<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 16, 1997
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
UNICCO SERVICE COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
MASSACHUSETTS 734 04-287-2501
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>
FOUR COPLEY PLACE
BOSTON, MASSACHUSETTS 02116
(617) 859-9100
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
SEE TABLE OF ADDITIONAL REGISTRANTS
------------------------
GEORGE A. KECHES
CHIEF FINANCIAL OFFICER AND TREASURER
UNICCO SERVICE COMPANY
FOUR COPLEY PLACE
BOSTON, MASSACHUSETTS 02116
(617) 859-9100
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
COPIES OF ALL COMMUNICATIONS TO:
MICHAEL L. ANDRESINO, ESQ.
POSTERNAK, BLANKSTEIN & LUND, L.L.P.
100 CHARLES RIVER PLAZA
BOSTON, MASSACHUSETTS 02114-2723
(617) 973-6100
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after this Registration Statement becomes effective.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
OF SECURITIES TO BE REGISTERED REGISTERED PER NOTE OFFERING PRICE FEE
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
9 7/8% Senior Subordinated
Notes, Series B............... $105,000,000 $995.30 $104,506,500 $30,830
- ----------------------------------------------------------------------------------------------------
Guarantees of 9 7/8% Senior
Subordinated Notes, Series
B............................. $105,000,000 (1) (1) None(1)
====================================================================================================
</TABLE>
(1) No separate consideration will be received for the guarantees of the 9 7/8%
Senior Subordinated Notes, Series B by certain subsidiaries of UNICCO
Service Company.
------------------------
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, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SUCH
SECTION 8(a), MAY DETERMINE.
================================================================================
<PAGE> 2
TABLE OF ADDITIONAL REGISTRANTS(1)
<TABLE>
<CAPTION>
STATE OR OTHER PRIMARY STANDARD
JURISDICTION OF INDUSTRIAL
INCORPORATION OR CLASSIFICATION
EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER ORGANIZATION CODE NUMBER
- --------------------------------------------------------------- ---------------- ----------------
<S> <C> <C>
UNICCO Finance Corp. (Co-Issuer)............................... Delaware 999
USC, Inc. (Guarantor).......................................... Massachusetts 734
UNICCO Government Services, Inc. (Guarantor)................... Delaware 734
UNICCO Security Services, Inc. (Guarantor)..................... Delaware 734
</TABLE>
- ---------------
(1) The address, including zip code, and telephone number, including area code,
of the additional Registrants' principal executive offices is Four Copley
Place, Boston, Massachusetts 02116, (617) 859-9100.
<PAGE> 3
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED DECEMBER 15, 1997
PRELIMINARY PROSPECTUS
[UNICCO SERVICE CO. LOGO]
OFFER TO EXCHANGE
UP TO $105,000,000 OF
9 7/8% SENIOR SUBORDINATED NOTES DUE 2007, SERIES B
FOR ANY AND ALL OF THE OUTSTANDING
9 7/8% SENIOR SUBORDINATED NOTES DUE 2007
OF
UNICCO SERVICE COMPANY
AND
UNICCO FINANCE CORP.
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON __________, 1998, UNLESS EXTENDED.
UNICCO Service Company, a Massachusetts business trust, and UNICCO Finance
Corp., a Delaware corporation (together, the "Issuers"), hereby offer, upon the
terms and subject to the conditions set forth in this Prospectus and the
accompanying letter of transmittal (the "Letter of Transmittal" and, together
with this Prospectus, the "Exchange Offer"), to exchange an aggregate of up to
$105,000,000 principal amount of 9 7/8% Senior Subordinated Notes due 2007,
Series B (the "Exchange Notes"), which have been registered under the Securities
Act of 1933, as amended (the "Securities Act"), for an identical face amount of
the issued and outstanding 9 7/8% Senior Subordinated Notes due 2007 (referred
to individually as the "144A Notes," "IAI Notes" and "Reg S Notes"; collectively
as the "Series A Notes"; and, together with the Exchange Notes, the "Notes") of
the Issuers from the Holders (as defined herein) thereof in integral multiples
of $1,000 principal amount. As of the date of this Prospectus, there are
$105,000,000 in aggregate principal amount of the Series A Notes outstanding.
The terms of the Exchange Notes are identical in all material respects to the
Series A Notes, except that the Exchange Notes have been registered under the
Securities Act, and therefore will not bear legends restricting their transfer
described in the Registration Rights Agreement (as defined herein), which
provisions generally will terminate as to all of the Notes upon the consummation
of the Exchange Offer. The Exchange Notes will be obligations of the Issuers
evidencing the same indebtedness as the Series A Notes, and will be entitled to
the benefits of the same Indenture (as defined herein). See "The Exchange
Offer."
Interest on the Exchange Notes will be payable semi-annually in arrears on
April 15 and October 15 of each year, commencing on April 15, 1998. The Exchange
Notes will mature on October 15, 2007. The Exchange Notes are redeemable at any
time on or after April 1, 2002 at the option of the Issuers, in whole or in
part, at the redemption prices set forth herein, together with accrued and
unpaid interest, if any, to the date of redemption. Upon the occurrence of a
Change of Control (as defined herein), each holder of the Exchange Notes may
require the Issuers to purchase all or a portion of such holder's Exchange Notes
at a purchase price equal to 101% of the principal amount thereof, together with
accrued and unpaid interest, if any, to the date of purchase. See "Description
of the Exchange Notes -- Repurchase at the Option of the Holders."
The Exchange Notes will be unsecured senior subordinated obligations of the
Issuers and, as such, will be subordinated in right of payment to all existing
and future senior indebtedness of the Issuers. The Exchange Notes will rank pari
passu in right of payment with all other existing and future senior subordinated
indebtedness, if any, of the Issuers, and senior in right of payment to all
existing and future subordinated indebtedness, if any, of the Issuers. The
Exchange Notes will be guaranteed, jointly and severally, on a senior
subordinated basis (the "Guarantees") by certain of the Issuers' subsidiaries
(the "Guarantors" and, together with the Issuers, the "Company"). The Guarantees
will be unsecured senior subordinated obligations of the Guarantors and will be
subordinated to all existing and future Senior Debt (as defined herein) of the
Guarantors. See "Description of the Exchange Notes -- Subsidiary Guarantees." As
of September 28, 1997, on a pro forma basis after giving effect to the
Transactions (as defined herein), the Company and the Guarantors would have had
approximately $3.4 million in aggregate principal amount of Senior Debt
outstanding.
SEE "RISK FACTORS," BEGINNING ON PAGE 12 FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED BY PARTICIPANTS IN THE EXCHANGE OFFER.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
UNTIL , 1998 (90 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS
EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THE DATE OF THIS PROSPECTUS IS , 1997.
<PAGE> 4
The Company will accept for exchange any and all validly tendered Series A
Notes on or prior to the Expiration Date (as defined herein). Tenders of Series
A Notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on
the Expiration Date; otherwise such tenders are irrevocable. The Exchange Offer
is not conditioned upon any minimum principal amount of Series A Notes being
tendered for exchange. For certain conditions to the Exchange Offer, see "The
Exchange Offer -- Conditions."
The Series A Notes were offered and sold on October 17, 1997 in a
transaction not registered under the Securities Act in reliance upon an
exemption from the registration requirements thereof. In general, the Series A
Notes may not be offered or sold unless registered under the Securities Act,
except pursuant to an exemption from, or in a transaction not subject to, the
Securities Act.
The Exchange Notes are being offered hereby in order to satisfy certain
obligations of the Company contained in the Registration Rights Agreement. The
Company has agreed to pay the expenses of the Exchange Offer. Based on
interpretations by the staff of the Securities and Exchange Commission (the
"Commission") set forth in no-action letters issued to third parties, the
Company believes that the Exchange Notes issued pursuant to the Exchange Offer
in exchange for Series A Notes may be offered for resale, resold or otherwise
transferred by any person in whose name Series A Notes are registered on the
books of the Company or any other person who has obtained a properly completed
bond power from the registered holder (a "Holder") thereof (other than any such
Holder that is an "affiliate" of the Company within the meaning of Rule 405
promulgated under the Securities Act) without compliance with the registration
and prospectus delivery provisions of the Securities Act, provided that such
Exchange Notes are acquired in the ordinary course of such Holder's business and
such Holder does not intend to participate and has no arrangement or
understanding with any person to participate in the distribution of such
Exchange Notes. In some cases, certain broker-dealers may be required to deliver
a prospectus in connection with the resale of such Exchange Notes.
This Prospectus, as it may be amended or supplemented from time to time,
may be used by a broker-dealer in connection with any resale of Exchange Notes
received in exchange for such Series A Notes where such Series A Notes were
acquired by such broker-dealer for its own account as a result of market-making
activities or other trading activities (other than Series A Notes acquired
directly from the Company). The Company has agreed that it will make this
Prospectus available to any broker-dealer for use in connection with any such
resale.
Prior to this Exchange Offer, there has been no public market for the
Notes. If a market for the Exchange Notes should develop, the Exchange Notes
could trade at a discount from their principal amount. The Company does not
intend to list the Exchange Notes on any securities exchange nor does the
Company intend to apply for quotation of the Exchange Notes on the NASDAQ
National Market or other quotation system. The Initial Purchaser (as defined
herein) has indicated to the Company that it intends to make a market in the
Notes, but is not obligated to do so and such market-making activities may be
discontinued at any time. As a result, no assurance can be given that an active
trading market for the Exchange Notes will develop.
The Exchange Notes issued pursuant to this Exchange Offer will be issued in
the form of a Global Exchange Note (as defined herein), which will be deposited
with, or on behalf of, The Depository Trust Company (the "Depository" or "DTC")
and registered in its name or in the name of Cede & Co., its nominee. Beneficial
interests in the Global Exchange Note representing the Exchange Notes will be
shown on, and transfers thereof will be effected through, records maintained by
DTC and its participants. Notwithstanding the foregoing, Series A Notes held in
certificated form will be exchanged solely for Certificated Exchange Notes (as
defined herein). After the initial issuance of the Global Exchange Note,
Certificated Exchange Notes will be issued in exchange for the Global Exchange
Note only on the terms set forth in the Indenture. See "Description of the
Exchange Notes -- Book-Entry, Delivery and Form."
i
<PAGE> 5
AVAILABLE INFORMATION
In connection with the Exchange Offer the Company will become subject to
the informational requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and in accordance therewith will file reports and
other information with the Commission. The reports and other information filed
by the Company with the Commission can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and is available at the Commission's
Regional Offices at 7 World Trade Center, 13th Floor, New York, New York 10048
and 500 West Madison Street, Suite 1400, Chicago, Illinois 60621. Copies of such
material can also be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. In addition, the Commission maintains a World Wide Web site
(http://www.sec.gov) that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission.
While any Series A Notes remain outstanding, the Company will make
available, upon request, to any Holder and any prospective purchaser of Series A
Notes the information required pursuant to Rule 144A(d)(4) under the Securities
Act during any period in which the Company is not subject to Section 13 or 15(d)
of the Exchange Act. Any such request should be directed to the Company at Four
Copley Place, Boston, Massachusetts 02116, Attention: Chief Financial Officer
(telephone number (617) 859-9100).
INCORPORATION OF DOCUMENTS BY REFERENCE
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act, prior to the consummation of the Exchange Offer,
shall be deemed to be incorporated by reference herein.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
UNTIL , 1998 (90 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS (EXCLUDING EXHIBITS TO SUCH
DOCUMENTS, UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE
THEREIN) ARE AVAILABLE UPON WRITTEN OR ORAL REQUEST WITHOUT CHARGE BY EACH
PERSON TO WHOM THIS PROSPECTUS IS DELIVERED FROM THE CHIEF FINANCIAL OFFICER OF
THE COMPANY, FOUR COPLEY PLACE, BOSTON, MASSACHUSETTS 02116 (TELEPHONE NUMBER
(617) 859-9100). IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY
REQUEST SHOULD BE MADE BY , 1998 (FIVE BUSINESS DAYS PRIOR TO THE
DATE ON WHICH A FINAL INVESTMENT DECISION MUST BE MADE).
ii
<PAGE> 6
PROSPECTUS SUMMARY
The following is a summary of certain information contained elsewhere in
this Prospectus. The following summary is qualified in its entirety by the more
detailed information, including "Risk Factors" and the Combined Consolidated
Financial Statements and notes thereto, appearing elsewhere in this Prospectus.
Unless the context otherwise requires, references herein to "UNICCO" or the
"Company" are to UNICCO Service Company and its subsidiaries after giving effect
to the Refinancing (as defined). References herein to a fiscal year of the
Company are to the 52- or 53-week period ended or ending on the last Sunday in
June of such year.
THE COMPANY
Founded in 1949, UNICCO is a leading provider of integrated facilities
services to a broad base of industrial, commercial and institutional clients
throughout the United States and Canada. The Company offers an extensive array
of commercial, operational and administrative services to its customers,
providing a single source solution for those services that can be more
cost-effectively and efficiently outsourced. Services offered by the Company
include industrial and mechanical engineering, plant operations, custodial and
maintenance services, security services and administrative services. UNICCO has
developed a reputation for quality through nearly 50 years of service to its
customers. The Company has achieved a significant market presence and a leading
market share in many of its operating regions through a combination of internal
growth and strategic acquisitions. The Company believes that the breadth of its
services, its reputation for quality and its significant market presence
position it to provide a single source facilities management solution to local,
multi-location and national customers. The Company has over 19,000 employees
servicing approximately 900 customers, including 29 of the Fortune 100
companies, at approximately 3,000 customer locations. Throughout its history,
the Company has generated a record of growth and consistent profitability. For
the fiscal year ended June 29, 1997, the Company's net income, revenues and
EBITDA (as defined) were $1.2 million, $533.9 million and $22.2 million,
respectively. For the three month period ended September 28, 1997, such amounts
were $578,000, $134.7 million and $5.5 million, respectively.
UNICCO analyzes the unique needs of each customer to develop a flexible,
integrated facilities services solution, comprised of a combination of the
following services:
<TABLE>
<CAPTION>
OPERATIONS & COMMERCIAL
ENGINEERING MAINTENANCE SERVICES
<S> <C> <C>
- - Mechanical Engineering - Facility Management/Repair - Janitorial/Housekeeping
- - Planning/Scheduling - Production Equipment - Recycling
- - Power Generation Maintenance/Repair - Snow Removal
Management - Warehouse Services and - Window Washing
- - Plant Engineering Inventory Control - Pest Control
- - Energy Management - Utility Program Management - Specialty Cleaning
- - Space Planning - Shipping/Receiving Services - Clean Rooms/
- - CAD Services - Construction Project Management High Tech
- - CMMS Programs - Waste Treatment - Sterile Environment
- - Environmental - Elevator/Escalator Maintenance - Landscaping/Grounds
- Fleet Maintenance Maintenance
- Roof Repair
- Telecommunications
</TABLE>
<TABLE>
<CAPTION>
SECURITY ADMINISTRATION
<S> <C>
- - Uniformed Guard Services - Subcontract Administration
- - Security/Protection Services - Materials Procurement
- - Access Control - Reprographics/Copy Center
- - Security Audits - Mail Distribution
- - Fire/Safety Administration - Audio/Visual Services
- - Document Control - Secretarial/Clerical Services
- - Telecommunications - Service Call Desk
- - Safety Training Programs - Switchboard/Reception
</TABLE>
<PAGE> 7
UNICCO has recently organized its operations around four Strategic Business
Units ("SBUs") to more effectively focus the Company's technical, sales and
marketing resources on the differing needs of its customers. The following table
provides an overview of the Company's four SBUs:
<TABLE>
<CAPTION>
EDUCATION/
HEALTHCARE/
COMMERCIAL INDUSTRIAL GOVERNMENT SECURITY
<S> <C> <C> <C>
Fiscal 1997 Revenues:
$214 Million $149 Million $110 Million $61 Million
Fiscal 1998 First Quarter Revenues:
$56 Million $35 Million $29 Million $15 Million
Types of Customer:
- - Commercial - Automotive - Schools - Industrial
Real Estate - Tire and Rubber - Universities - Commercial
- - Banking - Chemical - Hospitals - Education
- - Insurance - Pharmaceuticals - Healthcare - Healthcare
- - Retail - Aerospace/Defense Facilities - Government
- High Technology - Government Agencies
- Consumer Products
Representative Customers:
- - Beacon - Chrysler - Harvard University - BASF Corp.
Properties Corporation - University of Miami - Bell Atlantic
- - Hines Interests - Ford Motor Company - Henry Ford Health - Computer
- - Trammell Crow - Caterpillar System Associates
- - BankBoston - Bridgestone/Firestone - U.S. Department of - Hartford Insurance
- - CIGNA - American Home Housing and - Northeastern
- - The Travelers Products Urban Development University
- - MITRE - Bristol-Myers - U.S. General - Philadelphia
Squibb Services Museum of Art
- Lockheed Martin Administration - United Nations
- Gillette Plaza
</TABLE>
The Company believes that opportunities for growth exist in each SBU,
particularly in the Industrial and Education/Healthcare/Government sectors, as a
result of the trend toward outsourcing non-core business functions to a single
source provider. Outsourcing frees the customer from the considerable
administrative and overhead burdens of hiring, training, compensating and
supervising a large, often unionized, labor force that is performing non-core
functions. UNICCO has responded to its customers' outsourcing strategies by
providing an expanded array of services that has evolved from traditional
custodial and building maintenance to higher value added services.
The Company has a customer base of approximately 900 accounts, with no
single customer accounting for more than 3% of revenues during fiscal 1997. The
Company's customer retention rate historically has been high. Customers
representing approximately 75% of fiscal 1997 revenues have been UNICCO
customers for an average of more than six years (excluding revenues and
customers resulting from the Ogden Acquisition (as defined) in June 1996). On a
combined basis, the Company and Ogden (as defined) have serviced their 20
largest customers, including the former Ogden customers, for an average of 10
years. In addition, the Company has successfully retained over 90% of the
customers acquired in the Ogden Acquisition. UNICCO believes that its strong
reputation and long-term relationships with these customers is a result of a
high level of customer satisfaction. The Company also believes that these
established relationships enhance the Company's knowledge of its customers'
needs and place UNICCO in a strong competitive position to bid on and win new
business opportunities with these customers.
2
<PAGE> 8
BUSINESS STRENGTHS
UNICCO's revenues have increased through a combination of internal growth
and strategic acquisitions. The Company's growth, and its emergence as a leader
in the facilities services market in the United States and Canada, are
attributable to a number of factors, including the following:
High Customer Retention. The Company benefits from a large, stable base of
customers, including 29 of the Fortune 100 companies, 60 of the Fortune 500
companies and some of the country's most prestigious educational institutions.
The Company's customer base, together with its high customer retention rate,
have provided stable, recurring revenues and have contributed to the Company's
record of consistent profitability.
Established Reputation. The Company has established a reputation for
quality through almost 50 years of experience in providing dependable, complex
facilities services solutions in a changing business environment. The Company
believes that its established reputation and the breadth of its services have
allowed it to further penetrate its existing customer base as well as attract
new business. The Company plans to enhance its reputation for dependability and
technical expertise by pursuing the highest levels of industry accreditation.
Singular Focus on Facilities Services. The Company is focused exclusively
on providing facilities services solutions to its customers, unlike many of its
larger competitors for whom facilities management is an adjunct to their primary
business or one of many other unrelated lines of business. The Company believes
that this exclusive focus gives it a competitive advantage in delivering
dependable, high quality services.
Established North American Presence. The Company provides services
throughout the United States and Canada from 16 regional offices to customers in
over 40 states and each of the Canadian provinces. The Company believes that it
can leverage this infrastructure to support the marketing and delivery of
services to new customers in strategic geographic areas and to obtain additional
business from major companies that seek to utilize a single source provider
nationwide.
Effective Human Resources and Labor Relations Management. UNICCO
successfully manages a large and diverse work force of over 19,000 full and
part-time employees. The Company places a major emphasis on attracting,
training, managing, motivating and retaining the human resources necessary to
meet its existing and future business needs. The Company's extensive industry
experience and sophisticated computer-based costing models allow it to
accurately assess the labor requirements of new contracts. UNICCO seeks to
efficiently integrate its customers' existing workforce, thereby minimizing the
transitional issues typically associated with contract inception. In addition,
the Company believes that its experience in managing both union and non-union
work forces has enhanced its ability to grow its business.
Experienced Management Team. The Company's senior management team has an
average of 20 years of experience in the facilities services industry. The
Company benefits from the quality and depth of its management personnel, who are
dedicated to building customer relationships and delivering quality services to
meet and exceed its customers' needs. Additionally, management has developed
sophisticated databases and costing systems to forecast expenses for individual
customers' service requirements across a variety of service lines. These
proprietary databases enhance UNICCO's ability to effectively price and compete
for customers and contracts.
Successful Acquisition History. Throughout its 50-year history, UNICCO has
benefited from several successful strategic acquisitions. The Company has
completed three acquisitions since 1990, incorporating operations with revenues
of approximately $20 million, $5 million and $389 million in 1990, 1992 and
1996, respectively. The Company believes that its successful integration of
these acquisitions has positioned it to take advantage of opportunities for
further consolidation within the facilities services industry.
3
<PAGE> 9
THE COMPANY'S STRATEGY
The Company's objective is to enhance its position as a leading provider of
facilities services solutions. The Company's strategy to meet this objective
includes the following initiatives:
Providing Integrated Facilities Solutions. UNICCO believes that an
attractive opportunity exists to expand the scope of work performed for existing
customers. Cross-selling new services to existing customers represents a
cost-effective method for the Company to achieve revenue growth. The Company
seeks to create partnerships with its customers that enable it to capitalize on
the trend toward outsourcing to single source providers. As part of this
strategy, the Company intends to focus its efforts on increasing the proportion
of its business devoted to delivering higher value added services to its
customers.
Leveraging its National Presence. UNICCO has established a significant
presence throughout the United States and Canada. The Company believes that it
can substantially increase the number of multi-location and national accounts it
serves by leveraging its existing infrastructure to support the marketing and
delivery of bundled services to new customers that operate multiple locations.
Capitalizing on Outsourcing Initiatives. The Company believes that it is
well positioned to capitalize on favorable trends in a growing number of
industries toward outsourcing of non-core business functions. Many companies
have increased the volume and types of services they outsource in order to free
their human and capital resources to better focus on their strategic business
initiatives. The Company believes that its established reputation and the
breadth of its services enhance its ability to attract this potential business.
Strategic Business Development. Through its recent organization into the
four SBUs, the Company is focused on developing specific operating and marketing
strategies targeted to the unique needs of its customers in diverse market
segments. Because of the diversity of UNICCO's existing and potential customer
base, the Company believes that it can position itself to attract higher value
added business by continuing to anticipate its customers' differing needs. The
Company believes that the SBU initiatives it has implemented will enable it to
more effectively leverage its resources to generate new clients and additional
contracts with existing clients.
Growing through Selective Acquisitions. UNICCO has successfully expanded
its business through internal growth and strategic acquisitions, including the
successful integration of the Ogden Acquisition, and intends to seek additional
opportunities to grow through selective acquisitions. The Company may pursue
acquisitions that add additional services and technical capabilities to market
to its existing customer base, or that facilitate strategic expansion of the
Company's customer base or complement its existing geographic coverage.
THE OGDEN ACQUISITION
On June 28, 1996, the Company consummated the strategic acquisition (the
"Ogden Acquisition") of a substantial portion of the facilities services
business of Ogden Corporation ("Ogden"). The Ogden Acquisition expanded the
Company's geographic range to cover most of the United States and Canada. The
purchase price for the Ogden Acquisition was $62 million, of which $50 million
was paid in cash and $12 million was paid in the form of a subordinated
promissory note (the "Ogden Note"). The Ogden Note was repurchased from Ogden
for $11 million with a portion of the net proceeds of the Series A Notes. See
"Use of Proceeds" and "Business -- History of the Company; the Ogden
Acquisition."
4
<PAGE> 10
UNICCO FINANCE
UNICCO Finance is a wholly-owned subsidiary of UNICCO that was incorporated
in Delaware in order to facilitate the Offering of the Series A Notes by serving
as a co-issuer of the Series A Notes. The Company believed that certain
prospective purchasers of the Series A Notes may have been restricted in their
ability to purchase debt securities of a Massachusetts business trust, such as
UNICCO, unless such debt securities were jointly issued by a corporation. UNICCO
Finance will not have any substantial operations or assets and will not have any
revenues. As a result, prospective participants in the Exchange Offer should not
expect UNICCO Finance to participate in servicing the interest and principal
obligations under the Exchange Notes. See "Description of the Exchange
Notes -- General."
THE OFFERING
The Series A Notes......... The Series A Notes were sold by the Company to the
Initial Purchaser on October 14, 1997 (the
"Offering"), and were subsequently resold to (i)
Qualified Institutional Buyers (as defined herein)
pursuant to Rule 144A under the Securities Act,
(ii) other institutional "accredited investors" (as
defined in Rule 501(a)(1), (2), (3) or (7) under
the Securities Act) that executed and delivered a
letter containing certain representations and
agreements or, (iii) outside the United States in
reliance on Regulation S under the Securities Act
in a manner exempt from registration under the
Securities Act.
Registration Rights
Agreement.................. In connection with the Offering, the Company
entered into the Registration Rights Agreement,
which grants Holders of the Series A Notes certain
exchange and registration rights. The Exchange
Offer is intended to satisfy such exchange and
registration rights, which generally terminate upon
the consummation of the Exchange Offer.
THE EXCHANGE OFFER
Securities Offered......... $105,000,000 in aggregate principal amount of
9 7/8% Senior Subordinated Notes due 2007, Series
B.
The Exchange Offer......... $1,000 principal amount of the Exchange Notes in
exchange for each $1,000 principal amount of Series
A Notes. As of the date hereof, $105,000,000 in
aggregate principal amount of Series A Notes is
outstanding. The Company will issue the Exchange
Notes to Holders on or promptly after the
Expiration Date. The terms of the Exchange Notes
are substantially identical in all material
respects (including principal amount, interest rate
and maturity) to the terms of the Series A Notes
for which they may be exchanged pursuant to the
Exchange Offer, except that the Exchange Notes are
freely transferable by holders thereof (other than
as provided herein), and are not subject to any
covenant regarding registration under the
Securities Act. See "The Exchange Offer." Other
than compliance with applicable federal and state
securities laws, including the requirement that the
Registration Statement be declared effective by the
Commission, there are no material federal or state
regulatory requirements to be complied with in
connection with the Exchange Offer.
Interest Payments.......... The Exchange Notes will bear interest from October
17, 1997, the date of consummation of the issuance
of the Series A Notes, or the most recent interest
payment date to which interest on such Series A
Notes has been paid, whichever is later.
Accordingly, Holders of Series A
5
<PAGE> 11
Notes that are accepted for exchange will not
receive interest on such Series A Notes that is
accrued but unpaid at the time of tender, but such
interest will be payable on the first interest
payment date after the Expiration Date.
Minimum Condition.......... The Exchange Offer is not conditioned upon any
minimum aggregate principal amount of Series A
Notes being tendered for exchange.
Expiration Date............ 5:00 p.m., New York City time, on ,
1998 unless the Exchange Offer is extended, in
which case the term "Expiration Date" means the
latest date and time to which the Exchange Offer is
extended.
Exchange Date.............. The date of acceptance for exchange of the Series A
Notes will be the first business day following the
Expiration Date.
Withdrawal Rights.......... Tenders may be withdrawn at any time prior to 5:00
p.m., New York City time, on the Expiration Date.
See "The Exchange Offer -- Withdrawal of Tenders."
Acceptance Of Series A
Notes And Delivery Of
Exchange Offer Notes..... The Company will accept for exchange any and all
Series A Notes that are properly tendered in the
Exchange Offer prior to 5:00 p.m., New York City
time, on the Expiration Date. The Exchange Notes
issued pursuant to the Exchange Offer will be
delivered promptly following the Expiration Date.
See "The Exchange Offer -- Terms of the Exchange
Offer."
Conditions To The Exchange
Offer.................... The Exchange Offer is subject to certain customary
conditions, which may be waived by the Company. See
"The Exchange Offer -- Conditions."
Procedures For Tendering
Series A Notes........... To tender pursuant to the Exchange Offer, a Holder
must complete, sign and date the accompanying
Letter of Transmittal, or a facsimile thereof, have
the signatures therein guaranteed if required by
instruction 4 of the Letter of Transmittal and mail
or otherwise deliver such Letter of Transmittal, or
such facsimile, together with the Series A Notes
and any other required documentation to the
Exchange Agent at the address set forth herein
prior to 5:00 p.m., New York City time, on the
Expiration Date. See "The Exchange
Offer -- Procedures for Tendering" and "Plan of
Distribution." By executing the Letter of
Transmittal, each Holder will represent to the
Company that, among other things, the Holder or the
person receiving such Exchange Notes, whether or
not such person is the Holder, is acquiring the
Exchange Notes in the ordinary course of business
and that neither the Holder nor any such other
person intends to participate or has any
arrangement or understanding with any person to
participate in the distribution of such Exchange
Notes. In lieu of physical delivery of the
certificates representing Series A Notes, tendering
Holders may transfer Series A Notes pursuant to the
procedure for book-entry transfer as set forth
under "The Exchange Offer -- Procedures for
Tendering."
Special Procedures For
Beneficial Owners.......... Any beneficial owner whose Series A Notes are
registered in the name of a broker, commercial
bank, trust company or other nominee and who
6
<PAGE> 12
wishes to tender in the Exchange Offer should
contact such registered holder promptly and
instruct such registered holder to tender on such
beneficial owner's behalf. If such beneficial owner
wishes to tender on such beneficial owner's own
behalf, such beneficial owner must, prior to
completing and executing the Letter of Transmittal
and delivering the Series A Notes, either make
appropriate arrangements to register ownership of
the Series A Notes in such beneficial owner's name
or obtain a properly completed bond power from the
registered holder. The transfer of registered
ownership may take considerable time. See "The
Exchange Offer -- Procedures for Tendering."
Guaranteed Delivery
Procedures............... Holders of Series A Notes who wish to tender their
Series A Notes and whose Series A Notes are not
immediately available or who cannot deliver their
Series A Notes, the Letter of Transmittal or any
other documents required by the Letter of
Transmittal to the Exchange Agent (or comply with
the requirements for book-entry transfer) prior to
the Expiration Date must tender their Series A
Notes according to the guaranteed delivery
procedures set forth in "The Exchange Offer --
Guaranteed Delivery Procedures."
Federal Income Tax
Consequences............. The issuance of the Exchange Notes to Holders
pursuant to the terms set forth in this Prospectus
will not constitute an exchange for federal income
tax purposes. Consequently, no gain or loss would
be recognized by Holders upon receipt of the
Exchange Notes. See "The Exchange Offer -- Certain
Federal Income Tax Consequences of the Exchange
Offer."
Use Of Proceeds............ There will be no proceeds to the Company from the
exchange of Series A Notes pursuant to the Exchange
Offer.
Exchange Agent............. State Street Bank and Trust Company is serving as
exchange agent (the "Exchange Agent") in connection
with the Exchange Offer. See "The Exchange
Offer -- Exchange Agent."
SUMMARY OF TERMS OF THE EXCHANGE NOTES
The form and terms of the Exchange Notes are the same as the form and terms
of the Series A Notes (which they replace) except that (i) the Exchange Notes
have been registered under the Securities Act and, therefore, will not bear
legends restricting the transfer thereof, and (ii) the holders of Exchange Notes
generally will not be entitled to further registration rights under the
Registration Rights Agreement, which rights generally will be satisfied when the
Exchange Offer is consummated. The Exchange Notes will evidence the same debt as
the Series A Notes and will be entitled to the benefits of the indenture
pursuant to which the Series A Notes were issued (the "Indenture"). See
"Description of the Exchange Notes."
Issuers.................... UNICCO Service Company, a Massachusetts business
trust, and UNICCO Finance Corp., a Delaware
corporation.
Securities Offered......... $105 million in aggregate principal amount of
9 7/8% Senior Subordinated Notes due 2007, Series
B.
Maturity................... October 15, 2007.
Interest................... The Exchange Notes will bear interest at the rate
of 9 7/8% per annum, payable semi-annually in
arrears on April 15 and October 15 of each year,
commencing on April 15, 1998.
7
<PAGE> 13
Guarantees................. The Exchange Notes will be guaranteed by all of the
Company's existing
Domestic Restricted Subsidiaries (the
"Guarantors"), and all Domestic Restricted
Subsidiaries created or acquired by the Company in
the future.
Ranking.................... The Exchange Notes will be general unsecured
obligations of the Issuers and will be subordinated
in right of payment to all existing and future
Senior Debt of the Issuers. As of September 28,
1997, after giving pro forma effect to the
Transactions, the Issuers would have had
approximately $3.4 million of Senior Debt
outstanding, consisting of outstanding borrowings
under the Credit Facility. In addition, the Issuers
would have had $41.6 million of additional
borrowings available under the Credit Facility. See
"Use of Proceeds" and "Unaudited Pro Forma
Financial Data."
Optional Redemption........ Except as set forth below, the Exchange Notes will
not be redeemable at the option of the Issuers
prior to October 15, 2002. Thereafter, the Exchange
Notes will be subject to redemption at any time at
the option of the Issuers, in whole or in part, at
the redemption prices set forth herein, plus
accrued and unpaid interest and Liquidated Damages,
if any, thereon to the redemption date. In
addition, at any time prior to October 15, 2000,
the Issuers may redeem up to an aggregate of $33.0
million in principal amount of Exchange Notes at a
redemption price equal to 109.875% of the principal
amount thereof, plus accrued and unpaid interest
and Liquidated Damages, if any, thereon to the
redemption date, with the net cash proceeds of an
initial public offering of common equity of the
Company, provided that at least $72.0 million in
principal amount of Exchange Notes remains
outstanding immediately after the occurrence of
such redemption.
Change of Control.......... In the event of a Change of Control, the Issuers
will be required to make an offer to each holder of
Exchange Notes to repurchase all or any part of
such holder's Exchange Notes at a repurchase price
equal to 101% of the principal amount thereof, plus
accrued and unpaid interest and Liquidated Damages,
if any, thereon to the repurchase date.
Covenants.................. The Indenture contains certain covenants that,
among other things, limit the ability of the
Issuers and the Company's Restricted Subsidiaries
(as defined) to incur additional Indebtedness (as
defined), pay dividends, repurchase Equity
Interests (as defined) or make other Restricted
Payments (as defined), create Liens (as defined),
enter into transactions with Affiliates (as
defined), sell assets or enter into certain mergers
and consolidations. See "Description of the
Exchange Notes."
Exchange Offer,
Registration Rights........ The Registration Rights Agreement provides that if
(i) the Issuers are not required to file the
Exchange Offer Registration Statement or permitted
to consummate the Exchange Offer because the
Exchange Offer is not permitted by applicable law
or Commission policy or (ii) in certain
circumstances, a Holder notifies the Company prior
to the 20th day following consummation of the
Exchange Offer that (a) it is prohibited by law or
Commission policy from participating in the
Exchange Offer, (b) it may not resell the Exchange
Notes acquired by it in the Exchange Offer to the
public without delivering a prospectus and the
prospectus contained in the Exchange Offer
Registration Statement
8
<PAGE> 14
is not appropriate or available for such resales or
(c) it is a broker-dealer and owns Series A Notes
acquired directly from the Issuers or an affiliate
of the Issuers, the Issuers will file with the
Commission a shelf registration statement (the
"Shelf Registration Statement") to cover resales of
the Series A Notes by the Holders thereof who
satisfy certain conditions relating to the
provision of information in connection with the
Shelf Registration Statement.
The interest rate on the Notes is subject to
increase under certain circumstances if the Company
is not in compliance with its obligations under the
Registration Rights Agreement. See "Description of
the Exchange Notes -- Registration Rights;
Liquidated Damages."
Lack Of Prior Market For
The Exchange Notes......... The Exchange Notes will be new securities for which
there is currently no established trading market.
The Company does not intend to apply for listing of
the Exchange Notes on any national securities
exchange or for quotation of the Exchange Notes on
any automated dealer quotation system. The Company
has been advised by the Initial Purchasers that
they presently intend to make a market in the
Exchange Notes, although they are under no
obligation to do so and may discontinue any market-
making activities at any time without notice.
Accordingly, no assurance can be given as to the
liquidity of the trading market for the Exchange
Notes or that an active public market for the
Exchange Notes will develop. If an active trading
market for the Exchange Notes does not develop, the
market price and liquidity of the Exchange Notes
may be adversely affected. If the Exchange Notes
are traded, they may trade at a discount from their
initial offering price, depending on prevailing
interest rates, the market for similar securities,
the performance of the Company and certain other
factors. See "Risk Factors -- Absence of Public
Market for Exchange Notes."
RISK FACTORS
Holders of the Series A Notes should carefully consider the matters set
forth under "Risk Factors," as well as the other information and financial
statements and data included in this Prospectus prior to deciding to tender
Series A Notes in the Exchange Offer.
9
<PAGE> 15
SUMMARY FINANCIAL DATA
The following summary financial data as of and for each of the three years
in the period ended June 29, 1997 and as of September 28, 1997 and for the three
month periods ended September 28, 1997 and September 29, 1996 have been derived
from, and are qualified by reference to, the Combined Consolidated Financial
Statements of the Company included elsewhere in this Offering Memorandum. The
pro forma data as of and for the year ended June 29, 1997 give effect to the
Transactions (as defined) as if they had occurred as of July 1, 1996, in the
case of the statement of operations and other financial data, and as of June 29,
1997, in the case of the balance sheet data. The pro forma data as of and for
the three-month period ended September 28, 1997 give effect to the Offering (as
defined) as if it had occurred as of July 1, 1996, in the case of the statement
of operations data and as of September 28, 1997 in the case of the balance sheet
data. The pro forma data do not purport to be indicative of the results that
actually would have been obtained had the Transactions been completed as of such
dates and are not intended to be a projection of the Company's future results of
operations or financial position. The following information should be read in
conjunction with "Use of Proceeds," "Capitalization," "Selected Financial Data,"
"Unaudited Pro Forma Financial Data," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the Combined Consolidated
Financial Statements of the Company, including the notes thereto, included
elsewhere in this Offering Memorandum.
<TABLE>
<CAPTION>
FOR THE YEARS ENDED FOR THE THREE MONTH PRO FORMA
---------------------------- PRO FORMA PERIOD ENDED THREE-MONTH
JUNE JUNE YEAR ENDED ----------------------------- PERIOD ENDED
25, 30, JUNE 29, JUNE 29, SEPTEMBER 29, SEPTEMBER 28, SEPTEMBER 28,
1995 1996(1) 1997 1997 1996 1997 1997
------- ------- -------- ------------ ------------- ------------- -------------
(DOLLARS IN THOUSANDS) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Revenues......................... $88,095 $98,315 $533,882 $533,882 $ 128,310 $ 134,717 $ 134,717
Cost of revenues................. 74,695 84,244 482,526 482,526 115,929 121,147 121,147
------- ------- -------- -------- --------- --------- ---------
Gross profit................... 13,400 14,071 51,356 51,356 12,381 13,570 13,570
Selling, general and
administrative expenses........ 10,204 11,491 31,660 31,660 6,565 8,606 8,606
Amortization of intangible
assets......................... 535 551 4,749 4,749 1,191 1,191 1,191
------- ------- -------- -------- --------- --------- ---------
Income from operations......... 2,661 2,029 14,947 14,947 4,625 3,773 3,773
Interest income.................. 107 85 67 67 1 1 1
Interest expense................. (80) (178) (11,492) (11,651)(7) (2,459) (3,007) (3,326)(7)
------- ------- -------- -------- --------- --------- ---------
Income before provision for
income taxes................. 2,688 1,936 3,522 3,363 2,167 767 448
Provision for income taxes(2).... 214 189 2,339 2,069 940 189 153
------- ------- -------- -------- --------- --------- ---------
Net income..................... $ 2,474 $ 1,747 $ 1,183 $ 1,294 $ 1,227 $ 578 $ 295
======= ======= ======== ======== ========= ========= =========
OTHER FINANCIAL DATA:
EBITDA(3)........................ $ 3,863 $ 3,399 $ 22,209 $ 22,209 $ 6,357 $ 5,551 $ 5,551
EBITDA margin(4)................. 4.4% 3.5% 4.2% 4.2% 5.0% 4.1% 4.1%
Depreciation and amortization.... $ 1,202 $ 1,370 $ 7,262 $ 7,262 $ 1,732 $ 1,777 $ 1,777
Capital expenditures............. 949 1,227 2,578 2,578 355 249 249
Ratio of EBITDA to cash interest
expense(5)..................... 2.0x 1.9x
Ratio of net debt to EBITDA(6)... 4.9x 5.0x
Ratio of earnings to fixed
charges(8)..................... 7.5x 4.6x 1.3x 1.7x 1.2x
</TABLE>
<TABLE>
<CAPTION>
AS OF
AS OF JUNE 29, 1997 SEPTEMBER 28, 1997 PRO FORMA
------------------- ------------------ AS OF
HISTORICAL (UNAUDITED) SEPTEMBER 28, 1997
------------------- ------------------ ------------------
(IN THOUSANDS)
<S> <C> <C> <C>
BALANCE SHEET DATA:
Cash...................................................... $ 3,928 $ 2,106 $ 2,106
Working capital........................................... 45,050 45,291 53,476
Total assets.............................................. 161,087 156,433 158,734
Total long-term debt (including current maturities)....... 107,147 106,263 112,922
</TABLE>
10
<PAGE> 16
- ---------------
(1) Fiscal 1996 was a 53-week year. As a result, the Company's results of
operations for fiscal 1996 include approximately $1.0 million of payroll and
payroll-related expenses attributable to the additional week of operations
that were not billed in the period to customers with fixed price contracts.
See "Management's Discussion and Analysis of Financial Condition and Results
of Operations."
(2) For the years ended June 25, 1995 and June 30, 1996, the Company was not
subject to federal and certain state income taxes as it had elected to be
treated as a subchapter S corporation. For the year ended June 29, 1997,
certain entities of the Company were taxed as C corporations through
December 31, 1996, at which time they elected to be treated as subchapter S
corporations. See Note 7 of Notes to the Company's Combined Consolidated
Financial Statements.
(3) EBITDA is defined as earnings before provision for income taxes, interest
expense, interest income and depreciation and amortization. EBITDA is
presented because it is a widely accepted financial indicator of a leveraged
company's ability to service and/or incur indebtedness and because
management believes that EBITDA is a relevant measure of the Company's
ability to generate cash without regard to the Company's capital structure
or working capital needs. EBITDA as presented may not be comparable to
similarly titled measures used by other companies, depending upon the
non-cash charges included. When evaluating EBITDA, investors should consider
that EBITDA (i) should not be considered in isolation but together with
other factors which may influence operating and investing activities, such
as changes in operating assets and liabilities and purchases of property and
equipment; (ii) is not a measure of performance calculated in accordance
with generally accepted accounting principles; (iii) should not be construed
as an alternative or substitute for income from operations, net income or
cash flows from operating activities in analyzing the Company's operating
performance, financial position or cash flows; and (iv) should not be used
as an indicator of the Company's operating performance or as a measure of
its liquidity.
(4) EBITDA margin represents EBITDA as a percentage of revenues.
(5) Cash interest expense is defined as interest expense excluding amortization
of deferred financing costs.
(6) Net debt is defined as total long-term debt minus cash as of the end of the
period presented. EBITDA for the first quarter of fiscal 1998 has been
annualized for the purposes of calculating this ratio.
(7) Pro forma interest expense reflects (i) $438,500 of amortization of deferred
debt issuance costs related to the offering of the Series A Notes, (ii)
$49,350 of amortization of original issue discount related to the Series A
Notes, (iii) interest expense related to the Series A Notes and (iv)
interest expense related to pro forma borrowings under the Credit Facility
at an assumed interest rate of 7.63%, which is the interest rate that would
have been applicable under the Credit Facility for the year ended June 29,
1997. Pro forma interest expense for the three month period ended September
28, 1997 was calculated in a similar fashion.
(8) For purposes of calculating the ratio of earnings to fixed charges, earnings
consist of income before provision for income taxes, plus fixed charges.
Fixed charges consist of interest, amortization of deferred financing costs,
amortization of debt discount and that portion of rental payments on
operating leases deemed representative of the interest factor.
11
<PAGE> 17
RISK FACTORS
In addition to the other information set forth and incorporated by
reference herein, Holders of Series A Notes should carefully consider the
following information in evaluating the Company and its business before deciding
to tender the Series A Notes in the Exchange Offer. The information contained
and incorporated by reference herein contains forward-looking statements that
involve a number of risks and uncertainties. A number of factors, including
those discussed below, could cause results to differ materially from those
anticipated by such forward-looking statements. In addition, such
forward-looking statements are necessarily dependent upon assumptions, estimates
and data that may be incorrect or imprecise. Accordingly, any forward-looking
statements included or incorporated by reference herein do not purport to be
predictions of future events or circumstances and may not be realized.
LEVERAGE
The Company is highly leveraged. As of September 28, 1997, after giving pro
forma effect to the Transactions, the Company would have had total consolidated
indebtedness of approximately $112.9 million and a ratio of long-term debt to
total capitalization of approximately 94.8%. See "Capitalization" and "Unaudited
Pro Forma Financial Data." The Company may incur additional indebtedness in the
future, including through available borrowings under the Credit Facility,
subject to the satisfaction of certain financial tests. See "Description of
Other Indebtedness -- Credit Facility" and "Description of the Exchange Notes --
Certain Covenants -- Incurrence of Indebtedness and Issuance of Preferred
Stock."
The degree to which the Company is leveraged could have important
consequences to the holders of the Exchange Notes, including the following: (i)
the Company's ability to obtain additional financing in the future for working
capital, capital expenditures, acquisitions or other purposes may be limited or
impaired; (ii) the Company's flexibility with respect to certain matters will be
limited by covenants contained in the Indenture and the Credit Facility which
will limit the ability of the Company and its subsidiaries to incur additional
indebtedness, grant liens, pay dividends, redeem capital stock, prepay certain
subordinated indebtedness and enter into mergers and other similar transactions;
and (iii) the Company's degree of leverage may make it more vulnerable to
economic downturns, limit its ability to pursue other business opportunities and
reduce its flexibility in responding to changing business and economic
conditions.
The Company's ability to generate cash for the repayment of debt, including
the Exchange Notes, will be dependent upon the future performance of the
Company's business, which will in turn be subject to financial, competitive,
economic and other factors affecting the operations of the Company, including
certain factors beyond its control.
SUBORDINATION OF THE EXCHANGE NOTES
The Exchange Notes will be unsecured obligations of the Issuers and will be
subordinated in right of payment to all current and future Senior Debt of the
Issuers, including all indebtedness of the Issuers under the Credit Facility. In
addition, the guarantees of the Exchange Notes will be subordinated to all
current and future Senior Debt of the Guarantors, including the Guarantors'
obligations under the Credit Facility. See "Description of the Exchange
Notes -- Subordination." As of September 28, 1997, after giving pro forma effect
to the Transactions, the Issuers would have had approximately $3.4 million of
Senior Debt outstanding, consisting of outstanding borrowings under the Credit
Facility. In addition, the Issuers would have had $41.6 million of additional
borrowings available under the Credit Facility. As a result of the subordination
provisions of the Indenture, in the event of a liquidation or insolvency
involving the Company, holders of the Exchange Notes may recover less ratably
than creditors of the Company who are holders of Senior Debt. The Indenture will
permit the Company to incur additional Senior Debt, subject to certain financial
tests. See "Description of the Exchange Notes -- Certain Covenants -- Incurrence
of Indebtedness and Issuance of Preferred Stock."
COMPETITION
The facilities services industry is highly competitive. The Company
competes against large national and multi-national organizations, most of which
have greater financial and marketing resources than the Company.
12
<PAGE> 18
In the various local marketplaces for core janitorial and custodial services,
barriers to entry are low, and the Company competes against numerous smaller
service providers, many of which may have more experience in and knowledge of
the local market for such services. In these same markets, the Company is also
increasingly facing large competitors that are willing to accept lower profit
margins in order to capture market share. There can be no assurance that
competition will not have an adverse effect on the Company's financial condition
or results of operations. See "Business -- Competition."
DEPENDENCE ON KEY PERSONNEL
The Company is a service business that is highly dependent upon the
strength of its customer relationships. Accordingly, the Company's success
depends to a large extent upon the continued services of its key managers. In
particular, the Company is dependent upon the day-to-day leadership and
experience of Steven C. Kletjian, its Chairman, Chief Executive Officer and
principal shareholder. Mr. Kletjian is not subject to an employment agreement
with the Company or any of its subsidiaries. In addition, retention of other key
personnel is important to the continued success of the Company. The loss of
other key executive personnel could have a material adverse effect on the
Company. See "Management."
DEPENDENCE ON HOURLY WAGE AND UNION EMPLOYEES
The Company's business depends upon its ability to continue to recruit,
train and retain large numbers of hourly wage employees. Competition for such
employees, particularly in areas with strong regional economies, has led to
increased hourly wage levels and employee turnover. Inability to recruit, train
and retain such employees at competitive wage rates could have a material
adverse effect on the Company. In addition, the Company's workforce is heavily
unionized. Approximately 44% of the Company's workforce is unionized under more
than 170 different union contracts. As these union contracts expire, the Company
may be required to renegotiate them in an environment of increasing wage rates.
In addition, there can be no assurance that the Company will be able to
renegotiate union contracts on terms favorable to the Company or without
experiencing a work stoppage. See "Business -- Employees."
LENGTH OF CONTRACTS
The Company performs the majority of its work for customers under contracts
with a stated term of from one to three years, with termination clauses
permitting the customer to cancel the contract on 30 to 90 days' notice. While
the Company has maintained long-standing relationships with many of its
customers, and has experienced a low customer turnover rate, there can be no
assurance that the Company's customers will not exercise their rights to
terminate their contracts prior to expiration, or that the Company will be
successful in negotiating new contracts with customers as such contracts expire.
See "Business -- Contracts."
CONTROL BY PRINCIPAL SHAREHOLDERS
All of the voting common shares of beneficial ownership in the Company are
privately-held by members of the Kletjian family. As a result, these persons are
in a position to elect the Company's Board of Trustees, and to control the
management, policies and operations of the Company. These persons do not owe
fiduciary duties to the holders of the Notes. See "Share Ownership."
POTENTIAL ENVIRONMENTAL LIABILITY
The nature of the Company's business necessarily involves the transport,
storage, use and disposal of cleaning solvents, lubricants, chemicals and other
hazardous materials by Company employees to, on and around the customers'
facilities or, in certain cases, facilities leased by the Company on behalf of
its customers. Such activities are subject to stringent and changing federal,
state and local regulation, and present the potential for liability of the
Company for the actions of its employees in handling such materials. In
addition, the exposure of the Company's employees to these materials may give
rise to claims by employees against the Company. As a result, there can be no
assurance that compliance with governmental regulations or
13
<PAGE> 19
liability related to hazardous materials will not have a material adverse effect
on the Company's financial condition or results of operations. See
"Business -- Facilities."
LIABILITY CLAIMS AND INSURANCE COVERAGE
The nature of the Company's services exposes it to risks of liability for
employee acts (including negligence and harassment), injuries (including
workers' compensation claims) and omissions. The Company carries insurance of
various types, including workers' compensation, employment practices, vehicle
and general liability coverage. While the Company seeks to maintain appropriate
levels of insurance, there can be no assurance that the Company will avoid
material claims or adverse publicity related thereto. There can also be no
assurance that the Company's insurance will be adequate to cover the Company's
liabilities or that such insurance coverage will remain available at acceptable
costs. A successful claim brought against the Company for which coverage is
denied or which is in excess of its insurance coverage could have a material
adverse effect on the Company's financial condition or results of operations.
GOVERNMENTAL REGULATION
Due to the nature of the Company's business, particularly in its Security
SBU, the Company's operations are subject to a variety of federal, state, county
and municipal laws, regulations and licensing requirements, including labor,
employment, immigration, health and safety and environmental regulations and
regulations affecting private security firms. Changes in such laws, regulations
and licensing requirements may constrain the Company's ability to provide
services to customers or increase the costs of such services. In addition,
competitive pricing conditions in the industry may constrain the Company's
ability to adjust its billing rates to reflect any such increased costs.
ACQUISITION RISKS
As part of its strategy, the Company may pursue the acquisition of other
companies, assets or business lines that complement or expand its existing
business. Acquisitions involve a number of risks that could adversely affect the
Company, including the diversion of management's attention, the unsuccessful
integration of the operations and personnel of the acquired companies and the
potential loss of key employees or customers of the acquired operations. The
Company may not have had experience with the geographic or service markets of
the acquired business and accordingly may lack the management and marketing
expertise that will be necessary to successfully operate and integrate the
business. In addition, there can be no assurance that the Company will continue
to retain acquired management and other personnel, that the market will
favorably view the Company's entry into a new geographic or service market, or
that the Company will realize any of the other anticipated benefits of an
acquisition. No assurance can be given that future acquisitions by the Company
will not materially and adversely affect the Company or that any such future
acquisition will enhance the Company's business.
CHANGE OF CONTROL
In the event of a Change of Control, the Issuers will be required to make
an offer to each holder of Exchange Notes to repurchase all or any part of such
holder's Exchange Notes at a repurchase price equal to 101% of the principal
amount thereof, plus accrued and unpaid interest and Liquidated Damages, if any,
thereon to the repurchase date. The source of funds for any such repurchase
would be the Company's available cash or cash generated from operating or other
sources, including borrowings, sales of equity or funds provided by a new
controlling person. However, there can be no assurance that sufficient funds
will be available at the time of any Change of Control to make any required
purchases of the Exchange Notes tendered. In addition, the Credit Facility may
prohibit the Company from making any such required repurchases. The failure of
the Company to offer to repurchase Exchange Notes, or to repurchase Exchange
Notes tendered, following a Change of Control will result in a default under the
Indenture, which could lead to a cross-default under the Credit Facility and
under the terms of other indebtedness of the Company. In such a case, the
subordination provisions of the Indenture may limit the ability of the holders
of the Exchange Notes to receive payment in respect of their Exchange Notes. See
"Description of Other Indebtedness -- Credit Facility," "Description of
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the Exchange Notes -- Subordination" and "-- Repurchase of Exchange Notes at the
Option of Holders -- Change of Control."
RESTRICTIONS IMPOSED BY TERMS OF INDEBTEDNESS
The Indenture governing the terms of the Exchange Notes contains certain
covenants limiting, subject to certain exceptions, the incurrence of additional
indebtedness, the payment of dividends, the redemption of capital stock, the
making of certain investments, the issuance of capital stock of subsidiaries,
the creation of liens and other restrictions affecting the Company's
subsidiaries, the issuance of guarantees, transactions with affiliates, asset
sales and certain mergers and consolidations. A breach of any of these covenants
could result in an event of default under the Indenture. In addition, the New
Credit Facility and the instruments governing the Company's other indebtedness
contain other more restrictive covenants and require the Company to satisfy
certain financial tests. The Company's ability to comply with such covenants and
breach of any of these covenants could result in an event of default under the
New Credit Facility. In the event of a default under the New Credit Facility,
the lenders thereunder could elect to declare all amounts borrowed, together
with accrued interest, to be immediately due and payable, and the lenders under
the New Credit Facility or the instruments governing the Company's other
indebtedness could constitute a cross-default under the Indenture and any
instruments governing the Company's other indebtedness, and a default under the
Indenture could constitute a cross-default under the New Credit Facility and any
instruments governing the Company's other indebtedness. In the event of a
default under the New Credit Facility or other Senior Debt of the Company, the
subordination provisions of the Indenture may restrict payments with respect to
the Exchange Notes. See "-- Subordination," "Description of the Exchange
Notes -- Certain Covenants" and "Description of Other Indebtedness."
ABSENCE OF PUBLIC MARKET FOR THE EXCHANGE NOTES
The Exchange Notes are being offered to the holders of the Series A Notes.
The Series A Notes were offered and sold in October 1997 (i) to "Qualified
Institutional Buyers" (as defined in Rule 144A under the Securities Act), (ii)
to other institutional "accredited investors" (as defined in Rule 501(a)(1),
(2), (3) or (7) under the Securities Act) and (iii) outside the United States in
reliance on Regulation S under the Securities Act and are eligible for trading
in the Private Offering, Resales and Trading through Automated Linkages
("PORTAL") market.
The Exchange Notes will be a new class of securities for which there
currently is no established trading market. Although the Exchange Notes will
generally be permitted to be resold or otherwise transferred by nonaffiliates of
the Company without compliance with the registration requirements under the
Securities Act, the Company does not intend to apply for listing of the Exchange
Notes on any national securities exchange or for quotation of the Exchange Notes
on any automated dealer quotation system. Although the Initial Purchasers have
informed the Company that they currently intend to make a market in the Exchange
Notes, the Initial Purchasers are not obligated to do so, and any such
market-making may be discounted at any time without notice. The liquidity of any
market for the Exchange Notes will depend upon the number of holders of the
Exchange Notes, the interest of securities dealers in making a market in the
Exchange Notes and other factors. Accordingly, there can be no assurance as to
the development or liquidity of any market for the Exchange Notes. If an active
trading market for the Exchange Notes does not develop, the market price and
liquidity of the Exchange Notes may be adversely affected. If the Exchange Notes
are traded, they may trade at a discount from their initial offering price,
depending upon prevailing interest rates, the market for similar securities, the
performance of the Company and certain other factors. The liquidity of, and
trading markets for, the Exchange Notes may also be adversely affected by
general declines in the market for non-investment grade debt. Such declines may
adversely affect the liquidity of, and trading markets for, the Exchange Notes
independent of the financial performance of, or prospects for, the Company.
FRAUDULENT CONVEYANCE MATTERS
Under applicable provisions of federal bankruptcy law and comparable
provisions of state and federal fraudulent conveyance laws, if it were found
that any Guarantor (a) had incurred the indebtedness
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represented by its guarantee of the Exchange Notes with an intent to hinder,
delay or defraud creditors or (b) received less than reasonable equivalent value
or fair consideration for incurring such indebtedness and (i) was insolvent or
was rendered insolvent by reason of such incurrence, (ii) was engaged or about
to engage in a business or transaction for which its remaining assets
constituted unreasonably small capital to carry on its business or (iii)
intended to incur, or believed that it would incur, debts beyond its ability to
pay such debts as they matured, the obligations of such Guarantor under its
guarantee of the Exchange Notes could be avoided or claims in respect of such
guarantee could be subordinated to all other debts of such Guarantor. A legal
challenge of a guarantee of the Exchange Notes could, among other things, focus
on the benefits, if any, realized by a Guarantor as a result of the issuance by
the Issuers of the Exchange Notes. To the extent that a Guarantor's guarantee of
the Exchange Notes were held to be unenforceable as a fraudulent conveyance for
any reason, the holders of the Exchange Notes would cease to have any direct
claim in respect of such Guarantor. In the event a Guarantor's guarantee of the
Exchange Notes were held to be subordinated, the claims of the holders of the
Exchange Notes could be subordinated to claims of other creditors of such
Guarantor, including holders of Senior Debt and other holders of subordinated
indebtedness of such Guarantor.
The measure of insolvency for purposes of determining whether a transfer is
avoidable as a fraudulent conveyance varies depending upon the law of the
jurisdiction which is being applied. Generally, however, a debtor would be
considered insolvent if the sum of all its liabilities, including contingent
liabilities, were greater than the fair saleable value of its assets at a fair
valuation, or if the present fair saleable value of the debtor's assets were
less than the amount required to repay its liabilities on its existing debts,
including contingent liabilities, as they become absolute and matured. There can
be no assurance as to what standard a court would apply in order to make such
determination.
Each of the Guarantors believes that it will receive equivalent value at
the time the indebtedness under the Exchange Notes and the guarantees is
incurred. In addition, none of the Guarantors believes that, after giving effect
to the Exchange Offer, it (i) was or will be insolvent or rendered insolvent,
(ii) was or will be engaged in a business or transaction for which its remaining
assets constitute unreasonably small capital or (iii) intends or intended to
incur, or believes or believed that it will or would incur, debts beyond its
ability to pay such debts as they mature. Since, however, the question of
whether a guarantee is a fraudulent conveyance is inherently fact-based and
fact-specific, there can be no assurance that a court passing on such questions
would agree with the Guarantors.
RESTRICTIONS ON TRANSFER
The Series A Notes were offered and sold by the Company in a private
offering exempt from registration pursuant to the Securities Act and have been
resold pursuant to Rule 144A, Rule 501(a)(1), (2), (3) or (7) and Regulation S
and other exemptions under the Securities Act. As a result, the Series A Notes
may not be reoffered or resold by purchasers except pursuant to an effective
registration statement under the Securities Act or pursuant to an applicable
exemption from such registration, and the Series A Notes are legended to
restrict transfer as aforesaid. Each Holder (other than any Holder who is an
affiliate or promoter of the Company) who duly exchanges Series A Notes for
Exchange Notes in the Exchange Offer will receive Exchange Notes that are freely
transferable under the Securities Act. Holders who participate in the Exchange
Offer should be aware, however, that if they accept the Exchange Offer for the
purpose of engaging in a distribution, the Exchange Notes may not be publicly
reoffered or resold without complying with the registration and prospectus
delivery requirements of the Securities Act. As a result, each Holder accepting
the Exchange Offer will be deemed to have represented, by its acceptance of the
Exchange Offer, that it acquired the Exchange Notes in the ordinary course of
business and that it is not engaged in, and does not intend to engage in, a
distribution of the Exchange Notes. If existing Commission interpretations
permitting free transferability of the Exchange Notes following the Exchange
Offer are changed prior to consummation of the Exchange Offer, the Company will
use its best efforts to register the Series A Notes for resale under the
Securities Act. See "Prospectus Summary -- The Exchange Offer" and "Description
of the Exchange Notes -- Registration Rights; Liquidated Damages."
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<PAGE> 22
The Series A Notes currently may be sold pursuant to the restrictions set
forth in Rule 144A, Rule 501(a)(1), (2), (3) or (7) or Regulation S under the
Securities Act or pursuant to another available exemption under the Securities
Act without registration under the Securities Act. To the extent that Series A
Notes are tendered and accepted in the Exchange Offer, the trading market for
the untendered and tendered but unaccepted Series A Notes could be adversely
affected.
EXCHANGE OFFER PROCEDURES
Issuance of the Exchange Notes for Series A Notes pursuant to the Exchange
Offer will be made only after timely receipt by the Exchange Agent of such
Series A Notes, a properly completed, duly executed Letter of Transmittal and
all other required documents. Therefore, Holders desiring to tender their Series
A Notes in exchange for Exchange Notes should allow for sufficient time to
ensure timely delivery. The Company is under no duty to give notification of
defects or irregularities with respect to the tenders of Series A Notes for
exchange. Any Series A Notes that are not tendered or are tendered but not
accepted will, following the consummation of the Exchange Offer, continue to be
subject to the existing restrictions upon transfer thereof and, upon
consummation of the Exchange Offer, the registration rights under the
Registration Rights Agreement generally will terminate. In addition, any Holder
who tenders pursuant to the Exchange Offer for the purpose of participating in a
distribution of the Exchange Notes may be deemed to have received restricted
securities and, if so, will be required to comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
resale. Each broker-dealer that receives Exchange Notes for its own account in
exchange for Series A Notes, where such Series A Notes were acquired by such
broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Notes. See "The Exchange Offer."
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THE COMPANY
UNICCO was founded as a Massachusetts corporation in 1949, and was
reorganized as a Massachusetts business trust in 1988. UNICCO is a subchapter S
company for federal income tax purposes. The Company's principal executive
offices are located at Four Copley Place, Boston, Massachusetts 02116, and its
telephone number is (617) 859-9100. UNICCO Finance, which is a co-obligor under
the Notes, is a Delaware corporation and a wholly-owned subsidiary of UNICCO.
Prior to the Offering, the operations of the Company were conducted through
UNICCO and its subsidiary, and through affiliated entities owned by the same
shareholders as UNICCO. Effective January 1, 1997, such affiliated entities
elected to be taxed as subchapter S corporations for federal income tax
purposes. In connection with the Offering, the shareholders of UNICCO
contributed their interests in such affiliated entities to UNICCO (the
"Refinancing"), as a result of which all of the operations of the Company will
be conducted through UNICCO and its subsidiaries. See "Certain Transactions."
The Combined Consolidated Financial Statements of the Company and the other
historical financial and statistical data included in this Offering Memorandum
include the combined results of operations of UNICCO, its subsidiaries and such
affiliated entities.
THE EXCHANGE OFFER
The following discussion sets forth or summarizes what the Company believes
are the material terms of the Exchange Offer, including those set forth in the
Letter of Transmittal distributed with this Prospectus. This summary is
qualified in its entirety by reference to the full text of the documents
underlying the Exchange Offer, copies of which are filed as exhibits to the
Registration Statement of which this Prospectus is a part, and are incorporated
by reference herein.
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
In connection with the sale of the Series A Notes pursuant to the Purchase
Agreement, dated October 14, 1997 (the "Purchase Agreement"), between the
Company and the Initial Purchasers, the Initial Purchasers became entitled to
the benefits of the Registration Rights Agreement, dated as of October 17, 1997,
between the Company and the Initial Purchasers (the "Registration Rights
Agreement").
Under the Registration Rights Agreement, the Company agreed to (a) file a
registration statement in connection with a registered exchange offer within 45
days after October 17, 1997, the date the Series A Notes were issued (the "Issue
Date"), (b) use best efforts to cause such registration statement to become
effective under the Securities Act within 120 days of the Issue Date, (c) use
best efforts to keep such registration statement effective until the closing of
the Exchange Offer and (d) use best efforts to cause such registered Exchange
Offer to be consummated within 30 days after the effective date of such
registration statement. Within the applicable time periods, the Company will
endeavor to register under the Securities Act all of the Exchange Notes pursuant
to a registration statement under which the Company will offer each Holder of
Series A Notes the opportunity to exchange any and all of the outstanding Series
A Notes held by such Holder for Exchange Notes in an aggregate principal amount
equal to the aggregate principal amount of Series A Notes tendered for exchange
by such Holder. Subject to limited exceptions, the Exchange Offer being made
hereby, if commenced and consummated within such applicable time periods, will
satisfy those requirements under the Registration Rights Agreement. In such
event, the Series A Notes would remain outstanding and would continue to accrue
interest, but would not retain any rights under the Registration Rights
Agreement. Holders of Series A Notes seeking liquidity in their investment would
have to rely on exemptions to registration requirements under the securities
laws, including the Securities Act. A copy of the Registration Rights Agreement
has been filed as an exhibit to the Registration Statement of which this
Prospectus is a part. The term "Holder" with respect to the Exchange Offer means
any person in whose name the Series A Notes are registered on the books of the
Company or any other person who has obtained a properly completed bond power
from the registered holder.
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<PAGE> 24
Because the Exchange Offer is for any and all Series A Notes, the principal
amount of Series A Notes tendered and exchanged in the Exchange Offer will
reduce the principal amount of Series A Notes outstanding. Following the
consummation of the Exchange Offer, Holders who did not tender their Series A
Notes generally will not have any further registration rights under the
Registration Rights Agreement, and such Series A Notes will continue to be
subject to certain restrictions on transfer. Accordingly, the liquidity of the
market for such Series A Notes could be adversely affected. The Series A Notes
are currently eligible for sale pursuant to Rule 144A, Rule 501(a)(1), (2), (3)
or (7) or Regulation S through the PORTAL Market. Because the Company
anticipates that most Holders of Series A Notes will elect to exchange such
Series A Notes for Exchange Notes due to the absence of restrictions on the
resale of Exchange Notes under the Securities Act, the Company anticipates that
the liquidity of the market for any Series A Notes remaining after the
consummation of the Exchange Offer may be substantially limited. See
"Description of the Exchange Notes -- Registration Rights; Liquidated Damages"
and "Risk Factors -- Absence of Public Market for the Exchange Notes."
TERMS OF THE EXCHANGE OFFER
Upon the terms and conditions set forth in this Prospectus and in the
accompanying Letter of Transmittal, the Company will accept all Series A Notes
properly tendered and not withdrawn prior to 5:00 p.m., New York City time, on
the Expiration Date. The Company will issue $1,000 principal amount of Exchange
Notes in exchange for each $1,000 principal amount of outstanding Series A Notes
accepted in the Exchange Offer. Holders may tender some or all of their Series A
Notes pursuant to the Exchange Offer.
The form and terms of the Exchange Notes are the same as the form and terms
of the Series A Notes except that (i) the Exchange Notes have been registered
under the Securities Act and hence will not bear legends restricting the
transfer thereof, and (ii) the holders of Exchange Notes generally will not be
entitled to certain rights under the Registration Rights Agreement, which rights
generally will terminate upon consummation of the Exchange Offer. The Exchange
Notes will evidence the same debt as the Series A Notes and will be entitled to
the benefits of the Indenture.
Holders of Series A Notes do not have any appraisal or dissenters' rights
in connection with the Exchange Offer.
The Company shall be deemed to have accepted validly tendered Series A
Notes when, as and if the Company has given oral or written notice thereof to
the Exchange Agent. The Exchange Agent will act as agent for the tendering
Holders of Series A Notes for the purpose of receiving the Exchange Notes from
the Company and delivering Exchange Notes to such Holders.
If any tendered Series A Notes are not accepted for exchange because of an
invalid tender or the occurrence of certain other events set forth herein,
certificate for any such unaccepted Series A Notes will be returned, without
expense, to the tendering Holder thereof as promptly as practicable after the
Expiration Date.
Holders of Series A Notes who tender pursuant to the Exchange Offer will
not be required to pay brokerage commissions or fees or, subject to the
instructions in the Transmittal Letter, transfer taxes with respect to the
exchange of Series A Notes pursuant to the Exchange Offer. The Company will pay
all charges and expenses, other than certain applicable taxes, in connection
with the Exchange Offer. See "-- Fees and Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The Exchange Offer shall remain open for acceptance for a period of not
less than 20 business days (the "Exchange Period"). The Expiration Date will be
5:00 p.m., New York City time, on , 1998, unless the Company, in
its sole discretion, extends the Exchange Offer, in which case the Expiration
Date will be the latest business day to which the Exchange Offer is extended.
In order to extend the Expiration Date, the Issuers will notify the
Exchange Agent of any extension by oral or written notice and will mail to the
record Holders an announcement thereof, each prior to 9:00 a.m.,
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New York City time, on the next business day after the previously scheduled
Expiration Date. Such announcement may state that the Company is extending the
Exchange Offer for a specified period of time.
The Company reserves the right (i) to delay accepting any Series A Notes,
to extend the Exchange Offer or to terminate the Exchange Offer and not accept
Series A Notes not previously accepted if any of the conditions set forth under
"-- Conditions" shall have occurred and shall not have been waived by the
Company, by giving oral or written notice of such delay, extension or
termination to the Exchange Agent, or (ii) to amend the terms of the Exchange
Offer in any manner. Any such delay in acceptance, extension, termination or
amendment will be followed as promptly as practicable by oral or written notice
thereof. If the Exchange Offer is amended in a manner determined by the Issuers
to constitute a material change, the Issuers will promptly disclose such
amendment in a manner reasonably calculated to inform the Holders of such
amendment, and the Issuers will extend the Exchange Offer for a period of five
to ten business days, depending upon the significance of the amendment and the
manner of disclosure to Holders, if the Exchange offer would otherwise expire
during such five to ten business day period.
Without limiting the manner in which the Issuers may choose to make public
announcement of any extension, amendment or termination of the Exchange Offer,
the Issuers shall have no obligation to publish, advertise or otherwise
communicate any such public announcement, other than by making a timely release
to the Dow Jones News Service or other comparable service.
INTEREST ON THE EXCHANGE NOTES
Interest on the Exchange Notes is payable semi-annually on April 15 and
October 15 of each year at the rate of 9 7/8% per annum. The Exchange Notes will
bear interest from October 17, 1997, the date of issuance of the Series A Notes,
or the most recent interest payment date to which interest on such Series A
Notes has been paid, whichever is later. Accordingly, Holders of Series A Notes
that are accepted for exchange will not receive interest that is accrued but
unpaid on the Series A Notes at the time of tender, but such interest will be
payable in respect of the Exchange Notes delivered in exchange for such Series A
Notes on the first interest payment date after the Expiration Date.
