less than 40 years.
If it turns out that the period should have been shorter, earnings reported
in periods right after the acquisition would be overstated. Then in later years,
we will be burdened by a continuing charge against earnings, without the benefit
to income we thought we would get when we agreed on the purchase price. Earnings
in later years might also be significantly worse if we determine then that the
remaining balance of goodwill is impaired.
We reviewed with our independent accountants all of the factors and related
future cash flows which we considered in agreeing on a purchase price. We
concluded that the future cash flows related to goodwill will continue
indefinitely, and there is no persuasive evidence that any material portion will
dissipate over a period shorter than 40 years.
FORWARD-LOOKING STATEMENTS
This prospectus includes forward-looking statements. We have based these
forward-looking statements on our current expectations and projections about
future events. These forward-looking statements are subject to risks,
uncertainties and assumptions about us, including, among other things:
- our ability to acquire companies;
- the number and size of companies we are able to acquire;
- the effect of seasonality on our operating results;
- regional and national trends and conditions in our industry;
- our ability to integrate acquired businesses;
- regional and national economic conditions;
- our ability to compete; and
- our ability to grow our companies;
We undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
In light of these risks, uncertainties and assumptions, the forward-looking
events discussed in this prospectus might not occur.
8
<PAGE> 11
SECURITIES COVERED BY THIS PROSPECTUS
The common stock covered by this prospectus is available for use in future
acquisitions of businesses, properties or securities of entities or persons
engaged in the electrical contracting and other related businesses. The
consideration offered by Integrated Electrical Services, Inc. in such
acquisitions, in addition to the common stock offered by this prospectus, may
include cash, debt or other securities, or assumption by Integrated Electrical
Services, Inc. of liabilities of the businesses being acquired, or a combination
thereof. It is contemplated that the terms of each acquisition will be
determined by negotiations between Integrated Electrical Services, Inc. and the
management or the owners of the assets to be acquired or the owners of the
securities (including newly issued securities) to be acquired, with Integrated
Electrical Services, Inc. taking into account the quality of management, the
past and potential earning power and growth of the assets or securities to be
acquired, and other relevant factors. It is anticipated that the common stock
issued in acquisitions hereunder will be valued at a price reasonably related to
the market value of the common stock either at the time the terms of the
acquisition are tentatively agreed upon or at or about the time or times of
delivery of the shares.
We are continually considering possible acquisitions. We may from time to
time negotiate and enter into letters of intent with potential acquisition
candidates. The consideration related to these companies remains subject to
negotiation until a definitive agreement is signed. The timing, size or success
of any acquisition effort and the associated potential capital commitments
cannot be predicted. The completion of each acquisition is subject to a
satisfactory due diligence review, negotiation of definitive acquisition
agreements, obtaining any necessary approvals and fulfilling all other
conditions to closing.
9
<PAGE> 12
LEGAL MATTERS
The legality of the common stock being offered by this prospectus will be
passed upon for Integrated Electrical Services, Inc. by John F. Wombwell, Senior
Vice President, General Counsel and Secretary of Integrated Electrical Services,
Inc. Mr. Wombwell owns 96,000 shares of common stock and has options to purchase
93,750 shares of common stock.
EXPERTS
The financial statements of Integrated Electrical Services, Inc. and
subsidiaries and PCX Corporation incorporated by reference in this prospectus
have been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their reports, and upon the authority of the firm as experts in
giving audit reports.
The financial statements of Primo Electric Company incorporated by
reference in this prospectus have been audited by Hertzbach & Company, P.A.,
Independent Public Accountants, as stated in their report.
The financial statements of Kayton Electric, Inc. incorporated by reference
in this prospectus have been audited by KPMG Peat Marwick LLP, Independent
Public Accountants, as stated in their report.
The financial statements of Bachofner Electric, Inc. incorporated by
reference in this prospectus have been audited by Peck & Kopacek, P.C.,
Independent Public Accountants, as stated in their report.
10
<PAGE> 13
[INTEGRATED ELECTRICAL SERVICES LOGO]
21,000,000 SHARES
COMMON STOCK
---------------------
PROSPECTUS
---------------------
WE HAVE NOT AUTHORIZED ANY DEALER, SALESPERSON OR OTHER PERSON TO GIVE YOU
WRITTEN INFORMATION OTHER THAN THIS PROSPECTUS OR TO MAKE REPRESENTATIONS AS TO
MATTERS NOT STATED IN THIS PROSPECTUS. YOU MUST NOT RELY ON UNAUTHORIZED
INFORMATION. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES OR OUR
SOLICITATION OF YOUR OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE
THAT WOULD NOT BE PERMITTED OR LEGAL. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALES MADE HEREUNDER AFTER THE DATE OF THIS PROSPECTUS SHALL CREATE AN
IMPLICATION THAT THE INFORMATION CONTAINED HEREIN OR THE AFFAIRS OF THE COMPANY
HAVE NOT CHANGED SINCE THE DATE THEREOF.
<PAGE> 14
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.
[ALTERNATE PAGE FOR SELLING STOCKHOLDER PROSPECTUS]
SUBJECT TO COMPLETION, DATED , 1999.
PROSPECTUS
[INTEGRATED ELECTRICAL SERVICES LOGO]
21,000,000 SHARES
COMMON STOCK
---------------------
THE COMPANY:
- Our company is the third largest provider of electrical contracting and
maintenance services in the United States.
- Our address is:
Integrated Electrical Services, Inc.
515 Post Oak Boulevard
Suite 450
Houston, Texas 77027-9408
(713) 860-1500
THE OFFERING:
- 21,000,000 shares of common stock.
- All of the common stock offered by way of this prospectus will be
offered, from time to time, by stockholders of Integrated Electrical
Services, Inc. These shares were received by such Stockholders as
consideration for the securities or assets of their businesses. We will
receive none of the proceeds of this offering.
- Our common stock trades under the symbol "IEE." The last reported sale
price of the common stock on March 15, 1999 was $13 7/16.
THIS INVESTMENT INVOLVES RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 5.
---------------------
Neither the SEC nor any state securities commission has determined whether this
prospectus is truthful or complete. Nor have they made, nor will they make, any
determination as to whether anyone should buy these securities. Any
representation to the contrary is a criminal offense.
<PAGE> 15
[ALTERNATE PAGE FOR SELLING STOCKHOLDER PROSPECTUS]
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Where You Can Find More Information......................... 2
The Company................................................. 4
Risk Factors................................................ 5
Plan of Distribution........................................ 8
Legal Matters............................................... 10
Experts..................................................... 10
</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 copy any reports, statements or other
information we file at the SEC's public reference rooms in Washington, D.C., New
York, New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference rooms. Our SEC filings are also
available to the public from commercial document retrieval services and at the
Internet world wide web site maintained by the SEC at www.sec.gov.
We filed a registration statement on Form S-4 to register with the SEC the
common stock to be issued. This prospectus is a part of that registration
statement.
As allowed by SEC rules, this prospectus does not contain all the
information you can find in the registration statement or the exhibits to the
registration statement.
The SEC allows us to "incorporate by reference" information into this
prospectus, which means that we can disclose important information to you by
referring you to another document filed separately with the SEC. The information
incorporated by reference is deemed to be part of this prospectus, except for
any information superseded by information contained directly in this prospectus.
This prospectus incorporates by reference the documents set forth below that we
have previously filed with the SEC. These documents contain important
information about our company and its financial condition.
<TABLE>
<CAPTION>
SEC FILINGS (FILE NO. 1-13783) PERIOD
------------------------------ ------
<S> <C>
Annual Report on Form 10-K Year ended September 30, 1998 (as amended on
January 22, 1999 and March 17, 1999)
Quarterly Report on Form 10-Q Quarter ended December 31, 1998 (as amended
on March 17, 1999)
Current Report on Form 8-K Filed on February 4, 1999 (as amended on
March 17, 1999)
Proxy Statement Dated December 29, 1998
Registration Statement on Form 8-A Filed on January 14, 1998
</TABLE>
We also incorporate by reference into this prospectus additional documents
that may be filed with the SEC from the date of this prospectus to the date of
the termination of the offerings of common stock by way of this prospectus.
These include periodic reports, such as Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on Forms 8-K, as well as proxy
statements.
2
<PAGE> 16
[ALTERNATE PAGE FOR SELLING STOCKHOLDER PROSPECTUS]
PLAN OF DISTRIBUTION
We are registering the common stock on behalf of selling stockholders. As
used in this prospectus, "selling stockholders" includes donees and pledgees
selling shares received from a named selling stockholder after the date of this
prospectus. All costs, expenses and fees in connection with the registration of
the common stock offered by this prospectus will be paid by us. Brokerage
commissions and similar selling expenses, if any, attributable to the sale of
common stock will be paid by the selling stockholders. Sales of common stock may
be made by selling stockholders from time to time in one or more types of
transactions (which may include block transactions) on the NYSE, in the
over-the-counter market, in negotiated transactions, through put or call options
transactions relating to the common stock, through short sales of common stock,
or a combination of these methods of sale, at market prices prevailing at the
time of sale, or at negotiated prices. These transactions may or may not involve
brokers or dealers. The selling stockholders have advised us that they have not
entered into any agreements, understandings or arrangements with any
underwriters or broker-dealers regarding the sale of their securities, nor is
there an underwriter or coordinating broker acting in connection with the
proposed sale of common stock by the selling stockholders.
The selling stockholders may sell common stock directly to purchasers or to
or through broker-dealers, which may act as agents or principals. These
broker-dealers may receive compensation in the form of discounts, concessions,
or commissions from selling stockholders and/or the purchasers of common stock
for whom the broker-dealers may act as agents or to whom they sell as principal,
or both (which compensation as to a particular broker-dealer might be in excess
of customary commissions).
The selling stockholders and any broker-dealers that act in connection with
the sale of common stock might be "underwriters" within the meaning of Section
2(11) of the Securities Act of 1933, and any commissions received by
broker-dealers and any profit on the resale of the common stock sold by them
while acting as principals might be considered underwriting discounts or
commissions under the Securities Act. We have agreed to indemnify each selling
stockholder against liabilities, including liabilities arising under the
Securities Act. The selling stockholders may agree to indemnify any agent,
dealer or broker-dealer that participates in transactions involving sales of the
common stock against liabilities, including liabilities arising under the
Securities Act.
Because selling stockholders may be "underwriters" within the meaning of
Section 2(11) of the Securities Act, the selling stockholders will be subject to
the prospectus delivery requirements of the Securities Act, which may include
delivery through the facilities of the NYSE pursuant to Rule 153 under the
Securities Act. We have informed the selling stockholders that the
anti-manipulative provisions of Regulation M of the Exchange Act may apply to
their sales in the market.
Selling stockholders also may resell all or a portion of the common stock
in open market transactions in reliance upon Rule 144 under the Securities Act,
provided they meet the criteria and conform to the requirements of the rule.
Upon our being notified by a selling stockholders that any material
arrangement has been entered into with a broker-dealer for the sale of common
stock a supplement to this prospectus will be filed, if required, pursuant to
Rule 424(b) under the Act, disclosing
- the name of each selling stockholder and of the participating
broker-dealer(s),
- the number of shares involved,
- the price at which the shares were sold,
- the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable,
8
<PAGE> 17
- that the broker-dealer(s) did not conduct any investigation to verify the
information set out or incorporated by reference in this prospectus; and
- other facts material to the transaction.
In addition, upon the company being notified by a selling stockholder that
a donee or pledgee intends to sell more than 500 shares, a supplement to this
prospectus will be filed.
In order to add named selling stockholders to this registration statement,
we will file a post-effective amendment including information on the selling
stockholders, such as name, number of shares owned before the offering, number
of shares to be offered and number of shares owned after the offering.
9
<PAGE> 18
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Subsection (a) of section 145 of the General Corporation Law of the State
of Delaware empowers a corporation to indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, except that no indemnification may be made in
respect of any claim, issue or matter as to which such person shall have been
made to be liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
Section 145 further provides that to the extent a director or officer of a
corporation has been successful on the merits or otherwise in the defense of any
action, suit or proceeding referred to in subsections (a) and (b) of Section 145
in the defense of any claim, issue or matter therein, he shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection therewith; that indemnification provided for by Section 145
shall not be deemed exclusive of any other rights to which the indemnified party
may be entitled; that indemnification provided for by Section 145 shall, unless
otherwise provided when authorized or ratified, continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to the
benefit of such person's heirs, executors and administrators; and empowers the
corporation to purchase and maintain insurance on behalf of a director or
officer of the corporation against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as such
whether or not the corporation would have the power to indemnify him against
such liabilities under Section 145.
Section 102(b)(7) of the General Corporation Law of the State of Delaware
provides that a certificate of incorporation may contain a provision eliminating
or limiting the personal liability of a director to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director
provided that such provision shall not eliminate or limit the liability of a
director (i) for any breach of the director's duty of loyalty to the corporation
or its stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law, or (iv) for any transaction
from which the director derived an improper personal benefit.
II-1
<PAGE> 19
Article Eighth of the Company's Amended and Restated Certificate of
Incorporation states that:
No director of the Corporation shall be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty by such director as a director; provided, however, that this Article Eighth
shall not eliminate or limit the liability of a director to the extent provided
by applicable law (i) for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the DGCL or (iv) for any transaction from which the director
derived an improper personal benefit. No amendment to or repeal of this Article
Eighth shall apply to, or have any effect on, the liability or alleged liability
of any director of the Corporation for or with respect to any acts or omissions
of such director occurring prior to such amendment or repeal. If the DGCL is
amended to authorize corporate action further eliminating or limiting the
personal liability of directors, then the liability of a director of the
Corporation shall be eliminated or limited to the fullest extent permitted by
the DGCL, as so amended.
In addition, Article VI of the Company's Bylaws further provides that the
Company shall indemnify its officers, directors and employees to the fullest
extent permitted by law.
The Company has entered into indemnification agreements with each of its
executive officers and directors.
These limitations on liability would apply to violations of the federal
securities laws. However, the registrant has been advised that in the opinion of
the SEC, indemnification for liabilities under the Securities Act of 1933 is
against public policy and therefore unenforceable.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
<TABLE>
<C> <S>
3.1 -- Amended and Restated Certificate of Incorporation as
amended. (Incorporated by reference to Exhibit 3.1 to the
Registration Statement on Form S-1 (File No. 333-38715)
of the Company)
3.2 -- Bylaws, as amended. (Incorporated by reference to Exhibit
3.2 to the Annual Report on Form 10-K for the year ended
September 30, 1998 of the Company)
4.1 -- Specimen Common Stock Certificate. (Incorporated by
reference to Exhibit 4.1 to the Registration Statement on
Form S-1 (File No. 333-38715) of the Company)
*4.2 -- Indenture, dated January 28, 1999, by and among
Integrated Electrical Services, Inc. and the subsidiaries
named therein and State Street Bank and Trust Company
covering up to $150,000,000 9 3/8% Senior Subordinated
Notes due 2009
5.1 -- Opinion of John F. Wombwell (Incorporated by reference to
Exhibit 5.1 to the Registration Statement on Form S-1
(File No. 333-50031) of the Company)
10.1 -- Form of Employment Agreement (Incorporated by reference
to Exhibit 10.1 to the Registration Statement on Form S-1
(File No. 333-38715) of the Company)
10.2 -- Form of Officer and Director Indemnification Agreement.
(Incorporated by reference to Exhibit 10.2 to the
Registration Statement on Form S-1 (File No. 333-38715)
of the Company)
10.3 -- Integrated Electrical Services, Inc. 1997 Stock Plan.
(Incorporated by reference to Exhibit 10.3 to the
Registration Statement on Form S-1 (File No. 333-38715)
of the Company)
10.4 -- Integrated Electrical Services, Inc. 1997 Directors Stock
Plan. (Incorporated by reference to Exhibit 10.4 to the
Registration Statement on Form S-1 (File No. 333-38715)
of the Company)
</TABLE>
II-2
<PAGE> 20
<TABLE>
<C> <S>
10.5 -- Credit Agreement dated July 30, 1998, among the Company,
the Financial Institutions named therein and NationsBank
of Texas, N.A., including Guaranty, Pledge Agreement,
Security Agreement, form of promissory note, and form of
swing line note. (Incorporated by reference to Exhibit
10.5 to Post-Effective Amendment No. 1 to the
Registration Statement on Form S-1 (File No. 333-50031)
of the Company)
10.6 -- Amendment No. 1 dated September 30, 1998, to the Credit
Agreement dated July 30, 1998, among the Company, the
Financial Institutions named therein and NationsBank of
Texas, N.A. (Incorporated by reference to Exhibit 10.6 to
the Company's Annual Report on Form 10-K/A for the year
ended September 30, 1998)
10.7 -- Amendment No. 2 dated January 18, 1999, to the Credit
Agreement dated July 30, 1998, among the Company, the
Financial Institutions named therein and NationsBank of
Texas, N.A. (Incorporated by reference to Exhibit 10.7 to
Post-Effective Amendment No. 2 to the Registration
Statement on Form S-1 (File No. 333-50031) of the
Company)
10.8 -- Form of Lock-up Agreement entered into by the Company and
the stockholders set forth on Schedule A thereto.
(Incorporated by reference to Exhibit 10.6 to the
Registration Statement on Form S-1 (File No. 333-38715)
of the Company)
23.1 -- Consent of John F. Wombwell (included in Exhibit 5.1)
*23.2 -- Consent of Arthur Andersen LLP
*23.3 -- Consent of Hertzbach & Company, P.A.
*23.4 -- Consent of KPMG Peat Marwick LLP
*23.5 -- Consent of Peck & Kopacek, P.C.
*23.6 -- Consent of Arthur Andersen LLP
</TABLE>
- ---------------
* Filed herewith.
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
II-3
<PAGE> 21
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% change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the effective
registration statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(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 section 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(5) That prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an underwriter within
the meaning of Rule 145(c), the issuer undertakes that such reoffering
prospectus will contain the information called for by the applicable
registration form with respect to reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other Items
of the applicable form.
(6) That every prospectus (i) that is filed pursuant to paragraph (5)
immediately preceding, or (ii) that purports to meet the requirements of
section 10(a)(3) of the Act and is used in connection with an offering of
securities subject to Rule 415, will be filed as a part of an amendment to
the registration statement and will not be used until such amendment is
effective, and that, for purposes of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(7) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Items 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 main 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.
(8) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein,
that was not the subject of and included in the registration statement when
it became effective.
II-4
<PAGE> 22
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Post Effective Amendment No. 3 on Form S-4 to its
Registration Statement on Form S-1 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Houston, State of Texas,
on March 16, 1999.
INTEGRATED ELECTRICAL SERVICE, INC.
By: /s/ JIM P. WISE*
------------------------------------
Jim P. Wise
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on March 16, 1999.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ JIM P. WISE* President, Chief Executive Officer and
- ----------------------------------------------------- Director (Principal Executive Officer and
Jim P. Wise Principal Financial Officer)
/s/ J. PAUL WITHROW* Vice President and Chief Accounting Officer
- ----------------------------------------------------- (Principal Accounting Officer)
J. Paul Withrow
/s/ C. BYRON SNYDER* Chairman of the Board of Directors
- -----------------------------------------------------
C. Byron Snyder
/s/ JON POLLOCK* Vice Chairman of the Board of Directors
- -----------------------------------------------------
Jon Pollock
Director
- -----------------------------------------------------
Donald Paul Hodel
/s/ JERRY M. MILLS* Director
- -----------------------------------------------------
Jerry M. Mills
/s/ BEN L. MUELLER* Director
- -----------------------------------------------------
Ben L. Mueller
/s/ RICHARD MUTH* Director
- -----------------------------------------------------
Richard Muth
/s/ ALAN R. SIELBECK* Director
- -----------------------------------------------------
Alan R. Seilbeck
/s/ ROBERT STALVEY* Director
- -----------------------------------------------------
Robert Stalvey
</TABLE>
II-5
<PAGE> 23
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ RICHARD L. TUCKER* Director
- -----------------------------------------------------
Richard L. Tucker
/s/ BOB WEIK* Director
- -----------------------------------------------------
Bob Weik
</TABLE>
*By: /s/ JOHN F. WOMBWELL
-------------------------------
John F. Wombwell
Pursuant to a power-of-attorney filed
with the Registration Statement on
Form S-1 (333-50031) on
April 14, 1998.
II-6
<PAGE> 24
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
3.1 -- Amended and Restated Certificate of Incorporation as
amended. (Incorporated by reference to Exhibit 3.1 to the
Registration Statement on Form S-1 (File No. 333-38715)
of the Company)
3.2 -- Bylaws, as amended. (Incorporated by reference to Exhibit
3.2 to the Annual Report on Form 10-K for the year ended
September 30, 1998 of the Company)
4.1 -- Specimen Common Stock Certificate. (Incorporated by
reference to Exhibit 4.1 to the Registration Statement on
Form S-1 (File No. 333-38715) of the Company)
*4.2 -- Indenture, dated January 28, 1999, by and among
Integrated Electrical Services, Inc. and the subsidiaries
named therein and State Street Bank and Trust Company
covering up to $150,000,000 9 3/8% Senior Subordinated
Notes due 2009
5.1 -- Opinion of John F. Wombwell (Incorporated by reference to
Exhibit 5.1 to the Registration Statement on Form S-1
(File No. 333-50031) of the Company)
10.1 -- Form of Employment Agreement (Incorporated by reference
to Exhibit 10.1 to the Registration Statement on Form S-1
(File No. 333-38715) of the Company)
10.2 -- Form of Officer and Director Indemnification Agreement.
(Incorporated by reference to Exhibit 10.2 to the
Registration Statement on Form S-1 (File No. 333-38715)
of the Company)
10.3 -- Integrated Electrical Services, Inc. 1997 Stock Plan.
(Incorporated by reference to Exhibit 10.3 to the
Registration Statement on Form S-1 (File No. 333-38715)
of the Company)
10.4 -- Integrated Electrical Services, Inc. 1997 Directors Stock
Plan. (Incorporated by reference to Exhibit 10.4 to the
Registration Statement on Form S-1 (File No. 333-38715)
of the Company)
10.5 -- Credit Agreement dated July 30, 1998, among the Company,
the Financial Institutions named therein and NationsBank
of Texas, N.A., including Guaranty, Pledge Agreement,
Security Agreement, form of promissory note, and form of
swing line note. (Incorporated by reference to Exhibit
10.5 to Post-Effective Amendment No. 1 to the
Registration Statement on Form S-1 (File No. 333-50031)
of the Company)
10.6 -- Amendment No. 1 dated September 30, 1998, to the Credit
Agreement dated July 30, 1998, among the Company, the
Financial Institutions named therein and NationsBank of
Texas, N.A. (Incorporated by reference to Exhibit 10.6 to
the Company's Annual Report on Form 10-K/A for the year
ended September 30, 1998)
10.7 -- Amendment No. 2 dated January 18, 1999, to the Credit
Agreement dated July 30, 1998, among the Company, the
Financial Institutions named therein and NationsBank of
Texas, N.A. (Incorporated by reference to Exhibit 10.7 to
Post-Effective Amendment No. 2 to the Registration
Statement on Form S-1 (File No. 333-50031) of the
Company)
10.8 -- Form of Lock-up Agreement entered into by the Company and
the stockholders set forth on Schedule A thereto.
(Incorporated by reference to Exhibit 10.6 to the
Registration Statement on Form S-1 (File No. 333-38715)
of the Company)
</TABLE>
<PAGE> 25
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
23.1 -- Consent of John F. Wombwell (included in Exhibit 5.1)
*23.2 -- Consent of Arthur Andersen LLP
*23.3 -- Consent of Hertzbach & Company, P.A.
*23.4 -- Consent of KPMG Peat Marwick LLP
*23.5 -- Consent of Peck & Kopacek, P.C.
*23.6 -- Consent of Arthur Andersen LLP
</TABLE>
- ---------------
* Filed herewith.
<PAGE> 1
EXHIBIT 4.2
===============================================================================
INTEGRATED ELECTRICAL SERVICES, INC.
AS THE COMPANY
AND
THE SUBSIDIARIES NAMED HEREIN
AS GUARANTORS
TO
STATE STREET BANK AND TRUST COMPANY
AS TRUSTEE
INDENTURE
DATED AS OF JANUARY 28, 1999
UP TO $150,000,000
9 3/8% SENIOR SUBORDINATED NOTES DUE 2009,
SERIES A
9 3/8% SENIOR SUBORDINATED NOTES DUE 2009,
SERIES B
===============================================================================
<PAGE> 2
CROSS-REFERENCE TABLE
(NOTE - this table is not part of the Indenture)
<TABLE>
<CAPTION>
TIA Indenture
Section Section
- ------- -------
<S> <C>
310(a)(1).......................................................................................................6.9
310(a)(2).......................................................................................................6.9
310(a)(3)......................................................................................................N.A.
310(a)(4)......................................................................................................N.A.
310(a)(5)......................................................................................................N.A.
310(b)....................................................................................................6.8; 6.10
310(c).........................................................................................................N.A.
311(a).........................................................................................................6.13
311(b).........................................................................................................6.13
311(c).........................................................................................................N.A.
312(a).....................................................................................................7.1; 7.2
312(b)..........................................................................................................7.2
312(c)..........................................................................................................7.2
313(a)..........................................................................................................7.3
313(b)..........................................................................................................7.3
313(c)..........................................................................................................1.6
313(d)..........................................................................................................7.3
314(a)..........................................................................................................7.4
314(b).........................................................................................................N.A.
314(c)(1).......................................................................................................1.2
314(c)(2).......................................................................................................1.2
314(c)(3)......................................................................................................N.A.
314(d).........................................................................................................N.A.
314(e)..........................................................................................................1.2
314(f).........................................................................................................N.A.
315(a)..........................................................................................................6.1
315(b)..........................................................................................................6.2
315(c)..........................................................................................................6.1
315(d)..........................................................................................................6.1
315(e).........................................................................................................5.14
316(a)(1)(A)...................................................................................................5.12
316(a)(1)(B)...................................................................................................5.13
316(a)(2)......................................................................................................N.A.
316(a)(last sentence)...........................................................................................1.1
316(b).....................................................................................................5.7; 5.8
316(c)..........................................................................................................1.4
317(a)(1).......................................................................................................5.3
317(a)(2).......................................................................................................5.4
317(b).........................................................................................................10.3
317(a)..........................................................................................................1.7
</TABLE>
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
<S> <C> <C>
SECTION 1.1. Definitions........................................................1
SECTION 1.2. Compliance Certificates and Opinions..............................20
SECTION 1.3. Form of Documents Delivered to Trustee............................20
SECTION 1.4. Acts of Holders; Record Dates.....................................21
SECTION 1.5. Notices to Trustee, the Company or a Guarantor....................22
SECTION 1.6. Notice to Holders; Waiver.........................................23
SECTION 1.7. Conflict with Trust Indenture Act.................................23
SECTION 1.8. Effect of Headings and Table of Contents..........................23
SECTION 1.9. Successors and Assigns............................................23
SECTION 1.10. Separability Clause...............................................23
SECTION 1.11. Benefits of Indenture.............................................24
SECTION 1.12. Governing Law.....................................................24
SECTION 1.13. Legal Holidays....................................................24
ARTICLE II
SECURITY FORMS
SECTION 2.1. Forms Generally...................................................24
ARTICLE III
THE SECURITIES
SECTION 3.1. Title and Terms...................................................24
SECTION 3.2. Denominations.....................................................25
SECTION 3.3. Execution, Authentication, Delivery and Dating....................25
SECTION 3.4. Temporary Securities..............................................26
SECTION 3.5. Registration, Registration of Transfer and Exchange...............26
SECTION 3.6. Mutilated, Destroyed, Lost and Stolen Securities..................27
SECTION 3.7. Payment of Interest; Rights Preserved.............................28
SECTION 3.8. Persons Deemed Owners.............................................29
SECTION 3.9. Cancellation......................................................29
SECTION 3.10. Computation of Interest...........................................29
SECTION 3.11. CUSIP and CINS Numbers............................................29
SECTION 3.12. Deposits of Monies................................................29
SECTION 3.13. Book-Entry Provisions for Global Securities.......................30
SECTION 3.14. Special Transfer Provisions.......................................30
</TABLE>
-i-
<PAGE> 4
<TABLE>
<S> <C> <C>
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of Indenture..........................32
SECTION 4.2. Application of Trust Money.......................................33
ARTICLE V
REMEDIES
SECTION 5.1. Events of Default................................................34
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment...............35
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by Trustee..36
SECTION 5.4. Trustee May File Proofs of Claim.................................37
SECTION 5.5. Trustee May Enforce Claims Without Possession of Securities......37
SECTION 5.6. Application of Money Collected...................................38
SECTION 5.7. Limitation on Suits..............................................38
SECTION 5.10. Unconditional Right of Holders to Receive Principal,
Premium and Interest.............................................39
SECTION 5.11. Restoration of Rights and Remedies...............................39
SECTION 5.12. Rights and Remedies Cumulative...................................39
SECTION 5.13. Delay or Omission Not Waiver.....................................39
SECTION 5.14. Control by Holders...............................................39
SECTION 5.15. Waiver of Past Defaults..........................................40
SECTION 5.16. Undertaking for Costs............................................40
SECTION 5.17. Waiver of Stay or Extension Laws.................................40
ARTICLE VI
THE TRUSTEE
SECTION 6.1. Certain Duties and Responsibilities..............................41
SECTION 6.2. Notice of Defaults...............................................41
SECTION 6.3. Certain Rights of Trustee........................................42
SECTION 6.4. Not Responsible for Recitals or Issuance of Securities...........43
SECTION 6.5. May Hold Securities..............................................43
SECTION 6.6. Money Held in Trust..............................................43
SECTION 6.7. Compensation and Reimbursement...................................43
SECTION 6.8. Conflicting Interests............................................44
SECTION 6.9. Corporate Trustee Required; Eligibility..........................44
SECTION 6.10. Resignation and Removal; Appointment of Successor................44
SECTION 6.11. Acceptance of Appointment by Successor...........................45
SECTION 6.12. Merger, Conversion, Consolidation or Succession to Business......45
SECTION 6.13. Preferential Collection of Claims Against the Company or
a Guarantor......................................................46
SECTION 6.14. Appointment of Authenticating Agent..............................46
</TABLE>
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<TABLE>
ARTICLE VII
<S> <C> <C>
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.1. Company to Furnish Trustee Names and Addresses of Holders........47
SECTION 7.2. Preservation of Information; Communications to Holders...........47
SECTION 7.3. Reports by Trustee...............................................48
SECTION 7.4. Reports by Company...............................................48
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.1. Company May Merge, Consolidate, Etc. Only on Certain Terms.......48
SECTION 8.2. Successor Substituted............................................49
ARTICLE IX
AMENDMENTS; WAIVERS; SUPPLEMENTAL INDENTURES
SECTION 9.1. Amendments, Waivers and Supplemental Indentures
Without Consent of Holders.......................................50
SECTION 9.2. Modifications, Amendments and Supplemental
Indentures with Consent of Holders...............................50
SECTION 9.3. Execution of Supplemental Indentures.............................51
SECTION 9.4. Effect of Supplemental Indentures................................51
SECTION 9.5. Conformity with Trust Indenture Act..............................51
SECTION 9.6. Reference in Securities to Supplemental Indentures...............52
SECTION 9.7. Waiver of Certain Covenants......................................52
SECTION 9.8. No Liability for Certain Persons.................................52
ARTICLE X
COVENANTS
SECTION 10.1. Payment of Principal, Premium and Interest.......................52
SECTION 10.2. Maintenance of Office or Agency..................................52
SECTION 10.3. Money for Security Payments to be Held in Trust..................53
SECTION 10.4. Existence; Activities............................................54
SECTION 10.5. Maintenance of Properties........................................54
SECTION 10.6. Payment of Taxes and Other Claims................................54
SECTION 10.7. Maintenance of Insurance.........................................54
SECTION 10.8. Limitation on Indebtedness.......................................54
SECTION 10.9. Limitation on Restricted Payments................................55
SECTION 10.10. Limitation on Issuances and Sales of Restricted
Subsidiary Stock.................................................57
SECTION 10.11. Limitation on Transactions with Affiliates.......................57
SECTION 10.12. Limitation on Liens..............................................58
SECTION 10.13. Change of Control................................................58
SECTION 10.14. Disposition of Proceeds of Asset Sales...........................59
SECTION 10.15. Limitation on Dividends and Other Payment
Restrictions Affecting Restricted Subsidiaries...................61
SECTION 10.16. Limitation on Issuance of Subordinated Indebtedness.............61
SECTION 10.17. Additional Subsidiary Guarantees................................61
SECTION 10.18. Limitations on Designation of Unrestricted Subsidiaries.........62
</TABLE>
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SECTION 10.19. Provision of Financial Information..............................63
SECTION 10.20. Statement by Officers as to Default; Compliance Certificates....63
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 11.1. Right of Redemption..............................................63
SECTION 11.2. Applicability of Article.........................................63
SECTION 11.3. Election to Redeem; Notice to Trustee............................64
SECTION 11.4. Selection by Trustee of Securities To Be Redeemed................64
SECTION 11.5. Notice of Redemption.............................................64
SECTION 11.6. Deposit of Redemption Price......................................65
SECTION 11.7. Securities Payable on Redemption Date............................65
SECTION 11.8. Securities Redeemed in Part......................................65
ARTICLE XII
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 12.1. Company's Option To Effect Defeasance or Covenant Defeasance.....66
SECTION 12.2. Defeasance and Discharge.........................................66
SECTION 12.3. Covenant Defeasance..............................................66
SECTION 12.4. Conditions to Defeasance or Covenant Defeasance..................67
SECTION 12.5. Deposited Money and U.S. Government Obligations
To Be Held in Trust; Miscellaneous Provisions....................68
SECTION 12.6. Reinstatement....................................................69
ARTICLE XIII
GUARANTY
SECTION 13.1. Guaranty.........................................................69
SECTION 13.2. Limitation on Liability..........................................71
SECTION 13.3. Execution and Delivery of Guarantees; Supplemental Indentures....71
SECTION 13.4. Guarantors May Consolidate, Etc., on Certain Terms...............71
SECTION 13.5. Release of Guarantors............................................71
SECTION 13.6. Successors and Assigns...........................................72
SECTION 13.7. No Waiver, etc...................................................72
SECTION 13.8. Modification, etc................................................72
SECTION 13.9. Subordination of Guarantees......................................72
ARTICLE XIV
SUBORDINATION
SECTION 14.1. Securities Subordinate to Senior Indebtedness and
Senior to Subordinated Indebtedness..............................73
SECTION 14.2. Payment Over of Proceeds Upon Dissolution, Etc...................73
SECTION 14.3. No Payment When Designated Senior Indebtedness in Default........73
</TABLE>
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<TABLE>
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SECTION 14.4. Subrogation to Rights of Holders of Senior Indebtedness..........74
SECTION 14.5. Provisions Solely to Define Relative Rights......................74
SECTION 14.6. Trustee to Effectuate Subordination..............................75
SECTION 14.7. No Waiver of Subordination Provisions............................75
SECTION 14.8. Notice to Trustee................................................75
SECTION 14.9. Reliance on Judicial Order or Certificate of
Liquidating Agent................................................75
SECTION 14.10. Trustee Not Fiduciary for Holders of Senior
Indebtedness................................76
SECTION 14.11. Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights.................................76
SECTION 14.12. Article Applicable to Paying Agents..............................76
Schedule A List of Guarantors
Exhibit A-1 Form of Security
Exhibit A-2 Form of Series B Security
Exhibit B Global Securities Legend
Exhibit C Transfer Letter
Exhibit D Form of Supplemental Indenture
</TABLE>
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INDENTURE, dated as of January 28, 1999, among INTEGRATED ELECTRICAL
SERVICES, INC., a corporation duly organized and existing under the laws of the
State of Delaware (herein called the "Company"), the Subsidiaries of the
Company named in Schedule A as of the date of issuance (herein called the
"Initial Guarantors") and STATE STREET BANK AND TRUST COMPANY, as trustee
(herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of 93/8%
Senior Subordinated Notes due 2009, Series A and 93/8% Senior Subordinated
Notes due 2009, Series B (together, the "Securities") of substantially the
tenor and amount hereinafter set forth, and to provide therefor the Company has
duly authorized the execution and delivery of this Indenture.