PROCEDURES FOR TENDERING
Only a Holder of Series A Notes may tender such Series A Notes pursuant to
the Exchange Offer. To tender pursuant to the Exchange Offer, a Holder must
complete, sign and date the Letter of Transmittal, or a facsimile thereof, have
the signatures thereon guaranteed if required by instruction 4 of the Letter of
Transmittal, and mail or otherwise deliver such Letter of Transmittal or such
facsimile, together with the Series A Notes and any other required documents, to
the Exchange Agent prior to 5:00 p.m., New York City time, on the Expiration
Date. Delivery of the Series A Notes may be made by book-entry transfer in
accordance with the procedures described below. Confirmation of such book-entry
transfer must be received by the Exchange Agent prior to the Expiration Date.
The tender by a Holder of Series A Notes and the acceptance thereof by the
Company will constitute an agreement between such Holder and the Company in
accordance with the terms and subject to the conditions set forth herein in the
Letter of Transmittal.
THE METHOD OF DELIVERY OF SERIES A NOTES AND THE LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND RISK
OF THE HOLDER. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT HOLDERS USE
AN OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME SHOULD BE
ALLOWED TO ASSURE TIMELY DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION
DATE. NO LETTER OF TRANSMITTAL OR SERIES A NOTES SHOULD BE SENT TO THE COMPANY.
HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST
COMPANIES OR NOMINEES TO EFFECT SUCH TENDER FOR SUCH HOLDERS.
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Any beneficial Holder whose Series A Notes are registered in the name of
such Holder's broker, dealer, commercial bank, trust company or other nominee
and who wishes to tender should contact such registered holder promptly and
instruct such registered holder to tender on his behalf. If such beneficial
Holder wishes to tender on such beneficial Holder's behalf, such beneficial
Holder must, prior to completing and executing the Letter of Transmittal and
delivering his Series A Notes, either make appropriate arrangements to register
ownership of the Series A Notes in such Holder's name or obtain a properly
completed bond power from the registered holder. The transfer of record
ownership may take considerable time.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by a member firm of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.
or a commercial bank or trust company having an office or correspondent in the
United States or an "eligible guarantor institution" within the meaning of Rule
17Ad-15 under the Exchange Act (an "Eligible Institution") unless the Series A
Notes tendered pursuant thereto are tendered (i) by a registered Holder who has
not completed the box entitled "Special Registration Instructions" or "Special
Delivery Instructions" on the Letter of Transmittal or (ii) for the account of
an Eligible Institution. In the event that signatures on a Letter of Transmittal
or a notice of withdrawal, as the case may be, are required to be guaranteed,
such guarantees must be by an Eligible Institution.
If the Letter of Transmittal is signed by a person other than the
registered Holder of any Series A Notes listed therein, such Series A Notes must
be endorsed or accompanied by appropriate bond powers and a proxy which
authorizes such person to tender the Series A Notes on behalf of the registered
Holder, in each case signed as the name of the registered Holder or Holders
appears on the Series A Notes with the signature thereon guaranteed by an
Eligible Institution.
If the Letter of Transmittal or any Series A Notes or bond powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and unless waived by the
Company, evidence satisfactory to the Company of their authority to so act must
be submitted with the Letter of Transmittal.
The Company understands that the Exchange Agent will make a request
promptly after the date of this Prospectus to establish accounts with respect to
the Series A Notes at the DTC for the purpose of facilitating the Exchange
Offer, and subject to the establishment thereof, any financial institution that
is a participant in the DTC may make book-entry delivery of the Series A Notes
by causing the DTC to transfer such Series A Notes into the Exchange Agent's
account with respect to the Series A Notes in accordance with the DTC's
procedures for such transfer. Although delivery of the Series A Notes may be
effected through book-entry transfer into the Exchange Agent's account at the
DTC, a Letter of Transmittal properly completed and duly executed with any
required signature guarantee and all other required documents must in each case
be transmitted to and received or confirmed by the Exchange Agent at its address
set forth below on or prior to the Expiration Date, or, if the guaranteed
delivery procedures described below are complied with, within the time period
provided under such procedures. Delivery of documents to the DTC does not
constitute delivery to the Exchange Agent.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance of tendered Series A Notes and withdrawal of the tendered
Series A Notes will be determined by the Company in its sole discretion, which
determination will be final and binding. The Company reserves the absolute right
to reject any and all Series A Notes not properly tendered or any Series A Notes
the Company's acceptance of which would, in the opinion of counsel for the
Company, be unlawful. The Company also reserves the right to waive any
irregularities or conditions of tender as to particular Series A Notes. The
Company's interpretation of the terms and conditions of the Exchange Offer
(including, the instructions in the Letter of Transmittal) will be final and
binding on all parties. Unless waived, any defects or irregularities in
connection with tenders of Series A Notes must be cured within such time as the
Company shall determine. Neither the Company, the Exchange Agent nor any other
person shall be under any duty to give notification of defects or irregularities
with respect to tenders of Series A Notes, nor shall any of them incur any
liability for failure to give such notification. Tenders of Series A Notes will
not be deemed to have been made until such irregularities have
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<PAGE> 27
been cured or waived. Any Series A Notes received by the Exchange Agent that are
not properly tendered and as to which the defects or irregularities have not
been cured or waived will be returned without cost to such Holder by the
Exchange Agent to the tendering Holders of Series A Notes, unless otherwise
provided in the Letter of Transmittal, as soon as practicable following the
Expiration Date.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their Series A Notes and (i) whose Series A
Notes are not immediately available, or (ii) who cannot deliver their Series A
Notes, the Letter of Transmittal or any other required documents to the Exchange
Agent (or comply with the procedures for book-entry transfer) prior to the
Expiration Date, may effect a tender if:
a. the tender is made through an Eligible Institution;
b. prior to the Expiration Date, the Exchange Agent receives from such
Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by facsimile transmission, mail or hand delivery)
setting forth the name and address of the Holder of the Series A Notes, the
certificate or registration number or numbers of such Series A Notes and
the principal amount of Series A Notes tendered, stating that the tender is
being made thereby, and guaranteeing that, within five business days after
the Expiration Date, the Letter of Transmittal (or facsimile thereof)
together with the certificates(s) representing the Series A Notes to be
tendered in proper form for transfer (or a confirmation of book-entry
transfer of such Series A Notes into the Exchange Agent's account at the
Depository) and any other documents required by the Letter of Transmittal
will be deposited by the Eligible Institution with the Exchange Agent; and
c. such properly completed and executed Letter of Transmittal (or
facsimile thereof), together with the certificate(s) representing all
tendered Series A Notes in proper form for transfer (or a confirmation of
book-entry transfer of such Series A Notes into the Exchange Agent's
account at the Depository) and all other documents required by the Letter
of Transmittal are received by the Exchange Agent within five business days
after the Expiration Date.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Series A Notes may be
withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration
Date.
To withdraw a tender of Series A Notes pursuant to the Exchange Offer, a
written or facsimile transmission notice of withdrawal must be received by the
Exchange Agent at the address set forth herein prior to 5:00 p.m., New York City
time, on the Expiration Date. Any such notice of withdrawal must (i) specify the
name of the person having deposited the Series A Notes to be withdrawn (the
"Depositor"), (ii) identify the Series A Notes to be withdrawn (including the
certificate or registration number(s) and principal amount of such Series A
Notes, or, in the case of notes transferred by book-entry transfer, the name and
number of the account at the DTC to be credited), (iii) be signed by the
Depositor in the same manner as the original signature on the Letter of
Transmittal by which such Series A Notes were tendered (including any required
signature guarantees) or be accompanied by documents of transfer sufficient to
have the Trustee (as defined herein) with respect to the Series A Notes register
the transfer of such Series A Notes into the name of the Depositor withdrawing
the tender, (iv) specify the name in which any such Series A Notes are to be
registered, if different from that of the Depositor and (v) include a statement
that such Holder is withdrawing such Holder's election to have such Series A
Notes exchanged. All questions as to the validity, form and eligibility
(including time of receipt) of such withdrawal notices will be determined by the
Company, whose determination shall be final and binding on all parties. Any
Series A Notes withdrawn will be deemed not to have been validly tendered for
purposes of the Exchange Offer, and no Exchange Notes will be issued with
respect thereto unless the Series A Notes so withdrawn are validly retendered.
Any Series A Notes which have been tendered but which are not accepted for
payment will be returned to the Holder thereof without cost to such Holder as
soon as practicable after withdrawal, rejection of tender or termination of the
Exchange
22
<PAGE> 28
Offer. Properly withdrawn Series A Notes may be retendered by following one of
the procedures described under "-- Procedures for Tendering" at any time prior
to the Expiration Date.
CONDITIONS
Notwithstanding any other term of the Exchange Offer, the Company shall not
be required to accept for exchange, or to exchange Exchange Notes for, any
Series A Notes, and may terminate or amend the Exchange Offer as provided herein
before the acceptance of such Series A Notes, if:
(i) any law, statute, rule, regulation or interpretation by the staff
of the Commission is proposed, adopted or enacted, which, in the reasonable
judgment of the Company, might materially impair the ability of the Company
to proceed with the Exchange Offer or materially impair the contemplated
benefits of the Exchange Offer to the Company; or
(ii) any governmental approval has not been obtained, which approval
the Company shall, in its reasonable judgment, deem necessary for the
consummation of the Exchange Offer as contemplated hereby.
If the Company determines in its reasonable judgment that any of the
conditions are not satisfied, the Company may (i) refuse to accept any Series A
Notes and return all tendered Series A Notes to the tendering Holders, (ii)
extend the Exchange Offer and retain all Series A Notes tendered prior to the
expiration of the Exchange Offer subject, however, to the rights of Holders to
withdraw such Series A Notes (see "-- Withdrawal of Tenders") or (iii) waive
such unsatisfied conditions with respect to the Exchange Offer and accept all
properly tendered Series A Notes which have not been withdrawn. If such waiver
constitutes a material change to the Exchange Offer, the Company will promptly
disclose such waiver by means of a prospectus supplement that will be
distributed to the registered Holders, and, depending upon the significance of
the waiver and the manner of disclosure to the registered Holders, the Company
will extend the Exchange Offer for a period of five to ten business days if the
Exchange Offer would otherwise expire during such five to ten business-day
period.
EXCHANGE AGENT
State Street Bank and Trust Company has been appointed as Exchange Agent
for the Exchange Offer. Questions and requests for assistance and requests for
additional copies of this Prospectus or of the Letter of Transmittal should be
directed to the Exchange Agent addressed as follows:
<TABLE>
<S> <C> <C>
By Mail By Facsimile Transmission: By Hand or Overnight
(registered or certified (617) 664-5395 Delivery:
mail recommended):
State Street Bank and
Trust Company
State Street Bank and Corporate Trust Department
Trust Company To Confirm by Telephone 4th Floor
Corporate Trust Department or for Information Call: Two International Place
P.O. Box 778 (617) 664-5587 Boston, MA 02110
Boston, MA 02102-0078
</TABLE>
FEES AND EXPENSES
The expenses of soliciting tenders pursuant to the Exchange Offer will be
borne by the Company. The principal solicitation for tenders pursuant to the
Exchange Offer is being made by mail; however, additional solicitations may be
made by telegraph, telephone or in person by officers and regular employees of
the Company and its affiliates.
The Company has not retained any dealer-manager in connection with the
Exchange Offer and will not make any payments to brokers, dealers or other
persons soliciting acceptances of the Exchange Offer. The Company, however, will
pay the Exchange Agent reasonable and customary fees for its services and will
reimburse the Exchange Agent for its reasonable out-of-pocket expenses in
connection therewith and pay
23
<PAGE> 29
other registration expenses, including fees and expenses of the Trustee, filing
fees, blue sky fees and printing and distribution expenses.
The Company will pay all transfer taxes, if any, applicable to the exchange
of Series A Notes pursuant to the Exchange Offer. If, however, certificates
representing Exchange Notes or Series A Notes for principal amounts not tendered
or accepted for exchange are to be delivered to, or are to be registered or
issued in the name of any person other than the person signing the Letter of
Transmittal, or if a transfer tax is imposed for any reason other than the
exchange of Series A Notes pursuant to the Exchange Offer, then the amount of
any such transfer taxes (whether imposed on the registered holder or any other
person) will be payable by the tendering Holder. If satisfactory evidence of
payment of such taxes or exemption therefrom is not submitted with the Letter of
Transmittal, the amount of such transfer taxes will be billed directly to such
tendering Holder.
ACCOUNTING TREATMENT
The Exchange Notes will be recorded at the same carrying value as the
Series A Notes, which is the aggregate principal amount of the Series A Notes,
as reflected in the Company's accounting records on the date of exchange.
Accordingly, no gain or loss for accounting purposes will be recognized in
connection with the Exchange Offer. The cost of the Exchange Offer will be
deferred and amortized over the term of the Exchange Notes.
RESALE OF THE EXCHANGE NOTES
Under existing Commission interpretations, the Exchange Notes would, in
general, be freely transferable after the Exchange Offer by any holder of such
Exchange Notes (other than any such holder which is an "affiliate" of the
Company within the meaning of Rule 405 of the Securities Act) without compliance
with the registration and prospectus delivery provisions of the Securities Act,
provided that such Exchange Notes acquired pursuant to the Exchange Offer are
obtained in the ordinary course of such holder's business, and such holder does
not intend to participate, and has no arrangement or understanding to
participate, in the distribution of such Exchange Notes. Any holder who tenders
pursuant to the Exchange Offer with the intention to participate, or for the
purpose of participating, in a distribution of the Exchange Notes may not rely
on the position of the staff of the Commission enunciated in Exxon Capital
Holdings Corporation (available May 13, 1988) or Morgan Stanley & Co.,
Incorporated (available June 5, 1991) or similar interpretive letters, but
rather must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with a secondary resale transaction. In
addition, any such resale transaction should be covered by an effective
registration statement containing the selling security holders information
required by Item 507 of Regulation S-K of the Securities Act.
Each broker-dealer that received Exchange Notes for its own account in
exchange for Series A Notes, where such Series A Notes were acquired by such
broker-dealer as a result of market-making activities or other trading
activities, may be a statutory underwriter and must acknowledge that it will
deliver a prospectus in connection with any resale of such Exchange Notes. The
Company has agreed to make available a prospectus meeting the requirements of
the Securities Act to any such broker-dealer for use in connection with any
resale of any Exchange Notes acquired in the Exchange Offer. A broker-dealer
which delivers such a prospectus to purchasers in connection with such resales
will be subject to certain of the civil liability provisions under the
Securities Act and will be bound by the provisions of the Registration Rights
Agreement (including certain indemnification rights and obligations).
By tendering pursuant to the Exchange Offer, each Holder will represent to
the Company, among other things, that (i) the Exchange Notes acquired pursuant
to the Exchange Offer are being obtained in the ordinary course of its business,
(ii) neither the holder nor any such other person has an arrangement or
understanding with any person to participate in the distribution of the Exchange
Notes, and (iii) the holder and any such other person acknowledge that if they
participate in the Exchange Offer for the purpose of distributing the Exchange
Notes (a) they must, in the absence of an exemption therefrom, comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale of the
24
<PAGE> 30
Exchange Notes and cannot rely on the no-action letters referenced above and (b)
failure to comply with such requirements in such instance could result in such
holder incurring liability under the Securities Act for which such holder is not
indemnified by the Company. Further, by tendering in the Exchange Offer, each
holder that may be deemed an "affiliate" (as defined in Rule 405 of the
Securities Act) of the Company will represent to the Company that such holder
understands and acknowledges that the Exchange Notes may not be offered for
resale, resold or otherwise transferred by that Holder without registration
under the Securities Act or an exemption therefrom.
As set forth above, affiliates of the Company are not entitled to rely on
the foregoing interpretations of the staff of the Commission with respect to
resales of the Exchange Notes without compliance with the registration and
prospectus delivery requirements of the Securities Act.
CONSEQUENCES OF FAILURE TO EXCHANGE
As a result of the making of this Exchange Offer, the Company will have
fulfilled one of its obligations under the Registration Rights Agreement, and
Holders of Series A Notes who do not tender their Series A Notes generally will
not have any further registration rights under the Registration Rights Agreement
or otherwise. Accordingly, any Holder that does not exchange such Holder's
Series A Notes for Exchange Notes will continue to hold the untendered Series A
Notes and will be entitled to all the rights and limitations applicable thereto
under the Indenture, except to the extent that such rights or limitations, by
their terms, terminate or cease to have further effectiveness as a result of the
Exchange Offer.
The Series A Notes that are not exchanged for Exchange Notes pursuant to
the Exchange Offer will remain restricted securities. Accordingly, such Series A
Notes may be resold only (i) to the Company (upon redemption thereof or
otherwise), (ii) pursuant to an effective registration statement under the
Securities Act, (iii) so long as the 144A Notes are eligible for resale pursuant
to Rule 144A under the Securities Act, to a Qualified Institutional Buyer in a
transaction meeting the requirements of Rule 144A, (iv) outside the United
States to a foreign person pursuant to the exemption from the registration
requirements of the Securities Act provided by Regulation S thereunder, (v)
pursuant to an exemption from registration under the Securities Act provided by
Rule 144 thereunder (if available) or Regulation D, Rule 501 (a)(1), (2), (3) or
(7) or (vi) to an Accredited Investor in a transaction exempt from the
registration requirements of the Securities Act, in each case in accordance with
any applicable securities laws of any state of the United States or other
applicable jurisdiction. See "Risk Factors -- Restrictions on Transfer."
OTHER
Participation in the Exchange Offer is voluntary, and Holders should
carefully consider whether to accept. Holders are urged to consult their
financial and tax advisors in making their own decision on what action to take.
The Company may in the future seek to acquire untendered Series A Notes, to
the extent permitted by applicable law, in open market or privately negotiated
transactions, through subsequent exchange offers or otherwise. The Company has
no present plans to acquire any Series A Notes that are not tendered in the
Exchange Offer or to file a registration statement to permit resales of any
untendered Series A Notes.
In any state where the Exchange Offer does not fall under a statutory
exemption to the blue sky rules, the Company has filed the appropriate
registrations and notices, and has made the appropriate requests, to permit the
Exchange Offer to be made in such state.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE EXCHANGE OFFER
The following discussion is based upon current provisions of the Internal
Revenue Code of 1986, as amended (the "Code"), existing and proposed Treasury
Department regulations (the "Regulations") and existing administrative
interpretations and court decisions. There can be no assurance that the Internal
Revenue Service (the "IRS") will not take a contrary view, and no ruling from
the IRS has been or will be sought. Legislative, judicial or administrative
changes or interpretations may be forthcoming that could alter
25
<PAGE> 31
or modify the statements and conditions set forth herein. Any such changes or
interpretations may or may not be retroactive and could affect the tax
consequences to Holders. Certain Holders of the Series A Notes (including
insurance companies, tax-exempt organizations, financial institutions,
broker-dealers, foreign corporations and persons who are not citizens or
residents of the United States) may be subject to special rules not discussed
below. Each Holder of Series A Notes should consult his, her or its own tax
advisor as to the particular tax consequences of exchanging such Holder's Series
A Notes for Exchange Notes, including the applicability and effect of any state,
local or foreign tax laws.
The issuance of the Exchange Notes to Holders of the Series A Notes
pursuant to the terms set forth in this Prospectus will not constitute an
exchange for United States federal income tax purposes because such exchange
does not represent a significant modification of the debt instruments.
Consequently, no gain or loss would be recognized by Holders of the Series A
Notes upon receipt of the Exchange Notes, and ownership of the Exchange Notes
will be considered a continuation of ownership of the Series A Notes. For
purposes of determining gain or loss upon the subsequent sale or exchange of the
Exchange Notes, a Holder's basis in the Exchange Notes should be the same as
such Holder's basis in the Series A Notes exchanged therefore. A Holder's
holding period for the Exchange Notes should include the Holder's holding period
for the Series A Notes exchanged therefor. The issue price, original issue
discount inclusion and other tax characteristics of the Exchange Notes should be
identical to the issue price, original issue discount inclusion and other tax
characteristics of the Series A Notes exchanged therefor.
See also "Certain United States Federal Tax Considerations for Non-United
States Holders."
26
<PAGE> 32
USE OF PROCEEDS
There will be no proceeds to the Company from the exchange of Series A
Notes pursuant to the Exchange Offer. The net proceeds from the Offering of
Series A Notes were approximately $100.6 million, after deducting discounts to
the Initial Purchaser and estimated offering expenses payable by the Company.
The net proceeds from the Offering, together with borrowings under the Credit
Facility, were used to repay indebtedness under the Company's existing credit
facility and certain other indebtedness of the Company, as set forth in the
table below (assuming consummation of the Offering on September 28, 1997). The
Offering, the initial borrowings under the Credit Facility, the application of
the proceeds therefrom as set forth below and the subchapter S election of the
affiliated entities that will be subsidiaries of the Company following the
Refinancing are collectively referred to herein as the "Transactions."
<TABLE>
<CAPTION>
(IN THOUSANDS)
--------------
<S> <C>
Sources:
9 7/8% Senior Subordinated Notes due 2007............................ $104,507
Credit Facility(1)................................................... 3,415
---------
Total sources................................................ $107,922
=========
Uses:
Repayment of existing indebtedness:
Existing bank credit facility(2).................................. $ 88,252
Ogden Note(3)..................................................... 11,000
Notes payable to shareholders(4).................................. 3,000
Accrued interest.................................................. 1,285
Fees and expenses.................................................... 4,385
---------
Total uses................................................... $107,922
=========
</TABLE>
- ---------------
(1) The Credit Facility provides for total available borrowings of $45.0
million. See "Description of Other Indebtedness -- Credit Facility."
(2) The Company's existing bank credit facility bore interest at a blended
average rate of 8.96% per annum as of June 29, 1997 and matured in June
2001.
(3) The Ogden Note had a principal amount of $12.0 million and was issued to
Ogden in connection with the Ogden Acquisition. See "Business -- History of
the Company; the Ogden Acquisition." The Ogden Note was prepaid prior to its
scheduled maturity in September 2001 and bore interest at a rate of 8% per
annum.
(4) In order to finance a portion of the Ogden Acquisition, the UNICCO
shareholders loaned the Company $3.0 million. The notes evidencing this loan
bore interest at a rate of 15% per annum, with interest paid in-kind until
the maturity of such notes in October 2001. See "Business -- History of the
Company; the Ogden Acquisition" and "Certain Transactions."
27
<PAGE> 33
CAPITALIZATION
The following table sets forth the capitalization of the Company as of
September 28, 1997, on an unaudited actual basis and as adjusted to give effect
to the Offering. See "Use of Proceeds." The following table should be read in
conjunction with the "Selected Financial Data," "Unaudited Pro Forma Financial
Data" and the Combined Consolidated Financial Statements of the Company,
including the notes thereto, included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
AS OF SEPTEMBER 28, 1997
------------------------
(UNAUDITED)
ACTUAL AS ADJUSTED
-------- -----------
(IN THOUSANDS)
<S> <C> <C>
Long-term debt, including current maturities:
Existing bank credit facility.................................... $ 88,252 $ --
Credit Facility.................................................. -- 3,415(1)
9 7/8% Senior Subordinated Notes due 2007........................ -- 104,507(2)
Other long-term debt............................................. 18,111 5,000(3)
-------- --------
Total long-term debt............................................. 106,263 112,922
Shareholder's equity............................................... 9,217 6,144(4)
-------- --------
Total capitalization..................................... $115,480 $ 119,066
======== ========
</TABLE>
- ---------------
(1) The Credit Facility provides for total available borrowings of $45.0
million. See "Description of Other Indebtedness -- Credit Facility."
(2) The Notes are shown net of original issue discount of $493,500.
(3) Represents a $5.0 million note payable to Massachusetts Capital Resource
Company due in September 2001 that was issued to finance a portion of the
Ogden Acquisition. This note ranks pari passu in right of payment with the
Notes. See "Description of Other Indebtedness -- MCRC Note."
(4) The decrease in shareholders' equity resulted from the repayment of
indebtedness as part of the Transactions and consists of (a) the write-off
of $2.1 million of deferred financing costs and (b) the $1.0 million
premium paid over the carrying value of the Ogden Note.
28
<PAGE> 34
SELECTED FINANCIAL DATA
The following selected financial data as of and for each of the five years
in the period ended June 29, 1997 and as of September 28, 1997 and for the
three-month periods ended September 28, 1997 and September 29, 1996 have been
derived from, and are qualified by reference to, the Combined Consolidated
Financial Statements of the Company, which, in the case of the Combined
Consolidated Financial Statements as of June 30, 1996 and June 29, 1997 and for
each of the three years in the period ended June 29, 1997, and as of September
28, 1997 and for the three-month periods ended September 28, 1997 and September
29, 1996 are included elsewhere in this Prospectus. The following information
should be read in conjunction with "Unaudited Pro Forma Financial Data,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the Combined Consolidated Financial Statements of the Company,
including the notes thereto, included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
FOR THE YEARS ENDED FOR THE THREE MONTH PERIOD ENDED
--------------------------------------------------------- ----------------------------------
JUNE 27, JUNE 26, JUNE 25, JUNE 30, JUNE 29, SEPTEMBER 29, SEPTEMBER 28,
1993 1994 1995 1996(1) 1997 1996 1997
-------- -------- -------- --------- -------- ------------- -------------
(DOLLARS IN THOUSANDS) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Revenues....................... $73,559 $77,797 $88,095 $98,315 $533,882 $ 128,310 $ 134,717
Cost of revenues............... 61,685 64,866 74,695 84,244 482,526 115,929 121,147
------- ------- ------- ------- -------- --------- ---------
Gross profit................. 11,874 12,931 13,400 14,071 51,356 12,381 13,570
Selling, general and
administrative expenses...... 9,130 9,918 10,204 11,491 31,660 6,565 8,606
Amortization of intangible
assets....................... 879 558 535 551 4,749 1,191 1,191
------- ------- ------- ------- -------- --------- ---------
Income from operations....... 1,865 2,455 2,661 2,029 14,947 4,625 3,773
Interest income................ 80 68 107 85 67 1 1
Interest expense............... (144) (110) (80) (178) (11,492) (2,459) (3,007)
------- ------- ------- ------- -------- --------- ---------
Income before provision for
income taxes............... 1,801 2,413 2,688 1,936 3,522 2,167 767
Provision for income
taxes(2)..................... 150 205 214 189 2,339 940 189
------- ------- ------- ------- -------- --------- ---------
Net income................... $ 1,651 $ 2,208 $ 2,474 $ 1,747 $ 1,183 $ 1,227 $ 578
======= ======= ======= ======= ======== ========= =========
OTHER FINANCIAL DATA:
EBITDA(3)...................... $ 3,237 $ 3,683 $ 3,863 $ 3,399 $ 22,209 $ 6,357 $ 5,551
EBITDA margin(4)............... 4.4 % 4.7 % 4.4 % 3.5% 4.2% 5.0% 4.1%
Ratio of earnings to fixed
charges(5)................... 5.2x 7.0x 7.5x 4.6x 1.3x 1.7x 1.2x
Depreciation and
amortization................. $ 1,372 $ 1,228 $ 1,202 $ 1,370 $ 7,262 $ 1,732 $ 1,777
Capital expenditures........... 592 649 949 1,227 2,578 355 249
BALANCE SHEET DATA (AT END OF
PERIOD):
Cash......................... $ 603 $ 121 $ 121 $ 157 $ 3,928 $ 147 $ 2,106
Working capital.............. 813 3,000 4,543 (2,278) 45,050 40,090 45,291
Total assets................. 16,327 17,117 21,335 85,167 161,087 153,062 156,433
Total long-term debt
(including current
maturities)................ 2,017 1,532 2,687 62,850 107,147 104,783 106,263
</TABLE>
- ---------------
(1) Fiscal 1996 was a 53-week year. As a result, the Company's results of
operations for fiscal 1996 include approximately $1.0 million of payroll and
payroll-related expenses attributable to the additional week of operations
that were not billed in the period to customers with fixed price contracts.
See "Management's Discussion and Analysis of Financial Condition and Results
of Operations."
(2) For the years ended June 25, 1995 and June 30, 1996, the Company was not
subject to federal and certain state income taxes as it had elected to be
treated as a subchapter S corporation. For the year ended June 29, 1997,
certain entities of the Company were taxed as C corporations through
December 31, 1996, at which time they elected to be treated as subchapter S
corporations. See Note 7 of Notes to the Company's Combined Consolidated
Financial Statements.
(3) EBITDA is defined as earnings before provision for income taxes, interest
expense, interest income and depreciation and amortization. EBITDA is
presented because it is a widely accepted financial indicator of a leveraged
company's ability to service and/or incur indebtedness and because
management believes that EBITDA is a relevant measure of the Company's
ability to generate cash without regard to the Company's capital structure
or working capital needs. EBITDA as presented may not be comparable to
similarly titled measures used by other companies, depending upon the
non-cash charges included. When evaluating EBITDA, investors should consider
that EBITDA (i) should not be considered in isolation but together with
other factors which may influence operating and investing activities, such
as changes in operating assets and liabilities and purchases of property and
equipment; (ii) is not a measure of performance calculated in accordance
with generally accepted accounting principles; (iii) should not be construed
as an alternative or substitute for income from operations, net income or
cash flows from operating activities in analyzing the Company's operating
performance, financial position or cash flows; and (iv) should not be used
as an indicator of the Company's operating performance or as a measure of
its liquidity.
(4) EBITDA margin represents EBITDA as a percentage of revenues.
(5) For purposes of calculating the ratio of earnings to fixed charges, earnings
consist of income before provision for income taxes, plus fixed charges.
Fixed charges consist of interest, amortization of deferred financing costs,
amortization of debt discount and that portion of rental payments on
operating leases deemed representative of the interest factor.
29
<PAGE> 35
UNAUDITED PRO FORMA FINANCIAL DATA
The following unaudited pro forma financial data (the "Unaudited Pro Forma
Financial Data") have been derived from the historical Combined Consolidated
Financial Statements of the Company included elsewhere in this Prospectus, and
have been prepared on a pro forma basis giving effect to the Transactions as if
they had occurred on July 1, 1996, in the case of the Unaudited Pro Forma
Statement of Operations, and on September 28, 1997, in the case of the Unaudited
Pro Forma Balance Sheet. The Unaudited Pro Forma Financial Data and accompanying
notes should be read in conjunction with the Combined Consolidated Financial
Statements of the Company, including the notes thereto, included elsewhere in
this Offering Memorandum. The Unaudited Pro Forma Financial Data are not
intended to be indicative of future results of operations or financial position,
or the results of operations or financial position of the Company that might
have been achieved had the Transactions actually occurred on the dates
specified.
30
<PAGE> 36
UNAUDITED PRO FORMA COMBINED CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
AS OF SEPTEMBER 28, 1997
----------------------------------------
ACTUAL ADJUSTMENTS PRO FORMA
-------- ----------- ---------
(IN THOUSANDS)
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents............................... $ 2,106 $ 104,507(a) $ 2,106
(100,122)(b)
(4,385)(c)
Accounts receivable, less reserves...................... 88,253 88,253
Other current assets.................................... 2,436 2,436
-------- --------
Total current assets.......................... 92,795 92,795
Property and Equipment:
Transportation equipment................................ 1,382 1,382
Machinery and equipment................................. 6,261 6,261
Furniture and fixtures.................................. 3,921 3,921
Leasehold improvements.................................. 329 329
-------- --------
11,893 11,893
Less: accumulated depreciation and amortization......... (7,596) (7,596)
-------- --------
Net property and equipment.................... 4,297 4,297
Other Assets:
Notes receivable from officers.......................... 686 686
Intangible assets, net of amortization.................. 54,245 54,245
Other assets, net....................................... 4,410 4,385(c) 6,711
(2,084)(d)
-------- --------
Total assets.................................. $156,433 $ 158,734
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Total current liabilities............................... $ 47,504 $ (8,185)(b) $ 39,319
Long-term liabilities:
Line of credit.......................................... 51,752 (48,337)(b) 3,415
Long-term debt, less current portion.................... 47,611 104,507(a) 109,507
(43,600)(b)
989(e)
Other long-term liabilities............................. 349 349
-------- --------
Total liabilities............................. 147,216 152,590
Shareholders' Equity:
Common shares........................................... 378 378
Retained earnings....................................... 9,581 (2,084)(d) 6,508
(989)(e)
Less notes receivable from stock sales.................. (240) (240)
Less treasury shares at cost............................ (502) (502)
-------- --------
Total shareholders' equity.................... 9,217 6,144
-------- --------
Total liabilities and shareholders' equity.... $156,433 $ 158,734
======== ========
</TABLE>
31
<PAGE> 37
UNAUDITED PRO FORMA COMBINED CONSOLIDATED STATEMENT OF INCOME
<TABLE>
<CAPTION>
FOR THE
FOR THE YEAR ENDED JUNE 29, 1997 THREE-MONTH PERIOD
------------------------------------ ENDED
ACTUAL ADJUSTMENTS PRO FORMA SEPTEMBER 28, 1997
-------- ----------- --------- -------------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Revenues............................... $533,882 $ 533,882 $ 134,717
Cost of revenues....................... 482,526 482,526 121,147
-------- -------- --------
Gross profit................. 51,356 51,356 13,570
Selling, general and administrative
expenses............................. 31,660 31,660 8,606
Amortization of intangible assets...... 4,749 4,749 1,191
-------- -------- --------
Income from operations....... 14,947 14,947 3,773
Interest income........................ 67 67 1
Interest expense....................... (11,492) $ (159)(f) (11,651) (3,326)
-------- -------- -------- --------
Income before provision for
income taxes............... 3,522 3,363 448
Provision for income taxes............. 2,339 (270)(g) 2,069 153
-------- -------- --------
Net income................... $ 1,183 $ 1,294 $ 295
======== ======== ========
</TABLE>
NOTES TO UNAUDITED PRO FORMA COMBINED CONSOLIDATED FINANCIAL INFORMATION
<TABLE>
<S> <C>
(a) Reflects the issuance of the Notes, net of discount of $493,500.
(b) Reflects the repayment of indebtedness with the net proceeds of the Notes, as follows
(in thousands):
Bank debt:
Current portion of long-term debt............................ $ 6,900
Long-term debt, net of current portion....................... 29,600
Line of credit............................................... 48,337
Other debt:
Notes payable -- Ogden Corporation........................... 11,000
Notes payable -- Shareholders................................ 3,000
Accrued interest............................................. 1,285
----------
Total................................................... $100,122
==========
(c) Reflects debt issuance costs associated with the Offering of the Series A Notes,
including discounts to the Initial Purchaser and estimated offering expenses.
(d) Reflects the write-off of deferred debt issuance costs resulting from the repayment of
indebtedness as part of the Transactions.
(e) Reflects a charge associated with the difference between the prepayment price of the
Ogden Note and its carrying value of $9,878,400 at June 29, 1997.
(f) Pro forma interest expense reflects (i) $438,500 of amortization of deferred debt
issuance costs related to the offering of the Series A Notes, (ii) $49,350 of
amortization of original issue discount related to the Series A Notes, (iii) interest
expense related to the Series A Notes and (iv) interest expense related to pro forma
borrowings under the Credit Facility at an assumed interest rate of 7.63%, which is the
interest rate that would have been applicable under the Credit Facility for the year
ended June 29, 1997.
(g) Reflects the tax effects of the pro forma adjustments, including the pro forma effect of
subchapter S elections of certain entities of the Company, assuming such elections
occurred on July 1, 1996.
</TABLE>
32
<PAGE> 38
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The matters discussed below and elsewhere herein contain forward-looking
statements regarding the future performance of the Company and other anticipated
future events. These matters involve risks and uncertainties that could cause
actual results to differ materially from the statements contained herein. In
addition to the matters discussed below, see "Risk Factors" for information
relating to such risks and uncertainties.
GENERAL
The Company is a leading provider of integrated facilities services to a
broad base of industrial, commercial and institutional clients throughout the
United States and Canada. Services offered by the Company include industrial and
mechanical engineering, plant operations, custodial and maintenance services,
security services and administrative services.
The Company recently organized its operations around four Strategic
Business Units. The fiscal 1997 revenues for each SBU are as follows:
Commercial: $214 million; Industrial: $149 million;
Education/Healthcare/Government: $110 million; and Security: $61 million.
The Company structures its service contracts under three principal methods:
fixed price, cost plus fixed fee and hourly billing. These types of contracts
currently account for approximately 25%, 63% and 12%, respectively, of the
Company's revenues. Cost of service revenues primarily consists of direct labor
costs and related benefits, insurance, supplies and equipment. In fiscal 1997,
81.7% of the cost of service revenues consisted of direct labor costs and
related benefits. Selling, general and administrative expenses include employee
compensation and benefits, travel, insurance, rent, recruiting and training,
professional fees and bad debt expense. In fiscal 1997, 52.5% of selling,
general and administrative expenses consisted of employee compensation and
benefits.
The Company's fiscal 1997 results of operations were significantly impacted
by the Ogden Acquisition on June 28, 1996. See "Business -- History of the
Company; the Ogden Acquisition." The Company accounted for this transaction
under the purchase method of accounting. A significant portion of the purchase
price of $62 million was allocated to intangible assets. Accordingly, the
Company has incurred significant amortization expenses in fiscal 1997. Interest
expense also increased significantly due to the indebtedness incurred to finance
the acquisition. In addition, operating profit margins were negatively impacted
by the Ogden Acquisition because Ogden's business consisted of more lower margin
contracts than the Company's.
33
<PAGE> 39
RESULTS OF OPERATIONS
The following comparisons of the Company's results of operations for fiscal
years 1995, 1996 and 1997, and the first quarter of fiscal 1998 should be read
in conjunction with the Combined Consolidated Financial Statements of the
Company, including the notes thereto, included elsewhere in this Prospectus.
The following table sets forth, for the periods indicated, certain
operating data expressed both in dollars and as a percentage of revenues for the
period.
<TABLE>
<CAPTION>
FOR THE THREE MONTH PERIOD ENDED
FOR THE YEARS ENDED --------------------------------------
---------------------------------------------------------
SEPTEMBER 29, SEPTEMBER 28,
JUNE 25, 1995 JUNE 30, 1996 JUNE 29, 1997 1996 1997
---------------- ---------------- ----------------- ----------------- -----------------
(DOLLARS IN THOUSANDS) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues................... $88,095 100.0% $98,315 100.0% $533,882 100.0% $128,310 100.0% $134,717 100.0%
Cost of revenues........... 74,695 84.8 84,244 85.7 482,526 90.4 115,929 90.4 121,147 89.9
------- ----- ------- ----- -------- ----- -------- ----- -------- -----
Gross profit............. 13,400 15.2 14,071 14.3 51,356 9.6 12,381 9.6 13,570 10.1
Selling, general and
administrative
expenses................. 10,204 11.6 11,491 11.7 31,660 5.9 6,565 5.1 8,606 6.4
Amortization of intangible
assets................... 535 0.6 551 0.6 4,749 0.9 1,191 0.9 1,191 .9
------- ----- ------- ----- -------- ----- -------- ----- -------- -----
Income from operations... 2,661 3.0 2,029 2.1 14,947 2.8 4,625 3.6 3,773 2.8
Interest income............ 107 0.1 85 0.1 67 -- 1 -- 1 --
Interest expense........... (80) (0.1) (178) (0.2) (11,492) (2.2) (2,459) (1.9) (3,007) (2.2)
------- ----- ------- ----- -------- ----- -------- ----- -------- -----
Income before provision
for income taxes....... 2,688 3.1 1,936 2.0 3,522 0.7 2,167 1.7 767 .6
Provision for income
taxes.................... 214 0.2 189 0.2 2,339 0.4 940 0.7 189 .2
------- ----- ------- ----- -------- ----- -------- ----- -------- -----
Net income............... $ 2,474 2.8% $ 1,747 1.8% $ 1,183 0.2% $ 1,227 1.0 $ 578 .4%
======= ===== ======= ===== ======== ===== ======== ===== ======== =====
</TABLE>
COMPARISON OF THREE MONTH PERIODS ENDED SEPTEMBER 28, 1997 AND SEPTEMBER 29,
1996.
Revenues. Revenues for the first quarter of fiscal 1998 were $134.7
million compared to $128.3 million for the first quarter of fiscal 1997, an
increase of $6.4 million or 5.0%. This increase is primarily attributable to
revenue increases in the Company's Commercial SBU of $5.9 million. This increase
resulted from services performed under new contracts and the impact of a full
year's revenue from contracts acquired in the prior year. Revenues in the
Company's Canadian Division increased by $1.6 million between the comparable
quarters, primarily as a result of a new contract which commenced in the last
quarter of fiscal 1997. This increase was partially offset by a revenue decrease
of $1.0 million in the Company's Security SBU, primarily resulting from revenues
associated with non-recurring services performed for a customer in the first
quarter of fiscal 1997. Revenues attributable to this customer decreased
$524,000 between the comparable quarterly periods.
Cost of Revenues. Cost of revenues for the first quarter of fiscal 1998
were $121.1 million, or 89.9% of revenues, compared to $115.9 million, or 90.4%
of revenues, for the first quarter of fiscal 1997. The decrease as a percentage
of revenues was primarily due to a decrease in direct labor as a percentage of
revenues. Direct labor as a percentage of revenues was 57.5% in the 1998 period,
compared to 58.8% in the comparable quarter in fiscal 1997.
Gross Profit. As a result of the foregoing, gross profit for the first
quarter of fiscal 1998 was $13.6 million, or 10.1% of revenues, compared to
$12.4 million, or 9.6% of revenues, for the comparable period in fiscal 1997.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses for the first quarter of fiscal 1998 were $8.6 million,
or 6.4% of revenues, compared to $6.6 million, or 5.1% of revenues, for the
first quarter of fiscal 1997. The increase of $2.0 million was primarily
attributable to incremental costs associated with the assimilation of the Ogden
Acquisition. The majority of these incremental costs were incurred after the
second quarter of fiscal 1997. Salaries and wages increased $1.0 million as a
result of additional headcount required to support the acquired Ogden business
as well as the impact of annual salary
34
<PAGE> 40
adjustments effective July 1, 1997. Additionally, office and occupancy costs
increased $724,000 between the comparable periods, primarily as a result of
increased computer lease costs, depreciation expense, temporary help, relocation
expense and recruiting expenses. Professional fees increased $211,000 between
the comparable periods primarily as a result of third party systems programming
costs related to the integration of the Ogden business. Travel and entertainment
expenses increased $222,000 between the comparable periods as a result of
increased air travel and travel-related expenses primarily associated with the
Company's reorganization into Strategic Business Units, effective July 1, 1997.
Amortization of Intangible Assets. Amortization expense was $1.2 million
in each of the first quarters of fiscal 1998 and fiscal 1997.
Income from Operations. As a result of the foregoing, income from
operations for the first quarter of fiscal 1998 was $3.8 million or 2.8% of
revenues, compared to $4.6 million, or 3.6% of revenues for the first quarter of
fiscal 1997.
EBITDA. As a result of the foregoing, EBITDA for the first quarter of
fiscal 1998 was $5.5 million, or 4.1% of revenues, compared to $6.4 million, or
5.0% of revenues, for the first quarter of fiscal 1997.
Interest Expense. Interest expense for the first quarter of fiscal 1998
was $3.0 million, or 2.2% of revenues, compared to $2.5 million, or 1.9% of
revenues, for the first quarter of fiscal 1997. The increase resulted from
higher borrowings under the Company's revolving credit facilities during the
first quarter of fiscal 1998. Average monthly borrowings under these facilities
were $51.0 million for the first quarter of 1998, as compared to $20.5 million
for the comparable 1997 period.
Net Income. Net income for the first quarter of fiscal 1998 was $578,000,
or 0.4% of revenue, compared to $1.2 million, or 1.0% of revenue, for the first
quarter of fiscal 1997.
COMPARISON OF YEARS ENDED JUNE 29, 1997 AND JUNE 30, 1996
Revenues. Revenues for fiscal 1997 were $533.9 million, an increase of
$435.6 million, compared to revenues of $98.3 million for fiscal 1996. This
increase was primarily attributable to the Ogden Acquisition. Revenues of the
acquired business were approximately $389.0 million for the fiscal year
preceding the acquisition. The balance of the revenue increase of approximately
$46.6 million was attributable to new customer contracts, increases in services
to existing customers and the impact of a full year's revenue from contracts
acquired in the prior year.
Cost of Revenues. Cost of revenues for fiscal 1997 was $482.5 million, or
90.4% of revenues, compared to $84.2 million, or 85.7% of revenues, for fiscal
1996. The increase as a percentage of revenues was primarily due to a higher
labor component associated with the acquired Ogden business. The higher labor
component is primarily associated with contracts related to certain commercial
and security services and the regional infrastructure necessary to support the
Company's national scope of operations following the Ogden Acquisition.
Gross Profit. As a result of foregoing, gross profit for fiscal 1997 was
$51.4 million, or 9.6% of revenues, compared to $14.1 million, or 14.3% of
revenues, for fiscal 1996.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses for fiscal 1997 were $31.7 million, or 5.9% of revenues,
compared to $11.5 million, or 11.7% of revenues, for fiscal 1996. The increase
of $20.2 million was primarily attributable to the absorption of overhead costs
associated with the acquired Ogden business. A total of $2.3 million of the
increase in expense represented non-salary related incremental costs in the
accounting, information systems, payroll and human resources departments
attributable to the Ogden Acquisition, including information systems conversion
costs, programming costs, computer lease costs, temporary help and systems
training. The Company also increased headcount in its accounting, payroll and
human resources and information systems departments in order to develop the
infrastructure necessary to support the acquired Ogden business. Payroll costs
and benefits associated with the increased headcount were approximately $450,000
during fiscal 1997. On an annualized basis, such costs are expected to be
approximately $900,000. Selling, general and administrative expenses in 1997
also include $500,000 of non-
35
<PAGE> 41
recurring charges related to an accounting services agreement between Ogden and
the Company which ended on June 29, 1997.
Amortization of Intangible Assets. Amortization of intangible assets for
fiscal 1997 was $4.7 million, compared to $551,000 for fiscal 1996.
Approximately $59 million of the $62 million purchase price for the Ogden
business was allocated to intangible assets, which are being amortized over
various lives ranging from seven to 15 years.
Income from Operations. As a result of the foregoing, income from
operations for fiscal 1997 was $14.9 million, or 2.8% of revenue, compared to
$2.0 million, or 2.1% of revenue, for fiscal 1996.
EBITDA. As a result of the foregoing, EBITDA for fiscal 1997 was $22.2
million, or 4.2% of revenues, compared to $3.4 million, or 3.5% of revenues for
fiscal 1996.
Interest Expense. Interest expense for the year ended June 29, 1997 was
$11.5 million, or 2.2% of revenue, compared to $178,000, or 0.2% of revenue for
fiscal 1996. This substantial increase was attributable to indebtedness incurred
in connection with the Ogden Acquisition and the increased working capital
requirements associated therewith. This indebtedness included a $90 million bank
credit facility and $20 million of other subordinated debt. The blended average
interest rate on the bank credit facility was 8.96% as of June 29, 1997.
Net Income. Net income for fiscal 1997 was $1.2 million, or 0.2% of
revenue, compared to $1.7 million, or 1.8% of revenue, for fiscal 1996.
COMPARISON OF YEARS ENDED JUNE 30, 1996 AND JUNE 25, 1995
Revenues. Revenues for fiscal 1996 were $98.3 million compared to $88.1
million for fiscal 1995, an increase of $10.2 million or 11.6%. The increase was
primarily attributable to a $4.1 million increase in revenues in the Company's
then-existing Schools and College Division (now part of the Company's
Education/Healthcare/Government SBU) and $2.9 million and $2.2 million increases
in revenues from the Company's then-existing Mid-Atlantic and New England
Divisions, respectively.
Cost of Revenues. Cost of revenues for fiscal 1996 was $84.2 million, or
85.7% of revenues, compared to $74.7 million, or 84.8% of revenues, for fiscal
1995. The increase in cost of revenues as a percentage of revenues was primarily
due to (i) $1.0 million of payroll and payroll-related expenses attributable to
an additional week of operations in fiscal 1996, a 53-week period, that were not
billed in the period to customers who have fixed price contracts, (ii) a $1.4
million increase in workers' compensation and liability insurance premiums
resulting from the transition to a reinsurance program from the Company's
self-insurance arrangement (see "Certain Transactions") and (iii) a $1.0 million
increase in expenses primarily resulting from the increased use of
subcontractors to service several new large customers. These increased costs
were offset in part by $2.1 million in refunds and reversals of reserves
resulting from the Company's favorable insurance claims experience. See Note 5
of Notes to the Company's Combined Consolidated Financial Statements.
Gross Profit. As a result of the foregoing, gross profit for fiscal 1996
was $14.1 million, or 14.3% of revenues, compared to $13.4 million, or 15.2% of
revenues, for fiscal 1995. The increase in gross profit was attributable to the
increased revenues, offset in part by the higher payroll expenses in fiscal
1996.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses for fiscal 1996 were $11.5 million, or 11.7% of
revenues, compared to $10.2 million, or 11.6% of revenues, for fiscal 1995.
Selling, general and administrative expenses in fiscal 1996 included a $403,000
charge related to the cost of settlement of litigation with a former officer of
the Company, and approximately $124,000 of payroll and payroll-related expenses
related to the extra week of operations described above.
Amortization of Intangible Assets. Amortization of intangible assets for
fiscal 1996 was $551,000, compared to $535,000 in fiscal 1995. Amortization of
intangible assets in fiscal 1996 included $134,000 related to amortization of a
non-compete agreement signed in January 1996 by a former officer and shareholder
of the
36
<PAGE> 42
Company. This increase was partially offset by the full amortization of a
non-compete agreement associated with a 1992 acquisition.
Income from Operations. As a result of the foregoing, income from
operations for fiscal 1996 was $2.0 million, or 2.1% of revenues, compared to
$2.7 million, or 3.0% of revenues, for fiscal 1995.
EBITDA. As a result of the foregoing, EBITDA for fiscal 1996 was $3.4
million, or 3.5% of revenues,compared to $3.9 million, or 4.4% of revenues, for
fiscal 1995.
Interest Expense. Interest expense for fiscal 1996 was $178,000, or 0.2%
of revenue, compared to $80,000 or 0.1% of revenue for fiscal 1995. The increase
was attributable to a higher level of borrowings under the Company's revolving
credit facility during fiscal 1996.
Net Income. Net income for fiscal 1996 was $1.7 million, or 1.8% of
revenues, compared to $2.5 million, or 2.8% of revenues, for fiscal 1995. The
decrease was primarily attributable to the impact of incremental direct labor
expense associated with the 53rd week of operations as described above.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal capital requirements are to service the Company's
indebtedness, for working capital and, to a lesser extent, to fund capital
expenditures. The Company believes that its cash flow from operations, together
with its borrowing capacity under the Credit Facility, will be sufficient to
meet such requirements.
For the first quarter of fiscal 1998, cash decreased $1.8 million. The
decrease is primarily attributable to $1.9 million of repayments of term debt
during the period. Net cash used for operating and investing activities was
$56,000.
For the first quarter of fiscal 1997, $41.9 million was used for operating
activities and investing activities which consisted of $41.5 million of net cash
used for operating activities and $0.4 million used for investing activities.
Net cash provided by financing activities during the period was $41.9 million,
which primarily represented borrowings under the Company's $48 million line of
credit to fund the working capital requirements related to the Ogden
Acquisition, which occurred on June 28, 1996.
For fiscal 1997, $38.4 million was used for operating and investing
activities which consisted of $36.4 million of net cash used for operating
activities and $2.0 million used for investing activities. For fiscal 1996, the
Company used $46.8 million for operating and investing activities which
consisted of $5.5 million of net cash provided by operating activities and $52.3
million used in investing activities ($51.0 million of which was used for the
Ogden Acquisition). Net cash provided by financing activities in fiscal 1996 was
$46.8 million, primarily resulting from bank indebtedness related to the Ogden
Acquisition.
Capital expenditures were $2.6 million in fiscal 1997. The Company's
operations do not generally require material investment in capital assets. The
Company expects that its capital expenditure requirements will not increase
materially in 1998. The Company's business generally is not seasonal.
The Company's long-term indebtedness consists of borrowings under the
Credit Facility, the Notes and $5.0 million of subordinated indebtedness (which
will rank pari passu in right of payment with the Notes). Under the Credit
Facility, the Company has the ability to borrow up to $45.0 million for working
capital and general corporate purposes, subject to certain conditions. The
Credit Facility, the Indenture and the terms of the Company's other subordinated
indebtedness include certain financial and operating covenants which, among
other things, restrict the ability of the Company to incur additional
indebtedness, make investments and take other actions. See "Description of Other
Indebtedness" and "Description of the Exchange Notes." The ability of the
Company to meet its debt service obligations will be dependent upon the future
performance of the Company, which will be impacted by general economic
conditions and other factors. See "Risk Factors."
37
<PAGE> 43
YEAR 2000 COMPLIANCE
The Company's computer software systems are licensed from outside vendors.
The Company is in the process of working with its software vendors to determine
the necessary upgrades such that the Company's computer systems will function
properly on and after January 1, 2000. Although such matters will not be within
the Company's direct control, the Company believes that its computer systems
will be "Year 2000 compliant" and that such compliance will not have a material
adverse effect on the Company's results of operations or financial condition.
38
<PAGE> 44
BUSINESS
Founded in 1949, UNICCO is a leading provider of integrated facilities
services to a broad base of industrial, commercial and institutional clients
throughout the United States and Canada. The Company offers an extensive array
of commercial, operational and administrative services to its customers,
providing a single source solution for those services that can be more
cost-effectively and efficiently outsourced. Services offered by the Company
include industrial and mechanical engineering, plant operations, custodial and
maintenance services, security services and administrative services. UNICCO has
developed a reputation for quality through nearly 50 years of service to its
customers. The Company has achieved a significant market presence and a leading
market share in many of its operating regions through a combination of internal
growth and strategic acquisitions. The Company believes that the breadth of its
services, its reputation for quality and its significant market presence
position it to provide a single source facilities management solution to local,
multi-location and national customers. The Company has over 19,000 employees
servicing approximately 900 customers, including 29 of the Fortune 100
companies, at approximately 3,000 customer locations. Throughout its history,
the Company has generated a record of growth and consistent profitability. For
the fiscal year ended June 29, 1997, the Company's net income, revenues and
EBITDA were $1.2 million, $533.9 million and $22.2 million, respectively. For
the three month period ended September 28, 1997, such amounts were $578,000,
$134.7 million and $5.5 million, respectively.
UNICCO analyzes the unique needs of each customer to develop a flexible,
integrated facilities services solution, comprised of a combination of the
following services:
<TABLE>
<CAPTION>
ENGINEERING OPERATIONS & MAINTENANCE COMMERCIAL SERVICES
<S> <C> <C>
- - Mechanical Engineering - Facility Management/Repair - Janitorial/Housekeeping
- - Planning/Scheduling - Production Equipment - Recycling
- - Power Generation Maintenance/Repair - Snow Removal
Management - Warehouse Services and - Window Washing
- - Plant Engineering Inventory Control - Pest Control
- - Energy Management - Utility Program Management - Specialty Cleaning
- - Space Planning - Shipping/Receiving Services - Clean Rooms/
- - CAD Services - Construction Project Management High Tech
- - CMMS Programs - Waste Treatment - Sterile Environment
- - Environmental - Elevator/Escalator Maintenance - Landscaping/Grounds
- Fleet Maintenance Maintenance
- Roof Repair
- Telecommunications
</TABLE>
<TABLE>
<CAPTION>
SECURITY ADMINISTRATION
<S> <C>
- - Uniformed Guard Services - Subcontract Administration
- - Security/Protection Services - Materials Procurement
- - Access Control - Reprographics/Copy Center
- - Security Audits - Mail Distribution
- - Fire/Safety Administration - Audio/Visual Services
- - Document Control - Secretarial/Clerical Services
- - Telecommunications - Service Call Desk
- - Safety Training Programs - Switchboard/Reception
</TABLE>
39
<PAGE> 45
UNICCO has recently organized its operations around four Strategic Business
Units ("SBUs") to more effectively focus the Company's technical, sales and
marketing resources on the differing needs of its customers. The following table
provides an overview of the Company's four SBUs:
<TABLE>
<CAPTION>
EDUCATION/
HEALTHCARE/
COMMERCIAL INDUSTRIAL GOVERNMENT SECURITY
<S> <C> <C> <C>
Fiscal 1997 Revenues:
$214 Million $149 Million $110 Million $61 Million
Fiscal 1998 First Quarter Revenues:
$56 Million $35 Million $29 Million $15 Million
Types of Customer:
- - Commercial - Automotive - Schools - Industrial
Real Estate - Tire and Rubber - Universities - Commercial
- - Banking - Chemical - Hospitals - Education
- - Insurance - Pharmaceuticals - Healthcare - Healthcare
Facilities
- - Retail - Aerospace/Defense - Government Agencies - Government
- High Technology
- Consumer Products
Representative Customers:
- - Beacon Properties - Chrysler - Harvard University - BASF Corp.
Corporation
- - Hines Interests - Ford Motor Company - University of Miami - Bell Atlantic
- - Trammell Crow - Caterpillar - Henry Ford Health - Computer
- - BankBoston - Bridgestone/Firestone System Associates
- - CIGNA - American Home - U.S. Department of - Hartford Insurance
- - The Travelers Products Housing and Urban - Northeastern
- - MITRE - Bristol-Myers Development University
Squibb
- Lockheed Martin - U.S. General - Philadelphia
- Gillette Services Museum of Art
Administration - United Nations
Plaza
</TABLE>
The Company believes that opportunities for growth exist in each SBU,
particularly in the Industrial and Education/Healthcare/Government sectors, as a
result of the trend toward outsourcing non-core business functions to a single
source provider. Outsourcing frees the customer from the considerable
administrative and overhead burdens of hiring, training, compensating and
supervising a large, often unionized, labor force that is performing non-core
functions. UNICCO has responded to its customers' outsourcing strategies by
providing an expanded array of services that has evolved from traditional
custodial and building maintenance to higher value added services.
The Company has a customer base of approximately 900 accounts, with no
single customer accounting for more than 3% of revenues during fiscal 1997. The
Company's customer retention rate historically has been high. Customers
representing approximately 75% of fiscal 1997 revenues have been UNICCO
customers for an average of more than six years (excluding revenues and
customers resulting from the Ogden Acquisition in June 1996). On a combined
basis, the Company and Ogden have serviced their 20 largest customers, including
the former Ogden customers, for an average of 10 years. In addition, the Company
has successfully retained over 90% of the customers acquired in the Ogden
Acquisition. UNICCO believes that its strong
40
<PAGE> 46
reputation and long-term relationships with these customers is a result of a
high level of customer satisfaction. The Company also believes that these
established relationships enhance the Company's knowledge of its customers'
needs and place UNICCO in a strong competitive position to bid on and win new
business opportunities with these customers.
BUSINESS STRENGTHS
UNICCO's revenues have increased through a combination of internal growth
and strategic acquisitions. The Company's growth, and its emergence as a leader
in the facilities services market in the United States and Canada, are
attributable to a number of factors, including the following:
High Customer Retention. The Company benefits from a large, stable base of
customers, including 29 of the Fortune 100 companies, 60 of the Fortune 500
companies and some of the country's most prestigious educational institutions.
The Company's customer base, together with its high customer retention rate,
have provided stable, recurring revenues and have contributed to the Company's
record of consistent profitability.
Established Reputation. The Company has established a reputation for
quality through almost 50 years of experience in providing dependable, extensive
complex facilities services solutions in a changing business environment. The
Company believes that its established reputation and the breadth of its services
have allowed it to further penetrate its existing customer base as well as
attract new business. The Company plans to enhance its reputation for
dependability and technical expertise by pursuing the highest levels of industry
accreditation.
Singular Focus on Facilities Services. The Company is focused exclusively
on providing facilities services solutions to its customers, unlike many of its
larger competitors for whom facilities services is an adjunct to their primary
business or one of many other unrelated lines of business. The Company believes
that this exclusive focus gives it a competitive advantage in delivering
dependable, high quality services.
Established North American Presence. The Company provides services
throughout the United States and Canada from 16 regional offices to customers in
over 40 states and each of the Canadian provinces. The Company believes that it
can leverage this infrastructure to support the marketing and delivery of
services to new customers in strategic geographic areas and to obtain additional
business from major companies that seek to utilize a single source provider
nationwide.
Effective Human Resources and Labor Relations Management. UNICCO
successfully manages a large and diverse work force of over 19,000 full and
part-time employees. The Company places a major emphasis on attracting,
training, managing, motivating and retaining the human resources necessary to
meet its existing and future business needs. The Company's extensive industry
experience and sophisticated computer-based costing models allow it to
accurately assess the labor requirements of new contracts. UNICCO seeks to
efficiently integrate its customers' existing workforce, thereby minimizing the
traditional issues typically associated with contract inception. In addition,
the Company believes that its experience in managing both union and non-union
work forces has enhanced its ability to grow its business.
Experienced Management Team. The Company's senior management team has an
average of 20 years of experience in the facilities services industry. The
Company benefits from the quality and depth of its management personnel, who are
dedicated to building customer relationships and delivering quality services to
meet and exceed its customers' needs. Additionally, management has developed
sophisticated databases and costing systems to forecast expenses for individual
customers' service requirements across a variety of service lines. These
proprietary databases enhance UNICCO's ability to effectively price and compete
for customers and contracts.
Successful Acquisition History. Throughout its 50-year history, UNICCO has
benefited from several successful strategic acquisitions. The Company has
completed three acquisitions since 1990, incorporating operations with revenues
of approximately $20 million, $5 million and $389 million in 1990, 1992 and
1996, respectively. The Company believes that its successful integration of
these acquisitions has positioned it to take advantage of opportunities for
further consolidation within the facilities services industry.
41
<PAGE> 47
THE COMPANY'S STRATEGY
The Company's objective is to enhance its position as a leading provider of
facility management solutions. The Company's strategy to meet this objective
includes the following initiatives:
Providing Integrated Facilities Solutions. UNICCO believes that an
attractive opportunity exists to expand the scope of work performed for existing
customers. Cross-selling new services to existing customers represents a
cost-effective method for the Company to achieve revenue growth. The Company
seeks to create partnerships with its customers that enable it to capitalize on
the trend toward outsourcing to single source providers. As part of this
strategy, the Company intends to focus its efforts on increasing the proportion
of its business devoted to delivering higher value added services to its
customers.
Leveraging its National Presence. UNICCO has established a significant
presence throughout the United States and Canada. The Company believes that it
can substantially increase the number of multi-location and national accounts it
serves by leveraging its existing infrastructure to support the marketing and
delivery of bundled services to new customers that operate multiple locations.
Capitalizing on Outsourcing Initiatives. The Company believes that it is
well positioned to capitalize on favorable trends in a growing number of
industries toward outsourcing of non-core business functions. Many companies
have increased the volume and types of services they outsource in order to free
their human and capital resources to better focus on their strategic business
initiatives. The Company believes that its established reputation and the
breadth of its services enhance its ability to attract this potential business.
Strategic Business Development. Through its recent organization into the
four SBUs, the Company is focused on developing specific operating and marketing
strategies targeted to the unique needs of its customers in diverse market
segments. Because of the diversity of UNICCO's existing and potential customer
base, the Company believes that it can position itself to attract higher value
added business by continuing to anticipate its customers' differing needs. The
Company believes that the SBU initiatives it has implemented will enable it to
more effectively leverage its resources to generate new clients and additional
contracts with existing clients.
Growing through Selective Acquisitions. UNICCO has successfully expanded
its business through internal growth and strategic acquisitions, including the
successful integration of the Ogden Acquisition, and intends to seek additional
opportunities to grow through selective acquisitions. The Company may pursue
acquisitions that add additional services and technical capabilities to market
to its existing customer base, or that facilitate strategic expansion of the
Company's customer base or complement its existing geographic coverage.
HISTORY OF THE COMPANY; THE OGDEN ACQUISITION
The Company was founded by the Kletjian family in 1949 and, through early
1996, had grown to become a leading provider of facilities services in the New
England and Mid-Atlantic regions. The Company's expansion resulted from a
combination of internal growth and two strategic acquisitions from Ogden
Corporation. In 1990, the Company acquired a portion of Ogden's New England
facilities services operations representing revenues of approximately $20
million. In 1992, the Company acquired Ogden's Pittsburgh-area facilities
services operations, with revenues of approximately $5 million.
In June 1996, the Company consummated the acquisition of substantially all
of the remaining portion of Ogden's facilities services business, excluding most
New York City operations. The Company acquired the majority of Ogden's North
American facilities management, custodial, plant operation and mechanical
maintenance business, along with the majority of Ogden's North American security
business, as a going concern. As part of the Ogden Acquisition, all of the
senior operating managers of Ogden associated with the acquired operations
became employees of the Company. The Ogden Acquisition more than quadrupled the
amount of the Company's revenues and number of employees and increased the
Company's geographic range to cover most of the United States and Canada.
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<PAGE> 48
The purchase price for the Ogden Acquisition was $62 million, of which $50
million was paid in cash and $12 million was paid in the form of the Ogden Note.
In addition, Ogden agreed not to compete with the Company in the facilities
services business for a period of ten years. The Ogden Acquisition was accounted
for as a purchase.
The Company believes that the Ogden Acquisition has positioned the Company
among the leading United States-based facilities services firms and established
the Company as a full-service provider capable of delivering services to a wide
customer base throughout the United States and Canada. Notable Ogden customers
obtained from the acquisition include Bridgestone/Firestone, Chrysler
Corporation, AT&T, American Home Products, CIGNA, Bell Canada and Lockheed
Martin. The Company has retained over 90% of the customers acquired in the Ogden
Acquisition.
INDUSTRY
Over the last several years, trends toward outsourcing have transformed the
traditional facilities services industry. As companies began to realize the
benefits of outsourcing non-core business functions to single source vendors,
the opportunities for companies such as UNICCO to expand into new industries and
obtain new customers have increased. Facilities services companies have expanded
their businesses from providing traditional cleaning services for commercial
property managers and large corporations to performing higher value added
services for companies in the industrial, manufacturing, education and
healthcare sectors. Outsourcing allows companies to:
- focus on their core competencies to create competitive advantages;
- re-focus both human and capital resources toward their core
business;
- reduce operating expenses;
- share risk and management responsibility;
- improve quality; and
- access technical expertise not available internally.
According to The Outsourcing Institute, approximately 80% of U.S. companies
outsource some aspect of their business support services. According to The
Outsourcing Institute, in 1996, U.S. companies spent approximately $100 billion
on outsourcing, reflecting a 100% increase from 1992. Of the $100 billion spent
on outsourcing, an estimated 40% was spent for information technology services,
15% was spent for logistics services, 30% was spent for administrative, human
resources, customer service, transportation, sales and marketing services, and
15% was spent for real estate and physical plant services. These favorable
trends are expected to continue. The Outsourcing Institute estimates that the
U.S. market for outsourcing services will grow to approximately $320 billion by
the year 2001, and that the facilities management segment will grow from
approximately $9.3 billion to approximately $23.0 billion, a compound annual
growth rate of approximately 20%. With UNICCO's geographic coverage and
extensive array of product offerings, the Company believes it is well positioned
to capitalize on these trends.
SERVICES
The Company offers a range of integrated facilities management and support
services relating to the operation and maintenance of buildings and plants.
These services are designed to optimize the facility's operating efficiency
while relieving the Company's customers from the management and personnel
burdens associated with non-core functions.
The Company's building operation and maintenance services include
traditional custodial functions such as janitorial and housekeeping services,
and mechanical and plant maintenance, which are provided to customers across the
Company's various market sectors. In connection with the Company's total
facility management concept, the Company provides additional contract building
services in the areas of grounds maintenance, life safety systems, utility
operations, energy management, security, recycling, snow removal and building
systems controls.
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<PAGE> 49
In addition to providing services which are directly related to the
operation, safety and maintenance of the facility, the Company also supplies
certain facility support services and a combination of manufacturing and
administrative support functions to its customers. In response to both
outsourcing initiatives instituted by certain of its customers and the Company's
efforts to provide customers with cost effective solutions for non-core
functions, the Company has partnered with many organizations in supplying
process management and staffing in the areas of production support, warehousing,
distribution, shipping and receiving, preventive and predictive maintenance of
manufacturing equipment, vehicle maintenance, waste water treatment and chemical
distribution systems maintenance, and reprographic and mailroom operations
support.
In order to supply seamless integrated services to a broad base of
customers and facilities, the Company also selects, manages and integrates
services provided by third parties into the Company's overall portfolio of
services. For example, the Company is able to provide sub-contracted services in
areas such as facility renovation, facility planning, space design and office
relocation to relieve its customers of individually searching for and
contracting with suppliers of these services.
The Company's principal service offerings are listed below.
Engineering:
- - Mechanical Engineering
- - Planning/Scheduling
- - Power Generation Management
- - Plant Engineering
- - Energy Management
- - Space Planning
- - CAD Services
- - CMMS Programs
- - Environmental
Commercial Services:
- - Janitorial/Housekeeping
- - Recycling
- - Relamping Services
- - Porter/Matron Services
- - Snow Removal
- - Window Washing
- - Pest Control
- - Specialty Cleaning
- - Clean Rooms/High Tech
- - Sterile Environment
- - Landscaping/Grounds
Maintenance
Operations & Maintenance:
- - Facility Management/Repair
- - Production Equipment Maintenance/Repair
- - Warehouse Services and Inventory Control
- - Utility Program Operation
- - Shipping/Receiving Services
- - Construction Project Management
- - Distribution Management
- - Waste Management
- - Elevator/Escalator Maintenance
- - Fleet Maintenance
- - Roof Repair
- - Telecommunications
Security:
- - Uniformed Guard Services
- - Security/Protection Services
- - Access Control
- - Security Audits
- - Fire/Safety Administration
- - Document Control
- - Telecommunications
- - Safety Training Programs
Administration:
- - Subcontract Administration
- - Materials Procurement
- - Reprographics/Copy Center
- - Mail Distribution
- - Audio/Visual Services
- - Secretarial/Clerical Services
- - Service Call Desk
- - Switchboard/Reception
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<PAGE> 50
CUSTOMERS
The Company's customer base is diverse in its geographic coverage, industry
sector representation, category of facility and type of service provided. The
Company has approximately 900 active customer accounts, including 29 of the
Fortune 100 and 60 of the Fortune 500 companies, operating in a wide variety of
business sectors including commercial real estate, banking, insurance, consumer
products, automotive and heavy equipment manufacturing, pharmaceuticals,
telecommunications, high technology, aerospace, defense contracting and chemical
manufacturing. In addition, the Company provides services to government
agencies, colleges and universities and other organizations and institutions
such as museums and sports facilities.
The Company's revenue stream is diverse, with no single customer accounting
for more than 3% of the Company's revenues in fiscal 1997. Management does not
believe that the loss of any single customer would have a material adverse
effect on the Company. The Company services customers in over 40 states,
including Hawaii, and each of the Canadian provinces. A representative listing
of some of the Company's major customers is as follows:
Manufacturing:
- - Bridgestone/Firestone
- - Bristol-Myers Squibb
- - Caterpillar
- - Chrysler Corporation
- - Consolidated Diesel
- - Ford Motor Company
- - The Gillette Company
- - Goodyear Tire & Rubber
- - Ingersoll-Rand Company
- - Lockheed Martin
- - Polaroid Corporation
- - Raytheon Electronics Systems
Commercial Real Estate:
- - Beacon Properties
- - CB Commercial Real Estate
- - Hines Interests
- - Koll Management Services
- - Charles E. Smith
- - Trammell Crow
Financial Services:
- - BankBoston
- - Bank of Hawaii
- - Fidelity Investments
- - Fleet National Bank
- - Putnam
- - Royal Bank of Canada
Technology:
- - Computer Associates
- - Computervision
- - The MITRE Corporation
Telecommunications:
- - AmeriTech
- - AT&T
- - Lucent Technologies
- - Bell Atlantic
Insurance:
- - CIGNA
- - Hartford Insurance
- - Liberty Mutual
- - The Travelers
Education:
- - American University
- - Chicago Public School System
- - Drexel University
- - Harvard University
- - Northeastern University
- - University of Miami
Government:
- - United States Government Accounting Office
- - United States General Services Administration
- - United States Department of Housing and Urban Development
- - United States Marshall Service
Other Customers:
- - New Jersey Meadowlands
Entertainment Complex
- - World Bank
- - United Nations Plaza
- - Philadelphia Museum of Art
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<PAGE> 51
CONTRACTS
The Company's business is generally conducted under written contracts with
its customers. Contracts vary in type and duration, with a majority having a
term of one to three years, often with automatic renewal clauses unless either
party elects to terminate. Most of the Company's contracts are subject to
termination without penalty at the option of the customer, or by either the
Company or the customer, upon 30 to 90 days' notice. The Company's experience,
as evidenced by its history of long-standing customer relationships, is that
while contractual elements may be re-negotiated, termination clauses are rarely
exercised. On those occasions when the Company has lost a customer, it is most
commonly as a result of the contract being re-bid upon expiration rather than
the exercise of a termination clause. The Company does not view its business
prospects as being particularly dependent on its written contracts, but rather
on the strength of its customer relationships and the consistency and quality of
service delivered.
The Company structures its service contracts under three principal methods:
fixed price, cost plus fixed fee and hourly billing. All contracts are based
upon a defined scope and frequency of services to be provided. Under fixed price
contracts, which currently account for approximately 25% of the Company's
revenues, the customer agrees to a fixed dollar amount for all labor and
non-labor costs. Cost plus fixed fee contracts, which currently account for
approximately 63% of the Company's revenues, provide for the customer to be
billed for labor and non-labor costs, allocated overhead and a negotiated fee
based upon these costs. Hourly billing rate contracts, which currently account
for approximately 12% of the Company's revenues, are used primarily in providing
security services and provide for actual hours worked to be billed at
pre-determined hourly rates. In certain instances, modifications to the cost
plus fixed fee contracts are structured to include an incentive fee or shared
cost savings based upon operating efficiencies obtained.
Certain of the Company's contracts, particularly government contracts,
require the Company to post a performance bond and/or payment bond as a
condition of contract award. Total performance and/or payment bonds outstanding
at August 30, 1997 were $6.3 million. The Company has never had a claim made
under any performance or payment bond.
SALES AND MARKETING
The Company's marketing efforts are designed to create a cohesive,
company-wide image and strategy as well as to provide individual focus to each
of the Company's SBUs. Company-wide marketing efforts are coordinated by a
marketing department under the direction of the Company's recently established
position of Vice President -- Marketing who is also responsible for sales
process management, tactical marketing and strategic planning and development.
As a result of the Company's emergence as a leader in the industry and its
reputation for delivering quality services, the Company is frequently invited to
bid on new major facility service contracts in the United States and Canada. The
Company is able to respond to these requests as a result of its ability to
coordinate sales, technical and financial resources to develop comprehensive
proposals addressing and delivering all aspects of customers' service
requirements at a competitive price. The Company's marketing and planning group
has implemented initiatives to sell additional higher margin services to
UNICCO's existing customers, targeting industries and geographic areas which the
Company believes have the highest propensity to outsource services and which
involve large, complex, multi-site operations.
COMPETITION
The facility services industry is characterized by a combination of a small
number of large national organizations, none of which has a dominant market
share, as well as numerous smaller companies providing a narrow range of
services in a limited geographic area. While the Company operates throughout the
United States and Canada, its services are delivered at the local level and as a
result it competes with both national organizations as well as the smaller
contractors. There are many firms that provide core janitorial, custodial or
housekeeping services, principally in the Company's commercial market sector, on
either a regional basis or limited to a small number of geographically proximate
cities or contiguous states. In addition, the Company
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<PAGE> 52
faces competition from large national firms that have branch offices or
operating locations in major cities established to service the local business
community.
In the broader market for providing bundled facility management services to
customers or for multi-site/multi-function contracts, as well as outsourced
manufacturing and administrative support services, the Company competes
primarily against large national firms. The Company believes there are a limited
number of companies that offer the range of services to both local and national
accounts as are being provided by the Company. ABM Industries, Aramark, Fluor
Corp., ISS-International Service Systems, Johnson Controls, Marriott
Corporation, Pinkerton and Service Master, among others, all supply similar
services to customers in the Company's principal market sectors. These
organizations generally have substantially greater financial and marketing
resources than the Company.
The Company believes that the principal competitive factors in the market
segments in which it operates are quality of service, cost, capability to
provide a broad range of fully integrated services, geographic scale of
operations and the ability to establish and maintain long-term customer
relationships. The Company believes that it competes favorably with respect to
each of these factors.
EMPLOYEES
The Company employs over 19,000 employees of which approximately 58% are
full time and approximately 42% are part-time. Approximately 44% of the
Company's work force is unionized under more than 170 different union contracts.
The Company has not experienced any strikes or work stoppages, and management
generally considers its relationships with its employees and its unions to be
satisfactory.
FACILITIES
The following table sets forth the Company's principal office facilities
throughout North America. The Company also has a number of smaller offices in
other cities, all of which are leased. The majority of the Company's employees
are engaged in providing services directly to customers at the customers'
facilities. Accordingly, the Company does not consider any of these locations to
be material to its operations as a whole.
<TABLE>
<CAPTION>
NO. OF LEASE
LOCATION SQUARE FEET EXPIRATION
------------------------------------------------------ ----------- ----------
<S> <C> <C>
Arlington, Virginia................................... 4,555 1999
Boston, Massachusetts(1).............................. 23,555 2001
Boston, Massachusetts................................. 12,800 2002
Chicago, Illinois..................................... 7,801 2003
Fairfax, Virginia..................................... 4,880 1999
Farmingdale, New York................................. 7,800 (2)
Farmington Hills, Michigan............................ 6,165 1997
Honolulu, Hawaii...................................... 3,500 2005
Oklahoma City, Oklahoma............................... 11,034 1998
Pine Brook, New Jersey................................ 6,642 1997
Somerville, Massachusetts............................. 3,521 2001
Toronto, Ontario...................................... 7,121 1999
</TABLE>
- ---------------
(1) This location serves as the Company's corporate headquarters.
(2) This location is occupied under a month-to-month tenancy.
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<PAGE> 53
The following locations are leased by the Company on behalf of a customer.
The Company is fully reimbursed by the customer for all rental expenses under
the lease. The lease is assignable to the customer if the Company's services are
terminated.
<TABLE>
<CAPTION>
NO. OF LEASE
LOCATION SQUARE FEET EXPIRATION
------------------------------------------------------ ----------- ----------
<S> <C> <C>
Niagara Falls, Ontario................................ 80,000 2001
Terre Haute, Indiana.................................. 129,600 2002
</TABLE>
LEGAL PROCEEDINGS
The Company is not involved in any pending legal proceedings other than
those arising in the ordinary course of the Company's business. Management
believes that the resolution of these matters will not materially affect the
Company's financial position or results of operations.
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<PAGE> 54
MANAGEMENT
UNICCO is a Massachusetts business trust and, as such, has a Board of
Trustees that serves a function similar to that of the board of directors of a
corporation. The names and positions of the Company's Trustees, executive
officers and operating managers are as follows:
TRUSTEES AND EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
NAME POSITION
- ----------------------- ------------------------------------------------------------
<S> <C>
Steven C. Kletjian Chief Executive Officer and Chairman of the Board of
Trustees
Richard J. Kletjian Vice Chairman of the Board of Trustees
Robert P. Kletjian Vice President and Vice Chairman of the Board of Trustees
Sharkay Kletjian Trustee
John P. McGillicuddy Chief Operating Officer
George A. Keches Vice President -- Finance and Administration, Chief
Financial Officer and Treasurer
James Biere Marceau Vice President -- Marketing
Scott T. Moy Vice President -- Corporate Controller
</TABLE>
OPERATING MANAGERS
<TABLE>
<CAPTION>
NAME POSITION
- ----------------------- ------------------------------------------------------------
<S> <C>
John C. Feitor Senior Vice President -- Operations
Bruce L. Charboneau President -- Commercial Division
Robert J. Scoble President -- Industrial Division
John H. Barrett President -- Education and Government Division
Bruce H. Simon President -- Security Division
Jim E. Walters President -- Hawaiian Division
Brian Struthers President -- Canadian Division
</TABLE>
ADVISORY BOARD
The Company recently established an Advisory Board made up of independent
advisors with whom senior management will consult on a periodic basis. The
members of the Advisory Board are as follows:
<TABLE>
<CAPTION>
NAME POSITION
- ------------------------------------ -----------------------------------------------
<S> <C>
Dr. Gregory Adamian Former President, Bentley College
Anton Bernard (Ton) Funke Kupper Former President, HODON-GROUP
Leonard Lynch Retired Partner, Arthur Andersen LLP
Mitchell Reese Managing Director, Venture at The Carlyle Group
Harvey Wagner Chief Financial Officer, Scientific Atlanta
Corporation
</TABLE>
BIOGRAPHICAL INFORMATION
Set forth below is additional biographical information regarding each of
the persons listed in the tables above.
TRUSTEES AND EXECUTIVE OFFICERS
STEVEN C. KLETJIAN, CHAIRMAN AND CHIEF EXECUTIVE OFFICER Steven Kletjian,
53, has been Chairman and Chief Executive Officer of the Company since 1969. He
has over 30 years of service with the Company. He has served as a Trustee since
the Company's reorganization as a business trust in 1988, and had served as a
director of the Company's corporate predecessor.
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<PAGE> 55
RICHARD J. KLETJIAN, VICE CHAIRMAN Richard Kletjian, 50, has been Vice
Chairman of the Company since 1993 and served as President for six years prior
to 1993. From 1992 to 1993, he was also general manager of the Mid-Atlantic
Division, and was general manager of the Commercial Division from 1990 to 1992.
He has over 27 years of service with the Company. He has served as a Trustee
since 1988, and had served as a director of the Company's corporate predecessor.
ROBERT P. KLETJIAN, VICE PRESIDENT AND VICE CHAIRMAN Robert Kletjian, 47,
has been Vice Chairman of the Company since 1993 and was Vice President and
general manager of the Corporate and Education Division from 1990 to 1993. Prior
to 1990, Mr. Kletjian managed the Company's Hartford operations. He has over 24
years of service with the Company. He has served as a Trustee since 1988, and
had served as a director of the Company's corporate predecessor.
SHARKAY KLETJIAN, TRUSTEE Ms. Kletjian, 78, co-founded the Company in
1949. She served as a director of the Company's corporate predecessor, and has
served as a Trustee since 1988. Until 1997, she also served as Treasurer of the
Company.
JOHN P. MCGILLICUDDY, CHIEF OPERATING OFFICER Mr. McGillicuddy, 56, became
the Company's Chief Operating Officer in 1996 as part of the Ogden Acquisition.
From 1988 until 1996, he was responsible for all of Ogden's national facilities
services sales and operations. From 1986 until 1988, he was responsible for
Ogden's facilities services operations in the eastern United States, having
served as director of operations for the New York region from 1982 until 1986.
Mr. McGillicuddy joined Ogden in 1964 and has over 33 years of experience in the
industry.
GEORGE A. KECHES, VICE PRESIDENT -- FINANCE AND ADMINISTRATION, CHIEF
FINANCIAL OFFICER AND TREASURER Mr. Keches, 40, joined the Company in 1991
having previously held management positions at The Westwood Group, Inc. and
Arthur Andersen & Co. Mr. Keches is a Certified Public Accountant, and serves as
the Company's principal financial officer.
JAMES BIERE MARCEAU, VICE PRESIDENT -- MARKETING Mr. Marceau, 34, joined
the Company in May, 1997. He is responsible for the Company's overall marketing
efforts. From 1993 to 1997, Mr. Marceau served as Director of International
Sales and Marketing of Ryder System, Inc., an international transportation and
logistics company. Prior to that, he was Assistant Vice President of Atlantic
Gulf Corporation.
SCOTT T. MOY, VICE PRESIDENT -- CORPORATE CONTROLLER Mr. Moy, 36, joined
the Company in 1991 having previously held a management position at Digital
Equipment Corporation. Prior to that, Mr. Moy was an accountant at Arthur
Andersen & Co. Mr. Moy is a Certified Public Accountant.
OPERATING MANAGERS
JOHN C. FEITOR, SENIOR VICE PRESIDENT -- OPERATIONS Mr. Feitor, 52, joined
the Company in 1970. He has held various positions within the Company including
Area Manager and Vice President of Operations. In 1996, he was promoted to
Senior Vice President -- Operations.
BRUCE L. CHARBONEAU, PRESIDENT -- COMMERCIAL DIVISION Mr. Charboneau, 55,
joined the Company in 1994. Prior to joining the Company, Mr. Charboneau served
as President of the Eastern Region of National Cleaning, Inc., another
facilities services firm. He has over 25 years of experience in the facilities
services industry.
ROBERT J. SCOBLE, PRESIDENT -- INDUSTRIAL DIVISION Mr. Scoble, 46, joined
the Company in June 1996 as a result of the Ogden Acquisition. He served in
Ogden's facilities services and food service operations businesses since 1981
and as a Vice President at Ogden since 1989.
JOHN H. BARRETT, PRESIDENT -- EDUCATION AND GOVERNMENT DIVISION Mr.
Barrett, 38, joined the Company in June 1996 as a result of the Ogden
Acquisition. He joined Ogden in 1989, having previously served in various
marketing positions with Xerox Corporation.
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<PAGE> 56
BRUCE H. SIMON, PRESIDENT -- SECURITY DIVISION Mr. Simon, 38, joined the
Company in June 1996 as a result of the Ogden Acquisition. He had served in
various positions of increasing responsibility in Ogden's sales and operations
areas, having joined Ogden in 1983 as a supervisor in the facility services
group.
JIM E. WALTERS, PRESIDENT -- HAWAIIAN DIVISION Mr. Walters, 46, joined the
Company in June 1996 as a result of the Ogden Acquisition. He served as a
regional Vice President of Ogden from 1995, after beginning his career with
Ogden in 1991 as director of operations in Oklahoma. As a result of geographic
and other factors, the Company operates its Hawaiian business as a separate
division.
BRIAN STRUTHERS, PRESIDENT -- CANADIAN DIVISION Mr. Struthers, 43, joined
the Company in June 1996 as a result of the Ogden Acquisition. He joined Ogden
in 1988. Prior to joining Ogden, Mr. Struthers served in sales, marketing and
business development positions with Commonwealth Holiday Inns, McLean-Hunter and
Empire Maintenance Industries, Inc. As a result of geographic and other factors,
the Company operates its Canadian business as a separate division.
ADVISORY BOARD
GREGORY ADAMIAN, J.D., PH.D. (HON.) Dr. Adamian, 71, currently serves as
Chancellor and President Emeritus of Bentley College in Waltham, Massachusetts,
having previously served as its President. Dr. Adamian also serves on the boards
of Hesser College, Liberty Mutual Life Insurance Company and the West End House,
an affiliate of the Boys Club of America.
ANTON BERNARD (TON) FUNKE KUPPER Mr. Funke Kupper, 68, is the past
President and Chief Executive Officer of HODON-GROUP (currently known as ABILIS
International), a facility services company operating in the Netherlands,
Belgium and France, where he worked from 1949 to 1989. Mr. Funke Kupper has also
served as a board member of the U.S.A. Building Service Contractors Association
from 1985 to 1989, President of the World Federation of Building Contractors
from 1980 to 1982 and President of the Dutch Association of Contractors from
1970 to 1983.
LEONARD LYNCH Mr. Lynch, 61, is a retired partner of Arthur Andersen LLP
where he served as the Director of the Audit Practice and head of the Audit and
Business Advisory Practice in the Boston and Southern California offices. He
currently serves as a consultant to the firm. Mr. Lynch has also served as a
past trustee of the New England Aquarium, member of the Advisory Board of the
Heritage Plantation and a member of Town Hall of Los Angeles.
MITCHELL REESE Mr. Reese, 38, is Managing Director, Venture at The Carlyle
Group where he is responsible for the operations of Carlyle Venture Partners,
L.P., a $250 million fund established to pursue venture-oriented investments.
Prior to joining The Carlyle Group, Mr. Reese was employed for seven years by
Morgan Keegan Inc., an investment banking firm, as President of its venture
capital division and co-head of its investment banking group. Prior thereto, Mr.
Reese was Vice President in the mergers and acquisitions department of Alex.
Brown & Sons Incorporated.
HARVEY WAGNER Mr. Wagner, 56, is the Chief Financial Officer and Treasurer
of Scientific-Atlanta Corporation. From 1989 to 1994 Mr. Wagner was Vice
President, Finance and Chief Financial Officer at Computervision Corporation
(formerly Prime Computer). Mr. Wagner is a member of the Financial Executives
Institute, the Institute of Management Accountants and the American Electronics
Association. He sits on the President's Council at the University of Miami, the
Executive Advisory Board of the Wharton School of the University of Pennsylvania
and is a founding Board Member and Executive Vice President of The Wellness
Community-Atlanta.
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<PAGE> 57
EXECUTIVE COMPENSATION
The following Summary Compensation Table sets forth information concerning
the compensation paid or accrued by the Company with respect to the Company's
Chief Executive Officer and the other four most highly compensated executive
officers for the fiscal year ended June 29, 1997.
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION
COMPENSATION ---------------------------
---------------------------------------- SHARES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION SALARY BONUS COMPENSATION(1) OPTIONS COMPENSATION
- ------------------------------ -------- ------- --------------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Steven C. Kletjian............ $615,122 -- $24,562 -- $104,299(2)
Chief Executive Officer and
Chairman
Richard J. Kletjian........... 346,696 -- 23,169 -- 57,234(2)
Vice Chairman
Robert P. Kletjian............ 342,379 -- 22,277 -- 64,997(2)
Vice President and Vice
Chairman
John P. McGillicuddy.......... 316,650 -- 8,400 -- 1,125(3)
Chief Operating Officer
Robert L. Trow................ 190,275 $20,000 13,885 -- 2,800(3)
Vice President --
Human Resources(4)
</TABLE>
- ---------------
(1) Includes automobile allowance paid by the Company to or on behalf of the
designated officer.
(2) Includes premiums paid by the Company for life insurance for the designated
officer.
(3) Includes matching contributions by the Company to the executive's 401(k)
plan.
(4) Mr. Trow resigned from the Company in July 1997.
TRUSTEE COMPENSATION
Steven C. Kletjian, Richard J. Kletjian and Robert P. Kletjian receive no
additional compensation for serving as Trustees of the Company. Sharkay
Kletjian, a Trustee of the Company, received aggregate compensation of $172,566
during fiscal 1997 in her capacity as an employee of the Company.
EMPLOYMENT AGREEMENTS
In connection with the Ogden Acquisition in June 1996, the Company entered
into employment agreements with former Ogden managers of the acquired
operations, including Messrs. McGillicuddy, Scoble, Barrett, Simon, Walters and
Struthers, each for a term of three years. The employment agreements provide for
a base salary and an annual bonus based on the Company's operating income before
debt service, as well as benefits commensurate with those provided to the
Company's other senior managers. These agreements may be terminated by the
Company for cause, as defined therein. Each agreement contains a confidentiality
clause that survives for two years beyond termination of employment.
EMPLOYEE BENEFITS
The Company is in the process of implementing a new management incentive
plan under which a portion of the performance-based incentive bonuses payable to
senior management will be paid in the form of equity-based interests in UNICCO.
The bonuses will be determined based on both the Company's performance and the
performance of the applicable SBU. The Company is also considering the
implementation of a stock option plan pursuant to which employees, trustees,
directors and other key persons at the Company may be granted options to
purchase non-voting shares of UNICCO.
52
<PAGE> 58
SHARE OWNERSHIP
Under UNICCO's Declaration of Trust, UNICCO may issue an unlimited number
of shares of beneficial interest. The Trustees may determine the classes and
series of such shares and may designate the relative designations, preferences,
privileges, voting powers and restrictions applicable to the shares of each such
class and series. As of the date hereof, the outstanding securities of UNICCO
consist of an aggregate of 1,054 common shares of beneficial interest,
consisting of 1,000 voting common shares and 54 non-voting common shares.
The following table sets forth the beneficial and record ownership of
UNICCO's voting and non-voting common shares of beneficial ownership, taken
together as a single class.
<TABLE>
<CAPTION>
PERCENTAGE OF
SHAREHOLDER NUMBER OF SHARES PERCENTAGE OF CLASS VOTING POWER
--------------------------------------- ---------------- ------------------- --------------
<S> <C> <C> <C>
Steven C. Kletjian..................... 510 48.4% 51.0%
Richard J. Kletjian.................... 245 23.2 24.5
Robert P. Kletjian..................... 245 23.2 24.5
John C. Feitor......................... 27(1) 2.6 --
George A. Keches....................... 27(1) 2.6 --
----- ----- -----
1,054 100.0% 100.0%
===== ===== =====
</TABLE>
- ---------------
(1) Non-voting shares.
The Company has entered into a Share Purchase Agreement with holders of
non-voting shares pursuant to which the Company must redeem the shares at the
then-current book value of the shares (as defined therein) in the event that the
shareholder ceases to be employed by the Company. See "Certain Transactions."
The Indenture would permit such redemptions, subject to certain limitations. See
"Description of Notes -- Certain Covenants -- Restricted Payments."
53
<PAGE> 59
CERTAIN TRANSACTIONS
In connection with the Ogden Acquisition in June 1996, the shareholders of
UNICCO organized a sister corporation known as USC, Inc., which acquired all of
the outstanding capital stock of the two Ogden subsidiaries that conducted
Ogden's government and security business, and a portion of the capital stock of
Ogden's Canadian subsidiary. The purpose of this transaction was to facilitate
the acquisition of Ogden's government contracts and security permits and
licenses. A sister company rather than a subsidiary of UNICCO was utilized
because, as a subchapter S company under the Internal Revenue Code (the "Code")
as then in effect, UNICCO could not have any subsidiaries. As of January 1,
1997, the Code has been amended to permit "subchapter S" companies to have
subsidiaries. Accordingly, in connection with the Offering, the shareholders of
the Company contributed their interests in USC, Inc. to UNICCO, as a result of
which all of the operations of the Company will be conducted through UNICCO and
its subsidiaries.
A component of the Company's operating expenses consists of insurance
premiums for workers' compensation and general liability insurance. In May 1995,
the Company's shareholders organized Ashmont Insurance Company, Limited, a
Bermuda corporation ("Ashmont"), as a captive insurance company. Premiums for
workers' compensation and general liability insurance are paid by the Company to
Liberty Mutual Insurance Company and one of its subsidiaries, the fronting
carrier ("Liberty"). After deducting pre-determined fees for administration,
claims processing and taxes, Liberty remits the net premiums to Ashmont pursuant
to a re-insurance agreement. Ashmont, as re-insurer, then reimburses Liberty for
insurance losses paid on a monthly basis. Net insurance premiums received by
Ashmont pursuant to this arrangement aggregated $2.9 million, $2.5 million and
$5.6 million for fiscal 1995, fiscal 1996 and fiscal 1997, respectively.
Workers' compensation insurance premiums are based on statutory rates within the
states that the Company operates, adjusted for the Company's claims experience;
accordingly, management believes that these insurance premiums are consistent
with the premiums that would be paid for comparable insurance coverage obtained
on an arm's-length basis.
In connection with the Ogden Acquisition in June 1996, the Company borrowed
$3 million from the Company's shareholders. The notes bore interest at 15%,
which was payable in-kind until the notes were to mature in October 2001. The
Company used a portion of the net proceeds of the Offering to repay such notes,
including accrued interest. In addition, upon the repayment of the Ogden Note,
Steven C. Kletjian, the Company's Chief Executive Officer and principal
shareholder, was released from a limited recourse guarantee of the Ogden Note
and the pledge of Mr. Kletjian's shares of Ashmont which secured such guarantee.
See "Use of Proceeds."
The Company was indebted under a note payable to Sharkay Kletjian, a
Trustee of the Company, in the aggregate principal amount of approximately
$282,000 at June 29, 1997. Interest on this Note was payable at a rate of 20%
per annum. The Note was repaid on September 3, 1997.
The Company holds notes receivable aggregating approximately $646,000 from
five of its shareholders consisting primarily of demand notes that bear interest
at an average Applicable Federal Rate (5.68% at June 29, 1997). The Company
earned interest income of approximately $83,000, $77,000 and $56,000 related to
these loans during fiscal 1995, fiscal 1996 and fiscal 1997, respectively.
Interest receivables related to those notes were approximately $312,000 at June
29, 1997.
On June 24, 1996, the Company loaned one of its shareholders approximately
$217,000 to purchase 27 non-voting common shares of beneficial interest. This
loan bears interest at the applicable federal rate and matures on July 1, 2001.
54
<PAGE> 60
DESCRIPTION OF OTHER INDEBTEDNESS
CREDIT FACILITY
In connection with the Transactions, the Company and BankBoston, N.A.
("BankBoston") entered into a $45 million senior secured revolving credit
facility (the "Credit Facility") documented in the form of an amendment to the
Company's existing credit facility. Subject to compliance with certain financial
covenants and the satisfaction of customary borrowing conditions, UNICCO and its
subsidiaries, as co-borrowers, will be permitted to borrow up to an aggregate of
$45 million of revolving credit loans and up to a sublimit of $2.5 million in
letters of credit under the Credit Facility. The Company's borrowing capacity
under the Credit Facility is limited to a borrowing base of up to 80% of the
Company's eligible accounts receivable (as defined in the Credit Facility),
which as of June 29, 1997 was in excess of the maximum amount of borrowings
available under the Credit Facility. The Credit Facility is secured by
substantially all of the Company's assets. Borrowings under the Credit Facility
will represent Senior Debt under the Indenture. Moreover, a default under the
Indenture will result in a cross-default under the Credit Facility.
The ability of the Company to borrow under the Credit Facility will be
subject to, among other things, compliance with covenants and financial ratios
contained in the Credit Facility. Borrowings under the Credit Facility will
mature and be payable in October 2002.
The Credit Facility will bear interest, at the Company's option, at the
Alternate Base Rate (as defined below) or a Eurodollar rate, plus specified
margins based on the ratio of the Company's Total Funded Debt to EBITDA (each as
defined therein). The Alternate Base Rate will be the greater of BankBoston's
base rate as announced from time to time and the federal funds effective rate
plus 0.50%. The applicable margins were initially set at the Alternate Base Rate
plus 0.50% or the Eurodollar rate plus 2.00%.
The Credit Facility contains covenants and provisions that restrict, among
other things, the Company's and its subsidiaries' ability to (i) incur
additional indebtedness; (ii) incur liens on their property; (iii) redeem
subordinated debt, including the Notes; (iv) make capital expenditures; (v)
engage in certain sales of assets; (vi) engage in acquisitions that do not meet
specified criteria; and (vii) engage in certain transactions with affiliates.
The Credit Facility also requires the Company to maintain certain financial
ratios which become more stringent over the life of the facility, including (i)
minimum fixed charge coverage ratios, (ii) minimum interest coverage ratios and
(iii) maximum ratios of total debt to EBITDA.
MCRC NOTE
In order to finance a portion of the Ogden Acquisition in June 1996, the
Company issued a $5 million note payable to Massachusetts Capital Resource
Company ("MCRC"). This note (the "MCRC Note") bears interest at the rate of 14%
per annum and is due in September 2001. The MCRC Note is expressly subordinated
to the Company's indebtedness under the Credit Facility, and will rank pari
passu in right of payment with the Notes.
The MCRC Note requires quarterly payments of interest only. Prepayment of
the principal amount of the MCRC Note is not permitted prior to July 1999.
Thereafter, the Company may redeem up to $250,000 in principal amount of the
MCRC Note on a quarterly basis, without premium, and may redeem additional
principal amounts upon payment of a premium equal to 10% of the additional
principal amount so redeemed.
The MCRC Note was issued under a Note Purchase Agreement containing
representations, warranties and covenants customary for subordinated debt
financings of this type. In connection with the Transactions, the MCRC Note
Purchase Agreement was amended to eliminate the covenants requiring the Company
to maintain certain financial ratios, and to conform certain other covenants,
including those limiting restricted payments and the incurrence of additional
indebtedness, to those contained in the Indenture. In connection with this
amendment, MCRC released Steven C. Kletjian, the Company's Chief Executive
Officer and principal shareholder, from a limited recourse guarantee of the MCRC
Note and released a pledge of Mr. Kletjian's shares of Ashmont which secured
such guarantee.
55
<PAGE> 61
DESCRIPTION OF THE EXCHANGE NOTES
GENERAL
The Exchange Notes will be issued pursuant to the Indenture among the
Issuers, the Guarantors and State Street Bank and Trust Company, as trustee (the
"Trustee"). The terms of the Exchange Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"). Upon the
effectiveness of the Registration Statement of which this Prospectus forms a
part, the Indenture will be subject to and governed by the Trust Indenture Act.
The Notes are subject to all such terms, and Holders of Notes are referred to
the Indenture and the Trust Indenture Act for a statement thereof. The following
summary of the material provisions of the Indenture does not purport to be
complete and is qualified in its entirety by reference to the Indenture,
including the definitions therein of certain terms used below. Copies of the
Indenture and Registration Rights Agreement will be made available as set forth
under "-- Additional Information." The definitions of certain terms used in the
following summary are set forth below under "-- Certain Definitions." For
purposes of this "Description of the Exchange Notes," the term "Company" refers
only to UNICCO Service Company and not to any of its Subsidiaries.
The Exchange Notes will be general unsecured obligations of the Issuers and
will be subordinated in right of payment to all existing and future Senior Debt
of the Issuers. As of September 28, 1997, after giving pro forma effect to the
offering of the Series A Notes and the use of proceeds therefrom, the Issuers
would have had approximately $3.4 million of Senior Debt outstanding, consisting
of outstanding borrowings under the Credit Facility. In addition, the Issuers
would have had $41.6 million of additional borrowings available under the Credit
Facility. The Indenture permits the Issuers to incur additional indebtedness,
including additional Senior Debt, subject to certain restrictions. See "--
Certain Covenants -- Incurrence of Indebtedness and Issuance of Preferred
Stock."
UNICCO Finance is a wholly owned subsidiary of the Company that was
incorporated in Delaware for the purpose of serving as a co-issuer of the Series
A Notes and the Exchange Notes in order to facilitate the Offering. The Company
believes that certain prospective purchasers of the Series A Notes might have
been restricted in their ability to purchase debt securities of business trusts,
such as the Company, unless such debt securities are jointly issued by a
corporation. UNICCO Finance will not have any substantial operations or assets
and will not have any revenues. As a result, prospective purchasers of the
Exchange Notes should not expect UNICCO Finance to participate in servicing the
interest and principal obligations on the Exchange Notes.
All of the Company's Subsidiaries (other than UNICCO Finance) are
Restricted Subsidiaries. However, under certain circumstances, the Company is
able to designate current or future Subsidiaries (other than UNICCO Finance) as
Unrestricted Subsidiaries. Unrestricted Subsidiaries are not subject to many of
the restrictive covenants set forth in the Indenture. The Issuers' payment
obligations under the Exchange Notes will be guaranteed, on a senior
subordinated basis, by all of the Company's Domestic Restricted Subsidiaries.
See "-- Subsidiary Guarantees."
PRINCIPAL, MATURITY AND INTEREST
The Exchange Notes will be limited in aggregate principal amount to $150.0
million and will mature on October 15, 2007. Interest on the Exchange Notes will
accrue at the rate of 9 7/8% per annum and will be payable semi-annually in
arrears on April 15 and October 15 of each year, commencing on April 15, 1998,
to Holders of record on the immediately preceding April 1 and October 1.
Interest on the Exchange Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from the date of
original issuance. Interest will be computed on the basis of a 360-day year
comprised of twelve 30-day months. Principal of and premium, interest and
Liquidated Damages, if any, on the Exchange Notes will be payable at the office
or agency of the Issuers maintained for such purpose or, at the option of the
Issuers, payment of interest and Liquidated Damages may be made by check mailed
to the Holders of the Exchange Notes at their respective addresses set forth in
the register of Holders of Exchange Notes; provided that all payments of
principal, premium, interest and Liquidated Damages with respect to Exchange
Notes the Holders of which have given wire transfer instructions in writing to
the Trustee will be required to be made by
56
<PAGE> 62
wire transfer of immediately available funds to the accounts specified by the
Holders thereof. Until otherwise designated by the Issuers, the Issuers' office
or agency will be the office of the Trustee maintained for such purpose. The
Exchange Notes will be issued in denominations of $1,000 and integral multiples
thereof.
SUBORDINATION
The payment of principal of and premium, interest and Liquidated Damages,
if any, on the Exchange Notes will be subordinated in right of payment, as set
forth in the Indenture, to the prior payment in full in cash or Cash Equivalents
of all Senior Debt of the Issuers.
Upon any distribution to creditors of either Issuer in a liquidation or
dissolution of such Issuer or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to such Issuer or its property, an
assignment for the benefit of creditors or any marshalling of either Issuer's
assets and liabilities, the holders of Senior Debt of such Issuer will be
entitled to receive payment in full in cash or Cash Equivalents of all
Obligations due in respect of such Senior Debt (including interest after the
commencement of any such proceeding at the rate specified in the documents
governing the applicable Senior Debt) before the Holders of Exchange Notes will
be entitled to receive any payment with respect to the Exchange Notes, and until
all Obligations with respect to Senior Debt are paid in full in cash or Cash
Equivalents, any distribution to which the Holders of Exchange Notes would be
entitled shall be made to the holders of Senior Debt (except that Holders of
Exchange Notes may receive Permitted Junior Securities and payments made from
the trust described under "-- Legal Defeasance and Covenant Defeasance").
The Issuers also may not make any payment upon or in respect of the
Exchange Notes (except in Permitted Junior Securities or from the trust
described under "-- Legal Defeasance and Covenant Defeasance") if (i) a default
in the payment of the principal of or premium, or interest on any Designated
Senior Debt occurs and is continuing beyond any applicable period of grace or
(ii) any other default occurs and is continuing with respect to any Designated
Senior Debt that permits holders of the Designated Senior Debt as to which such
default relates to accelerate its maturity and the Trustee receives a notice of
such default (a "Payment Blockage Notice") from the Company or the holders of
such Designated Senior Debt. Payments on the Exchange Notes may and shall be
resumed (a) in the case of a payment default, upon the date on which such
default is cured or waived pursuant to the terms of such Designated Senior Debt
and (b) in case of a nonpayment default, the earlier of the date on which such
nonpayment default is cured or waived pursuant to the terms of such Designated
Senior Debt or 179 days after the date on which the applicable Payment Blockage
Notice is received, unless the maturity of any Designated Senior Debt has been
accelerated. No new period of payment blockage may be commenced unless and until
360 days have elapsed since the effectiveness of the immediately prior Payment
Blockage Notice. No nonpayment default that existed or was continuing on the
date of delivery of any Payment Blockage Notice to the Trustee shall be, or be
made, the basis for a subsequent Payment Blockage Notice.
The Indenture further requires that the Issuers promptly notify holders of
Senior Debt if payment of the Exchange Notes is accelerated because of an Event
of Default.
As a result of the subordination provisions described above, in the event
of a liquidation or insolvency, Holders of Exchange Notes may recover less
ratably than creditors of the Issuers who are holders of Senior Debt, and may
not recover any amounts owed to them in respect of the Exchange Notes. As of
September 28, 1997, after giving pro forma effect to the offering of the Series
A Notes and the use of proceeds therefrom, the Issuers would have had
approximately $3.4 million of Senior Debt outstanding, consisting of outstanding
borrowings under the Credit Facility. In addition, the Issuers would have had
$41.6 million of additional borrowings available under the Credit Facility. The
Issuers will be able to incur additional Senior Debt in the future, subject to
certain limitations. See "Risk Factors -- Subordination of the Exchange Notes"
and "-- Certain Covenants -- Incurrence of Indebtedness and Issuance of
Preferred Stock."
SUBSIDIARY GUARANTEES
The Issuers' payment obligations under the Exchange Notes will be
guaranteed by all of the Company's existing Domestic Restricted Subsidiaries.
The Guarantee of each Domestic Restricted Subsidiary will be
57
<PAGE> 63
subordinated in right of payment to all existing and future Senior Debt of such
Domestic Restricted Subsidiary to the same extent as the Exchange Notes are
subordinated to Senior Debt of the Issuers. See "-- Subordination." As of
September 28, 1997, after giving effect to the offering of the Series A Notes
and the use of proceeds therefrom, the Company's Restricted Subsidiaries had
approximately $3.4 million of Senior Debt outstanding, consisting of guarantees
of borrowings under the Credit Facility. The Indenture permits the Company's
Subsidiaries to incur additional indebtedness, including additional Senior Debt,
subject, in the case of the Company's Restricted Subsidiaries, to certain
restrictions. See "-- Certain Covenants -- Incurrence of Indebtedness and
Issuance of Preferred Stock."
The Indenture provides that in the event of a sale or other disposition of
all of the assets of any Domestic Restricted Subsidiary, by way of merger,
consolidation or otherwise, or a sale or other disposition of all of the capital
stock of any Domestic Restricted Subsidiary (other than to the Company or
another Domestic Restricted Subsidiary), or in the case the Company designates a
Domestic Restricted Subsidiary to be an Unrestricted Subsidiary in accordance
with the Indenture, then such Domestic Restricted Subsidiary will be released
and relieved of any obligations under its guarantee; provided that the Net
Proceeds of any such sale or other disposition are applied in accordance with
the applicable provisions of the Indenture. See "-- Repurchase at Option of
Holders -- Asset Sales."
OPTIONAL REDEMPTION
The Exchange Notes will not be redeemable at the Issuers' option prior to
October 15, 2002. Thereafter, the Exchange Notes will be subject to redemption
at any time at the option of the Issuers, in whole or in part, upon not less
than 30 nor more than 60 days' notice, at the redemption prices (expressed as
percentages of principal amount) set forth below, plus accrued and unpaid
interest and Liquidated Damages, if any, thereon to the applicable redemption
date, if redeemed during the twelve-month period beginning on October 15, of the
years indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
--------------------------------------------------------------- ----------
<S> <C>
2002........................................................... 104.94%
2003........................................................... 103.29
2004........................................................... 101.65
2005 and thereafter............................................ 100.00
</TABLE>
Notwithstanding the foregoing, prior to October 15, 2000, the Issuers may
redeem up to an aggregate of $33.0 million in principal amount of Exchange Notes
at a redemption price of 109.875% of the principal amount thereof, plus accrued
and unpaid interest and Liquidated Damages, if any, thereon to the redemption
date, with the net cash proceeds of an initial public offering of common equity
of the Company; provided that (i) at least $72.0 million in principal amount of
the Exchange Notes remains outstanding immediately after the occurrence of such
redemption and (ii) notice of such redemption shall be given within 90 days of
the date of the consummation of such initial public offering.
SELECTION AND NOTICE
If less than all of the Exchange Notes are to be redeemed at any time,
selection of Exchange Notes for redemption will be made by the Trustee in
compliance with the requirements of the principal national securities exchange,
if any, on which the Exchange Notes are listed, or, if the Exchange Notes are
not so listed, on a pro rata basis, by lot or by such method as the Trustee
shall deem fair and appropriate; provided that no Exchange Notes of $1,000 or
less shall be redeemed in part. Notices of redemption shall be mailed by first
class mail at least 30 but not more than 60 days before the redemption date to
each Holder of Exchange Notes to be redeemed at its registered address. Notices
of redemption may not be conditional. If any Exchange Note is to be redeemed in
part only, the notice of redemption that relates to such Exchange Note shall
state the portion of the principal amount thereof to be redeemed. A new Exchange
Note in principal amount equal to the unredeemed portion thereof will be issued
in the name of the Holder thereof upon cancellation of the original Exchange
Note. Exchange Notes called for redemption become due on the date fixed for
redemption. On and after the redemption date, interest ceases to accrue on
Exchange Notes or portions of them called for redemption.
58
<PAGE> 64
MANDATORY REDEMPTION
Except as set forth below under "-- Repurchase at the Option of Holders,"
the Issuers are not required to make mandatory redemption or sinking fund
payments with respect to the Exchange Notes.
REPURCHASE AT THE OPTION OF HOLDERS
CHANGE OF CONTROL
Upon the occurrence of a Change of Control, the Issuers will be obligated
to make an offer (a "Change of Control Offer") to each Holder of Exchange Notes
to repurchase all or any part (equal to $1,000 or an integral multiple thereof)
of such Holder's Exchange Notes at an offer price in cash equal to 101% of the
principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the date of purchase (the "Change of Control
Payment"). Within 30 days following a Change of Control, the Issuers will mail a
notice to each Holder describing the transaction or transactions that constitute
the Change of Control and offering to repurchase Exchange Notes on the date
specified in such notice, which date shall be no earlier than 30-days and no
later than 60 days from the date such notice is mailed (the "Change of Control
Payment Date"), pursuant to the procedures required by the Indenture and
described in such notice. The Issuers will comply with the requirements of Rule
14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in connection
with the repurchase of the Exchange Notes as a result of a Change of Control.
On the Change of Control Payment Date, the Issuers will, to the extent
lawful, (i) accept for payment all Notes or portions thereof properly tendered
pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent an
amount equal to the Change of Control Payment in respect of all Exchange Notes
or portions thereof so tendered and (iii) deliver or cause to be delivered to
the Trustee the Exchange Notes so accepted together with an officers'
certificate stating the aggregate principal amount of Exchange Notes or portions
thereof being purchased by the Issuers. The Paying Agent will promptly mail to
each Holder of Exchange Notes so tendered the Change of Control Payment for such
Exchange Notes, and the Trustee will promptly authenticate and mail (or cause to
be transferred by book entry) to each Holder a new Exchange Note equal in
principal amount to any unpurchased portion of the Exchange Notes surrendered,
if any; provided that each such new Exchange Note will be in a principal amount
of $1,000 or an integral multiple thereof. The Indenture will provide that,
prior to complying with the provisions of this covenant, but in any event within
90 days following a Change of Control, the Issuers will either repay all
outstanding Senior Debt or obtain the requisite consents, if any, under all
agreements governing outstanding Senior Debt to permit the repurchase of
Exchange Notes required by this covenant. The Issuers will publicly announce the
results of the Change of Control Offer on or as soon as practicable after the
Change of Control Payment Date.
The Change of Control provisions described above will be applicable whether
or not any other provisions of the Indenture are applicable. Except as described
above with respect to a Change of Control, the Indenture does not contain
provisions that permit the Holders of the Exchange Notes to require that the
Issuers repurchase or redeem the Exchange Notes in the event of a takeover,
recapitalization or similar transaction.
The Credit Facility prohibits, and future credit agreements or other
agreements relating to Senior Debt to which the Issuers become a party may
prohibit, the Issuers from purchasing any Exchange Notes following a Change of
Control and/or provide that certain change of control events with respect to the
Company would constitute a default thereunder. In the event a Change of Control
occurs at a time when the Issuers are prohibited from purchasing Exchange Notes,
the Issuers could seek the consent of their lenders to the purchase of Exchange
Notes or could attempt to refinance the borrowings that contain such
prohibition. If the Issuers do not obtain such a consent or repay such
borrowings, the Issuers will remain prohibited from purchasing Exchange Notes.
The Issuers' failure to purchase tendered Exchange Notes following a Change of
Control would constitute an Event of Default under the Indenture which would, in
turn, constitute as default under the Credit Facility. In such circumstances,
the subordination provisions in the Indenture would likely restrict payments to
the Holders of Exchange Notes. See "-- Subordination."
The Issuers will not be required to make a Change of Control Offer
following 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
59
<PAGE> 65
the requirements set forth in the Indenture applicable to a Change of Control
Offer made by the Issuers and purchases all Exchange Notes validly tendered and
not withdrawn under such Change of Control Offer.
ASSET SALES
The Indenture provides that the Company will not, and will not permit any
of its Restricted Subsidiaries to, consummate an Asset Sale unless (i) 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 (evidenced by a resolution of the Board of Directors set forth in an
officers' certificate delivered to the Trustee) of the assets or Equity
Interests issued or sold or otherwise disposed of and (ii) at least 80% of the
consideration therefor received by the Company or such Restricted Subsidiary is
in the form of cash; provided that the amount of (a) any liabilities (as shown
on the Company's or such Restricted Subsidiary's most recent balance sheet) of
the Company or such Restricted Subsidiary (other than contingent liabilities and
liabilities that are by their terms subordinated to the Notes or any Guarantee
thereof) that are assumed by the transferee of any such assets pursuant to a
customary novation agreement that releases the Company or such Restricted
Subsidiary from further liability and (b) any securities, notes or other
obligations received by the Company or such Restricted Subsidiary from such
transferee that are immediately converted by the Company or such Restricted
Subsidiary into cash (to the extent of the cash received) shall be deemed to be
cash for purposes of this provision.
Within 360 days after the receipt of any Net Proceeds from an Asset Sale,
the Company may apply such Net Proceeds, at its option, (i) to repay Senior Debt
(and to correspondingly reduce commitments with respect thereto in the case of
revolving borrowings) or (ii) to the acquisition of a controlling interest in
another business, the making of a capital expenditure or the acquisition of
other long-term assets. Pending the final application of any such Net Proceeds,
the Company may temporarily reduce Senior Debt or otherwise invest such Net
Proceeds in any manner that is not prohibited by the Indenture. Any Net Proceeds
from Asset Sales that are not applied or invested as provided in the first
sentence of this paragraph will be deemed to constitute "Excess Proceeds." When
the aggregate amount of Excess Proceeds exceeds $5.0 million, the Issuers will
be required to make an offer to all Holders of Exchange Notes (an "Asset Sale
Offer") to purchase the maximum principal amount of Exchange Notes that may be
purchased out of the Excess Proceeds at an offer price in cash in an amount
equal to 100% of the principal amount thereof, plus accrued and unpaid interest
and Liquidated Damages, if any, thereon to the date of purchase, in accordance
with the procedures set forth in the Indenture. To the extent that the aggregate
amount of Exchange Notes tendered pursuant to an Asset Sale Offer is less than
the Excess Proceeds, the Company may use any remaining Excess Proceeds for
general corporate purposes. If the aggregate principal amount of Exchange Notes
surrendered by Holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select the Exchange Notes to be purchased on a pro rata basis.
Upon completion of an Asset Sale Offer, the amount of Excess Proceeds shall be
reset at zero.
CERTAIN COVENANTS
RESTRICTED PAYMENTS
The Indenture provides that the Company will not, and will not permit any
of its Restricted Subsidiaries to, directly or indirectly: (i) declare or pay
any dividend or make any other payment or distribution on account of the
Company's Equity Interests (including, without limitation, any payment in
connection with any merger or consolidation involving the Company) or to any
direct or indirect holders of the Company's Equity Interests in their capacity
as such (other than dividends or distributions (a) payable in Equity Interests
(other than Disqualified Stock) of the Company or (b) to the Company or any
Wholly Owned Restricted Subsidiary of the Company); (ii) purchase, redeem or
otherwise acquire or retire for value (including without limitation, in
connection with any merger or consolidation involving the Company) any Equity
Interests of the Company or any direct or indirect parent of the Company (other
than any such Equity Interests owned by the Company or any Wholly Owned
Restricted Subsidiary of the Company); (iii) make any payment on or with respect
to, or purchase, redeem, defease or otherwise acquire or retire for value any
Indebtedness of the Company or any Restricted Subsidiary that is subordinated to
the Exchange Notes or any Guarantee thereof, except a payment of interest or
principal at Stated Maturity; or (iv) make any Restricted Investment (all such
payments and
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other actions set forth in clauses (i) through (iv) above being collectively
referred to as "Restricted Payments"), unless, at the time of and after giving
effect to such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(b) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had
been made at the beginning of the applicable four-quarter period, have been
permitted to incur at least $1.00 of additional Indebtedness pursuant to
the Fixed Charge Coverage Ratio test set forth in the first paragraph of
the covenant described below under caption "-- Incurrence of Indebtedness
and Issuance of Preferred Stock;" and
(c) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Company and its Restricted
Subsidiaries after the Closing Date (excluding Restricted Payments
permitted by clause (ii) through (v) of the next succeeding paragraph), is
less than the sum of (i) 50% of the Consolidated Net Income of the Company
for the period (taken as one accounting period) from the beginning of the
first fiscal quarter commencing after the Closing Date to the end of the
Company's most recently ended fiscal quarter for which internal financial
statements are available at the time of such Restricted Payment (or, if
such Consolidated Net Income for such period is a deficit, less 100% of
such deficit), plus (ii) 100% of the aggregate net cash proceeds received
by the Company from the issue or sale since the date of the Indenture of
Equity Interests of the Company (other than Disqualified Stock) or of
Disqualified Stock or debt securities of the Company that have been
converted into such Equity Interests (other than Equity Interests (or
Disqualified Stock or convertible debt securities) sold to a Subsidiary of
the Company and other than Disqualified Stock or convertible debt
securities that have been converted into Disqualified Stock), plus (iii)
50% of any dividends received by the Company or a Wholly Owned Restricted
Subsidiary after the date of the Indenture from an Unrestricted Subsidiary
of the Company, to the extent that such dividends were not otherwise
included in Consolidated Net Income of the Company for such period.
The foregoing provisions will not prohibit (i) the payment of any dividend
within 60 days after the date of declaration thereof, if at the date of
declaration such payment would have complied with the provisions of the
Indenture; (ii) the redemption, repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness or Equity Interests of the Company
or any Restricted Subsidiary in exchange for, or out of the net cash proceeds of
the substantially concurrent sale (other than to a Subsidiary of the Company)
of, other Equity Interests of the Company (other than any Disqualified Stock);
provided that the amount of any such net cash proceeds that are utilized for any
such redemption, repurchase, retirement, defeasance or other acquisition shall
be excluded from clause (c)(ii) of the preceding paragraph; (iii) the
defeasance, redemption, repurchase or other acquisition of subordinated
Indebtedness with the net cash proceeds from an incurrence of Permitted
Refinancing Indebtedness; (iv) for any period that the Company is treated as an
"S corporation" or a partnership for federal income tax purposes, distributions
to shareholders of the Company in an amount not to exceed the Tax Amount for
such period; (v) the redemption, retirement or defeasance of indebtedness with
the net proceeds of this Offering as contemplated under "Use of Proceeds;" and
(vi) the repurchase, redemption or other acquisition or retirement for value of
any Equity Interests of the Company or any Restricted Subsidiary of the Company
held by any member of the Company's (or any of its Restricted Subsidiaries')
management or Board of Directors pursuant to any management equity subscription
agreement, shareholders' agreement, equity incentive plan, stock option
agreement or other similar agreement; provided that the aggregate price paid for
all such repurchased, redeemed, acquired or retired Equity Interests under this
clause (vi) shall not exceed the sum of (a) $500,000 in any twelve-month period
plus (b) the aggregate net proceeds received by the Company from the issuance
after the Closing Date of Equity Interests of the Company to members of
management or the Board of Directors of the Company or any of its Restricted
Subsidiaries (provided that such net proceeds shall be excluded from clause
(c)(ii) of the preceding paragraph), and, in each case, no Default or Event of
Default shall have occurred and be continuing immediately after such
transaction.
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The amount of all Restricted Payments (other than cash) shall be the fair
market value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued by the Company or such Restricted
Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair
market value of any non-cash Restricted Payment shall be determined in good
faith by the Board of Directors whose resolution with respect thereto shall be
delivered to the Trustee. Not later than the date of making any Restricted
Payment, the Company shall deliver to the Trustee an officers' certificate
stating that such Restricted Payment is permitted and setting forth the basis
upon which the calculations required by the covenant "Restricted Payments" were
computed.
The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if such designation would not cause a Default. For
purposes of making such determination, all outstanding Investments by the
Company and its Restricted Subsidiaries (except to the extent repaid in cash) in
the Subsidiary so designated will be deemed to be Restricted Payments at the
time of such designation and will reduce the amount available for Restricted
Payments under the first paragraph of this covenant. All such outstanding
Investments will be deemed to constitute Investments in an amount equal to the
greatest of (i) the net book value of such Investments at the time of such
designation, (ii) the fair market value of such Investments at the time of such
designation and (iii) the original fair market value of such Investments at the
time they were made. Such designation will only be permitted if such Restricted
Payment would be permitted at such time and if such Restricted Subsidiary
otherwise meets the definition of an Unrestricted Subsidiary.
Any such designation by the Board of Directors shall be evidenced to the
Trustee by filing with the Trustee a certified copy of the board resolution
giving effect to such designation and an officers' certificate certifying that
such designation complied with the foregoing conditions. If, at any time, any
Unrestricted Subsidiary would fail to meet the definition of an Unrestricted
Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for
purposes of the Indenture and any Indebtedness of such Subsidiary shall be
deemed to be incurred by a Restricted Subsidiary of the Company as of such date
(and, if such Indebtedness is not permitted to be incurred as of such date under
the covenant described under the caption "-- Incurrence of Indebtedness and
Issuance of Preferred Stock," the Issuers shall be in default of such covenant).
The Board of Directors may at any time designate any Unrestricted Subsidiary to
be a Restricted Subsidiary; provided that such designation shall be deemed to be
an incurrence of Indebtedness by a Restricted Subsidiary of the Company of any
outstanding Indebtedness of such Unrestricted Subsidiary and such designation
shall only be permitted if (i) such Indebtedness is permitted under the covenant
described under the caption "-- Certain Covenants -- Incurrence of Indebtedness
and Issuance of Preferred Stock," calculated on a pro forma basis as if such
designation had occurred at the beginning of the four-quarter reference period,
and (ii) no Default or Event of Default would be in existence following such
designation.
INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK
The Indenture provides that the Company will not, and will not permit any
of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, "incur") any
Indebtedness (including Acquired Debt) and that the Company will not permit any
of its Restricted Subsidiaries to issue any shares of preferred stock (other
than to the Company or to another Restricted Subsidiary); provided, however,
that the Company and its Restricted Subsidiaries may incur Indebtedness
(including Acquired Debt) and the Company's Restricted Subsidiaries may issue
preferred stock if the Fixed Charge Coverage Ratio for the Company's most
recently ended four full fiscal quarters for which internal financial statements
are available immediately preceding the date on which such additional
Indebtedness is incurred or such preferred stock is issued would have been at
least 2.0 to 1, determined on a pro forma basis (including a pro forma
application of the net proceeds therefrom), as if the additional Indebtedness
had been incurred or the preferred stock had been issued at the beginning of
such four-quarter period.
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The provisions of the first paragraph of this covenant will not apply to
the incurrence of any of the following (collectively, "Permitted Debt"):
(i) the incurrence by the Company or its Restricted Subsidiaries of
Indebtedness under the Credit Facility; in an aggregate amount not to
exceed at any time outstanding the greater of (a) $45.0 million, less the
aggregate amount of all Net Proceeds of Asset Sales applied to repay any
such Indebtedness pursuant to clause (i) of the second paragraph of the
covenant described above under the caption "-- Asset Sales," and (b) 60% of
the Company's and its Restricted Subsidiaries' accounts receivable (net of
reserves), as shown on the Company's most recent consolidated balance
sheet;
(ii) the incurrence by the Company of Indebtedness represented by the
Exchange Notes and the Indenture;
(iii) the incurrence by the Company and its Restricted Subsidiaries of
the Existing Indebtedness;
(iv) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the
net proceeds of which are used to refund, refinance or replace Indebtedness
that was permitted to be incurred by the first paragraph, or by clauses
(ii) through (ix) of the second paragraph of this covenant;
(v) the incurrence of Indebtedness between or among the Company and
any of its Wholly Owned Restricted Subsidiaries; provided, however, that
(a) if the Company is the obligor on such Indebtedness, such Indebtedness
is expressly subordinated to the prior payment in full of all Obligations
with respect to the Exchange Notes and (b) any subsequent issuance or
transfer of Equity Interests that results in any such Indebtedness being
held by a Person other than the Company or a Wholly Owned Restricted
Subsidiary, and any sale or other transfer of any such Indebtedness to a
Person that is not either the Company or a Wholly Owned Restricted
Subsidiary, shall be deemed, in each case, to constitute an incurrence of
such Indebtedness by the Company or such Restricted Subsidiary, as the case
may be;
(vi) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred for the purpose of
fixing or hedging interest rate risk with respect to any floating rate
Indebtedness that is permitted by the terms of this Indenture to be
outstanding;
(vii) the incurrence by the Company or any of its Restricted
Subsidiaries of additional Indebtedness in an aggregate amount not to
exceed $10.0 million at any time outstanding;
(viii) the guarantee by the Company or any of its Restricted
Subsidiaries of Indebtedness that was permitted to be incurred by another
provision of this covenant; and
(ix) Indebtedness of a Receivables Subsidiary that is not recourse to
the Company or any of its Restricted Subsidiaries (other than Standard
Securitization Undertakings) incurred in connection with a Qualified
Receivables Transaction.
For purposes of determining compliance with this covenant, in the event
that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (i) through (ix) above or is
entitled to be incurred pursuant to the first paragraph of this covenant, the
Company shall, in its sole discretion, classify such item of Indebtedness in any
manner that complies with this covenant and such item of Indebtedness will be
treated as having been incurred pursuant to only one of such clauses or pursuant
to the first paragraph hereof. Accrual of interest, the accretion of accreted
value and the payment of interest in the form of additional Indebtedness will
not be deemed to be an incurrence of Indebtedness for purposes of this covenant.
LIENS
The Indenture provides that the Company will not, and will not permit any
of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume
or suffer to exist any Lien securing Indebtedness or trade payables on any asset
now owned or hereafter acquired, or any income or profits therefrom or assign or
convey any right to receive income therefrom, except Permitted Liens.
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DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES
The Indenture provides that 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 encumbrance or restriction on
the ability of any Restricted Subsidiary to (i)(a) pay dividends or make any
other distributions to the Company or any of its Restricted Subsidiaries (1) on
its Capital Stock or (2) with respect to any other interest or participation in,
or measured by, its profits, or (b) pay any indebtedness owed to the Company or
any of its Restricted Subsidiaries, (ii) make loans or advances to the Company
or any of its Restricted Subsidiaries or (iii) transfer any of its properties or
assets to the Company or any of its Restricted Subsidiaries, except for such
encumbrances or restrictions existing under or by reason of (a) Existing
Indebtedness as in effect on the Closing Date, (b) the Credit Facility as in
effect as of the Closing Date, and any amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or refinancings
thereof, provided that such amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacement or refinancings are no more
restrictive with respect to such dividend and other payment restrictions than
those contained in the Credit Facility as in effect on the Closing Date, (c) the
Indenture and the Exchange Notes, (d) applicable law, (e) any instrument
governing Indebtedness or Capital Stock of a Person acquired by the Company or
any of its Restricted Subsidiaries as in effect at the time of such acquisition
(except to the extent such Indebtedness was incurred in connection with or in
contemplation of such acquisition), 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, provided that,
in the case of Indebtedness, such Indebtedness was permitted by the terms of the
Indenture to be incurred, (f) by reason of customary non-assignment provisions
in leases entered into in the ordinary course of business, (g) purchase money
obligations for property acquired in the ordinary course of business that impose
restrictions of the nature described in clause (iii) above on the property so
acquired, (h) Permitted Refinancing Indebtedness, provided that the restrictions
contained in the agreements governing such Permitted Refinancing Indebtedness
are no more restrictive than those contained in the agreements governing the
Indebtedness being refinanced, or (i) any Purchase Money Note, or other
Indebtedness or contractual requirements incurred with respect to a Qualified
Receivables Transaction relating to a Receivables Subsidiary.
MERGER, CONSOLIDATION, OR SALE OF ASSETS
The Indenture provides that neither the Company, nor UNICCO Finance, nor
any Guarantor may consolidate or merge with or into (whether or not the Company,
UNICCO Finance or such Guarantor, as the case may be, is the surviving entity),
or sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its properties or assets in one or more related
transactions, to another corporation, Person or entity unless (i) the Company,
UNICCO Finance or such Guarantor, as the case may be, is the surviving entity,
or the entity or the Person formed by or surviving any such consolidation or
merger (if other than the Company, UNICCO Finance or such Guarantor) or to which
such sale, assignment, transfer, lease, conveyance or other disposition shall
have been made is a corporation, business trust or limited liability company
organized or existing under the laws of the United States, any state thereof or
the District of Columbia; (ii) the entity or Person formed by or surviving any
such consolidation or merger (if other than the Company, UNICCO Finance or such
Guarantor) or the entity or Person to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made assumes all the
obligations of the Company, UNICCO Finance or such Guarantor, as the case may
be, under the Exchange Notes or such Guarantor's Guarantee thereof and the
Indenture pursuant to a supplemental indenture in a form reasonably satisfactory
to the Trustee; (iii) immediately after such transaction no Default or Event of
Default exists; and (iv) except in the case of a merger of the Company or a
Guarantor with or into the Company or another Guarantor, the Company, such
Guarantor or the entity or Person formed by or surviving any such consolidation
or merger (if other than the Company or such Guarantor), or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made will, at the time of such transaction and after giving pro forma effect
thereto (including pro forma expense and cost reductions) as if such transaction
had occurred at the beginning of the applicable four-quarter period, be
permitted to incur at least $1.00 of additional Indebtedness pursuant to the
Fixed Charge Coverage Ratio test set forth in the first paragraph of
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the covenant described above under the caption "-- Incurrence of Indebtedness
and Issuance of Preferred Stock."
TRANSACTIONS WITH AFFILIATES
The Indenture provides that the Company will not, and will not permit any
of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer
or otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into or make or amend any transaction,
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate (each of the foregoing, an "Affiliate Transaction"),
unless (i) such Affiliate Transaction is on terms that are no less favorable to
the Company or such Restricted Subsidiary than those that would have been
obtained in a comparable transaction by the Company or such Restricted
Subsidiary with an unrelated Person and (ii) the Company delivers to the Trustee
(a) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $0.5 million, a
resolution of the Board of Directors set forth in an officers' certificate
certifying that such Affiliate Transaction complies with clause (i) above and
that such Affiliate Transaction has been approved by a majority of the
disinterested members of the Board of Directors, if any, and (b) with respect to
any Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $4.0 million, an opinion as to the fairness
to the Holders of such Affiliate Transaction from a financial point of view
issued by an accounting, appraisal or investment banking firm of national
standing.
The foregoing provisions will not prohibit: (i) any employment agreement or
other employment or compensation agreement entered into by the Company or any of
its Restricted Subsidiaries in the ordinary course of business; (ii)
transactions between or among the Company and/or its Restricted Subsidiaries
and/or UNICCO Finance; (iii) direct or indirect transactions between the Company
or any of its Restricted Subsidiaries, on the one hand, and Ashmont Insurance
Company Limited or any of its subsidiaries, on the other hand, on terms that are
not materially less favorable to the Company or the applicable Restricted
Subsidiary than those that could have been obtained from an unaffiliated third
party; (iv) the transactions contemplated under "Use of Proceeds;" (v) notes
payable to or receivable from, and leases of real property from, Affiliates (and
payments thereunder) as in effect on the Closing Date, as the same may be
amended, modified, renewed or extended in a manner no less favorable to the
Company and its Restricted Subsidiaries; (vi) any Restricted Payment that is
permitted by the provisions of the Indenture described above under the caption
"-- Restricted Payments;" and (vii) sales of accounts receivable and other
related assets customarily transferred in an asset securitization transaction
involving accounts receivable to a Receivables Subsidiary in a Qualified
Receivables Transaction.
LIMITATION ON OTHER SENIOR SUBORDINATED DEBT
The Indenture provides that neither the Company nor any Restricted
Subsidiary will incur any Indebtedness that is subordinate or junior in right of
payment to any Senior Debt of the Company or such Restricted Subsidiary, as the
case may be, and senior in any respect in right of payment to the Exchange Notes
or such Restricted Subsidiary's Guarantee thereof.
ADDITIONAL SUBSIDIARY GUARANTEES
The Indenture provides that if the Company or any of its Domestic
Restricted Subsidiaries shall acquire or create another Domestic Restricted
Subsidiary after the date of the Indenture, or any Unrestricted Subsidiary shall
cease to be an Unrestricted Subsidiary and shall become a Domestic Restricted
Subsidiary, then such Subsidiary shall execute a guarantee of the Exchange Notes
and deliver an opinion of counsel unless such Subsidiary shall have been
designated a Receivables Subsidiary in accordance with the terms of the
Indenture.
PAYMENTS FOR CONSENT
The Indenture provides that neither the Company nor UNICCO Finance nor any
of the Company's Restricted Subsidiaries will, directly or indirectly, pay or
cause to be paid any consideration, whether by way of
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interest, fee or otherwise, to any Holder of any Exchange Notes for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of the Indenture or the Exchange Notes unless such consideration is offered to
be paid or is paid to all Holders of the Exchange Notes that consent, waive or
agree to amend in the time frame set forth in the solicitation documents
relating to such consent, waiver or agreement.
REPORTS
The Indenture provides that, whether or not required by the rules and
regulations of the Commission, so long as any Exchange Notes are outstanding,
the Issuers will furnish to the Holders of Exchange Notes, within 15 days after
the required filing date, (i) all quarterly and annual financial information
(excluding the exhibits and financial schedules) that would be required to be
contained in a filing with the Commission on Forms 10-Q and 10-K if the Issuers
were required to file such Forms, including a "Management's Discussion and
Analysis of Financial Condition and Results of Operations" that describes the
financial condition and results of operations of the Issuers and their
consolidated Subsidiaries (showing in reasonable detail, either on the face of
the financial statements or in the footnotes thereto, the consolidated financial
condition and results of operations of the Company, UNICCO Finance and the
Company's Restricted Subsidiaries separate from the financial information and
results of operations of the Unrestricted Subsidiaries of the Company) and, with
respect to the annual information only, a report thereon by the Issuers'
certified independent accountants and (ii) all current reports that would be
required to be filed with the Commission on Form 8-K if the Issuers were
required to file such reports. In addition, whether or not required by the rules
and regulations of the Commission, the Issuers will file a copy of all such
information and reports with the Commission for public availability (unless the
Commission will not accept such a filing) and make such information available to
securities analysts and prospective investors upon request. In addition, the
Issuers and the Company's Restricted Subsidiaries will agree that, for so long
as any Notes remain outstanding, they will furnish to the Holders and to
securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the Act.
ACTIVITIES OF UNICCO FINANCE
The Indenture provides that UNICCO Finance may not hold any material
assets, become liable for any material obligations or engage in any significant
business activities; provided, however, that UNICCO Finance may be a co-obligor
or guarantor with respect to, and may pledge its assets to secure, Indebtedness
of which the Company is an obligor.
EVENTS OF DEFAULT AND REMEDIES
The Indenture provides that each of the following constitutes an Event of
Default: (i) default for 30 days in the payment when due of interest on, or
Liquidated Damages, if any, with respect to, the Exchange Notes (whether or not
prohibited by the subordination provisions of the Indenture), (ii) default in
payment when due of the principal of or premium, if any, on the Exchange Notes
(whether or not prohibited by the subordination provisions of the Indenture);
(iii) failure by the Issuers to comply with the provisions described under the
captions "-- Change of Control," "-- Asset Sales," "-- Restricted Payments,"
"-- Incurrence of Indebtedness and Issuance of Preferred Stock" or "-- Merger,
Consolidation or Sale of Assets;" (iv) failure by the Issuers for 60 days after
written notice by the Trustee or the Holders of at least 25% in principal amount
of the then outstanding Exchange Notes to comply with any of their other
agreements in the Indenture or the Exchange Notes; (v) default under any
mortgage, indenture or instrument under which there may be issued or by which
there may be secured or evidenced any Indebtedness for money borrowed by the
Company, UNICCO Finance or any of the Company's Restricted Subsidiaries (or the
payment of which is guaranteed by the Company, UNICCO Finance or any of the
Company's Restricted Subsidiaries), whether such Indebtedness or guarantee now
exists or is created after the Closing Date, which default (a) is caused by a
failure to pay principal of or premium, if any, or interest on such Indebtedness
prior to the expiration of the grace period provided in such Indebtedness on the
date of such default (a "Payment Default") or (b) results in the acceleration of
such Indebtedness prior to its express maturity and, in each case, the principal
amount of any such Indebtedness, together with the principal amount of any other
such Indebtedness under which there
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has been a Payment Default or the maturity of which has been so accelerated,
aggregates $5.0 million or more; (vi) failure by the Company, UNICCO Finance or
any of the Company's Restricted Subsidiaries to pay final judgments aggregating
in excess of $2.0 million and either (a) any creditor commences enforcement
proceedings upon any such judgment or (b) such judgments are not paid,
discharged or stayed for a period of 45 days; (vii) except as permitted by the
Indenture, any guarantee of the Exchange Notes shall be held in any judicial
proceeding to be unenforceable or invalid or shall cease for any reason to be in
full force and effect or any Restricted Subsidiary, or any Person acting on
behalf of any Restricted Subsidiary, shall deny or disaffirm its obligations
under its guarantee; (viii) the Refinancing shall not have been consummated by
11:59 p.m., New York City time, on the Closing Date; and (ix) certain events of
bankruptcy or insolvency with respect to the Company, UNICCO Finance or any of
the Company's Restricted Subsidiaries.
If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Exchange
Notes may declare all the Exchange Notes to be due and payable immediately.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, with respect to the Company, UNICCO
Finance, any Significant Subsidiary or any group of Restricted Subsidiaries of
the Company that, taken together, would constitute a Significant Subsidiary, all
outstanding Exchange Notes will become due and payable without further action or
notice. Holders of the Exchange Notes may not enforce the Indenture or the Notes
except as provided in the Indenture. Subject to certain limitations, Holders of
a majority in principal amount of the then outstanding Exchange Notes may direct
the Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of the Exchange Notes notice of any continuing Default or Event of
Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest.
In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Issuers with
the intention of avoiding payment of the premium that the Issuers would have had
to pay if the Issuers then had elected to redeem the Exchange Notes pursuant to
the optional redemption provisions of the Indenture, an equivalent premium shall
also become and be immediately due and payable to the extent permitted by law
upon the acceleration of the Exchange Notes. If an Event of Default occurs prior
to October 15, 2002 by reason of any willful action (or inaction) taken (or not
taken) by or on behalf of the Issuers with the intention of avoiding the
prohibition on redemption of the Exchange Notes prior to such date, then the
premium specified in the Indenture shall also become immediately due and payable
to the extent permitted by law upon the acceleration of the Exchange Notes.
The Holders of a majority in aggregate principal amount of the Exchange
Notes then outstanding by notice to the Trustee may on behalf of the Holders of
all of the Exchange Notes waive any existing Default or Event of Default and its
consequences under the Indenture except a continuing Default or Event of Default
in the payment of interest on, or the principal of, the Exchange Notes.
The Issuers are required to deliver to the Trustee annually a statement
regarding compliance with the Indenture, and the Issuers are required, upon
becoming aware of any Default or Event of Default, to deliver to the Trustee a
statement specifying such Default or Event of Default.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES, TRUSTEES, INCORPORATORS
AND SHAREHOLDERS
No director, officer, employee, trustee, incorporator or shareholder of
either Issuer or any of the Company's Subsidiaries, as such, shall have any
liability for any obligations of the Issuers or such Subsidiary under the
Exchange Notes, any Guarantee thereof, the Indenture or for any claim based on,
in respect of, or by reason of, such obligations or their creation. Each Holder
of Exchange Notes by accepting a Exchange Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Exchange Notes. Such waiver may not be effective to waive liabilities under
the federal securities laws and it is the view of the Commission that such a
waiver is against public policy.
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LEGAL DEFEASANCE AND COVENANT DEFEASANCE
The Issuers may, at their option and at any time, elect to have all of
their obligations discharged with respect to the outstanding Exchange Notes
("Legal Defeasance") except for (i) the rights of Holders of outstanding
Exchange Notes to receive payments in respect of the principal of and premium,
interest and Liquidated Damages, if any, on the Exchange Notes when such
payments are due from the trust referred to below, (ii) the Issuers' obligations
with respect to the Exchange Notes concerning issuing temporary Exchange Notes,
registration of Exchange Notes, mutilated, destroyed, lost or stolen Notes and
the maintenance of an office or agency for payment and money for security
payments held in trust, (iii) the rights, powers, trusts, duties and immunities
of the Trustee, and the Issuers' obligations in connection therewith and (iv)
the Legal Defeasance provisions of the Indenture. In addition, the Issuers may,
at their option and at any time, elect to have the obligations of the Issuers
released with respect to certain covenants that are described in the Indenture
("Covenant Defeasance") and thereafter any omission to comply with such
obligations shall not constitute a Default or Event of Default with respect to
the Exchange Notes. In the event Covenant Defeasance occurs, certain events (not
including non-payment, bankruptcy, receivership, rehabilitation and insolvency
events) described under "Events of Default" will no longer constitute an Event
of Default with respect to the Exchange Notes.