Each Guarantor desires to make the Guaranty provided herein and has
duly authorized the execution and delivery of this Indenture.
All things necessary to make the Securities, when executed by the
Company, authenticated and delivered hereunder and duly issued by the Company,
and the Guarantees, when executed and delivered hereunder by each Guarantor,
the valid obligations of the Company and each Guarantor, and to make this
Indenture a valid agreement of the Company and each Guarantor, in accordance
with their and its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders (as defined herein) thereof, it is mutually
covenanted and agreed, for the equal and proportionate benefit of all Holders
of the Securities, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP (whether or not such is
indicated herein);
(4) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or Section, as the case may
be, of this Indenture;
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(5) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision; and
(6) each reference herein to a rule or form of the Commission shall
mean such rule or form and any rule or form successor thereto, in each
case as amended from time to time.
Whenever this Indenture requires that a particular ratio or amount be
calculated with respect to a specified period after giving effect to certain
transactions or events on a pro forma basis, such calculation shall be made as
if the transactions or events occurred on the first day of such period, unless
otherwise specified.
"Acquired Indebtedness" means Indebtedness of a Person (a) assumed in
connection with an Asset Acquisition from such Person or (b) existing at the
time such Person becomes or is merged into a Subsidiary of any other Person.
"Act," when used with respect to any Holder, has the meaning specified in
Section 1.4.
"Affiliate" means, with respect to any specified Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of Voting Stock, by agreement or otherwise;
provided that beneficial ownership of 10% of more of the Voting Stock of a
Person shall be deemed to be control.
"Asset Acquisition" means (a) an Investment by the Company or any
Restricted Subsidiary of the Company in any other Person pursuant to which such
Person shall become a Restricted Subsidiary of the Company, or shall be merged
with or into the Company or any Restricted Subsidiary of the Company, or (b)
the acquisition by the Company or any Restricted Subsidiary of the Company of
the assets of any Person which constitute all or substantially all of the
assets of such Person, any division or line of business of such Person or,
other than in the ordinary course of business, any other properties or assets
of such Person.
"Asset Sale" means any sale, issuance, conveyance, transfer, lease or
other disposition by the Company or any Restricted Subsidiary to any Person
other than the Company or a Restricted Subsidiary, of (a) any Capital Stock of
any Restricted Subsidiary; (b) all or substantially all of the properties and
assets of any division or line of business of the Company or any Restricted
Subsidiary; or (c) any other properties or assets of the Company or any
Restricted Subsidiary outside of the ordinary course of business, other than
(i) sales of obsolete, damaged or used equipment or other equipment or
inventory sales in the ordinary course of business, (ii) sales of assets in one
or a series of related transactions for an aggregate consideration of less than
$2 million and (iii) sales of accounts receivable for financing purposes. For
the purposes of this definition, the term "Asset Sale" shall not include (i)
any sale, issuance, conveyance, transfer, lease or other disposition of
properties or assets that is governed by the provisions of Article VIII, (ii) a
Restricted Payment that is permitted under Section 10.9, or (iii) the trade or
exchange by the Company or any Restricted Subsidiary of any property or assets
owned or held by the Company or such Restricted Subsidiary for any property or
assets owned or held by another Person, provided that the Fair Market Value of
the properties traded or exchanged by the Company or such Restricted Subsidiary
(including any cash or Cash Equivalents to be delivered by the Company or such
Restricted Subsidiary) is reasonably equivalent to the Fair Market Value of the
properties (together with any cash or Cash Equivalents) to be received by the
Company or such Restricted Subsidiary, and provided further that any such cash
or Cash Equivalents shall be deemed to constitute Net Cash Proceeds of an Asset
Sale for purposes of Section 10.14.
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"Asset Sale Deficiency" has the meaning specified in Section 10.14.
"Asset Sale Offer" has the meaning specified in Section 10.14.
"Asset Sale Offer Amount" has the meaning specified in Section 10.14.
"Asset Sale Purchase Date" means the Purchase Date relating to an Asset
Sale Offer.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 6.14 hereof to act on behalf of the Trustee to authenticate
Securities.
"Average Life to Stated Maturity" means, with respect to any
Indebtedness, as at any date of determination, the quotient obtained by
dividing (i) the sum of the products of (a) the number of years (and any
portion thereof) from such date of such determination to the date or dates of
each successive scheduled principal payment (including, without limitation, any
sinking fund or mandatory redemption payment requirements) of such
Indebtedness, and (b) the amount of each such principal payment by (ii) the sum
of all such principal payments.
"Board of Directors" means the board of directors of a company or its
equivalent, including managers of a limited liability company, general partners
of a partnership or trustees of a business trust, or any duly authorized
committee thereof.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of a company to have been duly adopted by
the Board of Directors of such company and to be in full force and effect on
the date of such certification, and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in the Borough of Manhattan,
The City of New York, Hartford, Connecticut or Boston, Massachusetts are
authorized or obligated by law or executive order to close.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations, rights in or other equivalents (however designated)
of such Person's capital stock or equity participations, and any rights (other
than debt securities convertible into capital stock), warrants or options
exchangeable for or convertible into such capital stock and, including, without
limitation, with respect to partnerships, limited liability companies or
business trusts, ownership interests (whether general or limited) and any other
interest or participation that confers on a Person the right to receive a share
of the profits and losses of, or distributions of assets of, such partnerships,
limited liability companies or business trusts.
"Capitalized Lease Obligation" means any obligation under a lease of (or
other agreement conveying the right to use) any property (whether real,
personal or mixed) that is required to be classified and accounted for as a
capital lease obligation under GAAP, and, for the purpose of this Indenture,
the amount of such obligation at any date shall be the capitalized amount
thereof at such date, determined in accordance with GAAP.
"Cash Equivalents" means, at any time, (a) any evidence of Indebtedness,
maturing not more than one year after such time, issued or guaranteed by the
United States Government or any agency thereof (provided that the full faith
and credit of the United States of America is pledged in support thereof), (b)
commercial paper, maturing not more than one year from the date of issue, rated
at least A-2 by Standard & Poor's Ratings Group or P-2 by Moody's Investors
Service, Inc., (c) any certificate of deposit (or time deposits represented by
such certificates of deposit) or bankers acceptance, maturing not more than
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one year after such time, or overnight Federal Funds transactions that are
issued or sold by a banking institution that is a member of the Federal Reserve
System and has a combined capital and surplus and undivided profits of not less
than $500 million, (d) repurchase obligations with a term of not more than
seven days for underlying securities of the types described in clause (a) above
entered into with any bank meeting the specifications of clause (c) above, and
(e) investments in funds investing primarily in investments of the types
described in clauses (a) through (d) above.
"Cedel" means Cedel Bank, Societe anonyme.
"Change of Control" means the occurrence of any of the following events:
(a) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d)
of the Exchange Act) is or becomes the "beneficial owner" (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, except that a Person shall be deemed to
have "beneficial ownership" of all securities that such Person has the right to
acquire, whether such right is exercisable immediately or only after the
passage of time), directly or indirectly, of more than 50% of the total Voting
Stock of the Company; (b) the Company consolidates with, or merges with or
into, another Person or sells, assigns, conveys, transfers, leases or otherwise
disposes of all or substantially all of its assets to any Person, or any Person
consolidates with, or merges with or into, the Company, in any such event
pursuant to a transaction in which the outstanding Voting Stock of the Company
is converted into or exchanged for cash, securities or other property, other
than any such transaction where (i) the outstanding Voting Stock of the Company
is converted into or exchanged for Voting Stock (other than Redeemable Capital
Stock) of the surviving or transferee corporation and (ii) immediately after
such transaction no "Person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act) is the "beneficial owner" (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person shall be
deemed to have "beneficial ownership" of all securities that such Person has
the right to acquire, whether such right is exercisable immediately or only
after the passage of time), directly or indirectly, of more than 50% of the
total Voting Stock of the surviving or transferee corporation; (c) during any
consecutive two-year period, individuals who at the beginning of such period
constituted the Board of Directors of the Company (together with any new
directors whose election by such Board of Directors or whose nomination for
election by the stockholders of the Company was approved by a vote of 66 2/3%
of the directors then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board of Directors of the Company then in office; or (d) the Company is
liquidated or dissolved or adopts a plan of liquidation.
"Change of Control Date" has the meaning specified in Section 10.13.
"Change of Control Offer" has the meaning specified in Section 10.13.
"Change of Control Purchase Date" has the meaning specified in Section
10.13.
"Change of Control Purchase Price" has the meaning specified in Section
10.13.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations thereunder.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or, if at any time after
the execution of this instrument such Commission is not existing and performing
the duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
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"Common Stock" means the common stock of the Company, par value $0.01 per
share, and the Company's Restricted Voting Common Stock, par value $0.01 per
share.
"Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor Person shall have become such pursuant to
the applicable provisions of this Indenture and thereafter "Company" shall mean
such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Chief
Executive Officer, its Chief Financial Officer, its President or a Vice
President, and by its Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary, and delivered to the Trustee or Paying Agent, as
applicable.
"Consolidated Cash Flow Available for Fixed Charges"as of any date of
determination means, with respect to any Person for any period, the sum of,
without duplication, the amounts for such period, taken as a single accounting
period, of (a) Consolidated Net Income, (b) Consolidated Non-cash Charges, (c)
Consolidated Interest Expense, and (d) Consolidated Income Tax Expense (other
than income tax expense (either positive or negative) attributable to
extraordinary gains or losses).
"Consolidated Fixed Charge Coverage Ratio" as of any date of
determination means, with respect to any Person, the ratio of the aggregate
amount of Consolidated Cash Flow Available for Fixed Charges of such Person for
the four full fiscal quarters, treated as one period, for which financial
information in respect thereof is available immediately preceding the date of
the transaction (the "Transaction Date") giving rise to the need to calculate
the Consolidated Fixed Charge Coverage Ratio (such four full fiscal quarter
period being referred to herein as the "Four Quarter Period") to the aggregate
amount of Consolidated Fixed Charges of such Person for the Four Quarter
Period. For purposes of making the computation referred to above, Consolidated
Cash Flow Available for Fixed Charges and Consolidated Fixed Charges shall be
calculated giving pro forma effect (in a manner consistent with Rule 11-02 of
Regulation S-X) to the following events (without duplication): (i) any Asset
Sale or Asset Acquisition occurring since the first day of the Four Quarter
Period (including to the date of calculation) as if such acquisition or
disposition occurred at the beginning of the Four Quarter Period (including
giving effect to (A) the amount of any reduction in expenses related to any
compensation, remuneration or other benefit paid or provided to any employee,
consultant, Affiliate or equity owner of the entity involved in any such Asset
Sale or Asset Acquisition to the extent such costs are eliminated or reduced
(or public announcement has been made of the intent to eliminate or reduce such
costs) prior to the date of such calculation and not replaced and (B) the
amount of any reduction in general, administrative or overhead costs of the
entity involved in any such Asset Sale or Asset Acquisition), (ii) the
incurrence of Indebtedness giving rise to the need to calculate the
Consolidated Fixed Charge Coverage Ratio and (if applicable) the application of
the net proceeds therefrom, including to refinance other Indebtedness, as if
such Indebtedness were incurred at the beginning of the Four Quarter Period,
(iii) the incurrence, repayment or retirement of any other Indebtedness by the
Company and its Restricted Subsidiaries since the first day of the Four Quarter
Period and prior to the making of this calculation as if such Indebtedness or
obligations were incurred, repaid or retired at the beginning of the Four
Quarter Period (except that, in making such computation, the amount of
Indebtedness under any revolving credit facility shall be computed based upon
the average daily balance of such Indebtedness during the Four Quarter Period),
(iv) elimination of Consolidated Cash Flow Available for Fixed Charges and
Consolidated Fixed Charges attributable to discontinued operations, as
determined in accordance with GAAP, but, with respect to Consolidated Fixed
Charges, only to the extent that the obligations giving rise to such
Consolidated Fixed Charges will not be obligations of the referent Person or
any of its Restricted Subsidiaries following the Transaction Date. In
calculating Consolidated Fixed Charges for purposes of determining the
denominator (but not the numerator) of the Consolidated Fixed Charge Coverage
Ratio, (i) interest on outstanding Indebtedness determined on a fluctuating
basis as of the Transaction Date and
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which will continue to be so determined thereafter shall be deemed to have
accrued at a fixed rate per annum equal to the rate of interest on such
Indebtedness in effect on the Transaction Date; and (ii) if interest on any
Indebtedness actually incurred on the Transaction Date may optionally be
determined at an interest rate based upon a factor of a prime or similar rate,
a Eurocurrency interbank offered rate, or other rates, then the interest rate
in effect on the Transaction Date will be deemed to have been in effect during
the Four Quarter Period. If such Person or any of its Restricted Subsidiaries
directly or indirectly guarantees Indebtedness of a third Person, the above
provisions shall give effect to the incurrence of such guaranteed Indebtedness
as if such Person or such Subsidiary had directly incurred or otherwise assumed
such guaranteed Indebtedness.
"Consolidated Fixed Charges" means, with respect to any Person for any
period, the sum of, without duplication, the amounts for such period of (i)
Consolidated Interest Expense and (ii) the aggregate amount of dividends and
other distributions paid or accrued during such period in respect of Redeemable
Capital Stock or Preferred Stock of such Person and its Restricted Subsidiaries
on a consolidated basis.
"Consolidated Income Tax Expense" means, with respect to any Person for
any period, the provision for federal, state, local and foreign income taxes of
such Person and its Restricted Subsidiaries for such period as determined on a
consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" means, with respect to any Person for any
period, without duplication, the sum of (i) the interest expense of such Person
and its Restricted Subsidiaries for such period as determined on a consolidated
basis in accordance with GAAP, including, without limitation, (a) any
amortization of debt discount and capitalized debt issuance costs, (b) the net
cost under Interest Rate Protection Obligations (including any amortization of
discounts), (c) the interest portion of any deferred payment obligation, (d)
all commissions, discounts and other fees and charges owed with respect to
letters of credit, bankers' acceptance financing or similar facilities and (e)
all accrued interest and (ii) the interest component of Capitalized Lease
Obligations paid, accrued and/or scheduled to be paid or accrued by such Person
and its Restricted Subsidiaries during such period as determined on a
consolidated basis in accordance with GAAP.
"Consolidated Net Income" means, with respect to any Person, for any
period, the consolidated net income (or loss) of such Person and its Restricted
Subsidiaries for such period as determined in accordance with GAAP, adjusted,
to the extent included in calculating such net income, by excluding, without
duplication, (i) all extraordinary gains or losses (net of fees and expenses
relating to the transaction giving rise thereto), (ii) the portion of net
income of such Person and its Restricted Subsidiaries allocable to minority
interests in unconsolidated Persons or to Investments in Unrestricted
Subsidiaries to the extent that cash dividends or distributions have not
actually been received by such Person or one of its Restricted Subsidiaries,
(iii) net income (or loss) of any Person combined with such Person or one of
its Restricted Subsidiaries on a "pooling of interests" basis attributable to
any period prior to the date of combination, (iv) gains or losses in respect of
any Asset Sales by such Person or one of its Restricted Subsidiaries (net of
fees and expenses relating to the transaction giving rise thereto), on an
after-tax basis, (v) the net income of any Restricted Subsidiary of such Person
to the extent that the declaration of dividends or similar distributions by
that Restricted Subsidiary of that income is not at the time permitted,
directly or indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulations applicable to that Restricted Subsidiary or its stockholders and
(vi) any gain or loss realized as a result of the cumulative effect of a change
in accounting principles.
"Consolidated Non-cash Charges" means, with respect to any Person for any
period, the aggregate depreciation, amortization (including amortization of
goodwill and other intangibles) and other non-cash charges of such Person and
its Restricted Subsidiaries reducing Consolidated Net Income of such Person and
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its Restricted Subsidiaries for such period, determined on a consolidated basis
in accordance with GAAP (excluding any such non-cash charges constituting an
extraordinary item or loss).
"Corporate Trust Office" means the office of the Trustee at which at any
particular time its corporate trust business shall be administered, which
address as of the date of this Indenture is located at Goodwin Square, 23rd
Floor, 225 Asylum Street, Hartford, CT 06103, Attention: Corporate Trust,
Administration.
"Covenant Defeasance" has the meaning specified in Section 12.3.
"Credit Facility" means the Credit Agreement dated as of July 30, 1998
among the Company, NationsBank, N.A., as the Agent, and the Banks named
therein, including any notes, guarantees, collateral documents, instruments and
agreements executed in connection therewith, and in each case as amended
(including any amendment and restatement thereof), modified, extended, renewed,
refunded, substituted or replaced or refinanced from time to time, including
any agreement extending the maturity of, refinancing, replacing or otherwise
restructuring (including increasing the amount of available borrowings
thereunder or adding Subsidiaries of the Company as additional borrowers or
guarantors thereunder) all or any portion of the Indebtedness under such
agreement or any successor or replacement agreement and whether by the same or
any other agents, creditor, lender or group of creditors or lenders.
"Default" means any event that is, or after notice or passage of time, or
both, would be, an Event of Default.
"Defeasance" has the meaning specified in Section 12.2.
"Depository" means The Depositary Trust Company, or its successor.
"Designated Guarantor Senior Indebtedness" means, with respect to a
Guarantor, amounts owing by such Guarantor under the Credit Facility and
guarantees by such Guarantor of Designated Senior Indebtedness.
"Designated Senior Indebtedness" means (i) all Indebtedness under the
Credit Facility and (ii) any other issue of Senior Indebtedness which (a) at
the time of the determination is equal to or greater than $25,000,000 in
aggregate principal amount and (b) is specifically designated by the Company in
the instrument evidencing such Senior Indebtedness as "Designated Senior
Indebtedness."
"Disinterested Member of the Board of Directors of the Company" means,
with respect to any transaction or series of related transactions, a member of
the Board of Directors of the Company other than a member who has any material
direct or indirect financial interest in or with respect to such transaction or
series of transactions or who is an Affiliate, or an officer, director or an
employee of any Person (other than the Company) who has any direct or indirect
financial interest in or with respect to such transaction or series of
transactions (in each case other than an interest arising solely from the
beneficial ownership of Capital Stock of the Company).
"Distribution Compliance Period" has the meaning set forth in Section
3.14.
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear System.
"Event of Default" has the meaning specified in Section 5.1.
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<PAGE> 15
"Excess Proceeds" has the meaning specified in Section 10.14.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Securities" means the 93/8% Senior Subordinated Notes due 2009,
Series B, of the Company, to be offered in exchange for the Initial Securities
in accordance with the Registration Rights Agreement.
"Expiration Date" shall have the meaning set forth in the definition of
"Offer to Purchase."
"Fair Market Value" means, with respect to any asset, the price (after
taking into account any liabilities relating to such assets) which could be
negotiated in an arm's-length free market transaction between a willing seller
and a willing buyer, neither of which is under pressure or compulsion to
complete the transaction. Fair Market Value shall be determined by the Board of
Directors of the Company in good faith.
"Federal Bankruptcy Code" means Title 11, U.S. Code.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States of America, which are in effect from time to
time.
"Global Securities" means one or more Regulation S Global Securities and
144A Global Securities.
"guarantee" means, as applied to any obligation, (i) a guarantee (other
than by endorsement of negotiable instruments for collection in the ordinary
course of business), direct or indirect, in any manner, of any part or all of
such obligation and (ii) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the event of nonperformance) of all or
any part of such obligation, including, without limiting the foregoing, the
payment of amounts available to be drawn down under letters of credit of
another Person. The term "guarantee" used as a verb has a corresponding
meaning. The term "guarantor" shall mean any Person providing a guarantee of
any obligation.
"Guarantor Senior Indebtedness" of a Guarantor means the principal of,
premium, if any, and interest on any Indebtedness of such Guarantor, whether
outstanding on the Issue Date or thereafter created, incurred or assumed,
unless, in the case of any particular Indebtedness, the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly
provides that such Indebtedness shall not be senior in right of payment to such
Guarantor's Guarantee. Without limiting the generality of the foregoing, (x)
"Guarantor Senior Indebtedness" shall include the principal of, premium, if
any, and interest on all obligations of every nature of such Guarantor from
time to time owed to the lenders under the Credit Facility, including, without
limitation, principal of and interest on, and all fees, indemnities and
expenses payable under, the Credit Facility, and (y) in the case of amounts
owing under the Credit Facility and guarantees of Designated Senior
Indebtedness, "Guarantor Senior Indebtedness" shall include interest accruing
thereon subsequent to the occurrence of any Event of Default specified in
clause (7) or (8) of Section 5.1 relating to such Guarantor, whether or not the
claim for such interest is allowed under any applicable Bankruptcy Code.
Notwithstanding the foregoing, "Guarantor Senior Indebtedness" shall not
include (a) Indebtedness evidenced by the Securities or the Guarantees, (b)
Indebtedness that is expressly subordinate or junior in right of payment to any
other Indebtedness of such Guarantor, (c) Indebtedness which, when incurred and
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<PAGE> 16
without respect to any election under Section 1111(b) of Title 11, United
States Code, is by its terms without recourse to such Guarantor, (d)
Indebtedness which is represented by Redeemable Capital Stock, (e) to the
extent it constitutes Indebtedness, any liability for federal, state, local or
other taxes owed or owing by such Guarantor, (f) Indebtedness of such Guarantor
to the Company or a Subsidiary of the Company or any other Affiliate of the
Company or any of such Affiliate's Subsidiaries, and (g) that portion of any
Indebtedness which is incurred by such Guarantor in violation of the Indenture.
"Guarantor Subordinated Indebtedness" means, with respect to a Guarantor,
indebtedness and other obligations of such Guarantor which are expressly
subordinated in right of payment to such Guarantor's Guaranty.
"Guarantors" shall mean each Initial Guarantor and each future Subsidiary
designated a Guarantor in accordance with Section 10.17 herein.
"Guaranty" means each guaranty of the Securities contained in Article
XIII given by each Guarantor.
"Guaranty Obligations" means, with respect to each Guarantor, the
obligations of such Guarantor under Article XIII.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indebtedness" means, with respect to any Person, without duplication,
(a) all liabilities of such Person for borrowed money or for the deferred
purchase price of property or services, excluding any trade payables and other
accrued current liabilities incurred in the ordinary course of business, but
including, without limitation, all obligations, contingent or otherwise, of
such Person in connection with any letters of credit, banker's acceptance or
other similar credit transaction, if, and to the extent, any of the foregoing
would appear as a liability on a balance sheet of such Person prepared in
accordance with GAAP, (b) all obligations of such Person evidenced by bonds,
notes, debentures or other similar instruments, if, and to the extent, any of
the foregoing would appear as a liability on a balance sheet of such Person
prepared in accordance with GAAP, (c) all indebtedness of such Person created
or arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even if the rights and remedies of
the seller or lender under such agreement in the event of default are limited
to repossession or sale of such property), but excluding consignments and trade
accounts payable arising in the ordinary course of business, (d) all
Capitalized Lease Obligations of such Person, (e) all Indebtedness referred to
in the preceding clauses of other Persons and all dividends of other Persons,
the payment of which is secured by (or for which the Holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien upon property (including, without limitation, accounts and contract
rights) owned by such Person, even though such Person has not assumed or become
liable for the payment of such Indebtedness (the amount of such obligation
being deemed to be the lesser of the Fair Market Value of such property or
asset or the amount of the obligation so secured), (f) all guarantees of
Indebtedness referred to in this definition by such Person, (g) all Redeemable
Capital Stock of such Person valued at the greater of its voluntary or
involuntary maximum fixed repurchase price plus accrued dividends, and (h) all
Interest Rate Protection Obligations of such Person; provided, however, that
Indebtedness shall not include (i) Indebtedness arising from agreements of the
Company or any Restricted Subsidiary providing for indemnification, adjustment
or holdback of purchase price or similar obligations, in each case, incurred or
assumed in connection with the acquisition or disposition of any business,
assets or a Subsidiary, other than guarantees of Indebtedness incurred by any
Person acquiring all or any portion of such business, assets or Subsidiary for
the purpose of financing such acquisition, or (ii) obligations under
performance bonds, performance guarantees, surety bonds, appeal bonds, security
deposits or similar obligations. For purposes hereof, the "maximum fixed
repurchase price" of any Redeemable Capital Stock which does not have a fixed
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<PAGE> 17
repurchase price shall be calculated in accordance with the terms of such
Redeemable Capital Stock as if such Redeemable Capital Stock were purchased on
any date on which Indebtedness shall be required to be determined pursuant to
the Indenture, and if such price is based upon, or measured by, the fair market
value of such Redeemable Capital Stock, such fair market value shall be
approved in good faith by the board of directors of the issuer of such
Redeemable Capital Stock; provided, however, that if such Redeemable Capital
Stock is not at the date of determination permitted or required to be
repurchased, the "maximum fixed repurchase price" shall be the book value of
such Redeemable Capital Stock.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively.
"Initial Guarantors" has the meaning set forth in the introduction to
this Indenture.
"Initial Purchasers" means Merrill Lynch and Donaldson, Lufkin & Jenrette
Securities Corporation.
"Initial Securities" means the 93/8% Senior Subordinated Notes due 2009,
Series A, of the Company.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.
"Interest Rate Protection Agreement" means, with respect to any Person,
any arrangement with any other Person whereby, directly or indirectly, such
Person is entitled to receive from time to time periodic payments calculated by
applying either a floating or a fixed rate of interest on a stated notional
amount in exchange for periodic payments made by such Person calculated by
applying a fixed or a floating rate of interest on the same notional amount and
shall include, without limitation, interest rate swaps, caps, floors, collars
and similar agreements or arrangements designed to protect against or manage
such Person's exposure to fluctuations in interest rates.
"Interest Rate Protection Obligations" means the obligations of any
Person pursuant to any Interest Rate Protection Agreements.
"Investment" means, with respect to any Person, any direct or indirect
loan or other extension of credit (including, without limitation, a guarantee)
or capital contribution to (by means of any transfer of cash or other property
to others or any payment for property or services for the account or use of
others), 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, provided that the term "Investment" shall not
include (a) extensions of trade credit on commercially reasonable terms in
accordance with normal trade practices and (b) Interest Rate Protection
Obligations entered into in the ordinary course of business.
"Issue Date" means the original date of issuance of the Initial
Securities.
"Lien" means any mortgage, charge, pledge, lien (statutory or other),
security interest, hypothecation, assignment for security, claim or other
encumbrance upon or with respect to any property of any kind. A Person shall be
deemed to own subject to a Lien any property which such Person has acquired or
holds subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement.
"Maturity Date" means February 1, 2009.
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<PAGE> 18
"Merrill Lynch" means Merrill Lynch, Pierce, Fenner & Smith Incorporated.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds
thereof received by the Company or any Restricted Subsidiary in the form of
cash or Cash Equivalents including payments in respect of deferred payment
obligations when received in the form of cash or Cash Equivalents (except to
the extent that such obligations are financed or sold with recourse to the
Company or any Restricted Subsidiary) net of (i) brokerage commissions and
other fees and expenses (including, without limitation, fees and expenses of
legal counsel and investment bankers, recording fees, transfer fees and
appraisers' fees) related to such Asset Sale, (ii) provisions for all taxes
payable as a result of such Asset Sale, (iii) amounts required to be paid to
any Person (other than the Company or any Restricted Subsidiary) owning a
beneficial interest in the assets subject to the Asset Sale, (iv) payments made
to permanently retire Indebtedness where payment of such Indebtedness is
secured by the assets or properties the subject of such Asset Sale, and (v)
appropriate amounts to be provided by the Company or any Restricted Subsidiary,
as the case may be, as a reserve required in accordance with GAAP against any
liabilities associated with such Asset Sale and retained by the Company or any
Restricted Subsidiary, 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; provided, however,
that any amounts remaining after adjustments, revaluations or liquidations of
such reserves shall constitute Net Cash Proceeds.
"Non-U.S. Person" means a Person that is not a U.S. Person as such term
is defined in Regulation S.
"Notice of Default" means a written notice of the kind specified in
Section 5.2.
"Offer" means a Change of Control Offer or an Asset Sale Offer.
"Offer to Purchase" means an Offer, sent by or on behalf of the Company
by first-class mail, postage prepaid, to each Holder of Securities at its
address appearing in the register for the Securities on the date of the Offer,
offering to purchase up to the principal amount of Securities specified in such
Offer at the purchase price specified in such Offer (as determined pursuant to
this Indenture). Unless otherwise provided in Section 10.13 or 10.14 or
otherwise required by applicable law, the Offer shall specify an expiration
date (the "Expiration Date") of the Offer to Purchase, which shall be not less
than 20 Business Days nor more than 60 days after the date of such Offer (or
such later date as may be necessary for the Company to comply with the Exchange
Act), and a settlement date (the "Purchase Date") for purchase of Securities to
occur no later than five Business Days after the Expiration Date. The Company
shall notify the Trustee at least 15 Business Days (or such shorter period as
is acceptable to the Trustee) prior to the mailing of the Offer of the
Company's obligation to make an Offer to Purchase, and the Offer shall be
mailed by the Company or, at the Company's request, by the Trustee in the name
and at the expense of the Company. The Offer shall contain all the information
required by applicable law to be included therein. The Offer shall contain all
instructions and materials necessary to enable such Holders to tender
Securities pursuant to the Offer to Purchase. The Offer shall also state:
(1) the Section of this Indenture pursuant to which the Offer to
Purchase is being made;
(2) the Expiration Date and the Purchase Date;
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<PAGE> 19
(3) the purchase price to be paid by the Company for each $1,000
aggregate principal amount of Securities accepted for payment (as
specified pursuant to this Indenture) (the "Purchase Price"); and the
amount of accrued and unpaid interest to be paid;
(4) that the Holder may tender all or any portion of the Securities
registered in the name of such Holder and that any portion of a Security
tendered must be tendered in an integral multiple of $1,000 principal
amount;
(5) the place or places where Securities are to be surrendered for
tender pursuant to the Offer to Purchase;
(6) that interest on any Security not tendered or tendered but not
purchased by the Company pursuant to the Offer to Purchase will continue
to accrue;
(7) that on the Purchase Date the Purchase Price will become due
and payable upon each Security being accepted for payment pursuant to the
Offer to Purchase and that interest thereon shall cease to accrue on and
after the Purchase Date;
(8) that each Holder electing to tender all or any portion of a
Security pursuant to the Offer to Purchase will be required to surrender
such Security at the place or places specified in the Offer prior to the
close of business on the Expiration Date (such Security being, if the
Company or the Trustee so requires, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by the Holder thereof or his attorney duly
authorized in writing);
(9) that Holders will be entitled to withdraw all or any portion of
Securities tendered if the Company (or its Paying Agent) receives, not
later than the close of business on the fifth Business Day next preceding
the Expiration Date, a facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Security the Holder
tendered, the certificate number of the Security the Holder tendered and
a statement that such Holder is withdrawing all or a portion of his
tender;
(10) that (a) if Securities purchasable at an aggregate Purchase
Price less than or equal to the Purchase Amount are duly tendered and not
withdrawn pursuant to the Offer to Purchase, the Company shall purchase
all such Securities and (b) if Securities purchasable at an aggregate
Purchase Price in excess of the Purchase Amount are tendered and not
withdrawn pursuant to the Offer to Purchase, the Company shall purchase
Securities on a pro rata basis based on the Purchase Price therefor
(subject in each case to applicable rules of the Depositary and any
securities exchange upon which the Securities may then be listed), with
such adjustments as may be deemed appropriate so that only Securities in
denominations of $1,000 principal face amount or integral multiples
thereof shall be purchased; and
(11) that in the case of a Holder whose Security is purchased only
in part, the Company shall execute and the Trustee shall authenticate and
deliver to the Holder of such Security without service charge, a new
Security or Securities, of any authorized denomination as requested by
such Holder, in an aggregate principal amount equal to and in exchange
for the unpurchased portion of the Security so tendered.
An Offer to Purchase shall be governed by and effected in accordance with the
provisions of this Indenture pertaining to the type of Offer to which it
relates.
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<PAGE> 20
"Offered Price" has the meaning specified in Section 10.14.
"Offering Memorandum" means the Offering Memorandum dated January 25,
1999 pursuant to which the Securities were offered, and any supplement thereto.
"Officer's Certificate" means a certificate signed by the Chairman of the
Board, the Chief Executive Officer, the President or a Vice President, the
Chief Financial Officer, the Treasurer, an Assistant Treasurer, the Secretary
or an Assistant Secretary, of the Company, and delivered to the Trustee. One of
the officers signing an Officer's Certificate given pursuant to Section 10.20
shall be the principal executive, financial or accounting officer of the
Company.
"144A Global Security" means a permanent global security in registered
form representing the aggregate principal amount of Securities sold in reliance
on Rule 144A under the Securities Act.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be acceptable to the Trustee.
"Outstanding," when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Securities; provided that, if such
Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor satisfactory to
the Trustee has been made;
(iii) Securities which have been paid pursuant to Section 3.6 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities
in respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company; and
(iv) Securities as to which Defeasance has been effected pursuant
to Section 12.2;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given, made or taken any
request, demand, authorization, direction, notice, consent, waiver or other
action hereunder as of any date, Securities owned by the Company or any other
obligor upon the Securities or any Affiliate of the Company or of such other
obligor shall be disregarded and deemed not to be Outstanding (it being
understood that Securities to be acquired by the Company pursuant to an Offer
or other offer to purchase shall not be deemed to be owned by the Company until
legal title to such Securities passes to the Company), except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent, waiver or other
action, only Securities which a Responsible Officer of the Trustee actually
knows to be so owned shall be so disregarded. Securities so owned which have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such
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<PAGE> 21
Securities and that the pledgee is not the Company or any other obligor upon
the Securities or any Affiliate of the Company or of such other obligor.
"Pari Passu Indebtedness" means any Indebtedness of the Company that is
pari passu in right of payment to the Securities.
"Pari Passu Indebtedness Amount" has the meaning specified in Section
10.14.
"Pari Passu Offer" has the meaning specified in Section 10.14.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities on behalf of
the Company.
"Permitted Founder Stock Repurchases" means one or more repurchases by
the Company, for an aggregate purchase price not to exceed $10 million, of
shares of Common Stock owned by former owners of Subsidiaries of the Company,
that were, as of the date of acquisition of such stock by such Persons, subject
to contractual agreements with the Company restricting their resale.
"Permitted Indebtedness" means, without duplication:
(a) Indebtedness of the Company and the Guarantors evidenced by the
Securities and the Guarantees;
(b) Indebtedness of the Company and any Guarantor under the Credit
Facility in an aggregate principal amount at any one time outstanding not
to exceed $250 million, less any amounts permanently repaid in accordance
with Section 10.14;
(c) Indebtedness of the Company or any Guarantor outstanding on the
Issue Date;
(d) Indebtedness of the Company or any Restricted Subsidiary
incurred in respect of bankers' acceptances and letters of credit in the
ordinary course of business, including Indebtedness evidenced by letters
of credit issued in the ordinary course of business to support the
insurance or self-insurance obligations of the Company or any of its
Restricted Subsidiaries (including to secure workers' compensation and
other similar insurance coverages), in an aggregate amount not to exceed
$15 million at any time, but excluding letters of credit issued in
respect of or to secure money borrowed;
(e) (i) Interest Rate Protection Obligations of the Company or a
Guarantor covering Indebtedness of the Company or a Guarantor and (ii)
Interest Rate Protection Obligations of any Restricted Subsidiary
covering Permitted Indebtedness or Acquired Indebtedness of such
Restricted Subsidiary; provided that, in the case of either clause (i) or
(ii), (x) any Indebtedness to which any such Interest Rate Protection
Obligations correspond bears interest at fluctuating interest rates and
is otherwise permitted to be incurred under Section 10.8 and (y) the
notional principal amount of any such Interest Rate Protection
Obligations that exceeds 105% of the principal amount of the Indebtedness
to which such Interest Rate Protection Obligations relate shall not
constitute Permitted Indebtedness;
(f) Indebtedness of a Restricted Subsidiary owed to and held by the
Company or another Restricted Subsidiary, except that (i) any transfer of
such Indebtedness by the Company or a Restricted Subsidiary (other than
to the Company or another Restricted Subsidiary), (ii) the sale,
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<PAGE> 22
transfer or other disposition by the Company or any Restricted Subsidiary
of Capital Stock of a Restricted Subsidiary which is owed Indebtedness of
another Restricted Subsidiary such that it shall no longer be a
Restricted Subsidiary and (iii) the designation of a Restricted
Subsidiary which is owed Indebtedness of another Restricted Subsidiary as
an Unrestricted Subsidiary shall, in each case, be an incurrence of
Indebtedness by such Restricted Subsidiary subject to the other
provisions of the Indenture;
(g) Indebtedness of the Company owed to and held by a Restricted
Subsidiary which is unsecured and expressly subordinated in right of
payment to the payment and performance of the obligations of the Company
under the Indenture and the Securities, except that (i) any transfer of
such Indebtedness by a Restricted Subsidiary (other than to another
Restricted Subsidiary) and (ii) the sale, transfer or other disposition
by the Company or any Restricted Subsidiary of Capital Stock of a
Restricted Subsidiary which is owed Indebtedness of the Company such that
it shall no longer be a Restricted Subsidiary and (iii) the designation
of a Restricted Subsidiary which is owed Indebtedness of the Company
shall, in each case, be an incurrence of Indebtedness by the Company,
subject to the other provisions of the Indenture;
(h) Indebtedness of the Company or any Guarantor represented by
Capitalized Lease Obligations, mortgage financings or purchase money
obligations, in each case incurred for the purpose of financing all or
any part of the purchase price or cost of construction or improvement of
property, plant or equipment used in the business of the Company or such
Guarantor, in an aggregate principal amount not to exceed $25 million at
any time outstanding;
(i) Subordinated Indebtedness of the Company, in an aggregate
principal amount not to exceed $10 million at any time outstanding, that
is convertible into Common Stock and issued in connection with an Asset
Acquisition of a business engaged in the provision of electrical
contracting and maintenance services to the commercial, industrial, power
line and data cabling markets and any other businesses reasonably related
thereto;
(j) Indebtedness of the Company, in addition to that described in
clauses (a) through (i) of this definition, in an aggregate principal
amount not to exceed $30 million at any time outstanding;
(k) (i) Indebtedness of the Company the proceeds of which are used
solely to refinance (whether by amendment, renewal, extension or
refunding) Indebtedness of the Company or any of the Guarantors incurred
pursuant to the Consolidated Fixed Charge Coverage Ratio test of the
proviso of Section 10.8 or clause (a), (c) or (k) of this definition and
(ii) Indebtedness of any Guarantor the proceeds of which are used solely
to refinance (whether by amendment, renewal, extension or refunding)
Indebtedness of such Guarantor incurred pursuant to the Consolidated
Fixed Charge Coverage Ratio test of the proviso of Section 10.8 or clause
(c) or (k) of this definition; provided, however, that (x) the principal
amount of Indebtedness incurred pursuant to this clause (k) (or if such
Indebtedness provides for an amount less than the principal amount
thereof to be due and payable upon a declaration of acceleration of
maturity thereof, the original issue price of such Indebtedness) shall
not exceed the sum of the principal amount of Indebtedness so refinanced,
plus the amount of any premiums and fees required to be paid in
connection with such refinancing pursuant to the terms of such
Indebtedness, and (y) any Indebtedness incurred pursuant to this clause
(k) (A) has no scheduled principal payment prior to the 91st day after
the Maturity Date, (B) has an Average Life to Stated Maturity greater
than the remaining Average Life to Stated Maturity of the Securities and
(C) is subordinated to the Securities or the Guarantees, as the case may
be, at least
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<PAGE> 23
to the same extent that the Indebtedness being refinanced is subordinated
to the Securities or the Guarantees, as the case may be;
(l) Indebtedness of any Restricted Subsidiary that constitutes
Acquired Indebtedness not incurred in contemplation of the acquisition of
such Restricted Subsidiary; provided that such Indebtedness is repaid
within 90 days following the consummation of the Asset Acquisition in
which the Company acquired such Restricted Subsidiary; and
(m) Guarantees by the Company or guarantees by a Guarantor of
Indebtedness that was permitted to be incurred under the Indenture.
For purposes of determining compliance with Section 10.8, (A) in the
event that an item of Indebtedness meets the criteria of more than one of the
types of Indebtedness described in the clauses of the preceding paragraph, the
Company, in its sole discretion, shall classify such item of Indebtedness and
only be required to include the amount and type of such Indebtedness in one
such clause, and (B) the amount of Indebtedness issued at a price that is
either less than or greater than the principal amount thereof shall be equal to
the amount of the liability in respect thereof determined in conformity with
GAAP.
"Permitted Investments" means any of the following: (i) Investments in
the Company or in a Restricted Subsidiary; (ii) Investments in another Person,
if as a result of such Investment (A) such other Person becomes a Restricted
Subsidiary or (B) such other Person is merged or consolidated with or into, or
transfers or conveys all or substantially all of its assets to the Company or a
Restricted Subsidiary; (iii) Investments representing Capital Stock or
obligations issued to, the Company or any of its Restricted Subsidiaries in
settlement of debts created in the ordinary course of business or claims
against any other Person by reason of a composition or readjustment of debt or
a reorganization of any debtor of the Company or such Restricted Subsidiary or
in satisfaction of judgments; (iv) Investments in Interest Rate Protection
Agreements on commercially reasonable terms entered into by the Company or any
of its Restricted Subsidiaries in the ordinary course of business in connection
with the operations of the business of the Company or its Restricted
Subsidiaries to hedge against fluctuations in interest rates on its outstanding
Indebtedness; (v) Investments in the Securities; (vi) Investments in Cash
Equivalents; (vii) Investments acquired by the Company or any Restricted
Subsidiary in connection with an Asset Sale permitted under Section 10.14 to
the extent such Investments are non-cash proceeds as permitted under Section
10.14; (viii) any Investment to the extent that the consideration therefor is
Capital Stock (other than Redeemable Capital Stock) of the Company; (ix) any
loans or other advances made pursuant to any employee benefit plans (including
plans for the benefit of directors) or employment agreements or other
compensation arrangements (including for the purchase of Capital Stock by such
employees), in each case as approved by the Board of Directors of the Company
in its good faith judgment, not to exceed $1,000,000 at any one time
outstanding; and (x) other Investments not to exceed $5,000,000 at any time
outstanding.
"Permitted Junior Securities" means Capital Stock of the Company or debt
securities that are subordinated to all Senior Indebtedness (and any debt
securities issued in exchange for Senior Indebtedness) to at least the same
extent as the Securities are subordinated to Senior Indebtedness.
"Permitted Liens" means the following types of Liens:
(a) any Lien existing as of the date of the Indenture;
(b) any Lien securing Acquired Indebtedness created prior to (and
not created in connection with, or in contemplation of) the incurrence of
such Indebtedness by the Company or any
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Restricted Subsidiary, if such Lien does not attach to any property or
assets of the Company or any Restricted Subsidiary other than the
property or assets subject to the Lien prior to such incurrence;
(c) Liens in favor of the Company or a Restricted Subsidiary;
(d) Liens on and pledges of the Capital Stock of any Unrestricted
Subsidiary securing any Indebtedness of such Unrestricted Subsidiary;
(e) Liens for taxes, assessments or governmental charges or claims,
to the extent any such changes or claims constitute Indebtedness, either
(i) not delinquent or (ii) contested in good faith by appropriate
proceedings and as to which the Company or its Restricted Subsidiaries
shall have set aside on its books such reserves as may be required
pursuant to GAAP;
(f) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
or other kinds of social security, old age pension or public liability
obligations;
(g) Liens to secure Indebtedness (including Capitalized Lease
Obligations) permitted by clause (h) under the definition of Permitted
Indebtedness covering only the assets acquired with such indebtedness;
(h) Liens securing Interest Rate Protection Obligations permitted
to be entered into pursuant to Section 10.8;
(i) judgment and attachment Liens not giving rise to an Event of
Default or Liens created by or existing from any litigation or legal
proceeding that are currently being contested in good faith by
appropriate proceedings and for which adequate reserves have been made;
(j) Liens in favor of collecting or payor banks having a right of
setoff, revocation, refund or chargeback with respect to money or
instruments of the Company or any Subsidiary on deposit with or in
possession of such bank; and
(k) Liens not otherwise permitted by clauses (a) through (j) that
are incurred in the ordinary course of business of the Company or any
Restricted Subsidiary with respect to Indebtedness that does not exceed
$5 million at any one time outstanding.
"Person" means any individual, corporation, partnership (general or
limited), limited liability company, joint venture, association, joint-stock
company, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Preferred Stock," as applied to any Person, means Capital Stock of any
class or series (however designated) which is preferred as to the payment of
dividends or distributions, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such Person, over shares
of Capital Stock of any other class or series of such Person.
"Private Placement Legend" shall mean the legend initially set forth on
the Securities in the form set forth on Exhibit A-1.
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"Purchase Amount" means, with respect to an Offer to Purchase, the
maximum aggregate amount payable by the Company for Securities under the terms
of such Offer to Purchase, if such Offer to Purchase were accepted in respect
of all Securities.
"Purchase Date" shall have the meaning set forth in the definition of
"Offer to Purchase."
"Qualified Equity Offering" means (i) any public sale of Common Stock of
the Company pursuant to a registration statement filed with the Commission in
accordance with the Securities Act (other than any public offerings with
respect to the Company's Common Stock registered on Form S-8 or Form S-4) or
(ii) any private placement for aggregate proceeds of at least $25 million to a
third party of Common Stock or Capital Stock (other than Redeemable Capital
Stock) that is convertible into Common Stock.
"Qualified Institutional Buyer" or "QIB" has the meaning specified in
Rule 144A under the Securities Act.
"Record Expiration Date" has the meaning specified in Section 1.4.
"Redeemable Capital Stock" means any class or series of Capital Stock
that, either by its terms, by the terms of any security into which it is
convertible or exchangeable or by contract or otherwise, is or upon the
happening of an event or passage of time would be required to be redeemed prior
to the 91st day after the Maturity Date or is redeemable at the option of the
holder thereof at any time prior to the 91st day after the Maturity Date, or is
convertible into or exchangeable for debt securities at any time prior to the
91st day after the Maturity Date; provided that Capital Stock will not
constitute Redeemable Capital Stock solely because the holders thereof have the
right to require the Company to repurchase or redeem such Capital Stock upon
the occurrence of a Change of Control or an Asset Sale.
"Redemption Date," when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price," when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Registrable Securities" has the meaning set forth in the Registration
Rights Agreement.
"Registration Rights Agreement" means the Registration Rights Agreement
relating to the Securities dated as of January 28, 1999 by and among the
Company, the Guarantors and the Initial Purchasers, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with the
terms thereof.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the January 15 or July 15 (whether or not a Business Day), as the
case may be, next preceding such Interest Payment Date.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Global Security" means a permanent global Security in
registered form representing the aggregate principal amount of Securities sold
in reliance on Regulation S under the Securities Act.
"Replacement Assets" has the meaning specified in Section 10.14.
"Required Filing Dates" has the meaning specified in Section 10.19.
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"Responsible Officer," when used with respect to the Trustee, means any
officer within the Corporate Trust Office, including, any vice president, any
assistant vice president, any assistant secretary, any assistant treasurer, or
any other officer of the Trustee customarily performing functions similar to
those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of his knowledge of and familiarity with the
particular subject.
"Restricted Payments" has the meaning specified in Section 10.9.
"Restricted Security" means a Security that constitutes a "restricted
security" within the meaning of Rule 144(a)(3) under the Securities Act;
provided, however, that the Trustee shall be entitled to request and
conclusively rely on an opinion of counsel with respect to whether any Security
constitutes a Restricted Security.
"Restricted Subsidiary" means any Subsidiary of the Company that is not
an Unrestricted Subsidiary.
"Revocation" has the meaning set forth in Section 10.18.
"Rule 144A" means Rule 144A under the Securities Act.
"S&P" means Standard & Poor's Ratings Group, and its successors.
"Securities" means securities designated in the first paragraph of the
RECITALS OF THE COMPANY of this Indenture.
"Securities Act" means the Securities Act of 1933 and any statute
successor thereto, in each case as amended from time to time.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 3.5.
"Senior Indebtedness" means the principal of, premium, if any, and
interest on any Indebtedness of the Company, whether outstanding on the Issue
Date or thereafter created, incurred or assumed, unless, in the case of any
particular Indebtedness, the instrument creating or evidencing the same or
pursuant to which the same is outstanding expressly provides that such
Indebtedness shall not be senior in right of payment to the Securities. Without
limiting the generality of the foregoing, (x) "Senior Indebtedness" shall
include the principal of, premium, if any, and interest on all obligations of
every nature of the Company from time to time owed to the lenders under the
Credit Facility, including, without limitation, principal of and interest on,
and all fees, indemnities and expenses payable under, the Credit Facility, and
(y) in the case of Designated Senior Indebtedness, "Senior Indebtedness" shall
include interest accruing thereon subsequent to the occurrence of any Event of
Default specified in clause (7) or (8) of Section 5.1 relating to the Company,
whether or not the claim for such interest is allowed under any applicable
Bankruptcy Code. Notwithstanding the foregoing, "Senior Indebtedness" shall not
include (a) Indebtedness evidenced by the Securities, (b) Indebtedness that is
expressly subordinate or junior in right of payment to any other Indebtedness
of the Company, (c) Indebtedness which, when incurred and without respect to
any election under Section 1111(b) of Title 11, United States Code, is by its
terms without recourse to the Company, (d) Indebtedness which is represented by
Redeemable Capital Stock, (e) to the extent it constitutes Indebtedness, any
liability for federal, state, local or other taxes owed or owing by the
Company, (f) Indebtedness of the Company to a Subsidiary of the Company or any
other Affiliate of the Company or any of such Affiliate's Subsidiaries, and (g)
that portion of any Indebtedness which is incurred by the Company in violation
of this Indenture.
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"Significant Subsidiary" of any Person means, as of any date of
determination, a Restricted Subsidiary of such Person which would be a
significant subsidiary of such Person as of such date as determined in
accordance with the definition in Rule 1-02(w) of Regulation S-X promulgated by
the Commission and as in effect on the date of this Indenture.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.7.
"Stated Maturity" means, when used with respect to any Security or any
installment of interest thereon, the date specified in such Security as the
fixed date on which the principal of such Security or such installment of
interest is due and payable, and when used with respect to any other
Indebtedness, means the date specified in the instrument governing such
Indebtedness as the fixed date on which the principal of such Indebtedness, or
any installment of interest thereon, is due and payable.
"Subordinated Indebtedness" means, with respect to the Company,
Indebtedness of the Company which is expressly subordinated in right of payment
to the Securities.
"Subsidiary" means, with respect to any Person, (i) a corporation a
majority of whose Voting Stock is at the time, directly or indirectly, owned by
such Person, by one or more Subsidiaries of such Person or by such Person and
one or more Subsidiaries thereof and (ii) any other Person (other than a
corporation), including, without limitation, a partnership, limited liability
company, business trust or joint venture, in which such Person, one or more
Subsidiaries thereof or such Person and one or more Subsidiaries thereof,
directly or indirectly, at the date of determination thereof, have at least
majority ownership interest entitled to vote in the election of directors,
managers or trustees thereof (or other Person performing similar functions).
For purposes of this definition, any directors' qualifying shares or
investments by foreign nationals mandated by applicable law shall be
disregarded in determining the ownership of a Subsidiary.
"Trustee" means the Person named as the "Trustee" in the first paragraph
of this instrument until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall
mean such successor Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed; provided, however, that
in the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"Unrestricted Subsidiary" means each Subsidiary of the Company designated
as such pursuant to and in compliance with Section 10.18 and each Subsidiary of
any such Subsidiary.
"U.S. Government Obligation" has the meaning specified in Section 12.4.
"Vice President," when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president."
"Voting Stock" means any class or classes of Capital Stock pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors, managers
or trustees of any Person (irrespective of whether or not, at the time, stock
of any other class or classes shall have, or might have, voting power by reason
of the happening of any contingency) and, with respect to the Company, shall be
deemed to include the Common Stock.
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SECTION 1.2. Compliance Certificates and Opinions.
Upon any application or request by the Company or a Guarantor to the
Trustee to take any action under any provision of this Indenture, the Company
or the Guarantor shall furnish to the Trustee such certificates and opinions as
may be required under the Trust Indenture Act. Each such certificate or opinion
shall be given in the form of an Officer's Certificate, if to be given by an
officer of the Company or a Guarantor, or an Opinion of Counsel, if to be given
by counsel, and shall comply with the requirements of the Trust Indenture Act
and any other requirement set forth in this Indenture.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(i) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable him
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.3. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company or a Guarantor
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or in
the exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or opinion of counsel may
be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company or a
Guarantor stating that the information with respect to such factual matters is
in the possession of the Company or such Guarantor, unless such counsel knows,
or in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
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SECTION 1.4. Acts of Holders; Record Dates.
Any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company or a
Guarantor, as applicable. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 6.1)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.
The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by
a certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such
instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
The ownership of Securities shall be proved by the Security Register.
Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee, the Company or a
Guarantor in reliance thereon, whether or not notation of such action is made
upon such Security.
The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Indenture to be given or taken by Holders
of Securities, provided that the Company may not set a record date for, and the
provisions of this paragraph shall not apply with respect to, the giving or
making of any notice, declaration, request or direction referred to in the next
paragraph. If any record date is set pursuant to this paragraph, the Holders of
Outstanding Securities on such record date, and no other Holders, shall be
entitled to take the relevant action, whether or not such Holders remain
Holders after such record date; provided that no such action shall be effective
hereunder unless taken on or prior to the applicable Record Expiration Date by
Holders of the requisite principal amount of Outstanding Securities on such
record date. Nothing in this paragraph shall prevent the Company from setting a
new record date for any action for which a record date has previously been set
pursuant to this paragraph (whereupon the record date previously set shall
automatically and with no action by any Person be cancelled and of no effect),
nor shall anything in this paragraph be construed to render ineffective any
action taken pursuant to or in accordance with any other provision of this
Indenture by Holders of the requisite principal amount of Outstanding
Securities on the date such action is taken. Promptly after any record date is
set pursuant to this paragraph, the Company, at its own expense, shall cause
notice of such record date, the proposed action by Holders and the applicable
Record Expiration Date to be given to the Trustee in writing and to each Holder
of Securities in the manner set forth in Section 1.6.
The Trustee may but need not set any day as a record date for the purpose
of determining the Holders of Outstanding Securities entitled to join in the
giving or making of (i) any Notice of Default, (ii) any
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declaration of acceleration referred to in Section 5.2, (iii) any request to
institute proceedings referred to in Section 5.7(ii) or (v) any direction
referred to in Section 5.12. If any record date is set pursuant to this
paragraph, the Holders of Outstanding Securities on such record date, and no
other Holders, shall be entitled to join in such notice, declaration, request
or direction, whether or not such Holders remain Holders after such record
date; provided that no such action shall be effective hereunder unless taken on
or prior to the applicable Record Expiration Date by Holders of the requisite
principal amount of Outstanding Securities on such record date. Nothing in this
paragraph shall be construed to prevent the Trustee from setting a new record
date for any action (whereupon the record date previously set shall
automatically and without any action by any Person be cancelled and of no
effect), nor shall anything in this paragraph be construed to render
ineffective any action taken pursuant to or in accordance with any other
provision of this Indenture by Holders of the requisite principal amount of
Outstanding Securities on the date such action is taken. Promptly after any
record date is set pursuant to this paragraph, the Trustee, at the Company's
expense, shall cause notice of such record date, the matter(s) to be submitted
for potential action by Holders and the applicable Record Expiration Date to be
given to the Company in writing and to each Holder of Securities in the manner
set forth in Section 1.6.
With respect to any record date set pursuant to this Section, the party
hereto that sets such record date may designate any day as the "Record
Expiration Date" and from time to time may change the Record Expiration Date to
any earlier or later day, provided that no such change shall be effective
unless notice of the proposed new Record Expiration Date is given to the other
party hereto in writing, and to each Holder of Securities in the manner set
forth in Section 1.6, on or before the existing Record Expiration Date. If a
Record Expiration Date is not designated with respect to any record date set
pursuant to this Section, the party hereto that set such record date shall be
deemed to have initially designated the 180th day after such record date as the
Record Expiration Date with respect thereto, subject to its right to change the
Record Expiration Date as provided in this paragraph. Notwithstanding the
foregoing, no Record Expiration Date shall be later than the 180th day after
the applicable record date.
Without limiting the foregoing, a Holder entitled hereunder to take any
action hereunder with regard to any particular Security may do so with regard
to all or any part of the principal amount of such Security or by one or more
duly appointed agents each of which may do so pursuant to such appointment with
regard to all or any part of such principal amount.
SECTION 1.5. Notices to Trustee, the Company or a Guarantor.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
(i) the Trustee by any Holder or by the Company or a Guarantor
shall be sufficient for every purpose hereunder if made, given, furnished
or filed in writing or mailed, first class postage prepaid, or sent by
overnight courier, or sent by telecopier, to or with the Trustee at its
Corporate Trust Office, Attention: Corporate Trust Administration, or
(ii) the Company or a Guarantor by the Trustee or by any Holder
shall be sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company or such Guarantor addressed to it at the address
of the Company's principal office specified in the first paragraph of
this instrument, or at any other address previously furnished in writing
to the Trustee by the Company.