In order to exercise either Legal Defeasance or Covenant Defeasance, (i)
the Issuers must irrevocably deposit with the Trustee, in trust, for the benefit
of the Holders of the Exchange Notes, cash in U.S. dollars, non-callable
Government Securities, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent public
accountants, to pay the principal of and premium, interest and Liquidated
Damages, if any, on the outstanding Exchange Notes on the stated maturity or on
the applicable redemption date, as the case may be, and the Issuers must specify
whether the Exchange Notes are being defeased to maturity or to a particular
redemption date; (ii) in the case of Legal Defeasance, the Issuers shall have
delivered to the Trustee an opinion of counsel in the United States reasonably
acceptable to the Trustee confirming that (a) the Issuers have received from, or
there has been published by, the Internal Revenue Service a ruling or (b) since
the Closing Date, there has been a change in the applicable federal income tax
law, in either case to the effect that, and based thereon such opinion of
counsel shall confirm that, the Holders of the outstanding Exchange Notes will
not recognize income, gain or loss for federal income tax purposes as a result
of such Legal Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such Legal Defeasance had not occurred; (iii) in the case of Covenant
Defeasance, the Issuers shall have delivered to the Trustee an opinion of
counsel in the United States reasonably acceptable to the Trustee confirming
that the Holders of the outstanding Exchange Notes will not recognize income,
gain or loss for federal income tax purposes as a result of such Covenant
Defeasance and will be subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred; (iv) no Default or Event of Default shall have
occurred and be continuing on the date of such deposit (other than a Default or
Event of Default resulting from the borrowing of funds to be applied to such
deposit) or insofar as Events of Default from bankruptcy or insolvency events
are concerned, at any time in the period ending on the 91st day after the date
of deposit; (v) such Legal Defeasance or Covenant Defeasance will not result in
a breach or violation of, or constitute a default under any material agreement
or instrument (other than the Indenture) to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound; (vi) the Issuers shall have delivered to the Trustee an opinion of
counsel 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; (vii) the Issuers shall have delivered to the Trustee an officers'
certificate stating that the deposit was not made by the Issuers with the intent
of preferring the Holders of Exchange Notes over the other creditors of the
Issuers with the intent of defeating, hindering, delaying or defrauding
creditors of the Issuers or others; and (viii) the Issuers shall have delivered
to the Trustee an officers' certificate and an opinion of counsel, each stating
that all conditions precedent provided for relating to the Legal Defeasance or
the Covenant Defeasance have been complied with.
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TRANSFER AND EXCHANGE
A Holder may transfer or exchange the Exchange Notes in accordance with and
subject to the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Issuers may require a Holder to pay any taxes and fees required by law
or permitted by the Indenture. The Issuers are not required to transfer or
exchange any Exchange Note selected for redemption. Also, the Issuers are not
required to transfer or exchange any Exchange Note for a period of 15 days
before a selection of Exchange Notes to be redeemed.
The registered Holder of a Note will be treated as the owner of it for all
purposes.
AMENDMENT, SUPPLEMENT AND WAIVER
Except as provided in the next two succeeding paragraphs, the Indenture,
the Exchange Notes and the Guarantees thereof may be amended or supplemented
with the consent of the Holders of at least a majority in principal amount of
the Exchange Notes then outstanding (including, without limitation, consents
obtained in connection with a purchase of, or tender offer or exchange offer
for, Exchange Notes), and any existing default or compliance with any provision
of the Indenture, the Exchange Notes or the Guarantees thereof may be waived
with the consent of the Holders of a majority in principal amount of the then
outstanding Exchange Notes (including consents obtained in connection with a
tender offer or exchange offer for Exchange Notes).
Without the consent of each Holder affected, an amendment or waiver may not
(with respect to any Exchange Notes held by a non-consenting Holder): (i) reduce
the principal amount of Exchange Notes whose Holders must consent to an
amendment, supplement or waiver, (ii) reduce the principal of or change the
fixed maturity of any Exchange Note or alter the provisions with respect to the
redemption of the Exchange Notes (other than provisions relating to the
covenants described above under the caption "-- Repurchase at the Option of
Holders"), (iii) reduce the rate of or change the time for payment of interest
on any Note, (iv) waive a Default or Event of Default in the payment of
principal of or premium, interest or Liquidated Damages, if any, on the Exchange
Notes (except a rescission of acceleration of the Exchange Notes by the Holders
of at least a majority in aggregate principal amount of the Notes and a waiver
of the payment default that resulted from such acceleration), (v) make any
Exchange Note payable in money other than that stated in the Exchange Notes,
(vi) make any change in the provisions of the Indenture relating to waivers of
past Defaults or the rights of Holders of Exchange Notes to receive payments of
principal of or premium, interest or Liquidated Damages, if any, on the Exchange
Notes, (vii) waive a redemption payment with respect to any Exchange Note (other
than a payment required by one of the covenants described above under the
caption "-- Repurchase at the Option of Holders"), (ix) release any Restricted
Subsidiary from its Guarantee of the Exchange Notes except as provided in the
Indenture or (ix) make any change in the foregoing amendment and waiver
provisions. In addition, any amendment to the provisions of Article 10 of the
Indenture (which relate to subordination) (a) will require the consent of all
holders of Senior Debt if such amendment would adversely affect the rights of
holders of Senior Debt and (b) will require the consent of the Holders of at
least 75% in aggregate principal amount of the Exchange Notes then outstanding
if such amendment would adversely affect the rights of Holders of Exchange
Notes.
Notwithstanding the foregoing, without the consent of any Holder of
Exchange Notes, the Issuers, the Company's Restricted Subsidiaries and the
Trustee may amend or supplement the Indenture, the Exchange Notes or any
Guarantee thereof to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Exchange Notes in addition to or in place of certificated
Exchange Notes, to provide for the assumption of the Company's, UNICCO Finance's
or any Restricted Subsidiary's obligations to Holders of Exchange Notes in the
case of a merger or consolidation, to make any change that would provide any
additional rights or benefits to the Holders of Exchange Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder, or to
comply with requirements of the Commission in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act.
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CONCERNING THE TRUSTEE
The Indenture contains certain limitations on the rights of the Trustee,
should it become a creditor of the Issuers, to obtain payment of claims in
certain cases, or to realize on certain property received in respect of any such
claim as security or otherwise. The Trustee will be permitted to engage in other
transactions; however, if it acquires any conflicting interest it must eliminate
such conflict within 90 days, apply to the Commission for permission to continue
or resign.
The Holders of a majority in principal amount of the then outstanding
Exchange Notes will have the right to direct the time, method and place of
conducting any proceeding for exercising any remedy available to the Trustee,
subject to certain exceptions. The Indenture provides that in case an Event of
Default shall occur (which shall not be cured), the Trustee will be required, in
the exercise of its power, to use the degree of care of a prudent man in the
conduct of his own affairs. Subject to such provisions, the Trustee will be
under no obligation to exercise any of its rights or powers under the Indenture
at the request of any Holder of Exchange Notes, unless such Holder shall have
offered to the Trustee security and indemnity satisfactory to it against any
loss, liability or expense.
ADDITIONAL INFORMATION
Anyone who receives this Prospectus may obtain a copy of form of the
Indenture and Registration Rights Agreement without charge by writing to UNICCO
Service Company, Four Copley Place, Boston, Massachusetts 02116, Attention:
George A. Keches, Chief Financial Officer.
BOOK-ENTRY, DELIVERY AND FORM
The certificates representing the Exchange Notes will be issued in fully
registered form. Except as described in the next paragraph, the Exchange Notes
initially will be represented by a single, permanent global Exchange Note, in
definitive, fully registered form without interest coupons (the "Global Exchange
Note") and will be deposited with the Trustee as custodian for DTC and
registered in the name of Cede & Co. or such other nominee as DTC may designate.
The Global Exchange Note (and any Exchange Notes issued in exchange therefor)
will be subject to certain restrictions on transfer set forth therein and in the
Indenture and will bear the respective legends regarding such restrictions.
Holders of Exchange Notes who elect to take physical delivery of their
certificates instead of holding their interest through the Global Exchange Note
(collectively referred to herein as the "Non-Global Holders") will be issued in
registered form a certificated Exchange Note ("Certificate Exchange Note"). Upon
the transfer of any Certificated Exchange Note initially issued to a Non-Global
Holder, such Certificated Exchange Note will, unless the transferee requests
otherwise or the Global Exchange Note has previously been exchanged in whole for
Certificated Exchange Notes, be exchanged for an interest in the Global Exchange
Note.
The Depositary is a limited-purpose trust company that was created to hold
securities for its participating organizations (collectively, the "Participants"
or the "Depositary's Participants") and to facilitate the clearance and
settlement of transactions in such securities between Participants through
electronic book-entry changes in accounts of its Participants. The Depositary's
Participants include securities brokers and dealers (including the Initial
Purchaser), banks and trust companies, clearing corporations and certain other
organizations. Access to the Depositary's system is also available to other
entities such as banks, brokers, dealers and trust companies (collectively, the
"Indirect Participants" or the "Depositary's Indirect Participants") that clear
through or maintain a custodial relationship with a Participant, either directly
or indirectly. Persons who are not Participants may beneficially own securities
held by or on behalf of the Depositary only thorough the Depositary's
Participants or the Depositary's Indirect Participants.
The Issuers expect that, pursuant to procedures established by the
Depositary, (i) upon deposit of the Global Exchange Notes, the Depositary will
credit the accounts of Participants designated by the Initial Purchaser with
portions of the principal amount of the Global Exchange Notes and (ii) ownership
of the Exchange Notes evidenced by the Global Exchange Notes will be shown on,
and the transfer of ownership thereof will be effected only through, records
maintained by the Depositary (with respect to the interests of the Depositary's
Participants), the Depositary's Participants and the Depositary's Indirect
Participants.
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Prospective purchasers are advised that the laws of some states require that
certain persons take physical delivery in definitive form of securities that
they own. Consequently, the ability to transfer Exchange Notes evidenced by the
Global Exchange Notes will be limited to such extent. For certain other
restrictions on the transferability of the Exchange Notes, see "Notice to
Investors."
So long as the Global Exchange Note Holder is the registered owner of any
Notes, the Global Exchange Note Holder will be considered the sole Holder under
the Indenture of any Exchange Notes evidenced by the Global Exchange Notes.
Beneficial owners of Notes evidenced by the Global Exchange Notes will not be
considered the owners or Holders thereof under the Indenture for any purpose,
including with respect to the giving of any directions, instructions or
approvals to the Trustee thereunder. Neither the Issuers nor the Trustee will
have any responsibility or liability for any aspect of the records of the
Depositary or for maintaining, supervising or reviewing any records of the
Depositary relating to the Exchange Notes.
Payments in respect of the principal of and premium, interest and
Liquidated Damages, if any, on any Exchange Notes registered in the name of the
Global Exchange Note Holder on the applicable record date will be payable by the
Trustee to or at the direction of the Global Exchange Note Holder in its
capacity as the registered Holder under the Indenture. Under the terms of the
Indenture, the Issuers and the Trustee may treat the persons in whose names
Exchange Notes, including the Global Exchange Notes, are registered as the
owners thereof for the purpose of receiving such payments. Consequently, neither
the Issuers nor the Trustee has or will have any responsibility or liability for
the payment of such amounts to beneficial owners of Exchange Notes. The Issuers
believe, however, that it is currently the policy of the Depositary to
immediately credit the accounts of the relevant Participants with such payments,
in amounts proportionate to their respective holdings of beneficial interests in
the relevant security as shown on the records of the Depositary. Payments by the
Depositary's Participants and the Depositary's Indirect Participants to the
beneficial owners of Exchange Notes will be governed by standing instructions
and customary practice and will be the responsibility of the Depositary's
Participants or the Depositary's Indirect Participants.
ADDITIONAL INFORMATION CONCERNING EUROCLEAR AND CEDEL BANK
Euroclear and Cedel Bank hold securities for participating organizations
and facilitate the clearance and settlement of securities transactions between
their respective participants through electronic book-entry changes in accounts
of such participants. Euroclear and Cedel Bank provide to their participants,
among other things, services for safekeeping, administration, clearance and
settlement of internationally traded securities and securities lending and
borrowing. Euroclear and Cedel Bank interface with domestic securities markets.
Euroclear and Cedel Bank participants are financial institutions such as
underwriters, securities brokers and dealers, banks, trust companies and certain
other organizations. Indirect access to Euroclear and Cedel Bank is also
available to others such as banks, brokers, dealers and trust companies that
clear through or maintain a custodian relationship with a Euroclear or Cedel
Bank participant, either directly or indirectly. The Issuers will have no direct
control over the clearance and settlement of transactions through Euroclear or
Cedel Bank.
When beneficial interests are to be transferred from the account of a
Participant (other than Morgan Guaranty Trust Company of New York and Citibank,
N.A., as depositaries for Euroclear and Cedel Bank, respectively) to the account
of a Euroclear participant or a Cedel Bank participant, the purchaser must send
instructions to Euroclear or Cedel Bank through a participant at least one
business day prior to settlement. Euroclear or Cedel Bank, as the case may be,
will instruct Morgan Guaranty Trust Company of New York or Citibank, N.A. to
receive the beneficial interests against payment. Payment will include interest
attributable to the beneficial interest from and including the last payment date
to and excluding the settlement date, on the basis of a calendar year consisting
of twelve 30-day calendar months. For transactions settling on the 31st day of
the month, payment will include interest accrued to and excluding the first day
of the following month. Payment will then be made by Morgan Guaranty Trust
Company of New York or Citibank, N.A., as the case may be, to the Participant's
account against delivery of the beneficial interests. After settlement has been
completed, the beneficial interests will be credited to the respective clearing
systems and by the clearing system, in accordance with its usual procedures, to
the Euroclear participants' or Cedel Bank participants' account. Credit for the
beneficial interests will appear on the next business day (European time) and
the cash debit will be back-valued to, and interest attributable to the
beneficial interests will accrue from, the value
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date (which would be the preceding business day when settlement occurs in New
York). If settlement is not completed on the intended value date (i.e., the
trade fails), the Euroclear or Cedel Bank cash debit will instead be valued as
of the actual settlement date.
Euroclear participants and Cedel Bank participants will need to make
available to the respective clearing systems the funds necessary to process
same-day funds settlement. The most direct means of doing so is to preposition
funds for settlement, either from cash on hand or existing lines of credit, as
they would for any settlement occurring within Euroclear or Cedel Bank. Under
this approach, they may take on credit exposure to Euroclear or Cedel Bank until
the beneficial interests are credited to their accounts one day later. Finally,
day traders that use Euroclear or Cedel Bank and that purchase beneficial
interests from Participants for credit to Euroclear participants or Cedel Bank
participants should note that these trades would automatically fall on the sale
side unless affirmative action were taken to avoid these potential problems.
Due to time zone differences in their favor, Euroclear participants and
Cedel Bank participants may employ their customary procedures for transactions
in which beneficial interests are to be transferred by the respective clearing
system, through Morgan Guaranty Trust Company of New York or Citibank, N.A., to
another Participant. The seller must send instructions to Euroclear or Cedel
Bank through a participant at least one business day prior to settlement. In
these cases, Euroclear or Cedel Bank will instruct Morgan Guaranty Trust Company
of New York or Citibank, N.A., as the case may be, to credit the beneficial
interests to the Participant's account against payment. Payment will include
interest attributable to the beneficial interest from and including the last
payment date to and excluding the settlement date on the basis of a calendar
year consisting of twelve 30-day calendar months. For transactions settling on
the 31st day of the month, payment will include interest accrued to and
excluding the first day of the following month. The payment will then be
reflected in the account of the Euroclear participant or Cedel Bank participant
the following business day, and receipt of the cash proceeds in the Euroclear or
Cedel Bank participant's account will be back-valued to the value date (which
would be the preceding business day, when settlement occurs in New York). If the
Euroclear participant or Cedel Bank participant has a line of credit with its
representative clearing system and elects to draw on such line of credit in
anticipation of receipt of the sale proceeds in its account, the back-valuation
may substantially reduce or offset any overdraft charges incurred over that one-
day period. If settlement is not completed on the intended value date (i.e., if
trade fails), receipt of the cash proceeds in the Euroclear or Cedel Bank
participant's account would instead be valued as of the actual settlement date.
CERTIFICATED SECURITIES
Subject to certain conditions, any person having a beneficial interest in a
Global Exchange Note may, upon request, exchange such beneficial interest for
Exchange Notes in the form of Certificated Securities. Upon any such issuance,
the Trustee is required to register such Certificated Securities in the name of,
and cause the same to be delivered to, such person or persons (or the nominee of
any thereof). All such certificated Exchange Notes would be subject to the
legend requirements described herein under "Notice to Investors." In addition,
if (i) the Issuers notify the Trustee in writing that the Depositary is no
longer willing or able to act as a depositary and the Issuers are unable to
locate a qualified successor within 90 days or (ii) the Issuers, at their
option, notify the Trustee in writing that they elect to cause the issuance of
Exchange Notes in the form of Certificated Securities under the Indenture, then,
upon surrender by the Global Exchange Note Holder of the Global Exchange Notes,
Exchange Notes in such form will be issued to each person that the Global
Exchange Note Holder and the Depositary identify as being the beneficial owner
of the related Exchange Notes.
Neither the Issuers nor the Trustee will be liable for any delay by the
Global Exchange Note Holder or the Depositary in identifying the beneficial
owners of Exchange Notes and the Issuers and the Trustee may conclusively rely
on, and will be protected in relying on, instructions from the Global Exchange
Note Holder or the Depositary for all purposes.
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SAME-DAY SETTLEMENT AND PAYMENT
The Indenture will require that payments in respect of the Exchange Notes
represented by the Global Exchange Notes (including principal, premium, interest
and Liquidated Damages, if any) be made by wire transfer of immediately
available funds to the accounts specified by the Global Exchange Note Holder.
With respect to Certificated Securities, the Issuers will make all payments of
principal, premium, interest and Liquidated Damages, if any, by wire transfer of
immediately available funds to the accounts specified by the Holders thereof or,
if no such account is specified, by mailing a check to each such Holder's
registered address.
The Exchange Notes represented by the Global Exchange Notes are expected to
be eligible to trade in the PORTAL market and to trade in the Depositary's
Same-Day Funds Settlement System, and any permitted secondary market trading
activity in such Exchange Notes will, therefore, be required by the Depositary
to be settled in immediately available funds. The Issuers expect that secondary
trading in the Certificated Securities will also be settled in immediately
available funds, although such settlement will not be within the Issuers'
control.
REGISTRATION RIGHTS; LIQUIDATED DAMAGES
The Issuers, the Company's Restricted Subsidiaries and the Initial
Purchaser entered into the Registration Rights Agreement on the Closing Date.
Pursuant to the Registration Rights Agreement, the Issuers agreed to file with
the Commission the Exchange Offer Registration Statement on the appropriate form
under the Securities Act with respect to the Exchange Notes. Upon the
effectiveness of the Exchange Offer Registration Statement, the Issuers will
offer to the Holders of Transfer Restricted Securities pursuant to the Exchange
Offer who are able to make certain representations the opportunity to exchange
their Transfer Restricted Securities for Exchange Notes. If (i) the Issuers are
not required to file the Exchange Offer Registration Statement or permitted to
consummate the Exchange Offer because the Exchange Offer is not permitted by
applicable law or Commission policy or (ii) any Holder of Transfer Restricted
Securities notifies the Company prior to the 20th day following consummation of
the Exchange Offer that (a) it is prohibited by law or Commission policy from
participating in the Exchange Offer or (b) that it may not resell the Exchange
Notes acquired by it in the Exchange Offer to the public without delivering a
prospectus and the prospectus contained in the Exchange Offer Registration
Statement is not appropriate or available for such resales or (c) that it is a
broker-dealer and owns Series A Notes acquired directly from the Issuers or an
affiliate of the Issuers, the Issuers will file with the Commission a Shelf
Registration Statement to cover resales of the Series A Notes by the Holders
thereof who satisfy certain conditions relating to the provision of information
in connection with the Shelf Registration Statement. The Issuers will use their
reasonable best efforts to cause the applicable registration statement to be
declared effective as promptly as possible by the Commission. For purposes of
the foregoing, "Transfer Restricted Securities" means each Series A Note until
(i) the date on which such Series A Note has been exchanged by a person other
than a broker-dealer for an Exchange Note in the Exchange Offer, (ii) following
the exchange by a broker-dealer in the Exchange Offer of a Series A Note for an
Exchange Note, the date on which such Exchange Note is sold to a purchaser who
receives from such broker-dealer on or prior to the date of such sale a copy of
the prospectus contained in the Exchange Offer Registration Statement, (iii) the
date on which such Series A Note has been effectively registered under the
Securities Act and disposed of in accordance with the Shelf Registration
Statement or (iv) the date on which such Series A Note is resold to the public
pursuant to Rule 144 under the Act.
The Registration Rights Agreement provides that (i) the Issuers will file
an Exchange Offer Registration Statement with the Commission on or prior to 45
days after the Closing Date, (ii) the Issuers will use their best efforts to
have the Exchange Offer Registration Statement declared effective by the
Commission on or prior to 120 days after the Closing Date, (iii) unless the
Exchange Offer would not be permitted by applicable law or Commission policy,
the Issuers will commence the Exchange Offer and use their best efforts to
issue, on or prior to 30 business days after the date on which the Exchange
Offer Registration Statement was declared effective by the Commission, Exchange
Notes in exchange for all Series A Notes tendered prior thereto in the Exchange
Offer and (iv) if obligated to file the Shelf Registration Statement, the
Issuers will use their best efforts to file the Shelf Registration Statement
with the Commission on or prior to 45 days after
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such filing obligation arises and to cause the Shelf Registration to be declared
effective by the Commission on or prior to 120 days after such obligation
arises. If (a) the Issuers fail to file any of the Registration Statements
required by the Registration Rights Agreement on or before the date specified
for such filing, (b) any of such Registration Statements is not declared
effective by the Commission on or prior to the date specified for such
effectiveness, (c) the Issuers fail to consummate the Exchange Offer within 30
business days of the effective date of the Exchange Offer Registration Statement
or (d) the Shelf Registration Statement or the Exchange Offer Registration
Statement is declared effective but thereafter ceases to be effective or usable
in connection with resales of Transfer Restricted Securities during the periods
specified in the Registration Rights Agreement (each such event referred to in
clauses (a) through (d) above a "Registration Default"), then the Issuers will
pay Liquidated Damages to each Holder of Notes affected thereby, with respect to
the first 90-day period immediately following the occurrence of the first
Registration Default, in an amount equal to $.05 per week per $1,000 principal
amount of Series A Notes held by such Holder. The amount of the Liquidated
Damages will increase by an additional $.05 per week per $1,000 principal amount
of Series A Notes with respect to each subsequent 90-day period until all
Registration Defaults have been cured, up to a maximum amount of Liquidated
Damages of $.50 per week per $1,000 principal amount of Series A Notes. All
accrued Liquidated Damages will be paid by the Issuers on each Damages Payment
Date to the Global Note Holder by wire transfer of immediately available funds
or by federal funds check and to Holders of Certificated Securities by wire
transfer to the accounts specified by them or by mailing checks to their
registered addresses if no such accounts have been specified. Following the cure
of all Registration Defaults, the accrual of Liquidated Damages will cease.
Holders of Series A Notes will be required to make certain representations
to the Issuers (as described herein) in order to participate in the Exchange
Offer and will be required to deliver information to be used in connection with
the Shelf Registration Statement and to provide comments on the Shelf
Registration Statement within the time periods set forth in the Registration
Rights Agreement in order to have their Series A Notes included in the Shelf
Registration Statement and benefit from the provisions regarding Liquidated
Damages set forth above.
CERTAIN DEFINITIONS
Set forth below are certain defined terms used in the Indenture. Reference
is made to the Indenture for a full disclosure of all such terms, as well as any
other capitalized terms used herein for which no definition is provided.
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For 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 securities, by agreement or otherwise; provided that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control.
"Asset Sale" means (i) the sale, lease, conveyance or other disposition of
any assets or rights (including, without limitation, by way of a sale and
leaseback), excluding sales of services and ancillary products in the ordinary
course of business consistent with past practices (provided that the sale,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company and its Restricted Subsidiaries taken as a whole will be governed
by the provisions of the Indenture described above under the caption "-- Change
of Control" and/or the provisions described above under the caption "Certain
Covenants -- Merger, Consolidation or Sale of Assets" and not by the provisions
of the Asset Sale covenant), and (ii) the issue or sale by the
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Company or any of its Subsidiaries of Equity Interests of any of the Company's
Subsidiaries, in the case of either clause (i) or (ii), whether in a single
transaction or a series of related transactions (a) that have a fair market
value in excess of $1.0 million or (b) for net proceeds in excess of $1.0
million. Notwithstanding the foregoing: (i) a transfer of assets by the Company
to a Wholly Owned Restricted Subsidiary or by a Wholly Owned Restricted
Subsidiary to the Company or to another Wholly Owned Restricted Subsidiary, (ii)
an issuance of Equity Interests by a Wholly Owned Restricted Subsidiary to the
Company or to another Wholly Owned Restricted Subsidiary, (iii) a Restricted
Payment that is permitted by the covenant described above under the caption "--
Restricted Payments" and (iv) the sale of accounts receivable and related assets
customarily transferred in an asset securitization transaction involving
accounts receivable to a Receivables Subsidiary or by a Receivables Subsidiary
in connection with a Qualified Receivables Transaction will not be deemed to be
Asset Sales.
"Board of Directors" means (i) at any time the Company is a business trust,
the board of trustees of the Company, (ii) at any time the Company is a
corporation, the board of directors of the Company or any authorized committee
thereof, and (iii) at any time the Company is neither a business trust nor a
corporation, the board or committee of the Company serving a similar function.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership or limited liability
company, partnership or membership interests (whether general or limited) and
(iv) 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, the
issuing Person.
"Cash Equivalents" means (i) United States dollars, (ii) securities issued
or directly and fully guaranteed or insured by the United States government or
any agency or instrumentality thereof having maturities of not more than six
months from the date of acquisition, (iii) certificates of deposit and
eurodollar time deposits with maturities of six months or less from the date of
acquisition, bankers' acceptances with maturities not exceeding six months and
overnight bank deposits, in each case with any lender party to the Credit
Facility or with any domestic commercial bank having capital and surplus in
excess of $500.0 million and a Keefe Bank Watch Rating of "B" or better, (iv)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clauses (ii) and (iii) above entered into
with any financial institution meeting the qualifications specified in clause
(iii) above and (v) commercial paper having the highest rating obtainable from
Moody's Investors Service, Inc. or Standard & Poor's Corporation and in each
case maturing within six months after the date of acquisition.
"Change of Control" means the occurrence of any of the following: (i) the
sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Restricted Subsidiaries,
taken as a whole, other than to the Principals; (ii) the adoption of a plan for
the liquidation or dissolution of the Company; (iii) prior to the consummation
of an Initial Public Offering, the consummation of any transaction (including,
without limitation, any merger or consolidation) the result of which is that the
Principals fail to be the "beneficial owners" (as such term is defined in Rule
13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly, of at
least 51% of the aggregate voting power of the outstanding Voting Stock of the
Company; (iv) following the consummation of an Initial Public Offering, the
consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any "person" or "group" (as such
terms are used in Section 13(d)(3) of the Exchange Act), other than the
Principals, becomes the "beneficial owner" (as such term is defined in Rule
13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly, of (a)
more than 35% of the aggregate voting power of the outstanding Voting Stock of
the Company or (b) more of the voting power of the outstanding Voting Stock of
the Company than the aggregate of that beneficially owned by the Principals; or
(v) the first day on which more than a majority of the members of the Board of
Directors are not Continuing Directors.
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"Closing Date" means the date of the closing of the sale of the Notes.
"Consolidated Cash Flow" means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period plus, to the extent
deducted in computing such Consolidated Net Income, (i) an amount equal to any
extraordinary loss plus any net loss realized in connection with an Asset Sale,
(ii) provision for taxes based on income or profits and, without duplication,
the Tax Amount for such period, (iii) consolidated interest expense whether paid
or accrued and whether or not capitalized (including, without limitation,
original issue discount, non-cash interest payments, the interest component of
any deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, commissions, discounts and other fees
and charges incurred in respect of letter of credit or bankers' acceptance
financings, and net payments (if any) pursuant to Hedging Obligations),
excluding, however, amortization or write off of debt issuance costs, (iv)
depreciation and amortization (including amortization of goodwill and other
intangibles but excluding amortization of prepaid cash expenses that were paid
in a prior period) and (v) any non-cash compensation expense resulting from
compensation paid in Equity Interests of the Company, in each case, on a
consolidated basis and determined in accordance with GAAP. Notwithstanding the
foregoing, the provision for taxes based on the income or profits of, and the
depreciation and amortization of, a Restricted Subsidiary of a Person shall be
added to Consolidated Net Income to compute Consolidated Cash Flow only to the
extent (and in the same proportion) that the Net Income of such Restricted
Subsidiary was included in calculating the Consolidated Net Income of such
Person and only if a corresponding amount would be permitted at the date of
determination to be dividended by such Restricted Subsidiary without prior
approval (that has not been obtained) pursuant to the terms of its charter and
all agreements, instruments, judgments, decrees, orders, statutes, rules and
governmental regulations applicable to such Restricted Subsidiary or its
stockholders.
"Consolidated Net Income" means, with respect to any Person for any period,
the aggregate of the Net Income of such Person and its Restricted Subsidiaries
for such period, on a consolidated basis, determined in accordance with GAAP;
provided that (i) the Net Income (but not loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Wholly Owned Restricted
Subsidiary thereof, (ii) the Net Income of any Restricted Subsidiary shall be
excluded to the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at the
date of determination permitted without any prior governmental approval (that
has not been obtained) or, directly or indirectly, by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to that Restricted Subsidiary or its
stockholders, (iii) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition shall
be excluded, (iv) the cumulative effect of a change in accounting principles
shall be excluded and (v) the Net Income (but not loss) of any Unrestricted
Subsidiary shall be excluded, whether or not distributed to the Company or one
of its Restricted Subsidiaries.
"Continuing Directors" means, as of any date of determination, any member
of the Board of Directors who (i) was a member of such Board of Directors on the
date of the Indenture or (ii) was nominated for election or elected to such
Board of Directors with the approval of a majority of the Continuing Directors
who were members of such Board of Directors at the time of such nomination or
election.
"Credit Facility" means the Amended and Restated Revolving Credit Agreement
of the Company and certain of its subsidiaries, dated the Closing Date,
including any guarantees and security therefor, as amended, restated, extended,
modified, renewed, refunded, replaced, substituted, restructured or refinanced
in whole or in part from time to time (including, without limitation, any
successive amendments, restatements, extensions, modifications, renewals,
refundings, replacements, substitutions, restructurings or refinancings of the
fore-
going), whether with the Company or with one or more of its Subsidiaries, and
whether with the present lenders or any other lenders.
"Default" means any event that is or with the passage of time or the giving
of notice or both would be an Event of Default.
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"Designated Senior Debt" means (i) any Indebtedness outstanding under the
Credit Facility and (ii) any other Senior Debt permitted under the Indenture the
principal amount of which is $10.0 million or more and that has been designated
by the Company as "Designated Senior Debt."
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the Holder thereof, in whole or in part, on or prior to the date
that is 91 days after the date on which the Exchange Notes mature.
"Domestic Restricted Subsidiary" means a Restricted Subsidiary that is
organized pursuant to the laws of any state or other jurisdiction in the United
States.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Existing Indebtedness" means Indebtedness in existence on the date of the
Indenture, until such Indebtedness is repaid.
"Fixed Charges" means, with respect to any Person for any period, the sum,
without duplication, of (i) the consolidated interest expense of such Person and
its Restricted Subsidiaries for such period, whether paid or accrued (including,
without limitation, original issue discount, non-cash interest payments, the
interest component of any deferred payment obligations, the interest component
of all payments associated with Capital Lease Obligations, commissions,
discounts and other fees and charges incurred in respect of letter of credit or
bankers' acceptance financings, and net payments (if any) pursuant to Hedging
Obligations), excluding, however, amortization or write off of debt issuance
costs, (ii) the consolidated interest expense of such Person and its Restricted
Subsidiaries that was capitalized during such period, (iii) any interest expense
on Indebtedness of another Person that is Guaranteed by such Person or one of
its Restricted Subsidiaries or secured by a Lien on assets of such Person or one
of its Restricted Subsidiaries (whether or not such Guarantee or Lien is called
upon) and (iv) the product of (a) all dividend payments, whether or not in cash,
on any series of preferred equity of such Person or any of its Restricted
Subsidiaries, other than dividend payments on Equity Interests payable solely in
Equity Interests of the Company or to the Company or any Restricted Subsidiary,
times (b) a fraction, the numerator of which is one and the denominator of which
is one minus the then current combined federal, state and local statutory tax
rate of such Person (or, in the case of the Company for so long as it is treated
as an "S corporation" or a partnership for federal income tax purposes, the
combined federal, state and local statutory tax rate used to calculate the Tax
Amount), expressed as a decimal, in each case, on a consolidated basis and in
accordance with GAAP.
"Fixed Charge Coverage Ratio" means with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person for such period
to the Fixed Charges of such Person and its Restricted Subsidiaries for such
period. In the event that the Company or any of its Restricted Subsidiaries
incurs, assumes, Guarantees, repays or redeems any Indebtedness (other than
revolving credit borrowings) or issues or redeems preferred equity subsequent to
the commencement of the period for which the Fixed Charge Coverage Ratio is
being calculated but prior to the date on which the event for which the
calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"),
then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect
to such incurrence, assumption, Guarantee, repayment or redemption of
Indebtedness, or such issuance or redemption of preferred equity, as if the same
had occurred at the beginning of the applicable four-quarter reference period.
In addition, for purposes of making the computation referred to above, (i)
acquisitions that have been made by the Company or any of its Restricted
Subsidiaries, including through mergers or consolidations and including any
related financing transactions, during the four-quarter reference period or
subsequent to such reference period and on or prior to the Calculation Date
shall be deemed to have occurred on the first day of the four-quarter reference
period (giving effect to any pro forma expense and cost reductions) and
Consolidated Cash Flow for such reference period shall be calculated without
giving effect to clause (iii) of the proviso set forth in the definition of
Consolidated Net Income, (ii) the Consolidated Cash Flow attributable to
discontinued operations, as determined in accordance with GAAP, and operations
or businesses disposed of prior to the Calculation Date, shall be excluded and
(iii) the Fixed
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Charges attributable to discontinued operations, as determined in accordance
with GAAP, and operations or businesses disposed of prior to the Calculation
Date, shall be excluded, but only to the extent that the obligations giving rise
to such Fixed Charges will not be obligations of the referent Person or any of
its Restricted Subsidiaries following the Calculation Date.
"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 have been approved by a significant segment of the accounting
profession, which are in effect from time to time.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"Hedging Obligations" means, with respect to any Person, the obligations of
such Person under (i) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements and (ii) other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates.
"Indebtedness" means, with respect to any Person, (i) any indebtedness of
such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or banker's acceptances
or representing Capital Lease Obligations or the balance deferred and unpaid of
the purchase price of any property or representing any Hedging Obligations,
except any such balance that constitutes an accrued expense or trade payable, if
and to the extent any of the foregoing indebtedness (other than letters of
credit and Hedging Obligations) would appear as a liability upon a balance sheet
of such Person prepared in accordance with GAAP, (ii) all indebtedness of others
secured by a Lien on any asset of such Person (whether or not such indebtedness
is assumed by such Person) up to the value of the collateral and (iii) to the
extent not otherwise included, the Guarantee by such Person of any indebtedness
of any other Person. Notwithstanding the foregoing, Indebtedness shall not
include payment, performance or surety bonds or standby letters of credit issued
in the ordinary course of business.
"Initial Public Offering" means one or more underwritten public offerings
of the common equity of the Company registered under the Securities Act that
generate aggregate gross proceeds of at least $25.0 million.
"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
If the Company or any Subsidiary of the Company sells or otherwise disposes of
any Equity Interests of any direct or indirect Subsidiary of the Company such
that, after giving effect to any such sale or disposition, such Person is no
longer a Subsidiary of the Company, the Company shall be deemed to have made an
Investment on the date of any such sale or disposition equal to the fair market
value of the Equity Interests of such Subsidiary not sold or disposed of in an
amount determined as provided in the third paragraph of the covenant described
above under the caption "Certain Covenants -- Restricted Payments."
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
"Net Income" means, with respect to any Person, (i) the net income (loss)
of such Person, determined in accordance with GAAP and before any reduction in
respect of dividends on preferred equity, excluding,
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however, (a) any gain (but not loss), together with any related provision for
taxes on such gain (but not loss), realized in connection with (1) any Asset
Sale (including, without limitation, dispositions pursuant to sale and leaseback
transactions) or (2) the disposition of any securities by such Person or any of
its Restricted Subsidiaries or the extinguishment of any Indebtedness of such
Person or any of its Restricted Subsidiaries and (b) any extraordinary or
nonrecurring gain (but not loss), together with any related provision for taxes
on such extraordinary or nonrecurring gain (but not loss), minus (ii) in the
case of the Company for so long as it is treated as an "S corporation" or a
partnership for federal income tax purposes, the Tax Amount for such period,
excluding, however, any Tax Amount attributable to any gain referred to in
clause (i)(a) or (b), above.
"Net Proceeds" means the aggregate cash proceeds received by the Company or
any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale (including, without limitation, legal, accounting
and investment banking fees, and sales commissions) and any severance,
termination, closing or relocation or similar expenses incurred as a result
thereof, taxes or Tax Distributions paid or payable as a result thereof (after
taking into account any available tax credits or deductions and any tax sharing
arrangements), amounts required to be applied to the repayment of Indebtedness
secured by a Lien on the asset or assets that were the subject of such Asset
Sale and any reserve for adjustment in respect of the sale price of such asset
or assets established in accordance with GAAP.
"Non-Recourse Debt" means Indebtedness: (i) as to which neither the Company
nor any of its Restricted Subsidiaries (a) provides credit support of any kind
(including any undertaking, agreement or instrument that would constitute
Indebtedness), (b) is directly or indirectly liable (as a guarantor or
otherwise) or (c) constitutes the lender; (ii) no default with respect to which
(including any rights that the holders thereof may have to take enforcement
action against an Unrestricted Subsidiary) would permit (upon notice, lapse of
time or both) any holder of any other Indebtedness (other than the Exchange
Notes being offered hereby) of the Company or any of its Restricted Subsidiaries
to declare a default on such other Indebtedness or cause the payment thereof to
be accelerated or payable prior to its stated maturity; and (iii) as to which
the lenders have been notified in writing that they will not have any recourse
to the stock or assets of the Company or any of its Restricted Subsidiaries.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Permitted Investments" means (i) any Investment in the Company or in a
Wholly Owned Restricted Subsidiary of the Company; (ii) any Investment in Cash
Equivalents; (iii) any Investment by the Company or any Restricted Subsidiary of
the Company in a Person, if as a result of such Investment (a) such Person
becomes a Wholly Owned Restricted Subsidiary of the Company and a Guarantor or
(b) such Person is merged, consolidated or amalgamated with or into, or
transfers or conveys substantially all of its assets to, or is liquidated into,
the Company or a Wholly Owned Restricted Subsidiary of the Company; (iv) any
Restricted Investment made as a result of the receipt of non-cash consideration
from an Asset Sale that was made pursuant to and in compliance with the covenant
described above under the caption "-- Repurchase at the Option of Holders --
Asset Sales;" (v) any acquisition of assets solely in exchange for the issuance
of Equity Interests (other than Disqualified Stock) of the Company; (vi)
advances to employees in the ordinary course of business; (vii) other
Investments in any Person (measured on the date each such Investment was made
and without giving effect to subsequent changes in value), when taken together
with all other Investments made pursuant to this clause (vii) that are at the
time outstanding, not to exceed $10.0 million; and (viii) Investments by the
Company or a Restricted Subsidiary of the Company in a Receivables Subsidiary or
any Investment by a Receivables Subsidiary in any other Person or assets in
connection with a Qualified Receivables Transaction; provided that any
Investment in any such Person is in the form of a Purchase Money Note, an equity
interest or interests in accounts receivable generated by the Company or a
Subsidiary of the Company and transferred to any Person in connection with a
Qualified Receivables Transaction or any such Person owning such accounts
receivable.
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"Permitted Junior Securities" means Equity Interests in the Company or debt
securities that are subordinated to all Senior Debt (and any debt securities
issued in exchange for Senior Debt) to substantially the same extent as, or to a
greater extent than, the Exchange Notes are subordinated to Senior Debt pursuant
to Article 10 of the Indenture.
"Permitted Liens" means (i) Liens securing Senior Debt of the Company and
its Restricted Subsidiaries that was permitted by the terms of the Indenture to
be incurred; (ii) Liens in favor of the Company or any of its Restricted
Subsidiaries; (iii) Liens on property of a Person existing at the time such
Person is merged into or consolidated with the Company or any Restricted
Subsidiary of the Company; provided that such Liens were in existence prior to
the contemplation of such merger or consolidation and do not extend to any
assets other than those of the Person merged into or consolidated with the
Company; (iv) Liens on property existing at the time of acquisition thereof by
the Company or any Restricted Subsidiary of the Company, provided that such
Liens were in existence prior to the contemplation of such acquisition; (v)
Liens to secure the performance of statutory obligations, surety or appeal
bonds, performance bonds or other obligations of a like nature incurred in the
ordinary course of business; (vi) Liens existing on the date of the Indenture;
(vii) Liens for taxes, assessments or governmental charges or claims that are
not yet delinquent or that are being contested in good faith by appropriate
proceedings promptly instituted and diligently concluded, provided that any
reserve or other appropriate provision as shall be required in conformity with
GAAP shall have been made therefore; (viii) Liens incurred in the ordinary
course of business of the Company or any Restricted Subsidiary of the Company
with respect to obligations that do not exceed $2.0 million at any one time
outstanding and that (a) are not incurred in connection with the borrowing of
money or the obtaining of advances or credit (other than trade credit in the
ordinary course of business) and (b) do not in the aggregate materially detract
from the value of the property or materially impair the use thereof in the
operation of business by the Company or such Restricted Subsidiary; and (ix)
Liens on assets of a Receivables Subsidiary securing Indebtedness incurred in
connection with a Qualified Receivables Transaction, provided that such
Indebtedness was incurred in connection with such Qualified Receivables
Transaction.
"Permitted Refinancing Indebtedness" means any Indebtedness of the Company
or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries;
provided that: (i) the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the principal amount of
(or accreted value, if applicable), plus accrued interest on, the Indebtedness
so extended, refinanced, renewed, replaced, defeased or refunded (plus the
amount of reasonable expenses incurred in connection therewith); (ii) such
Permitted Refinancing Indebtedness has a final maturity date later than the
final maturity date of, and has a Weighted Average Life to Maturity no shorter
than the Weighted Average Life to Maturity of, the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; (iii) if the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded is
subordinated in right of payment to the Notes, such Permitted Refinancing
Indebtedness is subordinated in right of payment to the Notes on terms at least
as favorable to the Holders of Notes as those contained in the documentation
governing the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; and (iv) such Indebtedness is incurred either by the
Company or by the Restricted Subsidiary that is an obligor on or guarantor of
the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded.
"Principals" means Steven C. Kletjian, Richard J. Kletjian and Robert P.
Kletjian, their respective spouses and lineal descendants, and any Affiliate of,
trust or partnership for the benefit of, or direct, indirect, remainder or
contingent beneficiary of any such trust or partnership for the benefit of, any
of the foregoing.
"Purchase Money Note" means a promissory note evidencing a line of credit,
which may be irrevocable, from, or evidencing other Indebtedness owed to, the
Company or any Subsidiary of the Company in connection with a Qualified
Receivables Transaction.
"Qualified Receivables Transaction" means any transaction or series of
transactions that may be entered into by the Company or any Subsidiary of the
Company pursuant to which the Company or any Subsidiary of the Company may sell,
convey or otherwise transfer to (i) a Receivables Subsidiary (in the case of a
transfer
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by the Company or any Subsidiary of the Company) and (ii) any other person (in
the case of a transfer by a Receivables Subsidiary), or may grant a security
interest in, any accounts receivable (whether now existing or arising in the
future) of the Company or any Subsidiary of the Company, and any assets related
thereto including, without limitation, all collateral securing such accounts
receivable, all contracts and all guarantees or other obligations in respect of
such accounts receivable, proceeds of such accounts receivable and other assets
which are customarily transferred or in respect of which security interests are
customarily granted in connection with asset securitization transactions
involving accounts receivable.
"Receivables Subsidiary" means a Wholly Owned Restricted Subsidiary of the
Company, which engages in no activities other than in connection with the
financing of accounts receivable and which is designated by the Board of
Directors of the Company (as provided below) as a Receivables Subsidiary (i) no
portion of the Indebtedness or any other Obligations of which (a) is guaranteed
by the Company or any other Restricted Subsidiary of the Company (excluding
guarantees of Obligations (other than the principal of, and interest on,
Indebtedness)) pursuant to Standard Securitization Undertakings, (b) is recourse
to or obligates the Company or any other Restricted Subsidiary of the Company in
any way other than pursuant to Standard Securitization Undertakings or (c)
subjects any property or asset of the Company or any other Restricted Subsidiary
of the Company, directly or indirectly, contingently or otherwise, to the
satisfaction thereof, other than pursuant to Standard Securitization
Undertakings, (ii) with which neither the Company nor any other Restricted
Subsidiary of the Company has any material contract, agreement, arrangement or
understanding (except in connection with a Purchase Money Note or Qualified
Receivables Transaction) other than on terms no less favorable to the Company or
such other Restricted Subsidiary of the Company than those that might be
obtained at the time from persons that are not Affiliates of the Company, other
than fees payable in the ordinary course of business in connection with
servicing accounts receivable, and (iii) to which neither the Company nor any
other Restricted Subsidiary of the Company has any obligation to maintain or
preserve such entity's financial condition or cause such entity to achieve
certain levels of operating results. Any such designation by the Board of
Directors of the Company shall be evidenced to the Trustee by filing with the
Trustee a certified copy of the resolution of the Board of Directors of the
Company giving effect to such designation and an Officers' Certificate
certifying, to the best of such officers' knowledge and belief after consulting
with counsel, that such designation complied with the foregoing conditions.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person, other than UNICCO Finance, that is not an Unrestricted Subsidiary.
"Senior Debt" of a Person means (i) all Indebtedness of such Person
outstanding under the Credit Facility and all Hedging Obligations with respect
thereto, (ii) any other Indebtedness of such Person permitted to be incurred
under the terms of the Indenture, unless the instrument under which such
Indebtedness is incurred expressly provides that it is subordinated in right of
payment to any Senior Debt of such Person and (iii) all Obligations of such
Person with respect to the foregoing. Notwithstanding anything to the contrary
in the foregoing, Senior Debt of a Person will not include (a) any liability for
federal, state, local or other taxes owed or owing by such Person, (b) any
Indebtedness of such Person to any of its Subsidiaries or other Affiliates, (c)
any trade payables or (d) any Indebtedness that is incurred in violation of the
Indenture.
"Significant Subsidiary" means any Restricted Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Act, as such Regulation is in effect on the date
hereof.
"Standard Securitization Undertakings" means representations, warranties,
covenants and indemnities entered into by the Company or any Subsidiary of the
Company which are reasonably customary in an accounts receivable transaction.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be redeemed or paid in the original
documentation governing such Indebtedness, and shall not include any contingent
obligations to
81
<PAGE> 87
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof).
"Tax Amount" means the combined federal, state and local income taxes
payable by the shareholders of the Company, assuming the highest marginal rates
applicable to any of them, with respect to the taxable income of the Company
solely as a result of the taxation of the Company as an "S corporation" or a
partnership for federal income tax purposes.
"Tax Distribution" means a distribution in respect of taxes to the
shareholders of the Company pursuant to clause (iv) of the second full paragraph
of the covenant described under the caption "Restricted Payments."
"Unrestricted Subsidiary" means (i) any Subsidiary that is designated by
the Board of Directors as an Unrestricted Subsidiary pursuant to a board
resolution, but only to the extent that such Subsidiary: (a) has no Indebtedness
other than Non-Recourse Debt; (b) is not party to any agreement, contract,
arrangement or understanding with the Company or any Restricted Subsidiary of
the Company unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Company or such Restricted Subsidiary
than those that might be obtained at the time from Persons who are not
Affiliates of the Company; (c) is a Person with respect to which neither the
Company nor any of its Restricted Subsidiaries has any direct or indirect
obligation (1) to subscribe for additional Equity Interests or (2) to maintain
or preserve such Person's financial condition or to cause such Person to achieve
any specified levels of operating results; (d) has not guaranteed or otherwise
directly or indirectly provided credit support for any Indebtedness of the
Company or any of its Restricted Subsidiaries; and (e) has at least one director
on its board of directors that is not a director or executive officer of the
Company or any of its Restricted Subsidiaries.
"Voting Stock" means Capital Stock that is at the time entitled to vote in
the election of the Board of Directors.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (i) the sum of the
products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares) shall at
the time be owned by such Person or by one or more Wholly Owned Restricted
Subsidiaries of such Person and one or more Wholly Owned Restricted Subsidiaries
of such Person.
82
<PAGE> 88
PLAN OF DISTRIBUTION
Each Participating Broker-Dealer that receives Exchange Notes for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver a
Prospectus in connection with any resale of such Exchange Notes. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a Participating Broker-Dealer in connection with resales of Exchange Notes
received in exchange for Series A Notes where such Series A Notes were acquired
as a result of market-making activities or other trading activities. The Company
has agreed that it will make this Prospectus, as amended or supplemented,
available to any Participating Broker-Dealer for use in connection with any such
resale, and Participating Broker-Dealers shall be authorized to deliver this
Prospectus in connection with the sale or transfer of the Exchange Notes. In
addition, until , 1998 (90 days after the date of this Prospectus),
all dealers effecting transactions in the Exchange Notes may be required to
deliver a prospectus.
The Issuers will not receive any proceeds from any sales of the Exchange
Notes by Participating Broker-Dealers. Exchange Notes received by Participating
Broker-Dealers for their own account pursuant to the Exchange Offer may be sold
from time to time, in one or more transactions in the over-the-counter market,
in negotiated transactions, through the writing of options on the Exchange Notes
or a combination of such methods of resale, at market prices prevailing at the
time of resale, at prices related to such prevailing market prices or at
negotiated prices. Any such resale may be made directly to purchasers or to or
through brokers or dealers who may receive compensation in the form of
commissions or concessions from any such Participating Broker-Dealer that
resells the Exchange Notes that were received by it for its own account pursuant
to the Exchange Offer. Any broker or dealer that participates in a distribution
of such Exchange Notes may be deemed to be an "underwriter" within the meaning
of the Securities Act and any profit on any such resale of Exchange Notes and
any commissions or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act. The Letter of Transmittal
states that, by acknowledging that it will deliver and by delivering a
prospectus, a Participating Broker-Dealer will not be deemed to admit that is an
"underwriter" within the meaning of the Securities Act.
The Issuers will promptly send additional copies of this Prospectus and any
amendment or supplement of this Prospectus to any Participating Broker-Dealer
that requests such documents in the Letter of Transmittal. See "The Exchange
Offer."
83
<PAGE> 89
CERTAIN UNITED STATES FEDERAL TAX CONSIDERATIONS
FOR NON-UNITED STATES HOLDERS
The following is a general discussion of certain United States federal
income and estate tax consequences of the acquisition, ownership and disposition
of Notes by an initial beneficial owner of Notes that, for United States federal
income tax purposes, is not a "United States person" (a "Non-United States
Holder"). This discussion is based upon the United States federal tax law now in
effect, which is subject to change, possibly retroactively. For purposes of this
discussion, a "United States person" means a citizen or resident of the United
States, a corporation, partnership or other entity created or organized in the
United States or under the laws of the United States or of any political
subdivision thereof, an estate whose income is includible in gross income for
United States federal income tax purposes regardless of its source or a trust,
if a U.S. court is able to exercise primary supervision over the administration
of the trust and one or more U.S. persons have the authority to control all
substantial decisions of the trust. The tax treatment of the holders of the
Notes may vary depending upon their particular situations. U.S. persons
acquiring the Notes are subject to different rules than those discussed below.
In addition, certain other holders (including insurance companies, tax exempt
organizations, financial institutions and broker-dealers) may be subject to
special rules not discussed below. Prospective investors are urged to consult
their tax advisors regarding the United States federal tax consequences of
acquiring, holding and disposing of Notes, as well as any tax consequences that
may arise under the laws of any foreign, state, local or other taxing
jurisdiction. New final regulations dealing with withholding tax on income paid
to foreign persons and related matters (the "New Withholding Regulations") were
recently issued by the Treasury Department. In general, the New Withholding
Regulations do not significantly alter the substantive withholding and
information reporting requirements, but unify current certification procedures
and forms and clarify reliance standards. The New Withholding Regulations will
generally be effective for payments made after December 31, 1998, subject to
certain transition rules. Accordingly, payments made on or before December 31,
1998 will continue to be subject to the regulations that existed before the New
Withholding Regulations were issued. THE NEW WITHHOLDING REGULATIONS ARE QUITE
COMPLEX. THE NON-UNITED STATES HOLDERS ARE STRONGLY URGED TO CONSULT THEIR OWN
TAX ADVISORS WITH RESPECT TO THE NEW WITHHOLDING REGULATIONS.
INTEREST
Interest paid by the Company to a Non-United States Holder will not be
subject to United States federal income or withholding tax if such interest is
not effectively connected with the conduct of a trade or business within the
United States by such Non-United States Holder and such Non-United States Holder
(i) does not actually or constructively own 10% or more of the total combined
voting power of all classes of stock of the Company; (ii) is not a controlled
foreign corporation with respect to which the Company is a "related person"
within the meaning of the United States Internal Revenue Code of 1986, as
amended (the "Code"), and (iii) certifies, under penalties of perjury, that such
holder is not a United States person and provides such holder's name and
address. Under the New Withholding Regulations, the statement is required to be
made on Form W-8 and provided prior to payment. For a Non-United States Holder
who is claiming the benefits of a tax treaty, the New Withholding Regulations
may require such holder to obtain a U.S. taxpayer identification number and to
provide certain documentary evidence issued by foreign governmental authorities
to prove residence in the foreign country. Certain special procedures are
provided in the New Withholding Regulations for payments through qualified
intermediaries.
GAIN ON DISPOSITION
A Non-United States Holder will generally not be subject to United States
federal income tax on gain recognized on a sale, redemption or other disposition
of a Note unless (i) the gain is effectively connected with the conduct of a
trade or business within the United States by the Non-United States Holder or
(ii) in the case of a Non-United States Holder who is a nonresident alien
individual and holds the Note as a capital asset, such holder is present in the
United States for 183 or more days in the taxable year and certain other
requirements are met.
84
<PAGE> 90
FEDERAL ESTATE TAXES
If interest on the Notes is exempt from withholding of United States
federal income tax under the rules described above, the Notes will not be
included in the estate of a deceased Non-United States Holder for United States
federal estate tax purposes.
INFORMATION REPORTING AND BACKUP WITHHOLDING
For payments made on or before December 31, 1998, the Company will, where
required, report to the holders of Notes and the Internal Revenue Service the
amount of any interest paid on the Notes in each calendar year and the amounts
of tax withheld, if any, with respect to such payments.
In the case of payments of interest to Non-United States Holders, temporary
Treasury regulations provide that the 31% backup withholding tax and certain
information reporting will not apply to such payments with respect to which
either the requisite certification, as described above, has been received or an
exemption has otherwise been established; provided that neither the Company nor
its payment agent has actual knowledge that the holder is a United States person
or that the conditions of any other exemption are not in fact satisfied. Under
temporary Treasury regulations, these information reporting and backup
withholding requirements will apply, however, to the gross proceeds paid to a
Non-United States Holder on the disposition of the Notes by or through a United
States office of a United States or foreign broker, unless the holder certifies
to the broker under penalties of perjury as to its name, address and status as a
foreign person or the holder otherwise establishes an exemption. Information
reporting requirements, but not backup withholding, will also apply to a payment
of the proceeds of a disposition of the Notes by or through a foreign office of
a United States broker or foreign brokers with certain types of relationships to
the United States unless such broker has documentary evidence in its file that
the holder of the Notes is not a United States person, and such broker has no
actual knowledge to the contrary, or the holder establishes an exception.
Neither information reporting nor backup withholding generally will apply to a
payment of the proceeds of a disposition of the Notes by or through a foreign
office of a foreign broker not subject to the preceding sentence.
For payments made after December 31, 1998, the New Withholding Regulations
provide that to the extent a Non-United States Holder certifies on Form W-8 (or
a permitted substitute form) as to such holder's status as a foreign person, the
backup withholding provisions and the information reporting provisions will
generally not apply. If a Non-United States Holder fails to provide such
certification, such holder may be subject to certain information reporting and
the 31% backup withholding tax.
Backup withholding is not an additional tax. Any amounts withheld under the
backup withholding rules may be refunded or credited against the Non-United
States Holder's United States federal income tax liability, provided that the
required information is furnished to the Internal Revenue Service.
LEGAL MATTERS
Certain legal matters will be passed upon on behalf of the Company by
Posternak, Blankstein & Lund, L.L.P., Boston, Massachusetts.
EXPERTS
The financial statements of the Company as of June 29, 1997 and June 30,
1996 and for each of the two years then ended and the statements of income and
of cash flows of the Allied Facility Services Business for the years ended June
28, 1996 and June 30, 1995 included in this Prospectus have been so included in
reliance on the report of Price Waterhouse LLP, independent accountants, given
on the authority of said firm as experts in auditing and accounting.
The statements of income, stockholders' equity and cash flows of the
Company for the year ended June 25, 1995 included in this Prospectus and
elsewhere in the Registration Statement have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their report with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said report.
85
<PAGE> 91
On March 14, 1997, the Company's management retained Price Waterhouse LLP
as its independent accountants. The reports of the Company's former accountants
on the Company's financial statements did not contain any adverse opinion or
disclaimer of opinion and were not modified as to uncertainty, audit scope or
accounting principles. There were no disagreements with the former accountants
on any matter of accounting principles or practices, financial statement
disclosure or auditing scope or procedure with respect to the Company's
financial statements, which, if not resolved to the former accountants'
satisfaction, would have caused them to make reference to the subject matter of
the disagreement in connection with their reports. Prior to retaining Price
Waterhouse LLP, the Company had not consulted with such firm regarding
accounting principles or practices.
86
<PAGE> 92
INDEX TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
------
<S> <C>
UNICCO SERVICE COMPANY
Report of Price Waterhouse LLP, Independent Accountants.............................. F-2
Report of Arthur Andersen LLP, Independent Accountants............................... F-3
Combined Consolidated Balance Sheet at June 29, 1997, June 30, 1996 and September 28,
1997 (unaudited)................................................................... F-4
Combined Consolidated Statement of Income for the years ended June 29, 1997, June 30,
1996 and June 25, 1995 and for the three month periods ended September 28, 1997 and
September 29, 1996 (unaudited)..................................................... F-5
Combined Consolidated Statement of Shareholders' Equity for the period from June 26,
1994 to June 29, 1997 and to September 28, 1997 (unaudited)........................ F-6
Combined Consolidated Statement of Cash Flows for the years ended June 29, 1997, June
30, 1996 and June 25, 1995 and for the three month periods ended September 28, 1997
and September 29, 1996 (unaudited)................................................. F-7
Notes to Combined Consolidated Financial Statements.................................. F-8
ALLIED FACILITY SERVICES BUSINESS
Report of Price Waterhouse LLP, Independent Accountants.............................. F-25
Combined Statements of Income for the years ended June 28, 1996 and June 30, 1995.... F-26
Combined Statements of Cash Flows at June 28, 1996 and June 30, 1995................. F-27
Notes to Combined Financial Statements............................................... F-28
</TABLE>
F-1
<PAGE> 93
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees and the Board of Directors
and Shareholders of UNICCO Service Company and
USC, Inc.
In our opinion, the accompanying combined consolidated balance sheet and
the related combined consolidated statements of income, of shareholders' equity
and of cash flows present fairly, in all material respects, the financial
position of UNICCO Service Company and USC, Inc. and their subsidiaries (the
"Company") at June 29, 1997 and June 30, 1996, and the results of their
operations and their cash flows for the years then ended in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Boston, Massachusetts
September 25, 1997
F-2
<PAGE> 94
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To UNICCO Service Company:
We have audited the accompanying statements of income, shareholders' equity
and cash flows of UNICCO Service Company (a Massachusetts business trust) for
the year ended June 25, 1995. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of UNICCO Service Company as of
June 25, 1995, and the results of its operations and cash flows for the year
ended June 25, 1995, in conformity with generally accepted accounting
principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
September 11, 1995
F-3
<PAGE> 95
UNICCO SERVICE COMPANY
COMBINED CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
SEPTEMBER
28,
JUNE 29, JUNE 30, 1997
1997 1996 ------------
------------ ----------- (UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents........................... $ 3,928,310 $ 157,169 $ 2,106,195
Accounts receivable, less reserves of approximately
$1,561,000, $239,000 and $1,838,000 at 1997, 1996
and September 28, 1997 (unaudited),
respectively..................................... 61,890,192 7,892,087 59,230,321
Unbilled receivables................................ 27,036,284 3,569,177 29,022,933
Notes receivable from officers, current portion..... -- 160,000 --
Prepaid insurance................................... 247,530 2,208,272 223,939
Other current assets................................ 3,100,824 1,245,348 2,211,600
------------ ----------- ------------
Total current assets............................. 96,203,140 15,232,053 92,794,988
------------ ----------- ------------
Property and equipment, at cost:
Transportation equipment............................ 1,416,402 1,232,434 1,381,654
Machinery and equipment............................. 6,144,958 4,750,120 6,261,594
Furniture and fixtures.............................. 3,813,701 2,712,273 3,920,598
Leasehold improvements.............................. 318,257 348,754 329,282
------------ ----------- ------------
11,693,318 9,043,581 11,893,128
Less -- accumulated depreciation and amortization... 7,045,884 4,400,360 7,596,005
------------ ----------- ------------
4,647,434 4,643,221 4,297,123
------------ ----------- ------------
Notes receivable and accrued interest from officers,
net of current portion.............................. 716,125 1,103,211 686,125
Intangible assets, net of amortization................ 55,436,560 60,185,501 54,245,113
Other assets, net..................................... 4,083,615 4,002,552 4,410,094
------------ ----------- ------------
60,236,300 65,291,264 59,341,332
------------ ----------- ------------
$161,086,874 $85,166,538 156,433,443
============ =========== ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Cash overdraft...................................... $ 11,315,853 $ 2,041,535 $ 9,014,812
Current portion of long-term debt................... 7,000,000 5,500,000 6,900,000
Accounts payable.................................... 7,549,534 2,702,820 5,450,731
Accrued payroll and payroll-related expenses........ 18,513,851 5,676,799 18,786,675
Deferred income taxes............................... 2,823,247 655,216 2,823,247
Other accrued expenses.............................. 3,950,550 933,306 4,529,258
------------ ----------- ------------
Total current liabilities........................ 51,153,035 17,509,676 47,504,723
------------ ----------- ------------
Long-term liabilities:
Line of credit...................................... 50,587,111 6,220,153 51,751,857
Long-term debt, less current portion................ 49,278,403 50,848,000 47,611,003
Note payable to officer............................. 281,675 281,675 --
Other long-term liabilities......................... 950,982 1,023,613 348,829
------------ ----------- ------------
Total long-term liabilities...................... 101,098,171 58,373,441 99,711,689
------------ ----------- ------------
Commitments and Contingencies (Note 6)
Shareholders' equity:
Common shares (Note 8).............................. 377,733 377,733 377,733
Retained earnings................................... 9,202,003 9,660,003 9,580,804
------------ ----------- ------------
9,579,736 10,037,736 9,958,537
Less treasury shares at cost........................ (501,825) (501,825) (501,825)
Less notes receivable from stock sales.............. (242,243) (252,490) (239,681)
------------ ----------- ------------
Total shareholders' equity....................... 8,835,668 9,283,421 9,217,031
------------ ----------- ------------
$161,086,874 $85,166,538 $156,433,443
============ =========== ============
</TABLE>
The accompanying notes are an integral part of these combined consolidated
financial statements.
F-4
<PAGE> 96
UNICCO SERVICE COMPANY
COMBINED CONSOLIDATED STATEMENT OF INCOME
<TABLE>
<CAPTION>
FOR THE YEARS ENDED FOR THE THREE MONTH PERIODS ENDED
------------------------------------------ ------------------------------
JUNE 29, JUNE 30, JUNE 25, SEPTEMBER 28, SEPTEMBER 29,
1997 1996 1995 1997 1996
------------ ------------ ------------ ------------- -------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Service revenues......... $533,881,735 $ 98,314,682 $ 88,094,714 $ 134,716,796 $ 128,309,463
Cost of service
revenues............... 482,525,702 84,244,087 74,695,338 121,146,468 115,928,533
------------ ----------- ----------- ----------- -----------
Gross profit........... 51,356,033 14,070,595 13,399,376 13,570,328 12,380,930
Selling, general and
administrative
expenses............... 31,660,453 11,491,303 10,204,328 8,605,463 6,565,109
Amortization of
intangible assets...... 4,748,941 550,822 535,164 1,191,447 1,191,436
------------ ----------- ----------- ----------- -----------
Income from
operations.......... 14,946,639 2,028,470 2,659,884 3,773,418 4,624,385
Interest income.......... 66,693 84,589 107,142 702 1,161
Interest expense......... (11,491,474) (178,447) (79,798) (3,007,166) (2,458,528)
------------ ----------- ----------- ----------- -----------
Income before provision
for income taxes.... 3,521,858 1,934,612 2,687,228 766,954 2,167,018
Provision for income
taxes.................. 2,338,858 188,541 213,509 189,153 939,726
------------ ----------- ----------- ----------- -----------
Net income............. $ 1,183,000 $ 1,746,071 $ 2,473,719 $ 577,801 $ 1,227,292
============ =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these combined consolidated
financial statements.
F-5
<PAGE> 97
UNICCO SERVICE COMPANY
COMBINED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
COMMON SHARES NOTES TREASURY STOCK TOTAL
----------------- RETAINED RECEIVABLE FROM ------------------ SHAREHOLDERS'
SHARES AMOUNT EARNINGS STOCK SALES SHARES AMOUNT EQUITY
------ -------- ----------- --------------- ------ --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
UNICCO Service Company
- -----------------------------------------
Balance, June 26, 1994................... 1,093 $160,683 $ 7,032,213 $ (45,794) 11 $ (57,554) $ 7,089,548
Net income............................. -- -- 2,473,719 -- -- -- 2,473,719
Repayment of notes receivable -- -- -- 10,249 -- -- 10,249
Distributions to shareholders.......... -- -- (792,000) -- -- -- (792,000)
--
---- -------- ----------- --------- --------- -----------
Balance June 25, 1995.................... 1,093 160,683 8,713,932 (35,545) 11 (57,554) 8,781,516
--
---- -------- ----------- --------- --------- -----------
UNICCO Service Company
- -----------------------------------------
Balance, June 25, 1995................... 1,093 160,683 8,713,932 (35,545) 11 (57,554) 8,781,516
Issuance of shares..................... 27 216,945 -- (216,945) -- -- --
Repurchase of shares................... -- -- -- -- 55 (444,271) (444,271)
Net income............................. -- -- 1,746,071 -- -- 1,746,071
Distributions to shareholders.......... -- -- (800,000) -- -- (800,000)
--
---- -------- ----------- --------- --------- -----------
Balance, June 30, 1996................... 1,120 377,628 9,660,003 (252,490) 66 (501,825) 9,283,316
--
---- -------- ----------- --------- --------- -----------
USC, Inc.
- -----------------------------------------
Balance, June 25, 1995................... -- -- -- -- -- -- --
Initial issuance of shares............. 1,054 105 -- -- -- -- 105
--
---- -------- ----------- --------- --------- -----------
Balance, June 30, 1996................... 1,054 105 -- -- -- -- 105
--
---- -------- ----------- --------- --------- -----------
Combined balances, June 30, 1996......... 2,174 $377,733 $ 9,660,003 $(252,490) 66 $(501,825) $ 9,283,421
==== ======== =========== ========= == ========= ===========
UNICCO Service Company
- -----------------------------------------
Balance, June 30, 1996................... 1,120 $377,628 $ 9,660,003 $(252,490) 66 $(501,825) $ 9,283,316
Net income............................. -- -- 1,971,149 -- -- -- 1,971,149
Cumulative foreign currency
translation.......................... -- -- (4,000) -- -- -- (4,000)
Repayment of notes receivable.......... -- -- -- 10,247 -- -- 10,247
Distributions to shareholders.......... -- -- (1,637,000) -- -- -- (1,637,000)
--
---- -------- ----------- --------- --------- -----------
Balance, June 29, 1997................... 1,120 377,628 9,990,152 (242,243) 66 (501,825) 9,623,712
--
---- -------- ----------- --------- --------- -----------
USC, Inc.
- -----------------------------------------
Balance, June 30, 1996................... 1,054 105 -- -- -- -- 105
Net loss............................... -- -- (788,149) -- -- -- (788,149)
--
---- -------- ----------- --------- --------- -----------
Balance, June 29, 1997................... 1,054 105 (788,149) -- -- -- (788,044)
--
---- -------- ----------- --------- --------- -----------
Combined balances, June 29, 1997......... 2,174 $377,733 $ 9,202,003 $(242,243) 66 $(501,825) $ 8,835,668
==== ======== =========== ========= == ========= ===========
UNICCO Service Company
- -----------------------------------------
Balance, June 29, 1997................... 1,120 $377,628 $ 9,990,152 $(242,243) 66 $(501,825) $ 9,623,712
Net income (unaudited)................. -- -- 389,984 -- -- -- 389,984
Cumulative foreign currency translation
(unaudited).......................... -- -- 1,000 -- -- -- 1,000
Repayment of notes receivable
(unaudited).......................... -- -- 2,562 -- 2,562
Distributions to shareholders
(unaudited).......................... -- -- (200,000) -- -- -- (200,000)
--
---- -------- ----------- --------- --------- -----------
Balance, September 28, 1997
(unaudited)............................ 1,120 377,628 10,181,136 (239,681) 66 (501,825) 9,817,258
--
---- -------- ----------- --------- --------- -----------
USC, Inc.
- -----------------------------------------
Balance, June 29, 1997................... 1,054 105 $ (788,149) -- -- -- $ (788,044)
Net income (unaudited)................. -- -- 187,817 -- -- -- 187,817
--
---- -------- ----------- --------- --------- -----------
Balance, September 28, 1997
(unaudited)............................ -- 105 (600,332) -- -- (600,227)
--
---- -------- ----------- --------- --------- -----------
Combined balances, September 28, 1997
(unaudited)............................ 2,174 $377,733 $ 9,580,804 $(239,681) 66 $(501,825) $ 9,217,031
==== ======== =========== ========= == ========= ===========
</TABLE>
The accompanying notes are an integral part of these combined consolidated
financial statements.