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SECTION 1.6. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not later
than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders
is given by mail, neither the failure to mail or receive such notice, nor any
defect in any such notice, to any particular Holder shall affect the
sufficiency or validity of such notice. Where this Indenture provides for
notice in any manner, such notice may be waived in writing by the Person
entitled to receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give such notice by mail, then
such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
SECTION 1.7. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a provision
of the Trust Indenture Act that is required under the Trust Indenture Act to be
part of and govern this Indenture, such provision of the Trust Indenture Act
shall control. If any provision of this Indenture modifies or excludes any
provision of the Trust Indenture Act that may be so modified or excluded, such
provision shall be deemed to be so modified or excluded, as the case may be.
SECTION 1.8. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 1.9. Successors and Assigns.
Without limiting Articles VIII and XIII hereof, all covenants and
agreements in this Indenture by each of the Company or the Guarantors shall
bind their respective successors and assigns, whether so expressed or not.
SECTION 1.10. Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 1.11. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder and the Holders of Securities, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
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SECTION 1.12. Governing Law.
This Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New York, without regard to the
conflicts of laws principles thereof.
SECTION 1.13. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date, Purchase
Date or Stated Maturity of any Security shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of interest or principal (and premium, if any) need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect (including with respect to the accrual of interest) as if made on
the Interest Payment Date, Redemption Date or Purchase Date, or at the Stated
Maturity.
ARTICLE II
SECURITY FORMS
SECTION 2.1. Forms Generally.
The Securities and the Trustee's certificates of authentication shall be
in substantially the forms set forth or referenced in Exhibit A-1 and Exhibit
A-2 annexed hereto, with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture, and may
have such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or the Depository or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution thereof.
ARTICLE III
THE SECURITIES
SECTION 3.1. Title and Terms.
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is limited to $150,000,000 principal amount,
except for Securities authenticated and delivered upon registration or transfer
of, or in exchange for, or in lieu of, other Securities pursuant to Sections
3.4, 3.5, 3.6, 9.6 or 11.8 or in connection with an Offer pursuant to Sections
10.13 or 10.14.
The Initial Securities shall be known and designated as the "93/8% Senior
Subordinated Notes due 2009, Series A" of the Company and the Exchange
Securities shall be known and designated as the "93/8% Senior Subordinated
Notes due 2009, Series B" of the Company. The Stated Maturity for payment of
principal of the Securities shall be February 1, 2009. Interest on the
Securities shall accrue at the rate of 93/8% per annum (subject, in the case of
the Initial Securities, to increase in the circumstances contemplated in the
Registration Rights Agreement) and shall be payable semi-annually on each
February 1 and August 1, commencing August 1, 1999, to the Holders of record of
Securities at the close of business on the January 15 and July 15,
respectively, immediately preceding such Interest Payment Date. Interest on the
Securities will accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from the Issue Date of such Securities.
Interest will be computed on the basis of a 360-day year comprised of twelve
30-day months.
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The Initial Securities and the Exchange Securities shall be considered
collectively as a single class for all purposes of this Indenture. Holders of
the Initial Securities and the Exchange Securities will vote and consent
together on all matters to which such Holders are entitled to vote or consent
as one class, and none of the Holders of the Initial Securities or the Exchange
Securities shall have the right to vote or consent as a separate class on any
matter to which such Holders are entitled to vote or consent.
The principal of (and premium, if any) and interest on the Securities
shall be payable at the office or agency of the Trustee in the Borough of
Manhattan, The City of New York or such other office maintained by the Trustee
for such purpose and at any other office or agency maintained by the Company
for such purpose; provided, however, that, at the option of the Company,
payment of interest on Securities that are not held in global form may be made
by check mailed to the address of the Person entitled thereto as such address
shall appear in the Security Register subject to the right of any Holder of
Securities in the principal amount of $500,000 or more to request payment by
wire transfer.
The Company may be required to make a Change of Control Offer as provided
in Section 10.13, or an Asset Sale Offer as provided in Section 10.14.
The Securities shall be redeemable as provided in Article XI and the
Securities.
The Securities shall be subject to Defeasance and/or Covenant Defeasance
as provided in Article XII.
The other terms and provisions contained in the Securities shall
constitute, and are hereby expressly made, a part of this Indenture.
SECTION 3.2. Denominations.
The Securities shall be issuable only in registered form without coupons
and only in denominations of $1,000 principal amount and any integral multiple
thereof.
SECTION 3.3. Execution, Authentication, Delivery and Dating.
The Initial Securities and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A-1 hereto. The Exchange
Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A-2 hereto.
The terms and provisions contained in the Securities annexed hereto as
Exhibits A-1 and A-2 shall constitute, and are hereby expressly, made, a part
of this Indenture and, to the extent applicable, the Company and the Trustee,
by their execution and delivery of this Indenture, expressly agree to such
terms and provisions and to be bound thereby.
Securities offered and sold in reliance on Rule 144A and Securities
offered and sold in reliance on Regulation S shall be issued initially in the
form of one or more Global Securities, substantially in the form set forth in
Exhibit A-1, deposited with the Trustee, as custodian for the Depository, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided and shall bear the legend set forth in Exhibit B. The aggregate
principal amount of the Global Securities may from time to time be increased or
decreased by adjustments made on the records of the Trustee, as custodian for
the Depository, as hereinafter provided.
All Securities shall remain in the form of a Global Security, except as
provided herein.
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The Securities shall be executed on behalf of the Company by its Chairman
of the Board, its Chief Executive officer, its President or one of its Vice
Presidents, or its Chief Financial Officer, attested by its Secretary or one of
its Assistant Secretaries. The signature of any of these officers on the
Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company to
the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities; and the Trustee in accordance
with such Company order shall authenticate and deliver such Securities as in
this Indenture provided and not otherwise.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder.
SECTION 3.4. Temporary Securities.
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at any office
or agency of the Company designated pursuant to Section 10.2, without charge to
the Holder. Upon surrender for cancellation of any one or more temporary
Securities the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a like principal amount of definitive Securities
of authorized denominations and of a like tenor. Until so exchanged the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
SECTION 3.5. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 10.2 being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as the Company may prescribe, the Company shall provide
for the registration of Securities and of transfers of Securities. The Trustee
is hereby appointed the initial "Security Registrar" for the purpose of
registering Securities and transfers of Securities as herein provided.
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Subject to Sections 3.13 and 3.14 of this Indenture, upon surrender for
registration of transfer of any Security at an office or agency of the Company
designated pursuant to Section 10.2 for such purpose, the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Securities of any
authorized denomination and of a like aggregate principal amount and tenor.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denominations and of a like aggregate principal
amount and tenor, upon surrender of the Securities to be exchanged at such
office or agency. Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 3.4, 9.6 or 11.8 or in accordance with any Change
of Control Offer pursuant to Section 10.13 or any Asset Sale Offer pursuant to
Section 10.14, and in any such case not involving any transfer.
The Company shall not be required (i) to issue, register the transfer of
or exchange any Security during a period beginning at the opening of business
15 days before the day of the mailing of a notice of redemption of Securities
selected for redemption under Section 11.4 and ending at the close of business
on the day of such mailing, (ii) to register the transfer of or exchange any
Security so selected for redemption in whole or in part, except the unredeemed
portion of any Security being redeemed in part or (iii) to register the
transfer of any Securities other than Securities having a principal amount of
$1,000 or integral multiples thereof.
SECTION 3.6. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Security and
(ii) such security or indemnity as may be required by them to save each of them
and any agent of each of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute, and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of like tenor and principal amount and bearing a
number not contemporaneously outstanding.
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In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of, issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.7. Payment of Interest; Rights Preserved.
Interest on any Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Security (or one or more predecessor securities) is registered at the
close of business on the Regular Record Date for such interest payment.
Any interest on any Security which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the Holder on the relevant
Regular Record Date by virtue of having been such Holder, and such Defaulted
Interest may be paid by the Company, at its election in each case, as provided
in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities (or their respective
predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be
paid on each Security and the date of the proposed payment, and at the
same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money
when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this clause provided. Thereupon
the Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 days and not less than
10 days prior to the date of the proposed payment and not less than 15
days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such Special
Record Date and, in the name and at the expense of the Company, shall
cause notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor to be given to each Holder in the manner
specified in Section 1.6, not less than 10 days prior to such Special
Record Date. Notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor having been so mailed, such
Defaulted Interest shall be paid to the Persons in whose names the
Securities (or their respective predecessor Securities) are registered at
the close of business on such Special Record Date and shall no longer be
payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities
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may be listed, and upon such notice as may be required by such exchange,
if, after notice given by the Company to the Trustee of the proposed
payment pursuant to this Clause, such manner of payment shall be deemed
practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION 3.8. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name such Security is registered as the owner of such Security
for the purpose of receiving payment of principal of (and premium, if any) and
(subject to Section 3.7) interest on such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and neither the Company,
the Trustee nor any agent of the Company or the Trustee shall be affected by
notice to the contrary.
SECTION 3.9. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or tendered and accepted pursuant to any Change of Control
Offer pursuant to Section 10.13 or any Asset Sale Offer pursuant to Section
10.14 shall, if surrendered to any Person other than the Trustee, be delivered
to the Trustee and shall be promptly cancelled by it. The Company may at any
time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in
any manner whatsoever, and all Securities so delivered shall be promptly
cancelled by the Trustee. No Securities shall be authenticated in lieu of or in
exchange for any Securities cancelled as provided in this Section, except as
expressly permitted by this Indenture. All cancelled Securities held by the
Trustee shall be disposed of in the customary manner by the Trustee unless
otherwise directed by a Company Order.
SECTION 3.10. Computation of Interest.
Interest on the Securities shall be computed on the basis of a 360-day
year comprised of twelve 30-day months.
SECTION 3.11. CUSIP and CINS Numbers.
The Company in issuing the Securities may use "CUSIP" and "CINS" numbers
(if then generally in use), and, if so, the Trustee shall use the CUSIP or CINS
numbers in notices of redemption or repurchase as a convenience to Holders;
provided that any such notice may state that no representation is made as to
the correctness of such numbers either as printed on the Securities or as
contained in any notice of a redemption or repurchase and that reliance may be
placed only on the other identification numbers printed on the Securities, and
any such redemption or repurchase shall not be affected by any defect in or
omission of such numbers.
SECTION 3.12. Deposits of Monies.
Except to the extent payment of interest is made by the Company's check
or wire transfer pursuant to Section 3.1, prior to 11:00 a.m. New York City
time on each Interest Payment Date, Redemption Date, Stated Maturity, and
Purchase Date, the Company shall deposit with the Paying Agent in immediately
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available funds money sufficient to make cash payments, if any, due on such
Interest Payment Date, Redemption Date, Stated Maturity and Purchase Date, as
the case may be, in a timely manner which permits the Paying Agent to remit
payment to the Holders on such Interest Payment Date, Redemption Date, Stated
Maturity, and Purchase Date, as the case may be.
SECTION 3.13. Book-Entry Provisions for Global Securities.
(a) The Global Securities initially shall (i) be registered in the
name of the Depository or the nominee of such Depository, (ii) be
delivered to the Trustee as custodian for such Depository and (iii) bear
legends as set forth in Exhibit B hereto.
Members of, or participants in, the Depository ("Agent Members")
shall have no rights under this Indenture with respect to any Global
Security held on their behalf by the Depository, or the Trustee as its
custodian, or under any Global Security, and the Depository may be
treated by the Company, the Trustee and any agent of the Company or the
Trustee as the absolute owner of the Global Securities for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Company, the Trustee or any agent of the Company or the Trustee from
giving effect to any written certification, proxy or other authorization
furnished by the Depository or impair, as between the Depository and its
Agent Members, the operation of customary practices governing the
exercise of the rights of a Holder of any Security.
(b) Transfer of Global Securities shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their
respective nominees. Interests of beneficial owners in the Global
Securities may not be transferred or exchanged for physical securities,
except that physical securities shall be transferred to all beneficial
owners in exchange for their beneficial interests in Global Securities if
(i) the Depository notifies the Company that it is unwilling or unable to
continue as Depository for any Global Security, or that it will cease to
be a "Clearing Agency" under the Exchange Act, and in either case a
successor Depository is not appointed by the Company within 90 days of
such notice or (ii) an Event of Default has occurred and is continuing
and the Security Registrar has received a written request from the
Depository to issue physical securities.
(c) The Holder of any Global Security may grant proxies and
otherwise authorize any Person, including Agent Members and Persons that
may hold interests through Agent Members, to take any action which a
Holder is entitled to take under this Indenture or the Securities.
SECTION 3.14. Special Transfer Provisions.
(a) Transfers to Non-U.S. Persons. The following additional
provisions shall apply with respect to the registration of any proposed
transfer of and the transfer of the beneficial interest in an Initial
Security to any Non-U.S. Person:
(i) the Security Registrar shall register the transfer of any
Initial Security, whether or not such Security bears the Private
Placement Legend, and a transfer of the beneficial interest in an
Initial Security may be made if (x) the requested transfer is after
the second anniversary of the Issue Date; provided, however, that
neither the Company nor any Affiliate of the Company has held any
beneficial interest in such Security, or portion thereof, at any
time on or prior to the second anniversary of the Issue Date and
such transfer can otherwise be lawfully made under the Securities
Act without registering such Initial Security thereunder,(y) in the
case of the registration of a transfer by the Security Registrar,
the proposed transferor has delivered to the Security Registrar a
certificate substantially in
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the form of Exhibit C hereto or (i) in the case of the transfer of
the beneficial interest in an Initial Security, (other than a
transfer by an Agent Member, to which clause (ii) below shall
apply), the transfer is made in accordance with Regulation S under
the Securities Act and in accordance with clause (iii) below to the
extent applicable;
(ii) if the proposed transferor is an Agent Member seeking to
transfer an interest in a 144A Global Security, upon receipt by the
Security Registrar of (x) written instructions given in accordance
with the Depository's and the Security Registrar's procedures and
(y) the appropriate certificate, if any, required by clause (y) of
paragraph (i) above, together with any required legal opinions and
certifications, the Security Registrar shall register the transfer
and reflect on its books and records the date and (A) a decrease in
the principal amount of the 144A Global Security from which such
interests are to be transferred in an amount equal to the principal
amount of the Securities to be transferred and (B) an increase in
the principal amount of the Regulation S Global Security in an
amount equal to the principal amount of the Global Security to be
transferred; and
(iii) subject to Section 3.14(b), until the 41st day after
the Issue Date (the "Distribution Compliance Period"), an owner of
a beneficial interest in the Regulation S Global Security may not
transfer such interest to a transferee that is a U.S. Person or for
the account or benefit of a U.S. Person within the meaning of Rule
902(o) of the Securities Act. Subject to Section 3.14(b), during
the Distribution Compliance Period, all beneficial interests in the
Regulation S Global Security shall be transferred only through
Cedel or Euroclear, either directly if the transferor and
transferee are participants in such systems, or indirectly through
organizations that are participants therein.
(b) Transfers to QIBs. The following provisions shall apply with
respect to the registration of any proposed transfer of an Initial
Security and the transfer of the beneficial interest in an Initial
Security to a QIB (excluding Non-U.S. Persons):
(i) the Security Registrar shall register the transfer of any
Initial Security, whether or not such Security bears the Private
Placement Legend, and the transfer of the beneficial interest in an
Initial Security may be made if (x) the requested transfer is after
the second anniversary of the Issue Date; provided, however, that
neither the Company nor any Affiliate of the Company has held any
beneficial interest in such Security, or portion thereof, at any
time on or prior to the second anniversary of the Issue Date and
such transfer can otherwise be lawfully made under the Securities
Act without registering such Initial Security thereunder, (y) in
the case of the registration of a transfer by the Security
Registrar, such transfer is being made by a proposed transferor who
has checked the box provided for on the form of Security stating,
or has otherwise advised the Company and the Security Registrar in
writing, that the sale has been made in compliance with the
provisions of Rule 144A to a transferee who has signed the
certification provided for on the form of Security stating, or has
otherwise advised the Company and the Security Registrar in
writing, that it is purchasing the Security for its own account or
an account with respect to which it exercises sole investment
discretion and that it and any such account is a QIB within the
meaning of Rule 144A, and is aware that the sale to it is being
made in reliance on Rule 144A and acknowledges that it has received
such information regarding the Company as it has requested pursuant
to Rule 144A or has determined not to request such information and
that it is aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from registration
provided by Rule 144A or (z) in the case of the transfer of the
beneficial interest in an Initial Security (other than
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a transfer by an Agent Member, to which clause (ii) below shall
apply), the transfer is made in accordance with Rule 144A under the
Securities Act; and
(ii) if the proposed transferor is an Agent Member seeking to
transfer an interest in a Regulation S Global Security, upon
receipt by the Security Registrar of written instructions given in
accordance with the Depository's and the Security Registrar's
procedures, the Security Registrar shall register the transfer and
reflect on its books and records the date and (A) a decrease in the
principal amount of the Regulation S Global Security from which
interests are to be transferred in an amount equal to the principal
amount of the Securities to be transferred and (B) an increase in
the principal amount of the 144A Global Security in an amount equal
to the principal amount of the Global Security to be transferred.
(c) Private Legend. Upon the registration of transfer, exchange or
replacement of Securities not bearing the Private Placement Legend, the
Security Registrar shall deliver Securities that do not bear the Private
Placement Legend. Upon the registration of transfer, exchange or
replacement of Securities bearing the Private Placement Legend, the
Security Registrar shall deliver only Securities that bear the Private
Placement Legend unless (i) the circumstances contemplated by paragraph
(a)(i)(x) or (b)(i)(x) of this Section 3.14 exists, (ii) there is
delivered to the Security Registrar an opinion of counsel reasonably
satisfactory to the Company and the Trustee to the effect that neither
such legend nor the related restrictions on transfer are required in
order to maintain compliance with the provisions of the Securities Act or
(iii) such Security has been sold pursuant to an effective registration
statement under the Securities Act.
(d) Other Transfers. If a Holder proposes to transfer a Security
constituting a Restricted Security pursuant to any exemption from the
registration requirements of the Securities Act other than as provided
for by Section 3.14(a), (b) and (c), the Security Registrar shall only
register such transfer or exchange if such transferor delivers an opinion
of counsel satisfactory to the Company and the Security Registrar that
such transfer is in compliance with the Securities Act and the terms of
this Indenture.
(e) General. By its acceptance of any Security bearing the Private
Placement Legend and by its ownership of a beneficial interest therein,
each Holder of such a Security and each owner of a beneficial interest
therein acknowledges the restrictions on transfer of such Security and of
beneficial interests therein set forth in this Indenture and in the
Private Placement Legend and agrees that it will transfer such Security
and beneficial interests therein only as provided in this Indenture.
The Security Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 3.13 or this Section
3.14. The Company shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon
the giving of reasonable prior written notice to the Security Registrar.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as to any
surviving rights of registration of transfer or exchange of Securities herein
expressly provided for), and the Trustee, on demand of and at the
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expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or
stolen and which have been replaced or repaid as provided in
Section 3.6 and (ii) Securities for whose payment money has
theretofore been deposited in trust or segregated and held in trust
by the Company and thereafter repaid to the Company or discharged
from such trust, as provided in Section 10.3) have been delivered
to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the
Trustee for cancellation (other than Securities which have been
destroyed, lost or stolen and which have been replaced or repaid as
provided in Section 3.6),
(i) have become due and payable, or
(ii) will become due and payable at their Stated
Maturity within one year, or
(iii) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving
of notice of redemption by the Trustee in the name, and at
the expense, of the Company,
and the Company or any Guarantor, in the case of (i), (ii) or (iii)
above, has irrevocably deposited or caused to be deposited with the
Trustee as trust funds in trust for the purpose an amount
sufficient to pay and discharge the entire Indebtedness on such
Securities not theretofore delivered to the Trustee for
cancellation, for principal of, premium, if any, and interest on
the Securities to the date of deposit (in the case of Securities
which have become due and payable) or to the Stated Maturity or
Redemption Date, as the case may be, together with irrevocable
instructions from the Company directing the Trustee to apply such
funds to the payment thereof at maturity or redemption, as the case
may be;
(2) the Company or the Guarantors have paid or caused to be paid
all other sums payable hereunder by the Company or the Guarantors; and
(3) the Company has delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, which, taken together, state that
all conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture pursuant to
this Article IV, the obligations of the Company to the Trustee under Section
6.7, the obligations of the Company to any Authenticating Agent under Section
6.14 and, if money shall have been deposited with the Trustee pursuant to
subclause (B) of clause (1) of this Section, the obligations of the Trustee
under Section 4.2 and the last paragraph of Section 10.3 shall survive.
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SECTION 4.2. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 10.3, all
money deposited with the Trustee pursuant to Section 4.1 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee.
ARTICLE V
REMEDIES
SECTION 5.1. Events of Default.
"Event of Default," wherever used herein, means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of the principal of or premium, if any,
when due and payable, on any of the Securities (at Stated Maturity, upon
optional redemption, required purchase or otherwise); or
(2) default in the payment of an installment of interest on any of
the Securities, when due and payable, for 30 days; or
(3) default in the performance, or breach, of any covenant or
agreement of the Company under this Indenture (other than a default in
the performance or breach of a covenant or agreement which is
specifically dealt with in clauses (1), (2) or (4)) and such default or
breach shall continue for a period of 30 days after written notice has
been given, by certified mail, (x) to the Company by the Trustee or (y)
to the Company and the Trustee by the holders of at least 25% in
aggregate principal amount of the Outstanding Securities; or
(4) (a) there shall be a default in the performance or breach of
the provisions of Section 8.1 with respect to the Company; (b) the
Company shall have failed to make or consummate an Asset Sale Offer in
accordance with the provisions of Section 10.14; or (c) the Company shall
have failed to make or consummate a Change of Control Offer in accordance
with the provisions of Section 10.13; or
(5) default or defaults under one or more agreements, instruments,
mortgages, bonds, debentures or other evidences of Indebtedness under
which the Company or any Restricted Subsidiary then has outstanding
Indebtedness in excess of $10,000,000, individually or in the aggregate,
and (a) such default or defaults include a failure to make a payment of
principal, (b) such Indebtedness is already due and payable in full or
(c) such default or defaults have resulted in the acceleration of the
maturity of such Indebtedness; provided that if any such default is cured
or waived or any such acceleration rescinded, or such Indebtedness is
repaid, within a period of 10 days from the continuation of such default
beyond the applicable grace period or the occurrence of such
acceleration, as the case may be, such Event of Default and any
consequential acceleration of the
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Securities shall be automatically rescinded, so long as such rescission
does not conflict with any judgment or decree; or
(6) one or more judgments, orders or decrees of any court or
regulatory or administrative agency of competent jurisdiction for the
payment of money in excess of $10,000,000, either individually or in the
aggregate (net of applicable insurance coverage which is acknowledged in
writing by the insurer or which has been determined to be applicable by a
final nonappealable determination by a court of competent jurisdiction),
shall be entered against the Company or any Restricted Subsidiary or any
of their respective properties and shall not be discharged and there
shall have been a period of 60 days after the date on which any period
for appeal has expired and during which a stay of enforcement of such
judgment, order or decree, shall not be in effect; or
(7) the entry of a decree or order by a court having jurisdiction
in the premises (A) for relief in respect of the Company or any
Significant Subsidiary or one or more Restricted Subsidiaries that, taken
together, would constitute a Significant Subsidiary, in an involuntary
case or proceeding under the Federal Bankruptcy Code or any other
federal, state or foreign bankruptcy, insolvency, reorganization or
similar law or (B) adjudging the Company or any Significant Subsidiary or
one or more Restricted Subsidiaries that, taken together, would
constitute a Significant Subsidiary, bankrupt or insolvent, or approving
a petition seeking reorganization, arrangement, adjustment or composition
of or in respect of the Company or any Significant Subsidiary or one or
more Restricted Subsidiaries that, taken together, would constitute a
Significant Subsidiary, under the Federal Bankruptcy Code or any other
similar federal, state or foreign law, or appointing a custodian,
receiver, liquidator, assignee, trustee or sequestrator (or other similar
official) of the Company or any Significant Subsidiary or one or more
Restricted Subsidiaries that, taken together, would constitute a
Significant Subsidiary or of any substantial part of any of their
properties, or ordering the winding up or liquidation of any of their
affairs, and the continuance of any such decree or order unstayed and in
effect for a period of 60 consecutive days; or
(8) the institution by the Company or any Significant Subsidiary or
one or more Restricted Subsidiaries that, taken together, would
constitute a Significant Subsidiary of a voluntary case or proceeding
under the Federal Bankruptcy Code or any other similar federal, state or
foreign law or any other case or proceedings to be adjudicated a bankrupt
or insolvent, or the consent by the Company or any Significant Subsidiary
or one or more Restricted Subsidiaries that, taken together, would
constitute a Significant Subsidiary to the entry of a decree or order for
relief in respect of the Company or such Significant Subsidiary or group
of Restricted Subsidiaries in any involuntary case or proceeding under
the Federal Bankruptcy Code or any other similar federal, state or
foreign law or to the institution of bankruptcy or insolvency proceedings
against the Company or such Significant Subsidiary or group of Restricted
Subsidiaries, or the filing by the Company or any Significant Subsidiary
or one or more Restricted Subsidiaries that, taken together, would
constitute a Significant Subsidiary of a petition or answer or consent
seeking reorganization or relief under the Federal Bankruptcy Code or any
other similar federal, state or foreign law, or the consent by it to the
filing of any such petition or to the appointment of or taking possession
by a custodian, receiver, liquidator, assignee, trustee or sequestrator
(or other similar official) of any of the Company or any Significant
Subsidiary or one or more Restricted Subsidiaries that, taken together,
would constitute a Significant Subsidiary or of any substantial part of
its property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its
debts generally as they become due or the taking of corporate action by
the Company or any Significant Subsidiary or one or more Restricted
Subsidiaries that, taken together, would constitute a Significant
Subsidiary in furtherance of any such action; or
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(9) any of the Guarantees of any Significant Subsidiary or one or
more Restricted Subsidiaries that, taken together, would constitute a
Significant Subsidiary ceases to be in full force and effect or any of
such Guarantees is declared to be null and void and unenforceable or any
of such Guarantees is found to be invalid or any of such Guarantors
denies its liability under its Guaranty (other than by reason of release
of such Guarantor in accordance with the terms of this Indenture).
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than those covered by clause (7) or (8)
of Section 5.1 with respect to the Company) shall occur and be continuing, the
Trustee, by notice to the Company, or the Holders of at least 25% in aggregate
principal amount of the Securities then Outstanding, by notice to the Trustee
and the Company, may declare the principal of, premium, if any, and accrued and
unpaid interest, if any, on all of the outstanding Securities due and payable
immediately, upon which declaration, all amounts payable in respect of the
Securities shall be due and payable. If an Event of Default specified in clause
(7) or (8) of Section 5.1 with respect to the Company or a Significant
Subsidiary occurs and is continuing, then the principal of, premium, if any,
and accrued and unpaid interest, if any, on all the outstanding Securities
shall ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder of
Securities.
After a declaration of acceleration under the Indenture, but before a
judgment or decree for payment of the money due has been obtained by the
Trustee, the Holders of a majority in aggregate principal amount of the
Outstanding Securities, by written notice to the Company and the Trustee, may
rescind such declaration if
(1) the Company or any Guarantor has paid or deposited with the
Trustee a sum sufficient to pay
(A) all sums paid or advanced by the Trustee under this
Indenture and the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel,
(B) all overdue interest on all Securities,
(C) the principal of and premium, if any, on any Securities
which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate borne by the
Securities, and
(D) to the extent that payment of such interest is lawful,
interest upon overdue interest and overdue principal at the rate
set forth in the Securities which has become due otherwise than by
such declaration of acceleration;
(2) the rescission would not conflict with any judgment or decree
of a court of competent jurisdiction; and
(3) all Events of Default, other than the nonpayment of principal
of, premium, if any, and interest on the Securities that have become due
solely by such declaration of acceleration, have been cured or waived.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
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SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company and each Guarantor covenants that if
(i) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for
a period of 30 days, or
(ii) default is made in the payment of the principal of (or
premium, if any, on) any Security on the due date for payment thereof,
including, with respect to any Security required to have been purchased
pursuant to a Change of Control Offer or an Asset Sale Offer made by the
Company, at the Purchase Date thereof,
the Company or such Guarantor will, upon demand of the Trustee, pay to it, for
the benefit of the Holders of such Securities, the whole amount then due and
payable on such Securities for principal (and premium, if any) and interest,
and, to the extent that payment of such interest shall be legally enforceable,
interest on any overdue principal (and premium, if any) and on any overdue
interest, at the rate provided by the Securities, and, in addition thereto,
such further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
In addition to the rights and powers set forth in Section 317(a) of the
Trust Indenture Act, the Trustee shall be entitled to file such other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee and of the Holders of the Securities allowed in any judicial proceeding
relative to the Company, any Guarantor or any other obligor upon the
Securities, its creditors, or its property, and to collect and receive any
moneys or other property payable or deliverable on any such claims, and to
distribute the same after the deduction of its charges and expenses; and any
receiver, assignee or trustee in bankruptcy or reorganization is hereby
authorized by each of the Holders to make such payments to the Trustee, and, in
the event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due it for
compensation and expenses, including counsel fees incurred by it up to the date
of such distribution.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 5.4. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company, a Guarantor
(or any other obligor upon the Securities), its property or its creditors, the
Trustee shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 6.7.
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No provision of this Indenture shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding; provided,
however, that the Trustee may, on behalf of the Holders, vote for the election
of a trustee in bankruptcy or similar official and be a member of a creditors,
or other similar committee.
SECTION 5.5. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto,
and any such proceeding instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
distributions and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 5.6. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (or premium,
if any) or interest, upon presentation of the Securities and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
6.7;
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Securities in
respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind, according
to the amounts due and payable on such Securities for principal (and
premium, if any) and interest, respectively;
THIRD: To the payment of any and all other amounts due under the
Indenture, the Securities or the Guarantees; and
FOURTH: To the Company (or such other Person as a court of
competent jurisdiction may direct).
SECTION 5.7. Limitation on Suits.
Subject to Section 5.8, no Holder of any Security shall have and right to
institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(i) such Holder has previously given written notice to the Trustee
of a continuing Event of Default;
(ii) the Holders of not less than 25% in principal amount of the
Outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name
as Trustee hereunder;
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(iii) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(iv) the Trustee for 45 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(v) no direction inconsistent with such written request has been
given to the Trustee during such 45-day period by the Holders of a
majority in principal amount of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have
any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of
any other Holders, or to obtain or to seek to obtain priority or
preference over any other Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and
ratable benefit of all the Holders.
SECTION 5.10. Unconditional Right of Holders to Receive Principal, Premium
and Interest.
Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of (and premium, if any) and (subject to Section 3.7)
interest on such Security on the respective Stated Maturities expressed in such
Security (or, in the case of redemption, on the Redemption Date or in the case
of a Change of Control Offer or an Asset Sale Offer made by the Company and
required to be accepted as to such Security, on the relevant Purchase Date) and
to institute suit for the enforcement of any such payment, and such rights
shall not be impaired without the consent of such Holder.
SECTION 5.11. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Company, each Guarantor, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall
continue as though no such proceeding had been instituted, subject to the
determination in such proceeding.
SECTION 5.12. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities in Section 3.6, no right or
remedy herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at
law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 5.13. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security to
exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such
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Event of Default or an acquiescence therein. Every right and remedy given by
this Article or by law to the Trustee or to the Holders may be exercised from
time to time, and as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.
SECTION 5.14. Control by Holders.
The Holders of a majority in principal amount of the Outstanding
Securities shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee, provided that
(i) such direction shall not be in conflict with any rule of law or
with this Indenture, and
(ii) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 5.15. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities may on behalf of the Holders of all the Securities waive
any past default hereunder and its consequences, except a default
(i) in the payment of the principal of (or premium, if any) or
interest on any Security (including any Security which is required to
have been purchased pursuant to a Change of Control Offer or an Asset
Sale Offer which has been made by the Company), or
(ii) in respect of a covenant or provision hereof which under
Article IX cannot be modified or amended without the consent of the
Holder of each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
SECTION 5.16. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit
to file an undertaking to pay the costs of such suit, and may assess costs
against any such party litigant, in the manner and to the extent provided in
the Trust Indenture Act; provided, that neither this Section nor the Trust
Indenture Act shall be deemed to authorize any court to require such an
undertaking or to make such an assessment in any suit instituted by the Company
or a Guarantor, in any suit instituted by the Trustee, in any suit instituted
by any Holder or group of Holders, holding in the aggregate more than 10% in
principal amount of the Outstanding Securities, or in any suit instituted by
any Holder for the enforcement of the payment of the principal of (or premium,
if any) or interest on any Security on or after the Stated Maturity expressed
in such Security (or, in the case of redemption, on or after the Redemption
Date or, in the case of a Change of Control Offer or an Asset Sale Offer, made
by the Company and required to be accepted as to such Security, on the
applicable Purchase Date, as the case may be).
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SECTION 5.17. Waiver of Stay or Extension Laws.
The Company and each Guarantor covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, or plead, or in any
manner whatsoever claim or take the benefit or advantage of, any usury, stay or
extension law wherever enacted, now or at any time hereafter in force, which
may affect the covenants or the performance of this Indenture; and the Company
and each Guarantor (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law and covenants that it will not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
ARTICLE VI
THE TRUSTEE
SECTION 6.1. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(i) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of any such
certificates or opinions which by the provisions hereof are
specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture but need not
verify the contents thereof.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise,
as a prudent Person would exercise or use under the circumstances in the
conduct of such Person's own affairs.
(c) No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent misconduct, except that
no provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of
its rights or powers under this Indenture, unless the Trustee has
received security and indemnity satisfactory to it against any loss,
liability or expense. The Trustee shall not be liable for any error of
judgment unless it is proved that the Trustee was negligent in the
performance of its duties hereunder.
(d) Whether or not therein expressly so provided, every provision
of this Indenture relating to the conduct or affecting the liability of
or affording protection to the Trustee shall be subject to the provisions
of this Section 6.1.
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SECTION 6.2. Notice of Defaults.
Within 30 days after the occurrence of any Default, the Trustee shall
transmit by mail to all Holders, as their names and addresses appear in the
Security Register, notice of such Default hereunder known to the Trustee,
unless such Default shall have been cured or waived; provided, however, that,
except in the case of a Default in the payment of the principal of, premium, if
any, or interest on any Security, the Trustee shall be protected in withholding
such notice if and so long as a trust committee of Responsible Officers of the
Trustee in good faith determines that the withholding of such notice is in the
interest of the Holders.
SECTION 6.3. Certain Rights of Trustee.
Subject to the provisions of Section 6.1:
(a) the Trustee may conclusively rely as to the truth of the
statements and correctness of the opinions expressed therein and shall be
fully protected in acting or refraining from acting upon any resolution,
Officer's Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors of the Company may be sufficiently
evidenced by a Board Resolution of the Company;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officer's Certificate;
(d) the Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled (subject to reasonable
confidentiality arrangements as may be proposed by the Company or any
Guarantor) to make reasonable examination (upon prior notice and during
regular business hours) of the books, records and premises of the Company
or a Guarantor, personally or by agent or attorney;
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(g) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents
or attorneys or custodians or nominees and the Trustee shall not be
responsible for the supervision of, or any misconduct or negligence on
the part of any agent or attorney appointed with due care by it
hereunder;
(h) the Trustee shall not be liable for any action taken, suffered,
or omitted to be taken by it in good faith and reasonably believed by it
to be authorized or within the discretion or rights or powers conferred
upon it by this Indenture; and
(i) in the event that the Trustee is also acting as Authenticating
Agent, Paying Agent or Security Registrar hereunder, the rights and
protections afforded to the Trustee pursuant to this Article VI shall
also be afforded to such Authenticating Agent, Paying Agent and Security
Registrar.
SECTION 6.4. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the
Company, and the Trustee or any Authenticating Agent assumes no responsibility
for their correctness. The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Securities. The Trustee shall not be
accountable for the use or application by the Company of Securities or the
proceeds thereof.
SECTION 6.5. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company or any Guarantor, in its individual
or any other capacity, may become the owner or pledgee of Securities and,
subject to Sections 6.8 and 6.13, may otherwise deal with the Company or a
Guarantor with the same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Security Registrar or such other agent.
SECTION 6.6. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as
otherwise agreed in writing with the Company.
SECTION 6.7. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time such reasonable
compensation as the Company and the Trustee shall from time to time agree
in writing for all services rendered by it hereunder (which compensation
shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to promptly
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance
with any provision of this Indenture (including the reasonable
compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
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(3) to indemnify the Trustee, its directors, officers, agents and
employees for, and to hold them harmless against, any and all loss,
damage, claim, liability or expense incurred without negligence or bad
faith on its part, including taxes (other than taxes based upon, measured
by or determined by the revenue or income of the Trustee), arising out of
or in connection with the acceptance or administration of this trust,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its
powers or duties hereunder.
The Trustee shall have a lien prior to the Securities as to all property
and funds held by it hereunder for any amount owing to it pursuant to this
Section 6.7, except with respect to funds held in trust for the benefit of the
Holders of particular Securities.
When the Trustee incurs expenses or renders services in connection with
an Event of Default specified in Section 5.1(7) or Section 5.1(8), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or State bankruptcy, insolvency or
other similar law.
The provisions of this Section shall survive any termination of this
Indenture.
SECTION 6.8. Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
SECTION 6.9. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a Person
that is eligible pursuant to the Trust Indenture Act to act as such and has, or
is a wholly-owned subsidiary of a bank holding company that has, a combined
capital and surplus of at least $100,000,000. If such Person publishes reports
of condition at least annually, pursuant to law or to the requirements of a
Federal or State supervising or examining authority, then for the purposes of
this Section and to the extent permitted by the Trust Indenture Act, the
combined capital and surplus of such Person shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.
SECTION 6.10. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of
a successor Trustee pursuant to this Article shall become effective until
the acceptance of appointment by the successor Trustee in accordance with
the applicable requirements of Section 6.9.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. if an instrument of acceptance by a successor
Trustee in accordance with the applicable requirements of Section 6.9
shall not have been delivered to the Company and the resigning Trustee
within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for
the appointment of a successor Trustee.
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(c) The Trustee may be removed at any time by Act of the Holders of
a majority in principal amount of the Outstanding Securities, delivered
to the Trustee and to the Company.
(d) If at any time:
(i) the Trustee shall fail to comply with Section 6.8 after
written request therefor by the Company or by any Holder who has
been a bona fide Holder of a Security for at least six months, or
(ii) the Trustee shall cease to be eligible under Section 6.9
and shall fail to resign after written request therefor by the
Company, any Guarantor or by any such Holder, or
(iii) the Trustee shall become incapable of acting or shall
be adjudged a bankrupt or insolvent or a receiver of the Trustee or
of its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company or any Guarantor, in each case by a
Board Resolution, may remove the Trustee, or (ii) subject to Section 5.14, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee and the appointment of
a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any
cause, the Company, by a Board Resolution, shall promptly appoint a
successor Trustee. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee
shall be appointed by Act of the Holders of a majority in principal
amount of the Outstanding Securities delivered to the Company and the
retiring Trustee, the successor Trustee so appointed shall, forthwith
upon its acceptance of such appointment in accordance with the applicable
requirements of Section 6.11, become the successor Trustee and supersede
the successor Trustee appointed by the Company. If no successor Trustee
shall have been so appointed by the Company or the Holders and accepted
appointment in accordance with the applicable requirements of Section
6.11, any Holder who has been a bona fide Holder of a Security for at
least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee to all
Holders in the manner provided in Section 1.6. Each notice shall include
the name of the successor Trustee and the address of its Corporate Trust
Office.
(g) The resignation or removal of the Trustee pursuant to this
Section 6.10 shall not affect the obligation of the Company to indemnify
the Trustee pursuant to Section 6.7(3) in connection with the exercise or
performance by the Trustee prior to its resignation or removal of any of
its powers or duties hereunder.
(h) No Trustee under this Indenture shall be liable for any action
or omission of any successor Trustee.
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SECTION 6.11. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers,
trusts and duties of the retiring Trustee; but, on request of the Company or
the successor Trustee, such retiring Trustee shall, upon payment of its
charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder. Upon request of any such
successor Trustee, the Company shall execute any and all instruments for more
fully and certainly vesting in and confirming to such successor Trustee all
such rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 6.12. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
SECTION 6.13. Preferential Collection of Claims Against the Company or a
Guarantor.
If and when the Trustee shall be or become a creditor of the Company or a
Guarantor (or any other obligor upon the Securities), the Trustee shall be
subject to the provisions of the Trust Indenture Act regarding the collection
of claims against the Company or such Guarantor (or any such other obligor).
SECTION 6.14. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents which shall be
authorized to act on behalf of the Trustee to authenticate Securities issued
upon original issue and upon exchange, registration of transfer or partial
redemption or partial purchase or pursuant to Section 3.6, and Securities so
authenticated shall be entitled to the benefits of this Indenture and shall be
valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. Wherever reference is made in this Indenture to the authentication
and delivery of Securities by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company and shall at all
times be a corporation organized and doing business under the laws of the
United States of America, any State thereof or the District of Columbia,
authorized under such laws to act as Authenticating Agent, having a combined
capital and surplus of not less than $100,000,000 and subject to supervision or
examination by Federal or State authority. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of
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this Section, the combined capital and surplus of such Authenticating Agent
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time an Authenticating Agent
shall cease to be eligible in accordance with the provisions of this Section,
such Authenticating Agent shall resign immediately in the manner and with the
effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate agency or corporate trust business of an Authenticating Agent,
shall continue to be an Authenticating Agent, provided such corporation shall
be otherwise eligible under this Section, without the execution or filing of
any paper or any further act on the part of the Trustee or the Authenticating
Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 1.6, to all Holders as their
names and addresses appear in the Security Register. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder,
with like effect as if originally named as an Authenticating Agent. No
successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section.
If an appointment is made pursuant to this Section, the Securities may
have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternative certificate of authentication in the following
form:
This is one of the Securities described in the within-mentioned
Indenture.
Dated:
State Street Bank and Trust Company,
As Trustee
By:
-------------------------------------
As Authenticating Agent
By:
-------------------------------------
Authorized Signatory
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ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.1. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee at such
times as the Trustee may reasonably request in writing, within 30 days after
the receipt by the Company of any such request, a list of similar form and
content as of a date not more than 15 days prior to the time such list is
furnished; excluding from any such list names and addresses received by the
Trustee in its capacity as Security Registrar.
SECTION 7.2. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in
the most recent list furnished to the Trustee as provided in Section 7.1
and the names and addresses of Holders received by the Trustee in its
capacity as Security Registrar, if so acting.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and
the corresponding rights and duties of the Trustee, shall be as provided
by the Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company, any
Guarantor nor the Trustee nor any agent of either of them shall be held
accountable by reason of any disclosure of information as to the names
and addresses of Holders made pursuant to the Trust Indenture Act.
SECTION 7.3. Reports by Trustee.
(a) Within 60 days after May 15 of each year commencing May 15,
1999, the Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture to the extent required
pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant thereto.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange
upon which the Securities are listed, with the Commission and with the
Company. The Company will promptly notify the Trustee when the Securities
are listed on any stock exchange.
SECTION 7.4. Reports by Company.
The Company shall file with the Trustee and the Commission, and transmit
to Holders, such information, documents and other reports, and such summaries
thereof, as may be required pursuant to the Trust Indenture Act at the times
and in the manner provided pursuant to the Trust Indenture Act; provided that
any such information, documents or reports required to be filed with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act shall be filed
with the Trustee within 15 days after the same is so required to be filed with
the Commission.
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ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.1. Company May Merge, Consolidate, Etc. Only on Certain Terms.
(A) The Company will not, in any transaction or series of
transactions, merge or consolidate with or into, or sell, assign, convey,
transfer, lease or otherwise dispose of all or substantially all of its
properties and assets to, any Person or Persons, and (B) the Company will
not permit any of its Restricted Subsidiaries to enter into any such
transaction or series of transactions if such transaction or series of
transactions, in the aggregate, would result in a sale, assignment,
conveyance, transfer, lease or other disposition of all or substantially
all of the properties and assets of the Company or the Company and its
Restricted Subsidiaries, on a consolidated basis, to any other Person or
Persons, unless, in each of cases (A) and (B), at the time and after
giving effect thereto:
(1) either:
(x) if the transaction or transactions is a merger or
consolidation, the Company or such Restricted Subsidiary, as
the case may be, shall be the surviving Person of such merger
or consolidation, or
(y) the Person formed by such consolidation or into
which the Company or such Restricted Subsidiary, as the case
may be, is merged or to which the properties and assets of
the Company or such Restricted Subsidiary, as the case may
be, are disposed of (any such surviving Person or transferee
Person being the "Surviving Entity") shall be a corporation
organized and existing under the laws of the United States of
America, any state thereof or the District of Columbia and
shall expressly assume by a supplemental indenture executed
and delivered to the Trustee, in form satisfactory to the
Trustee, all the obligations of the Company under the
Securities, this Indenture and the Registration Rights
Agreement and in each case, this Indenture, the Securities
and the Registration Rights Agreement shall remain in full
force and effect;
(2) immediately after giving effect to such transaction or
series of transactions on a pro forma basis (including, without
limitation, any Indebtedness incurred or anticipated to be incurred
in connection with or in respect of such transaction or series of
transactions), no Default or Event of Default shall have occurred
and be continuing; and
(3) except in the case of any merger of the Company with any
Restricted Subsidiary of the Company or any merger of Guarantors,
in each case with no other Person, the Company or the Surviving
Entity, as the case may be, after giving effect to such transaction
or series of transactions on a pro forma basis on the assumption
that the transaction or transactions had occurred on the first day
of the period of four fiscal quarters ending immediately prior to
the consummation of such transaction or transactions, with the
appropriate adjustments with respect to such transaction or
transactions being included in such pro forma calculation, could
incur $1.00 of additional Indebtedness (other than Permitted
Indebtedness) under Section 10.8 (assuming a market rate of
interest with respect to such additional Indebtedness).
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In connection with any consolidation, merger, transfer, lease, assignment
or other disposition contemplated by the foregoing provisions of this Section
8.1, the Company shall deliver, or cause to be delivered, to the Trustee, in
form and substance reasonably satisfactory to the Trustee, an Officer's
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger, transfer, lease, assignment, or other disposition and the supplemental
indenture in respect thereof (required under clause (1)(y) of this Section 8.1)
comply with the requirements of this Indenture. Each such Officer's Certificate
shall set forth the manner of determination of the ability to incur
Indebtedness in accordance with clause (3) of this Section 8.1.
SECTION 8.2. Successor Substituted.
Upon any consolidation or merger, or any sale, assignment, conveyance,
transfer, lease or disposition subject to and in accordance with Section 8.1,
the successor Person formed by such consolidation or into which the Company or
Restricted Subsidiary, as the case may be, is merged or the successor Person to
which such sale, assignment, conveyance, transfer, lease or disposition is made
shall succeed to, and be substituted for, and may exercise every right and
power of the Company under the Securities, this Indenture and/or the
Registration Rights Agreement, as applicable, with the same effect as if such
successor had been named as the Company in the Securities, this Indenture
and/or in the Registration Rights Agreement, as the case may be, and, except in
the case of a lease, the Company or such Restricted Subsidiary, as the case may
be, shall be automatically and unconditionally released and discharged from its
obligations thereunder.
For all purposes of this Indenture and the Securities (including the
provisions of this Article VIII and Sections 10.8, 10.9 and 10.12),
Subsidiaries of any Surviving Entity shall, upon consummation of such
transaction or series of related transactions, become Restricted Subsidiaries
unless and until designated Unrestricted Subsidiaries pursuant to and in
accordance with Section 10.18 and all Indebtedness, and all Liens on property
or assets, of the Company and the Restricted Subsidiaries in existence
immediately prior to such transaction or series of related transactions will be
deemed to have been incurred upon consummation of such transaction or series of
related transactions.
ARTICLE IX
AMENDMENTS; WAIVERS; SUPPLEMENTAL INDENTURES
SECTION 9.1. Amendments, Waivers and Supplemental Indentures Without Consent
of Holders.
Without the consent of any Holders, the Company and each Guarantor, when
authorized by Board Resolutions, and the Trustee, at any time and from time to
time, may together amend, waive or supplement this Indenture, for any of the
following purposes:
(i) to evidence the succession of another Person to the Company or
a Guarantor and the assumption by any such successor of the covenants of
the Company or such Guarantor herein and in the Securities and to
evidence the assumption of obligations under this Indenture and a
Guaranty pursuant to Section 10.17; or
(ii) to add to the covenants of the Company or a Guarantor for the
benefit of the Holders, or to surrender any right or power herein
conferred upon the Company or a Guarantor; or
(iii) to secure the Securities pursuant to the requirements of
Section 10.12 or otherwise; or
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(iv) to comply with any requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust
Indenture Act; or
(v) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture which shall not be inconsistent
with the provisions of this Indenture,
provided that (a) such amendment, waiver or supplement does not adversely
affect the rights of any Holder of Securities and (b) the Company shall have
delivered to the Trustee an Opinion of Counsel stating that such action
pursuant to clauses (i), (ii), (iii), (iv) or (v) above is permitted by this
Indenture. The Trustee shall not be obligated to enter into any such amendment
or supplemental indenture that adversely affects its own rights, duties or
immunities under this Indenture or otherwise.
SECTION 9.2. Modifications, Amendments and Supplemental Indentures with
Consent of Holders.
With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Securities, by Act of said Holders delivered to the
Company and the Trustee, the Company and the Guarantors, when authorized by
Board Resolutions, and the Trustee may together modify, amend or supplement
this Indenture for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Indenture or of modifying
in any manner the rights of the Holders under this Indenture; provided,
however, that no such modification, amendment or supplemental indenture shall,
without the consent of the Holder of each Outstanding Security affected
thereby,
(i) change the Stated Maturity of the principal of, or any
installment of interest on, any Security, or reduce the principal amount
of (or the premium, if any, on), or interest on, any Securities or alter
the redemption provisions of the Securities,
(ii) change the currency in which any Securities or any premium or
the interest thereon is payable,
(iii) reduce the above-stated percentage in principal amount of
outstanding Securities that must consent to an amendment or modification
of this Indenture or the Securities,
(iv) reduce the specified percentage in aggregate principal amount
of outstanding Securities necessary to waive compliance with provisions
of the Indenture or to waive defaults under the Indenture,
(v) impair the right to institute suit for the enforcement of any
payment on or with respect to the Securities or any Guaranty,
(vi) amend, change or modify the obligation of the Company to make
and consummate a Change of Control Offer after the occurrence of a Change
of Control or make and consummate an Asset Sale Offer with respect to any
Asset Sale that has been consummated or modify any of the provisions or
definitions with respect thereto,
(vii) modify or change any provision of this Indenture relating to
the Guarantees in a manner adverse to the Holders of the Securities, or
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(viii) modify or change any provision of this Indenture affecting
the Subordination or ranking of the Securities or any Guaranty in a
manner which adversely affects the holders of Securities.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed amendment or supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
The Trustee shall join with the Company and each Guarantor in the
execution of such amended or supplemental indenture unless such amended or
supplemental indenture affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise, in which case the Trustee may in its
discretion but shall not be obligated to enter into such amendment or
supplemental indenture.
SECTION 9.3. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby
of the trusts created by this Indenture, the Trustee shall be entitled to
receive, and (subject to Section 6.1) shall be fully protected in relying upon,
an Opinion of Counsel stating that the execution of such supplemental indenture
is authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise;
provided that the Trustee shall enter into and execute all other supplemental
indentures which satisfy all applicable conditions under this Article IX.
SECTION 9.4. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every
Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
SECTION 9.5. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 9.6. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture, provided that any failure by the
Trustee to make such notation shall not affect the validity of the matter
provided for in such supplemental indenture or any Security or Guaranty
hereunder. If the Company shall so determine, new Securities so modified as to
conform, in the opinion of the Trustee, the Guarantors and the Company, to any
such supplemental indenture may be prepared and executed by the Company or
Guarantor and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
SECTION 9.7. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
covenant or condition set forth in Section 8.1, any covenant or condition
provided pursuant to Section 9.1(ii) or any covenant or condition
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set forth in Sections 10.4 to 10.12 and 10.15 to 10.18, inclusive, if before
the time for such compliance the Holders of at least a majority in principal
amount of the Outstanding Securities shall, by Act of such Holders, either
waive such compliance in such instance or generally waive compliance with such
covenant or condition, but no such waiver shall extend to or affect such
covenant or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the duties of
the Trustee in respect of any such covenant or condition shall remain in full
force and effect.
SECTION 9.8. No Liability for Certain Persons.
No director, officer, employee, or stockholder of the Company, nor any
director, officer or employees of any Guarantor, as such, shall have any
liability for any obligations of the Company or any Guarantor under the
Securities, the Guarantees or this Indenture based on or by reason of such
obligations or their creation. Each Holder by accepting a Security waives and
releases all such liability. The foregoing waiver and release is an integral
part of the consideration for the issuance of the Securities and the
Guarantees.
ARTICLE X
COVENANTS
SECTION 10.1. Payment of Principal, Premium and Interest.
The Company shall duly and punctually pay the principal of (and premium,
if any) and interest on the Securities in accordance with the terms of the
Securities, this Indenture and the Registration Rights Agreement.
SECTION 10.2. Maintenance of Office or Agency.
The Company shall maintain an office or agency where Securities may be
presented or surrendered for payment, where Securities may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company or any Guarantor in respect of the Securities, the Guarantees and
this Indenture may be served. The Company shall give prompt written notice to
the Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at
the Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands. In the event any such notice or demands are so made or served on the
Trustee, the Trustee shall promptly forward copies thereof to the Company.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations.
Further, if at any time there shall be no such office or agency in the City of
New York where the Securities may be presented or surrendered for payment, the
Company shall forthwith designate and maintain such an office or agency in the
City of New York in order that the Securities shall at all times be payable in
the City of New York. The Company shall give prompt written notice to the
Trustee of any such designation or rescission and of any change in the location
of any such other office or agency.
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SECTION 10.3. Money for Security Payments to be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it will, on
or before each due date of the principal of (and premium, if any) or interest
on any of the Securities, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal (and premium, if
any) or interest so becoming due until such sums shall be paid to such Persons
or otherwise disposed of as herein provided and will promptly notify the
Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents, the Company
will, prior to 11:00 a.m. New York City time on each due date of the principal
of (and premium, if any) or interest on any Securities, deposit with a Paying
Agent a sum sufficient to pay the principal (and premium, if any) or interest
so becoming due, such sum to be held as provided by the Trust Indenture Act,
and (unless such Paying Agent is the Trustee) the Company will promptly notify
the Trustee of its action or failure so to act.
The Company shall cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will: (i) comply with the provisions of the Trust Indenture
Act applicable to it as Paying Agent and (ii) during the continuance of any
default by the Company (or any other obligor upon the Securities) in the making
of any payment in respect of the Securities, upon the written request of the
Trustee, forthwith pay to the Trustee all sums held in trust by such Paying
Agent as such.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held
in trust by such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by such Paying Agent; and,
upon such payment by any Paying Agent (other than the Company) to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of (and premium, if any)
or interest on any Security and remaining unclaimed for two years after such
principal (and premium, if any) or interest has become due and payable shall be
paid to the Company on Company Request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Security shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in The City of New York, notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such publication, any unclaimed balance of such money then
remaining will be repaid to the Company.
SECTION 10.4. Existence; Activities.
Subject to Article VIII, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect its existence,
rights (charter and statutory) and material franchises; provided, however, that
the Company shall not be required to preserve any such right or franchise if
the Board of Directors of the Company in good faith shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and that the loss thereof is not disadvantageous in any material
respect to the Holders.
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SECTION 10.5. Maintenance of Properties.
The Company shall cause all material properties used in the conduct of
its business or the business of any Restricted Subsidiary to be maintained and
kept in good condition, repair and working order (regular wear and tear
excepted), all as in the judgment of the Company may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; provided, however, that nothing in this Section shall
prevent the Company from disposing of any asset (subject to compliance with
Section 10.14) or from discontinuing the operation or maintenance of any of
such material properties if such discontinuance is, as determined by the
Company in good faith, desirable in the conduct of its business or the business
of any Restricted Subsidiary and not disadvantageous in any material respect to
the Holders.
SECTION 10.6. Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon the Company or any of its
Restricted Subsidiaries or upon the income, profits or property of the Company
or any of its Restricted Subsidiaries, and (2) all lawful material claims for
labor, materials and supplies which, if unpaid, might by law become a lien upon
property of the Company or any of its Restricted Subsidiaries; provided,
however, that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings.
SECTION 10.7. Maintenance of Insurance.
The Company shall, and shall cause its Restricted Subsidiaries to, keep
at all times all of their material properties which are of an insurable nature
insured against loss or damage with insurers believed by the Company to be
responsible to the extent that property of similar character is usually so
insured by corporations similarly situated and owning like properties in
accordance with good business practice. The Company shall, and shall cause its
Restricted Subsidiaries to, use the proceeds from any such insurance policy to
repair, replace or otherwise restore all material properties to which such
proceeds relate, provided, however, that the Company shall not be required to
repair, replace or otherwise restore any such material property if the Company
in good faith determines that such inaction is desirable in the conduct of the
business of the Company or any Restricted Subsidiary and not disadvantageous in
any material respect to the Holders.
SECTION 10.8. Limitation on Indebtedness.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume,
guarantee or in any manner become directly or indirectly liable, contingently
or otherwise (in each case, to "incur"), for the payment of any Indebtedness
(including any Acquired Indebtedness) other than Permitted Indebtedness;
provided, however, that the Company and any Guarantor will be permitted to
incur Indebtedness (including Acquired Indebtedness) if (A) the Consolidated
Fixed Charge Coverage Ratio of the Company is at least 2.0 to 1 and (B) no
Default or Event of Default would occur or be continuing.
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SECTION 10.9. Limitation on Restricted Payments.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly:
(a) declare or pay any dividend or make any other distribution or
payment on or in respect of Capital Stock of the Company or any of its
Restricted Subsidiaries or make any payment to the direct or indirect
holders (in their capacities as such) of Capital Stock of the Company or
any of its Restricted Subsidiaries (other than dividends or distributions
payable solely in Capital Stock of the Company (other than Redeemable
Capital Stock) or in options, warrants or other rights to purchase
Capital Stock of the Company (other than Redeemable Capital Stock))
(other than the declaration or payment of dividends or other
distributions to the extent declared or paid to the Company or any
Restricted Subsidiary);
(b) purchase, redeem, or otherwise acquire or retire for value any
Capital Stock of the Company or any of its Restricted Subsidiaries or any
options, warrants, or other rights to purchase any such Capital Stock
(other than any securities owned by the Company or a Restricted
Subsidiary);
(c) make any principal payment on, or purchase, defease,
repurchase, redeem or otherwise acquire or retire for value, prior to any
scheduled maturity, scheduled repayment, scheduled sinking fund payment
or other Stated Maturity, any Subordinated Indebtedness (other than any
such Subordinated Indebtedness owed by the Company or a Restricted
Subsidiary); or
(d) make any Investment (other than any Permitted Investment) in
any Person,
(such payments or Investments described in the preceding clauses
(a), (b), (c) and (d) are collectively referred to as "Restricted
Payments"), unless, after giving effect to the proposed Restricted
Payment (the amount of any such Restricted Payment, if other than
cash, shall be the Fair Market Value of the asset(s) proposed to be
transferred by the Company or such Restricted Subsidiary, as the
case may be, pursuant to such Restricted Payment), (A) no Default
or Event of Default shall have occurred and be continuing, (B)
after giving pro forma effect to such Restricted Payment, the
Company would be able to incur $1.00 of additional Indebtedness
(other than Permitted Indebtedness) pursuant to Section 10.8 and
(C) the aggregate amount of all Restricted Payments declared or
made from and after the Issue Date would not exceed the sum of:
(1) 50% of the aggregate Consolidated Net Income of the Company
accrued on a cumulative basis during the period beginning on January 1,
1999 and ending on the last day of the fiscal quarter of the Company
ending immediately prior to the date of such proposed Restricted Payment
(or, if such aggregate cumulative Consolidated Net Income of the Company
for such period shall be a loss, minus 100% of such loss);
(2) the aggregate net cash proceeds received by the Company as
capital contributions to the Company after the Issue Date and which
constitute shareholders' equity of the Company in accordance with GAAP;
(3) the aggregate net cash proceeds received by the Company from
the issuance or sale of Capital Stock (excluding Redeemable Capital
Stock) of the Company to any Person (other than to a Subsidiary of the
Company) after the Issue Date;
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(4) the aggregate net cash proceeds received by the Company from
any Person (other than a Subsidiary of the Company) upon the exercise of
any options, warrants or rights to purchase shares of Capital Stock
(other than Redeemable Capital Stock) of the Company after the Issue
Date;
(5) the aggregate net cash proceeds received after the Issue Date
by the Company from any Person (other than a Subsidiary of the Company)
for debt securities that have been converted into or exchanged for
Capital Stock of the Company (other than Redeemable Capital Stock) to the
extent such debt securities were originally sold for cash, plus the
aggregate amount of cash received by the Company (other than from a
Subsidiary of the Company) at the time of such conversion or exchange;
(6) to the extent not otherwise included in the Company's
Consolidated Net Income, in the case of the disposition or repayment of
any Investment constituting a Restricted Payment after the Issue Date, an
amount equal to the lesser of the return of capital with respect to such
Investment and the initial amount of such Investment, in either case,
less the cost of the disposition of such Investment; and
(7) so long as the Designation (as defined in Section 10.18)
thereof was treated as a Restricted Payment made after the Issue Date,
with respect to any Unrestricted Subsidiary that has been redesignated as
a Restricted Subsidiary after the Issue Date in accordance with Section
10.18 below, the Fair Market Value of the Company's interest in such
Subsidiary at the time of such redesignation, provided that such amount
shall not in any case exceed the Designation Amount (as defined in
Section 10.18) with respect to such Restricted Subsidiary upon its
Designation; and
(8) $10,000,000.