F-6
<PAGE> 98
UNICCO SERVICE COMPANY
COMBINED CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE YEARS ENDED FOR THE THREE MONTH PERIODS
----------------------------------------- ENDED
--------------------------------
JUNE 29, JUNE 30, JUNE 25, SEPTEMBER 28, SEPTEMBER 29,
1997 1996 1995 1997 1996
------------ ------------ ----------- ------------- -------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows relating to operating activities:
Net income................................. $ 1,183,000 $ 1,746,071 $ 2,473,719 577,801 1,227,292
Adjustments to reconcile net income to net
cash provided by operating activities:
Amortization of intangible assets........ 4,748,941 550,822 535,164 1,191,447 1,191,436
Amortization of debt issue costs and
discount............................... 1,087,393 -- -- 271,555 271,555
Depreciation and amortization............ 2,513,476 818,294 666,676 585,239 540,496
Loss on disposals........................ 60,628 43,131 -- 14,376 20,318
Deferred income taxes.................... 1,797,611 31,000 177,000 -- 176,638
Changes in assets and liabilities:
Accounts receivable.................... (53,998,105) 1,016,368 (2,375,498) 2,659,871 (46,599,654)
Unbilled receivables................... (23,467,107) (501,846) -- (1,986,649) (23,270,048)
Prepaid insurance...................... 1,960,742 418,549 -- 23,591 759,753
Other current assets................... (1,855,476) (1,012,446) (1,663,165) 889,224 (156,596)
Other long-term assets................. (271,636) 56,400 -- 87,234 (174,499)
Cash overdraft......................... 9,274,318 411,489 149,879 (2,301,041) 8,870,836
Accounts payable....................... 4,846,714 1,393,632 809,357 (2,098,803) 5,710,570
Accrued expenses and other current
liabilities.......................... 15,854,296 2,004,523 (54,204) 851,532 10,271,402
Other long-term liabilities............ (72,631) (1,440,986) 299,500 (602,153) (376,987)
------------ ------------ ----------- ----------- ------------
Net cash provided by (used in)
operating activities............... (36,337,836) 5,535,001 1,018,428 163,224 (41,537,488)
------------ ------------ ----------- ----------- ------------
Cash flows relating to investing activities:
Acquisition................................ -- (51,004,351) -- -- --
Purchases of property and equipment........ (2,578,317) (1,226,724) (949,191) (249,304) (355,230)
Increases in notes receivable and accrued
interest from officers................... (56,414) (295,755) (241,249) -- --
Payments received for notes receivable from
officers................................. 106,194 128,321 -- 30,000 --
Forgiveness of notes receivable and accrued
interest from officers................... 497,306 107,785 -- -- --
------------ ------------ ----------- ----------- ------------
Net cash used in investing
activities......................... (2,031,231) (52,290,724) (1,190,440) (219,304) (355,230)
------------ ------------ ----------- ----------- ------------
Cash flows relating to financing activities:
Net proceeds from line of credit........... 44,366,958 3,815,153 1,405,000 1,164,746 39,082,847
Proceeds from debt......................... 3,000,003 47,000,000 -- -- 3,000,003
Payments on debt........................... (3,600,000) -- (250,000) (1,900,000) --
Increase in debt issuance costs............ -- (2,779,097) (190,655) (551,668) --
Issuance of common stock................... -- 105 -- -- --
Purchase of treasury stock................. -- (444,271) -- -- --
Distribution to shareholders............... (1,637,000) (800,000) (792,000) (200,000) (200,000)
Payment on note receivable from stock
sale..................................... 10,247 -- -- 2,562 --
Payment on note payable to related party... -- -- -- (281,675) --
------------ ------------ ----------- ----------- ------------
Net cash provided by (used in)
financing activities............... 42,140,208 46,791,890 172,345 (1,766,035) 41,882,850
------------ ------------ ----------- ----------- ------------
Net increase/(decrease) in cash and cash
equivalents................................ 3,771,141 36,167 333 (1,822,115) (9,868)
Cash and cash equivalents, beginning of
year....................................... 157,169 121,002 120,669 3,928,310 157,169
------------ ------------ ----------- ----------- ------------
Cash and cash equivalents, end of year....... $ 3,928,310 $ 157,169 $ 121,002 $ 2,106,195 $ 147,301
============ ============ =========== =========== ============
Supplemental disclosure of cash flow
information:
Cash paid during the year for:
Interest................................. $ 8,636,561 $ 178,448 $ 79,798 $ 3,490,771 $ 291,823
============ ============ =========== =========== ============
Income taxes............................. $ 760,200 $ 3,607 $ 5,951 $ 17,215 $ 63,590
============ ============ =========== =========== ============
</TABLE>
The accompanying notes are an integral part of these combined consolidated
financial statements.
F-7
<PAGE> 99
UNICCO SERVICE COMPANY
NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS
1. OPERATIONS
These combined consolidated financial statements include the consolidated
accounts of UNICCO Service Company and subsidiary ("UNICCO"), and USC, Inc. and
subsidiaries ("USC"), hereafter referred to collectively as the "Group", which
are owned and controlled by common shareholders. USC owns all of the outstanding
common stock of UNICCO Government Services, Inc. and UNICCO Security Services,
Inc. and 21% of the outstanding common stock of UNICCO Facility Services Canada
Company ("UFSCC"). UNICCO owns the remaining 79% of the outstanding common stock
of UFSCC. The Group provides integrated facilities services, including
industrial and mechanical engineering, plant operations, custodial and
maintenance services, administrative services and security. The Group's
customers include commercial, industrial and financial institutions, educational
and healthcare facilities, and state and federal government agencies.
2. ACQUISITION
On June 28, 1996: (1) UNICCO acquired certain assets and the business, as
defined, of certain Allied Facility Services ("AFS") operations engaged in
janitorial, office, facility management and mechanical maintenance services,
primarily in the United States; (2) USC acquired all of the common stock and the
business of certain AFS operations engaged primarily in (a) building security
and (b) facility services to agencies of the federal government; and (3) UFSCC
acquired the assets and the business of certain AFS operations engaged in
janitorial, office facility management and mechanical maintenance services in
Canada. The aggregate purchase price of approximately $62 million was financed
in part by senior bank debt, subordinated debt and a $12 million note payable to
the seller (see Note 4). The acquisition was accounted for as a purchase, and
accordingly, the operations of the acquired businesses are included in the
accompanying financial statements from the date of acquisition. The operations
of the acquired businesses did not have a material effect on the Group's
combined consolidated statement of income for the year ended June 30, 1996.
The allocation of the purchase price of the acquired businesses, including
acquisition related costs of approximately $946,000, is as follows:
<TABLE>
<S> <C>
Property and equipment...................................... $ 2,850,000
Acquired contract rights.................................... 42,324,000
Favorable leasing........................................... 320,000
Favorable financing......................................... 2,652,000
Goodwill.................................................... 14,858,000
-----------
$63,004,000
===========
</TABLE>
The following unaudited pro forma amounts summarize the effect of the
businesses acquired as if the Acquisition had occurred on June 26, 1995. This
pro forma information is presented for informational purposes only. It is
derived from historical information and does not purport to represent the actual
results that may have occurred, nor is it necessarily indicative of future
results of operations of the combined enterprises.
<TABLE>
<CAPTION>
YEAR ENDED
JUNE 30,
1996
(Unaudited)
in thousands
------------
<S> <C>
Pro forma service revenues.................................. $487,415
Pro forma net income........................................ $ 6,342
</TABLE>
F-8
<PAGE> 100
UNICCO SERVICE COMPANY
NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Unaudited Interim Financial Information
The interim financial data as of September 28, 1997 and for the three month
periods ended September 28, 1997 and September 29, 1996 is unaudited; however,
in the opinion of the Company, the interim data includes all adjustments,
consisting only of normal recurring adjustments, necessary for a fair statement
of the financial position and the results of operations as of and for the
interim periods.
Principles of Combination and Consolidation
The accompanying combined consolidated financial statements include the
accounts of the entities referred to in Note 1. All significant transactions
between the entities in the Group have been eliminated in combination and
consolidation.
Accounting Records
UNICCO is on the cash basis of accounting for tax reporting purposes. USC,
Inc. and subsidiaries are on the accrual basis of accounting for tax reporting
purposes. All adjustments have been made to the financial statements to reflect
the accrual basis of accounting.
Fiscal Year
The Group is on a 52/53 week fiscal year ending on the close of business on
the last Sunday of June. The fiscal year end 1996 was a fifty-three week year.
Cash and Cash Equivalents
The Group considers all highly liquid investments with remaining maturities
of three months or less at the time of acquisition to be cash equivalents.
Depreciation and Amortization
The Group provides for depreciation and amortization by charges to
operations in amounts that allocate the cost of property and equipment and
leasehold improvements over their estimated useful lives using the declining
balance and straight-line methods as follows:
<TABLE>
<CAPTION>
ESTIMATED
DESCRIPTION USEFUL LIFE
---------------------------------------------------- ------------------------------
<S> <C>
Transportation equipment 3-5 years
Machinery and equipment 5-10 years
Furniture and fixtures 5-10 years
Leasehold improvements Shorter of estimated
useful life or life of lease
</TABLE>
F-9
<PAGE> 101
UNICCO SERVICE COMPANY
NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Intangible Assets
Intangible assets consist primarily of acquired contract rights, favorable
lease arrangements, noncompete agreements and goodwill, representing the excess
of the purchase price over the fair value of the net assets acquired in each
acquisition accounted for as purchase. Acquired contract rights are amortized on
a straight-line basis over estimated useful lives ranging from seven to 15
years. These lives represent the estimated average lives of the contracts
acquired and are based generally on the historical experience of the individual
businesses and contracts acquired. Capitalized noncompete agreements are
amortized over three years, representing the contractual noncompete period.
Goodwill is amortized on a straight-line basis over an estimated life of 15
years. Intangible assets (rounded to the nearest thousand) consist of the
following at June 29, 1997 and June 30, 1996:
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
Acquired contract rights........................ $46,799,000 $46,799,000
Favorable leases................................ 320,000 320,000
Noncompete agreements........................... 803,000 803,000
Goodwill........................................ 14,858,000 14,858,000
----------- -----------
62,780,000 62,780,000
Less -- Accumulated amortization................ (7,344,000) (2,595,000)
----------- -----------
$55,436,000 $60,185,000
=========== ===========
</TABLE>
Impairment
The Group has adopted Statement of Financial Accounting Standards No. 121,
"Accounting for Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of." In accordance with this Statement, the Group reviews long-lived
assets and related goodwill for impairment whenever events or changes in
circumstances indicate that the carrying amounts of such assets may not be fully
recoverable.
Other Assets
Other assets consist principally of deferred financing costs, which are
amortized over the repayment term of the respective debt.
Revenue Recognition
Service revenues are generated primarily by efforts expended on cost-plus
fixed-fee, fixed price and time and material contracts. Revenue from cost-plus
fixed-fee contracts is recognized on the basis of direct and indirect expenses
incurred plus the allocable portion of the fixed fee. Revenues on fixed price
contracts are recognized based on the monthly amount as stipulated in the
contract and the performance of services. Revenues under time and material
contracts are recorded at the contracted rates as labor efforts are expended and
other direct costs are incurred. Losses, if any, are provided for at the time
that management determines that costs, including estimated costs to complete,
exceed contract revenue.
Financial Instruments
The Group's financial instruments consist of cash, cash equivalents,
receivables, accounts payable and debt instruments. The estimated fair values of
the Group's cash, cash equivalents, receivables, accounts payable and fixed-rate
debt instruments approximate their carrying value.
Income Taxes
Income taxes for financial reporting purposes are recorded in accordance
with Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes" (FAS 109). The asset and liability approach underlying FAS 109 requires
the recognition of deferred tax liabilities and assets for the expected future
tax
F-10
<PAGE> 102
UNICCO SERVICE COMPANY
NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
consequences of temporary differences between the carrying amounts and tax bases
of the Group's assets and liabilities.
Foreign Currency Translation
In accordance with Statement of Financial Accounting Standards No. 52,
"Foreign Currency Translation," the financial statements of UFSCC are translated
into U.S. dollars as follows: assets and liabilities at year-end exchange rates;
income, expenses and cash flows at average exchange rates; and shareholders'
equity at historical exchange rates. The resulting translation adjustment is
recorded as a component of shareholders' equity.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect amounts and disclosures reported in the accompanying
combined consolidated financial statements. Actual amounts could differ from
those estimates.
Concentration of Credit Risk
Concentrations of credit risk with respect to accounts receivable and
unbilled receivables are limited because a large number of North American
customers make up the Group's customer base, thus spreading trade credit risk.
In addition, the Group performs ongoing evaluations of customers' financial
position. The Group does not require collateral and maintains reserves for
potential uncollectible amounts which, in the aggregate, have not exceeded
management expectations.
Reclassifications
Certain amounts in the prior year financial statements have been
reclassified to conform with the current year's presentation.
4. DEBT
Subsequent to September 28, 1997 the Company consummated a refinancing
transaction in which it paid in full all amounts outstanding (including accrued
interest) under the revolving credit facility, the demand line of credit, Term
Loans A and B, the Seller Senior Subordinated promissory note and the Junior
Subordinated promissory notes (see Note 12).
Line of Credit
On June 28, 1996, the Group entered into a revolving credit and term loan
agreement (the Agreement) with a syndicated bank group for a $48 million
revolving line of credit (see Acquisition Financing below for discussion of term
loans). The maximum amount available to borrow is limited, as the total of all
revolving loans plus letters of credit outstanding cannot exceed the lesser of
the total line committed or 80% of net accounts receivable, as defined. This
credit agreement terminates on June 30, 2001. The Group may designate borrowings
as either Base Rate Loans or Eurodollar Loans, as defined. For Base Rate Loans,
interest on borrowings is payable quarterly in arrears beginning October 1, 1996
at an annual rate equal to the base rate plus applicable base rate margin, as
defined (10.0% at June 29, 1997 and 8.5% at June 30, 1996). For Eurodollar
Loans, interest is payable at the end of each interest period, as defined, at an
annual rate equal to the adjusted Eurodollar rate plus the applicable Eurodollar
margin, as defined (8.8% at June 29, 1997 and 8.4% at June 30, 1996). Borrowings
outstanding under this line of credit were $46,424,112 at June 29, 1997 and
$6,220,153 at June 30, 1996. The provisions of the Agreement permit the Group to
obtain letters of credit up to a maximum amount, as defined (see Note 6).
The Agreement provides for certain covenants, including maintenance of
defined levels of tangible net worth, earnings before interest, taxes,
depreciation and amortization, and certain other financial ratios. The
F-11
<PAGE> 103
UNICCO SERVICE COMPANY
NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Group was not in compliance with certain of these covenants at December 1996,
March 1997 and June 1997. Subsequently, the bank waived the Group's defaults of
these covenants and financial provisions and amended the covenants and financial
provisions through the end of fiscal 1998 which brings the Group into
compliance. Borrowings under the Agreement are collateralized by substantially
all assets of the Group. The Agreement also provides for limited recourse
guarantees and pledge agreements from certain shareholders, an affiliated
company and UFSCC.
On September 23, 1996, UNICCO entered into a demand line of credit
agreement with a bank. The agreement allows UNICCO to borrow up to $5,000,000 at
the bank's discretion, for working capital purposes. The terms and conditions of
the agreement are substantially the same as those contained in the $48 million
revolving line of credit and term loan agreement described above. The agreement
has been extended to expire on December 31, 1997. Borrowings outstanding under
this line of credit were $4,162,999 at June 29, 1997.
In 1995 and until the date of the AFS acquisition described in Note 2,
UNICCO had a loan agreement with a bank providing UNICCO with a $6,500,000
annually renewable line of credit, inclusive of a $3,500,000 limit for letters
of credit and a $56,000,000 revolving facility for acquisition financing. This
agreement was terminated in June, 1996.
Acquisition Financing
Amounts outstanding at June 29, 1997 and June 30, 1996 related to debt
agreements entered into in connection with the AFS acquisition were:
<TABLE>
<CAPTION>
JUNE 29, JUNE 30,
1997 1996
----------- -----------
<S> <C> <C>
Term Loan A..................................................... $28,400,000 $32,000,000
Term Loan B..................................................... 10,000,000 10,000,000
Senior subordinated promissory note............................. 5,000,000 5,000,000
Seller senior subordinated promissory note...................... 9,878,400 9,348,000
Junior subordinated promissory notes............................ 3,000,003 --
----------- -----------
Total debt................................................. 56,278,403 56,348,000
Less:
Current portion................................................. 7,000,000 5,500,000
----------- -----------
Long-term portion.......................................... $49,278,403 $50,848,000
=========== ===========
</TABLE>
Term Loan A requires payments of principal in varying quarterly
installments ranging from $1,500,000 to $1,800,000, expiring on June 30, 2001.
Term Loan B requires annual principal payments of $100,000 through June 30, 2000
and a balloon payment of $9,600,000 on June 30, 2001. The Group may designate
borrowings under both Term Loan A and Term Loan B as either Base Rate Loans or
Eurodollar Loans. Interest on borrowings of Term Loan A is payable quarterly in
arrears for Base Rate Loans, at an annual rate equal to the base rate plus
applicable base rate margin, as defined (10.0% at June 29, 1997 and 8.25% at
June 30, 1996). For Eurodollar Loans, interest is payable at the end of each
interest period, as defined, at an annual rate equal to the adjusted Eurodollar
rate plus applicable Eurodollar margin, as defined (8.8% at June 29, 1997 and
8.4% at June 30, 1996). Interest on borrowings of Term Loan B is payable
quarterly in arrears for Base Rate Loans, at a base rate plus 2%, (10.5% at June
29, 1997 and 8.25% at June 30, 1996). For Eurodollar Loans, interest is payable
at the end of each interest period, as defined, at the Eurodollar rate plus 3.5%
(9.3% at June 29, 1997 and 8.9% at June 30, 1996). The Agreement provides for
mandatory principal repayments of Term Loan A and Term Loan B in the event of
asset sales and excess cash flow, as defined.
On June 28, 1996, the Group entered into a $5,000,000 subordinated
promissory note agreement with Massachusetts Capital Resource Company ("MCRC").
The promissory note is due on September 30, 2001
F-12
<PAGE> 104
UNICCO SERVICE COMPANY
NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
and provides for quarterly interest payments based on an annual interest rate of
14%. The agreement provides for maintenance of certain financial ratio
covenants. The agreement includes a limited recourse guarantee from a principal
shareholder and UFSCC, as well as a pledge agreement from such shareholder.
In connection with the AFS acquisition (Note 2), UNICCO entered into a
$12,000,000 subordinated promissory note agreement with the seller. The
promissory note is subordinated to the line of credit, Term Loans A and B, and
the MCRC loan described above, and is due on September 30, 2001. The agreement
provides for quarterly interest payments based on an annual interest rate of 8%
and includes a limited recourse guarantee from a key shareholder and UFSCC, as
well as a pledge agreement from a key shareholder. The approximate fair value of
this note at June 29, 1997 and June 30, 1996 was $9,878,400 and $9,348,000,
respectively. As more fully described in Notes 2 and 3, the favorable financing
associated with this note has been considered in the Group's purchase accounting
for the acquisition resulting in a $2,652,000 debt discount which is being
amortized over the five-year term of the note.
Junior subordinated promissory note agreements were issued in July 1997 to
certain shareholders of the Group for approximately $3 million. The promissory
notes are due on October 1, 2001 and provide for annual interest payments at
15%.
Minimum future payments of long-term debt are as follows:
<TABLE>
<CAPTION>
FISCAL YEAR AMOUNT
------------------------------------------------------------ -----------
<S> <C>
1998........................................................ $ 7,000,000
1999........................................................ 6,300,000
2000........................................................ 6,700,000
2001........................................................ 7,050,000
2002........................................................ 29,228,403
-----------
$56,278,403
===========
</TABLE>
5. TRANSACTIONS WITH RELATED PARTIES
Notes Receivable From Officers
Notes receivable from officers consist primarily of demand notes receivable
from officers/shareholders bearing interest at the applicable federal rate. The
long-term portion of the notes receivable represents the portion the Group will
not collect within the next year, in accordance with the repayment terms.
Interest income of approximately $56,000, $77,000 and $83,000 related to these
loans are included in the accompanying combined consolidated statements of
income during 1997, 1996 and 1995, respectively. Interest receivable related to
these notes was approximately $312,000 and $367,000 at June 29, 1997 and June
30, 1996, respectively.
On June 24, 1996, UNICCO loaned an officer of the Group approximately
$217,000 to purchase 27 shares of nonvoting common stock. This loan bears
interest at an average of the Applicable Federal Rate (5.68% at June 29, 1997
and 5.8% at June 30, 1996), is due on July 1, 2001 and is classified as a
deduction from shareholders' equity in the accompanying combined consolidated
balance sheet.
In connection with the loan agreements discussed in Note 4, certain notes
receivable from officers and shareholders have been assigned to the lenders
under such loan agreements.
Demand Note Payable To An Officer
The demand note payable to an officer of approximately $282,000, included
in the accompanying combined consolidated balance sheet, bears interest at the
prime rate or 20%, whichever is greater. This note was paid in full, including
accrued interest, on September 3, 1997.
F-13
<PAGE> 105
UNICCO SERVICE COMPANY
NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Junior Subordinated Promissory Notes
In connection with the AFS acquisition (see Note 2), certain shareholders
loaned the Companies $3,000,003 (see Note 4).
Lease Agreement With An Affiliate
The Group leases certain office space from an affiliated company. The
agreement commenced on July 1, 1995 and will be effective for a term of five
years and five months. Approximate future minimum payments under this lease are
$51,800 per year from July 1996 through June 1998, and $57,000 per year from
July 1998 through November 2000. Such amounts are included in Note 6.
Insurance Agreement With An Affiliate
Prior to the end of fiscal 1995, the Group insured its workers'
compensation and general liability risks through a combination of a
self-insurance program and indemnity coverage obtained from a third-party
carrier. At the end of fiscal 1995, the Group entered into an agreement with a
commercial insurance carrier whereby its workers' compensation and general
liability insurance risks are reinsured with an affiliated company. Under the
terms of this arrangement, the Group's obligations with respect to workers'
compensation and general liability claims are limited to the premiums paid for
such insurance. The Group's insurance premiums are actuarially determined based
on its historical loss experience. The amount charged to expense related to the
arrangement was approximately $10,129,000, $3,501,000 and $1,244,000 in fiscal
1997, fiscal 1996 and fiscal 1995, respectively. Included in prepaid insurance
as of June 29, 1997 and June 30, 1996 are amounts of $0 and approximately
$2,026,000, respectively, related to this agreement. The affiliated company's
outstanding common stock has been pledged by the shareholder as collateral for
the Agreement described in Note 4.
Included in the Group's combined consolidated results of operations for the
year ended June 30, 1996 is approximately $929,000 in income representing
refunds received in fiscal 1996 from a third-party insurance carrier as a result
of the Group's ultimate favorable claims experience from accident years prior to
fiscal 1996. Additionally, in fiscal 1996, as a result of the Company's
sustained favorable experience with respect to its self insurance program and,
as discussed above, the establishment of the reinsurance arrangement at the end
of fiscal 1995, the Company reevaluated its reserve requirements and reversed
approximately $1,148,000 of workers' compensation and general liability
insurance reserves.
6. COMMITMENTS AND CONTINGENCIES
Operating Leases
The Group leases certain equipment and facilities under noncancelable
operating leases through June 30, 2005. Rent expense under these leases was
approximately $3,207,000, $1,095,000 and $999,000 for the years ended June 29,
1997, June 30, 1996 and June 25, 1995, respectively. The approximate future
minimum payments under these leases are as follows:
<TABLE>
<CAPTION>
FISCAL YEAR AMOUNT
---------------------------------------------------------- -----------
<S> <C>
1998...................................................... $ 3,347,665
1999...................................................... 2,950,897
2000...................................................... 2,503,787
2001...................................................... 1,503,505
2002...................................................... 717,526
Thereafter................................................ 107,000
-----------
$11,130,380
===========
</TABLE>
F-14
<PAGE> 106
UNICCO SERVICE COMPANY
NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The Group leases certain facilities under tenancy-at-will agreements, which
are not included in the future minimum lease payments above. Future payments
above do not include the lease of a warehouse at an annual cost of approximately
$222,000 through 2001, which is fully reimbursed by a customer.
Letters of Credit
As of June 29, 1997, the Group was contingently liable under certain
letters of credit, in the aggregate amount of approximately $1,556,000,
primarily issued in connection with the Group's surety bonding arrangements. The
letters of credit expire on various dates through June 30, 2000.
Stock Repurchase Agreement
All nonvoting common shares (see Note 8) must be redeemed by the Group at
the then book value of the shares, as defined, in the event that the
shareholders cease employment with the Group.
Litigation
UNICCO was a party to a lawsuit filed in May 1994 by a former employee who
alleged breach of contract and misrepresentation in connection with his
employment. In 1996, the parties to the lawsuit reached agreement to settle the
litigation pursuant to a court-ordered mediation of the claims. The settlement
amount (approximately $400,000) is included in selling, general and
administrative expenses in the accompanying statement of income for fiscal 1996.
In the ordinary course of business, the Group is party to various types of
litigation. The Group believes it has meritorious defenses to all claims, and,
in its opinion, all litigation currently pending or threatened will not have a
material adverse effect on the Group's financial position or results of
operations.
7. INCOME TAXES
UNICCO has elected to be taxed as an S corporation for federal and certain
state income tax purposes and is a business trust for Massachusetts state tax
purposes. UNICCO's provision for income taxes in 1997 and 1996 results from
states that do not recognize its S corporation status for state income tax
purposes and its business trust status in Massachusetts.
Effective January 1, 1997, USC elected to be taxed as an S corporation for
federal and certain state income tax purposes. Prior to January 1, 1997, USC was
a C corporation and was subject to federal and state income taxes at the
corporate level.
Income before income tax expense was taxed under the following
jurisdictions:
<TABLE>
<CAPTION>
YEAR ENDED
------------------------------------
JUNE 29, JUNE 30, JUNE 25,
1997 1996 1995
---------- ---------- ----------
<S> <C> <C> <C>
Domestic............................... $3,322,953 $1,934,612 $2,687,228
Foreign................................ 198,905 -- --
---------- ---------- ----------
$3,521,858 $1,934,612 $2,687,228
========== ========== ==========
</TABLE>
F-15
<PAGE> 107
UNICCO SERVICE COMPANY
NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The provision for income taxes consists of the following:
<TABLE>
<CAPTION>
YEAR ENDED
--------------------------------
JUNE 29, JUNE 30, JUNE 25,
1997 1996 1995
---------- -------- --------
<S> <C> <C> <C>
Current...................................
Federal................................. $ 309,187 $ -- $ --
State................................... 133,060 157,541 36,509
Foreign................................. 99,000 -- --
Deferred..................................
Federal................................. -- -- --
State................................... 1,797,611 31,000 177,000
---------- -------- --------
$2,338,858 $188,541 $213,509
========== ======== ========
</TABLE>
Deferred taxes arise primarily from book (accrual basis) and tax (cash
basis) differences in recording revenues and expenses.
Deferred tax assets (liabilities) are comprised of the following:
<TABLE>
<CAPTION>
JUNE 29, JUNE 30, JUNE 25,
1997 1996 1995
----------- ----------- -----------
<S> <C> <C> <C>
Receivables.................................. $(4,065,404) $ (772,233) $ (730,051)
Prepaid insurance............................ -- (145,746) (157,609)
Other assets................................. (113,249) (117,557) (173,508)
----------- ----------- -----------
Gross deferred tax liabilities............... (4,178,653) (1,035,536) (1,061,168)
----------- ----------- -----------
Accounts payable............................. 313,741 133,943 78,551
Accrued payroll.............................. 687,220 148,667 147,170
Accrued insurance............................ -- -- 165,270
Other accruals and reserves.................. 354,445 97,710 45,961
State net operating loss carryforwards....... 2,040,040 -- --
----------- ----------- -----------
Gross deferred tax assets.................... 3,395,446 380,320 436,952
Valuation allowance.......................... (1,669,620) -- --
----------- ----------- -----------
Net deferred tax assets...................... 1,725,826 380,320 436,952
----------- ----------- -----------
Net deferred tax liabilities................. $(2,452,827) $ (655,216) $ (624,216)
=========== =========== ===========
</TABLE>
As a cash basis tax payer, UNICCO generated an operating loss of
approximately $29,350,000 for income tax purposes in fiscal 1997, primarily as a
result of the increase in working capital from its June 28, 1996 acquisition of
AFS (Note 2). Such operating losses, which are limited to those states which do
not recognize UNICCO's subchapter S status, are further limited to the
carryforward period for each respective state in which such loss was generated,
generally ranging from three to fifteen years. Management believes that it is
more likely than not that it will realize approximately $370,000 of the tax
benefit associated with the operating loss described above. This belief is based
upon a review of all available evidence, including historical operating results,
projections of future taxable income, recognizing the limitations described
above, and tax planning strategies. The Group has recorded a valuation allowance
against the remaining portion of the tax benefit related to the above referenced
operating losses.
F-16
<PAGE> 108
UNICCO SERVICE COMPANY
NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The effective income tax rate differs from the statutory federal income tax
rate as follows:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
--------------------------------
JUNE 29, JUNE 28, JUNE 25,
1997 1996 1995
-------- -------- --------
<S> <C> <C> <C>
Federal statutory rate.................................. 34.0% 34.0% 34.0%
Income from S corporations not taxable for corporate
income tax purposes................................... (22.5) (34.0) (34.0)
State income taxes, net of federal benefit (1997
only)................................................. 4.9 9.7 7.9
Valuation allowance..................................... 47.0 -- --
Other................................................... 3.0 -- --
----- ----- -----
66.4% 9.7% 7.9%
===== ===== =====
</TABLE>
8. COMMON SHARES
Common shares consist of the following:
<TABLE>
<CAPTION>
JUNE 29, JUNE 30,
1997 1996
-------- --------
<S> <C> <C>
UNICCO --
Common shares of beneficial interest, voting, no par value -
Issued and outstanding -- 1,000 shares.................... $ 10,333 $ 10,333
Common shares of beneficial interest, nonvoting, no par
value -
Issued-120 shares (includes 66 shares in treasury) at June
29, 1997 and June 30, 1996, respectively................ 367,295 367,295
-------- --------
377,628 377,628
-------- --------
USC --
Common shares, voting, no par value -
Issued and outstanding -- 1,000 shares.................... 100 100
Common shares, nonvoting, no par value -
Issued and outstanding -- 54 shares....................... 5 5
-------- --------
105 105
-------- --------
Combined consolidated................................ $377,733 $377,733
======== ========
</TABLE>
9. EMPLOYEE BENEFIT PLANS
Multi-employer Pension Plans
Certain employees under collective bargaining agreements are covered by
union-sponsored, multi-employer pension plans. Group contributions, generally
based on hours worked, are in accordance with negotiated labor contracts. The
Group recorded expenses of approximately $5,398,000, $703,000 and $561,000 in
fiscal 1997, 1996 and 1995, respectively, related to the plans. Information is
not readily available for the Group to determine its share of unfunded vested
benefits, if any, under the plans.
401(k) Investment Savings Plans
UNICCO maintains two 401(k) retirement plans (the "Plans") covering all
employees who have completed one year of service, as defined, and are not
subject to a collective bargaining agreement. The Plans allow eligible employees
to make salary-deferred contributions for not less than 1% nor more than 20% of
their compensation for the contribution period, as defined, subject to certain
IRS limitations. UNICCO may contribute to the Plans in any year at its
discretion. UNICCO made contributions of approximately $1,017,000, $32,000 and
$33,000 in fiscal 1997, 1996 and 1995, respectively.
F-17
<PAGE> 109
UNICCO SERVICE COMPANY
NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
10. RESIGNATION OF OFFICERS
On January 3, 1996, one of UNICCO's officers and shareholders resigned.
UNICCO repurchased the officer's 55 nonvoting outstanding shares for
approximately $444,000. The former officer also signed a noncompete agreement
with UNICCO for approximately $800,000, which UNICCO has capitalized and is
amortizing over the life of the noncompete agreement. The provisions of the
agreement require monthly payments of approximately $23,000, commencing on
January 1, 1996 through December 31, 1998, subject to the former officer not
competing with the Group. Further, the agreement provides for such payments to
cease and reimbursement of all payments previously made under the terms of the
arrangement if the former officer violates the agreement. Amortization expense
on the noncompete agreement was approximately $267,500 and $134,000 for the
years ended June 29, 1997 and June 30, 1996, respectively.
Unaudited
In July 1997 one of UNICCO's officers resigned. The severance agreement
with the officer provides for periodic payments totalling approximately
$370,000. Such amount is included in the accompanying condensed combining
consolidating financial statements.
11. CONDENSED COMBINING CONSOLIDATING FINANCIAL INFORMATION OF GUARANTOR
SUBSIDIARIES
Each guarantor subsidiary of UNICCO is directly or indirectly wholly-owned
and the guarantees related to the Series A Note Offering are full, unconditional
and joint and several. UFSCC is indirectly wholly-owned and is not a guarantor
of this debt. Separate financial statements of the guarantor subsidiaries are
not presented because management has determined that they would not be material
to investors. However, condensed combining consolidating financial information
as of June 29, 1997 and for the year then ended, and as of September 28, 1997
and for the three months then ended (unaudited) are presented. The following
presents condensed combining consolidating financial information (rounded to the
nearest thousand) for (i) UNICCO only, (ii) the guarantor subsidiaries on a
combined basis, (iii) the nonguarantor subsidiary -- UFSCC and (iv) the Group on
a combined consolidated basis (see Note 12).
F-18
<PAGE> 110
UNICCO SERVICE COMPANY
NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Condensed Combining Consolidating Balance Sheet
<TABLE>
<CAPTION>
JUNE 29, 1997
-------------------------------------------------------------------------
NONGUARANTOR COMBINED
GUARANTOR SUBSIDIARY- CONSOLIDATED
UNICCO AFFILIATES UFSCC ELIMINATIONS TOTAL
------------ ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.......................... $ 1,997,853 $ 621,457 $ 1,309,000 $ -- $ 3,928,310
Accounts receivable, less reserves of approximately
$1,561,000....................................... 40,509,844 17,916,348 3,464,000 -- 61,890,192
Unbilled receivable................................ 22,710,479 4,325,805 -- -- 27,036,284
Intercompany receivable (payable).................. 19,520,368 (17,420,273) (2,100,095) -- --
Prepaid insurance.................................. 236,470 11,060 -- -- 247,530
Other current assets............................... 2,633,650 427,174 40,000 -- 3,100,824
------------ ------------ ----------- ----------- ------------
Total current assets............................. 87,608,664 5,881,571 2,712,905 -- 96,203,140
------------ ------------ ----------- ----------- ------------
Property and equipment, at cost:..................... 10,675,587 407,731 610,000 -- 11,693,318
Less -- accumulated depreciation and
amortization..................................... 6,783,424 134,460 128,000 -- 7,045,884
------------ ------------ ----------- ----------- ------------
3,892,163 273,271 482,000 -- 4,647,434
------------ ------------ ----------- ----------- ------------
Due from (to) affiliates............................. 14,458,555 (569,910) -- (13,888,645) --
Investment in subsidiary............................. 2,053,925 545,980 -- (2,599,905) --
Notes receivable and accrued interest from officers,
net of current portion............................. 716,125 -- -- -- 716,125
Intangible assets, net of amortization............... 40,880,753 12,644,807 1,911,000 -- 55,436,560
Other assets, net.................................... 4,055,562 7,053 21,000 -- 4,083,615
------------ ------------ ----------- ----------- ------------
62,164,920 12,627,930 1,932,000 (16,488,550) 60,236,300
------------ ------------ ----------- ----------- ------------
$153,665,747 $ 18,782,772 $ 5,126,905 $(16,488,550) $161,086,874
============ ============ =========== =========== ============
</TABLE>
<TABLE>
<CAPTION>
JUNE 29, 1997
-------------------------------------------------------------------------
NONGUARANTOR COMBINED
GUARANTOR SUBSIDIARY- CONSOLIDATED
UNICCO AFFILIATES UFSCC ELIMINATIONS TOTAL
------------ ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Cash overdraft..................................... $ 10,839,753 $ 476,100 $ -- $ -- $ 11,315,853
Current portion of long-term debt.................. 7,000,000 -- -- -- 7,000,000
Accounts payable................................... 5,177,237 1,585,297 787,000 -- 7,549,534
Accrued payroll and payroll-related expenses....... 14,507,393 2,378,458 1,628,000 -- 18,513,851
Deferred income taxes.............................. 2,823,450 (203) -- -- 2,823,247
Other accrued expenses............................. 3,593,540 240,010 117,000 -- 3,950,550
------------ ------------ ----------- ----------- ------------
Total current liabilities........................ 43,941,373 4,679,662 2,532,000 -- 51,153,035
------------ ------------ ----------- ----------- ------------
Long-term liabilities:
Line of credit..................................... 50,587,111 -- -- -- 50,587,111
Long-term debt, less current portion............... 49,278,403 -- -- -- 49,278,403
Note payable to officer............................ 281,675 -- -- -- 281,675
Other long-term liabilities........................ 950,982 -- -- -- 950,982
------------ ------------ ----------- ----------- ------------
Total long-term liabilities...................... 101,098,171 -- -- -- 101,098,171
------------ ------------ ----------- ----------- ------------
Commitments and Contingencies (Note 6)
Shareholders' equity............................... 9,370,271 14,103,110 2,594,905 (16,488,550) 9,579,736
------------ ------------ ----------- ----------- ------------
Less treasury shares at cost....................... (501,825) -- -- -- (501,825)
Less notes receivable from stock sales............. (242,243) -- -- -- (242,243)
------------ ------------ ----------- ----------- ------------
Total shareholders' equity....................... 8,626,203 14,103,110 2,594,905 (16,488,550) 8,835,668
------------ ------------ ----------- ----------- ------------
$153,665,747 $ 18,782,772 $ 5,126,905 $(16,488,550) $161,086,874
============ ============ =========== =========== ============
</TABLE>
F-19
<PAGE> 111
UNICCO SERVICE COMPANY
NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Condensed Combining Consolidating Balance Sheet
<TABLE>
<CAPTION>
SEPTEMBER 28, 1997 (UNAUDITED)
-------------------------------------------------------------------------
NONGUARANTOR COMBINED
GUARANTOR SUBSIDIARY- CONSOLIDATED
UNICCO AFFILIATES UFSCC ELIMINATIONS TOTAL
------------ ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents..................... $ 2,016,738 $ 6,457 $ 83,000 $ -- $ 2,106,195
Accounts receivable, less reserves of
approximately $1,838,000 (unaudited)........ 38,751,749 16,495,572 3,983,000 -- 59,230,321
Unbilled receivables.......................... 24,440,329 4,582,604 -- -- 29,022,933
Intercompany receivable (payable)............. 16,399,633 (14,321,949) (2,077,684) -- --
Prepaid insurance............................. 212,879 11,060 -- -- 223,939
Other current assets.......................... 1,643,486 423,114 145,000 -- 2,211,600
------------ ------------ ----------- ----------- ------------
Total current assets................... 83,464,814 7,196,858 2,133,316 -- 92,794,988
------------ ------------ ----------- ----------- ------------
Property and equipment, at cost:................ 10,854,893 417,235 621,000 -- 11,893,128
Less -- accumulated depreciation and
amortization................................ (7,259,677) (183,328) (153,000) -- (7,596,005)
------------ ------------ ----------- ----------- ------------
3,595,216 233,907 468,000 -- 4,297,123
------------ ------------ ----------- ----------- ------------
Due from (to) affiliates........................ 14,469,782 (581,137) (13,888,645) --
Investment in subsidiary........................ 2,055,040 546,276 -- (2,601,316) --
Notes receivable and accrued interest from
officers, net of current portion.............. 686,125 -- -- -- 686,125
Intangible assets, net of amortization.......... 39,971,026 12,398,087 1,876,000 -- 54,245,113
Other assets, net............................... 4,366,099 22,995 21,000 -- 4,410,094
------------ ------------ ----------- ----------- ------------
61,548,072 12,386,221 1,897,000 (16,489,961) 59,341,332
------------ ------------ ----------- ----------- ------------
$148,608,102 $ 19,816,986 $ 4,498,316 $(16,489,961) $156,433,443
============ ============ =========== =========== ============
</TABLE>
<TABLE>
<CAPTION>
SEPTEMBER 28, 1997 (UNAUDITED)
-------------------------------------------------------------------------
NONGUARANTOR COMBINED
GUARANTOR SUBSIDIARY- CONSOLIDATED
UNICCO AFFILIATES UFSCC ELIMINATIONS TOTAL
------------ ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Cash overdraft................................ $ 7,369,659 $ 1,323,153 $ 322,000 $ -- $ 9,014,812
Current portion of long-term debt............. 6,900,000 -- 6,900,000
Accounts payable.............................. 3,775,967 1,309,764 365,000 -- 5,450,731
Accrued payroll and payroll-related
expenses.................................... 14,989,354 2,673,321 1,124,000 -- 18,786,675
Deferred income taxes......................... 2,823,450 (203) -- 2,823,247
Other accrued expenses........................ 4,231,406 207,852 90,000 -- 4,529,258
------------ ------------ ----------- ----------- ------------
Total current liabilities................... 40,089,836 5,513,887 1,901,000 -- 47,504,723
------------ ------------ ----------- ----------- ------------
Long-term liabilities:
Line of credit................................ 51,751,857 -- -- -- 51,751,857
Long-term debt, less current portion.......... 47,611,003 -- -- -- 47,611,003
Note payable to officer....................... -- -- -- -- --
Other long-term liabilities................... 348,829 -- -- -- 348,829
------------ ------------ ----------- ----------- ------------
Total long-term liabilities................. 99,711,689 -- -- -- 99,711,689
------------ ------------ ----------- ----------- ------------
Commitments and Contingencies (Note 6)
Shareholders' equity.......................... 9,548,083 14,303,099 2,597,316 (16,489,961) 9,958,537
------------ ------------ ----------- ----------- ------------
Less treasury shares at cost.................. (501,825) -- -- -- (501,825)
Less notes receivable from stock sales........ (239,681) -- -- -- (239,681)
------------ ------------ ----------- ----------- ------------
Total shareholders' equity.................. 8,806,577 14,303,099 2,597,316 (16,489,961) 9,217,031
------------ ------------ ----------- ----------- ------------
$148,608,102 $ 19,816,986 $ 4,498,316 $(16,489,961) $156,433,443
============ ============ =========== =========== ============
</TABLE>
F-20
<PAGE> 112
UNICCO SERVICE COMPANY
NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Condensed Combining Consolidating Statement of Income
<TABLE>
<CAPTION>
YEAR ENDED JUNE 29, 1997
-------------------------------------------------------------------------
NONGUARANTOR COMBINED
GUARANTOR SUBSIDIARY- CONSOLIDATED
UNICCO AFFILIATES UFSCC ELIMINATIONS TOTAL
------------ ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Service revenues........................ $403,153,669 $102,189,066 $28,539,000 $ -- $533,881,735
Cost of service revenues................ 358,928,696 96,835,170 25,792,000 969,836 482,525,702
------------ ------------ ----------- ----------- ------------
Gross profit.......................... 44,224,973 5,353,896 2,747,000 (969,836) 51,356,033
Selling, general and administrative
expenses.............................. 28,620,927 1,746,268 2,263,094 (969,836) 31,660,453
Amortization of intangible
assets................................ 3,626,060 986,881 136,000 -- 4,748,941
------------ ------------ ----------- ----------- ------------
Income from operations................ 11,977,986 2,620,747 347,906 -- 14,946,639
Interest income......................... 97,693 -- -- (31,000) 66,693
Interest expense........................ (9,381,721) (1,991,752) (149,001) 31,000 (11,491,474)
------------ ------------ ----------- ----------- ------------
Income before provision for income
taxes.............................. 2,693,958 628,995 198,905 -- 3,521,858
Provision for income taxes.............. 1,804,243 435,615 99,000 -- 2,338,858
------------ ------------ ----------- ----------- ------------
Income before equity in net earnings of
subsidiaries.......................... 889,715 193,380 99,905 -- 1,183,000
Equity in net earnings of
subsidiaries.......................... 78,925 20,980 -- (99,905) --
------------ ------------ ----------- ----------- ------------
Net income......................... $ 968,640 $ 214,360 $ 99,905 $ (99,905) $ 1,183,000
============ ============ =========== =========== ============
</TABLE>
<TABLE>
<CAPTION>
THREE MONTH PERIOD ENDED
SEPTEMBER 28, 1997 (UNAUDITED)
-------------------------------------------------------------------------
NONGUARANTOR COMBINED
GUARANTOR SUBSIDIARY- CONSOLIDATED
UNICCO AFFILIATES UFSCC ELIMINATIONS TOTAL
------------ ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Service revenues......................... $102,948,629 $ 24,001,167 $ 7,767,000 $ -- $134,716,796
Cost of service revenues................. 91,967,660 22,260,808 6,918,000 -- 121,146,468
------------ ------------ ----------- ----------- ------------
Gross profit........................... 10,980,969 1,740,359 849,000 -- 13,570,328
Selling, general and administrative
expenses............................... 7,476,414 544,049 585,000 -- 8,605,463
Amortization of intangible
assets................................. 911,727 246,720 33,000 -- 1,191,447
------------ ------------ ----------- ----------- ------------
Income from operations................. 2,592,828 949,590 231,000 -- 3,773,418
Interest income.......................... 702 702
Interest expense......................... (2,164,406) (730,171) (112,589) -- (3,007,166)
------------ ------------ ----------- ----------- ------------
Income before provision for income
taxes............................... 429,124 219,419 118,411 -- 766,954
Provision for income taxes............... 40,255 31,898 117,000 -- 189,153
------------ ------------ ----------- ----------- ------------
Income before equity in net earnings of
subsidiaries........................... 388,869 187,521 1,411 -- 577,801
Equity in net earnings of subsidiaries... 1,115 296 -- (1,411) --
------------ ------------ ----------- ----------- ------------
Net income.......................... $ 389,984 $ 187,817 $ 1,411 $ (1,411) $ 577,801
============ ============ =========== =========== ============
</TABLE>
F-21
<PAGE> 113
UNICCO SERVICE COMPANY
NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Condensed Combining Consolidating Statement of Cash Flows
<TABLE>
<CAPTION>
YEAR ENDED JUNE 29, 1997
-------------------------------------------------------------------------
NONGUARANTOR COMBINED
GUARANTOR SUBSIDIARY- CONSOLIDATED
UNICCO SUBSIDIARIES UFSCC ELIMINATIONS TOTAL
------------ ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Cash flows relating to operating activities:
Net income..................................... $ 968,640 $ 214,360 $ 99,905 $(99,905) $ 1,183,000
Net earnings from equity investment............ (78,925) (20,980) -- 99,905 --
Adjustments to reconcile net income to net cash
provided by operating activities:
Amortization of intangible assets............ 3,615,060 986,881 147,000 -- 4,748,941
Amortization of debt issue costs and
discount................................... 1,087,393 -- -- -- 1,087,393
Depreciation and amortization................ 2,251,016 134,460 128,000 -- 2,513,476
Loss on disposals............................ 60,628 -- -- -- 60,628
Deferred income taxes........................ 1,797,814 (203) -- -- 1,797,611
Changes in assets and liabilities:
Accounts receivable........................ (32,617,757) (17,916,348) (3,464,000) -- (53,998,105)
Unbilled receivables....................... (19,141,302) (4,325,805) -- -- (23,467,107)
Intercompany receivable (payable).......... (19,520,368) 17,420,273 2,100,095 -- --
Other current assets....................... 583,395 (438,129) (40,000) -- 105,266
Other long-term assets..................... (238,583) (7,053) (26,000) -- (271,636)
Cash overdraft............................. 8,798,218 476,100 -- -- 9,274,318
Accounts payable........................... 2,474,417 1,585,297 787,000 -- 4,846,714
Accrued expenses and other current
liabilities............................. 11,490,828 2,618,468 1,745,000 -- 15,854,296
Other long-term liabilities................ (72,631) -- -- -- (72,631)
------------ ------------ ----------- -------- ------------
Net cash provided by (used in) operating
activities................................. (38,542,157) 727,321 1,477,000 -- (36,337,836)
------------ ------------ ----------- -------- ------------
Cash relating to investing activities:
Due to/from affiliates......................... (44,910) 44,910 -- -- --
Purchases of property and equipment............ (2,259,543) (150,774) (168,000) -- (2,578,317)
Increases in notes receivable and accrued
interest from officers....................... (56,414) -- -- -- (56,414)
Payments received for notes receivable from
officers..................................... 106,194 -- -- -- 106,194
Forgiveness of notes receivable and accrued
interest from officers....................... 497,306 -- -- -- 497,306
------------ ------------ ----------- -------- ------------
Net cash used in investing activities........ (1,757,367) (105,864) (168,000) -- (2,031,231)
------------ ------------ ----------- -------- ------------
Cash flows relating to financing activities:
Net proceeds from line of credit............... 44,366,958 -- -- -- 44,366,958
Proceeds from debt............................. 3,000,003 -- -- -- 3,000,003
Payments on debt............................... (3,600,000) -- -- -- (3,600,000)
Distribution to shareholders................... (1,637,000) -- -- -- (1,637,000)
Payment on note receivable from stock sale..... 10,247 -- -- -- 10,247
------------ ------------ ----------- -------- ------------
Net cash provided by financing activities.... 42,140,208 -- -- -- 42,140,208
------------ ------------ ----------- -------- ------------
Net increase in cash and cash equivalents........ 1,840,684 621,457 1,309,000 -- 3,771,141
Cash and cash equivalents, beginning of year..... 157,169 -- -- -- 157,169
------------ ------------ ----------- -------- ------------
Cash and cash equivalents, end of year........... $ 1,997,853 $ 621,457 $ 1,309,000 $ -- $ 3,928,310
============ ============ =========== ======== ============
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest..................................... $ 8,636,561 $ -- $ -- $ -- $ 8,636,561
============ ============ =========== ======== ============
Income taxes................................. $ 760,200 $ -- $ -- $ -- $ 760,200
============ ============ =========== ======== ============
</TABLE>
F-22
<PAGE> 114
UNICCO SERVICE COMPANY
NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Condensed Combining Consolidating Statement of Cash Flows
<TABLE>
<CAPTION>
THREE MONTH PERIOD ENDED
SEPTEMBER 28, 1997 (UNAUDITED)
----------------------------------------------------------------------------
NONGUARANTOR COMBINED
GUARANTOR SUBSIDIARY- CONSOLIDATED
UNICCO SUBSIDIARIES UFSCC ELIMINATIONS TOTAL
----------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Cash flows relating to operating activities:
Net income........................................ $ 389,984 $ 187,817 $ 1,411 $ (1411) $ 577,801
Net earnings from equity investments.............. (1,115) (296) -- 1,411 --
Adjustments to reconcile net income to net cash
provided by operating activities:
Amortization of intangible assets............... 909,727 246,720 35,000 -- 1,191,447
Amortization of debt issue costs and discount... 271,555 -- -- -- 271,555
Depreciation and amortization................... 517,222 43,017 25,000 -- 585,239
Loss on disposals............................... (1,779) 16,155 -- -- 14,376
Deferred income taxes........................... -- -- -- -- --
Change in assets and liabilities:
Accounts receivable........................... 1,758,095 1,420,776 (519,000) -- 2,659,871
Unbilled receivables.......................... (1,729,850) (256,799) -- -- (1,986,649)
Intercompany receivable (payable)............. 3,120,735 (3,098,324) (22,411) -- --
Other current assets.......................... 1,013,755 4,060 (105,000) -- 912,815
Other long-term assets........................ 102,176 (15,942) 1,000 -- 87,234
Cash overdraft................................ (3,470,094) 847,053 322,000 -- (2,301,041)
Accounts payable.............................. (1,401,270) (275,533) (422,000) -- (2,098,803)
Accrued expenses and other current
liabilities................................ 1,119,827 262,705 (531,000) -- 851,532
Other long-term liabilities................... (602,153) -- -- -- (602,153)
----------- ----------- ----------- ------- -----------
Net cash provided by (used in) operating
activities.................................... 1,996,815 (618,591) (1,215,000) -- 163,224
----------- ----------- ----------- ------- -----------
Cash flows relating to investing activities:
Due to/from affiliates............................ (11,227) 11,227 -- -- --
Purchases of property and equipment............... (230,668) (7,636) (11,000) -- (249,304)
Increases in notes receivable and accrued interest
from officers...................................
Payments received on notes receivable from
officers........................................ 30,000 -- -- -- 30,000
----------- ----------- ----------- ------- -----------
Net cash provided by (used in) investing
activities.................................... (211,895) 3,591 (11,000) -- (219,304)
----------- ----------- ----------- ------- -----------
Cash flows relating to financing activities:
Net proceeds from line of credit.................. 1,164,746 -- -- -- 1,164,746
Payments on debt.................................. (1,900,000) -- -- -- (1,900,000)
Increase in debt issuance costs................... (551,668) -- -- -- (551,668)
Distribution to shareholders...................... (200,000) -- -- -- (200,000)
Payment on note receivable from stock sale........ 2,562 -- -- -- 2,562
Payment on note payable to related party.......... (281,675) -- -- -- (281,675)
----------- ----------- ----------- ------- -----------
Net cash provided by financing activities....... (1,766,035) -- -- -- (1,766,035)
----------- ----------- ----------- ------- -----------
Net increase (decrease) in cash and cash
equivalents....................................... 18,885 (615,000) (1,226,000) -- (1,822,115)
Cash and cash equivalents, beginning of year........ 1,997,853 621,457 1,309,000 -- 3,928,310
----------- ----------- ----------- ------- -----------
Cash and cash equivalents, end of year.............. $ 2,016,738 $ 6,457 $ 83,000 $ -- $ 2,106,195
=========== =========== =========== ======= ===========
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest........................................ $ 3,490,771 $ -- $ -- $ -- $ 3,490,771
=========== =========== =========== ======= ===========
Income taxes.................................... $ 17,215 $ -- $ -- $ -- $ 17,215
=========== =========== =========== ======= ===========
</TABLE>
F-23
<PAGE> 115
UNICCO SERVICE COMPANY
NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
12. SUBSEQUENT EVENT (UNAUDITED)
On October 17, 1997 the Group consummated the Series A Note Offering and
entered into the Amended Facility. The net proceeds from the Series A Note
Offering and the Amended Facility were used to repay approximately $83.2 million
of indebtedness under the Group's existing credit facilities and $16.8 million
of certain other indebtedness, fees and expenses incurred in connection with
such financing. The Group recorded a $3.0 million extraordinary charge related
to such repayments in the second quarter of fiscal 1998.
The Series A Note Offering will mature on October 15, 2007. The Notes will
not be redeemable at the issuers' option prior to October 15, 2002. Thereafter,
the Notes will be subject to redemption at any time at the option of the issuers
at redemption prices set forth in the Notes. Interest on the Notes will accrue
at the rate of 9 7/8% per annum and will be payable semi-annually in arrears on
April 15 and October 15 of each year, commencing on April 15, 1998. The payment
of principal and interest on the Notes will be subordinated in right to the
prior payment of all Senior Debt, as defined.
Upon the occurrence of a change in control, as defined, the issuers will be
obligated to make an offer to each holder of the Notes to repurchase all or any
part of such holders' Notes at an offer price in cash equal to 101% of the
principal amount thereof, plus accrued and unpaid interest. Restrictions under
the Notes and the Amended Facility include certain sales of assets, certain
payments of dividends and incurrence of debt, and limitations on certain mergers
and transactions with affiliates. With respect to the Amended Facility, the
Company will be required to maintain certain financial ratios and covenants
which are similar to the credit facility in existence on September 28, 1997.
As previously discussed, the accompanying combined consolidated financial
statements include the accounts of UNICCO and USC, Inc., which are owned and
controlled by common shareholders. In connection with the Offering, the
shareholders of UNICCO contributed their ownership interests in USC, Inc. to
UNICCO. As a result, all of the operations of the Group will be conducted
through UNICCO and its wholly-owned subsidiaries. This transaction will be
accounted for in a manner similar to that in pooling of interests accounting
with the assets and liabilities being recorded at their historical cost due to
the exchange of stock occurring between entities under common control.
F-24
<PAGE> 116
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees and Shareholders of
UNICCO Service Company and the
Board of Directors and Shareholders of USC, Inc.
In our opinion, the accompanying combined statements of income and of cash
flows present fairly, in all material respects, the results of operations and
cash flows of the Allied Facility Services Business ("Services Business") for
the years ended June 28, 1996 and June 30, 1995, in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of the Services Business' management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Boston, Massachusetts
September 23, 1997
F-25
<PAGE> 117
ALLIED FACILITY SERVICES BUSINESS
COMBINED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
---------------------------
JUNE 28, JUNE 30,
1996 1995
------------ ------------
<S> <C> <C>
Service revenues.................................................. $389,100,108 $354,568,402
Cost of service revenues.......................................... 350,069,709 315,855,811
------------ ------------
Gross profit.................................................... 39,030,399 38,712,591
Selling, general and administrative expenses...................... 28,758,874 25,256,200
------------ ------------
Income from operations before provision for income taxes........ 10,271,525 13,456,391
Provision for income taxes........................................ 4,577,385 5,782,306
------------ ------------
Net income...................................................... $ 5,694,140 $ 7,674,085
============ ============
</TABLE>
The accompanying notes are an integral part of these combined financial
statements.
F-26
<PAGE> 118
ALLIED FACILITY SERVICES BUSINESS
COMBINED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
-------------------------
JUNE 28, JUNE 30,
1996 1995
----------- -----------
<S> <C> <C>
Cash flows relating to operating activities:
Net income........................................................ $ 5,694,140 $ 7,674,085
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization.................................. 1,275,152 1,101,568
Deferred income taxes.......................................... (645,611) (613,517)
Changes in assets and liabilities:
Accounts receivable............................................ 923,829 (7,392,366)
Unbilled receivables........................................... (391,356) (2,239,061)
Allowance for doubtful accounts................................ 972,892 244,606
Other current assets........................................... 222,915 (62,263)
Other long term assets......................................... (225,224) (54,539)
Accounts payable............................................... (229,999) 1,781,894
Accrued expenses and other current liabilities................. (899,715) (1,187,008)
Accrued insurance.............................................. 807,817 766,416
Accrued income taxes........................................... (1,172,827) 35,524
----------- -----------
Net cash provided by operating activities................. 6,332,013 55,339
Cash flows relating to investing activities:
Purchases of property and equipment............................... (1,280,111) (1,470,734)
Cash flows relating to financing activities:
Net change in parent company investment........................... (5,262,232) 1,108,526
----------- -----------
Net decrease in cash................................................ (210,330) (306,869)
Cash, beginning of year............................................. 1,104,821 1,411,690
----------- -----------
Cash, end of year................................................... $ 894,491 $ 1,104,821
=========== ===========
</TABLE>
The accompanying notes are an integral part of these combined financial
statements.
F-27
<PAGE> 119
ALLIED FACILITY SERVICES BUSINESS
NOTES TO COMBINED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Business
On June 28, 1996, UNICCO Service Company, ("UNICCO"), USC, Inc. ("USC") and
UNICCO Facility Services Canada Company ("UFSCC"), collectively "the Group",
affiliated and consolidated companies with common shareholders, acquired the
Allied Facility Services Business ("Services Business"), exclusive of the
operations in and surrounding the metropolitan New York City area (the "Excluded
Operations"), from the Services Business' parent in accordance with the Purchase
Agreement (the "Agreement") dated May 3, 1996. Under the terms of the Agreement,
the Group acquired i) certain assets, liabilities and operations of the facility
services business, exclusive of the Excluded Operations and ii) the stock of the
government and security businesses. The Services Business provides the following
services to its customers in the United States and Canada: janitorial services;
facility management services; mechanical maintenance; building security and
office services. Customers of the Services Business include corporate
headquarters, colleges and universities, financial institutions, governmental
agencies, healthcare facilities, industrial plants, tourism and convention
centers, retail malls and property management companies.
Basis of Presentation
The combined financial statements have been prepared by combining the
operating results and cash flows of the Services Business and reflecting the
allocation of certain overhead expenses (see Note 2).
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amount of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amount of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Insurance Costs
Included in the accompanying combined financial statements are workers'
compensation and general liability insurance premiums and claims costs, handled
under a parent company insurance program. These amounts are actuarially
determined based upon the loss experience of the Services Business and amounted
to $12,021,000 and $10,648,000 in fiscal 1996 and 1995, respectively. These
costs are included in cost of service revenues. For the Services Business'
foreign operations, the insurance costs are incurred directly under government
directed programs.
Revenue Recognition
Service revenues are generated primarily by efforts expended on cost-plus
fixed-fee, fixed price and time and material contracts. Revenue from cost-plus
fixed-fee contracts is recognized on the basis of direct and indirect expenses
incurred plus the allocable portion of the fixed fee. Revenues on fixed price
contracts are recognized based on the monthly amount as stipulated in the
contract and the performance of services. Revenues under time and material
contracts are recorded at the contracted rates as labor efforts are expended and
other direct costs are incurred. Losses, if any, are provided for at the time
that management determines that costs, including estimated costs to complete,
exceed contract revenue.
Concentration of Credit Risk
Financial instruments which potentially expose the Services Business to
concentrations of credit risk consist primarily of trade accounts receivable. To
minimize this risk, ongoing credit evaluations of customers' financial condition
are performed, although collateral is not required. In addition, the Services
Business
F-28
<PAGE> 120
ALLIED FACILITY SERVICES BUSINESS
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
maintains allowances for potential uncollectible amounts and such amounts, in
the aggregate, have not exceeded management's expectations.
Depreciation and Amortization
The Services Business provides for depreciation and amortization by charges
to operations in amounts that allocate the cost of property, equipment and
leasehold improvements over their estimated useful lives using the straight-line
method as follows:
<TABLE>
<CAPTION>
ESTIMATED
DESCRIPTION USEFUL LIFE
------------------------------------------------ ------------------------------
<S> <C>
Transportation equipment 3-5 years
Machinery and equipment 5-10 years
Furniture and fixtures 5-10 years
Leasehold improvements shorter of estimated
useful life or life of lease
</TABLE>
Foreign Currency Translation
In accordance with Statement of Financial Accounting Standards No. 52,
Foreign Currency Translation, the statements of income and of cash flows of the
Services Business' Canadian operations included in the combined financial
statements have been translated at average exchange rates for the respective
reporting periods. The impact of such translation is not significant in the
years ended June 28, 1996 and June 30, 1995.
Income Taxes
Historically, the results of the Services Business' operations have been
included in the consolidated income tax returns of its parent. The provision for
income taxes included in these financial statements have been calculated as if
the Services Business were a stand-alone taxpayer.
The provisions of Statement of Financial Accounting Standards No.109 ("FAS
109") have been applied to these financial statements. FAS 109 is an asset and
liability approach that requires the recognition of deferred tax assets and
liabilities for the expected future consequences of events that have been
recognized in the financial statements or tax returns. In estimating future tax
consequences, FAS 109 generally considers all expected future events other than
anticipated changes in the tax laws or rates.
2. RELATED PARTY TRANSACTIONS
Corporate Administrative Services
Historically, the Services Business was not allocated or charged its
portion of corporate expenses. For purposes of these financial statements, such
expenses have been allocated, including executive management and corporate
overhead; employee benefit administration; information systems services; risk
management/insurance administration; tax and treasury/cash management services;
litigation administration services and other corporate support functions.
All of the allocations and charges described above are included in selling,
general and administrative expenses in the accompanying combined financial
statements. Such allocations and charges are based on either a direct cost pass
through or a percentage of total costs for the services provided based on
factors such as headcount, management time or the specific level of activity
directly related to such costs (i.e., checks processed, etc.). Such allocations
and charges totaled approximately $3,943,000 and $3,365,000 for the years ended
June 28, 1996 and June 30, 1995, respectively. Management believes that the
basis of allocation is reasonable, however, such allocated expenses may differ
from those that the Services Business would incur if it operated as stand-alone
entity. Management does not believe it is practicable to quantify these expenses
as if the Services Business operated as a stand-alone entity.
F-29
<PAGE> 121
ALLIED FACILITY SERVICES BUSINESS
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
3. INCOME TAXES
Income from operations before provision for income taxes was taxed under
the following jurisdictions:
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
-------------------------
JUNE 28, JUNE 30,
1996 1995
----------- -----------
<S> <C> <C>
Domestic........................................ $ 8,488,048 $11,801,067
Foreign......................................... 1,783,477 1,655,324
----------- -----------
$10,271,525 $13,456,391
=========== ===========
</TABLE>
Provision (benefit) for income taxes consists of the following:
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
-----------------------
JUNE 28, JUNE 30,
1996 1995
---------- ----------
<S> <C> <C>
Current:
Federal........................................... $3,534,378 $4,543,713
State............................................. 796,878 1,024,448
Foreign........................................... 891,740 827,662
---------- ----------
5,222,996 6,395,823
---------- ----------
Deferred:
Federal........................................... (568,378) (540,124)
State............................................. (77,233) (73,393)
---------- ----------
(645,611) (613,517)
---------- ----------
$4,577,385 $5,782,306
========== ==========
</TABLE>
Deferred tax assets are comprised of the following:
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
-------------------------
JUNE 28, JUNE 30,
1996 1995
----------- -----------
<S> <C> <C>
Workers compensation and general liability
insurance..................................... $ 8,520,710 $ 8,197,145
Reserves........................................ 1,853,214 1,531,168
----------- -----------
Gross deferred tax assets....................... 10,373,924 9,728,313
Valuation allowance............................. -- --
----------- -----------
Net deferred tax assets......................... $10,373,924 $ 9,728,313
=========== ===========
</TABLE>
No valuation allowance has been provided for the deferred tax assets as it
is believed that it is more likely than not that the associated tax benefits
will be realized.
The effective income tax rate differs from the statutory federal income tax
rate as follows:
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
-------------------
JUNE 28, JUNE 30,
1996 1995
-------- --------
<S> <C> <C>
Federal statutory rate.................................. 34% 34%
State income taxes, net of federal benefit.............. 5% 5%
Foreign rate differential............................... 1% 1%
Nondeductible items..................................... 5% 3%
-------- -- -- --
-- -- --
45% 43%
========== ==========
</TABLE>
F-30
<PAGE> 122
ALLIED FACILITY SERVICES BUSINESS
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
4. GEOGRAPHIC SEGMENT AND MAJOR CUSTOMER INFORMATION
The Services Business operates solely in the facility services market
segment as more fully described in Note 1. Revenues by geographic segments
approximated the following:
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
-----------------------------
JUNE 28, JUNE 30,
1996 1995
------------ ------------
<S> <C> <C>
United States............................. $364,035,000 $331,375,000
Canada.................................... 25,065,000 23,193,000
------------ ------------
$389,100,000 $354,568,000
============ ============
</TABLE>
No single customer's revenues exceeded 10% of net revenues for any of the
years presented.
5. COMMITMENTS AND CONTINGENCIES
Operating Leases
The Services Business leases certain equipment and facilities under
noncancelable operating leases expiring on various dates through June, 2005.
Rent expense under these leases was approximately $1,511,301 and $1,032,528 for
the years ended June 28, 1996 and June 30, 1995, respectively. The approximate
future minimum payments under these leases are as follows:
<TABLE>
<CAPTION>
FISCAL YEAR AMOUNT
------------------------------------------------------------- ----------
<S> <C>
1997......................................................... $1,371,000
1998......................................................... 906,000
1999......................................................... 506,000
2000......................................................... 363,000
2001......................................................... 357,000
Thereafter................................................... 312,000
----------
$3,815,000
==========
</TABLE>
Litigation
The Services Business was a defendant to a class action lawsuit resulting
from the release of certain contaminants into the groundwater and air from a
facility owned by one of its customers (the Customer). The Services Business
provided various maintenance services at such facility from 1982 through 1993.
In January 1995, the Services Business entered into a settlement agreement with
the Customer whereby the Services Business' parent agreed to pay a total of $10
million to the Customer on behalf of the Services Business as follows:
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30, AMOUNT
----------------------------------------------------- ---------------------
<S> <C>
1995................................................. $3,000,000
1996-2002............................................ $1,000,000 each year
</TABLE>
In the ordinary course of business, the Services Business is party to
various lawsuits other than those pertaining to workers compensation and general
liability (see Note 1). In connection with the purchase of the Services Business
(see Note 6), the Group has been indemnified as to any obligation, contingent or
otherwise, relating to or arising from events occurring or accruing at the
Services Business prior to June 28, 1996, subject to a claim being asserted for
such obligation prior to June 30, 1998.
6. SIGNIFICANT EVENT
On June 28, 1996, the parent sold the Services Business to the Group for a
total purchase price of approximately $62 million, of which $12 million was
financed by the parent.
F-31
<PAGE> 123
============================================================
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS, AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE ISSUERS OR THE INITIAL PURCHASER. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE ISSUERS
SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES, OTHER THAN THE SECURITIES TO
WHICH IT RELATES, OR ANY OFFER TO BUY THE EXCHANGE NOTES IN ANY JURISDICTION
WHERE OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION
IN SUCH JURISDICTION.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary......................... 1
Risk Factors............................... 12
The Company................................ 18
The Exchange Offer......................... 18
Use of Proceeds............................ 27
Capitalization............................. 28
Selected Financial Data.................... 29
Unaudited Pro Forma Financial Data......... 30
Management's Discussion and Analysis of
Financial Condition and Results of
Operations............................... 33
Business................................... 39
Management................................. 49
Share Ownership............................ 53
Certain Transactions....................... 54
Description of Other Indebtedness.......... 55
Description of the Exchange Notes.......... 56
Plan of Distribution....................... 83
Certain United States Federal Tax
Considerations for Non-United States
Holders.................................. 84
Legal Matters.............................. 85
Experts.................................... 85
Index to Combined Consolidated Financial
Statements............................... F-1
</TABLE>
============================================================
============================================================
[UNICCO Service Co. LOGO]
UNICCO SERVICE
COMPANY
UNICCO FINANCE CORP.
OFFER TO EXCHANGE
$105,000,000
9 7/8% SENIOR SUBORDINATED
NOTES DUE 2007, SERIES B
FOR
9 7/8% SENIOR SUBORDINATED
NOTES DUE 2007
------------------------
PRELIMINARY PROSPECTUS
------------------------
, 1997
============================================================
<PAGE> 124
PART II
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article VIII of the Company's Declaration of Trust provides that the
Trustees are entitled to reimbursement and exoneration out of the trust estate
for any liability incurred by the Trust or Trustees, except for the Trustees'
own acts, negligence and defaults in bad faith. Article 3 of the Company's
by-laws provides for indemnification of Trustees and officers and duly appointed
agents of Company against liabilities in connection with the defense of any
action, suit or proceeding to which such persons are made a party by reason of
being a Trustee, officer or duly appointed agent of the Company, except in
relation to matters as to which such persons are adjudged liable for negligence
or misconduct in the performance of their duties.
The Company maintains directors' and officers' liability insurance which
may cover liabilities under the Act.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ ------------------------------------------------------------------------------------
<C> <S>
1.1 Purchase Agreement dated October 14, 1997 among the Issuers and BancBoston
Securities Inc.
3.1 Amended Declaration of Trust of UNICCO Service Company
3.2 Certificate of Incorporation of UNICCO Finance Corp.
3.3 By-laws of UNICCO Service Company
3.4 By-laws of UNICCO Finance Corp.
4.1 Indenture dated October 17, 1997 among the Issuers, the Guarantors and State Street
Bank and Trust Company
4.2 Form of Notes (included in Exhibit 4.1)
4.3 Form of Guaranty (included in Exhibit 4.1)
4.4 Registration Rights Agreement dated October 17, 1997 among the Issuers, the
Guarantors and BancBoston Securities Inc.
5.1 Opinion of Posternak, Blankstein & Lund, L.L.P.
10.1 Amended and Restated Revolving Credit Agreement dated as of October 17, 1997 by and
among BankBoston, N.A. and other banks which may become parties thereto, and UNICCO
Service Company, USC, Inc., UNICCO Finance Corp., UNICCO Security Services, Inc. and
UNICCO Government Services, Inc.