For purposes of the preceding clause (C)(4), the value of the aggregate
net proceeds received by the Company upon the issuance of Capital Stock upon
the exercise of options, warrants or rights will be the net cash proceeds
received upon the issuance of such options, warrants or rights plus the
incremental amount received by the Company upon the exercise thereof.
None of the foregoing provisions will prohibit, so long as, in the case
of clause (v) below, there is no Default or Event of Default continuing, (i)
the payment of any dividend or distribution within 60 days after the date of
its declaration, if at the date of declaration such payment would be permitted
by the first paragraph of this covenant; (ii) the redemption, repurchase or
other acquisition or retirement of any shares of any class of Capital Stock of
the Company in exchange for, or out of the net cash proceeds of a substantially
concurrent issue and sale of, other shares of Capital Stock of the Company
(other than Redeemable Capital Stock) to any Person (other than to a Subsidiary
of the Company); provided, however, that such net cash proceeds are excluded
from clause (C) of the first paragraph of this covenant; (iii) any redemption,
repurchase or other acquisition or retirement of Subordinated Indebtedness of
the Company in exchange for, or out of the net cash proceeds of a substantially
concurrent issue and sale of, (1) Capital Stock (other than Redeemable Capital
Stock) of the Company to any Person (other than to a Subsidiary of the
Company); provided, however, that any such net cash proceeds are excluded from
clause (C) of the first paragraph of this covenant; or (2) other Subordinated
Indebtedness of the Company which (w) has no scheduled principal payment prior
to the 91st day after the Maturity Date, (x) has an Average Life to Stated
Maturity greater than the remaining Average Life to Stated Maturity of the
Securities and (y) is subordinated to the Securities to at least the same
extent as the Subordinated Indebtedness so purchased, exchanged, redeemed,
acquired or retired; (iv) payments to purchase Capital Stock of the Company
from management or employees of the Company or any of its Subsidiaries, or
their authorized representatives, upon the death, disability or termination of
employment of such employees, in aggregate amounts under this clause (iv) not
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to exceed $3 million in any fiscal year of the Company; (v) payments relating
to Permitted Founder Stock Repurchases so long as the Consolidated Fixed Charge
Coverage Ratio of the Company is at least 3.0 to 1.0; (vi) cash payments in
lieu of fractional shares issuable as dividends on preferred securities of the
Company or any of its Restricted Subsidiaries, in aggregate amounts under this
clause (vi) not to exceed $20,000 in any fiscal year of the Company; (vii)
repurchases of Capital Stock deemed to occur upon exercise of stock options if
such Capital Stock represents a portion of the exercise price of such options;
and (viii) the payment of the redemption price of rights issued pursuant to any
shareholders' rights plan not in excess of $0.05 per right and not in excess of
$1,000,000 in the aggregate. Any payments made pursuant to clause (i) of this
paragraph shall be taken into account in calculating the amount of Restricted
Payments made from and after the Issue Date.
In computing Consolidated Net Income of the Company under clause (C)(1)
of the first paragraph of this covenant, (1) the Company shall use audited
financial statements for the portions of the relevant period for which audited
financial statements are available on the date of determination and unaudited
financial statements and other current financial data based on the books and
records of the Company for the remaining portion of such period and (2) the
Company shall be permitted to rely in good faith on the financial statements
and other financial data derived from the books and records of the Company that
are available on the date of determination. If the Company makes a Restricted
Payment which, at the time of the making of such Restricted Payment would in
the good faith determination of the Company be permitted under the requirements
of the Indenture, such Restricted Payment shall be deemed to have been made in
compliance with the Indenture notwithstanding any subsequent adjustments made
in good faith to the Company's financial statements affecting Consolidated Net
Income of the Company for any period.
SECTION 10.10. Limitation on Issuances and Sales of Restricted Subsidiary Stock.
The Company (i) will not permit any Restricted Subsidiary to issue any
Capital Stock (other than to the Company or a Restricted Subsidiary) and (ii)
will not permit any Person (other than the Company and/or one or more
Restricted Subsidiaries) to own any Capital Stock of any Restricted Subsidiary;
provided, however, that this covenant shall not prohibit (1) the issuance and
sale of all, but not less than all, of the issued and outstanding Capital Stock
of any Restricted Subsidiary owned by the Company or any of its Restricted
Subsidiaries in compliance with the other provisions of this Indenture, or (2)
the ownership by directors of directors' qualifying shares or the ownership by
foreign nationals of Capital Stock of any Restricted Subsidiary, to the extent
mandated by applicable law.
SECTION 10.11. Limitation on Transactions with Affiliates.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into any transaction or series
of related transactions (including, without limitation, the sale, transfer,
disposition, purchase, exchange or lease of assets, property or services) with,
or for the benefit of, any of its Affiliates, except (a) on terms that are no
less favorable to the Company or such Restricted Subsidiary, as the case may
be, than those which could have been obtained at the time in a comparable
transaction or series of related transactions at such time from Persons who are
not Affiliates of the Company, (b) with respect to a transaction or series of
related transactions involving aggregate payments or value equal to or greater
than $5,000,000, the Company shall have delivered an Officer's Certificate to
the Trustee certifying that such transaction or transactions comply with the
preceding clause (a) and have been approved by the Board of Directors of the
Company, and (c) with respect to a transaction or series of related
transactions involving aggregate payments or value equal to or greater than $10
million, the Officers' Certificate referred to in clause (b) above also
includes a certification that such transaction or transactions have been
approved by a majority of the Disinterested Members of the Board of Directors
of the Company or, in the event there are no such Disinterested Members of the
Board of Directors, that the Company has
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obtained a written opinion from an independent nationally recognized investment
banking firm, accounting firm or appraisal firm, in each case specializing or
having a speciality in the type and subject matter of the transaction or series
of transactions at issue, which opinion shall be to the effect set forth in
clause (a) above or shall state that such transaction or series of related
transactions is fair from a financial point of view to the Company or such
Restricted Subsidiary.
Notwithstanding the foregoing, the restrictions set forth in this
covenant shall not apply to (i) transactions between or among the Company and
its Restricted Subsidiaries, (ii) customary directors' fees, indemnification
and similar arrangements, consulting fees, employee salaries, bonuses or
employment agreements, compensation or employee benefit arrangements and
incentive arrangements with any officer, director or employee of the Company or
any Restricted Subsidiary entered into in the ordinary course of business,
(iii) any dividends made in compliance with Section 10.9, (iv) loans and
advances to officers, directors and employees of the Company or any Restricted
Subsidiary made in the ordinary course of business in an aggregate amount not
to exceed $1,000,000 outstanding at any one time, (v) transactions pursuant to
agreements in effect on the Issue Date, (vi) written agreements entered into or
assumed in connection with acquisitions of other businesses with Persons who
were not Affiliates prior to such transactions, or (vii) leases of property or
equipment entered into in the ordinary course of business on terms that are
substantially similar to those which could have been obtained at the time in a
comparable transaction with non-Affiliates.
SECTION 10.12. Limitation on Liens.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, create, incur, assume or suffer to exist any Liens of any kind
securing Indebtedness upon any of its property or assets, or any proceeds
therefrom, unless the Securities are equally and ratably secured (except that
Liens securing Subordinated Indebtedness shall be expressly subordinate to
Liens securing the Securities to the same extent such Subordinated Indebtedness
is subordinate to the Securities), except for (a) Liens securing Senior
Indebtedness and Guarantor Senior Indebtedness; (b) Liens securing the
Securities; (c) Liens securing Indebtedness which is incurred to refinance
Indebtedness which has been secured by a Lien (other than a Lien in favor of
the Company or a Restricted Subsidiary) permitted under the Indenture and which
has been incurred in accordance with the provisions of this Indenture;
provided, however, that such Liens do not extend to or cover any property or
assets of the Company or any its Restricted Subsidiaries not securing the
Indebtedness so refinanced; and (d) Permitted Liens.
SECTION 10.13. Change of Control.
On or before the 30th day after the date of the occurrence of a Change of
Control (the "Change of Control Date"), the Company shall make an Offer to
Purchase (a "Change of Control Offer") on a Business Day not more than 60 nor
less than 30 days following the mailing of such Offer to Purchase, (the "Change
of Control Purchase Date") all of the then Outstanding Securities tendered at a
purchase price in cash (the "Change of Control Purchase Price") equal to 101%
of the principal amount thereof plus accrued and unpaid interest, if any,
thereon to the Change of Control Purchase Date. The Company shall be required
to purchase all Securities tendered into the Change of Control Offer and not
withdrawn.
On the Change of Control Purchase Date, the Company shall (i) accept for
payment Securities or portions thereof (not less than $1,000 principal amount
and integral multiples thereof) tendered pursuant to the Change of Control
Offer, (ii) deposit with the Paying Agent money, in immediately available
funds, sufficient to pay the purchase price of all Securities or portions
thereof so tendered and accepted and (iii) deliver to the Trustee the
Securities so accepted together with an Officer's Certificate setting forth the
Securities or portions thereof tendered to and accepted for payment by the
Company. The Paying Agent
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shall promptly mail or deliver to the Holders of Securities so accepted payment
in an amount equal to the purchase price, and the Trustee shall promptly
authenticate and make available for delivery to such Holders a new Security of
like tenor equal in principal amount to any unpurchased portion of the Security
surrendered. Any Securities not so accepted shall be promptly mailed or
delivered by the Company to the Holder thereof. The Company shall publicly
announce the results of the Change of Control Offer not later than the third
Business Day following the Change of Control Purchase Date.
The Company shall not be required to make a Change of Control offer upon
a Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements
applicable to a Change of Control Offer made by the Company and purchases all
Securities validly tendered and not withdrawn under such Change of Control
Offer.
The Company shall comply with Rule 14e-1 under the Exchange Act and any
other securities laws and regulations thereunder, to the extent such laws or
regulations are applicable, in the event that a Change of Control occurs and
the Company is required to purchase Securities as described above, and any
violation of the provisions of the Indenture relating to such Offer to Purchase
occurring as a result of such compliance shall not be deemed a Default or an
Event of Default.
SECTION 10.14. Disposition of Proceeds of Asset Sales.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, make any Asset Sale unless (a) the Company or such Restricted
Subsidiary, as the case may be, receives consideration at the time of such
Asset Sale at least equal to the Fair Market Value of the shares or assets sold
or otherwise disposed of and (b) at least 75% of the consideration in such
Asset Sale, plus all other Asset Sales since the Issue Date on a cumulative
basis, consists of cash or Cash Equivalents; provided, however, that the amount
of any Indebtedness (as shown on the most recent balance sheet of the Company
or such Restricted Subsidiary) of the Company or such Restricted Subsidiary
that is assumed by the transferee of such assets as a result of which the
Company and its Restricted Subsidiaries are no longer liable thereon, and any
securities, notes or other obligations received by the Company or such
Restricted Subsidiary from such transferee that are converted within 60 days
into cash or Cash Equivalents (to the extent of the cash or Cash Equivalents
received) shall be deemed to be cash for the purposes of this provision. To the
extent that the Net Cash Proceeds, or portion thereof, of any Asset Sale are
not applied to repay, and permanently reduce the commitments under Senior
Indebtedness or Guarantor Senior Indebtedness in accordance with the terms
thereof, the Company or such Restricted Subsidiary, as the case may be, may
apply the Net Cash Proceeds, or portion thereof, from such Asset Sale, within
360 days of such Asset Sale, to an investment in properties and assets that
replace the properties and assets that were the subject of such Asset Sale or
in properties and assets that (as determined in good faith by the Board of
Directors of the Company or the Restricted Subsidiary, as the case may be) are
used or useful in the business of the Company and its Restricted Subsidiaries
conducted at such time or in businesses reasonably related thereto or in
Capital Stock of a Person, the principal portion of whose assets consist of
such property or assets ("Replacement Assets"). Any Net Cash Proceeds from any
Asset Sale that are neither used to repay, and permanently reduce the
commitments under, Senior Indebtedness or Guarantor Senior Indebtedness in
accordance with the terms thereof nor invested in Replacement Assets within
such 360-day period will constitute "Excess Proceeds" subject to disposition as
provided below.
When the aggregate amount of Excess Proceeds equals or exceeds
$10,000,000, the Company shall make an Offer to Purchase, from all Holders of
the Securities and any then outstanding Pari Passu Indebtedness required to be
repurchased or repaid on a permanent basis in connection with an Asset Sale, an
aggregate principal amount of Securities and any then outstanding Pari Passu
Indebtedness equal to such Excess Proceeds as follows:
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(i) (A) The Company shall make an Offer to Purchase (an "Asset Sale
Offer") from all Holders of the Securities the maximum principal amount
(expressed as a multiple of $1,000) of Securities that may be purchased
out of an amount (the "Asset Sale Offer Amount") equal to the product of
such Excess Proceeds, multiplied by a fraction, the numerator of which is
the outstanding principal amount of the Securities and the denominator of
which is the sum of the outstanding principal amount of the Securities
and such Pari Passu Indebtedness, if any (subject to proration in the
event such amount is less than the aggregate Offered Price (as defined
below) of all Securities tendered), and (B) to the extent required by
such Pari Passu Indebtedness and provided there is a permanent reduction
in the principal amount of such Pari Passu Indebtedness, the Company
shall make an Offer to Purchase Pari Passu Indebtedness (a "Pari Passu
Offer") in an amount (the "Pari Passu Indebtedness Amount") equal to the
excess of the Excess Proceeds over the Asset Sale Offer Amount;
(ii) The offer price for the Securities shall be payable in cash in
an amount equal to 100% of the principal amount of the Securities
tendered pursuant to an Asset Sale Offer, plus accrued and unpaid
interest, if any, to the date such Asset Sale Offer is consummated (the
"Offered Price"), in accordance with the procedures set forth in the
Indenture. To the extent that the aggregate Offered Price of the
Securities tendered pursuant to an Asset Sale Offer is less than the
Asset Sale Offer Amount relating thereto or the aggregate amount of the
Pari Passu Indebtedness that is purchased or repaid pursuant to the Pari
Passu Offer is less than the Pari Passu Indebtedness Amount (such
shortfall constituting an "Asset Sale Deficiency"), the Company may use
such Asset Sale Deficiency for general corporate purposes, subject to the
limitations in Section 10.9, and
(iii) If the aggregate Offered Price of Securities validly tendered
and not withdrawn by Holders thereof exceeds the Asset Sale Offer Amount,
Securities to be purchased will be selected on a pro rata basis. Upon
completion of such Asset Sale Offer and Pari Passu Offer, the amount of
Excess Proceeds shall be reset to zero.
On the Asset Sale Offer Purchase Date, the Company shall (i) accept for
payment (subject to proration as described in the Offer to Purchase) Securities
or portions thereof validly tendered pursuant to the Asset Sale Offer,
respectively, (ii) deposit with the Paying Agent money, in immediately
available funds, sufficient to pay the purchase price of all such Securities or
portions thereof so tendered and accepted and (iii) deliver to the Trustee the
Securities so accepted together with an Officer's Certificate setting forth the
Securities or portions thereof tendered to and accepted for payment by the
Company. The Paying Agent shall promptly mail or deliver to the Holders of
Securities so accepted payment in an amount equal to the purchase price, and
the Trustee shall promptly authenticate and make available for delivery to such
Holders a new Security of like tenor equal in principal amount to any
unpurchased portion of the Security surrendered. Any Securities not so accepted
shall be promptly mailed or delivered by the Company to the Holder thereof. The
Company shall publicly announce the results of the Asset Sale Offer and Pari
Passu Offer not later than the third Business Day following the Asset Sale
Offer Purchase Date.
Whenever the aggregate amount of Excess Proceeds received by the Company
and its Restricted Subsidiaries exceeds $10,000,000, such Excess Proceeds
shall, prior to the purchase of Securities, be set aside by the Company or such
Restricted Subsidiary, as the case may be, in a separate account pending (i)
deposit with the Paying Agent of the amount required to purchase the Securities
tendered in an Asset Sale Offer or (ii) delivery by the Company of the Offered
Price to the Holders of the Securities validly tendered and not withdrawn
pursuant to an Asset Sale Offer. Such Excess Proceeds may be invested in Cash
Equivalents, as directed by the Company, having a maturity date which is not
later than the earliest possible date for purchase of Securities pursuant to
the Asset Sale Offer. The Company will be entitled to any interest or dividends
accrued, earned or paid on such Cash Equivalents.
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The Company shall comply with Rule 14e-1 under the Exchange Act and any
other securities laws and regulations thereunder, to the extent such laws and
regulations are applicable, in the event that an Asset Sale occurs and the
Company is required to purchase Securities as described above, and any
violation of the provisions of the Indenture relating to such Offer to Purchase
occurring as a result of such compliance shall not be deemed a Default or an
Event of Default.
SECTION 10.15. Limitation on Dividends and Other Payment Restrictions Affecting
Restricted Subsidiaries.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction on the
ability of any Restricted Subsidiary to (a) pay dividends, in cash or
otherwise, or make any other distributions on or in respect of its Capital
Stock to the Company or any other Restricted Subsidiary, (b) pay any
Indebtedness owed to the Company or any other Restricted Subsidiary of the
Company, (c) make loans or advances to the Company or any other Restricted
Subsidiary of the Company, (d) transfer any of its properties or assets to the
Company or any other Restricted Subsidiary of the Company or (e) guarantee any
Indebtedness of the Company or any other Restricted Subsidiary of the Company,
except for such encumbrances or restrictions existing under or by reason of (i)
applicable law or any applicable rule, regulation or order, (ii) customary
non-assignment provisions of any contract or any lease governing a leasehold
interest of the Company or any Restricted Subsidiary of the Company, (iii)
customary restrictions on transfers of property subject to a Lien permitted
under this Indenture (including purchase money Liens permitted under this
Indenture), (iv) any agreement or other instrument of a Person acquired by the
Company or any Restricted Subsidiary in existence at the time of such
acquisition (but not created in contemplation thereof), which encumbrance or
restriction is not applicable to any Person, or the properties or assets of any
Person, other than the Person, or the property or assets of the Person, so
acquired, (v) an agreement entered into for the sale or disposition of Capital
Stock or assets of a Restricted Subsidiary or an agreement entered into for the
sale of specified assets (in either case, so long as such encumbrance or
restriction, by its terms, terminates on the earlier of the termination of such
agreement or the consummation of such agreement and so long as such restriction
applies only to the Capital Stock or assets to be sold), (vi) any agreement in
effect on the Issue Date, (vii) this Indenture and the Guarantees, and (viii)
any agreement that amends, extends, refinances, renews or replaces any
agreement described in the foregoing clauses; provided that the terms and
conditions of any such agreement are not materially less favorable to the
Holders of the Securities with respect to such encumbrances or restrictions
than those under or pursuant to the agreement amended, extended, refinanced,
renewed or replaced.
SECTION 10.16. Limitation on Issuance of Subordinated Indebtedness.
The Company shall not, and shall not permit any Guarantor to, directly or
indirectly, incur any Indebtedness (including Acquired Indebtedness) that is
expressly subordinate or junior in right of payment to any Indebtedness of the
Company or such Guarantor and senior in right of payment to the Securities or
the Guaranty of such Guarantor, as the case may be.
SECTION 10.17. Additional Subsidiary Guarantees.
If the Company or any of its Restricted Subsidiaries acquires, creates or
designates another Restricted Subsidiary organized under the laws of the United
States or any possession or territory thereof, any State of the United States
or the District of Columbia, then such newly acquired, created or designated
Restricted Subsidiary shall, within 30 days after the date of its acquisition,
creation or designation, whichever is later, execute and deliver to the Trustee
a supplemental indenture in substantially the form set forth in Exhibit D,
pursuant to which such Restricted Subsidiary shall become a Guarantor of the
Securities in the
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manner set forth in Article XIII; provided, that such Restricted Subsidiary
shall not be obligated to become a Guarantor in the manner set forth above if
such Restricted Subsidiary is not, either individually or when considered in
the aggregate with all other Restricted Subsidiaries that are not Guarantors, a
Significant Subsidiary. Thereafter, such Restricted Subsidiary shall be a
Guarantor for all purposes of this Indenture. In addition to the foregoing, the
Company shall cause any Restricted Subsidiary that is not a Guarantor to become
a Guarantor in the manner provided above within 30 days of such time as it
becomes, either individually or when considered in the aggregate with all other
Restricted Subsidiaries that are not Guarantors, a Significant Subsidiary. The
Company at its option may also cause any other Restricted Subsidiary to become
a Guarantor in the manner provided in this Section.
SECTION 10.18. Limitations on Designation of Unrestricted Subsidiaries.
(a) The Company may designate after the Issue Date any Restricted
Subsidiary as an "Unrestricted Subsidiary" under this Indenture (a
"Designation") only if:
(i) no Default shall have occurred and be continuing at the
time of or after giving effect to such Designation;
(ii) the Company would be permitted to make an Investment
(other than a Permitted Investment covered by clause (x) of the
definition thereof) at the time of Designation (assuming the
effectiveness of such Designation) pursuant to the first paragraph
of Section 10.9 in an amount (the "Designation Amount") equal to
the Fair Market Value of the Company's interest in such Subsidiary
on such date; and
(iii) the Company would be permitted under this Indenture to
incur $1.00 of additional Indebtedness (other than Permitted
Indebtedness) pursuant to Section 10.8 at the time of such
Designation (assuming the effectiveness of such Designation).
In the event of any such Designation, the Company shall be deemed to have
made an Investment constituting a Restricted Payment pursuant to Section 10.9
for all purposes of this Indenture in the Designation Amount.
The Company shall not, and shall not cause or permit any Restricted
Subsidiary to, at any time (x) provide credit support for or subject any of its
property or assets (other than the Capital Stock of any Unrestricted
Subsidiary) to the satisfaction of, any Indebtedness of any Unrestricted
Subsidiary (including any undertaking, agreement or instrument evidencing such
Indebtedness), (y) be directly or indirectly liable for any Indebtedness of any
Unrestricted Subsidiary or (z) be directly or indirectly liable for any
Indebtedness which provides that the holder thereof may (upon notice, lapse of
time or both) declare a default thereon or cause the payment thereof to be
accelerated or payable prior to its final Stated Maturity upon the occurrence
of a default with respect to any Indebtedness of any Unrestricted Subsidiary
(including any right to take enforcement action against such Unrestricted
Subsidiary). All Subsidiaries of Unrestricted Subsidiaries shall automatically
be deemed to be Unrestricted Subsidiaries.
(b) The Company may revoke any Designation of a Subsidiary as an
Unrestricted Subsidiary (a "Revocation") if:
(i) no Default shall have occurred and be continuing at the
time of and after giving effect to such Revocation, and
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(ii) all Liens and Indebtedness of such Unrestricted
Subsidiary outstanding immediately following such Revocation would,
if incurred at such time by a Restricted Subsidiary, have been
permitted to be incurred for all purposes of this Indenture.
(c) All Designations and Revocations must be evidenced by Board
Resolutions of the Company delivered to the Trustee certifying compliance
with the foregoing provisions.
SECTION 10.19. Provision of Financial Information.
For so long as the Securities are outstanding, whether or not the Company
is subject to Section 13(a) or 15(d) of the Exchange Act, or any successor
provision thereto, the Company shall file with the Commission (if permitted by
Commission practice and applicable law and regulations) the annual reports,
quarterly reports and other documents which the Company would have been
required to file with the Commission pursuant to such Section 13(a) or 15(d) or
any successor provision thereto if the Company were so subject, such documents
to be filed with the Commission on or prior to the respective dates (the
"Required Filing Dates") by which the Company would have been required so to
file such documents if the Company were so subject. The Company shall also in
any event within 15 days after each Required Filing Date (whether or not
permitted or required to be filed with the Commission) file with the Trustee,
copies of the annual reports, quarterly reports and other documents which the
Company would be required to file with the Commission if the Securities were
then registered under the Exchange Act and to make such information available
to Holders of Securities upon request. In addition, if the Company is not
subject to the reporting requirements of the Exchange Act, for so long as any
Securities remain outstanding, the Company will furnish to the Holders of
Securities and prospective investors, upon their request, the information
required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
SECTION 10.20. Statement by Officers as to Default; Compliance Certificates.
(a) The Company shall deliver to the Trustee, prior to March 31 in
each year commencing March 31, 1999, an Officer's Certificate, stating
whether or not to the best knowledge of the signers thereof the Company
is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period
of grace or requirement of notice provided hereunder), and if the Company
shall be in default, specifying all such defaults and the nature and
status thereof of which he may have knowledge.
(b) The Company shall deliver to the Trustee, as soon as possible
and in any event within five business days after the Company becomes
aware of the occurrence of a Default or an Event of Default, an Officer's
Certificate setting forth the details of such Default or Event of
Default, and the action which the Company proposes to take with respect
thereto.
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 11.1. Right of Redemption.
The Securities may be redeemed at the election of the Company, in the
amounts, at the times, at the Redemption Prices (together with any applicable
accrued and unpaid interest to the Redemption Date), and subject to the
conditions specified in the form of Security and hereinafter set forth.
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SECTION 11.2. Applicability of Article.
Redemption of Securities at the election of the Company, as permitted by
this Indenture and the provisions of the Securities, shall be made in
accordance with such provisions and this Article.
SECTION 11.3. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities pursuant to Section
11.1 shall be evidenced by a Board Resolution. In the event of any redemption
at the election of the Company pursuant to Section 11.1, the Company shall
notify the Trustee, in case of a redemption of less than all the Securities, at
least 60 days, and in the case of a redemption of all the Securities, at least
40 days, prior to the Redemption Date fixed by the Company (in each case,
unless a shorter notice shall be satisfactory to the Trustee) of such
Redemption Date and of the principal amount of Securities to be redeemed.
SECTION 11.4. Selection by Trustee of Securities To Be Redeemed.
In the event that less than all of the Securities are to be redeemed at
any time, selection of such Securities for redemption will be made by the
Trustee in compliance with the requirements of the principal national
securities exchange, if any, on which the Securities are listed or, if the
Securities are not then listed on a national securities exchange, on a pro rata
basis, by lot or by such method as the Trustee shall deem fair and appropriate
(subject to the rules of the Depository); provided, however, that Securities
shall only be redeemable in amounts of $1,000 or an integral multiple of
$1,000.
The Trustee shall promptly notify the Company and each Security Registrar
in writing of the Securities selected for redemption and, in the case of any
Securities selected for partial redemption, the principal amount thereof to be
redeemed.
For all purposes of this Indenture and of the Securities, unless the
context otherwise requires, all provisions relating to the redemption of
Securities shall relate, in the case of any Securities redeemed or to be
redeemed only in part, to the portion of the principal amount of such
Securities which has been or is to be redeemed.
SECTION 11.5. Notice of Redemption.
Notice of redemption shall be given by first class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the Redemption Date, to
each Holder of Securities to be redeemed, at his address appearing in the
Security Register.
All notices of redemption shall identify the Securities to be redeemed
(including, if used, CUSIP or CINS numbers) and shall state:
(i) the Redemption Date,
(ii) the Redemption Price,
(iii) if less than all the Outstanding Securities are to be
redeemed, the identification (and, in the case of partial redemption, the
principal amounts) of the particular Securities to be redeemed,
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(iv) that on the Redemption Date the Redemption Price will become
due and payable upon each such Security to be redeemed and that interest
thereon will cease to accrue on and after such Redemption Date,
(v) the place or places where such Securities are to be surrendered
for payment of the Redemption Price, and
(vi) if the redemption is being made pursuant to the provisions of
the Securities regarding a Qualified Equity Offering, a brief description
of the transaction or transactions giving rise to such redemption, the
nature and amount of Capital Stock sold by the Company thereto in such
transaction or transactions, the aggregate purchase price thereof and the
net cash proceeds therefrom available for such redemption, the date or
dates on which such transaction or transactions were completed and the
percentage of the aggregate principal amount of Outstanding Securities
being redeemed.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall be irrevocable.
SECTION 11.6. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with the Trustee
or with a Paying Agent (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 10.3) an amount of money
sufficient to pay the Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date) any applicable accrued interest on, all the
Securities which are to be redeemed on that date.
SECTION 11.7. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and any applicable
accrued interest) such Securities shall not bear interest. Upon surrender of
any such Security for redemption in accordance with said notice, such Security
shall be paid by the Company at the Redemption Price, together with any
applicable accrued and unpaid interest to the Redemption Date; provided,
however, that installments of interest whose Stated Maturity is on or prior to
the Redemption Date shall be payable to the Holders of such Securities, or one
or more predecessor securities, registered as such at the close of business on
the relevant record dates according to their terms and the provisions of
Section 3.7.
If any Security called for redemption in accordance with the election of
the Company made pursuant to Section 11.1 shall not be so paid upon surrender
thereof for redemption, the principal (and premium, if any) shall, until paid,
bear interest from the Redemption Date at the rate provided by the Security.
SECTION 11.8. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered at
an office or agency of the Company designated for that purpose pursuant to
Section 10.2 (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or his attorney duly
authorized in writing), and the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Security without
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service charge, a new Security or Securities, of any authorized denomination as
requested by such Holder, in aggregate principal amount at Stated Maturity
equal to and in exchange for the unredeemed portion of the principal amount at
Stated Maturity of the Security so surrendered.
ARTICLE XII
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 12.1. Company's Option To Effect Defeasance or Covenant Defeasance.
The Company may elect, at its option at any time, to have Section 12.2 or
Section 12.3 applied to the Outstanding Securities (as a whole and not in part)
upon compliance with the conditions set forth below in this Article. Any such
election shall be evidenced by a Board Resolution.
SECTION 12.2. Defeasance and Discharge.
Upon the Company's exercise of its option to have this Section applied to
the Outstanding Securities (as a whole and not in part), the Company shall be
deemed to have been discharged from its obligations with respect to such
Securities as provided in this Section on and after the date the conditions set
forth in Section 12.4 are satisfied (hereinafter called "Defeasance"). For this
purpose, such Defeasance means that the Company shall be deemed to have paid
and discharged the entire Indebtedness represented by such Securities and to
have satisfied all its other obligations under such Securities and this
Indenture insofar as such Securities are concerned (and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging the
same), subject to the following which shall survive until otherwise terminated
or discharged hereunder: (1) the rights of Holders of Outstanding Securities to
receive, solely from the trust fund described in Section 12.4 and as more fully
set forth in such Section, payments in respect of the principal of, premium, if
any, and interest on such Securities when payments are due, (2) the Company's
obligations with respect to such Securities under Sections 3.4, 3.5, 3.6, 10.2
and 10.3, (3) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and (4) this Article. Subject to compliance with this Article, the
Company may exercise its option to have this Section applied to the Outstanding
Securities (as a whole and not in part) notwithstanding the prior exercise of
its option to have Section 12.3 applied to such Securities.
SECTION 12.3. Covenant Defeasance.
Upon the Company's exercise of its option to have this Section applied to
the Outstanding Securities (as a whole and not in part), (i) the Company and
the Guarantors shall be released from their obligations under Section
8.1(A)(3), Sections 10.5 through 10.19, inclusive, and any covenant provided
pursuant to Section 9.1(ii), (ii) the occurrence of any event specified in
Sections 5.1(3) and 5.1(4) (with respect to Section 8.1(A)(3) and any of
Sections 10.5 through 10.19, inclusive, and any such covenants provided
pursuant to Section 9.1(ii)), shall be deemed not to be or result in an Event
of Default, in each case with respect to such Securities as provided in this
Section on and after the date the conditions set forth in Section 12.4 are
satisfied (hereinafter called "Covenant Defeasance"). For this purpose, such
Covenant Defeasance means that, with respect to such Securities, the Company
may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such specified Section (to the extent
so specified in the case of Section 5.1(3) or 5.1(4)), whether directly or
indirectly, by reason of any reference elsewhere herein to any such Section or
by reason of any reference in any such Section to any other provision herein or
in any other document, but the remainder of this Indenture and such Securities
shall be unaffected thereby.
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SECTION 12.4. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to the application of Section 12.2
or Section 12.3 to the Outstanding Securities:
(1) The Company or any Guarantor shall irrevocably have deposited
or caused to be deposited with the Trustee (or another trustee which
satisfies the requirements contemplated by Section 6.9 and agrees to
comply with the provisions of this Article applicable to it) as trust
funds in trust for the purpose of making the following payments,
specifically pledged as security for, and dedicated solely to, the
benefits of the Holders of such Securities, (A) money in an amount, or
(B) U.S. Government Obligations which through the scheduled payment of
principal and interest in respect thereof in accordance with their terms
will provide, not later than one day before the due date of any payment,
money in an amount, or (C) a combination thereof, in each case
sufficient, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered
to the Trustee, to pay and discharge, and which shall be applied by the
Trustee (or any such other qualifying trustee) to pay and discharge, the
principal of, premium, if any, and any installment of interest on such
Securities on the respective Stated Maturities thereof, in accordance
with the terms of this Indenture and such Securities. As used herein,
"U.S. Government Obligation" means (x) any security which is (i) a direct
Obligation of the United States of America for the payment of which the
full faith and credit of the United States of America is pledged or (ii)
an obligation of a Person controlled or supervised by and acting as an
agency or instrumentality of the United States of America the payment of
which is unconditionally guaranteed as a full faith and credit obligation
by the United States of America, which, in either case (i) or (ii), is
not callable or redeemable at the option of the issuer thereof, and (y)
any depositary receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act) as custodian with respect to any U.S. Government
Obligation which is specified in clause (x) above and held by such bank
for the account of the holder of such depositary receipt, or with respect
to any specific payment of principal of or interest on any U.S.
Government Obligation which is so specified and held, provided (except as
required by law) such custodian is not authorized to make any deduction
from the amount payable to the holder of such depositary receipt from any
amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of principal or interest evidenced by
such depositary receipt.
(2) In the event of an election to have Section 12.2 apply to the
Outstanding Securities, the Company shall have delivered to the Trustee
an Opinion of Counsel stating that (A) the Company has received from, or
there has been published by, the Internal Revenue Service a ruling or (B)
since the date of this 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 shall confirm that, the Holders of such
Securities will not recognize gain or loss for Federal income tax
purposes as a result of the deposit, Defeasance and discharge to be
effected with respect to such Securities and will be subject to Federal
income tax on the same amount, in the same manner and at the same times
as would be the case if such deposit, Defeasance and discharge were not
to occur.
(3) In the event of an election to have Section 12.3 apply to the
Outstanding Securities, the Company shall have delivered to the Trustee
an Opinion of Counsel to the effect that the Holders of such Securities
will not recognize gain or loss for Federal income tax purposes as a
result of the deposit and Covenant Defeasance to be effected with respect
to such Securities and will be subject to Federal income tax on the same
amount, in the same manner and at the same times as would be the case if
such deposit and Covenant Defeasance were not to occur.
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(4) No Default or Event of Default with respect to the Outstanding
Securities shall have occurred and be continuing at the time of such
deposit (excluding a Default or Event of Default due to a breach of
Section 10.8 which arises solely due to the borrowing of funds entirely
and immediately applied to such deposit).
(5) Such Defeasance or Covenant Defeasance shall not cause the
Trustee to have a conflicting interest with respect to any securities of
the Company or any Guarantor.
(6) Such Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any other
agreement or instrument to which the Company is a party or by which it is
bound.
(7) The Company shall have delivered to the Trustee an Opinion of
Counsel (which opinion may be subject to customary assumptions and
exceptions) to the effect that after the 91st day following the deposit,
the trust funds will not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally.
(8) The Company shall have delivered to the Trustee an Officer's
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders of the Securities over the other
creditors of the Company or any Guarantor with the intent of defeating,
hindering, delaying or defrauding creditors of the Company or any
Guarantor or others.
(9) No event or condition shall exist that would prevent the
Company from making payments of the principal of, premium, if any, and
interest on the Securities on the date of such deposit or at any time
ending on the 91st day after the date of such deposit.
(10) The Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent under this Indenture to either Defeasance or Covenant
Defeasance, as the case may be, have been complied with.
SECTION 12.5. Deposited Money and U.S. Government Obligations To Be Held in
Trust; Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 10.3, all
money and U.S. Government Obligations (including the proceeds thereof)
deposited with the Trustee or other qualifying trustee (solely for purposes of
this Section and Section 12.6, the Trustee and any such other trustee are
referred to collectively as the "Trustee") pursuant to Section 12.4 in respect
of the Outstanding Securities shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Securities and this
Indenture, to the payment, either directly or through any such Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities, of all sums due and to become due
thereon in respect of principal and any premium and interest, but money so held
in trust need not be segregated from other funds except to the extent required
by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 12.4 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is
for the account of the Holders of Outstanding Securities.
Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or U.S. Government Obligations held by
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it as provided in Section 12.4 which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, are in excess of the amount thereof which
would then be required to be deposited to effect the Defeasance or Covenant
Defeasance, as the case may be, with respect to the Outstanding Securities.
SECTION 12.6. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article with respect to any Securities by reason of any
order or judgment of any court or governmental authority enjoining,
restraining, or otherwise prohibiting such application, then the obligations
under this Indenture, such Securities and the Guarantees from which the Company
and the Guarantors have been discharged or released pursuant to Section 12.2 or
12.3 shall be revived and reinstated as though no deposit had occurred pursuant
to this Article with respect to such Securities, until such time as the Trustee
or Paying Agent is permitted to apply all money held in trust pursuant to
Section 12.5 with respect to such Securities in accordance with this Article;
provided, however, that if the Company makes any payment of principal of or any
premium or interest on any such Security following such reinstatement of its
obligations, the Company shall be subrogated to the rights (if any) of the
Holders of such Securities to receive such payment from the money so held in
trust.
ARTICLE XIII
GUARANTY
SECTION 13.1. Guaranty.
Each Guarantor hereby unconditionally and irrevocably guarantees on a
senior subordinated basis, jointly and severally, to each Holder and to the
Trustee and its successors and assigns (a) the full and prompt payment (within
applicable grace periods) of principal of and interest on the Securities when
due, whether at maturity, by acceleration, by redemption or otherwise, and all
other monetary obligations of the Company under this Indenture and the
Securities and (b) the full and prompt performance within applicable grace
periods of all other obligations of the Company under this Indenture and the
Securities (all the foregoing being hereinafter collectively called the
"Guaranty Obligations"). Each Guarantor further agrees that the Guaranty
Obligations may be extended or renewed, in whole or in part, without notice or
further assent from such Guarantor, and that such Guarantor will remain bound
under this Article XIII notwithstanding any extension or renewal of any
Guaranty Obligation.
To the extent that any Guarantor shall be required to pay any amounts on
account of the Securities pursuant to a Guaranty in excess of an amount
calculated as the product of (i) the aggregate amount payable by the Guarantors
on account of the Securities pursuant to the Guarantees times (ii) the
proportion (expressed as a fraction) that such Guarantor's net assets
(determined in accordance with GAAP) at the date enforcement of the Guarantees
is sought bears to the aggregate net assets (determined in accordance with
GAAP) of all Guarantors at such date, then such Guarantor shall be reimbursed
by the other Guarantors for the amount of such excess, pro rata, based upon the
respective net assets (determined in accordance with GAAP) of such other
Guarantors at the date enforcement of the Guarantees is sought. This paragraph
is intended only to define the relative rights of Guarantors as among
themselves, and nothing set forth in this paragraph is intended to or shall
impair the joint and several obligations of the Guarantors under their
respective Guarantees.
The Guarantors shall have the right to seek contribution from any
non-paying Guarantor so long as the exercise of such right does not impair the
rights of the Holders under any Guaranty.
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Each Guarantor waives presentation to, demand of payment from and protest
to the Company of any of the Guaranty Obligations and also waives notice of
protest for nonpayment. Each Guarantor waives notice of any default under the
Securities or the Guaranty Obligations. The obligations of each Guarantor
hereunder shall not be affected by (a) the failure of any Holder or the Trustee
to assert any claim or demand or to enforce any right or remedy against the
Company or any other Person under this Indenture, the Securities or any other
agreement or otherwise; (b) any extension or renewal of any thereof; (c) any
rescission, waiver, amendment or modification of any of the terms or provisions
of this Indenture, the Securities or any other agreement; (d) the release of
any security held by any Holder or the Trustee for the Guaranty Obligations or
any of them; (e) the failure of any Holder or Trustee to exercise any right or
remedy against any other guarantor of the Guaranty Obligations; or (f) any
change in the ownership of any Guarantor (subject to Section 13.5(b)).
Each Guarantor further agrees that its Guaranty herein constitutes a
guaranty of payment, performance and compliance when due (and not a guaranty of
collection) and waives any right to require that any resort be had by any
Holder or the Trustee to any security held for payment of the Guaranty
Obligations.
To the fullest extent permitted by law, the obligations of each Guarantor
hereunder shall not be subject to any reduction, limitation, impairment or
termination for any reason, including any claim of waiver, release, surrender,
alteration or compromise, and shall not be subject to any defense of setoff,
counterclaim, recoupment or termination whatsoever or by reason of the
invalidity, illegality or unenforceability of the Guaranty Obligations or
otherwise. Without limiting the generality of the foregoing, to the fullest
extent permitted by law, the obligations of each Guarantor herein shall not be
discharged or impaired or otherwise affected by the failure of any Holder or
the Trustee to assert any claim or demand or to enforce any remedy under this
Indenture, the Securities or any other agreement, by any waiver or modification
of any thereof, by any default, failure or delay, willful or otherwise, in the
performance of the Guaranty Obligations, or by any other act or thing or
omission or delay to do any other act or thing which may or might in any manner
or to any extent vary the risk of such Guarantor or would otherwise operate as
a discharge of each Guarantor as a matter of law or equity.
Each Guarantor further agrees that its Guaranty herein shall continue to
be effective or be reinstated, as the case may be, if at any time payment, or
any part thereof, of principal of or interest on any Guaranty Obligation is
rescinded or must otherwise be restored by any Holder or the Trustee upon the
bankruptcy or reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any other right
which any Holder or the Trustee has at law or in equity against each Guarantor
by virtue hereof, upon the failure of the Company to pay the principal of or
interest on any Guaranty Obligation when and as the same shall become due,
whether at maturity, by acceleration, by redemption or otherwise (within
applicable grace periods), or to perform or comply with any other Guaranty
Obligation (within applicable grace periods), each Guarantor hereby promises to
and shall, upon receipt of written demand by the Trustee, forthwith pay, or
cause to be paid, in cash, to the Holders or the Trustee an amount equal to the
sum of (i) the unpaid principal amount of such Guaranty Obligations (ii)
accrued and unpaid interest on such Guaranty Obligations (but only to the
extent not prohibited by law) and (iii) all other monetary Guaranty Obligations
of the Company to the Holders and the Trustee.
Each Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any Guaranty Obligations
guarantied hereby until payment in full of all Guaranty Obligations. Each
Guarantor further agrees that, as between the Guarantors, on the one hand, and
the Holders and the Trustee, on the other hand, (x) the maturity of the
Guaranty Obligations guarantied hereby may be accelerated as provided in
Article V for the purposes of its Guaranty herein, notwithstanding any
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stay, injunction or other prohibition preventing such acceleration in respect
of the Guaranty Obligations guaranteed hereby, and (y) in the event of any
declaration of acceleration of such Guaranty Obligations as provided in Article
V, such Guaranty Obligations (whether or not due and payable) shall forthwith
become due and payable by each Guarantor for the purposes of this Section.
Each Guarantor also agrees to pay any and all costs and expenses
(including reasonable attorneys' fees and expenses) incurred by the Trustee or
any Holder in enforcing any rights under this Section.
SECTION 13.2. Limitation on Liability.
Any term or provision of this Indenture to the contrary notwithstanding,
the obligations of each Guarantor hereunder are limited to the maximum amount
which, after giving effect to all other contingent and fixed liabilities of
such Guarantor 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 Guaranty or pursuant to its contribution obligations
under this Indenture, will result in the obligations of such Guarantor under
this Indenture or its Guaranty not being voidable as a fraudulent conveyance or
fraudulent transfer under federal or state law.
SECTION 13.3. Execution and Delivery of Guarantees; Supplemental Indentures.
The Guaranty of each Guarantor shall be conclusively evidenced by the
execution and delivery by such Guarantor of this Indenture. The execution and
delivery of any Restricted Subsidiary of the Company that is required to become
a Guarantor pursuant to Section 10.17 shall be conclusively evidenced by its
execution and delivery of the supplemental indenture referred to therein.
Each Guarantor hereby agrees that its Guaranty shall remain in full force
and effect notwithstanding any failure to endorse on each Security a notation
of such Guaranty.
The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Guarantees on behalf of
the Guarantors.
SECTION 13.4. Guarantors May Consolidate, Etc., on Certain Terms.
(a) Except as may be provided in Articles VIII and X, nothing
contained in this Indenture or in any of the Securities shall prevent any
consolidation or merger of a Guarantor with or into the Company or
another Guarantor or shall prevent any sale or conveyance of the assets
of a Guarantor as an entirety or substantially as an entirety or the
Capital Stock of a Guarantor to the Company or another Guarantor.
(b) No Guarantor shall consolidate with or merge with or into
(whether or not such Guarantor is the surviving Person), another Person
(other than the Company or another Guarantor), whether or not affiliated
with such Guarantor, unless, (i) subject to Section 13.5, the Person
formed by or surviving any such consolidation or merger (if other than
such Guarantor) assumes all the obligations of such Guarantor pursuant to
a supplemental indenture, substantially in the form of Exhibit D hereto,
under the Securities and this Indenture; and (ii) immediately after
giving effect to such transaction, no Default or Event of Default exists.
In the case of any such consolidation or merger and upon the assumption
by the successor Person by supplemental indenture of the applicable
Guaranty, such successor Person shall succeed to and be substituted for
the Guarantor with the same effect as if it had been named herein as a
Guarantor.
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SECTION 13.5. Release of Guarantors.
(a) Concurrently with any consolidation or merger of a Guarantor or
any sale or conveyance of all or substantially all of the assets of a
Guarantor, in each case as permitted by the other provisions of this
Indenture (including, without limitation, Sections 10.9, 10.11 and 10.14)
and as a result of which such Guarantor ceases to be a Restricted
Subsidiary of the Company, upon delivery by the Company to the Trustee of
an Officer's Certificate to the effect that such consolidation, merger,
sale or conveyance was made in accordance with this Indenture and an
Opinion of Counsel to the effect that such transaction is permitted by
this Indenture (which opinion may be subject to customary assumptions and
limitations), the Trustee shall execute any documents reasonably required
in order to evidence the release of such Guarantor from its obligations
under its Guaranty under this Article XIII. Any Guarantor not released
from its obligations under its Guaranty under this Article XIII shall
remain liable for the full amount of principal of and premium, if any,
and interest on the Securities and for the other obligations of a
Guarantor under its Guaranty under this Article XIII.
(b) In the event that the Company designates a Guarantor to be an
Unrestricted Subsidiary in accordance with the terms of this Indenture
(including Section 10.18), then such Guarantor shall be released and
relieved of any obligations under its Guaranty.
SECTION 13.6. Successors and Assigns.
This Article XIII shall be binding upon each Guarantor and its successors
and assigns and shall inure to the benefit of the successors and assigns of the
Trustee and the Holders and, in the event of any transfer or assignment of
rights by any Holder or the Trustee, the rights and privileges conferred upon
that party in this Indenture and in the Securities shall automatically extend
to and be vested in such transferee or assignee, all subject to the terms and
conditions of this Indenture.
SECTION 13.7. No Waiver, etc.
Neither a failure nor a delay on the part of either the Trustee or the
Holders in exercising any right, power or privilege under this Article XIII
shall operate as a waiver thereof, nor shall a single or partial exercise
thereof preclude any other or further exercise of any right, power or
privilege. The rights, remedies and benefits of the Trustee and the Holders
herein expressly specified are cumulative and not exclusive of any other
rights, remedies or benefits which either may have under this Article XIII at
law, in equity, by statute or otherwise.
SECTION 13.8. Modification, etc.
No modification, amendment or waiver of any provision of this Article,
nor the consent to any departure by a Guarantor therefrom, shall in any event
be effective unless the same shall be in writing and signed by the Trustee, and
then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. No notice to or demand on a Guarantor in
any case shall entitle such Guarantor or any other guarantor to any other or
further notice or demand in the same, similar or other circumstances.
SECTION 13.9. Subordination of Guarantees.
The obligations of each Guarantor pursuant to its Guaranty and this
Article XIII shall be (a) junior and subordinated in right of payment to the
prior payment in full in cash of all Guarantor Senior
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Indebtedness of such Guarantor and (b) senior in right of payment to all
existing and future Guarantor Subordinated Indebtedness of such Guarantor, in
each case on the same basis as the Securities and the obligations of the
Company hereunder are junior and subordinated to all Senior Indebtedness and
senior in right of payment to all Subordinated Indebtedness. For the purposes
of this Section 13.9, Article XIV shall apply to the obligations of each
Guarantor under its Guaranty, this Article XIII and the other provisions of
this Indenture as if references therein to the Company, the Securities, Senior
Indebtedness, Subordinated Indebtedness and Designated Senior Indebtedness were
references to such Guarantor, such Guarantor's Guaranty, Guarantor Senior
Indebtedness, Guarantor Subordinated Indebtedness and Designated Guarantor
Senior Indebtedness, respectively.
ARTICLE XIV
SUBORDINATION
SECTION 14.1. Securities Subordinate to Senior Indebtedness and Senior to
Subordinated Indebtedness.
The Company covenants and agrees, and each Holder of a Security, by his
acceptance thereof, likewise covenants and agrees that, to the extent and in
the manner hereinafter set forth in this Article XIV, the Indebtedness
evidenced by the Securities is hereby expressly made subordinate in right of
payment to the prior payment in full in cash of all Senior Indebtedness and
senior in right of payment to all existing and future Subordinated Indebtedness
of the Company.
SECTION 14.2. Payment Over of Proceeds Upon Dissolution, Etc.
In the event of any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding
in connection therewith, relating to the Company or its assets, or any
liquidation, dissolution or other winding-up of the Company, whether voluntary
or involuntary, or any assignment for the benefit of creditors or other
marshaling of assets or liabilities of the Company, all Senior Indebtedness
(including, in the case of Designated Senior Indebtedness, any interest
accruing subsequent to the filing of a petition for bankruptcy (regardless of
whether such interest is an allowed claim in the bankruptcy proceeding)) must
be paid in full in cash before any direct or indirect payment (other than
payments from a trust previously created pursuant to Article XII) by or on
behalf of the Company of any kind or character (excluding Permitted Junior
Securities) may be made on account of the principal of, premium, if any, or
interest on, or the purchase, redemption or other acquisition of, the
Securities.
SECTION 14.3. No Payment When Designated Senior Indebtedness in Default.
During the continuance of any default in the payment of principal, or
premium, if any, or interest on any Senior Indebtedness, when the same becomes
due, and after receipt by the Trustee and the Company from representatives of
holders of such Senior Indebtedness of written notice of such default, no
direct or indirect payment (other than payments from trusts previously created
pursuant to Article XII) by or on behalf of the Company of any kind or
character (other than Permitted Junior Securities) may be made on account of
the principal of, premium, if any, or interest on, or the purchase, redemption
or other acquisition of, the Securities unless and until such default has been
cured or waived or has ceased to exist or such Senior Indebtedness shall have
been paid in full in cash or indefeasibly discharged, after which the Company
shall resume making any and all required payments in respect of the Securities,
including any missed payments.
In addition, during the continuance of any other default with respect to
any Designated Senior Indebtedness that permits, or would permit with the
passage of time or the giving of notice or both, the
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maturity thereof to be accelerated (a "Non-payment Default") and upon the
earlier to occur of (a) receipt by the Trustee and the Company from the
representatives of holders of such Designated Senior Indebtedness of a written
notice of such Non-payment Default or (b) if such Non-payment Default results
from the acceleration of the maturity of the Securities, the date of such
acceleration, no payment (other than payments from trusts previously created
pursuant to Article XII) of any kind or character (excluding Permitted Junior
Securities) may be made by the Company on account of the principal of, premium,
if any, or interest on, or the purchase, redemption, or other acquisition of,
the Securities for the period specified below (the "Payment Blockage Period").
The Payment Blockage Period shall commence upon the receipt of notice of
a Non-payment Default by the Trustee and the Company from the representatives
of holders of Designated Senior Indebtedness or the date of the acceleration
referred to in clause (b) of the preceding paragraph, as the case may be, and
shall end on the earliest to occur of the following events: (i) 179 days have
elapsed since the receipt of such notice or the date of the acceleration
referred to in clause (b) of the preceding paragraph (provided the maturity of
such Designated Senior Indebtedness shall not theretofore have been
accelerated), (ii) such default is cured or waived or ceases to exist or such
Designated Senior Indebtedness is paid in full in cash or indefeasibly
discharged, or (iii) such Payment Blockage Period shall have been terminated by
written notice to the Company or the Trustee from the representatives of
holders of Designated Senior Indebtedness initiating such Payment Blockage
Period, after which the Company shall promptly resume making any and all
required payments in respect of the Securities, including any missed payments.
Only one Payment Blockage Period with respect to the Securities may be
commenced within any 360 consecutive day period. No Non-payment Default with
respect to Designated Senior Indebtedness that existed or was continuing on the
date of the commencement of any Payment Blockage Period with respect to the
Designated Senior Indebtedness initiating such Payment Blockage Period will be,
or can be, made the basis for the commencement of a second Payment Blockage
Period, whether or not within a period of 360 consecutive days, unless such
default has been cured or waived for a period of not less than 90 consecutive
days. In no event will a Payment Blockage Period extend beyond 179 days from
the date of the receipt by the Trustee of the notice or the date of the
acceleration initiating such Payment Blockage Period, and there must be a 181
consecutive day period in any 360 day period during which no Payment Blockage
Period is in effect.
SECTION 14.4. Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the payment in full in cash of all Senior Indebtedness, the
Holders of the Securities shall be subrogated to the extent of the payments or
distributions made to the holders of such Senior Indebtedness pursuant to the
provisions of this Article XIV to the rights of the holders of such Senior
Indebtedness to receive payments and distributions of cash, property and
securities applicable to the Senior Indebtedness until the principal of,
premium, if any, and interest on the Securities shall be paid in full. For
purposes of such subrogation, no payments or distributions to the holders of
the Senior Indebtedness of any cash, property or securities to which the
Holders of the Securities or the Trustee would be entitled except for the
provisions of this Article XIV, and no payments over pursuant to the provisions
of this Article XIV to the holders of Senior Indebtedness by Holders of the
Securities or the Trustee, shall, as among the Company, its creditors other
than holders of Senior Indebtedness and the Holders of the Securities, be
deemed to be a payment or distribution by the Company to or on account of the
Senior Indebtedness.
SECTION 14.5. Provisions Solely to Define Relative Rights.
The provisions of this Article XIV are and are intended solely for the
purpose of defining the relative rights of the Holders of the Securities on the
one hand and the holders of Senior Indebtedness on the other hand. Nothing
contained in this Article XIV or elsewhere in this Indenture or in the
Securities is intended to or shall (a) impair, as among the Company, its
creditors other than holders of Senior Indebtedness and the
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<PAGE> 84
Holders of the Securities, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders of the Securities the principal of,
premium, if any and interest on the Securities as and when the same shall
become due and payable in accordance with their terms; (b) affect the relative
rights against the Company of the Holders of the Securities and creditors of
the Company other than the holders of Senior Indebtedness; or (c) prevent the
Trustee or the Holder of any Securities from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article XIV of the holders of Senior Indebtedness to
receive cash, property and securities otherwise payable or deliverable to the
Trustee or such Holder.
SECTION 14.6. Trustee to Effectuate Subordination.
Each Holder of a Security by its acceptance thereof authorizes and
directs the Trustee on its behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article XIV and
appoints the Trustee its attorney-in-fact for any and all such purposes.
SECTION 14.7. No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
non-compliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article
XIV or the obligations hereunder of the Holders of the Securities to the
holders of Senior Indebtedness, do any one or more of the following: (i) change
the manner, place or terms of payment or extend the time of payment of, or
renew or alter, Senior Indebtedness, or otherwise amend or supplement in any
manner Senior Indebtedness or any instrument evidencing the same or any
agreement under which Senior Indebtedness is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing Senior Indebtedness; (iii) release any Person liable in any manner for
the collection of Senior Indebtedness; and (iv) exercise or refrain from
exercising any rights against the Company and any other Person.
SECTION 14.8. Notice to Trustee.
The Company shall give prompt written notice to the Trustee of any fact
known to the Company which would prohibit the making of any payment to or by
the Trustee in respect of the Securities. Notwithstanding the provisions of
this Article XIV or any other provision of this Indenture, the Trustee shall
not be charged with knowledge of the existence of any facts which would
prohibit the making of any payment to or by the Trustee in respect of the
Securities, unless and until the Trustee shall have received written notice
thereof from the Company or a holder of Senior Indebtedness or from any trustee
therefor; and, prior to the receipt of any such written notice, the Trustee,
subject to the provisions of Section 6.1, shall be entitled in all respects to
assume that no such facts exist; provided, however, that if the Trustee shall
not have received at its Corporate Trust Office the notice provided for in this
Section at least three Business Days prior to the date upon which by the terms
hereof any money may become payable for any purpose (including, without
limitation, the payment in cash of the principal of, premium, if any or
interest on any Security), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive
such money and to apply the same to the purpose for which such money was
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<PAGE> 85
received and shall not be affected by any notice to the contrary which may be
received by it within three Business Days prior to such date.
SECTION 14.9. Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets of the Company referred to in
this Article XIV, the Trustee, subject to the provisions of Section 6.1, and
the Holders of the Securities shall be entitled to rely upon any order or
decree entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding up
or similar case or proceeding is pending, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit
of creditors, agent or other Person making such payment or distribution,
delivered to the Trustee or to the Holders of Securities, for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of Senior Indebtedness and other Indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article
XIV.
SECTION 14.10. Trustee Not Fiduciary for Holders of Senior Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the holders
of Senior Indebtedness and shall not be liable to any such holders if it shall
in good faith mistakenly pay over or distribute to Holders of Securities or to
the Company or to any other Person cash, property or securities to which any
holders of Senior Indebtedness shall be entitled by virtue of this Article XIV
or otherwise, except in the case of gross negligence or wilful misconduct on
the part of the Trustee.
SECTION 14.11. Rights of Trustee as Holder of Senior Indebtedness; Preservation
of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article XIV with respect to any Senior Indebtedness
which may at any time be held by it, to the same extent as any other holder of
Senior Indebtedness, and nothing in this Indenture shall deprive the Trustee of
any of its rights as such holder.
Nothing in this Article XIV shall apply to claims of, or payments to, the
Trustee or its agent or counsel under or pursuant to Section 6.7.
SECTION 14.12. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article XIV shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article XIV in addition to or in place of the Trustee; provided,
however, that Section 14.11 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.
================================
This Indenture may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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<PAGE> 86
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the day and year first above written.
INTEGRATED ELECTRICAL SERVICES, INC.
By: /s/ JIM P. WISE
-------------------------------------
Name: Jim P. Wise
Title: President and Chief Executive Officer
STATE STREET BANK AND TRUST COMPANY
By: /s/ MICHAEL M. HOPKINS
-------------------------------------
Name: Michael M. Hopkins
Title: Vice President
THE GUARANTORS LISTED ON
SCHEDULE A HERETO
By: /s/ JOHN F. WOMBWELL
-------------------------------------
John F. Wombwell
Acting in his capacity as (i) Vice
President of the Guarantors listed in
Part I of Schedule A; (ii) Vice
President of the general partners of the
Guarantors listed in Part II of Schedule
A (such general partners acting on
behalf of such Guarantors) and (iii)
President of the Guarantors (or general
partner thereof) listed in Part III of
Schedule A.
By: /s/ HARVEY FREIDMAN
-------------------------------------
Harvey Freidman
Acting in his capacity as President of
the Guarantors listed in Part IV of
Schedule A.
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<PAGE> 87
Schedule A
LIST OF GUARANTORS
<TABLE>
<CAPTION>
PART I
<S> <C>
Ace Electric, Inc. PCX Acquisition Corporation
Aladdin-Ward Electric & Air, Inc. Pollock Electric Inc.
Amber Electric, Inc. Primo Electric Company
ARC Electric, Incorporated Raines Electric Co., Inc.
Bachofner Electric, Inc. Raines Management LLC
Brink Electric Construction Co. Reynolds Electric Corp.
BW/BEC, Inc. RKT Electric, Inc.
BW/BEC, L.L.C. Rockwell Electric, Inc.
BW/CEC, Inc. Rodgers Electric Company, Inc.
BW/CEC, L.L.C. Spectrol, Inc.
BW Consolidated, Inc. Spoor Electric, Inc.
Charles P. Bagby Co., Inc. Summit Electric of Texas, Incorporated
Commercial Electrical Contractors, Inc. T&H Electrical Corporation
Cypress Electrical Contractors, Inc. Thomas Popp & Company
Daniel Electrical of Treasure Coast, Inc. Thurman & O'Connell Corporation
Daniel Electrical Contractors, Inc. Wright Electrical Contracting, Inc.
Davis Electrical Constructors, Inc.
East Coast Electric Co. PART II
Electro-Tech, Inc.
Florida Industrial Electric, Inc. Bexar Electric Company, Ltd.
General Partner, Inc. (GP is BW/BEC, Inc.)
Goss Electric Company, Inc. Calhoun Electric Company, Ltd.
H. R. Allen, Inc. (GP is BW/CEC, Inc.)
Hatfield Electric, Inc. Haymaker Electric, Ltd.
Holland Electrical Systems, Inc. (GP is General Partner, Inc.)
Houston-Stafford Electric, Inc. Houston-Stafford Electrical Contractors, LP
Houston-Stafford Management LLC (GP is Houston Stafford Management LLC)
Howard Brothers Electric Co., Inc. ICS Integrated Communication Services LP
ICS Management LLC (GP is ICS Management LLC)
Integrated Communication Services, Inc. IES Management LP
Integrated Electrical Finance, Inc. (GP is Integrated Electrical Finance, Inc.)