10.2 Employment Agreement with John P. McGillicuddy dated June 25, 1996
10.3 Severance Agreement with Robert L. Trow dated July 31, 1997
10.4 Share Purchase Agreement with George A. Keches dated June 20, 1996
10.5 Share Purchase Agreement with John C. Feitor dated July 1, 1989
12.1 Statements re Computation of Ratios
16.1 Letter re change in certifying accountant
21.1 Subsidiaries of the Registrant
23.1 Consent of Independent Accountants -- Price Waterhouse LLP
23.2 Consent of Independent Public Accountants -- Arthur Andersen LLP
23.3 Consent of Posternak, Blankstein & Lund, L.L.P. (included in Exhibit 5.1)
24.1 Power of Attorney (included on signature pages)
25.1 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of State
Street Bank and Trust Company
</TABLE>
II-1
<PAGE> 125
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ ------------------------------------------------------------------------------------
<C> <S>
27.1 Financial Data Schedule
99.1 Form of Letter of Transmittal
99.2 Form of Notice of Guaranteed Delivery
</TABLE>
(b) Financial Statement Schedules.
None
ITEM 22. UNDERTAKINGS.
Each undersigned Registrant hereby undertakes:
(a)(l) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high and of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement;
(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.
(b) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in the Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) That, 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
II-2
<PAGE> 126
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
(d) 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 mail or other equally prompt means. This
includes information contained in documents filed subsequent to the effective
date of the Registration Statement through the date of responding to the
request.
(e) 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-3
<PAGE> 127
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
undersigned registrant has duly caused this Registration Statement to be signed
on its behalf by the undersigned, hereunto duly authorized, in the City of
Boston, Commonwealth of Massachusetts, on December 15, 1997.
UNICCO SERVICE COMPANY
By: /s/ STEVEN C. KLETJIAN
------------------------------------
Steven C. Kletjian
KNOW ALL BY THESE PRESENTS, each person whose signature appears below
hereby constitutes and appoints Steven C. Kletjian and George A. Keches, and
each of them, his true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments to this Registration
Statement, and to file the same, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ---------------------------------- ------------------
<S> <C> <C>
/s/ STEVEN C. KLETJIAN Chief Executive Officer and December 15, 1997
- ------------------------------------------ Chairman of Board of Trustees
Steven C. Kletjian
/s/ GEORGE A. KECHES Vice President -- Finance and December 15, 1997
- ------------------------------------------ Administration, Chief Financial
George A. Keches Officer, Treasurer
/s/ RICHARD J. KLETJIAN Vice Chairman of the Board of December 15, 1997
- ------------------------------------------ Trustees
Richard J. Kletjian
/s/ ROBERT P. KLETJIAN Vice President and Vice Chairman December 15, 1997
- ------------------------------------------ of Board of Trustees
Robert P. Kletjian
/s/ SHARKAY KLETJIAN Trustee December 15, 1997
- ------------------------------------------
Sharkay Kletjian
</TABLE>
II-4
<PAGE> 128
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
undersigned registrant has duly caused this Registration Statement to be signed
on its behalf by the undersigned, hereunto duly authorized, in the City of
Boston, Commonwealth of Massachusetts, on December 15, 1997.
UNICCO FINANCE COMPANY
By: /s/ STEVEN C. KLETJIAN
------------------------------------
Steven C. Kletjian
KNOW ALL BY THESE PRESENTS, each person whose signature appears below
hereby constitutes and appoints Steven C. Kletjian and George A. Keches, and
each of them, his true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments to this Registration
Statement, and to file the same, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ------------------------------ ------------------
<S> <C> <C>
/s/ STEVEN C. KLETJIAN President and Director December 15, 1997
- ------------------------------------------
Steven C. Kletjian
/s/ GEORGE A. KECHES Treasurer December 15, 1997
- ------------------------------------------
George A. Keches
</TABLE>
II-5
<PAGE> 129
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
undersigned registrant has duly caused this Registration Statement to be signed
on its behalf by the undersigned, hereunto duly authorized, in the City of
Boston, Commonwealth of Massachusetts, on December 15, 1997.
USC, INC.
By: /s/ STEVEN C. KLETJIAN
------------------------------------
Steven C. Kletjian
KNOW ALL BY THESE PRESENTS, each person whose signature appears below
hereby constitutes and appoints Steven C. Kletjian and George A. Keches, and
each of them, his true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments to this Registration
Statement, and to file the same, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ---------------------------- ------------------
<S> <C> <C>
/s/ STEVEN C. KLETJIAN President and Director December 15, 1997
- ------------------------------------------
Steven C. Kletjian
/s/ GEORGE A. KECHES Treasurer December 15, 1997
- ------------------------------------------
George A. Keches
/s/ RICHARD J. KLETJIAN Director December 15, 1997
- ------------------------------------------
Richard J. Kletjian
/s/ ROBERT P. KLETJIAN Director December 15, 1997
- ------------------------------------------
Robert P. Kletjian
/s/ SHARKAY KLETJIAN Director December 15, 1997
- ------------------------------------------
Sharkay Kletjian
</TABLE>
II-6
<PAGE> 130
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
undersigned registrant has duly caused this Registration Statement to be signed
on its behalf by the undersigned, hereunto duly authorized, in the City of
Boston, Commonwealth of Massachusetts, on December 15, 1997.
UNICCO GOVERNMENT SERVICES, INC.
By: /s/ STEVEN C. KLETJIAN
------------------------------------
Steven C. Kletjian
KNOW ALL BY THESE PRESENTS, each person whose signature appears below
hereby constitutes and appoints Steven C. Kletjian and George A. Keches, and
each of them, his true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments to this Registration
Statement, and to file the same, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ---------------------------- ------------------
<S> <C> <C>
/s/ STEVEN C. KLETJIAN President and Director December 15, 1997
- ------------------------------------------
Steven C. Kletjian
/s/ GEORGE A. KECHES Treasurer December 15, 1997
- ------------------------------------------
George A. Keches
</TABLE>
II-7
<PAGE> 131
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
undersigned registrant has duly caused this Registration Statement to be signed
on its behalf by the undersigned, hereunto duly authorized, in the City of
Boston, Commonwealth of Massachusetts, on December 15, 1997.
UNICCO SECURITY SERVICES, INC.
By: /s/ MICHAEL F. DUNN
------------------------------------
Michael F. Dunn
KNOW ALL BY THESE PRESENTS, each person whose signature appears below
hereby constitutes and appoints Steven C. Kletjian and George A. Keches, and
each of them, his true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments to this Registration
Statement, and to file the same, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ------------------------------ ------------------
<S> <C> <C>
/s/ MICHAEL F. DUNN President and Director December 15, 1997
- ------------------------------------------
Michael F. Dunn
/s/ GEORGE A. KECHES Principal Accounting Officer December 15, 1997
- ------------------------------------------
George A. Keches
</TABLE>
II-8
<PAGE> 1
Exhibit 1.1
EXECUTION COPY
================================================================================
UNICCO SERVICE COMPANY
UNICCO FINANCE CORP.
$105,000,000
9 7/8% Senior Subordinated Notes due 2007
Purchase Agreement
October 14, 1997
BANCBOSTON SECURITIES INC.
================================================================================
<PAGE> 2
UNICCO SERVICE COMPANY
UNICCO FINANCE CORP.
$105,000,000
9 7/8% Senior Subordinated Notes due 2007
PURCHASE AGREEMENT
October 14, 1997
New York, New York
BANCBOSTON SECURITIES INC.
100 Federal Street
Boston, Massachusetts 02110
Ladies & Gentlemen:
UNICCO Service Company, a Massachusetts business trust (the
"COMPANY"), and UNICCO Finance Corp., a Delaware corporation ("FINANCE" and,
together with the Company, the "ISSUERS"), as joint and several obligors,
propose to issue and sell to BancBoston Securities Inc. (the "INITIAL
PURCHASER") $105,000,000 in aggregate principal amount of 9 7/8% Series A Senior
Subordinated Notes due 2007 (the "SERIES A NOTES"), subject to the terms and
conditions set forth herein. The Series A Notes will be issued pursuant to an
indenture (the "INDENTURE"), to be dated the Closing Date (as defined), among
the Issuers, the Guarantors (as defined) and State Street Bank and Trust
Company, as trustee (the "TRUSTEE"). The Notes (as defined) will be fully and
unconditionally guaranteed (the "GUARANTEES") as to payment of principal,
interest, liquidated damages and premium, if any, on an unsecured senior
subordinated basis, jointly and severally, by each entity listed on EXHIBIT A
hereto (collectively, the " GUARANTORS"). Capitalized terms used herein and not
otherwise defined shall have the meanings assigned to such terms in the
Indenture.
In connection with the offering of the Series A Notes, the
shareholders of the Company will contribute their interests in affiliated
entities of the Company to the Company (the "Refinancing"). As a result of the
Refinancing, such affiliated entities will become subsidiaries of the Company.
1. ISSUANCE OF SECURITIES. The Issuers propose, upon the terms
and subject to the conditions set forth herein, to issue and sell to the Initial
Purchaser an aggregate of $105,000,000 in principal amount of Series A Notes.
The Series A Notes and the Series B Notes (as defined) issuable in exchange
therefor are collectively referred to herein as the "NOTES."
Upon original issuance thereof, and until such time as the same is no
longer required under the applicable requirements of the Securities Act of 1933,
as amended (the "ACT"), the Series A Notes (and all securities issued in
exchange therefor or in substitution thereof) shall bear the following legend:
1
<PAGE> 3
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY
EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. BY ITS ACQUISITION HEREOF, THE HOLDER
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT) OR (C) IT IS NOT A U.S. PERSON AND
IS NOT ACQUIRING THIS SECURITY FOR THE ACCOUNT OR BENEFIT OF A U.S.
PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT. THE HOLDER OF
THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUERS
THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
ONLY (1)(a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT), IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER
THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE
SECURITIES ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL IF THE ISSUERS SO REQUEST), (2) TO THE ISSUERS, (3)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED
HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE."
2. OFFERING. The Series A Notes will be offered and sold to the
Initial Purchaser pursuant to an exemption from the registration requirements
under the Act. The Issuers have prepared a preliminary offering memorandum,
dated September 26, 1997 (the "PRELIMINARY OFFERING MEMORANDUM"), and a final
offering memorandum, dated October 14, 1997 (the "OFFERING MEMORANDUM"),
relating to the Company, its subsidiaries and the Series A Notes.
The Initial Purchaser has advised the Issuers that the Initial
Purchaser will make offers (the "EXEMPT RESALES") of the Series A Notes on the
terms set forth in the Offering Memorandum, as amended or supplemented, solely
to (i) persons whom the Initial Purchaser reasonably believes to be "qualified
institutional buyers," as defined in Rule 144A under the Act ("QIBS"), (ii) a
limited number of persons who have represented to the Issuers that they are
institutional "Accredited Investors" referred to in Rule 501(a)(1), (2), (3) or
(7) under the Act (each, an "ACCREDITED INVESTOR") and (iii) non-U.S. persons
outside
2
<PAGE> 4
the United States in reliance upon Regulation S ("REGULATION S") under the Act
(each, a "REG S INVESTOR"). The QIBs, Accredited Investors and Reg S Investors
are collectively referred to herein as the "ELIGIBLE PURCHASERS." The Initial
Purchaser will offer the Series A Notes to such Eligible Purchasers initially at
a price equal to 99.53% of the principal amount thereof. Such price may be
changed at any time without notice.
Holders (including subsequent transferees) of the Series A Notes will
have the registration rights set forth in the registration rights agreement
relating thereto (the "REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing
Date, for so long as such Series A Notes constitute "TRANSFER RESTRICTED
SECURITIES" (as defined in the Registration Rights Agreement). Pursuant to the
Registration Rights Agreement, the Issuers and the Guarantors will agree to file
with the Securities and Exchange Commission (the "COMMISSION"), under the
circumstances set forth therein, (i) a registration statement under the Act (the
"EXCHANGE OFFER REGISTRATION STATEMENT") relating to the 9 7/8% Series B Notes
due 2007 (the "SERIES B NOTES") to be offered in exchange for the Series A Notes
(the "EXCHANGE OFFER") and (ii) a shelf registration statement pursuant to Rule
415 under the Act (the "SHELF REGISTRATION STATEMENT" and, together with the
Exchange Offer Registration Statement, the "REGISTRATION STATEMENTS") relating
to the resale by certain holders of the Series A Notes, and to use their best
efforts to cause such Registration Statements to be declared effective and to
consummate the Exchange Offer. This Agreement, the Notes, the Guarantees, the
Indenture, the Registration Rights Agreement and the Amended Credit Facility (as
defined in the Offering Memorandum) are hereinafter referred to collectively as
the "OPERATIVE DOCUMENTS."
3. PURCHASE, SALE AND DELIVERY. (a) On the basis of the
representations, warranties and covenants contained in this Agreement, and
subject to its terms and conditions, the Issuers agree to issue and sell to the
Initial Purchaser, and the Initial Purchaser agrees to purchase from the
Issuers, all of the Series A Notes. The purchase price for the Series A Notes
will be $965.441 per $1,000 principal amount Series A Note.
(b) Delivery of the Series A Notes shall be made, against payment of
the purchase price therefor, at the offices of Posternak, Blankstein & Lund,
L.L.P., Boston, Massachusetts or such other location as may be mutually
acceptable. Such delivery and payment shall be made at 9:00 a.m., New York City
time, on October 17, 1997 or at such other time as shall be agreed upon by the
Initial Purchaser and the Issuers. The time and date of such delivery and
payment are herein called the "CLOSING DATE."
(c) On the Closing Date, one or more Series A Notes in definitive form,
registered in the name of Cede & Co., as nominee of The Depository Trust Company
("DTC"), having an aggregate amount corresponding to the aggregate amount of the
Series A Notes sold pursuant to Exempt Resales to Eligible Purchasers (the
"GLOBAL NOTES") shall be delivered by the Issuers to the Initial Purchaser (or
as the Initial Purchaser directs), against payment by the Initial Purchaser of
the purchase price therefor, by wire transfer of same day funds, to an account
designated by the Issuers, provided that the Issuers shall give at least two
business days' prior written notice to the Initial Purchaser of the information
required to effect such wire transfer. The Global Notes shall be made available
to the Initial Purchaser for inspection not later than 9:30 a.m. on the business
day immediately preceding the Closing Date.
4. AGREEMENTS OF THE ISSUERS. The Issuers covenant and agree with
the Initial Purchaser as follows:
(a) To advise the Initial Purchaser promptly and, if requested
by the Initial Purchaser, confirm such advice in writing, (i) of the
issuance by any state securities commission of any stop order
suspending the qualification or exemption from qualification of any
Notes for offering or sale in any jurisdiction, or the initiation of
any proceeding for such purpose by any state securities
3
<PAGE> 5
commission or other regulatory authority and (ii) of the happening of
any event that makes any statement of a material fact made in the
Preliminary Offering Memorandum or the Offering Memorandum untrue or
that requires the making of any additions to or changes in the
Preliminary Offering Memorandum or the Offering Memorandum in order to
make the statements therein, in the light of the circumstances under
which they are made, not misleading. The Issuers shall use their
reasonable best efforts to prevent the issuance of any stop order or
order suspending the qualification or exemption of any Notes under any
state securities or Blue Sky laws and, if at any time any state
securities commission or other regulatory authority shall issue an
order suspending the qualification or exemption of any Notes or
Guarantees of Notes under any state securities or Blue Sky laws, the
Issuers shall use their reasonable best efforts to obtain the
withdrawal or lifting of such order at the earliest possible time.
(b) To furnish the Initial Purchaser and those persons
identified by the Initial Purchaser to the Issuers, without charge, as
many copies of the Preliminary Offering Memorandum and the Offering
Memorandum, and any amendments or supplements thereto, as the Initial
Purchaser may reasonably request. The Issuers consent to the use of the
Preliminary Offering Memorandum and the Offering Memorandum, and any
amendments and supplements thereto required pursuant hereto, by the
Initial Purchaser in connection with Exempt Resales.
(c) Not to amend or supplement the Preliminary Offering
Memorandum or the Offering Memorandum prior to the Closing Date unless
the Initial Purchaser shall previously have been advised thereof and
shall not have objected thereto within a reasonable time after being
furnished a copy thereof. The Issuers shall promptly prepare, upon the
Initial Purchaser's request, any amendment or supplement to the
Preliminary Offering Memorandum or the Offering Memorandum that may be
necessary or advisable in connection with Exempt Resales.
(d) If, after the date hereof and prior to consummation of any
Exempt Resale, any event shall occur as a result of which, in the
judgment of the Issuers or in the reasonable opinion of counsel for the
Issuers or counsel for the Initial Purchaser, it becomes necessary or
advisable to amend or supplement the Preliminary Offering Memorandum or
the Offering Memorandum in order to make the statements therein, in the
light of the circumstances when such Offering Memorandum is delivered
to an Eligible Purchaser which is a prospective purchaser, not
misleading, or if it is necessary or advisable to amend or supplement
the Preliminary Offering Memorandum or Offering Memorandum to comply
with applicable law, (i) to notify the Initial Purchaser and (ii)
forthwith to prepare an appropriate amendment or supplement to such
Preliminary Offering Memorandum or Offering Memorandum so that the
statements therein as so amended or supplemented will not, in the light
of the circumstances when it is so delivered, be misleading, or so that
such Preliminary Offering Memorandum or Offering Memorandum will comply
with applicable law.
(e) To cooperate with the Initial Purchaser and counsel for
the Initial Purchaser in connection with the qualification or
registration of the Series A Notes under the securities or Blue Sky
laws of such jurisdictions as the Initial Purchaser may reasonably
request and to continue such qualification in effect so long as
required for the Exempt Resales; provided, however, that none of the
Issuers shall be required in connection therewith to register or
qualify as a foreign corporation where it is not now so qualified or to
take any action that would subject it to service of process in suits or
taxation, in each case, other than as to matters and transactions
relating to the Preliminary Offering Memorandum, the Offering
Memorandum or Exempt Resales, in any jurisdiction where it is not now
so subject.
4
<PAGE> 6
(f) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement becomes effective or is
terminated, to pay all costs, expenses, fees and taxes incident to the
performance of the obligations of the Issuers hereunder, including in
connection with: (i) the preparation, printing, filing and distribution
of the Preliminary Offering Memorandum and the Offering Memorandum
(including, without limitation, financial statements) and all
amendments and supplements thereto required pursuant hereto, (ii) the
issuance, transfer and delivery of the Notes and the Guarantees to the
Initial Purchaser, (iii) the qualification or registration of the Notes
and the Guarantees for offer and sale under the securities or Blue Sky
laws of the several states (including, without limitation, the cost of
printing and mailing a preliminary and final Blue Sky Memorandum and
the reasonable fees and disbursements of counsel for the Initial
Purchaser relating thereto), (iv) furnishing such copies of the
Preliminary Offering Memorandum and the Offering Memorandum, and all
amendments and supplements thereto, as may be requested for use in
connection with Exempt Resales, (v) the preparation of certificates for
the Notes and the Guarantees (including, without limitation, printing
and engraving thereof), (vi) the fees, disbursements and expenses of
the Issuers' counsel and accountants, (vii) all fees and expenses
(including fees and expenses of counsel) of the Issuers in connection
with the approval of the Notes by DTC for "book-entry" transfer, (viii)
rating the Notes by rating agencies, (ix) the reasonable fees and
expenses of the Trustee and its counsel, (x) the performance by the
Issuers of their other obligations under this Agreement and the other
Operative Documents and (xi) "roadshow" travel and other expenses
incurred by the Company in connection with the marketing and sale of
the Notes.
(g) To use the proceeds from the sale of the Series A Notes in
the manner described in the Offering Memorandum under the caption "Use
of Proceeds."
(h) Not to voluntarily claim, and to resist actively any
attempts to claim, the benefit of any usury laws against the holders of
any Notes.
(i) To do and perform all things required to be done and
performed under this Agreement by them prior to or after the Closing
Date and to satisfy all conditions precedent on their part to the
delivery of the Series A Notes and the Guarantees.
(j) Not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Act)
that would be integrated with the sale of the Series A Notes in a
manner that would require the registration under the Act of the sale to
the Initial Purchaser or the Eligible Purchasers of the Series A Notes
or to take any other action that would result in the Exempt Resales not
being exempt from registration under the Act.
(k) For so long as any of the Notes remain outstanding and
during any period in which the Issuers and the Guarantors are not
subject to Section 13 or 15(d) of the Securities Exchange Act of 1934,
as amended (the "EXCHANGE ACT"), to make available to any holder or
beneficial owner of Series A Notes in connection with any sale thereof
and any prospective purchaser of such Notes from such holder or
beneficial owner, the information required by Rule 144A(d)(4) under the
Act.
(l) To cause the Exchange Offer to be made in the appropriate
form to permit registered Series B Notes to be offered in exchange for
the Series A Notes and to comply with all applicable federal and state
securities laws in connection with the Exchange Offer.
(m) To comply with all of their agreements set forth in the
Registration Rights
5
<PAGE> 7
Agreement and all agreements set forth in the representation letters of
the Issuers to DTC relating to the approval of the Notes by DTC for
"book-entry" transfer.
(n) To effect the inclusion of the Notes in PORTAL and to
obtain approval of the Series A Notes by DTC for "book-entry" transfer.
(o) During a period of five years following the Closing Date,
to deliver without charge to the Initial Purchaser, as it may
reasonably request, promptly upon their becoming available, copies of
(i) all reports or other publicly available information that such
Issuer shall mail or otherwise make available to its public
securityholders and (ii) all reports, financial statements and proxy or
information statements filed by such Issuer with the Commission or any
national securities exchange and such other publicly available
information concerning such Issuer or any of its subsidiaries,
including without limitation, press releases.
(p) Prior to the Closing Date, to furnish to the Initial
Purchaser, as soon as they have been prepared in the ordinary course by
either Issuer, copies of any unaudited interim financial statements for
any period subsequent to the periods covered by the financial
statements appearing in the Offering Memorandum.
(q) Not to take, directly or indirectly, any action designed
to, or that might reasonably be expected to, cause or result in
stabilization or manipulation of the price of any security of either of
the Issuers to facilitate the sale or resale of the Notes. Except as
permitted by the Act, neither Issuer will distribute any (i)
preliminary offering memorandum, including, without limitation, the
Preliminary Offering Memorandum, (ii) offering memorandum, including,
without limitation, the Offering Memorandum, or (iii) other offering
material in connection with the offering and sale of the Notes.
(r) To cause the Guarantors to authorize, execute and deliver
the Registration Rights Agreement, the Guarantees and the Indenture on
the Closing Date.
(s) To use their best efforts to do and perform all things
required or necessary to be done and performed under this Agreement
prior to the Closing Date and to satisfy all conditions precedent to
the delivery of the Series A Notes and the Guarantees.
5. REPRESENTATIONS AND WARRANTIES. (a) The Issuers represent and
warrant to the Initial Purchaser that:
(i) The Preliminary Offering Memorandum as of its date does
not, and the Offering Memorandum as of its date and (as amended or
supplemented) as of the Closing Date does not and will not, and any
supplement or amendment to them will not, contain any untrue statement
of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading, except that the representations and warranties contained in
this paragraph shall not apply to statements in or omissions from the
Preliminary Offering Memorandum and the Offering Memorandum (or any
supplement or amendment thereto) made in reliance upon and in
conformity with information relating to the Initial Purchaser furnished
to the Issuers in writing by the Initial Purchaser expressly for use
therein. No stop order preventing the use of the Preliminary Offering
Memorandum or the Offering Memorandum, or any amendment or supplement
thereto, or any order asserting that any of the transactions
contemplated by this Agreement are subject to the registration
requirements of the Act, has been issued.
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(ii) The Company (A) is a Massachusetts business trust duly
formed, validly existing and in good standing under the laws of
Massachusetts, (B) has all requisite trust power and authority to carry
on its business as it is currently being conducted and to own, lease
and operate its properties, and (C) is duly qualified and is in good
standing as a foreign business trust, authorized to do business in each
jurisdiction which maintains a procedure for the qualification of
business trusts and in which the nature of its business or its
ownership or leasing of property requires such qualification except
where the failure to be so qualified could not reasonably be expected
to (x) result, individually or in the aggregate, in a material adverse
effect on the properties, business, results of operations, condition
(financial or otherwise), affairs or prospects of the Company and its
subsidiaries, taken as a whole, (y) interfere with or adversely affect
the issuance or marketability of the Notes or the issuance of the
Guarantees pursuant hereto or (z) in any manner draw into question the
validity of this Agreement or any other Operative Document or the
transactions described in the Offering Memorandum under the caption
"Use of Proceeds" (any of the events set forth in clauses (x), (y) or
(z), a "MATERIAL ADVERSE EFFECT").
(iii) Each of the Company's subsidiaries (A) has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation, (B) has all
requisite corporate power and authority to carry on its business as it
is currently being conducted and as described in the Offering
Memorandum and to own, lease and operate its properties, and (C) is
duly qualified and in good standing as a foreign corporation,
authorized to do business in each jurisdiction in which the nature of
its business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified could not
reasonably be expected to have a Material Adverse Effect.
(iv) The Company's only subsidiaries are Finance and UNICCO
Facility Services Canada Company; after giving effect to the
Refinancing, the Company will have no other subsidiaries other than the
Guarantors.
(v) All of the outstanding capital stock of each subsidiary of
the Company is owned directly or indirectly by the Company, free and
clear of any security interest, claim, lien, limitation on voting
rights or encumbrance, except for any such security interest, claim,
lien, limitation on voting rights or encumbrance pursuant to the
Amended Credit Facility; and all such securities have been duly
authorized, validly issued, and are fully paid and nonassessable and
were not issued in violation of any preemptive or similar rights.
(vi) Other than pursuant to the Refinancing, there are not
currently any outstanding subscriptions, rights, warrants, calls,
commitments of sale or options to acquire, or instruments convertible
into or exchangeable for, any capital stock or other equity interest of
the Company's subsidiaries.
(vii) When the Series A Notes and the Guarantees are issued
and delivered pursuant to this Agreement, no Series A Note or Guarantee
will be of the same class (within the meaning of Rule 144A under the
Act) as securities of either of the Issuers or of any of the Guarantors
that are listed on a national securities exchange registered under
Section 6 of the Exchange Act or that are quoted in a United States
automated inter-dealer quotation system.
(viii) Each of the Issuers and the Guarantors has all
requisite corporate or trust power and authority, as applicable, to
execute, deliver and perform its obligations under this Agreement and
each of the other Operative Documents to which it is a party and to
consummate the
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<PAGE> 9
transactions contemplated hereby and thereby, including, without
limitation, the corporate or trust power and authority, as applicable,
to issue, sell and deliver the Notes and to issue and deliver the
Guarantees as provided herein and therein.
(ix) This Agreement has been duly and validly authorized,
executed and delivered by each of the Issuers and is the legal, valid
and binding agreement of each of the Issuers, enforceable against each
of them in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization or similar laws
affecting the rights of creditors generally and subject to general
principles of equity.
(x) The Indenture has been duly and validly authorized by each
of the Issuers and the Guarantors and, when duly executed and delivered
by each of the Issuers and the Guarantors, will be the legal, valid and
binding obligation of each of them, enforceable against each of them in
accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization or similar laws
affecting the rights of creditors generally and subject to general
principles of equity. On the Closing Date, the Indenture will conform
in all material respects to the requirements of the Trust Indenture Act
of 1939, as amended (the "TRUST INDENTURE ACT"), and the rules and
regulations of the Commission applicable to an indenture which is
qualified thereunder. The Offering Memorandum contains a summary of the
material terms of the Indenture, which is accurate in all material
respects.
(xi) The Registration Rights Agreement has been duly and
validly authorized by each of the Issuers and the Guarantors and, when
duly executed and delivered by each of the Issuers and the Guarantors,
will be the legal, valid and binding obligation of each of the Issuers
and the Guarantors, enforceable against each of them in accordance with
its terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization or similar laws affecting the rights of
creditors generally and subject to general principles of equity. The
Offering Memorandum contains a summary of the material terms of the
Registration Rights Agreement, which is accurate in all material
respects.
(xii) The Amended Credit Facility has been duly and validly
authorized by each of the Company and its subsidiaries party thereto
and, when duly executed and delivered by each of the Company and such
subsidiaries, will be the legal, valid and binding obligation of each
of the Company and such subsidiaries, enforceable against each of them
in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization or similar laws
affecting the rights of creditors generally and subject to general
principles of equity. The Offering Memorandum contains a summary of the
material terms of the Amended Credit Facility, which is accurate in all
material respects.
(xiii) The Series A Notes have been duly and validly
authorized by each of the Issuers for issuance and sale to the Initial
Purchaser pursuant to this Agreement and, when issued and authenticated
in accordance with the terms of the Indenture and delivered against
payment therefor in accordance with the terms hereof and thereof, will
be the legal, valid and binding obligations of each of the Issuers,
enforceable against each of them in accordance with their terms and
entitled to the benefits of the Indenture, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization or
similar laws affecting the rights of creditors generally and subject to
general principles of equity. The Offering Memorandum contains a
summary of the material terms of the Notes, which is accurate in all
material respects.
(xiv) The Series B Notes have been duly and validly authorized
for issuance by each of
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<PAGE> 10
the Issuers and, when issued and authenticated in accordance with the
terms of the Exchange Offer and the Indenture, will be the legal, valid
and binding obligations of the each of Issuers, enforceable against
each of them in accordance with their terms and entitled to the
benefits of the Indenture, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization or similar laws
affecting the rights of creditors generally and subject to general
principles of equity.
(xv) The Guarantees of the Series A Notes have been duly and
validly authorized by each of the Guarantors and, when executed and
delivered in accordance with the terms of the Indenture and when the
Series A Notes have been issued and authenticated in accordance with
the terms of the Indenture and delivered against payment therefor in
accordance with the terms hereof and thereof, will be the legal, valid
and binding obligations of each of the Guarantors, enforceable against
each of them in accordance with their terms and entitled to the
benefits of the Indenture, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization or similar laws
affecting the rights of creditors generally and subject to general
principles of equity. The Offering Memorandum contains a summary of the
material terms of the Guarantees, which is accurate in all material
respects.
(xvi) The Guarantees of the Series B Notes have been duly and
validly authorized by each of the Guarantors and, when executed and
delivered in accordance with the terms of the Indenture and when the
Series B Notes have been issued and authenticated in accordance with
the terms of the Exchange Offer and the Indenture, will be the legal,
valid and binding obligations of each of the Guarantors, enforceable
against each of them in accordance with their terms and entitled to the
benefits of the Indenture, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization or similar laws
affecting the rights of creditors generally and subject to general
principles of equity.
(xvii) Each of the Company and its subsidiaries is not and,
after giving effect to the Offering, the Amended Credit Facility, the
amendment of the Note Purchase Agreement with Massachusetts Capital
Resource Company (the "MCRC AMENDMENT") and the Refinancing, will not
be, (A) in violation of its charter or bylaws or other organizational
documents, as applicable, (B) in default in the performance of any
bond, debenture, note, indenture, mortgage, deed of trust or other
agreement or instrument to which it is a party or by which it is bound
or to which any of its properties is subject, which singly or in the
aggregate, could reasonably be expected to have a Material Adverse
Effect, or (C) in violation of any local, state, federal or foreign
law, statute, ordinance, rule, regulation, requirement, judgment or
court decree (including, without limitation, environmental laws,
statutes, ordinances, rules, regulations, judgments or court decrees)
applicable to it or any of its subsidiaries or any of its or their
assets or properties (whether owned or leased), which singly or in the
aggregate, could reasonably be expected to have a Material Adverse
Effect. To the best knowledge of the Issuers, there exists no condition
that, with notice, the passage of time or otherwise, would constitute a
default under any such document or instrument.
(xviii) None of (A) the execution, delivery or performance by
either of the Issuers or any of the Guarantors of this Agreement or any
of the other Operative Documents to which it is a party, (B) the
consummation of the Refinancing, (C) the issuance and sale of the Notes
and the issuance of the Guarantees and (D) consummation by the Issuers
of the transactions described in the Offering Memorandum under the
caption "Use of Proceeds," violates, conflicts with or constitutes a
breach of any of the terms or provisions of, or, after giving effect to
the Amended Credit Facility, the MCRC Amendment and the Refinancing,
will violate, conflict with or constitute a breach of any of the terms
or provisions of, or a default under (or an event that with
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<PAGE> 11
notice or the lapse of time, or both, would constitute a default), or
require consent under, or result in the imposition of a lien or
encumbrance on any properties of the Company or any of its
subsidiaries, or an acceleration of any indebtedness of the Company or
any of its subsidiaries pursuant to, (1) the charter or bylaws or other
organizational documents, as applicable, of the Company or any of its
subsidiaries, (2) any bond, debenture, note, indenture, mortgage, deed
of trust or other agreement or instrument to which the Company or any
of its subsidiaries is a party or by which any of them or their
property is or may be bound, (3) any statute, rule or regulation
applicable to the Company or any of its subsidiaries or any of their
assets or properties or (4) any judgment, order or decree of any court
or governmental agency or authority having jurisdiction over the
Company or any of its subsidiaries or any of their assets or
properties. No consent, approval, authorization or order of, or filing,
registration, qualification, license or permit of or with, (A) any
court or governmental agency, body or administrative agency or (B) any
other person is required for (1) the execution, delivery and
performance by either of the Issuers or any of the Guarantors of this
Agreement or any of the other Operative Documents to which it is a
party, (2) the Refinancing or (3) the issuance and sale of the Notes
and the issuance of the Guarantees and the transactions contemplated
hereby and thereby, except such as have been or will be obtained and
made on or prior to the Closing Date (or, in the case of the
Registration Rights Agreement, will be obtained and made under the Act,
the Trust Indenture Act, and state securities or Blue Sky laws and
regulations).
(xix) There is and, after giving effect to the Refinancing,
will be (A) no action, suit, investigation or proceeding before or by
any court, arbitrator or governmental agency, body or official,
domestic or foreign, now pending or, to the best knowledge of the
Issuers, threatened or contemplated to which the Company or any of its
subsidiaries is or may be a party or to which the business or property
of the Company or any of its subsidiaries, is or, after giving effect
to the Refinancing, may be subject, (B) no statute, rule, regulation or
order that has been enacted, adopted or issued by any governmental
agency or that has been proposed by any governmental body and (C) no
injunction, restraining order or order of any nature by a federal or
state court or foreign court of competent jurisdiction to which the
Company or any of its subsidiaries is or may be subject or to which the
business, assets or property of the Company or any of its subsidiaries
is or may be subject, that, in the case of clauses (A), (B) and (C)
above, (1) is required to be disclosed in the Preliminary Offering
Memorandum and the Offering Memorandum and that is not so disclosed, or
(2) could reasonably be expected to result in a Material Adverse
Effect.
(xx) No action has been taken and no statute, rule, regulation
or order has been enacted, adopted or issued by any governmental agency
that prevents the issuance of the Notes or the Guarantees or prevents
or suspends the use of the Offering Memorandum; no injunction,
restraining order or order of any nature by a federal or state court of
competent jurisdiction has been issued that prevents the issuance of
the Notes or the Guarantees or prevents or suspends the sale of the
Notes in any jurisdiction referred to in Section 4(e) hereof; and every
request of any securities authority or agency of any jurisdiction for
additional information has been complied with in all material respects.
(xxi) The Issuers have delivered to the Initial Purchaser true
and correct copies of all documents and agreements related to the
Refinancing and the Amended Credit Facility, including all amendments,
alterations, modifications or waivers thereto and all exhibits or
schedules thereto.
(xxii) There is and, after giving effect to the Refinancing,
except as could not reasonably be expected to result in a Material
Adverse Effect, will be (A) no unfair labor practice complaint pending
against the Company or any of its subsidiaries nor, to the best
knowledge of the Issuers,
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threatened against any of them, before the National Labor Relations
Board, any state or local labor relations board or any foreign labor
relations board, and no grievance or arbitration proceeding arising out
of or under any collective bargaining agreement is so pending against
the Company or any of its subsidiaries or, to the best knowledge of the
Issuers, threatened against any of them, (B) no strike, labor dispute,
slowdown or stoppage pending against the Company or any of its
subsidiaries nor, to the best knowledge of the Issuers, threatened
against the Company or any of its subsidiaries and (C) to the best
knowledge of the Issuers, no union representation question existing
with respect to the employees of the Company or any of its
subsidiaries. To the best knowledge of the Issuers, no collective
bargaining organizing activities are taking place with respect to the
Company or any of its subsidiaries, except those activities that could
not reasonably be expected to have a Material Adverse Effect. None of
the Company or any of its subsidiaries has violated (A) any federal,
state or local law or foreign law relating to discrimination in hiring,
promotion or pay of employees, (B) any applicable wage or hour laws or
(C) any provision of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or the rules and regulations thereunder,
except those violations that could not reasonably be expected to have a
Material Adverse Effect.
(xxiii) None of the Company or any of its subsidiaries has
violated any foreign, federal, state or local law or regulation
relating to the protection of human health and safety, the environment
or hazardous or toxic substances or wastes, pollutants or contaminants
("ENVIRONMENTAL LAWS") which violation could reasonably be expected to
have a Material Adverse Effect.
(xxiv) There is no alleged liability, nor, to the best
knowledge of the Issuers, any reasonable basis for liability
(including, without limitation, alleged or potential liability for
investigatory costs, cleanup costs, governmental response costs,
natural resource damages, property damages, personal injuries or
penalties) of the Company or any of its subsidiaries arising out of,
based on or resulting from (A) the presence or release into the
environment of any Hazardous Material (as defined) at any location,
whether or not owned by the Company or such subsidiary, as the case may
be, or (B) any violation or alleged violation of any Environmental Law,
which alleged or potential liability is required to be disclosed in the
Offering Memorandum, other than as disclosed therein, or could
reasonably be expected to have a Material Adverse Effect. The term
"HAZARDOUS MATERIAL" means (i) any "hazardous substance" as defined by
the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, (ii) any "hazardous waste" as defined by the
Resource Conservation and Recovery Act, as amended, (iii) any petroleum
or petroleum product, (iv) any polychlorinated biphenyl, and (v) any
pollutant or contaminant or hazardous, dangerous or toxic chemical,
material, waste or substance regulated under or within the meaning of
any other law relating to protection of human health or the environment
or imposing liability or standards of conduct concerning any such
chemical material, waste or substance.
(xxv) Each of the Company and its subsidiaries has and, after
giving effect to the Refinancing, will have such permits, licenses,
franchises and authorizations of governmental or regulatory authorities
("PERMITS"), including, without limitation, under any applicable
Environmental Laws, as are necessary to own, lease and operate their
respective properties and to conduct their businesses except where the
failure to have such permits could not reasonably be expected to have a
Material Adverse Effect; each of the Company and its subsidiaries has
fulfilled and performed all of its obligations with respect to such
permits and no event has occurred which allows, or after notice or
lapse of time would allow, revocation or termination thereof or results
in any other material impairment of the rights of the holder of any
such permit; and such permits
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contain no restrictions that are materially burdensome to the Company
or such subsidiary, as the case may be.
(xxvi) Each of the Company and its subsidiaries has and, after
giving effect to the Refinancing, will have (A) good and marketable
title to all of the properties and assets described in the Offering
Memorandum as owned by it, free and clear of all liens, charges,
encumbrances and restrictions (except for Permitted Liens (as defined
in the Indenture) and taxes not yet payable), (B) peaceful and
undisturbed possession under all material leases to which any of them
is a party as lessee and each of which lease is valid and binding and
no default exists thereunder, except for defaults that could not
reasonably be expected to have a Material Adverse Effect, (C) all
licenses, certificates, permits, authorizations, approvals, franchises
and other rights from, and has made all declarations and filings with,
all federal, state and local authorities, all self-regulatory
authorities and all courts and other tribunals (each, an
"AUTHORIZATION") necessary to engage in the business conducted by any
of them in the manner described in the Offering Memorandum and (D) no
reason to believe that any governmental body or agency is considering
limiting, suspending or revoking any such Authorization. All such
Authorizations are and, after giving effect to the Refinancing, will be
valid and in full force and effect and each of the Company and its
subsidiaries is in compliance in all material respects with the terms
and conditions of all such Authorizations and with the rules and
regulations of the regulatory authorities having jurisdiction with
respect thereto. All material leases to which the Company or any of its
subsidiaries is a party are valid and binding and no default by the
Company or such subsidiary, as the case may be, has occurred and is
continuing thereunder and, to the best knowledge of the Issuers, no
material defaults by the landlord are existing under any such lease,
except those defaults that could not reasonably be expected to have a
Material Adverse Effect.
(xxvii) Each of the Company and its subsidiaries owns,
possesses or has the right to employ all patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential
information, software, systems or procedures), trademarks, service
marks and trade names, inventions, computer programs, technical data
and information (collectively, the "INTELLECTUAL PROPERTY") presently
employed by it in connection with the businesses now operated by it or
that are proposed to be operated by it free and clear of and without
violating any right, claimed right, charge, encumbrance, pledge,
security interest, restriction or lien of any kind of any other person,
and none of the Company or any of its subsidiaries has received any
notice of infringement of or conflict with asserted rights of others
with respect to any of the foregoing. The use of the Intellectual
Property in connection with the business and operations of the Company
or any of its subsidiaries does not infringe on the rights of any
person, except as could not reasonably be expected to have a Material
Adverse Effect.
(xxviii) All material tax returns required to be filed by the
Company or any of its subsidiaries in all jurisdictions have been so
filed. All material taxes, including withholding taxes, penalties and
interest, assessments, fees and other charges due or claimed to be due
from such entities or that are due and payable have been paid, other
than those being contested in good faith and for which adequate
reserves have been provided or those currently payable without penalty
or interest. To the knowledge of the Issuers, there are no material
proposed additional tax assessments against the Company or any of its
subsidiaries, or the assets or property of the Company or any of its
subsidiaries, except those tax assessments for which adequate reserves
have been established.
(xxix) None of the Company or any of its subsidiaries is and,
after giving effect to the
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Refinancing, will be an "investment company" or a company "controlled"
by an "investment company" within the meaning of the Investment Company
Act of 1940, as amended (the "INVESTMENT COMPANY ACT").
(xxx) There are no holders of securities of the Company or any
of its subsidiaries who, by reason of the execution by the Issuers and
the Guarantors of this Agreement or any other Operative Document or the
consummation by the Issuers and the Guarantors of the transactions
contemplated hereby and thereby, have the right to request or demand
that the Company or any of its subsidiaries register under the Act or
analogous foreign laws and regulations securities held by them.
(xxxi) Each of the Company and its subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that: (A) transactions are executed in accordance with
management's general or specific authorizations; (B) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain accountability for assets; (C) access to assets is permitted
only in accordance with management's general or specific authorization;
and (D) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect thereto.
(xxxii) Each of the Company and its subsidiaries maintains
insurance covering its properties, operations, personnel and
businesses, insuring against such losses and risks as are consistent
with industry practice to protect the Company and its subsidiaries and
their respective businesses. None of the Company or any of its
subsidiaries has received notice from any insurer or agent of such
insurer that substantial capital improvements or other expenditures
will have to be made in order to continue such insurance.
(xxxiii) None of the Company or any of its subsidiaries has
(A) taken, directly or indirectly, any action designed to, or that
might reasonably be expected to, cause or result in stabilization or
manipulation of the price of any security of the Company or any of its
subsidiaries to facilitate the sale or resale of the Notes or (B) since
the date of the Preliminary Offering Memorandum (1) sold, bid for,
purchased or paid any person any compensation for soliciting purchases
of the Notes or (2) paid or agreed to pay to any person any
compensation for soliciting another to purchase any other securities of
the Company or any of its subsidiaries.
(xxxiv) No registration under the Act of the Series A Notes is
required for the sale of the Series A Notes to the Initial Purchaser as
contemplated hereby or for the Exempt Resales assuming (A) that the
purchasers who buy the Series A Notes in the Exempt Resales are
Eligible Purchasers and (B) the accuracy of the Initial Purchaser's
representations regarding the absence of general solicitation in
connection with the sale of Series A Notes to the Initial Purchaser and
the Exempt Resales contained herein. No form of general solicitation or
general advertising (as defined in Regulation D under the Act) was used
by either of the Issuers or any of their respective representatives
(other than the Initial Purchaser, as to which the Issuers make no
representation or warranty) in connection with the offer and sale of
any of the Series A Notes or in connection with Exempt Resales,
including, but not limited to, articles, notices or other
communications published in any newspaper, magazine, or similar medium
or broadcast over television or radio, or any seminar or meeting whose
attendees have been invited by any general solicitation or general
advertising. No securities of the same class as the Notes or the
Guarantees have been issued and sold by the Company or any of its
subsidiaries within the six-month period immediately prior to the date
hereof.
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(xxxv) The execution and delivery of this Agreement, the other
Operative Documents and the sale of the Series A Notes to be purchased
by Eligible Purchasers will not involve any prohibited transaction
within the meaning of Section 406 of ERISA or Section 4975 of the
Internal Revenue Code of 1986. The representation made by the Issuers
in the preceding sentence is made in reliance upon and subject to the
accuracy of, and compliance with, the representations and covenants
made or deemed made by Eligible Purchasers as set forth in the Offering
Memorandum under the caption "Notice to Investors."
(xxxvi) Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its date, and each amendment or supplement
thereto, as of its date, contains the information specified in, and
meets the requirements of, Rule 144A(d)(4) under the Act.
(xxxvii) Prior to the effectiveness of any Registration
Statement, the Indenture is not required to be qualified under the
Trust Indenture Act.
(xxxviii) None of the Issuers or any of their respective
affiliates or any person acting on its or their behalf (other than the
Initial Purchaser, as to whom the Issuers make no representation) has
engaged or will engage in any directed selling efforts within the
meaning of Regulation S with respect to the Series A Notes or the
Guarantees.
(xxxix) The Series A Notes offered and sold in reliance on
Regulation S have been and will be offered and sold by the Issuers only
in offshore transactions.
(xl) The sale of the Series A Notes pursuant to Regulation S
is not part of a plan or scheme by the Issuers to evade the
registration provisions of the Act.
(xli) The Issuers and their respective affiliates and all
persons acting on their behalf (other than the Initial Purchaser, as to
whom the Issuers make no representation) have complied with and will
comply with the offering restrictions requirements of Regulation S in
connection with the offering of the Series A Notes outside the United
States and, in connection therewith, the Preliminary Offering
Memorandum and the Offering Memorandum contains or will contain the
disclosure required by Rule 902(h).
(xlii) The Series A Notes sold in reliance on Regulation S
will be represented upon issuance by a temporary global security that
may not be exchanged for definitive securities until the expiration of
the 40-day restricted period referred to in Rule 903(c)(3) of the Act
and only upon certification of beneficial ownership of such Series A
Notes by non-U.S. persons or U.S. persons who purchased such Series A
Notes in transactions that were exempt from the registration
requirements of the Act.
(xliii) Subsequent to the respective dates as of which
information is given in the Offering Memorandum and up to the Closing
Date, except as set forth in the Offering Memorandum, (A) none of the
Company or any of its subsidiaries has incurred any liabilities or
obligations, direct or contingent, which are or, after giving effect to
the Refinancing, will be material, individually or in the aggregate, to
the Company and its subsidiaries, taken as a whole, nor entered into
any transaction not in the ordinary course of business, (B) there has
not been any change or development which, singly or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect and
(C) there has been no dividend or distribution of any kind declared,
paid or made by the Issuers on any class of their capital stock other
than Tax Distributions (as
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<PAGE> 16
defined in the Offering Memorandum).
(xliv) None of the execution, delivery and performance of this
Agreement, the issuance and sale of the Notes, the issuance of the
Guarantees, the application of the proceeds from the issuance and sale
of the Notes and the consummation of the transactions contemplated
thereby as set forth in the Offering Memorandum, will violate
Regulations G, T, U or X promulgated by the Board of Governors of the
Federal Reserve System or analogous foreign laws and regulations.
(xlv) The accountants who have certified or will certify the
financial statements included or to be included as part of the Offering
Memorandum were, as of the respective dates of their reports,
independent accountants as required by the Act. The historical
financial statements of the Company, together with related schedules
and notes thereto, comply as to form in all material respects with the
requirements applicable to registration statements on Form S-1 under
the Act and present fairly in all material respects the financial
position and results of operations of the Company and its subsidiaries
at the dates and for the periods indicated. Such financial statements
have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods
presented. The pro forma financial statements included in the Offering
Memorandum have been prepared on a basis consistent with such
historical statements of the Company, except for the pro forma
adjustments specified therein, and give effect to assumptions made on a
reasonable basis and present fairly in all material respects the
historical and proposed transactions contemplated by this Agreement and
the other Operative Documents; and such pro forma financial statements
comply as to form in all material respects with the requirements
applicable to pro forma financial statements included in registration
statements on Form S-1 under the Act, except as expressly stated
therein. The other financial and statistical information and data
included in the Offering Memorandum derived from the historical and pro
forma financial statements, are accurately presented in all material
respects and prepared on a basis consistent with the financial
statements, historical and pro forma, included in the Offering
Memorandum and the books and records of the Company and its
subsidiaries.
(xlvi) None of the Issuers intends to, nor does it believe
that it will, incur debts beyond its ability to pay such debts as they
mature. The present fair saleable value of the assets of each of the
Issuers exceeds the amount that will be required to be paid on or in
respect of its existing debts and other liabilities (including
contingent liabilities) as they become absolute and matured. The assets
of each of the Issuers do not constitute unreasonably small capital to
carry out its business as conducted or as proposed to be conducted.
Upon the issuance of the Notes and consummation of the Refinancing, the
present fair saleable value of the assets of each of the Issuers will
exceed the amount that will be required to be paid on or in respect of
its existing debts and other liabilities (including contingent
liabilities) as they become absolute and matured. Upon the issuance of
the Notes and the consummation of the Refinancing, the assets of each
of the Issuers will not constitute unreasonably small capital to carry
out its business as now conducted, including the capital needs of each
of the Issuers, taking into account the projected capital requirements
and capital availability.
(xlvii) Except pursuant to this Agreement, there are no
contracts, agreements or understandings between the Company and its
subsidiaries and any other person that would give rise to a valid claim
against the Company or any of its subsidiaries or the Initial Purchaser
for a brokerage commission, finder's fee or like payment in connection
with the issuance, purchase and sale of the Notes or the issuance of
the Guarantees.
(xlviii) There exist no conditions that would constitute a
default (or an event which with
15
<PAGE> 17
notice or the lapse of time, or both, would constitute a default) under
any of the Operative Documents.
(xlix) Each of the Company and its subsidiaries, to their
knowledge, has complied with all of the provisions of Florida H.B.
1771, codified as Section 517.075 of the Florida statutes, and the
Company and its subsidiaries are not doing business with the Government
of Cuba or with any person or any affiliate located in Cuba.
(l) Each certificate signed by any officer of the Issuers or
any of the Guarantors and delivered to the Initial Purchaser or counsel
for the Initial Purchaser shall be deemed to be a representation and
warranty by such Issuer or such Guarantor, as the case may be, to the
Initial Purchaser as to the matters covered thereby.
The Issuers acknowledge that the Initial Purchaser and, for
purposes of the opinions to be delivered to the Initial Purchaser pursuant to
Section 8 hereof, counsel for the Issuers and counsel for the Initial Purchaser,
will rely upon the accuracy and truth of the foregoing representations and
hereby consent to such reliance.
(b) The Initial Purchaser represents, warrants and covenants to the
Issuers and agrees that:
(i) Such Initial Purchaser is a QIB, with such knowledge and
experience in financial and business matters as are necessary in order
to evaluate the merits and risks of an investment in the Series A
Notes.
(ii) Such Initial Purchaser (A) is not acquiring the Series A
Notes with a view to any distribution thereof that would violate the
Act or the securities laws of any state of the United States or any
other applicable jurisdiction and (B) will be reoffering and reselling
the Series A Notes only to QIBs in reliance on the exemption from the
registration requirements of the Act provided by Rule 144A, to
Accredited Investors in a private placement exempt from the
registration requirements of the Act and in offshore transactions in
reliance upon Regulation S under the Act.
(iii) No form of general solicitation or general advertising
(within the meaning of Regulation D under the Act) has been or will be
used by such Initial Purchaser or any of its representatives in
connection with the offer and sale of any of the Series A Notes,
including, but not limited to, articles, notices or other
communications published in any newspaper, magazine, or similar medium
or broadcast over television or radio, or any seminar or meeting whose
attendees have been invited by any general solicitation or general
advertising.
(iv) The Initial Purchaser agrees that, in connection with the
Exempt Resales, it will solicit offers to buy the Series A Notes only
from, and will offer to sell the Series A Notes only to, Eligible
Purchasers. The Initial Purchaser further (A) agrees that it will offer
to sell the Series A Notes only to, and will solicit offers to buy the
Series A Notes only from (1) Eligible Purchasers that the Initial
Purchaser reasonably believes are QIBs, (2) Accredited Investors who
make the representations contained in, and execute and return to the
Initial Purchaser, a certificate in the form of ANNEX A attached to the
Offering Memorandum and (3) Reg S Investors, (B) in the case of such
QIBs, such Accredited Investors and such Reg S Investors, acknowledges
and agrees that such Series A Notes will not have been registered under
the Act and may be resold, pledged or otherwise transferred only (x)(I)
to a person whom the seller reasonably believes is a QIB purchasing for
its own account or for the account of a QIB in a transaction meeting
the
16
<PAGE> 18
requirements of Rule 144A, (II) in an offshore transaction (as defined
in Rule 902 under the Act) meeting the requirements of Rule 904 under
the Act, (III) in a transaction meeting the requirements of Rule 144
under the Act, (IV) to an Accredited Investor that, prior to such
transfer, furnishes the Initial Purchaser a signed letter containing
certain representations and agreements relating to the registration of
transfer of such Series A Notes (the form of which is substantially the
same as ANNEX A to the Offering Memorandum) and, if such transfer is in
respect of an aggregate principal amount of Series A Notes less than
$250,000, an opinion of counsel acceptable to the Issuers that such
transfer is in compliance with the Act or (V) in accordance with
another exemption from the registration requirements of the Act (and
based upon an opinion of counsel if the Issuers so request), (y) to the
Issuers, (z) pursuant to an effective registration statement under the
Act and, in each case, in accordance with any applicable securities
laws of any state of the United States or any other applicable
jurisdiction and (C) acknowledges that it will, and will notify each
subsequent holder that it is required to, notify any purchaser of the
security evidenced thereby of the resale restrictions set forth in (B)
above.
(v) Such Initial Purchaser agrees that it has offered the
Series A Notes and will offer and sell the Series A Notes (A) as part
of its distribution at any time and (B) otherwise until 40 days after
the later of the commencement of the offering of the Series A Notes
pursuant hereto and the Closing Date, only in accordance with Rule 903
of Regulation S or another exemption from the registration requirements
of the Act. Such Initial Purchaser agrees that, during such 40-day
restricted period, it will not cause any advertisement with respect to
the Series A Notes (including any "tombstone advertisement") to be
published in any newspaper or periodical or posted in any public place
and will not issue any circular relating to the Series A Notes, except
such advertisements as are permitted by and include the statements
required by Regulation S.
(vi) Such Initial Purchaser agrees that it has not offered or
sold and will not offer or sell the Series A Notes sold pursuant hereto
in reliance on Regulation S (A) as part of its distribution at any time
and (B) otherwise until 40 days after the later of the commencement of
the offering of the Series A Notes pursuant hereto and the Closing
Date, to a U.S. person (as defined in Rule 902 of the Act) or for the
account or benefit of a U.S. person (other than a distributor (as
defined in Rule 902 of the Act)).
(vii) Such Initial Purchaser agrees that, at or prior to
confirmation of a sale of Series A Notes by it to any distributor,
dealer or person receiving a selling concession, fee or other
remuneration during the 40-day restricted period referred to in Rule
903(c)(3) under the Act, it will send to such distributor, dealer or
person receiving a selling concession, fee or other remuneration a
confirmation or notice to substantially the following effect:
"The Series A Notes covered hereby have not been
registered under the U.S. Securities Act of 1933, as
amended (the "Securities Act"), and may not be
offered and sold within the United States or to, or
for the account or benefit of, U.S. persons (i) as
part of your distribution at any time or (ii)
otherwise until 40 days after the later of the
commencement of the offering and the Closing Date,
except in either case in accordance with Regulation S
under the Act (or Rule 144A or to Accredited
Investors in transactions that are exempt from the
registration requirements of the Act), and in
connection with any subsequent sale by you of the
Series A Notes covered hereby in reliance on
Regulation S during the period referred to above to
any distributor, dealer or person receiving a selling
concession, fee or other remuneration, you must
deliver a notice to substantially the foregoing
effect. Terms used above have the meanings assigned
17
<PAGE> 19
to them in Regulation S."
(viii) Such Initial Purchaser agrees that the Series A Notes
offered and sold in reliance on Regulation S will be represented upon
issuance by a global security that may not be exchanged for definitive
securities until the expiration of the 40-day restricted period
referred to in Rule 903(c)(3) of the Act and only upon certification of
beneficial ownership of such Series A Notes by non-U.S. persons or U.S.
persons who purchased such Series A Notes in transactions that were
exempt from the registration requirements of the Act.
The Initial Purchaser understands that the Issuers and, for
purposes of the opinions to be delivered to the Initial Purchaser pursuant to
Section 8 hereof, counsel for the Issuers and counsel for the Initial Purchaser
will rely upon the accuracy and truth of the foregoing representations and
hereby consents to such reliance.
6. INDEMNIFICATION.
(a) The Issuers agree, and will cause the Guarantors to agree,
to indemnify and hold harmless (i) the Initial Purchaser, (ii) each
person, if any, who controls the Initial Purchaser within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act and (iii)
the officers, directors, partners, employees, representatives and
agents of the Initial Purchaser or any controlling person to the
fullest extent lawful, from and against any and all losses,
liabilities, claims, damages and expenses whatsoever (including but not
limited to reasonable attorneys' fees and any and all expenses
whatsoever incurred in investigating, preparing or defending against
any investigation or litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become
subject under the Act, the Exchange Act or otherwise, insofar as such
losses, liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Preliminary
Offering Memorandum or the Offering Memorandum, or in any supplement
thereto or amendment thereof, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; provided, however, that the Issuers and the Guarantors will
not be liable in any such case to the extent, but only to the extent,
that any such loss, liability, claim, damage or expense arises out of
or is based upon any such untrue statement or alleged untrue statement
or omission or alleged omission made therein in reliance upon and in
conformity with information relating to the Initial Purchaser furnished
to the Issuers in writing by or on behalf of the Initial Purchaser
expressly for use therein. This indemnity agreement will be in addition
to any liability which the Issuers and the Guarantors may otherwise
have, including under this Agreement.
(b) The Initial Purchaser agrees to indemnify and hold
harmless (i) the Issuers and the Guarantors, (ii) each person, if any,
who controls any of the Issuers and the Guarantors within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act, and
(iii) the respective officers, directors, trustees, partners,
employees, representatives and agents of the Issuers and the
Guarantors, or any controlling person, against any losses, liabilities,
claims, damages and expenses whatsoever (including but not limited to
reasonable attorneys' fees and any and all expenses whatsoever incurred
in investigating, preparing or defending against any investigation or
litigation, commenced or threatened, or any claim whatsoever and any
and all amounts paid in settlement of any claim or litigation), joint
or several, to which they or any of them may become subject under the
Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims,
18
<PAGE> 20
damages or expenses (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of a
material fact contained in the Preliminary Offering Memorandum or the
Offering Memorandum, or in any amendment thereof or supplement thereto,
or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, in each case
to the extent, but only to the extent, that any such loss, liability,
claim, damage or expense arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with information
relating to the Initial Purchaser furnished to the Issuers in writing
by or on behalf of the Initial Purchaser expressly for use therein;
provided, however, that in no case shall the Initial Purchaser be
liable or responsible for any amount in excess of the discounts and
commissions received by the Initial Purchaser, as set forth on the
cover page of the Offering Memorandum. This indemnity will be in
addition to any liability which the Initial Purchaser may otherwise
have, including under this Agreement.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under such subsection, notify
each party against whom indemnification is to be sought in writing of
the commencement thereof (but the failure so to notify an indemnifying
party shall not relieve it from any liability which it may have under
this Section 6 except to the extent that it has been prejudiced in any
material respect by such failure or from any liability which it may
otherwise have). In case any such action is brought against any
indemnified party, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein, and to the extent it may elect by written notice
delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense
thereof with counsel reasonably satisfactory to such indemnified party.
Notwithstanding the foregoing, the indemnified party or parties shall
have the right to employ its or their own counsel in any such case, but
the fees and expenses of such counsel shall be at the expense of such
indemnified party or parties unless (i) the employment of such counsel
shall have been authorized in writing by the indemnifying parties in
connection with the defense of such action, (ii) the indemnifying
parties shall not have employed counsel to take charge of the defense
of such action within a reasonable time after notice of commencement of
the action, or (iii) such indemnified party or parties shall have
reasonably concluded, based upon the advice of counsel, that there may
be defenses available to it or them which are different from or
additional to those available to one or all of the indemnifying parties
(in which case the indemnifying party or parties shall not have the
right to direct the defense of such action on behalf of the indemnified
party or parties), in any of which events such fees and expenses of
counsel shall be borne by the indemnifying parties; provided, however,
that the indemnifying party under subsection (a) or (b) above shall
only be liable for the legal expenses of one counsel (in addition to
any local counsel) for all indemnified parties in each jurisdiction in
which any claim or action is brought. Anything in this subsection to
the contrary notwithstanding, an indemnifying party shall not be liable
for any settlement of any claim or action effected without its prior
written consent, provided that such consent was not unreasonably
withheld.
7. CONTRIBUTION. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 6 is for any
reason held to be unavailable from the Issuers and the Guarantors or is
insufficient to hold harmless a party indemnified thereunder, the Issuers and
the Guarantors, on the one hand, and the Initial Purchaser, on the other hand,
shall contribute to the aggregate losses, claims, damages, liabilities and
expenses of the nature contemplated by such indemnification provision (including
any investigation, legal and other expenses incurred in connection with, and any
19
<PAGE> 21
amount paid in settlement of, any action, suit or proceeding or any claims
asserted, but after deducting in the case of losses, claims, damages,
liabilities and expenses suffered by the Issuers and the Guarantors, any
contribution received by the Issuers and the Guarantors from persons, other than
the Initial Purchaser, who may also be liable for contribution, including
persons who control the Issuers and the Guarantors within the meaning of Section
15 of the Act or Section 20(a) of the Exchange Act) to which the Issuers, the
Guarantors and the Initial Purchaser may be subject, in such proportion as is
appropriate to reflect the relative benefits received by the Issuers and the
Guarantors, on one hand, and the Initial Purchaser, on the other hand, from the
offering of the Series A Notes or, if such allocation is not permitted by
applicable law or indemnification is not available as a result of the
indemnifying party not having received notice as provided in Section 6, in such
proportion as is appropriate to reflect not only the relative benefits referred
to above but also the relative fault of the Issuers and the Guarantors, on one
hand, and the Initial Purchaser, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Issuers and the Guarantors, on one hand,
and the Initial Purchaser, on the other hand, shall be deemed to be in the same
proportion as (i) the total proceeds from the offering of Series A Notes (net of
discounts but before deducting expenses) received by the Issuers and the
Guarantors and (ii) the discounts and commissions received by the Initial
Purchaser, respectively, in each case as set forth in the table on the cover
page of the Offering Memorandum. The relative fault of the Issuers and the
Guarantors, on one hand, and of the Initial Purchaser, on the other hand, shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Issuers, the Guarantors
or the Initial Purchaser and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Issuers, the Guarantors and the Initial Purchaser agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined by
pro rata allocation or by any other method of allocation which does not take
into account the equitable considerations referred to above. Notwithstanding the
provisions of this Section 7, (i) in no case shall the Initial Purchaser be
required to contribute any amount in excess of the amount by which the discounts
and commissions applicable to the Series A Notes purchased by the Initial
Purchaser pursuant to this Agreement exceeds the amount of any damages which the
Initial Purchaser has otherwise been required to pay by reason of any untrue or
alleged untrue statement or omission or alleged omission and (ii) no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For purposes of this Section 7, (A) each
person, if any, who controls the Initial Purchaser within the meaning of Section
15 of the Act or Section 20(a) of the Exchange Act and (B) the officers,
directors, partners, employees, representatives and agents of the Initial
Purchaser or any controlling person shall have the same rights to contribution
as the Initial Purchaser, and (A) each person, if any, who controls any of the
Issuers and the Guarantors within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act and (B) the respective officers, directors,
trustees, partners, employees, representatives and agents of the Issuers and the
Guarantors shall have the same rights to contribution as the Issuers and the
Guarantors, subject in each case to clauses (i) and (ii) of this Section 7. Any
party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against another party or parties
under this Section 7, notify such party or parties from whom contribution may be
sought, but the failure to so notify such party or parties shall not relieve the
party or parties from whom contribution may be sought from any obligation it or
they may have under this Section 7 or otherwise. No party shall be liable for
contribution with respect to any action or claim settled without its prior
written consent, provided that such written consent was not unreasonably
withheld.
8. CONDITIONS OF INITIAL PURCHASER'S OBLIGATIONS. The obligations
of the Initial Purchaser to purchase and pay for the Series A Notes, as provided
herein, shall be subject to the satisfaction of the
20
<PAGE> 22
following conditions:
(a) All of the representations and warranties of the Issuers
contained in this Agreement shall be true and correct on the date
hereof and on the Closing Date (after giving effect to the Amended
Credit Facility, the MCRC Amendment and the Refinancing) with the same
force and effect as if made on and as of the date hereof and the
Closing Date, respectively. Each of the Issuers shall have performed or
complied with all of the agreements herein contained and required to be
performed or complied with by it at or prior to the Closing Date.
(b) The Offering Memorandum shall have been printed and copies
distributed to the Initial Purchaser not later than 10:00 a.m., New
York City time, on the second business day following the date of this
Agreement or at such later date and time as to which the Initial
Purchaser may agree, and no stop order suspending the qualification or
exemption from qualification of the Series A Notes in any jurisdiction
referred to in Section 4(e) shall have been issued and no proceeding
for that purpose shall have been commenced or shall be pending or
threatened.
(c) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency which would, as of the Closing Date, prevent the
issuance of the Series A Notes or the Guarantees or the consummation of
the Refinancing; no action, suit or proceeding shall have been
commenced and be pending against or affecting or, to the best knowledge
of the Issuers, threatened against, the Company or any of its
subsidiaries before any court or arbitrator or any governmental body,
agency or official that, if adversely determined, could reasonably be
expected to prevent the issuance of the Series A Notes or the
Guarantees or the consummation of the Refinancing; and no stop order
shall have been issued preventing the use of the Offering Memorandum,
or any amendment or supplement thereto, or which could reasonably be
expected to have a Material Adverse Effect.
(d) Since the dates as of which information is given in the
Offering Memorandum, (i) there shall not have been any material adverse
change, or any development that is reasonably likely to result in a
material adverse change, in the capital stock or the long-term debt, or
material increase in the short-term debt, of the Company or any of its
subsidiaries from that set forth in the Offering Memorandum, (ii) no
dividend or distribution of any kind shall have been declared, paid or
made by the Company or any of its subsidiaries on any class of its
capital stock (other than Tax Distributions) and (iii) none of the
Company or any of its subsidiaries shall have incurred any liabilities
or obligations, direct or contingent, that are or, after giving effect
to the Refinancing, will be material, individually or in the aggregate,
to the Company and its subsidiaries, taken as a whole, and that are
required to be disclosed on a balance sheet or notes thereto in
accordance with generally accepted accounting principles and are not
disclosed on the latest balance sheet or notes thereto included in the
Offering Memorandum. Since the date hereof and since the dates as of
which information is given in the Offering Memorandum, there shall not
have occurred any material adverse change in the business, prospects,
financial condition or results of operation of the Company and its
subsidiaries, taken as a whole.
(e) The Initial Purchaser shall have received certificates,
dated the Closing Date, signed on behalf of the Issuers, in form and
substance satisfactory to the Initial Purchaser, confirming, as of the
Closing Date, the matters set forth in paragraphs (a), (b), (c) and (d)
of this Section 8 and that, as of the Closing Date, the obligations of
the Issuers to be performed hereunder on or prior thereto have been
duly performed.
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<PAGE> 23
(f) The Initial Purchaser shall have received on the Closing
Date an opinion, dated the Closing Date, in form and substance
satisfactory to the Initial Purchaser and counsel for the Initial
Purchaser, of Posternak, Blankstein & Lund, L.L.P., counsel for the
Issuers and the Guarantors, to the effect set forth in EXHIBIT B
hereto.
(g) At the time this Agreement is executed and at the Closing
Date, the Initial Purchaser shall have received from Price Waterhouse
LLP, independent public accountants, and Arthur Andersen, independent
public accountants as of the date of their reports, in each case, dated
as of the date of this Agreement and as of the Closing Date, customary
comfort letters addressed to the Initial Purchaser and in form and
substance satisfactory to the Initial Purchaser and counsel for the
Initial Purchaser with respect to the financial statements and certain
financial information of the Company and its subsidiaries contained in
the Offering Memorandum.
(h) The Initial Purchaser shall have received an opinion,
dated the Closing Date, in form and substance reasonably satisfactory
to the Initial Purchaser, of Latham & Watkins, counsel for the Initial
Purchaser, covering such matters as are customarily covered in such
opinions.
(i) Latham & Watkins shall have been furnished with such
documents, in addition to those set forth above, as they may reasonably
require for the purpose of enabling them to review or pass upon the
matters referred to in this Section 8 and in order to evidence the
accuracy, completeness or satisfaction in all material respects of any
of the representations, warranties or conditions herein contained.
(j) Prior to the Closing Date, the Issuers and the Guarantors
shall have furnished to the Initial Purchaser such further information,
certificates and documents as the Initial Purchaser may reasonably
request.
(k) The Issuers, the Guarantors and the Trustee shall have
entered into the Indenture and the Initial Purchaser shall have
received counterparts, conformed as executed, thereof.
(l) The Issuers and the Guarantors shall have entered into the
Registration Rights Agreement and the Initial Purchaser shall have
received counterparts, conformed as executed, thereof.
(m) The Refinancing and the Amended Credit Facility shall be
consummated prior to, or simultaneously with, the Closing of the
Offering on substantially the terms described in the Offering
Memorandum and the Initial Purchaser shall have received counterparts,
conformed as executed, of the Amended Credit Facility and such other
documentation as it deems necessary to evidence the consummation
thereof.
(n) The Company, USC, Inc., UNICCO Security Services, Inc.,
UNICCO Government Services, Inc. and Massachusetts Capital Resource
Company shall have entered into MCRC Amendment, which MCRC Amendment
shall be in form and substance satisfactory to the Initial Purchaser
and counsel for the Initial Purchaser, and the Initial Purchaser shall
have received counterparts, conformed as executed, thereof.
(o) The Company's repurchase of the Ogden Note (as defined in
the Offering Memorandum) shall be consummated prior to, or
simultaneously with, the Closing of the Offering on substantially the
terms described in the Offering Memorandum and the Initial Purchaser
shall have received such documentation as it deems necessary to
evidence the consummation thereof.
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<PAGE> 24
(p) There shall not have been any announcement by any
"nationally recognized statistical rating organization," as defined for
purposes of Rule 463(g) under the Act, that (i) it is downgrading its
rating assigned to any class of securities of the Issuers or (ii) it is
reviewing its ratings assigned to any class of securities of the
Issuers with a view to possible downgrading, or with negative
implications, or direction not determined.
(q) The Notes shall have been approved for trading on PORTAL.
All opinions, certificates, letters and other documents
required by this Section 8 to be delivered by the Issuers and the Guarantors
will be in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to the Initial Purchaser. The Issuers and the
Guarantors shall furnish the Initial Purchaser with such conformed copies of
such opinions, certificates, letters and other documents as they shall
reasonably request.
9. INITIAL PURCHASER'S INFORMATION. The Issuers acknowledge that
the statements with respect to the offering of the Series A Notes set forth in
the last paragraph of the cover page and the third paragraph and the fourth
sentence of the fourth paragraph under the caption "Plan of Distribution" in the
Offering Memorandum constitute the only information relating to the Initial
Purchaser furnished to the Issuers in writing by or on behalf of the Initial
Purchaser expressly for use in the Offering Memorandum.