J. W. Gray Electric Co., Inc. J. W. Gray Electrical Contractors LP
J. W. Gray Management LLC (GP is JW Gray Management LLC)
Kayton Electric, Inc. Mills Electric LP
Key Electrical Supply, Inc. (GP is Mills Management LLC)
Mark Henderson, Incorporated Pollock Summit Electric LP
Menninga Electric, Inc. (GPs are Pollock Electric, Inc and Summit
Mid-States Electric Company, Inc. Electric of Texas, Inc.)
Mills Electrical Contractors, Inc. Raines Electric LP
Mills Management LLC (GP is Raines Management LLC)
Muth Electric, Inc.
Paulin Electric Company, Inc.
</TABLE>
<PAGE> 88
PART III
IES Contractors Management LLC
IES Contractors LP
(GP is IES Contractors Management LLC)
PART IV
Houston-Stafford Holdings LLC
IES Contractors Holdings LLC
ICS Holdings LLC
IES Holdings LLC
J. W. Gray Holdings LLC
Mills Electrical Holdings LLC
Pollock Summit Holdings, Inc.
Raines Holdings LLC
<PAGE> 89
EXHIBIT A-1
FORM OF SECURITY
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE OR
OTHER SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES
THAT IT WILL NOT, PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF (OR OF ANY PREDECESSOR OF THIS SECURITY) OR THE LAST
DAY ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS
SECURITY (OR ANY PREDECESSOR OF THIS SECURITY), OFFER, SELL OR OTHERWISE
TRANSFER THIS SECURITY EXCEPT (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THE SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE
144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) THAT PURCHASES THIS SECURITY
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO
WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A,
(D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 (IF
AVAILABLE), OR (E) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; PROVIDED THAT THE COMPANY, THE
TRUSTEE, AND THE SECURITY REGISTRAR SHALL HAVE THE RIGHT PRIOR TO ANY SUCH
OFFER, SALE OR TRANSFER (I) PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND (II) IN EACH OF THE FOREGOING CASES, TO
REQUIRE THAT A CERTIFICATION OF TRANSFER IN THE FORM APPEARING ON THE OTHER
SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
TRUSTEE.
Integrated Electrical Services, Inc.
93/8% Senior Subordinated Note due 2009, Series A
No. ___________ $_________
CUSIP NO. 45811EAA1
Integrated Electrical Services, Inc., a corporation duly organized and
existing under the laws of the State of Delaware (herein called the "Company,"
which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay to ___________ or
registered assigns, the principal sum of __________ Dollars on February 1, 2009
and to pay interest thereon from January 28, 1999 or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
semiannually in arrears on February 1 and August 1 in each year, commencing
August 1, 1999 at the rate of 93/8% per annum, until the principal hereof is
paid or duly provided for, provided that any principal and premium, and any
such installment of interest, which is overdue shall bear interest at the rate
of 93/8% per annum (to the extent that the payment of such interest shall be
legally enforceable), from the dates such amounts are due until they are paid
or duly provided for. The interest so payable and punctually
A-1-1
<PAGE> 90
paid or duly provided for, on any Interest Payment Date will, as provided in
such Indenture, be paid to the Person in whose name this Security (or one or
more predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest, which shall be the January 15 and July 15
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly provided
for will forthwith cease to be payable to the Holder on such Regular Record Date
and may either be paid to the Person in whose name this Security (or one or more
predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of securities not less than 10
days prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in said Indenture.
Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Company maintained for
that purpose, in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts;
provided, however, that, at the option of the Company, payment of interest may
be made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register (subject to the right of certain
holders to request payment by wire transfer as provided in the Indenture).
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
A-1-2
<PAGE> 91
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed and attested.
Attest: Integrated Electrical Services, Inc.
By:
- ----------------------------------- ------------------------------------
Title: Title:
A-1-3
<PAGE> 92
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned
Indenture.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
Dated: By:
-------------------------------------
Authorized Signatory
A-1-4
<PAGE> 93
FORM OF REVERSE OF SECURITY
This Security is one of a duly authorized issue of Securities of the
Company designated as 93/8% Senior Subordinated Notes due 2009, Series A
(herein called the "Initial Securities"), limited in aggregate principal amount
at Stated Maturity to $150,000,000 issued and to be issued under an Indenture,
dated as of January 28, 1999 (herein called the "Indenture," which term shall
have the meaning assigned to it in such instrument), among the Company, the
Guarantors named therein and State Street Bank and Trust Company, as Trustee
(herein called the "Trustee," which term includes any successor trustee under
the Indenture), and reference is hereby made to the Indenture for a statement
of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders of the Securities and of
the terms upon which the Securities are, and are to be, authenticated and
delivered. The Securities include the Initial Securities and the Exchange
Securities referred to below, which may be issued in exchange for the Initial
Securities pursuant to the Registration Rights Agreement. The Initial
Securities and the Exchange Securities are treated as a single class of
securities under the Indenture.
The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of
1939 (15 U.S.C. Sections 7aaa - 77bbbb) (the "TIA"), as in effect on the date of
the Indenture. Notwithstanding anything to the contrary herein, the Securities
are subject to all such terms, and Holders of Securities are referred to the
Indenture and the TIA for a statement of such terms. The Securities are
unsecured senior subordinated obligations of the Company limited to
$150,000,000.
This Security is redeemable at the option of the Company, in whole or in
part, at any time on or after February 1, 2004, at the Redemption Prices
(expressed as percentages of principal amount) set forth below, plus accrued
and unpaid interest, if any, thereon to the Redemption Date, if redeemed during
the 12-month period beginning February 1 of the years indicated below:
<TABLE>
<CAPTION>
Redemption
Year Price
- ---- ----------
<S> <C>
2004................................................. 104.688%
2005................................................. 103.125%
2006................................................. 101.563%
2007 and thereafter.................................. 100.000%
</TABLE>
In addition, at any time, or from time to time, on or prior to February
1, 2002, the Company may, at its option, use the net cash proceeds of one or
more Qualified Equity Offerings to redeem up to an aggregate of 35% of the
principal amount of the Securities originally issued, at a redemption price
equal to 109.375% of the principal amount thereof plus accrued and unpaid
interest, if any, thereon to the Redemption Date; provided that at least 65% of
the originally issued principal amount of Securities remains outstanding
immediately after the occurrence of such redemption. In order to effect the
foregoing redemption with the proceeds of any Qualified Equity Offering, the
Company must consummate such redemption not later than 60 days after the
closing of any such Qualified Equity Offering.
The Securities are not subject to any sinking fund.
The Indenture provides that the Company is obligated (a) upon the
occurrence of a Change in Control to make an offer to purchase all outstanding
Securities at a purchase price equal to 101% of the principal amount thereof,
plus accrued and unpaid interest, if any, thereon to the date of purchase and
(b) to make an offer to purchase Securities with a portion of the net cash
proceeds of certain sales or other dispositions of assets (not applied as
specified in the Indenture within the periods set forth therein) at a
A-1-5
<PAGE> 94
purchase price equal to 100% of the principal amount thereof plus accrued and
unpaid interest, if any, to the date of purchase.
In the event of redemption or purchase of this Security in part only
pursuant to a Change of Control Offer or an Asset Sale Offer, a new Security or
Securities for the unredeemed or unpurchased portion hereof will be issued in
the name of the Holder hereof upon the cancellation hereof.
The Indenture contains provisions for defeasance at any time of the
entire indebtedness of this Security or of certain restrictive covenants and
Events of Default with respect to this Security, in each case upon compliance
with certain conditions set forth in the Indenture.
If an Event of Default shall occur and be continuing, there may be
declared due and payable the principal of, premium, if any, and accrued and
unpaid interest, if any, on all of the outstanding Securities, in the manner
and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of a
majority in aggregate principal amount of the Securities at the time
Outstanding. The Indenture also contains provisions permitting the Holders of
specified percentages in aggregate principal amount of the Securities at the
time Outstanding, on behalf of the Holders of all the Securities, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Security.
As provided in and subject to the provisions of the Indenture, the Holder
of this Security shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Securities, the Holders of not less than 25% in principal amount of the
Securities at the time Outstanding shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default as Trustee
and offered the Trustee reasonable indemnity and the Trustee shall not have
received from the Holders of a majority in principal amount of Securities at
the time Outstanding a direction inconsistent with such request, and shall have
failed to institute any such proceeding for 60 days after receipt of such
notice, request and offer of indemnity. The foregoing shall not apply to
certain suits described in the Indenture, including any suit instituted by the
Holder of this Security for the enforcement of any payment of principal hereof
or any premium or interest hereon on or after the respective due dates
expressed herein (or, in the case of redemption, on or after the Redemption
Date or, in the case of any purchase of this Security required to be made
pursuant to a Change of Control Offer or an Asset Sale Offer, on or after the
relevant Purchase Date).
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in the Borough of Manhattan, The City of New
York, duly endorsed
A-1-6
<PAGE> 95
by, or accompanied by a written instrument of transfer in form satisfactory to
the Company and the Security Registrar duly executed by, the Holder hereof or
his attorney duly authorized in writing, and thereupon one or more new
Securities, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
This Security is issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Securities are
exchangeable for a like aggregate principal amount of Securities of like tenor
of a different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for
all purposes, whether or not this Security be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the contrary.
Pursuant to the Registration Rights Agreement by and among the Company
and the Initial Purchasers, the Company will be obligated to consummate an
exchange offer pursuant to which the Holder of this Security shall have the
right to exchange this Security for 93/8% Senior Subordinated Notes due 2009,
Series B, of the Company (herein called the "Exchange Securities"), which have
been registered under the Securities Act, in like principal amount and having
identical terms as the Initial Securities (other than as set forth in this
paragraph). The Holders of Initial Securities shall be entitled to receive
certain additional interest payments in the event such exchange offer is not
consummated and upon certain other conditions, all pursuant to and in
accordance with the terms of the Registration Rights Agreement.
Interest on this Security shall be computed on the basis of a 360-day
year of twelve 30-day months.
The obligations of the Company under the Indenture and this Security are
expressly subordinated to all Senior Indebtedness and senior in right of
payment to all Subordinated Indebtedness, in each case to the extent set forth
in Article XIV of the Indenture, and reference is hereby made to such Indenture
for the precise terms of such subordination.
As provided in the Indenture and subject to certain limitations therein
set forth, the obligations of the Company under the Indenture and this Security
are Guaranteed pursuant to Guarantees as provided in the Indenture. Each
Holder, by holding this Security, agrees to all of the terms and provisions of
said Guarantees. The Indenture provides that each Guarantor shall be released
from its Guaranty upon compliance with certain conditions.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
The Indenture and this Security shall be governed by and construed in
accordance with the laws of the State of New York, without regard to the
conflicts of laws principles thereof.
A-1-7
<PAGE> 96
ASSIGNMENT FORM
If you, the Holder, want to assign this Security, fill in the form below and
have your signature guaranteed:
I (or we) assign and transfer this Security to
- -------------------------------------------------------------------------------
(Insert assignee's social security or tax ID number)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code) and irrevocably appoint
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for such agent.
In connection with any transfer of this Security occurring prior to the
date which is the earlier of (i) the date of the declaration by the Commission
of the effectiveness of a registration 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) the date two years (or such shorter period of time as
permitted by Rule 144(k) under the Securities Act or any successor provision
thereunder) after the later of the original issuance date appearing on the face
of this Security (or any predecessor thereto) or the last date on which the
Company or any affiliate of the Company was the owner of this Security (or any
predecessor thereto), the undersigned confirms that it has not utilized any
general solicitation or general advertising in connection with the transfer and
that:
Check One
[ ] (a) this Security is being transferred in compliance with the
exemption from registration under the Securities Act provided by
Rule 144A thereunder.
[ ] (b) this Security is being transferred other than in accordance with
(a) above and documents, and a transferor certificate
substantially in the form of Exhibit C to the Indenture in the
case of a transfer pursuant to Regulation S, are being furnished
which comply with the conditions of transfer set forth in this
Security and the Indenture.
If none of the foregoing boxes is checked and, in the case of (b) above, if the
appropriate document is not attached or otherwise furnished to the Trustee, the
Trustee or Security Registrar shall not be obliged to register this Security in
the name of any Person other than the Holder hereof unless and until the
conditions to any such transfer of registration set forth herein and in Section
3.14 of the Indenture shall have been satisfied.
A-1-8
<PAGE> 97
- -------------------------------------------------------------------------------
Date: ___________ Your Signature:
-------------------------------------
(Sign exactly as your name appears on
the other side of this Security)
By:
----------------------------------
NOTICE: To be executed by an
executive officer
Signature Guarantee:
---------------------------------------------------
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A (including the information
specified in Rule 144A(d)(4)) or has determined not to request such information
and that it is aware that the transferor is relying upon the undersigned's
foregoing representations in order to claim the exemption from registration
provided by Rule 144A.
Date: ___________ ---------------------------------------------
NOTICE: To be executed by an executive
officer
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased in its entirety by
the Company pursuant to Section 10.13 or 10.14 of the Indenture, check the
applicable box:
Section 10.13 __
Section 10.14 __
If you want to elect to have only a part of the principal amount of this
Security purchased by the Company pursuant to Section 10.13 or 10.14 of the
Indenture, state the portion of such amount:
$
-------------
Date: ___________ Your Signature:
-------------------------------------
(Sign exactly as name appears on the
other side of this Security)
Signature Guarantee:
--------------------------------------------------------
(Signature must be guaranteed by a financial institution
that is a member of the Securities Transfer Agent
Medallion Program ("STAMP"), the Stock Exchange Medallion
Program ("SEMP"), the New York Stock Exchange, Inc.
Medallion Signature Program ("MSP") or such other
signature guarantee program as may be determined by the
Security Registrar in addition to, or in substitution
for, STAMP, SEMP or MSP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
A-1-9
<PAGE> 98
EXHIBIT A-2
INTEGRATED ELECTRICAL SERVICES, INC.
93/8% SENIOR SUBORDINATED NOTE DUE 2009, SERIES B
No. ___________ $__________
CUSIP NO.__________
Integrated Electrical Services, Inc., a corporation duly organized and
existing under the laws of the State of Delaware (herein called the "Company,"
which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay to ________________ or
registered assigns, the principal sum of ________________ Dollars on February
1, 2009 and to pay interest thereon from January 28, 1999 or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, semiannually in arrears on February 1 and August 1 in each year,
commencing August 1, 1999 at the rate of 93/8% per annum, until the principal
hereof is paid or duly provided for, provided that any principal and premium,
and any such installment of interest, which is overdue shall bear interest at
the rate of 93/8% per annum (to the extent that the payment of such interest
shall be legally enforceable), from the dates such amounts are due until they
are paid or duly provided for. The interest so payable and punctually paid or
duly provided for, on any Interest Payment Date will, as provided in such
Indenture, be paid to the Person in whose name this Security (or one or more
predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest, which shall be the January 15 and August 15
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this Security
(or one or more predecessor Securities) is registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest to be fixed
by the Trustee, notice whereof shall be given to Holders of securities not less
than 10 days prior to such Special Record Date, or be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in said Indenture.
Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Company maintained for
that purpose, in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts;
provided, however, that, at the option of the Company, payment of interest may
be made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register (subject to the right of certain
holders to request payment by wire transfer as provided in the Indenture).
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
<PAGE> 99
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed and attested.
Attest: Integrated Electrical Services, Inc.
By:
- -------------------------------- -------------------------------------
Title: Title:
<PAGE> 100
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned
Indenture.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
Dated: By:
-------------------------------------
Authorized Signatory
<PAGE> 101
FORM OF REVERSE OF SECURITY
This Security is one of a duly authorized issue of Securities of the
Company designated as 93/8% Senior Subordinated Notes due 2009, Series B
(herein called the "Exchange Securities"), limited in aggregate principal
amount at Stated Maturity to $150,000,000 issued and to be issued under an
Indenture, dated as of January 28, 1999 (herein called the "Indenture," which
term shall have the meaning assigned to it in such instrument), among the
Company, the Guarantors named therein and State Street Bank and Trust Company ,
as Trustee (herein called the "Trustee," which term includes any successor
trustee under the Indenture), and reference is hereby made to the Indenture for
a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. The Securities include the Initial Securities and
the Exchange Securities, issued in exchange for the Initial Securities pursuant
to the Registration Rights Agreement. The Initial Securities and the Exchange
Securities are treated as a single class of securities under the Indenture.
The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of
1939 (15 U.S.C. Sections 7aaa - 77bbbb) (the "TIA"), as in effect on the date of
the Indenture. Notwithstanding anything to the contrary herein, the Securities
are subject to all such terms, and Holders of Securities are referred to the
Indenture and the TIA for a statement of such terms. The Securities are
unsecured senior subordinated obligations of the Company limited to
$150,000,000.
This Security is redeemable at the option of the Company, in whole or in
part, at any time on or after February 1, 2004, at the Redemption Prices
(expressed as percentages of principal amount) set forth below, plus accrued
and unpaid interest, if any, thereon to the Redemption Date, if redeemed during
the 12-month period beginning February 1 of the years indicated below:
<TABLE>
<CAPTION>
Redemption
Year Price
- ---- ----------
<S> <C>
2004........................................... 104.688%
2005........................................... 103.125%
2006........................................... 101.563%
2007 and thereafter............................ 100.000%
</TABLE>
In addition, at any time, or from time to time, on or prior to February
1, 2002, the Company may, at its option, use the net cash proceeds of one or
more Qualified Equity Offerings to redeem up to an aggregate of 35% of the
principal amount of the Securities originally issued, at a redemption price
equal to 109.375% of the principal amount thereof plus accrued and unpaid
interest, if any, thereon to the Redemption Date; provided that at least 65% of
the originally issued principal amount of Securities remains outstanding
immediately after the occurrence of such redemption. In order to effect the
foregoing redemption with the proceeds of any Qualified Equity Offering, the
Company shall consummate such redemption not later than 60 days after the
closing of any such Qualified Equity Offering.
The Securities are not subject to any sinking fund.
The Indenture provides that the Company is obligated (a) upon the
occurrence of a Change in Control to make an offer to purchase all outstanding
Securities at a purchase price equal to 101% of the principal amount thereof,
plus accrued and unpaid interest, if any, thereon to the date of purchase and
(b) to make an offer to purchase Securities with a portion of the net cash
proceeds of certain sales or other dispositions of assets (not applied as
specified in the Indenture within the periods set forth therein) at a
<PAGE> 102
purchase price equal to 100% of the principal amount thereof plus accrued and
unpaid interest, if any, to the date of purchase.
In the event of redemption or purchase of this Security in part only
pursuant to a Change of Control Offer or an Asset Sale Offer, a new Security or
Securities for the unredeemed or unpurchased portion hereof will be issued in
the name of the Holder hereof upon the cancellation hereof.
The Indenture contains provisions for defeasance at any time of the
entire indebtedness of this Security or of certain restrictive covenants and
Events of Default with respect to this Security, in each case upon compliance
with certain conditions set forth in the Indenture.
If an Event of Default shall occur and be continuing, there may be
declared due and payable the principal of, premium, if any, and accrued and
unpaid interest, if any, on all of the outstanding Securities, in the manner
and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of a
majority in aggregate principal amount of the Securities at the time
Outstanding. The Indenture also contains provisions permitting the Holders of
specified percentages in aggregate principal amount of the Securities at the
time Outstanding, on behalf of the Holders of all the Securities, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Security.
As provided in and subject to the provisions of the Indenture, the Holder
of this Security shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Securities, the Holders of not less than 25% in principal amount of the
Securities at the time Outstanding shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default as Trustee
and offered the Trustee reasonable indemnity and the Trustee shall not have
received from the Holders of a majority in principal amount of Securities at
the time Outstanding a direction inconsistent with such request, and shall have
failed to institute any such proceeding for 60 days after receipt of such
notice, request and offer of indemnity. The foregoing shall not apply to
certain suits described in the Indenture, including any suit instituted by the
Holder of this Security for the enforcement of any payment of principal hereof
or any premium or interest hereon on or after the respective due dates
expressed herein (or, in the case of redemption, on or after the Redemption
Date or, in the case of any purchase of this Security required to be made
pursuant to a Change of Control Offer or an Asset Sale Offer, on or after the
relevant Purchase Date).
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
The obligations of the Company under the Indenture and this Security are
expressly subordinated to all Senior Indebtedness, in each case to the extent
set forth in Article XIV of the Indenture, and reference is hereby made to such
Indenture for the precise terms of such subordination.
<PAGE> 103
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in the Borough of Manhattan, The City of New
York, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Security Registrar duly executed by,
the Holder hereof or his attorney duly authorized in writing, and thereupon one
or more new Securities, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
This Security is issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Securities are
exchangeable for a like aggregate principal amount of Securities of like tenor
of a different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for
all purposes, whether or not this Security be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the contrary.
Interest on this Security shall be computed on the basis of a 360-day
year of twelve 30-day months.
As provided in the Indenture and subject to certain limitations therein
set forth, the obligations of the Company under the Indenture and this Security
are Guaranteed pursuant to Guarantees as provided in the Indenture. Each
Holder, by holding this Security, agrees to all of the terms and provisions of
said Guarantees. The Indenture provides that each Guarantor shall be released
from its Guaranty upon compliance with certain conditions.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
The Indenture and this Security shall be governed by and construed in
accordance with the laws of the State of New York, without regard to the
conflicts of laws principles thereof.
<PAGE> 104
ASSIGNMENT FORM
If you, the Holder, want to assign this Security, fill in the form below and
have your signature guaranteed:
I (or we) assign and transfer this Security to
- -------------------------------------------------------------------------------
(Insert assignee's social security or tax ID number)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code) and irrevocably appoint
- -------------------------------------------------------------------------------
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for such agent.
Date: ___________ Your Signature:
-------------------------------------
(Sign exactly as your name appears on
the other side of this Security)
By:
----------------------------------
NOTICE: To be executed by an
executive officer
Signature Guarantee:
------------------------------------------------
<PAGE> 105
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased in its entirety by
the Company pursuant to Section 10.13 or 10.14 of the Indenture, check the
applicable box:
Section 10.13 __
Section 10.14 __
If you want to elect to have only a part of the principal amount of this
Security purchased by the Company pursuant to Section 10.13 or 10.14 of the
Indenture, state the portion of such amount:
$
--------------------
Date: ___________ Your Signature:
-------------------------------------
(Sign exactly as name appears on the
other side of this Security)
Signature Guarantee:
-----------------------------------------------------------
(Signature must be guaranteed by a financial institution
that is a member of the Securities Transfer Agent
Medallion Program ("STAMP"), the Stock Exchange Medallion
Program ("SEMP"), the New York Stock Exchange, Inc.
Medallion Signature Program ("MSP") or such other
signature guarantee program as may be determined by the
Security Registrar in addition to, or in substitution
for, STAMP, SEMP or MSP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
<PAGE> 106
EXHIBIT B
FORM OF LEGEND FOR BOOK-ENTRY SECURITIES
Any Global Security authenticated and delivered hereunder shall bear a
legend (which would be in addition to any other legends required in the case of
a Restricted Security) in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS SECURITY IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS
SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A
NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("D.T.C."), 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 D.T.C. (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF D.T.C.), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
B-1
<PAGE> 107
EXHIBIT C
FORM OF CERTIFICATE TO BE DELIVERED
IN CONNECTION WITH TRANSFERS
PURSUANT TO REGULATION S
State Street Bank and Trust Company
Goodwin Square, 23rd Floor
225 Asylum Street
Hartford, CT 06103
Attn: Corporate Trust Administration
Re: Integrated Electrical Services, Inc. (the "Company") 93/8% Senior
Subordinated Notes due 2009 (the "Securities")
Ladies and Gentlemen:
In connection with our proposed sale of ___________ aggregate principal
amount of the Securities, we confirm that such sale has been effected pursuant
to and in accordance with Regulation S under the U.S. Securities Act of 1933,
as amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Securities was not made to a Person in the
United States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any Person acting on
our behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated offshore securities market described in Rule
902(a) of Regulation S and neither we nor any Person acting on our behalf
knows that the transaction has been pre-arranged with a buyer in the
United States;
(3) no directed selling efforts have been made in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act;
(5) we have advised the transferee of the transfer restrictions
applicable to the Securities;
(6) if the circumstances set forth in rule 904(c) under the
Securities Act are applicable, we have complied with the additional
conditions therein, including (if applicable) sending a confirmation or
other notice stating that the Securities may be offered and sold during
the distribution compliance period specified in Rule 903(c)(2) or (3), as
applicable, only in accordance with the provisions of Regulation S;
pursuant to registration of the Securities under the Securities Act; or
pursuant to another available exemption from the registration
requirements under the Securities Act; and
<PAGE> 108
(7) if the sale is made during a distribution compliance period and
the provisions of Rule 903(c)(3) are applicable thereto, we confirm that
such sale has been made in accordance with such provisions.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Terms used in this certificate have
the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:
-----------------------------------
Authorized Signature
<PAGE> 109
EXHIBIT D
FORM OF SUPPLEMENTAL INDENTURE RELATING TO ADDITIONAL GUARANTORS
SUPPLEMENTAL INDENTURE
This SUPPLEMENTAL INDENTURE, dated as of __________ ___, ____, is among
Integrated Electrical Services, Inc., a Delaware corporation (the "Company"),
each of the parties identified under the caption "Guarantors" on the signature
page hereto (the "Guarantors") and State Street Bank and Trust Company, as
Trustee.
RECITALS
WHEREAS, the Company, the subsidiaries of the Company named therein and
the Trustee entered into an Indenture, dated as of January 28, 1999 (as amended
or supplemented, the "Indenture"), pursuant to which the Company has originally
issued $150,000,000 in principal amount of 93/8% Senior Subordinated Notes due
2009 (the "Securities"); and
WHEREAS, Section 9.1(i) of the Indenture provides that the Company and
the Trustee may amend or supplement the Indenture in order to execute and
deliver a guarantee (a "Guarantee") to comply with Section 10.17 thereof
without the consent of the Holders of the Securities; and
WHEREAS, all acts and things prescribed by the Indenture, by law and by
the certificate of incorporation and the bylaws (or comparable constituent
documents) of the Company, of the Guarantors and of the Trustee necessary to
make this Supplemental Indenture a valid instrument legally binding on the
Company, the Guarantors and the Trustee, in accordance with its terms, have
been duly done and performed;
NOW, THEREFORE, to comply with the provisions of the Indenture and in
consideration of the above premises, the Company, the Guarantors and the
Trustee covenant and agree for the equal and proportionate benefit of the
respective Holders of the Securities as follows:
ARTICLE 1
Section 1.01. This Supplemental Indenture is supplemental to the
Indenture and does and shall be deemed to form a part of, and shall be
construed in connection with and as part of, the Indenture for any and all
purposes.
Section 1.02. This Supplemental Indenture shall become effective
immediately upon its execution and delivery by each of the Company, the
Guarantors and the Trustee.
ARTICLE 2
From this date, in accordance with Section 10.17 and by executing this
Supplemental Indenture, the Guarantors whose signatures appear below are
Guarantors for all purposes under the Indenture and are subject to the
provisions of the Indenture to the extent provided for in Article XIII
thereunder.
D-1
<PAGE> 110
ARTICLE 3
Section 3.01. Except as specifically modified herein, the Indenture and
the Securities are in all respects ratified and confirmed (mutatis mutandis)
and shall remain in full force and effect in accordance with their terms with
all capitalized terms used herein without definition having the same respective
meanings ascribed to them as in the Indenture.
Section 3.02. Except as otherwise expressly provided herein, no duties,
responsibilities or liabilities are assumed, or shall be construed to be
assumed, by the Trustee by reason of this Supplemental Indenture. This
Supplemental Indenture is executed and accepted by the Trustee subject to all
the terms and conditions set forth in the Indenture with the same force and
effect as if those terms and conditions were repeated at length herein and made
applicable to the Trustee with respect hereto.
Section 3.03. THE LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED
TO CONSTRUE AND ENFORCE THIS SUPPLEMENTAL INDENTURE, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.
Section 3.04. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of such
executed copies together shall represent the same agreement.
[NEXT PAGE IS SIGNATURE PAGE]
D-2
<PAGE> 111
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, all as of the date first written above.
INTEGRATED ELECTRICAL SERVICES, INC.
By
--------------------------------------
Name:
Title:
GUARANTORS
[ ]
By
--------------------------------------
Name:
Title:
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By
--------------------------------------
Name:
Title:
D-3
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our report dated
November 12, 1998 included in Integrated Electrical Services, Inc.'s Annual
Report on Form 10-K for the year ended September 30, 1998, and to all references
to our Firm included in this registration statement.
ARTHUR ANDERSEN LLP
Houston, Texas
March 16, 1999
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Post-Effective Amendment No. 3 on Form S-4
to Form S-1 of Integrated Electrical Services, Inc. of our report dated July 14,
1998, on the financial statements of Prime Electric Company included in
Integrated Electrical Services, Inc.'s Current Report on Form 8-K, filed with
the Securities and Exchange Commission on February 4, 1999, and to all
references to our firm in this registration statement.
Hertzbach & Company, P.A.
HS&S Professional Building
10 Music Fair Road
Owings Mills, MD 21117
March 16, 1999
<PAGE> 1
EXHIBIT 23.4
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
Board of Directors
Kayton Electric, Inc.
We consent to the incorporation by reference in this Post-Effective Amendment
No. 3 on Form S-4 to Form S-1 of Integrated Electrical Services, Inc. of our
report dated January 28, 1998 (November 19, 1998 as to note 8) on the financial
statements of Kayton Electric, Inc. included in Integrated Electrical Services,
Inc.'s Current Report on Form 8-K/A, filed with the Securities and Exchange
Commission on March 17, 1999, including references to our firm in the
Form S-4.
KPMG Peat Marwick LLP
Lincoln, Nebraska
March 17, 1999
<PAGE> 1
EXHIBIT 23.5
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accounts, we hereby consent to the incorporation by
reference in this Post-Effective Amendment No. 3 on Form S-4 to Form S-1 of
Integrated Electrical Services, Inc. of our report dated January 25, 1999, on
the financial statements of Bachofner Electric, Inc. included in Integrated
Electrical Services, Inc.'s Current Report on Form 8-K, filed with the
Securities and Exchange Commission on February 4, 1999, and to all references to
our firm in this registration statement.
Peck & Kopacek, P.C.
Beaverton, Oregon
March 16, 1999
<PAGE> 1
EXHIBIT 23.6
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Integrated Electrical Services:
As independent public accountants, we hereby consent to the incorporation by
reference in this Post-Effective Amendment No. 3 on Form S-4 to Form S-1
of Integrated Electrical Services, Inc. of our report dated March 17, 1998
on the balance sheet of PCX Corporation as of December 31, 1997, and the
related statements of operations, stockholders' equity and cash flows for the
year then ended included in Integrated Electrical Services, Inc.'s current
report on Form 8-K, filed with the Securities and Exchange Commission on
February 4, 1999, and to all references to our firm in this registration
statement.
/s/ ARTHUR ANDERSEN LLP
Raleigh, North Carolina
March 17, 1999