10. SURVIVAL OF REPRESENTATIONS AND AGREEMENTS. All
representations and warranties, covenants and agreements of the Initial
Purchaser, the Issuers contained in this Agreement, including the agreements
contained in Sections 4(f) and 11(d), the indemnity agreements contained in
Section 6 and the contribution agreements contained in Section 7, shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of the Initial Purchaser, any controlling person thereof, or by or
on behalf of the Issuers or any controlling person thereof, and shall survive
delivery of and payment for the Series A Notes to and by the Initial Purchaser.
The representations contained in Section 5 and the agreements contained in
Sections 4(f), 6, 7 and 11(d) shall survive the termination of this Agreement,
including any termination pursuant to Section 11.
11. EFFECTIVE DATE OF AGREEMENT; TERMINATION.
(a) This Agreement shall become effective upon execution and
delivery of a counterpart hereof by each of the parties hereto.
(b) The Initial Purchaser shall have the right to terminate
this Agreement at any time prior to the Closing Date by notice to the
Issuers from the Initial Purchaser, without liability (other than with
respect to Sections 6 and 7) on the Initial Purchaser's part to either
of the Issuers if, on or prior to such date, (i) either of the Issuers
shall have failed, refused or been unable to perform in any material
respect any agreement on their part to be performed hereunder, (ii) any
other condition to the obligations of the Initial Purchaser hereunder
as provided in Section 8 is not fulfilled when and as required in any
material respect, (iii) in the reasonable judgment of the Initial
Purchaser, any material adverse change shall have occurred since the
respective dates as of which information is given in the Offering
Memorandum in the condition (financial or otherwise), business,
properties, assets, liabilities, prospects, net worth, results of
operations or cash flows of the Company and its subsidiaries, taken as
a whole, other than as set forth in the Offering Memorandum, or (iv)(A)
any domestic or international event or act or occurrence has materially
disrupted, or in the opinion of the Initial Purchaser will in the
immediate future materially disrupt, the market for the Issuers'
securities or for securities in general; or (B) trading in securities
23
<PAGE> 25
generally on the New York or American Stock Exchange shall have been
suspended or materially limited, or minimum or maximum prices for
trading shall have been established, or maximum ranges for prices for
securities shall have been required, on such exchange, or by such
exchange or other regulatory body or governmental authority having
jurisdiction; or (C) a banking moratorium shall have been declared by
federal or state authorities, or a moratorium in foreign exchange
trading by major international banks shall have been declared; or (D)
there is an outbreak or escalation of armed hostilities involving the
United States on or after the date hereof, or if there has been a
declaration by the United States of a national emergency or war, the
effect of which shall be, in the Initial Purchaser's judgment, to make
it inadvisable or impracticable to proceed with the offering or
delivery of the Series A Notes on the terms and in the manner
contemplated in the Offering Memorandum; or (E) there shall have been
such a material adverse change in general economic, political or
financial conditions or if the effect of international conditions on
the financial markets in the United States shall be such as, in the
Initial Purchaser's judgment, makes it inadvisable or impracticable to
proceed with the delivery of the Series A Notes as contemplated hereby.
(c) Any notice of termination pursuant to this Section 11
shall be by telephone or telephonic facsimile and, in either case,
confirmed in writing by letter.
(d) If this Agreement shall be terminated pursuant to any of
the provisions hereof (otherwise than pursuant to clause (iv) of
Section 11(b), in which case each party will be responsible for its own
expenses), or if the sale of the Series A Notes provided for herein is
not consummated because any condition to the obligations of the Initial
Purchaser set forth herein is not satisfied or because of any refusal,
inability or failure on the part of either of the Issuers to perform
any agreement herein or comply with any provision hereof, the Issuers
shall reimburse the Initial Purchaser for all out-of-pocket expenses
(including the reasonable fees and expenses of the Initial Purchaser's
counsel), incurred by the Initial Purchaser in connection herewith.
12. NOTICE. All communications hereunder, except as may be
otherwise specifically provided herein, shall be in writing and, if sent to the
Initial Purchaser shall be mailed, delivered, telecopied and confirmed in
writing or sent by a nationally recognized overnight courier service
guaranteeing delivery on the next business day to BancBoston Securities Inc.,
100 Federal Street, Boston, Massachusetts 02110, Attention: Corporate Finance
Department, telecopy number: (617) 434-0624, with a copy to Latham & Watkins,
885 Third Avenue, Suite 1000, New York, New York 10022, Attention: Ian B.
Blumenstein, telecopy number: (212) 751-4864; and if sent to either of the
Issuers, shall be mailed, delivered, telecopied and confirmed in writing or sent
by a nationally recognized overnight courier service guaranteeing delivery on
the next business day to UNICCO Service Company, Four Copley Place, Boston,
Massachusetts 02116, Attention: Chief Financial Officer, telecopy number: (617)
859-0735, with a copy to Posternak, Blankstein & Lund, L.L.P., 100 Charles River
Plaza, Boston, Massachusetts 02114, Attention: Noel G. Posternak P.C., telecopy
number: (617) 367-2315.
13. PARTIES. This Agreement shall inure solely to the benefit of,
and shall be binding upon, the Initial Purchaser, the Issuers and the
controlling persons and agents referred to in Sections 6 and 7, and their
respective successors and assigns, and no other person shall have or be
construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provision herein contained. The
term "successors and assigns" shall not include a purchaser, in its capacity as
such, of Notes from the Initial Purchaser.
24
<PAGE> 26
14. CONSTRUCTION. This Agreement shall be construed in accordance
with the internal laws of the State of New York. TIME IS OF THE ESSENCE IN THIS
AGREEMENT.
15. CAPTIONS. The captions included in this Agreement are included
solely for convenience of reference and are not to be considered a part of this
Agreement.
16. COUNTERPARTS. This Agreement may be executed in various
counterparts which together shall constitute one and the same instrument.
[Signature page to follow]
25
<PAGE> 27
If the foregoing correctly sets forth the understanding among
the Initial Purchaser and the Issuers please so indicate in the space provided
below for that purpose, whereupon this letter shall constitute a binding
agreement among us.
Very truly yours,
UNICCO SERVICE COMPANY
By: /s/ George A. Keches
--------------------------------
Name: George A. Keches
Title: CFO and Treasurer
UNICCO FINANCE CORP.
By: /s/ George A. Keches
--------------------------------
Name: George A. Keches
Title: Treasurer
<PAGE> 28
Accepted and agreed to as of
the date first above written:
BANCBOSTON SECURITIES INC.
By: /s/ Neal J. Reiner
-------------------------------
Name: Neal J. Reiner
Title: Managing Director
<PAGE> 1
Exhibit 3.1
DECLARATION OF TRUST
establishing
UNICCO SERVICE COMPANY
Agreement and Declaration of Trust executed on and as of the 24th day
of December, 1988, by Steven c. Kletjian, Richard J. Kletjian, Robert Kletjian
and Sharkay Kletjian, hereinafter called the Trustees, which term shall extend
to and include whoever shall from time to time be the Trustees hereunder.
ARTICLE I
It is hereby agreed and declared that all real and personal property of
every kind and character, together with the income therefrom and the proceeds
thereof (all of the foregoing being hereinafter sometimes called the trust
property or assets) which the Trustees may at any time acquire shall be held by
them upon the trusts, under the conditions, and with the powers set forth in
this instrument.
ARTICLE II
All acts of the Trustees relating to this Trust may be done under the name set
forth in the heading of this instrument, or such other name or names as the
Trustees may from time to time adopt.
ARTICLE III - Purpose
Unicco Service Company is created as a trust for the following purpose:
to carry on a general maintenance business and cleaning consulting business,
consisting of janitor service, cleaning of light fixtures, drapes, floors, rugs,
walls and windows, floor waxing, and other cleaning and maintenance activities;
to provide building management and watchman services; to buy and sell retail and
wholesale all types of cleaning supplies, materials and equipment; and to engage
in such further businesses and activities, whether or not similar thereto, as
the trustees in their opinion deem advisable. Without limiting the generality of
the foregoing, the purpose of the Trust shall include the lending of money, with
or without security; the borrowing of money and the issuing of notes, bonds or
other obligations, secured or unsecured; purchasing, leasing, exchanging or
otherwise acquiring, holding, selling or otherwise dealing in any real or
personal property or any rights or interests which the Trustees may consider
necessary or convenient for the purpose of its business; purchasing, acquiring,
receiving, holding, selling, or otherwise dealing in all or any part of the
capital stock, notes or other evidences of debts, or other securities of any
individual, corporation, association, or organization including its own;
guaranteeing, endorsing, or otherwise pledging its credit for the benefit of any
other individual, corporation, association or organization to advance or serve
the other interests of this Trust; and carrying on any other business or
activity which may legally be carried on by the Trust.
<PAGE> 2
ARTICLE IV - Powers of the Trustees
Except as herein otherwise expressly provided, the Trustees in general
shall have the power to deal with the trust property as if they were the
absolute owners thereof free of all trusts and to take any other action that
they may deem beneficial to the Trust. Without limiting the generality of the
foregoing, they shall also have the following powers:
A. To purchase or otherwise acquire and to hold, develop, improve, and
manage any real or personal property; to invest any of the trust property in
such manner as they may deem advisable without being limited as to the kind or
amount of any investment; to sell, exchange or otherwise dispose of and convey
any real or personal property or any interest therein for such considerations
and upon such terms and conditions as they may deem advisable; to participate in
loans; to be a joint venturer; to be a partner; to join with others in the
acquisition or development of real or personal property or any interest therein;
to borrow money or acquire assets on a purchase money loan basis, and to issue
bonds, notes or other evidences of indebtedness, and to secure the same by
mortgage or pledge of all or any part of the trust assets, provided that any
such obligations shall bind the trust property only, and not the Trustees or
shareholders individually; to lend money without or with security; to guarantee
the obligations of others; to execute leases as lessor or as lessee, including
leases for terms expiring after the expiration of the Trust; to hold any
property or any interest in property in the name of agents or nominees without
disclosure of the Trust; to make contractual arrangements as to salaries, wages,
and fringe benefits; and to make such contracts, agreements, undertakings, and
commitments in the name and behalf of the Trust as they deem appropriate. No
license of court shall be requisite to the validity of any transaction entered
into by the Trustees with respect to the trust estate.
B. To prosecute, compromise, submit to arbitration, or abandon any
claim or dispute involving the trust property or assets and pay all debts,
expenses or claims against them upon such evidence as they deem proper.
C. To adopt by-laws and rules in the nature of by-laws for the
administration of the Trust and to change the same from time to time; and such
by-laws or rules shall control the action of the Trust while in effect, but no
person dealing with the Trust or the Trustees need inquire as to the existence
of the same or compliance therewith, but may rely completely upon this Trust
instrument as amended in accordance with the provisions hereof or upon any
certificate as hereinafter provided.
D. To deposit moneys of the Trust in any bank or trust company, or with
any bankers, and to entrust to any bank or banker, trust company or safe deposit
company for safekeeping any of the securities and any documents and papers
comprised in or relating to the trust estate.
-2-
<PAGE> 3
E. To appoint a President, Treasurer, Secretary, and such other
officers as the Trustees deem appropriate. An officer may, but need not, be a
Trustee. Such officers shall be subject to removal by the Trustees at any time.
To employ and discharge agents and employees, legal counsel, accountants, and
other professional advisers, any of whom may, but need not be, a Trustee or
officer. To delegate to any of the officers, agents, employees, or to one or
more of the Trustees, any power or powers of the Trustees. No Trustee shall be
liable for the act or neglect of any other Trustee, nor of any officer, agent,
or employee.
F. Any Trustee may by an instrument in writing grant to any other
Trustee the power and authority to exercise on behalf of the Trust any of the
powers, authority and discretion of such grantor Trustee hereunder, so that
while said delegation is in effect the Trustee to whom such powers, authority
and discretion are granted may exercise the same as if he were acting in the
capacity of Trustee in place and stead of such grantor in addition to acting as
Trustee in his own capacity; and in the event of such grant, the grantee Trustee
shall, in all matters requiring or permitting the vote of the Trustees, have one
vote in his own capacity and one vote as grantee of each Trustee who has made
such grant of powers, authority, and discretion to him. G. The Trustees may
determine reasonable compensation for themselves as Trustees and also the
compensation of any officer, employee or agent of the Trust.
ARTICLE V - Appointment Resignation, Removal and Other Matters Concerning
Trustees
A. Not more than one Trustee shall be required hereunder, and not more
than seven Trustees shall be permitted. No Trustee shall be required to be a
shareholder, nor to give bond or surety in any form.
B. Any Trustee may resign by a written instrument signed and
acknowledged by such Trustee and such resignation shall become effective when
accepted by the Trustees.
C. Successor and additional Trustees may be appointed by the holders of
a majority of the voting shares entitled to vote on the matter. Any such
appointment shall become effective upon written acceptance of the office by the
new Trustee. Upon the appointment of any successor Trustee, title to the trust
estate shall thereupon without any conveyance vest in said succeeding Trustee
jointly with the remaining Trustee or Trustees, if any.
D. Any Trustee may be removed by the holders of a majority of the
voting shares entitled to vote in the election of a Trustee to fill the vacancy.
Any such removal shall be effective forthwith upon such action being taken.
E. Except as otherwise expressly provided in this instrument, any
action or vote taken by or any decision made by the Trustees shall be by a
majority of the then Trustees. No meeting, formal or informal, shall be required
for them to act.
-3-
<PAGE> 4
ARTICLE VI - Execution of Instruments
A. All instruments, documents, and papers, whether or not under seal
(including, but not limited to, deeds, mortgages, bills of sale, leases,
contracts, releases, notes, partial releases, discharges, subordination
agreements, checks, drafts, securities, assignments, endorsements, and proxies)
may be signed, sealed, executed, acknowledged, and delivered on behalf of the
Trust by such Trustee or Trustees, officer or agent as "hall be authorized by
action or vote of the Trustee. All instruments, documents, and papers either
executed as aforesaid, accompanied by a certificate as set forth in Paragraph B
of Article VII, or executed by a majority of the Trustees, shall be conclusive
evidence in favor of every person relying thereon or claiming thereunder at the
time of the delivery thereof that this Trust was in full force and effect and
that the person or persons executing such instrument were duly authorized to
execute and deliver the same and that the execution and delivery thereof were in
every respect binding upon the Trustees and the Trust.
B. All agreements, obligations, instruments, papers, and actions by or
in the name and behalf of this Trust shall be made, incurred, executed, signed
or taken by or in the name of the Trust, and shall, in such cases and in such
manner as the Trustees deem advisable, expressly exempt the Trustees and
shareholders from personal liability and expressly provide that the trust
property alone shall be liable thereunder or by reason thereof.
C. The Trustees may from time to time adopt and use a form of seal for
this Trust, forms for certificates representing shares hereunder, and such other
forms as they deem appropriate.
ARTICLE VII - Protection of Persons Dealing with Trust
A. No corporation, person, or transfer agent shall be held to examine
into the trust hereunder, but such corporation, person, or transfer agent may
deal with trust property as if the Trustees were the owners thereof free of all
trusts; and no such corporation, person, or transfer agent dealing with the
Trustees shall be required to see to the application of any money or property
paid or delivered to any Trustee or agent of the Trustees.
B. A certificate signed by any one Trustee or the Secretary certifying
as to who are the Trustees for the time being, or as to any action by the
Trustees or shareholders, or as to any other fact affecting or relating to the
Trust or the trust instrument, may be treated as conclusive evidence thereof by
persons dealing with this Trust.
C. Any Trustee, shareholder, officer, or agent of this Trust or any
firm, trust, corporation, concern or estate in which he is interested as a
member, trustee, director, officer, beneficiary, shareholder, agent, fiduciary,
or otherwise, may sell to, buy from, contract with and otherwise deal with this
Trust as freely and effectually as though no interest or fiduciary relation
existed; and the Trustees hereunder shall have power to exercise or concur in
exercising all powers and discretions given to them hereunder or by law,
notwithstanding that they or any of them may have a direct or indirect interest,
personally or otherwise, in the mode, result or effect of exercising such powers
or discretions.
-4-
<PAGE> 5
ARTICLE VIII - Protection of Trustees and Shareholders
A. A Trust, and not a partnership, is created by this Declaration. The
relationship of the shareholders to the Trustees is solely that of cestuis que
trust, and neither the shareholders nor the Trustees are partners.
B. No shareholder shall be personally liable for any obligation or
liability incurred by this Trust or by the Trustees, and the Trustees shall have
no right of indemnity or exoneration against the shareholders in respect
thereof.
C. Subject to Paragraph F of this Article, no Trustee shall be
personally liable for any obligation or liability incurred by this Trust or by
the Trustees, and each Trustee shall be entitled to reimbursement and
exoneration out of the trust estate according to law.
D. The trust estate alone shall be liable for the payment or
satisfaction of all obligations and liabilities incurred in carrying on the
affairs of this Trust.
E. Proceedings against this Trust may be brought against the Trustees
as Trustee" hereunder but not personally. The Trustees shall be parties thereto
only insofar as necessary to enable such obligation or liability to be enforced
against the trust estate.
F. No Trustee shall be liable to this Trust or the shareholders except
for his own acts, neglects and defaults in bad faith.
ARTICLE IX - Shares and Shareholders
A. The beneficial interests hereunder shall be represented by such
shares as the Trustees may determine. The shares may be preferred shares or
common shares or both, and may be issued in any number of classes and, within
each class, in one or more series, all as the Trustees may determine. The
Trustees are authorized to fix the designations, preferences, privileges, and
voting powers of the shares of each such class and series and the restrictions
or qualifications thereof. Without limiting the generality of the foregoing, the
Trustees may fix the number of shares to constitute each class and series, which
number may from time to time be increased or decreased, and the distinctive
designations thereof; the dividend rate on the shares and whether the dividends
shall be cumulative or non-cumulative; whether or not the shares or a class or
series shall be redeemable and, if redeemable, all of the terms and conditions
of redemption; the conversion rights, if any, of any class or series, as well as
provisions for adjustment of the conversion rate, in such events as the Trustees
shall determine; the amount per share payable on the shares of each class and
series upon voluntary or involuntary liquidation, dissolution, or winding up of
the trust; the voting rights of each class and series; the restrictions, if any,
on the transfer of the shares of any class or series; and such other terms and
conditions as the Trustees may determine.
B. The number of shares which the Trustees may authorize shall be
unlimited. The Trustees from time to time may issue such shares, including
fractional shares, upon such terms and conditions, in such amounts, to such
persons, at such times, and for such consideration as they may
-5-
<PAGE> 6
from time to time deem appropriate. No holder of any class or series of shares
shall be entitled to subscribe for any additional shares of such class or series
or any other class or series unless the Trustees shall otherwise determine.
C. Except as specifically otherwise provided in this instrument as it
may from time to time be amended, or as the Trustees may from time to time
determine under Paragraph A above, the holders of voting common shares shall
have exclusive voting power on any matter on which the vote or consent of
shareholders is authorized or required to be given under the terms hereof. No
amendment of this Declaration of Trust may be made nor shall the Trustees take
any action which modifies and adversely affects the rights of holders of any
class or series of shares except with the written assent of the holders of a
majority of the outstanding shares of such class or series.
D. Each shareholder shall be entitled to a certificate signed by a
Trustee, and the Secretary or an assistant Secretary, if there be such officers.
E. Shares shall be transferable only on the books of the Trust by
assignment in writing by the person entitled to make such transfer hereunder or
his agent or legal representative, upon surrender and cancellation of the
certificate or certificates therefor. The Trustees may treat the holder of
record for all purposes as the owner of the share or shares standing in his
name.
F. Shareholders, insofar as action by them is required or permitted,
may act with or without a meeting and may act either personally or through their
agent or proxies or through their guardians or other legal representatives. The
holders of majority of the shares of any class or series shall constitute a
quorum at any meeting of such class or series.
G. Meetings of shareholders may be called by any Trustee, or by any
shareholder owning at least ten percent (10%) of any class or series of shares.
A written notice stating the time, place and purposes of the meeting shall be
mailed to all shareholders at least three days before such meeting by the person
calling such meeting or by the Trustees. Any shareholder may by writing waive
notice of any meeting, assent to the record thereof after the meeting, and give
proxies, and any one of such procedures or combination thereof shall have the
same effect as if the shareholders attended the meeting and voted his shares
there. Any action to be taken by shareholders may be taken without a meeting if
authorized by all shareholders entitled to vote on the matter by a writing
signed by such shareholders and delivered to the secretary for filing with the
records of meetings of shareholders. Promptly upon the receipt of any such
signed authorization, the secretary shall file same with the appropriate
records.
ARTICLE X - Termination
This Trust shall terminate upon the expiration of twenty (20) years
after the death of the last to die of all of the original Trustees, their
present spouses and their issue now living, and may be sooner terminated by vote
of, or by an instrument or instruments in writing signed by a majority of the
Trustees and by the holders of a majority of each class and series of the voting
shares outstanding. Upon the termination of the Trust, subject to the payment or
making provision for the payment of all obligations and liabilities of the Trust
and the Trustees and payment to the holders of preferred shares, if any, the net
assets of the Trust shall be distributed among the holders of the common shares,
on a share for share basis except as may be otherwise provided in the
-6-
<PAGE> 7
authorizations creating the classes and series of shares. In making any such
distribution, the Trustees may sell all or any portion of the trust property and
distribute the net proceeds thereof, or they may distribute any of the assets or
undivided interests therein in kind, at such valuations as they may deem to be
fair, their determination to be conclusive upon all parties. Upon termination of
the Trust, the foregoing powers shall be deemed to include the power to transfer
the trust property or any portion thereof to any association, trust or
corporation in exchange for securities of the association, trust or corporation
and for the purpose of distributing the securities so received to shareholders
in the manner above set forth. In making any transfer pursuant to distribution,
they may make such transfer subject to any or all of the liabilities of the
Trust or on condition of the shareholders assuming in a manner satisfactory to
the Trustees the obligation to pay and discharge the obligations and liabilities
of the Trust. The powers of the Trustees shall continue until the affairs of the
Trust have been wound up.
ARTICLE XI - Recording
The Trustees may record this instrument in any Registry of Deeds or
Land Court Registry in the Commonwealth of Massachusetts. If they so record, all
amendments to this Trust and all changes of persons constituting the Trustees
from time to time shall be recorded in the Registry where this Trust is first
recorded. This Trust shall first be recorded in Middlesex (South) Registry of
Deeds. If they so record, any person dealing with the Trustees of any of them or
the trust property, may assume without further inquiry that there has been
recorded or filed in said Registry notice of all amendments of or additions to
the trust instrument, of any resignation, removals, appointments or other
changes of Trustees, or of any other matter affecting the terms or existence of
this Trust, and all such persons shall be fully protected in relying on the
state of the record in said Registry without further inquiry. Any person dealing
with the trust property or the Trustees or any of them may, however, without
resort to said Registry, always rely conclusively on a certificate as authorized
under Paragraph B of Article VII. The Trustee may record this instrument in any
other place they deem appropriate.
ARTICLE XII - Amendments
The terms of this Declaration of Trust may from time to time be
amended, added to, or rescinded in any particular whatsoever by vote of, or by
a written instrument signed by one of the Trustees and assented to or approved
in writing by the holders opound sterling a majority of each class and series
of the outstanding voting shares. Such action shall become effective upon its
execution.
ARTICLE XIII - Addresses
The address of the Trust is Four Copley Place, Boston, Massachusetts
02116 The Trustees addresses are as follows:
Robert P. Kletjian, . . ., 16 Powers Rd., Andover, MA 01810
Richard J. Kletjian.... .9 Crooked Meadow, Hingham, MA 02043
Steven C. Kletjian... ...300 Boylston Street, Ste. 515, Boston, MA 02116
Sharkay Kletjian.. ... 111 Riverside Dx, Norwell, ~ 02061
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<PAGE> 8
ARTICLE XIV Miscellaneous.
This document shall be governed by and construed under the laws of the
Commonwealth of Massachusetts.
IN WITNESS WHEREOF five identical copies hereof have been executed
under seal by the Trustees on the day and date first above written.
/s/ROBERT KLETJIAN
Robert Kletjian )
)
/s/ STEVEN C. KLETJIAN
Steven C. Kletjian ) As
) Trustees
/s/ RICHARD J. KLETJIAN ) and not
Richard J. Kletjian ) Personally
)
/s/ SHARKAY KLETJIAN )
Sharkay Kletjian )
-8-
<PAGE> 9
AMENDMENT TO DECLARATION OF TRUST
ESTABLISHING UNICCO SERVICE COMPANY
The Agreement and Declaration of Trust dated as of December 24, 1988 by
Steven C. Kletjian, Richard J. Kletjian, Robert Kletjian and Sharkay Kletjian is
hereby amended as follows:
The first sentence of Article 3 of the Declaration of Trust is hereby
amended by the addition of the underlined language:
"Unicco Service Company is created as a trust for the following
purpose: to carry on a general maintenance business and cleaning
consulting business, consisting of janitor services, cleaning of light
fixtures, drapes, floors, rugs, walls and windows, floor waxing, and
other cleaning and maintenance activities; to provide building
management and watchman services; to buy and sell retail and wholesale
all types of cleaning supplies, materials and equipment; to install and
maintain electrical premises wiring systems; and to engage in such
further businesses and activities, whether or not similar thereto as
the trustees in their opinion deem advisable."
Except as expressly amended hereby, the Declaration of Trust shall
continue in full force and effect.
IN WITNESS WHEREOF, this amendment has been signed under seal as of
November 1, 1991.
/s/ STEVEN C. KLETJIAN
----------------------
Steven C. Kletjian, as Trustee and
not individually
COMMONWEALTH OF MASSACHUSETTS )
)
COUNTY OF SUFFOLK ) November 1, 1991
Then personally appeared Steven C. Kletjian, Trustee as aforesaid, and
acknowledged the foregoing instrument to be his free act and deed, before me,
/s/ KATHERINE LUNDBERG
----------------------
Notary Public
My Commission Expires:
(Notary Seal)
-9-
<PAGE> 10
AMENDMENT NO. 2 TO DECLARATION OF TRUST
ESTABLISHING UNICCO SERVICE COMPANY
The Agreement and Declaration of Trust dated as of December 24, 1988 by
Steven C. Kletjian, Richard J. Kletjian, Robert Kletjian and Sharkay Kletjian is
hereby amended as follows:
"Unicco Service Company is created as a trust for the following
purpose: to carry on a general maintenance business and cleaning
consulting business, consisting of janitor service, cleaning of light
fixtures, drapes, floors, rugs, walls and windows, floor waxing, and
other cleaning and maintenance activities; to provide building
management and watchman services; to buy and sell retail and wholesale
all types of cleaning supplies, materials and equipment; to install and
maintain electrical premises wiring systems; to provide security
services; and to engage in such further businesses and activities,
whether or not similar thereto as the trustees in their opinion deem
advisable."
Except as expressly amended hereby, the Declaration of Trust shall
continue in full force and effect.
IN WITNESS WHEREOF, this amendment has been signed under seal as of
November 1, 1996.
/s/ STEVEN C. KLETJIAN
----------------------
Steven C. Kletjian, as Trustee and
not individually
COMMONWEALTH OF MASSACHUSETTS )
)
COUNTY OF SUFFOLK ) November 1, 1996
Then personally appeared Steven C. Kletjian, Trustee as aforesaid, and
acknowledged the foregoing instrument to be his free act and deed, before me,
/s/ GINA M. VALENTINO
---------------------
Notary Public
My Commission Expires:
(Notary Seal)
-10-
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EXHIBIT 3.2
CERTIFICATE OF INCORPORATION
OF
UNICCO FINANCE CORP.
FIRST: The name of the Corporation (hereinafter called the
"Corporation") is UNICCO Finance Corp.
SECOND: The address, including street, number, city, and
county, of the registered office of the Corporation in the State of Delaware is
Corporation Trust Center, 1209 Orange Street, City of Wilmington, County of New
Castle; and the name of the registered agent of the Corporation in the State of
Delaware at such address is The Corporation Trust Company.
THIRD: The nature of the business or the purpose to be
conducted or promoted by the Corporation is to engage in any lawful act or
activity for which Corporations may be organized under the General Corporation
Law of the State of Delaware.
FOURTH: The aggregate number of shares of all classes of
capital stock which the Corporation has authority to issue is 200,000 shares of
Common Stock, par value $0.01 per share.
FIFTH: The name and the mailing address of the incorporator
are as follows:
NAME MAILING ADDRESS
---- ---------------
Molly A. Martin Posternak, Blankstein & Lund, L.L.P.
100 Charles River Plaza
Boston, MA 02114
SIXTH: The Corporation is to have perpetual existence.
SEVENTH: For the management of the business and for the
conduct of the affairs of the Corporation, and in further definition,
limitation, and regulation of the powers of the Corporation and of its directors
and of its stockholders or any class thereof, as the case may be, it is further
provided:
1. No election of directors need be by written ballot
unless so provided in the By-Laws of the Corporation.
2. Whenever the Corporation shall be authorized to
issue only one class of stock, each outstanding share shall
entitle the holder thereof to notice of, and the right to vote
at, any meeting of stockholders. Whenever the Corporation
shall be authorized to issue more than one class of stock, no
outstanding share of any class of stock which is denied voting
power under the provisions of the Certificate of Incorporation
shall entitle the holder thereof to the right to vote at any
meeting of stockholders except as the provisions of the
General
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Corporation Law of the State of Delaware shall otherwise
require; provided, that no share of any such class which is
otherwise denied voting power shall entitle the holder thereof
to vote upon the increase or decrease in the number of
authorized shares of said class.
EIGHTH: LIABILITY OF DIRECTORS. No director shall be
personally liable to the Corporation or its stockholders for monetary damages
for breach of a fiduciary duty as a director; provided, however, that to the
extent required by the provisions of Section 102(b)(7) of the General
Corporation Law of the State of Delaware or any successor statute, or any other
laws of the State of Delaware, this 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 General Corporation Law of the State of Delaware,
(iv) for any transaction from which the director derived an improper personal
benefit, or (v) for any act or omission occurring prior to the date when the
provision becomes effective. If the General Corporation Law of the State of
Delaware hereafter is amended to authorize the further elimination or limitation
on personal liability of directors, then the liability of a director of the
Corporation, in addition to the limitation on personal liability provided
herein, shall be limited to the fullest extent permitted by the amended General
Corporation Law of the State of Delaware. Any repeal or modification of this
Article Tenth by the stockholders of the Corporation shall be prospective only,
and shall not adversely affect any limitation on the personal liability of a
director of the Corporation existing at the time of such repeal or modification.
NINTH: INDEMNIFICATION AND ADVANCEMENT OF EXPENSES.
9.1 INDEMNIFICATION. Each person who was or is
made a party or is threatened to be made a party to or is involved in any
action, suit or proceeding, whether civil, criminal, administrative or
investigative (hereinafter a "proceeding"), by reason of the fact that he, or a
person for whom he is the legal representative, is or was a director, officer or
employee 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, including service with
respect to employee benefit plans, shall be indemnified by the Corporation to
the fullest extent permitted by the General Corporation Law of the State of
Delaware. Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the Corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount if
it shall ultimately be determined that he is not entitled to be indemnified by
the corporation as authorized by the General Corporation Law of the State of
Delaware. Such expenses (including attorneys' fees) incurred by other employees
and agents may be so paid upon such terms and conditions, if any, as the Board
of Directors deems appropriate.
9.2 NONEXCLUSIVITY. The rights of
indemnification provided in this Article NINTH shall be in addition to any
rights to which any person may otherwise be entitled by law or under any By-law,
agreement, vote of stockholders or disinterested directors, or otherwise. Such
rights shall continue as to any person who has ceased to be a director, officer
or employee and shall inure to the benefit of his heirs, executors and
administrators, and shall be applied to proceedings
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commenced after the adoption hereof, whether arising from acts or omissions
occurring before or after the adoption hereof.
9.3 INSURANCE. The Corporation may purchase and
maintain insurance to protect any persons against any liability or expense
asserted against or incurred by such person in connection with any proceeding,
whether or not the Corporation would have the power to indemnify such person
against such liability or expense by law or under this Article NINTH or
otherwise. The Corporation may create a trust fund, grant a security interest or
use other means (including, without limitation, a letter of credit) to insure
the payment of such sums as may become necessary to effect indemnification as
provided herein.
9.4 AMENDMENT. No amendment to or repeal of this
Article NINTH shall apply to or have any effect on the rights of any individual
referred to in this Article NINTH for or with respect to acts or omissions of
such individual occurring prior to such amendment or repeal.
TENTH: The power to amend, alter, or repeal the Bylaws of the
Corporation and to adopt new Bylaws may be exercised by the Board of Directors
or by the stockholders.
ELEVENTH: From time to time any of the provisions of this
Certificate of Incorporation may be amended, altered, or repealed, and other
provisions authorized by the laws of the State of Delaware at the time in force
may be added or inserted in the manner and at the time prescribed by said laws,
and all rights at any time conferred upon the stockholders of the Corporation by
this Certificate of Incorporation are granted subject to the provisions of this
Article ELEVENTH.
Signed on October 10, 1997
/s/ Molly A. Martin
--------------------------------
Molly A. Martin, Incorporator
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EXHIBIT 3.3
UNICCO SERVICE COMPANY
BY-LAWS
ARTICLE I
Declaration of Trust and Principal Office
1.1 DECLARATION OF TRUST. These By-Laws shall be subject to the Declaration of
Trust, as from time to time in effect (the "Declaration of Trust"), of UNICCO
Service Company (the "Trust"), the Massachusetts business trust established by
the Declaration of Trust.
1.2 PRINCIPAL OFFICE OF THE TRUST. The principal office of the Trust shall be
located in Boston, Massachusetts.
Article 2
Meetings of Trustees
2.1 REGULAR MEETINGS. Regular meetings of the Trustees may be held without call
or notice at such places and at such times as the Trustees may from time to time
determine, provided that notice of the first regular meeting following any such
determination shall be given to absent Trustees.
2.2 SPECIAL MEETINGS. Special meetings of the Trustees may be held, at any time
and at any place designated in the call of the meeting, when called by the
Chairman of the Board, if any, the President or the Treasurer or by two or more
Trustees, sufficient notice thereof being given to each Trustee by the Clerk or
an Assistant Clerk or by the officer or the Trustees calling the meeting.
2.3 NOTICE. It shall be sufficient notice to a Trustee of a special meeting to
send notice by mail at least forty-eight hours or by telegram at least
twenty-four hours before the meeting addressed to the Trustee at his or her
usual or last known business or residence address or to give notice to him or
her in person or by telephone at least twenty-four hours before the meeting.
Notice of a meeting need not be given (a) to any Trustee if a written waiver of
notice, executed by him before or after the meeting, is filed with the records
of the meeting; or (b) to any Trustee who attends the meeting without protesting
prior thereto or at its commencement the lack of notice to him or her. Neither
notice of a meeting nor a waiver of a notice need specify the purposes of the
meeting.
2.4 QUORUM. At any meeting of the Trustees a majority of the Trustees then in
office shall constitute a quorum. Any meeting may be adjourned from time to time
by a majority of the votes cast upon the question, whether or not a quorum is
present, and the meeting may be held as adjourned without further notice.
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2.5. ACTION WITHOUT A MEETING. Any action to be taken by the Trustees may be
taken without a meeting if a written consent thereto is signed by a majority of
the Trustees then in office and filed with the records of the Trustees'
meetings. Such consent shall be treated as a vote of the Trustees for all
purposes.
ARTICLE 3
Indemnification
3.1 TRUSTEES, OFFICERS. ETC. The Trust shall indemnify each of its Trustees,
officers and duly appointed agents (including persons who serve at the Trust's
request as directors, officers or trustees of another organization in which the
Trust has any interest as a shareholder, creditor or otherwise) (each such
Trustee, officer, agent or person hereinafter referred to as a "Covered
Person") against all liabilities and expenses, including but not limited to
amounts paid in satisfaction of judgments, in compromise or as fines and
penalties, and counsel fees reasonably incurred by any Covered Person in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before any court or administrative or
legislative body, in which such Covered Person may be or may have been involved
as a party or otherwise or with which such person may be or may have been
threatened, while in office or thereafter, by reason of any alleged act or
omission as a Trustee or officer or agent or by reason of his or her being or
having been such a Trustee or officer or agent, except with respect to any
matter as to which such Covered Person shall have been finally adjudicated in
any such action, suit or other proceeding not to have acted in good faith in the
reasonable belief that such Covered Person's action was in the best interest of
the Trust, and except that no Covered Person shall be indemnified against any
liability to the Trust or its Shareholders to which such Covered Person would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of such
Covered Person's office. Expenses, including counsel fees so incurred by any
such Covered Person, may be paid from time to time by the Trust in advance of
the final disposition of any such action, suit or proceeding on the condition
that the amounts so paid shall be repaid to the Trust if it is ultimately
determined that indemnification of such expenses is not authorized under this
Article.
3.2 INDEMNIFICATION NOT EXCLUSIVE. The right of indemnification hereby provided
shall not be exclusive of or affect any other rights to which any such Covered
Person may be entitled. As used in this Article 4, the term "Covered Person"
shall include such person and his, her or its heirs, executors and
administrators. Nothing contained in this Article shall affect any rights to
indemnification to which personnel of the Trust, other than Trustees and
officers and agents, and other persons may be entitled by contract or otherwise
under law, or the power of the Trust to purchase and maintain liability
insurance on behalf of any such person.
3.3 AMENDMENT. No amendment to or repeal of this Article 3 shall apply to or
have any effect on the rights of any individual referred to in this Article 3
for or with respect to acts or omissions of such
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individual occurring prior to such amendment or repeal.
ARTICLE 4
Reports
4.1 GENERAL. The Trustees and officers shall render reports at the time and in
the manner required by the Declaration of Trust or any applicable law. Officers
shall render such additional reports as they may deem desirable or from time to
time as may be required by the Trustees.
ARTICLE 5
Fiscal Year
5.1 GENERAL. Except as otherwise provided from time to time by the Trustees, the
fiscal year of the Trust shall end on the last Sunday in June in each year.
ARTICLE 6
Seal
6.1 GENERAL. The seal of the Trust shall consist of a flatfaced die with the
word "Massachusetts", together with the name of the Trust and the year of its
organization cut or engraved thereon. Unless otherwise required by the Trustees,
it shall not be necessary to place the seal on, and its absence shall not impair
the validity of, any document, instrument or other paper executed and delivered
by or on behalf of the Trust.
ARTICLE 7
Execution of Papers
7.1 GENERAL. Except as the Trustees, generally or in particular cases, may have
authorized the execution thereof in some other manner, all checks, notes, drafts
and other obligations and all registration statements and amendments thereto and
all reports and amendments thereto to the Securities and Exchange Commission
shall be signed by any of the Chief Executive Officer, any Vice-President, the
Treasurer or any of such other officers or agents as shall be designated for
that purpose by a vote of the Trustees.
ARTICLE 8
Issuance of Share Certificates
8.1 SHARE CERTIFICATES. The Trustees may at any time authorize the issuance of
share certificates. In that event, each shareholder shall be entitled to a
certificate stating the number of shares owned by him or her, in such form as
shall be prescribed from time to time by the Trustees. Such
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certificates shall be signed by a Trustee, and the Secretary or Assistant
Secretary. Such signatures may be by facsimile if the certificate is signed by a
transfer agent, or by a registrar, other than a Trustee, officer or employee of
the Trust. In case any officer who has signed or whose facsimile signature has
been placed on such certificate shall cease to be such officer before such
certificate is issued, it may be issued by the Trust with the same effect as if
he or she were such officer at the time of its issue. In lieu of issuing
certificates for shares, the Trustees or the transfer agent may either issue
receipts therefor or may keep accounts upon the books of the trust for the
record holders of such shares, who shall in either case be deemed, for all
purposes hereunder, to be the holders of certificates for such shares as if they
had accepted such certificates and shall be held to have expressly assented and
agreed to the terms of this Article 8.
8.2 LOSS OF CERTIFICATES. In case of the alleged loss or destruction or the
mutilation of a share certificate, a duplicate certificate may be issued in
place thereof, upon such terms as the Trustees shall prescribe.
8.3 DISCONTINUANCE OF ISSUANCE OF CERTIFICATES. The Trustees may at any time
discontinue the issuance of share certificates and may, by written notice to
each shareholder, require the surrender of share certificates to the Trust for
cancellation. Such surrender and cancellation shall not effect the ownership of
shares in the Trust.
ARTICLE 9
Shareholders' Voting Powers and Meetings
9.1 RECORD DATES. For the purpose of determining the shareholders who are
entitled to vote or act at any meeting or any adjournment thereof, or who are
entitled to receive payment of any dividend or of any other distribution, the
Trustees may from time to time fix a time, which shall be not more than 60 days
before the date of any meeting of shareholders or the date for the payment of
any dividend or of any other distribution, as the record date for determining
the shareholders having the right to notice of and to vote at such meeting and
any adjournment thereof or the right to receive such dividend or distribution,
and in such case only shareholders of record on such record date shall have such
right notwithstanding any transfer of shares on the books of the Trust after the
record date; or without fixing such record date the Trustees may for any of such
purposes close the register or transfer books for all or any part of such
period.
ARTICLE 10
Amendments to the By-Laws
10.1 GENERAL. These By-Laws may be amended or repealed, in whole or in part, by
a majority of the Trustees then in office at any meeting of the Trustees.
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EXHIBIT 3.4
BY-LAWS
OF
UNICCO FINANCE CORP.
ARTICLE I
LAW, CERTIFICATE OF INCORPORATION AND BY-LAWS
SECTION 1.1. These By-Laws are subject to the Certificate of
Incorporation of the Corporation. In these By-Laws, references to law, the
Certificate of Incorporation and By-Laws mean the law, the provisions of the
Certificate of Incorporation and the By-Laws as are from time to time in effect.
ARTICLE II
OFFICES
SECTION 2.1. REGISTERED OFFICE. The registered office of the
Corporation within the State of Delaware shall be located at the principal place
of business of the Corporation in the State of Delaware or of the person acting
as the Corporation's registered agent in the State of Delaware.
SECTION 2.2. OTHER OFFICES. The Corporation may also have offices and
places of business at such other places both within and without the State of
Delaware as the Board of Directors may from time to time determine or the
business of the Corporation may require.
ARTICLE III
MEETINGS OF THE STOCKHOLDERS
SECTION 3.1. PLACE OF MEETINGS. All meetings of the stockholders for
the election of directors or for any other purpose shall be held at such place
within or without the State of Delaware as may be determined from time to time
by the Chairman of the Board of Directors, the President, the Chief Executive
Officer or the Board of Directors. Any adjourned session of any meeting of the
stockholders shall be held at the place designated in the vote of adjournment.
SECTION 3.2. ANNUAL MEETINGS. The annual meeting of stockholders shall
be held at 10:00 a.m. on the second Tuesday in August in each year, unless that
day is a legal holiday at the place where the meeting is to be held, in which
case the meeting shall be held at the same hour on the next succeeding day not a
legal holiday, or at such other date and time as shall be designated from time
to time by the Board of Directors and stated in the notice of the meeting, at
which they shall elect a Board of Directors and transact such other business as
may be required by law or
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these by-laws or as may properly come before the meeting.
SECTION 3.3. SPECIAL MEETINGS. Special meetings of stockholders, for
any purpose or purposes, may be called at any time by the Chairman of the Board
of Directors, the President, the Chief Executive Officer, or the Board of
Directors. A special meeting of the stockholders shall be called by the
Secretary, or in the case of the death, absence, incapacity or refusal of the
Secretary, by an Assistant Secretary or some other officer, upon application of
a majority of the directors. Any such application shall state the purpose or
purposes of the proposed meeting. Any such call shall state the place, date,
hour, and purposes of the meeting.
SECTION 3.4. NOTICE OF MEETINGS. Written notice of every meeting of
stockholders, stating the place, date and hour thereof and, in the case of a
special meeting of stockholders, the purpose or purposes thereof and the person
or persons by whom or at whose direction such meeting has been called and such
notice is being issued, shall be given not less than ten (10) nor more than
sixty (60) days before the date of the meeting, either personally or by mail, to
each stockholder of record entitled to vote at such meeting. If mailed, such
notice shall be deemed to be given when deposited in the United States mail,
postage prepaid, directed to the stockholder at his address as it appears on the
stock transfer books of the Corporation. Such notice shall be given by the
Secretary, or by an officer or person designated by the Board of Directors, or
in the case of a special meeting by the officer calling the meeting.
SECTION 3.5. ACTION WITHOUT A MEETING. Any action required by the
General Corporation Law of the State of Delaware to be taken at any annual or
special meeting of the stockholders of the Corporation, or any action which may
be taken at any annual or special meeting of such stockholders, may be taken
without a meeting, without prior notice and without a vote, if a consent or
consents in writing, setting forth the action so taken, shall be signed by the
holders of outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted and shall be
delivered to the Corporation by delivery to its registered office in the State
of Delaware, its principal place of business, or an officer or agent of the
Corporation having custody of the book in which proceedings of meetings of
stockholders are recorded. Delivery made to the Corporation's registered office
shall be by hand or by certified or registered mail, return receipt requested.
SECTION 3.6. QUORUM. Except as otherwise provided in these By-Laws or
the Certificate of Incorporation, the holders of a majority of the issued and
outstanding shares of stock of the Corporation entitled to vote, represented in
person or by proxy, shall be necessary to and shall constitute a quorum for the
transaction of business at any meeting of stockholders; provided, however, that
when a specific item of business is required by law or by the Certificate of
Incorporation to be voted on separately by a class or series, a majority of the
outstanding shares in such class or series must in addition be represented,
either in person or by proxy, to constitute a quorum for the transaction of such
items of business. If, however, such quorum shall not be present or represented
at any meeting of stockholders, the stockholders entitled to vote thereat,
present in person or represented by proxy, shall have the power to adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented,
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any business may be transacted which might have been transacted at the meeting
as originally noticed. Notwithstanding the foregoing, if after any such
adjournment, the Board of Directors shall fix a new record date for the
adjourned meeting, or the adjournment is for more than thirty (30) days, a
notice of such adjourned meeting shall be given as provided in Section 3.4 of
these By-Laws.
SECTION 3.7. VOTING. Except as otherwise required by law, the
Certificate of Incorporation or these By-Laws, a majority of the votes cast at a
meeting by those shares entitled to vote on the subject matter shall be
sufficient to authorize any corporate action.
SECTION 3.8. PROXIES. Every stockholder entitled to vote at a meeting,
or by consent with a meeting, may authorize another person or persons to act for
him by proxy. Each proxy shall be in writing executed by the stockholder giving
the proxy or by his duly authorized attorney. No proxy shall be valid after the
expiration of three (3) years from its date, unless a longer period is provided
for in the proxy. Unless and until voted, every proxy shall be revocable at the
pleasure of the person who executed it, or his legal representatives or assigns,
except in those cases where an irrevocable proxy permitted by statute has been
given.
SECTION 3.9. STOCK RECORDS. The Secretary or agent having charge of the
stock transfer books shall make, at least ten (10) days before each meeting of
stockholders, a complete list of the stockholders entitled to vote at such
meeting or any adjournment thereof, arranged in alphabetical order and showing
the address of and the number and class and series, if any, of shares held by
each stockholder. Such list, for a period of ten (10) days prior to such
meeting, shall be kept at the principal place of business of the Corporation or
at the office of the transfer agent or registrar of the Corporation and such
other places as required by statute and shall be subject to inspection by any
stockholder at any time during the meeting.
SECTION 3.10. CONDUCT OF MEETING. The Chairman of the Board of
Directors shall preside at all meetings of the stockholders. In the absence of
the Chairman of the Board of Directors, the President shall preside at all such
meetings. In the absence of the Chairman of the Board of Directors and the
President, the Chief Executive Officer shall preside at all such meetings. If
neither the Chairman of the Board of Directors, the President nor the Chief
Executive Officer are present, then any other director chosen by the directors
in attendance shall preside. The Secretary of the Corporation, or, in his or her
absence, an Assistant Secretary, if any, shall act as Secretary of every
meeting, but if neither the Secretary nor an Assistant Secretary is present, the
person presiding at the meeting shall appoint a Secretary of the meeting.
SECTION 3.11. INSPECTORS AND JUDGES. The directors, in advance of any
meeting, may, but need not, appoint one or more inspectors of election or judges
of the vote, as the case may be, to act at the meeting or any adjournment
thereof. If an inspector or inspectors or judge or judges are not appointed, the
person presiding at the meeting may, but need not, appoint one or more
inspectors or judges. In case any person who may be appointed as an inspector or
judge fails to appear or act, the vacancy may be filled by appointment made by
the person presiding at the meeting. Each inspector or judge, if any, before
entering upon the discharge of his duties, shall take and sign an oath to
faithfully execute the duties of inspector or judge at such meeting with strict
impartiality and according to the best of his ability. The inspectors or judges,
if any, shall
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determine the number of shares of stock outstanding and the voting power of each
class and series, the shares of stock represented at the meeting, the existence
of a quorum, the validity and effect of proxies, and shall receive votes,
ballots or consents, hear and determine all challenges and questions arising in
connection with the right to vote, count and tabulate all votes, ballots or
consents, determine the result, and do such acts as are proper to conduct the
election or vote with fairness to all stockholders. On request of the person
presiding at the meeting, the inspector or inspectors or judge or judges, if
any, shall make a report in writing on any challenge, question or matter
determined by him or her or them and execute a certificate of any fact found by
him or her or them.
SECTION 3.12. STOCKHOLDER PROPOSALS. At any annual meeting of the
stockholders, only such business shall be conducted as shall have been brought
before the meeting (a) by or at the direction of the Board of Directors or (b)
by any stockholder of the Corporation who is a stockholder of record at the time
of giving of the notice provided for in this Section 3.12, who shall be entitled
to vote at such meeting and who complies with the procedures set forth below.
For business to be properly brought before an annual meeting of stockholders,
the stockholder must have given timely notice thereof in writing to the
Secretary of the Corporation. To be timely, a stockholder's notice must be
delivered to or mailed and received at the principal executive offices of the
Corporation not less than sixty (60) days nor more than ninety (90) days prior
to the anniversary date of the immediately preceding annual meeting; provided,
however, that in the event that the annual meeting with respect to which such
notice is to be tendered is not held within thirty (30) days before or after
such anniversary date, notice by the stockholder to be timely must be received
no later than the close of business on the tenth (10th) day following the day on
which notice of the date of the meeting or public disclosure thereof was given
or made. Such stockholder's notice shall set forth as to each matter the
stockholder proposes to bring before the meeting (a) a brief description of the
business desired to be brought before the meeting and the reasons for conducting
such business at the meeting, (b) the name and address, as they appear on the
Corporation's books, of the stockholder proposing such business, (c) the class
and the number of shares of stock of the Corporation which are beneficially
owned by the stockholder and (d) a description of all arrangements or
understandings between such stockholder and any other person or persons
(including their names) in connection with such business and any material
interest of the stockholder in such business. Notwithstanding anything in these
By-laws to the contrary, no business shall be conducted at a stockholders
meeting except in accordance with the procedures set forth in this Section 3.12.
If the Board of Directors shall determine, based on the facts, that business was
not properly brought before the meeting in accordance with the procedures set
forth in this Section 3.12, the Chairman of the Board of Directors or the person
presiding at such meeting shall so declare to the meeting and any such business
not properly brought before such meeting shall not be transacted.
Notwithstanding the foregoing provisions of this Section 3.12, a stockholder
shall also comply with all applicable requirements of the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder with respect
to the matters set forth in this Section 3.12. Notwithstanding the foregoing
provisions of this Section 3.12, stockholder nominations of persons for election
to the Board of Directors shall be governed by the Certificate of Incorporation.
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ARTICLE IV
DIRECTORS
SECTION 4.1. GENERAL POWERS AND NUMBER. The business and affairs of the
Corporation shall be under the direction of its Board of Directors. The Board of
Directors may elect a Chairman of the Board from among its members. The number
of directors which shall initially constitute the whole board shall be one.
Directors need not be stockholders. The number of directors may be changed from
time to time by the directors or by action of holders of a majority of the
outstanding voting stock of the Corporation.
SECTION 4.2. TENURE. Except as otherwise provided by law, by the
Certificate of Incorporation or by these By-Laws, each director shall hold
office until the next annual meeting and until his successor is elected and
qualified, or until he sooner dies, resigns, is removed or becomes disqualified.
SECTION 4.3. VACANCIES. Vacancies and any newly created directorships
resulting from any increase in the number of directors may be filled by vote of
the stockholders at a meeting called for the purpose, or by a majority of the
directors then in office, although less than a quorum, or by a sole remaining
director. When one or more directors shall resign from the board, effective at a
future date, a majority of the directors then in office, including those who
have resigned, shall have power to fill such vacancy or vacancies, the vote or
action by writing thereon to take effect when such resignation or resignations
shall become effective. The directors shall have and may exercise all their
powers notwithstanding the existence of one or more vacancies in their number,
subject to any requirements of law or of the Certificate of Incorporation or of
these By-Laws as to the number of directors required for a quorum or for any
vote or other actions.
SECTION 4.4. POWERS AND DUTIES. Subject to the applicable provisions of
law, these By-Laws or the Certificate of Incorporation, but in furtherance and
not in limitation of any rights therein conferred, the Board of Directors shall
have the control and management of the business and affairs of the Corporation
and shall exercise all such powers of the Corporation and do all such lawful
acts and things as may be exercised by the Corporation.
SECTION 4.5. PLACE OF MEETING. All meetings of the Board of Directors
may be held within or without the State of Delaware.
SECTION 4.6. REGULAR MEETINGS. The directors shall meet annually
immediately following, and at the same place as, the annual meeting of the
stockholders, and quarterly at times determined by the Board of Directors;
provided that the failure to hold the annual meeting shall not work a forfeiture
or otherwise effect valid corporate acts and that notice of the first regular
meeting following any such determination shall be given to absent directors.
Other meetings of the Board of Directors may be held upon such notice or without
notice, and at such time and at such place as shall from time to time be
determined by the Board of Directors.
5
<PAGE> 6
SECTION 4.7. SPECIAL MEETINGS. Special meetings of the Board of
Directors may be called by the Chairman of the Board, the President or the Chief
Executive Officer and shall be called promptly by the Chairman of the Board, the
President, the Chief Executive Officer or the Secretary upon the written request
of any two members of the Board of Directors specifying the special purpose
thereof, on not less than two (2) days' notice to each director. Such request
shall state the date, time and place of the meeting. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the Board
of Directors need be specified in the notice or waiver of notice of such
meeting.
SECTION 4.8. NOTICE OF MEETINGS. Notice of each special meeting of the
Board of Directors (and each regular meeting for which notice shall be required)
shall be given by the Secretary or an Assistant Secretary and shall state the
place, date and time of the meeting. Notice of each such meeting shall be given
by any of the following ("Contact Means"): orally or by telecopy, telegraph,
electronic mail or express mail or by courier delivery for next day delivery.
Each director shall provide in writing to the Corporation and to the other
directors a list indicating, in order of preference, the Contact Means and
addresses or other necessary information for providing notice of meetings to
such director. This list may from time to time be amended in writing by the
director. The Secretary or Assistant Secretary shall given notice in order of
each director's listed Contact Means. Notice shall be deemed given hereunder to
each director upon the earlier of (a) obtaining verification from such director
that the notice has been actually received by such director and (b) all Contact
Means have been made, as certified by the Secretary or Assistant Secretary.
Notice of any adjourned meeting, including the place, date and time of the new
meeting, shall be given to all directors, not present at the time of the
adjournment, as well as to the other directors unless the place, date and time
of the new meeting is announced at the adjourned meeting.
SECTION 4.9. QUORUM AND VOTING. At all meetings of the Board of
Directors, a majority of the entire Board of Directors shall be necessary to and
shall constitute a quorum for the transaction of business, unless otherwise
provided by any applicable provision of law, by these By-Laws or by the
Certificate of Incorporation. The act of a majority of the directors present at
the time of the vote, if a quorum is present at such time, shall be the act of
the Board of Directors, unless otherwise provided by any applicable provision of
law, by these By-Laws or by the Certificate of Incorporation. If a quorum shall
not be present at any meeting of the Board of Directors, the directors present
thereat may adjourn the meeting from time to time, until a quorum shall be
present.
SECTION 4.10. BOOKS AND RECORDS. The directors may keep the books of
the Corporation, except such as are required by law to be kept within the State
of Delaware, outside of the State of Delaware, at such place or places as they
may from time to time determine.
SECTION 4.11. ACTION WITHOUT A MEETING. Any action required or
permitted to be taken by the Board of Directors, or by a committee of the Board
of Directors, may be taken without a meeting if all members of the Board of
Directors or the committee, as the case may be, consent in writing to the
adoption of a resolution authorizing the action. Any such resolution and the
written consents thereto by the members of the Board of Directors or committee
shall be filed with the minutes of the proceedings of the Board of Directors
or committee.
6
<PAGE> 7
SECTION 4.12. TELEPHONE PARTICIPATION. Any one or more members of the
Board of Directors, or any committee of the Board of Directors, may participate
in a meeting of the Board of Directors or committee by means of a conference
telephone call or similar communications equipment allowing all persons
participating in the meeting to hear each other at the same time. Participation
by such means shall constitute presence in person at a meeting.
SECTION 4.13. COMMITTEES.
(a) The Board of Directors may, by vote of a majority of the
whole Board, (i) designate, change the membership of or terminate the existence
of any committee or committees, each committee to consist of one or more of the
directors; (ii) designate one or more directors as alternate members of any such
committee who may replace any absent or disqualified member at any meeting of
the committee; and (iii) determine the extent to which each such committee shall
have and may exercise the powers of the Board of Directors in the management of
the business and affairs of the Corporation, including the power to authorize
the seal of the Corporation to be affixed to all papers which require it and the
power and authority to declare dividends or to authorize the issuance of stock;
excepting, however, such powers which by law, by the certificate of
incorporation or by these by-laws they are prohibited from so delegating. In the
absence or disqualification of any member of such committee and his alternate,
if any, the member or members thereof present at any meeting and not
disqualified from voting, whether or not constituting a quorum, may unanimously
appoint another member of the Board of Directors to act at the meeting in the
place of any such absent or disqualified member. Except as the Board of
Directors may otherwise determine, any committee may make rules for the conduct
of its business, but unless otherwise provided by the Board or such rules, its
business shall be conducted as nearly as may be in the same manner as is
provided by these by-laws for the conduct of business by the Board of Directors.
Each committee shall keep regular minutes of its meetings and report the same to
the Board of Directors upon request.
(b) Unless the Board of Directors otherwise provides, each
committee designated by the Board of Directors may make, alter and repeal rules
for the holding of its meetings and the conduct of its business, subject to the
following: a majority of the entire authorized number of members of such
committee shall constitute a quorum for the transaction of business; the vote of
a majority of the members present at a meeting at the time of a vote if a quorum
is then present shall be the act of such committee.
SECTION 4.14. COMPENSATION. The directors may be paid their expenses,
if any, of attendance at each meeting of the Board of Directors and the
non-employee directors may be paid a fixed sum or receive stock options or other
securities of the Corporation for attendance at each meeting of the Board of
Directors or may be paid a stated salary or receive a stated number of stock
options or other securities of the Corporation as a director. No such payment
shall preclude any director from serving the Corporation in any other capacity
and receiving compensation therefor. Non-employee members of special or standing
committees may be allowed like compensation for attending committee meetings.
7
<PAGE> 8
SECTION 4.15. PRESUMPTION OF ASSENT. A director of the Corporation who
is present at a meeting of the Board of Directors at which action on any matter
is taken shall be presumed to have assented to the action taken unless his or
her dissent or abstention shall be entered in the minutes of the meeting or
unless he or she shall file a written dissent to such action with the person
acting as the Secretary of the meeting before the adjournment thereof or shall
forward such dissent by registered mail to the Secretary of the Corporation
within five (5) days after the date a copy of the minutes of the meeting is
received. Such right to dissent shall not apply to a director who voted in favor
of such action.
SECTION 4.16. INTERESTED DIRECTORS AND OFFICERS.
(a) No contract or transaction between the Corporation and one or
more of its directors or officers, or between the Corporation and any other
corporation, partnership, association, or other organization in which one or
more of the Corporation's directors or officers are directors or officers, or
have a financial interest, shall be void or voidable solely for this reason, or
solely because the director or officer is present at or participates in the
meeting of the Board or committee thereof which authorizes the contract or
transaction, or solely because his or their votes are counted for such purpose,
if:
(1) The material facts as to his relationship or interest and
as to the contract or transaction are disclosed or are known to the
Board of Directors or the committee, and the Board or committee in good
faith authorizes the contract or transaction by the affirmative votes
of a majority of the disinterested directors, even though the
disinterested directors be less than a quorum; or
(2) The material facts as to his relationship or interest and
as to the contract or transaction are disclosed or are known to the
stockholders entitled to vote thereon, and the contract or transaction
is specifically approved in good faith by vote of the stockholders; or
(3) The contract or transaction is fair as to the Corporation
as of the time it is authorized, approved or ratified, by the Board of
Directors, a committee thereof, or the stockholders.
(b) Common or interested directors may be counted in determining
the presence of a quorum at a meeting of the Board of Directors or of a
committee which authorizes the contract or transaction.
ARTICLE V
WAIVER
SECTION 5.1. WAIVER. Whenever a notice is required to be given by any
provision of law, by these By-Laws, or by the Certificate of Incorporation, a
waiver thereof in writing, whether before or after the time stated therein,
shall be deemed equivalent to such notice. Attendance of a person at a meeting
shall constitute a waiver of notice of such meeting, except when the person
8
<PAGE> 9
attends a meeting for the express purpose of objecting at the beginning of the
meeting, to the transaction of any business because the meeting is not lawfully
called or convened. Neither the business to be transacted at, nor the purpose
of, any regular or special meeting of the stockholders, directors, or members of
a committee of directors need be specified in any written waiver of notice
unless so required by the certificate of incorporation or the bylaws.
ARTICLE VI
OFFICERS
SECTION 6.1. NUMBER. The principal officers of the Corporation shall be
a President, a Treasurer, a Secretary and an Assistant Secretary. In addition,
there may be such other officers as the Board of Directors may deem necessary.
Any two or more offices may be held by the same person.
SECTION 6.2. TERM OF OFFICE. The principal officers shall be chosen
annually by the Board of Directors at the regular annual meeting of the Board of
Directors. Other officers may be elected from time to time. Each officer shall
serve until his successor shall have been chosen and qualified, or until his
death, resignation or removal. In case of the absence or disability of any
officer of the Corporation and of any person hereby authorized to act in his
place during such period of absence or disability, the Board of Directors may
from time to time delegate the powers and duties of such officer to any other
officer, or any director, or any other person whom it may select.
SECTION 6.3. REMOVAL. Any officer may be removed from office, at any
time by the affirmative vote of a majority of the total number of directors then
in office whenever it be judged that the best interests of the Corporation will
be served thereby. Said removal shall not prejudice the contract rights, if any,
of the person so removed.
SECTION 6.4. VACANCIES. Any vacancy in an office from any cause may be
filled for the unexpired portion of the term by the Board of Directors.
SECTION 6.5. CHAIRMAN OF THE BOARD. The Chairman of the Board of
Directors shall be a member of the Board of Directors and shall preside at all
meetings of stockholders and of the Board of Directors. He may delegate his
authority to preside at such meetings to any other director or to an office of
the Corporation. The Chairman of the Board of Directors shall have the power to
sign and deliver agreements, certificates and other instruments on behalf of the
Corporation subject to the prior approval or direction of the Board of Directors
or the Chief Executive Officer and shall have an exercise all such other duties
that are incident to this office or that are from time to time assigned to him
by the Board of Directors or the Chief Executive Officer. In addition, the
Chairman of the Board of Directors shall carry out the duties and functions of
the Chief Executive Officer in the event of the disability of the Chief
Executive Officer or at the direction of the Chief Executive Officer subject to
the direction of the Board of Directors.
9
<PAGE> 10
SECTION 6.6. ALL OTHER OFFICERS. The other officers of the Corporation
shall have such powers and perform such duties as the Board of Directors may
from time to time authorize or determine. In the absence of action by the Board
of Directors, the officers shall have such powers as the Chief Executive Officer
may from time to time authorize. In the absence of action by the Board of
Directors or the Chief Executive Officer, the officers shall have such powers as
generally pertain to their respective offices.
SECTION 6.7. VOTING SECURITIES OWNED BY THE CORPORATION. Powers of
attorney, proxies, waivers of notice of meeting, consents and other instruments
relating to securities owned by the Corporation may be executed in the name of
an on behalf of the Corporation by the Chief Executive Officer, or President or
any Vice President and any such officer may, in the name of and on behalf of the
Corporation, take all such action as any such officer may deem advisable to vote
in person or by proxy at any meeting of security holders of any corporation in
which the Corporation may own securities and at any such meeting shall possess
and may exercise any and all rights and power incident to the ownership of such
securities and which, as the owner thereof, the Corporation might have exercised
and possessed if present. The Board of Directors may, by resolution, from time
to time confer like powers upon any other person or persons.
ARTICLE VII
PROVISIONS RELATING TO STOCK CERTIFICATES AND STOCKHOLDERS
SECTION 7.1. FORM AND SIGNATURE. The shares of the Corporation shall be
represented by certificates signed by the Chairman of the Board or Vice-chairman
or President or any Vice President and by the Secretary or any Assistant
Secretary or the Treasurer or any Assistant Treasurer, and shall bear the seal
of the Corporation or a facsimile thereof. Each certificate representing shares
shall state upon its face (a) that the Corporation is formed under the laws of
the State of Delaware, (b) the name of the person or persons to whom it is
issued, (c) the number of shares which such certificate represents and (d) the
par value, if any, of each share represented by such certificate.
SECTION 7.2. REGISTERED STOCKHOLDERS. The Corporation shall be entitled
to recognize the exclusive right of a person registered on its books as the
owner of share of stock to receive dividends or other distributions, and to vote
as such owner, and to hold liable for calls and assessments a person registered
on its books as the owner of shares of stock, and shall not be bound to
recognize any equitable or legal claim to or interest in such shares on the part
of any other person, except as required by law.
SECTION 7.3. TRANSFER OF STOCK. Upon surrender to the Corporation or
the appropriate transfer agent, if any, of the Corporation of a certificate
representing shares of stock duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer and accompanied by any necessary
stock transfer tax stamps, and, in the event that the certificate refers to any
agreement restricting transfer of the shares which is represents, proper
evidence of compliance with such agreement, a new certificate shall be issued to
the person entitled thereto, and the old certificate cancelled and the
transaction recorded upon the books of the Corporation.
10
<PAGE> 11
SECTION 7.4. LOST CERTIFICATES, ETC. The Corporation may issue a new
certificate for shares in place of any certificate theretofore issued by it,
alleged to have been lost, mutilated, stolen or destroyed certificate, or his
legal representatives, to make an affidavit of that fact and/or to give the
Corporation a bond in such sum as it may direct as indemnity against any claim
that may be made against the Corporation on account of the alleged loss,
mutilation, theft or destruction of any such certificate or the issuance of any
such new certificate.
SECTION 7.5. RECORD DATE. In order that the Corporation may determine
the stockholders entitled to notice of or to vote at any meeting of stockholders
or any adjournment thereof, the Board of Directors may fix a record date, which
record date shall not precede the date upon which the resolution fixing the
record date is adopted by the Board of Directors, and which record date shall
not be more than sixty nor less than ten (10) days before the date of such
meeting. If no such record date is fixed by the Board of Directors, the record
date for determining the stockholders entitled to notice of or to vote at a
meeting of stockholders shall be at the close of business on the day next
preceding the day on which notice is given, or, if notice is waived, at the
close of business on the day next preceding the day on which the meeting is
held. A determination of stockholders of record entitled to notice of or to vote
at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.
In order that the Corporation may determine the stockholders entitled
to consent to corporate action in writing without a meeting, the Board of
Directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the Board of
Directors, and which date shall not be more than ten days after the date upon
which the resolution fixing the record date is adopted by the Board of
Directors. If no such record date has been fixed by the Board of Directors, the
record date for determining stockholders entitled to consent to corporate action
in writing without a meeting, when no prior action by the Board of Directors is
required by the General Corporation Law of the State of Delaware, shall be the
first date on which a signed written consent setting forth the action taken or
proposed to be taken is delivered to the Corporation by delivery to its
registered office in Delaware by hand or certified or registered mail, return
receipt requested, to its principal place of business or to an officer or agent
of the Corporation having custody of the book in which proceedings of meetings
of stockholders are recorded. If no record date has been fixed by the Board of
Directors and prior action by the Board of Directors is required by the General
Corporation Law of the State of Delaware, the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting shall be at the close of business on the day on which the Board of
Directors adopts the resolution taking such prior action.
In order that the Corporation may determine the stockholders entitled
to receive payment of any dividend or other distribution or allotment of any
rights or to exercise any rights in respect of any change, conversion or
exchange of stock, or for the purpose of any other lawful action, the Board of
Directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted, and which record
date shall be not more than sixty days prior to such payment, exercise or other
action. If no such record date is fixed, the record date for determining
stockholders for any such purpose shall be at the close of business on the day
on which the Board of Directors adopts the resolution relating thereto.
11
<PAGE> 12
SECTION 7.6. REGULATIONS. Except as otherwise provided by law, the
Board of Directors may make such additional rules and regulations, not
inconsistent with these By-Laws, as it may deem expedient, concerning the issue,
transfer and registration of certificates for the securities of the Corporation.
The Board of Directors may appoint, or authorize any officer or officers to
appoint, one or more transfer agents and one or more registrars and may require
all certificates for shares of capital stock to bear the signature or signatures
of any of them.
ARTICLE VIII
GENERAL PROVISIONS
SECTION 8.1. DIVIDENDS AND DISTRIBUTIONS. Dividends and other
distributions upon or with respect to outstanding shares of stock of the
Corporation may be declared by the Board of Directors at any regular or special
meeting, and may be paid in cash, bonds, property, or in stock of the
Corporation. The Board of Directors shall have full power and discretion,
subject to the provisions of the Certificate of Incorporation or the terms of
any other corporate document or instrument binding upon the Corporation to
determine what, if any, dividends or distributions shall be declared and paid or
made.
SECTION 8.2. CHECKS, ETC. All checks or demands for money and notes or
other instruments evidencing, indebtedness or obligations of the Corporation
shall be signed by such officer or officers or other person or persons as may
from time to time be designated by the Board of Directors.
SECTION 8.3. SEAL. The corporate seal shall have inscribed thereon the
name of the Corporation, the year of its incorporation and the words "Corporate
Seal Delaware." The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or otherwise reproduced.
SECTION 8.4. FISCAL YEAR. The fiscal year of the Corporation shall be
determined by the Board of Directors.
SECTION 8.5. GENERAL AND SPECIAL BANK ACCOUNTS. The Board may authorize
from time to time the opening and keeping of general and special bank accounts
with such banks, trust companies or other depositories as the Board of Directors
may designate or as may be designated by any officer or officers of the
Corporation to whom such power of designation may be delegated by the Board of
Directors from time to time. The Board of Directors may make such special rules
and regulations with respect to such bank accounts, not inconsistent with the
provisions of these By-Laws, as it may deem expedient.
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ARTICLE IX
AMENDMENTS
SECTION 9.1. POWER TO AMEND. Subject to the provisions of the
Certificate of Incorporation and the provisions of the General Corporation Law
of the State of Delaware, the power to amend, alter, or repeal these Bylaws and
to adopt new Bylaws may be exercised by the Board of Directors or by the
stockholders.
13
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EXHIBIT 4.1
EXECUTION COPY
================================================================================
UNICCO SERVICE COMPANY
UNICCO FINANCE CORP.
SERIES A AND SERIES B
9 7/8% SENIOR SUBORDINATED NOTES DUE 2007
INDENTURE
------------------------
Dated as of October 17, 1997
------------------------
State Street Bank and Trust Company
Trustee
================================================================================
<PAGE> 2
CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310 (a)(1)............................................................. 7.10
(a)(2) ................................................................ 7.10
(a)(3)................................................................. N.A.
(a)(4)................................................................. N.A.
(a)(5)................................................................. 7.10
(i)(b)................................................................. 7.10
(ii)(c)................................................................ N.A.
311(a)................................................................. 7.11
(b).................................................................... 7.11
(iii(c)................................................................ N.A.
312 (a)................................................................ 2.05
(b)....................................................................11.03
(iv)(c)................................................................11.03
313(a)................................................................. 7.06
(b)(1).................................................................10.03
(b)(2)................................................................. 7.07
(v)(c)................................................................. 7.06;
11.02
(vi)(d)................................................................ 7.06
314(a)................................................................. 4.03;
11.02
(A)(b).................................................................10.02
(c)(1).................................................................11.04
(c)(2).................................................................11.04
(c)(3)................................................................. N.A.
(d)....................................................................10.03,
10.04,
10.05
(vii)(e)...............................................................11.05
(f).................................................................... N.A.
315 (a)................................................................ 7.01
(b).....................................................................7.05,
11.02
(B)(c)................................................................. 7.01
(d).................................................................... 7.01
(e).................................................................... 6.11
316 (a)(last sentence)................................................. 2.09
(a)(1)(A).............................................................. 6.05
(a)(1)(B).............................................................. 6.04
(a)(2)................................................................. N.A.
(b).................................................................... 6.07
(C)(c)................................................................. 2.12
317 (a)(1)............................................................. 6.08
(a)(2)................................................................. 6.09
<PAGE> 3
(b)....................................................................... 2.04
318 (a)...................................................................11.01
(b) ...................................................................... N.A.
(c).......................................................................11.01
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
<PAGE> 4
TABLE OF CONTENTS
PAGE
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE 1
SECTION 1.01. DEFINITIONS. 1
SECTION 1.02. OTHER DEFINITIONS. 15
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. 16
SECTION 1.04. RULES OF CONSTRUCTION. 16
ARTICLE 2. THE NOTES 17
SECTION 2.01. FORM AND DATING. 17
SECTION 2.02. EXECUTION AND AUTHENTICATION. 18
SECTION 2.03. REGISTRAR AND PAYING AGENT. 18
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST. 19
SECTION 2.05. HOLDER LISTS. 19
SECTION 2.06. TRANSFER AND EXCHANGE. 19
SECTION 2.07. REPLACEMENT NOTES. 32
SECTION 2.08. OUTSTANDING NOTES. 32
SECTION 2.09. TREASURY NOTES. 33
SECTION 2.10. TEMPORARY NOTES. 33
SECTION 2.11. CANCELLATION. 33
SECTION 2.12. DEFAULTED INTEREST. 33
ARTICLE 3. REDEMPTION AND PREPAYMENT 34
SECTION 3.01. NOTICES TO TRUSTEE. 34
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED. 34
SECTION 3.03. NOTICE OF REDEMPTION. 34
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION. 35
<PAGE> 5
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE 35
SECTION 3.06. NOTES REDEEMED IN PART. 35
SECTION 3.07. OPTIONAL REDEMPTION. 36
SECTION 3.08. MANDATORY REDEMPTION. 36
SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS. 36
ARTICLE 4. COVENANTS 38
SECTION 4.01. PAYMENT OF NOTES. 38
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY. 38
SECTION 4.03. REPORTS. 39
SECTION 4.04. COMPLIANCE CERTIFICATE. 39
SECTION 4.05. TAXES. 40
SECTION 4.06. STAY, EXTENSION AND USURY LAWS. 40
SECTION 4.07. RESTRICTED PAYMENTS. 41
SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES. 43
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED
STOCK. 44
SECTION 4.10. ASSET SALES 45
SECTION 4.11. TRANSACTIONS WITH AFFILIATES. 46
SECTION 4.12. LIENS. 47
SECTION 4.13. ACTIVITIES OF UNICCO FINANCE. 47
SECTION 4.14. CORPORATE EXISTENCE. 47
SECTION 4.15. OFFER TO REPURCHASE UPON CHANGE OF CONTROL. 47
SECTION 4.16. LIMITATION ON OTHER SENIOR SUBORDINATED DEBT. 49
SECTION 4.17. PAYMENTS FOR CONSENT. 49
SECTION 4.18. ADDITIONAL NOTE GUARANTEES. 49
ARTICLE 5. SUCCESSORS 49
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS. 49
<PAGE> 6
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED. 50
ARTICLE 6. DEFAULTS AND REMEDIES. 50
SECTION 6.01. EVENTS OF DEFAULT. 50
SECTION 6.02. ACCELERATION. 52
SECTION 6.03. OTHER REMEDIES. 53
SECTION 6.04. WAIVER OF PAST DEFAULTS. 53
SECTION 6.05. CONTROL BY MAJORITY. 53
SECTION 6.06. LIMITATION ON SUITS. 53
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT. 54
SECTION 6.08. COLLECTION SUIT BY TRUSTEE. 54
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM. 54
SECTION 6.10. PRIORITIES. 55
SECTION 6.11. UNDERTAKING FOR COSTS. 55
ARTICLE 7. TRUSTEE. 55
SECTION 7.01. DUTIES OF TRUSTEE. 55
SECTION 7.02. RIGHTS OF TRUSTEE. 56
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE. 57
SECTION 7.04. TRUSTEE'S DISCLAIMER. 57
SECTION 7.05. NOTICE OF DEFAULTS. 57
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES. 57
SECTION 7.07. COMPENSATION AND INDEMNITY. 58
SECTION 7.08. REPLACEMENT OF TRUSTEE. 59
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC. 59
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION. 60
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUERS. 60
<PAGE> 7
ARTICLE 8. LEGAL DEFEASANCE AND COVENANT DEFEASANCE 60
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE. 60
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE. 60
SECTION 8.03. COVENANT DEFEASANCE. 61
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE. 61
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD
IN TRUST; OTHER MISCELLANEOUS PROVISIONS. 62
SECTION 8.06. REPAYMENT TO ISSUERS. 63
SECTION 8.07. REINSTATEMENT. 63
ARTICLE 9. AMENDMENT, SUPPLEMENT AND WAIVER 63
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES. 63
SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES. 64
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT. 65
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS. 65
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES. 66
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC. 66
ARTICLE 10. SUBORDINATION 66
SECTION 10.01. AGREEMENT TO SUBORDINATE. 66
SECTION 10.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY. 66
SECTION 10.03. DEFAULT ON DESIGNATED SENIOR DEBT. 67
SECTION 10.04. ACCELERATION OF SECURITIES. 68
SECTION 10.05. WHEN DISTRIBUTION MUST BE PAID OVER. 68
SECTION 10.06. NOTICE BY ISSUERS. 68
SECTION 10.07. SUBROGATION. 68
SECTION 10.08. RELATIVE RIGHTS. 69
SECTION 10.09. SUBORDINATION MAY NOT BE IMPAIRED BY ISSUERS. 69
<PAGE> 8
SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE. 69
SECTION 10.11. RIGHTS OF TRUSTEE AND PAYING AGENT. 69
SECTION 10.12. AUTHORIZATION TO EFFECT SUBORDINATION. 70
SECTION 10.13. AMENDMENTS. 70
ARTICLE 11. NOTE GUARANTEES 70
SECTION 11.01. GUARANTEE. 70
SECTION 11.02. SUBORDINATION OF NOTE GUARANTEE. 71
SECTION 11.03. LIMITATION ON GUARANTOR LIABILITY. 71
SECTION 11.04. EXECUTION AND DELIVERY OF NOTE GUARANTEE. 72
SECTION 11.05. CONSOLIDATION, ETC. BY GUARANTORS. 72
SECTION 11.06 RELEASES FOLLOWING SALE OF ASSETS. 72
ARTICLE 12. MISCELLANEOUS 73
SECTION 12.01. TRUST INDENTURE ACT CONTROLS. 73
SECTION 12.02. NOTICES. 73
SECTION 12.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER
HOLDERS OF NOTES. 74
SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT. 74
SECTION 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. 74
SECTION 12.06. RULES BY TRUSTEE AND AGENTS. 75
SECTION 12.07. NO PERSONAL LIABILITY OF TRUSTEES, DIRECTORS, OFFICERS,
EMPLOYEES AND STOCKHOLDERS. 75
SECTION 12.08. GOVERNING LAW. 75
SECTION 12.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS. 75
SECTION 12.10. SUCCESSORS. 76
SECTION 12.11. SEVERABILITY. 76
SECTION 12.12. COUNTERPART ORIGINALS. 76
SECTION 12.13. TABLE OF CONTENTS, HEADINGS, ETC. 76
EXHIBITS
<PAGE> 9
Exhibit A FORM OF NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED
INVESTOR
Exhibit E FORM OF NOTE GUARANTEE
Exhibit F FORM OF SUPPLEMENTAL INDENTURE
<PAGE> 10
INDENTURE dated as of October 17, 1997 among UNICCO Service Company, a
Massachusetts business trust, (the "Company"), UNICCO Finance Corp., a Delaware
corporation, ("UNICCO Finance" and, together with the Company, the "Issuers"),
USC, Inc., UNICCO Security Services, Inc., and UNICCO Government Services, Inc.
(collectively, the "Guarantors") and State Street Bank and Trust Company, as
trustee (the "Trustee").
The Issuers, the Guarantors and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the Holders of
the 97/8% Series A Senior Subordinated Notes due 2007 (the "Series A Notes") and
the 97/8% Series B Senior Subordinated Notes due 2007 (the "Series B Notes" and,
together with the Series A Notes, the "Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"144A Global Note" means a global note in the form of Exhibit A-1 hereto
bearing the Global Note Legend and the Private Placement Legend and deposited
with or on behalf of, and registered in the name of, the Depositary or its
nominee that will be issued in a denomination equal to the outstanding principal
amount of the Notes sold in reliance on Rule 144A.
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with or in contemplation
of, such other Person merging with or into or becoming a Subsidiary of such
specified Person, and (ii) Indebtedness secured by a Lien encumbering any asset
acquired by such specified Person.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For 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 securities, by agreement or otherwise; provided that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Procedures" means, with respect to any transfer or exchange
of or for beneficial interests in any Global Note, the rules and procedures of
the Depositary, Euroclear and Cedel that apply to such transfer or exchange.
"Asset Sale" means (i) the sale, lease, conveyance or other disposition
of any assets or rights (including, without limitation, by way of a sale or
leaseback), excluding sales of services and ancillary products in the ordinary
course of business consistent with past practices (provided that the sale,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company and its Restricted Subsidiaries taken as a whole shall be
governed by Sections 4.15 and 5.01 hereof and not
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by Section 4.10 hereof), and (ii) the issue or sale by the Company or any of its
Subsidiaries of Equity Interests of any of the Company's Subsidiaries, in the
case of either clause (i) or (ii), whether in a single transaction or a series
of related transactions (a) that have a fair market value in excess of $1.0
million or (b) for net proceeds in excess of $1.0 million. Notwithstanding the
foregoing: (i) a transfer of assets by the Company to a Wholly Owned Restricted
Subsidiary or by a Wholly Owned Restricted Subsidiary to the Company or to
another Wholly Owned Restricted Subsidiary, (ii) an issuance of Equity Interests
by a Wholly Owned Restricted Subsidiary to the Issuers or to another Wholly
Owned Restricted Subsidiary, (iii) a Restricted Payment that is permitted by
Section 4.07 hereof and (iv) the sale of accounts receivable and related assets
customarily transferred in an asset securitization transaction involving
accounts receivable to a Receivables Subsidiary or by a Receivables Subsidiary
in connection with a Qualified Receivables Transaction shall not be deemed to be
Asset Sales.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Board of Directors" means (i) at any time the Company is a business
trust, the board of trustees of the Company, (ii) at any time the Company is a
corporation, the board of directors of the Company or any authorized committee
thereof, and (iii) at any time the Company is neither a business trust nor a
corporation, the board or committee of the Company serving a similar function.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination thereof
is to be made, the amount of the liability in respect of a capital lease that
would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership or limited liability
company, partnership or membership interests (whether general or limited) and
(iv) any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distribution of assets of, the
issuing Person.
"Cash Equivalents" means (i) United States dollars, (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having maturities of not
more than six months from the date of acquisition, (iii) certificates of deposit
and eurodollar time deposits with maturities of six months or less from the date
of acquisition, bankers' acceptances with maturities not exceeding six months
and overnight bank deposits, in each case with any lender party to the Credit
Facility or with any domestic commercial bank having capital and surplus in
excess of $500.0 million and a Keefe Bank Watch Rating of "B" or better, (iv)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clauses (ii) and (iii) above entered into
with any financial institution meeting the qualifications specified in clause
(iii) above and (v) commercial paper having the highest rating obtainable from
Moody's Investors Service, Inc. or Standard & Poor's Corporation and in each
case maturing within six months after the date of acquisition.
"Cedel" means Cedel Bank, SA.
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"Change of Control" means the occurrence of any of the following: (i) the
sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Restricted Subsidiaries,
taken as a whole, other than to the Principals; (ii) the adoption of a plan for
the liquidation or dissolution of the Company; (iii) prior to the consummation
of an Initial Public Offering, the consummation of any transaction (including,
without limitation, any merger or consolidation) the result of which is that the
Principals fail to be the "beneficial owners" (as such term is defined in Rule
13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly, of at
least 51% of the aggregate voting power of the outstanding Voting Stock of the
Company; (iv) following the consummation of an Initial Public Offering, the
consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any "person" or "group" (as such
terms are used in Section 13(d)(3) of the Exchange Act), other than the
Principals, becomes the "beneficial owner" (as such term is defined in Rule
13-d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly, of (a)
more than 35% of the aggregate voting power of the outstanding Voting Stock of
the Company or (b) more of the voting power of the outstanding Voting Stock of
the Company than the aggregate of that beneficially owned by the Principals; or
(v) the first day on which more than a majority of the members of the Board of
Directors are not Continuing Directors.
"Company" means UNICCO Service Company, a Massachusetts business trust,
and any and all successors thereto.
"Consolidated Cash Flow" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period plus, to the
extent deducted in computing such Consolidated Net Income, (i) an amount equal
to any extraordinary loss plus any net loss realized in connection with an Asset
Sale, (ii) provision for taxes based on income or profits and, without
duplication, the Tax Amount for such period, (iii) consolidated interest expense
whether paid or accrued and whether or not capitalized (including, without
limitation, original issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest component of all
payments associated with Capital Lease Obligations, commissions, discounts and
other fees and charges incurred in respect of letter of credit or bankers'
acceptance financings, and net payments (if any) pursuant to Hedging
Obligations), excluding, however, amortization or write off of debt issuance
costs, (iv) depreciation and amortization (including amortization of goodwill
and other intangibles but excluding amortization of prepaid cash expenses that
were paid in a prior period) and (v) any non-cash compensation expense resulting
from compensation paid in Equity Interests of the Company, in each case, on a
consolidated basis and determined in accordance with GAAP. Notwithstanding the
foregoing, the provision for taxes based on the income or profits of, and the
depreciation and amortization of, a Restricted Subsidiary of a Person shall be
added to Consolidated Net Income to compute Consolidated Cash Flow only to the
extent (and in the same proportion) that the Net Income of such Restricted
Subsidiary was included in calculating the Consolidated Net Income of such
Person and only if a corresponding amount would be permitted at the date of
determination to be dividended by such Restricted Subsidiary without prior
approval (that has not been obtained) pursuant to the terms of its charter and
all agreements, instruments, judgments, decrees, orders, statutes, rules and
governmental regulations applicable to such Restricted Subsidiary or its
stockholders.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that (i) the Net Income (but not loss) of any Person that is
not a Restricted Subsidiary or that is accounted for by the equity method of
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accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Wholly Owned Restricted
Subsidiary thereof, (ii) the Net Income of any Restricted Subsidiary shall be
excluded to the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at the
date of determination permitted without any prior governmental approval (that
has not been obtained) or, directly or indirectly, by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to that Restricted Subsidiary or its
stockholders, (iii) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition shall
be excluded, (iv) the cumulative effect of a change in accounting principles
shall be excluded and (v) the Net Income (but not loss) of any Unrestricted
Subsidiary shall be excluded, whether or not distributed to the Company or one
of its Restricted Subsidiaries.
"Continuing Directors" means, as of any date of determination, any member
of the Board of Directors who (i) was a member of such Board of Directors on the
date of this Indenture or (ii) was nominated for election or elected to such
Board of Directors with the approval of a majority of the Continuing Directors
who were members of such Board of Directors at the time of such nomination or
election.
"Credit Facility" means the Amended and Restated Revolving Credit
Agreement of the Company and certain of its subsidiaries, dated the date of this
Indenture, including any guarantees and security therefor, as amended, restated,
modified, renewed, refunded, replaced, substituted, restructured or refinanced
in whole or in part from time to time (including, without limitation, any
successive amendments, restatements, extensions, modifications, renewals,
refundings, replacements, substitutions, restructurings or refinancings of the
foregoing), whether with the Company or with one or more of its Subsidiaries,
and whether with the present lenders or any other lenders.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 12.02 hereof or such other address as to which the
Trustee may give notice to the Issuers.
"Custodian" means the Trustee, as custodian with respect to the Notes in
global form, or any successor entity thereto.
"Default" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"Definitive Note" means a certificated Note registered in the name of the
Holder thereof and issued in accordance with Section 2.06 hereof, in the form of
Exhibit A-1 hereto except that such Note shall not bear the Global Note Legend
and shall not have the "Schedule of Exchanges of Interests in the Global Note"
attached thereto.
"Depositary" means, with respect to the Notes issuable or issued in whole
or in part in global form, the Person specified in Section 2.03 hereof as the
Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"Designated Senior Debt" means (i) any Indebtedness and other obligations
outstanding under the Credit Facility and (ii) any other Senior Debt permitted
under this Indenture the principal
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amount of which is $10.0 million or more and that has been designated by the
Company as "Designated Senior Debt."
"Disqualified Stock" means any Capital Stock that, but its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the Holder thereof, in whole or in part, on or prior to the date
that is 91 days after the date on which the Notes mature.
"Domestic Restricted Subsidiary" means a Restricted Subsidiary that is
organized pursuant to the laws of any state or other jurisdiction in the United
States.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear system.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means the Notes issued in the Exchange Offer pursuant to
Section 2.06(f) hereof.
"Exchange Offer" has the meaning set forth in the Registration Rights
Agreement.
"Exchange Offer Registration Statement" has the meaning set forth in the
Registration Rights Agreement.
"Existing Indebtedness" means Indebtedness in existence on the date of
this Indenture, until such Indebtedness is repaid.
"Fixed Charges" means, with respect to any Person for any period, the
sum, without duplication, of (i) the consolidated interest expense of such
Person and its Restricted Subsidiaries for such period, whether paid or accrued
(including, without limitation, original issue discount, non-cash interest
payments, the interest component of any deferred payment obligations, the
interest component of all payments associated with Capital Lease Obligations,
commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers' acceptance financings, and net payments (if any) pursuant
to Hedging Obligations), excluding, however, amortization or write off of debt
issuance costs, (ii) the consolidated interest expense of such Person and its
Restricted Subsidiaries that was capitalized during such period, (iii) any
interest expense on Indebtedness of another Person that is Guaranteed by such
Person or one of its Restricted Subsidiaries or secured by a Lien on assets of
such Person or one of its Restricted Subsidiaries (whether or not such Guarantee
or Lien is called upon) and (iv) the product of (a) all dividend payments,
whether or not in cash, on any series of preferred equity of such Person or any
of its Restricted Subsidiaries, other than dividend payments on Equity Interests
payable solely in Equity Interests of the Company or to the Company or any
Restricted Subsidiary, times (b) a fraction, the numerator of which is one and
the denominator of which is one minus the then current combined federal, state
and local statutory tax rate of such Person (or, in the case of the Company for
so long as it is treated as an "S corporation" or a partnership for federal
income tax
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purposes, the combined federal, state and local statutory tax rate used to
calculate the Tax Amount), expressed as a decimal, in each case, on a
consolidated basis and in accordance with GAAP.
"Fixed Charge Coverage Ratio" means with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person for such period
to the Fixed Charges of such Person and its Restricted Subsidiaries for such
period. In the event that the Company or any of its Restricted Subsidiaries
incurs, assumes, Guarantees, repays or redeems any Indebtedness (other than
revolving credit borrowings) or issues or redeems preferred equity subsequent to
the commencement of the period for which the Fixed Charge Coverage Ratio is
being calculated but prior to the date on which the event for which the
calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"),
then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect
to such incurrence, assumption, Guarantee, repayment or redemption of
Indebtedness, or such issuance or redemption of preferred equity, as if the same
had occurred at the beginning of the applicable four-quarter reference period.
In addition, for purposes of making the computation referred to above, (i)
acquisitions that have been made by the Company or any of its Restricted
Subsidiaries, including through mergers or consolidations and including any
related financing transactions, during the four-quarter reference period or
subsequent to such reference period and on or prior to the Calculation Date
shall be deemed to have occurred on the first day of the four-quarter reference
period (giving effect to any pro forma expense and cost reductions) and
Consolidated Cash Flow for such reference period shall be calculated without
giving effect to clause (iii) of the proviso set forth in the definition of
Consolidated Net Income, (ii) the Consolidated Cash Flow attributable to
discontinued operations, as determined in accordance with GAAP, and operations
or businesses disposed of prior to the Calculation Date, shall be excluded and
(iii) the Fixed Charges attributable to discontinued operations, as determined
in accordance with GAAP, and operations or businesses disposed of prior to the
Calculation Date, shall be excluded, but only to the extent that the obligations
giving rise to such Fixed Charges shall not be obligations of the referent
Person or any of its Restricted Subsidiaries following the Calculation Date.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institution of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect from time to time.
"Global Notes" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, in the form of
Exhibit A-1 hereto issued in accordance with Section 2.01, 2.06(b)(iv),
2.06(d)(ii) or 2.06(f) hereof.
"Global Note Legend" means the legend set forth in Section 2.06(g)(ii),
which is required to be placed on all Global Notes issued under this Indenture.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America, and the payment for which the
United States pledges its full faith and credit.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
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"Guarantor" means each Person named as a Guarantor in the preamble to
this Indenture, any Domestic Restricted Subsidiary that executes a Note
Guarantee in accordance with the provisions of this Indenture, and all
successors and assigns of each of the foregoing.
"Hedging Obligations" means, with respect to any Person, the obligations
of such Person under (i) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements and (ii) other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates.
"Holder" means a Person in whose name a Note is registered.
"IAI Global Note" means the global Note in the form of Exhibit A-1 hereto
bearing the Global Note Legend and the Private Placement Legend and deposited
with or on behalf of and registered in the name of the Depositary or its nominee
that will be issued in a denomination equal to the outstanding principal amount
of the Notes sold to Institutional Accredited Investors.
"Indebtedness" means, with respect to any Person, (i) any indebtedness of
such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or banker's acceptances
or representing Capital Lease Obligations or the balance deferred and unpaid of
the purchase price of any property or representing any Hedging Obligations,
except any such balance that constitutes an accrued expense or trade payable, if
and to the extent any of the foregoing indebtedness (other than letters of
credit and Hedging Obligations) would appear as a liability upon a balance sheet
of such Person prepared in accordance with GAAP, (ii) all indebtedness of others
secured by a Lien on any asset of such Person (whether or nor such indebtedness
is assumed by such Person) up to the value of the collateral and (iii) to the
extent not otherwise included, the Guarantee by such Person of any indebtedness
of any other Person. Notwithstanding the foregoing, Indebtedness shall not
include payment, performance or surety bonds or standby letters of credit issued
in the ordinary course of business.
"Indenture" means this Indenture, as amended or supplemented from time to
time.
"Indirect Participant" means a Person who holds a beneficial interest in
a Global Note through a Participant.
"Initial Purchaser" means BancBoston Securities Inc.
"Initial Public Offering" means one or more underwritten public offerings
of the common equity of the Company registered under the Securities Act that
generate aggregate gross proceeds of at least $25.0 million.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who are not also QIBs.
"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with
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all items that are or would be classified as investments on a balance sheet
prepared in accordance with GAAP. If the Company or any Subsidiary of the
Company sells or otherwise disposes of any Equity Interests of any direct or
indirect Subsidiary of the Company such that, after giving effect to any such
sale or disposition, such Person is no longer a Subsidiary of the Company, the
Company shall be deemed to have made an Investment on the date of any such sale
or disposition equal to the fair market value of the Equity Interests of such
Subsidiary not sold or disposed of in an amount determined as provided in the
third full paragraph of Section 4.07 hereof.
"Issuers" means the Company and UNICCO Finance, as Issuers.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York, New York or Boston, Massachusetts or at a
place of payment are authorized by law, regulation or executive order to remain
closed. If a payment date is a Legal Holiday at a place of payment, payment may
be made at that place on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue on such payment for the intervening period.
"Letter of Transmittal" means the letter of transmittal to be prepared by
the Issuers and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
"Liquidated Damages" means all liquidated damages then owing pursuant to
Section 5 of the Registration Rights Agreement.
"Net Income" means, with respect to any Person, (i) the net income (loss)
of such Person, determined in accordance with GAAP and before any reduction in
respect of dividends on preferred equity, excluding, however, (a) any gain (but
not loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with (1) any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions) or (2) the
disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries and (b) any extraordinary or nonrecurring gain (but
not loss), together with any related provision for taxes on such extraordinary
or nonrecurring gain (but not loss), minus (ii) in the case of the Company for
so long as it is treated as an "S corporation" or a partnership for federal
income tax purposes, the Tax Amount for such period, excluding, however, any Tax
Amount attributable to any gain referred to in clause (i)(a) or (b) above.
"Net Proceeds" means the aggregate cash proceeds received by the Company
or any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale (including, without limitation, legal, accounting
and investment banking fees, and sales commissions) and any severance,
termination, closing or relocation or similar expenses incurred as a result
thereof, taxes or Tax Distributions paid or payable as a result thereof (after
taking into account any available tax credits or deductions and any tax sharing
arrangements),
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amounts required to be applied to the repayment of Indebtedness secured by a
Lien on the asset or assets that were the subject of such Asset Sale and any
reserve for adjustment in respect of the sale price of such asset or assets
established in accordance with GAAP.
"Non-Recourse Debt" means Indebtedness: (i) as to which neither the
Company nor any of its Restricted Subsidiaries (a) provides credit support of
any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness), (b) is directly or indirectly liable (as a guarantor
or otherwise) or (c) constitutes the lender; (ii) no default with respect to
which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness (other than
the Notes) of the Company or any of its Restricted Subsidiaries to declare a
default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity, and (iii) as to which the
lenders have been notified in writing that they will not have any recourse to
the stock or assets of the Company or any of its Restricted Subsidiaries.
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Note Guarantee" means the Guarantee by each Guarantor of the Issuers'
payment obligations under this Indenture and the Notes, executed pursuant to the
provisions of this Indenture.
"Notes" has the meaning assigned to it in the preamble to this Indenture.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offering" means the offering of the Notes by the Issuers.
"Offering Memorandum" means the Offering Memorandum, dated October 14,
1997, relating to the Notes. "Officer" means, with respect to any Person, the
Chairman of the Board, the Chief Executive Officer, the President, the Chief
Operating Officer, the Chief Financial Officer, the Treasurer, any Assistant
Treasurer, the Controller, the Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the
Issuers by two Officers of each of the Issuers, one of whom must be the
principal executive officer, the principal financial officer, the treasurer or
the principal accounting officer of such Issuer, that meets the requirements of
Section 12.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who
is reasonably acceptable to the Trustee, that meets the requirements of Section
12.05 hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"Participant" means, with respect to the Depositary, Euroclear or Cedel,
a Person who has an account with the Depositary, Euroclear or Cedel,
respectively (and, with respect to The Depository Trust Company, shall include
Euroclear and Cedel).
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"Participating Broker-Dealer" has the meaning set forth in the
Registration Rights Agreement.
"Permitted Investments" means (i) any Investment in the Company or in a
Wholly Owned Restricted Subsidiary of the Company; (ii) any Investment in Cash
Equivalents; (iii) any Investment by the Company or any Restricted Subsidiary of
the Company in a Person, if as a result of such Investment (a) such Person
becomes a Wholly Owned Restricted Subsidiary of the Company and a Guarantor or
(b) such Person is merged, consolidated or amalgamated with or into, or
transfers or conveys substantially all of its assets to, or is liquidated into,
the Company or a Wholly Owned Restricted Subsidiary of the Company; (iv) any
Restricted Investment made as a result of the receipt of non-cash consideration
from an Asset Sale that was made pursuant to and in compliance with Section 4.10
hereof; (v) any acquisition of assets solely in exchange for the issuance of
Equity Interests (other than Disqualified Stock) of the Company; (vi) advances
to employees in the ordinary course of business; (vii) other Investments in any
Person (measured on the date each such Investment was made and without giving
effect to subsequent changes in value), when taken together with all other
Investments made pursuant to this clause (vii) that are at the time outstanding,
not to exceed $10.0 million; and (viii) Investments by the Company or a
Restricted Subsidiary of the Company in a Receivables Subsidiary or any
Investment by a Receivables Subsidiary in any other Person or assets in
connection with Qualified Receivables Transaction; provided that any Investment
in any such Person is in the form of a Purchase Money Note, an equity interest
or interests in accounts receivable generated by the Company or a Subsidiary of
the Company and transferred to any Person in connection with a Qualified
Receivables Transaction or any such Person owning such accounts receivable.
"Permitted Junior Securities" means Equity Interests in the Company or
debt securities that are subordinated to all Senior Debt (and any debt
securities issued in exchange for Senior Debt) to substantially the same extent
as, or to a greater extent than, the Notes are subordinated to Senior Debt
pursuant to Article 10 hereof.
"Permitted Liens" means (i) Liens securing Senior Debt of the Company and
its Restricted Subsidiaries that was permitted by the terms of this Indenture to
be incurred; (ii) Liens in favor of the Company or any of its Restricted
Subsidiaries; (iii) Liens on property of a Person existing at the time such
Person is merged into or consolidated with the Company or any Restricted
Subsidiary of the Company; provided that such Liens were in existence prior to
the contemplation of such merger or consolidation and do not extend to any
assets other than those of the Person merged into or consolidated with the
Company; (iv) Liens on property existing at the time of acquisition thereof by
the Company or any Restricted Subsidiary of the Company, provided that such
Liens were in existence prior to the contemplation of such acquisition; (v)
Liens to secure the performance of statutory obligations, surety or appeal
bonds, performance bonds or other obligations of a like nature incurred in the
ordinary course of business; (vi) Liens existing on the date of this Indenture;
(vii) Liens for taxes, assessments or governmental charges or claims that are
not yet delinquent or that are being contested in good faith by appropriate
proceedings promptly instituted and diligently concluded, provided that any
reserve or other appropriate provision as shall be required in conformity with
GAAP shall have been made therefore; (viii) Liens incurred in the ordinary
course of business of the Company or any Restricted Subsidiary of the Company
with respect to obligations that do not exceed $2.0 million at any one time
outstanding and that (a) are not incurred in connection with the borrowing of
money or the obtaining of advances or credit (other than trade credit in the
ordinary course of business) and (b) do not in the aggregate materially detract
from the value of the property or materially impair the use thereof in the
operation of business by the Company or such Restricted Subsidiary; and (ix)
Liens on
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assets of a Receivables Subsidiary securing Indebtedness incurred in connection
with a Qualified Receivables Transaction, provided that such Indebtedness was
incurred in connection with such Qualified Receivables Transaction.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries;
provided that: (i) the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the principal amount of
(or accreted value, if applicable), plus accrued interest on, the Indebtedness
so extended, refinanced, renewed, replaced, defeased or refunded (plus the
amount of reasonable expenses incurred in connection therewith); (ii) such
Permitted Refinancing Indebtedness has a final maturity date later than the
final maturity date of, and has Weighted Average Life to Maturity of, the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; (iii) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to the Notes,
such Permitted Refinancing Indebtedness is subordinated in right of payment to
the Notes on terms at least as favorable to the Holders of Notes as those
contained in the documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; and (iv) such Indebtedness
is incurred either by the Company or by the Restricted Subsidiary that is an
obligor on or guarantor of the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or agency or political subdivision thereof (including any subdivision
or ongoing business of any such entity or substantially all of the assets of any
such entity, subdivision or business).
"Principals" means Steven C. Kletjian, Richard J. Kletjian and Robert P.
Kletjian, their respective spouses and lineal descendants, and any Affiliate of,
trust or partnership for the benefit of, or direct, indirect, remainder or
contingent beneficiary of any such trust or partnership for the benefit of, any
of the foregoing.
"Private Placement Legend" means the legend set forth in Section
2.06(g)(i) to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.
"Purchase Money Note" means a promissory note evidencing a line of
credit, which may be irrevocable, from, or evidencing other Indebtedness owed
to, the Company or any Subsidiary of the Company in connection with a Qualified
Receivables Transaction.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Qualified Receivables Transaction" means any transaction or series of
transactions that may be entered into by the Company or any Subsidiary of the
Company pursuant to which the Company or any Subsidiary of the Company may sell,
convey or otherwise transfer to (i) a Receivables Subsidiary (in the case of a
transfer by the Company or any Subsidiary of the Company) and (ii) any other
person (in the case of a transfer by a Receivables Subsidiary), or may grant a
security interest in, any accounts receivable (whether now existing or arising
in the future) of the Company or any Subsidiary of the Company, and any assets
thereto including, without limitation, all collateral securing
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such accounts receivable, all contracts and all guarantees or other obligations
in respect of such accounts receivable, proceeds of such accounts receivable and
other assets which are customarily transferred or in respect of which security
interests are customarily granted in connection with asset securitization
transactions involving accounts receivable.
"Receivables Subsidiary" means a Wholly Owned Restricted Subsidiary of
the Company, which engages in no activities other than in connection with the
financing of accounts receivable and which is designated by the Board of
Directors of the Issuers (as provided below) as a Receivables Subsidiary (i) no
portion of the Indebtedness or any other Obligations of which (a) is guaranteed
by the Company or any other Restricted Subsidiary of the Company (excluding
guarantees of Obligations (other than the principal of, and interest on,
Indebtedness)) pursuant to Standard Securitization Undertakings, (b) is recourse
to or obligates the Company or any other Restricted Subsidiary of the Company in
any way other than pursuant to Standard Securitization Undertakings or (c)
subjects any property or asset of the Company or any other Restricted Subsidiary
of the Company, directly or indirectly, contingently or otherwise, to the
satisfaction thereof, other than pursuant to Standard Securitization
Undertakings, (ii) with which neither the Company nor any other Restricted
Subsidiary of the Company has any material contract, agreement, arrangement or
understanding (except in connection with a Purchase Money Note or Qualified
Receivables Transaction) other than on terms no less favorable to the Company or
such other Restricted Subsidiary of the Company than those that might be
obtained at the time from persons that are not Affiliates of the Company, other
than fees payable in the ordinary course of business in connection with
servicing accounts receivable, and (iii) to which neither the Company nor any
other Restricted Subsidiary of the Company has any obligation to maintain or
preserve such entity's financial condition or cause such entity to achieve
certain levels of operating results. Any such designation by the Board of
Directors of the Company shall be evidenced to the Trustee by filing with the
Trustee a certified copy of the resolution of the Board of Directors of the
Company giving effect to such designation and an Officers' Certificate
certifying, to the best of such officers' knowledge and belief after consulting
with counsel, that such designation complied with the foregoing conditions.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of October 17, 1997, by and among the Issuers, the Guarantors and the
Initial Purchaser as such agreement may be amended, modified or supplemented
from time to time.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Note" means the Regulation S Permanent Global Note
or the Regulation S Temporary Global Note, as appropriate.
"Regulation S Permanent Global Note" means a permanent global Note in the
form of Exhibit A-1 hereto bearing the Global Note Legend and the Private
Placement Legend and deposited with or on behalf of and registered in the name
of the Depositary or its nominee, issued in a denomination equal to the
outstanding principal amount of the Regulation S Temporary Global Note upon
expiration of the Restricted Period.
"Regulation S Temporary Global Note" means a temporary global Note in the
form of Exhibit A-2 hereto bearing the Private Placement Legend and deposited
with or on behalf of and registered in the name of the Depositary or its
nominee, issued in a denomination equal to the outstanding principal amount of
the Notes initially sold in reliance on Rule 903 of Regulation S.
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"Representative" means the indenture trustee or other trustee, agent or
representative for the holders of any Senior Debt. As of the Closing Date, Bank
Boston, N.A., as agent, shall be the Representative for the Credit Facility.
"Responsible Officer," when used with respect to the Trustee, means any
officer within the Corporate Trust Department of the Trustee (or any successor
group of the Trustee) 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 Definitive Note" means a Definitive Note bearing the Private
Placement Legend.
"Restricted Global Note" means a Global Note bearing the Private
Placement Legend.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Period" means the 40-day restricted period as defined in
Regulation S.
"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person, other than UNICCO Finance, that is not an Unrestricted Subsidiary.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Debt" of a Person means (i) all Indebtedness of such Person
outstanding under the Credit Facility and all Hedging Obligations with respect
thereto, (ii) any other Indebtedness of such Person permitted to be incurred
under the terms of this Indenture, unless the instrument under which such
Indebtedness is incurred expressly provides that it is subordinated in right of
payment to any Senior Debt of such Person and (iii) all Obligations of such
Person with respect to the foregoing. Notwithstanding anything to the contrary
in the foregoing, Senior Debt of a Person shall not include (a) any liability
for federal, state, local or other taxes owed or owing by such Person, (b) any
Indebtedness of such Person to any of its Subsidiaries or other Affiliates, (c)
any trade payables or (d) any Indebtedness that is incurred in violation of this
Indenture.
"Shelf Registration Statement" means the Shelf Registration Statement as
defined in the Registration Rights Agreement.
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"Significant Subsidiary" means any Restricted Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Act, as such Regulation is in effect on the date
hereof.
"Standard Securitization Undertakings" means representations, warranties,
covenants and indemnities entered into by the Company or any Subsidiary of the
Company which are reasonably customary in an accounts receivable transaction.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be redeemed or paid in the original
documentation governing such Indebtedness, and shall not include any contingent
obligations to repay, redeem or repurchase any such interest or principal prior
to the date originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof).
"Tax Amount" means the combined federal, state and local income taxes
payable by the shareholders of the Company, assuming the highest marginal rates
applicable to any of them, with respect to the taxable income of the Company
solely as a result of the taxation of the Company as an "S corporation" or a
partnership for federal income tax purposes.
"Tax Distribution" means a distribution in respect of taxes to the
shareholders of the Company pursuant to clause (iv) of the second full paragraph
of Section 4.07 hereof.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.ss.ss.) as in
effect on the date on which this Indenture is qualified under the TIA.
"Trustee" means the party named as such above until a successor replaces
it in accordance with the applicable provisions of this Indenture and thereafter
means the successor serving hereunder.
"Unrestricted Definitive Note" means one or more Definitive Notes that do
not bear and are not required to bear the Private Placement Legend.
"Unrestricted Global Note" means a permanent Global Note in the form of
Exhibit A-1 attached hereto that bears the Global Note Legend and that has the
"Schedule of Exchanges of Interests in the Global Note" attached thereto, and
that is deposited with or on behalf of and registered in the name of the
Depositary, representing a series of Notes that do not bear the Private
Placement Legend.
"Unrestricted Subsidiary" means (i) any Subsidiary that is designated by
the Board of Directors as an Unrestricted Subsidiary pursuant to a board
resolution, but only to the extent that such Subsidiary: (a) has no Indebtedness
other than Non-Recourse Debt; (b) is not a party to any agreement,
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<PAGE> 24
contract, arrangement or understanding with the Company or any Restricted
Subsidiary of the Company unless the terms of any such agreement, contract,
arrangement or understanding are no less favorable to the Company or such
Restricted Subsidiary than those that might be obtained at the time from Persons
who are not affiliates of the Company, (c) is a Person with respect to which
neither the Company nor any of its Restricted Subsidiaries has any direct or
indirect obligation (1) to subscribe for additional Equity Interests or (2) to
maintain or preserve such Person's financial condition or to cause such Person
to achieve any specified levels of operating results; (d) has not guaranteed or
otherwise directly or indirectly provided credit support for any Indebtedness of
the Company or any of its Restricted Subsidiaries; and (e) has at least one
director on its board of directors that is not a director or executive officer
of the Company or any of its Restricted Subsidiaries.
"UNICCO Finance" means UNICCO Finance Corp., a Delaware corporation.
"Voting Stock" means Capital Stock that is at the time entitled to vote
in the election of the Board of Directors.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares) shall at
the time be owned by such Person or by one or more Wholly Owned Restricted
Subsidiaries of such Person and one or more Wholly Owned Restricted Subsidiaries
of such Person.
SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
"Affiliate Transaction".....................................4.11
"Asset Sale Offer"..........................................4.10
"Authentication Order"......................................2.02
"Bankruptcy Law"............................................4.01
"Change of Control Offer"...................................4.15
"Change of Control Payment".................................4.15
"Change of Control Payment Date" ...........................4.15
"Covenant Defeasance".......................................8.03
"Event of Default"..........................................6.01
"Excess Proceeds"...........................................4.10
"incur".....................................................4.09
"Legal Defeasance" .........................................8.02
"Offer Amount"..............................................3.09
"Offer Period"..............................................3.09
<PAGE> 25
"Paying Agent".............................................. 2.03
"Payment Default" .......................................... 6.01
"Payment Blockage Notice" ..................................10.03
"Permitted Debt"............................................ 4.09
"Purchase Date"............................................. 3.09
"Registrar"................................................. 2.03
"Restricted Payments"....................................... 4.07
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Notes and the Note Guarantees means the Issuers and the
Guarantors, respectively, and any successor obligor upon the Notes and the Note
Guarantees, respectively.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
(6) references to sections of or rules under the Securities Act
shall be deemed to include substitute, replacement of successor sections
or rules adopted by the SEC from time to time.
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ARTICLE 2.
THE NOTES
SECTION 2.01. FORM AND DATING.
(a) General. The Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A-1 hereto. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note shall be dated the date of its authentication. The Notes shall
be in denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes shall constitute,
and are hereby expressly made, a part of this Indenture and the Issuers, the
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and agree to be bound thereby.
However, to the extent any provision of any Note conflicts with the express
provisions of this Indenture, the provisions of this Indenture shall govern and
be controlling.
(b) Global Notes. Notes issued in global form shall be substantially
in the form of Exhibits A-1 or A-2, as applicable, attached hereto (including
the Global Note Legend thereon and the "Schedule of Exchanges of Interests in
the Global Note" attached thereto). Notes issued in definitive form shall be
substantially in the form of Exhibit A-1 attached hereto (but without the Global
Note Legend thereon and without the "Schedule of Exchanges of Interests in the
Global Note" attached thereto). Each Global Note shall represent such of the
outstanding Notes as shall be specified therein and each shall provide that it
shall represent the aggregate principal amount of outstanding Notes from time to
time endorsed thereon and that the aggregate principal amount of outstanding
Notes represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a Global
Note to reflect the amount of any increase or decrease in the aggregate
principal amount of outstanding Notes represented thereby shall be made by the
Trustee or the Custodian, at the direction of the Trustee, in accordance with
instructions given by the Holder thereof as required by Section 2.06 hereof.
(c) Temporary Global Notes. Notes offered and sold in reliance on
Regulation S shall be issued initially in the form of the Regulation S Temporary
Global Note, which shall be deposited on behalf of the purchasers of the Notes
represented thereby with the Trustee, as custodian for the Depositary, and
registered in the name of the Depositary or the nominee of the Depositary for
the accounts of designated agents holding on behalf of Euroclear or Cedel Bank,
duly executed by the Issuers and authenticated by the Trustee as hereinafter
provided. The Restricted Period shall be terminated upon the receipt by the
Trustee of (i) a written certificate from the Depositary, together with copies
of certificates from Euroclear and Cedel Bank certifying that they have received
certification of non-United States beneficial ownership of 100% of the aggregate
principal amount of the Regulation S Temporary Global Note (except to the extent
of any beneficial owners thereof who acquired an
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<PAGE> 27
interest therein during the Restricted Period pursuant to another exemption from
registration under the Securities Act and who will take delivery of a beneficial
ownership interest in a 144A Global Note or an IAI Global Note bearing a Private
Placement Legend, all as contemplated by Section 2.06(a)(ii) hereof), and (ii)
an Officers' Certificate from the Issuers. Following the termination of the
Restricted Period, beneficial interests in the Regulation S Temporary Global
Note shall be exchanged for beneficial interests in the Regulation S Permanent
Global Note pursuant to the Applicable Procedures. Simultaneously with the
authentication of the Regulation S Permanent Global Note, the Trustee shall
cancel the Regulation S Temporary Global Note. The aggregate principal amount of
the Regulation S Temporary Global Note and the Regulation S Permanent Global
Notes may from time to time be increased or decreased by adjustments made on the
records of the Trustee and the Depositary or its nominee, as the case may be, in
connection with transfers of interest as hereinafter provided.
(d) Euroclear and Cedel Procedures Applicable. The provisions of the
"Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" of Euroclear and the "General Terms and Conditions
of Cedel Bank" and "Customer Handbook" of Cedel Bank shall be applicable to
transfers of beneficial interests in the Regulation S Temporary Global Note and
the Regulation S Permanent Global Notes that are held by Participants through
Euroclear or Cedel.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
Two Officers shall sign the Notes for each Issuer by manual or
facsimile signature. The Company's seal shall be reproduced on the Notes and may
be in facsimile form.
If an Officer whose signature is on a Note no longer holds that
office at the time a Note is authenticated, the Note shall nevertheless be
valid.
A Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Note has been authenticated under this Indenture.
The Trustee shall, upon a written order of the Issuers signed by
two Officers of each of the Issuers (an "Authentication Order"), authenticate
Notes for original issue up to the aggregate principal amount stated in
paragraph 4 of the Notes. The aggregate principal amount of Notes outstanding at
any time may not exceed such amount except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Issuers to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Issuers.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
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The Issuers shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Issuers may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Issuers may change any
Paying Agent or Registrar without notice to any Holder. The Issuers shall notify
the Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Issuers fail to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.
The Issuers initially appoint The Depository Trust Company ("DTC")
to act as Depositary with respect to the Global Notes.
The Issuers initially appoint the Trustee to act as the Registrar
and Paying Agent and to act as Custodian with respect to the Global Notes.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Issuers shall require each Paying Agent other than the Trustee
to agree in writing that such Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or Liquidated Damages, if any, or interest on the Notes, and
will notify the Trustee of any default by the Issuers in making any such
payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Issuers at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) shall have no further liability for the money. If the Company or a
Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust
fund for the benefit of the Holders all money held by it as Paying Agent. Upon
any bankruptcy or reorganization proceedings relating to the Issuers, the
Trustee shall serve as Paying Agent for the Notes.
SECTION 2.05. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA ss. 312(a). If the Trustee is
not the Registrar, the Issuers shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Issuers shall otherwise comply with TIA ss. 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, by the Depositary or any such nominee to a successor Depositary or a
nominee of such successor Depositary. All Global Notes will be exchanged by the
Issuers for Definitive Notes if (i) the Company delivers to the Trustee notice
from the Depositary that it is
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unwilling or unable to continue to act as Depositary or that it is no longer a
clearing agency registered under the Exchange Act and, in either case, a
successor Depositary is not appointed by the Issuers within 90 days after the
date of such notice from the Depositary or (ii) the Issuers in their sole
discretion determine that the Global Notes (in whole but not in part) should be
exchanged for Definitive Notes and deliver a written notice to such effect to
the Trustee; provided that in no event shall the Regulation S Temporary Global
Note be exchanged by the Issuers for Definitive Notes prior to (x) the
expiration of the Restricted Period and (y) the receipt by the Registrar of any
certificates required pursuant to Rule 903(c)(3)(ii)(B) under the Securities
Act.
Upon the occurrence of either of the preceding events in (i) or
(ii) above, Definitive Notes shall be issued in such names as the Depositary
shall instruct the Trustee. Global Notes also may be exchanged or replaced, in
whole or in part, as provided in Sections 2.07 and 2.10 hereof. Every Note
authenticated and delivered in exchange for, or in lieu of, a Global Note or any
portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof,
shall be authenticated and delivered in the form of, and shall be, a Global
Note. A Global Note may not be exchanged for another Note other than as provided
in this Section 2.06(a), however, beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 2.06(b),(c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global Notes.
The transfer and exchange of beneficial interests in the Global Notes shall be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Restricted
Global Notes shall be subject to restrictions on transfer comparable to those
set forth herein to the extent required by the Securities Act. Transfers of
beneficial interests in the Global Notes also shall require compliance with
either subparagraph (i) or (ii) below, as applicable, as well as one or more of
the other following subparagraphs, as applicable:
(i) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in
the same Restricted Global Note in accordance with the transfer
restrictions set forth in the Private Placement Legend; provided, however,
that prior to the expiration of the Restricted Period, transfers of
beneficial interests in the Temporary Regulation S Global Note may not be
made to a U.S. Person or for the account or benefit of a U.S. Person (other
than the Initial Purchaser) Beneficial interests in any Unrestricted Global
Note may be transferred to Persons who take delivery thereof in the form of
a beneficial interest in an Unrestricted Global Note. No written orders or
instructions shall be required to be delivered to the Registrar to effect
the transfers described in this Section 2.06(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests in
Global Notes. In connection with all transfers and exchanges of beneficial
interests that are not subject to Section 2.06(b)(i) above, the transferor
of such beneficial interest must deliver to the Registrar either (A) (1) a
written order from a Participant or an Indirect Participant given to the
Depositary in accordance with the Applicable
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Procedures directing the Depositary to credit or cause to be credited a
beneficial interest in another Global Note in an amount equal to the
beneficial interest to be transferred or exchanged and (2) instructions
given in accordance with the Applicable Procedures containing information
regarding the Participant account to be credited with such increase or (B)
(1) a written order from a Participant or an Indirect Participant given to
the Depositary in accordance with the Applicable Procedures directing the
Depositary to cause to be issued a Definitive Note in an amount equal to
the beneficial interest to be transferred or exchanged and (2) instructions
given by the Depositary to the Registrar containing information regarding
the Person in whose name such Definitive Note shall be registered to effect
the transfer or exchange referred to in (1) above; provided that in no
event shall Definitive Notes be issued upon the transfer or exchange of
beneficial interests in the Regulation S Temporary Global Note prior to (x)
the expiration of the Restricted Period and (y) the receipt by the
Registrar of any certificates required pursuant to Rule 903 under the
Securities Act. Upon consummation of an Exchange Offer by the Issuers in
accordance with Section 2.06(f) hereof, the requirements of this Section
2.06(b)(ii) shall be deemed to have been satisfied upon receipt by the
Registrar of the instructions contained in the Letter of Transmittal
delivered by the Holder of such beneficial interests in the Restricted
Global Notes. Upon satisfaction of all of the requirements for transfer or
exchange of beneficial interests in Global Notes contained in this
Indenture and the Notes or otherwise applicable under the Securities Act,
the Trustee shall adjust the principal amount of the relevant Global
Note(s) pursuant to Section 2.06(h) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted Global
Note. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.06(b)(ii) above and the
Registrar receives the following:
(A) if the transferee will take delivery in the form of a
beneficial interest in the 144A Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof;
(B) if the transferee will take delivery in the form of a
beneficial interest in the Regulation S Temporary Global Note or the
Regulation S Global Note, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in item (2) thereof; and
(C) if the transferee will take delivery in the form of a
beneficial interest in the IAI Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications and certificates and Opinion of Counsel required by
item (3) thereof, if applicable.
(iv) Transfer and Exchange of Beneficial Interests in a Restricted
Global Note for Beneficial Interests in the Unrestricted Global Note. A
beneficial interest in any Restricted Global Note may be exchanged by any
holder thereof for a beneficial interest in an Unrestricted Global Note or
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note if the exchange or
transfer complies with the requirements of Section 2.06(b)(ii) above and:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the holder of the beneficial interest to be transferred, in the
case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not (1) a
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broker-dealer, (2) a Person participating in the distribution of the
Exchange Notes or (3) a Person who is an affiliate (as defined in Rule
144) of the Issuers;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Participating Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance
with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a beneficial
interest in an Unrestricted Global Note, a certificate from such holder in the
form of Exhibit C hereto, including the certifications in item (1)(a) thereof;
or
(2) if the holder of such beneficial interest in a Restricted
Global Note proposes to transfer such beneficial interest to a Person who shall
take delivery thereof in the form of a beneficial interest in an Unrestricted
Global Note, a certificate from such holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof; and, in each such case set
forth in this subparagraph (D), if the Registrar so requests or if the
Applicable Procedures so require, an Opinion of Counsel in form reasonably
acceptable to the Registrar to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on transfer
contained herein and in the Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or
(D) above at a time when an Unrestricted Global Note has not yet been issued,
the Issuers shall issue and, upon receipt of an Authentication Order in
accordance with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
aggregate principal amount of beneficial interests transferred pursuant to
subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in the form
of, a beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive
Notes.
(i) Beneficial Interests in Restricted Global Notes to Restricted
Definitive Notes. If any holder of a beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a Restricted
Definitive Note or to transfer such beneficial interest to a Person who
takes delivery thereof in the form of a Restricted Definitive Note, then,
upon receipt by the Registrar of the following documentation:
(A) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a
Restricted Definitive Note, a certificate from such holder in the form
of Exhibit C hereto, including the certifications in item (2)(a)
thereof;
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(B) if such beneficial interest is being transferred to a QIB in
accordance with Rule 144A under the Securities Act, a certificate to
the effect set forth in Exhibit B hereto, including the certifications
in item (1) thereof;
(C) if such beneficial interest is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule 903
or Rule 904 under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (2)
thereof;
(D) if such beneficial interest is being transferred pursuant to
an exemption from the registration requirements of the Securities Act
in accordance with Rule 144 under the Securities Act, a certificate to
the effect set forth in Exhibit B hereto, including the certifications
in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to an
Institutional Accredited Investor in reliance on an exemption from the
registration requirements of the Securities Act other than those
listed in subparagraphs (B) through (D) above, a certificate to the
effect set forth in Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3) thereof, if
applicable;
(F) if such beneficial interest is being transferred to the
Company or any of its Subsidiaries, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (3)(b)
thereof; or
(G) if such beneficial interest is being transferred pursuant to
an effective registration statement under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(c) thereof, the Trustee shall cause the
aggregate principal amount of the applicable Global Note to be reduced
accordingly pursuant to Section 2.06(h) hereof, and the Issuers shall
execute and the Trustee shall authenticate and deliver to the Person
designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a
beneficial interest in a Restricted Global Note pursuant to this
Section 2.06(c)(i) shall be registered in such name or names and in
such authorized denomination or denominations as the holder of such
beneficial interest shall instruct the Registrar through instructions
from the Depositary and the Participant or Indirect Participant. The
Trustee shall deliver such Definitive Notes to the Persons in whose
names such Notes are so registered. Any Definitive Note issued in
exchange for a beneficial interest in a Restricted Global Note
pursuant to this Section 2.06(c)(i) shall bear the Private Placement
Legend and shall be subject to all restrictions on transfer contained
therein.
(ii) Notwithstanding Sections 2.06(c)(i)(A) and (C) hereof, a
beneficial interest in the Regulation S Temporary Global Note may not be
exchanged for a Definitive Note or transferred to a Person who takes delivery
thereof in the form of a Definitive Note prior to (x) the expiration of the
Restricted Period and (y) the receipt by the Registrar of any certificates
required pursuant to Rule 903(c)(3)(ii)(B) under the Securities Act, except in
the case of a transfer pursuant to an
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exemption from the registration requirements of the Securities Act other than
Rule 903 or Rule 904.
(iii) Beneficial Interests in Restricted Global Notes to Unrestricted
Definitive Notes. A holder of a beneficial interest in a Restricted Global Note
may exchange such beneficial interest for an Unrestricted Definitive Note or may
transfer such beneficial interest to a Person who takes delivery thereof in the
form of an Unrestricted Definitive Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement and
the holder of such beneficial interest, in the case of an exchange, or
the transferee, in the case of a transfer, certifies in the applicable
Letter of Transmittal that it is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3) a Person
who is an affiliate (as defined in Rule 144) of the Issuers;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Participating Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance with
the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such
beneficial interest for a Definitive Note that does not bear the
Private Placement Legend, a certificate from such holder in the form
of Exhibit C hereto, including the certifications in item (1)(b)
thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial interest
to a Person who shall take delivery thereof in the form of a
Definitive Note that does not bear the Private Placement Legend, a
certificate from such holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
(iv) Beneficial Interests in Unrestricted Global Notes to Unrestricted
Definitive Notes. If any holder of a beneficial interest in an Unrestricted
Global Note proposes to exchange such beneficial interest for a Definitive Note
or to transfer such beneficial interest to a Person who takes delivery thereof
in the form of a Definitive Note, then, upon satisfaction of the conditions set
forth in Section 2.06(b)(ii) hereof, the Trustee shall cause the aggregate
principal amount of the applicable Global Note to be reduced accordingly
pursuant to Section 2.06(h) hereof, and the Issuers shall execute and upon
receipt of an Authentication Order the Trustee shall authenticate and
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deliver to the Person designated in the instructions a Definitive Note in the
appropriate principal amount. Any Definitive Note issued in exchange for a
beneficial interest pursuant to this Section 2.06(c)(iv) shall be registered in
such name or names and in such authorized denomination or denominations as the
holder of such beneficial interest shall instruct the Registrar through
instructions from the Depositary and the Participant or Indirect Participant.
The Trustee shall deliver such Definitive Notes to the Persons in whose names
such Notes are so registered. Any Definitive Note issued in exchange for a
beneficial interest pursuant to this Section 2.06(c)(iv) shall not bear the
Private Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial
Interests.
(v) Restricted Definitive Notes to Beneficial Interests in Restricted
Global Notes. If any Holder of a Restricted Definitive Note proposes to exchange
such Note for a beneficial interest in a Restricted Global Note or to transfer
such Restricted Definitive Notes to a Person who takes delivery thereof in the
form of a beneficial interest in a Restricted Global Note, then, upon receipt by
the Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note proposes
to exchange such Note for a beneficial interest in a Restricted Global
Note, a certificate from such Holder in the form of Exhibit C hereto,
including the certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Note is being transferred to
a QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being transferred to
a Non-U.S. Person in an offshore transaction in accordance with Rule 903
or Rule 904 under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (2)
thereof;
(D) if such Restricted Definitive Note is being transferred
pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(a) thereof;
(E) if such Restricted Definitive Note is being transferred to
an Institutional Accredited Investor in reliance on an exemption from the
registration requirements of the Securities Act other than those listed
in subparagraphs (B) through (D) above, a certificate to the effect set
forth in Exhibit B hereto, including the certifications, certificates and
Opinion of Counsel required by item (3) thereof, if applicable;
(F) if such Restricted Definitive Note is being transferred to
the Company or any of its Subsidiaries, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (3)(b)
thereof; or
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(G) if such Restricted Definitive Note is being transferred
pursuant to an effective registration statement under the Securities Act,
a certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(c) thereof,
the Trustee shall cancel the Restricted Definitive Note, increase or
cause to be increased the aggregate principal amount of, in the case of
clause (A) above, the appropriate Restricted Global Note, in the case of
clause (B) above, the 144A Global Note, in the case of clause (C) above,
the Regulation S Global Note, and in all other cases, the IAI Global
Note.
(vi) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note may exchange
such Note for a beneficial interest in an Unrestricted Global Note or transfer
such Restricted Definitive Note to a Person who takes delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement and
the Holder, in the case of an exchange, or the transferee, in the case of
a transfer, certifies in the applicable Letter of Transmittal that it is
not (1) a broker-dealer, (2) a Person participating in the distribution
of the Exchange Notes or (3) a Person who is an affiliate (as defined in
Rule 144) of the Issuers;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Participating Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance with
the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Definitive Notes proposes to
exchange such Notes for a beneficial interest in the Unrestricted Global
Note, a certificate from such Holder in the form of Exhibit C hereto,
including the certifications in item (1)(c) thereof; or
(2) if the Holder of such Definitive Notes proposes to
transfer such Notes to a Person who shall take delivery thereof in the
form of a beneficial interest in the Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit B hereto, including
the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to the
effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein and
in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs in this
Section 2.06(d)(ii), the Trustee shall cancel the Definitive Notes and
increase or cause to be increased the aggregate principal amount of the
Unrestricted Global Note.
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(vii) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note or
transfer such Definitive Notes to a Person who takes delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note at any time. Upon
receipt of a request for such an exchange or transfer, the Trustee shall cancel
the applicable Unrestricted Definitive Note and increase or cause to be
increased the aggregate principal amount of one of the Unrestricted Global
Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or
(iii) above at a time when an Unrestricted Global Note has not yet been issued,
the Issuers shall issue and, upon receipt of an Authentication Order in
accordance with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of Definitive Notes so transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes.
Upon request by a Holder of Definitive Notes and such Holder's compliance with
the provisions of this Section 2.06(e), the Registrar shall register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting Holder shall present or surrender to the Registrar
the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by his or her attorney, duly authorized in writing. In addition, the requesting
Holder shall provide any additional certifications, documents and information,
as applicable, required pursuant to the following provisions of this Section
2.06(e).
(i) Restricted Definitive Notes to Restricted Definitive Notes. Any
Restricted Definitive Note may be transferred to and registered in the name
of Persons who take delivery thereof in the form of a Restricted Definitive
Note if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A under the
Securities Act, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications in item (1)
thereof;
(B) if the transfer will be made pursuant to Rule 903 or Rule
904, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (2) thereof;
and
(C) if the transfer will be made pursuant to any other exemption
from the registration requirements of the Securities Act, then the
transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications, certificates and Opinion of Counsel
required by item (3) thereof, if applicable.
(ii) Restricted Definitive Notes to Unrestricted Definitive Notes. Any
Restricted Definitive Note may be exchanged by the Holder thereof for an
Unrestricted Definitive Note or transferred to a Person or Persons who take
delivery thereof in the form of an Unrestricted Definitive Note if:
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(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in the
case of a transfer, certifies in the applicable Letter of Transmittal
that it is not (1) a broker-dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who is an affiliate
(as defined in Rule 144) of the Issuers;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive Notes
proposes to exchange such Notes for an Unrestricted Definitive Note, a
certificate from such Holder in the form of Exhibit C hereto,
including the certifications in item (1)(d) thereof; or
(2) if the Holder of such Restricted Definitive Notes
proposes to transfer such Notes to a Person who shall take delivery
thereof in the form of an Unrestricted Definitive Note, a certificate
from such Holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests, an Opinion of Counsel in form reasonably
acceptable to the Issuers to the effect that such exchange or transfer
is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the Securities
Act.
(iii) Unrestricted Definitive Notes to Unrestricted Definitive Notes.
A Holder of Unrestricted Definitive Notes may transfer such Notes to a
Person who takes delivery thereof in the form of an Unrestricted Definitive
Note. Upon receipt of a request to register such a transfer, the Registrar
shall register the Unrestricted Definitive Notes pursuant to the
instructions from the Holder thereof.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Issuers shall issue and,
upon receipt of an Authentication Order in accordance with Section 2.02, the
Trustee shall authenticate (i) one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered for acceptance by Persons that
certify in the applicable Letters of Transmittal that (x) they are not
broker-dealers, (y) they are not participating in a distribution of the Exchange
Notes and (z) they are not affiliates (as defined in Rule 144) of the Issuers,
and accepted for exchange in the Exchange Offer and (ii) Definitive Notes in an
aggregate principal amount equal to the principal amount of the Restricted
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Definitive Notes accepted for exchange in the Exchange Offer. Concurrently with
the issuance of such Notes, the Trustee shall cause the aggregate principal
amount of the applicable Restricted Global Notes to be reduced accordingly, and
the Issuers shall execute and the Trustee shall authenticate and deliver to the
Persons designated by the Holders of Definitive Notes so accepted Definitive
Notes in the appropriate principal amount.
(g) Legends. The following legends shall appear on the face of all
Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(i) Subordination Legend. Each Global Note and each Definitive Note shall
bear a legend in substantially the following form:
"THIS NOTE IS SUBORDINATED IN ACCORDANCE WITH THE PROVISIONS OF ARTICLE 10
OF THE INDENTURE GOVERNING THIS NOTE."
(ii) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each Global Note
and each Definitive Note (and all Notes issued in exchange therefor or
substitution thereof) shall bear the legend in substantially the following
form:
"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT") AND, ACCORDINGLY, MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR
FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST
HEREIN, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), (B) IT
IS NOT A U.S. PERSON, IS NOT ACQUIRING THIS NOTE FOR THE ACCOUNT OR BENEFIT
OF A U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT OR (C) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3)
OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN "IAI"), (2) AGREES
THAT IT WILL NOT, WITHIN THE TIME PERIOD REFERRED TO UNDER RULE 144(k)
(TAKING INTO ACCOUNT THE PROVISIONS OF RULE 144(d) UNDER THE SECURITIES
ACT, IF APPLICABLE) UNDER THE SECURITIES ACT AS IN EFFECT ON THE DATE OF
THE TRANSFER OF THIS NOTE, RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT
(A) TO THE ISSUERS, (B) TO A PERSON WHOM THE HOLDER REASONABLY BELIEVES IS
A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY
RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (E) TO AN IAI THAT, PRIOR
TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING
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CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE REGISTRATION OF
TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE
TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL
AMOUNT OF NOTES AT THE TIME OF TRANSFER OF LESS THAN $250,000, AN OPINION
OF COUNSEL ACCEPTABLE TO THE ISSUERS THAT SUCH TRANSFER IS IN COMPLIANCE
WITH THE SECURITIES ACT OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS, AND (3) AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER
OF THIS NOTE OR ANY INTEREST HEREIN WITHIN THE TIME PERIOD REFERRED TO
ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE
HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE
TO THE TRUSTEE. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF
REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION
REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN
VIOLATION OF THE FOREGOING RESTRICTIONS."
(B) Notwithstanding the foregoing, any Global Note or Definitive Note
issued pursuant to subparagraphs (b)(iv), (c)(ii), (c)(iv), (d)(ii),
(d)(iii), (e)(ii), (e)(iii) or (f) to this Section 2.06 (and all Notes
issued in exchange therefor or substitution thereof) shall not bear the
Private Placement Legend.
(ii) Global Note Legend. Each Global Note shall bear a legend in
substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS
MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL
NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a)
OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE
FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS
GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR
WRITTEN CONSENT OF THE ISSUERS."
(iii) Regulation S Temporary Global Note Legend The Regulation S Temporary
Global Note shall bear a legend in substantially the following form:
"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES,
ARE AS SPECIFIED IN THE INDENTURE. NEITHER THE HOLDER NOR THE BENEFICIAL
OWNER OF THIS REGULATION S TEMPORARY
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GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON."
(h) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note shall be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for or transferred to a Person who will take delivery thereof in
the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note shall be
reduced accordingly and an endorsement shall be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note shall be increased accordingly
and an endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the Issuers
shall execute and the Trustee shall authenticate Global Notes and
Definitive Notes upon the Issuers' order or at the Registrar's request.
(ii) No service charge shall be made to a holder of a beneficial
interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Issuers may require payment
of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes
or similar governmental charge payable upon exchange or transfer pursuant
to Sections 2.10, 3.06, 3.09, 4.10, 4.15 and 9.05 hereof).
(iii) The Registrar shall not be required to register the transfer of
or exchange any Note selected for redemption in whole or in part, except
the unredeemed portion of any Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes
shall be the valid obligations of the Issuers, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Global Notes
or Definitive Notes surrendered upon such registration of transfer or
exchange.
(v) The Issuers shall not be required (A) to issue, to register the
transfer of or to exchange any Notes during a period beginning at the
opening of business 15 days before the day of any selection of Notes for
redemption under Section 3.02 hereof and ending at the close of business on
the day of selection, (B) to register the transfer of or to exchange any
Note so selected for redemption in whole or in part, except the unredeemed
portion of any Note being redeemed in part
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or (c) to register the transfer of or to exchange a Note between a record
date and the next succeeding Interest Payment Date.
(vi) Prior to due presentment for the registration of a transfer of
any Note, the Trustee, any Agent and the Issuers may deem and treat the
Person in whose name any Note is registered as the absolute owner of such
Note for the purpose of receiving payment of principal of and interest on
such Notes and for all other purposes, and none of the Trustee, any Agent
or the Issuers shall be affected by notice to the contrary.
(vii) The Trustee shall authenticate Global Notes and Definitive Notes
in accordance with the provisions of Section 2.02 hereof.
(viii) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.06 to
effect a registration of transfer or exchange may be submitted by
facsimile.
SECTION 2.07. REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee or the
Issuers and the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Note, the Issuers shall issue and the Trustee,
upon receipt of an Authentication Order, shall authenticate a replacement Note
if the Trustee's requirements are met. If required by the Trustee or the
Issuers, an indemnity bond must be supplied by the Holder that is sufficient in
the judgment of the Trustee and the Issuers to protect the Issuers, the Trustee,
any Agent and any authenticating agent from any loss that any of them may suffer
if a Note is replaced. The Issuers may charge for their expenses in replacing a
Note.
Every replacement Note is an additional obligation of the Issuers
and shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
SECTION 2.08. OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated
by the Trustee except for those canceled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section as not outstanding. Except as set forth in Section 2.09 hereof, a Note
does not cease to be outstanding because the Issuers or an Affiliate of the
Issuers holds the Note.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases
to be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under
Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to
accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.
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SECTION 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal
amount of Notes have concurred in any direction, waiver or consent, Notes owned
by the Issuers, or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Issuers, shall
be considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes that the Trustee knows are so owned
shall be so disregarded.
SECTION 2.10. TEMPORARY NOTES.
Until certificates representing Notes are ready for delivery, the
Issuers may prepare and the Trustee, upon receipt of an Authentication Order,
shall authenticate temporary Notes. Temporary Notes shall be substantially in
the form of certificated Notes but may have variations that the Issuers consider
appropriate for temporary Notes and as shall be reasonably acceptable to the
Trustee. Without unreasonable delay, the Issuers shall prepare and the Trustee
shall authenticate definitive Notes in exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the
benefits of this Indenture.
SECTION 2.11. CANCELLATION.
The Issuers at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall destroy
canceled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all canceled Notes shall be delivered
to the Issuers. The Issuers may not issue new Notes to replace Notes that they
have paid or that have been delivered to the Trustee for cancellation.
SECTION 2.12. DEFAULTED INTEREST.
If the Issuers default in a payment of interest on the Notes,
they shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate provided
in the Notes and in Section 4.01 hereof. The Company shall notify the Trustee in
writing of the amount of defaulted interest proposed to be paid on each Note and
the date of the proposed payment. The Company shall fix or cause to be fixed
each such special record date and payment date, provided that no such special
record date shall be less than 10 days prior to the related payment date for
such defaulted interest. At least 15 days before the special record date, the
Issuers (or, upon the written request of the Issuers, the Trustee in the name
and at the expense of the Issuers) shall mail or cause to be mailed to Holders a
notice that states the special record date, the related payment date and the
amount of such interest to be paid.
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ARTICLE 3.
REDEMPTION AND PREPAYMENT
SECTION 3.01. NOTICES TO TRUSTEE.
If the Issuers elect to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, they shall furnish to the Trustee,
at least 30 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth (i) the clause of this Indenture pursuant to
which the redemption shall occur, (ii) the redemption date, (iii) the principal
amount of Notes to be redeemed and (iv) the redemption price.
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed or purchased in
an offer to purchase at any time, the Trustee shall select the Notes to be
redeemed or purchased among the Holders of the Notes in compliance with the
requirements of the principal national securities exchange, if any, on which the
Notes are listed or, if the Notes are not so listed, on a pro rata basis, by lot
or in accordance with any other method the Trustee considers fair and
appropriate; provided that no Notes of $1,000 or less shall be redeemed in part.
In the event of partial redemption by lot, the particular Notes to be redeemed
shall be selected, unless otherwise provided herein, not less than 30 nor more
than 60 days prior to the redemption date by the Trustee from the outstanding
Notes not previously called for redemption.
The Trustee shall promptly notify the Issuers in writing of the
Notes selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
SECTION 3.03. NOTICE OF REDEMPTION.
Subject to the provisions of Section 3.09 hereof, at least 30
days but not more than 60 days before a redemption date, the Company shall mail
or cause to be mailed, by first class mail, a notice of redemption to each
Holder whose Notes are to be redeemed at its registered address.
The notice shall identify the Notes to be redeemed and shall
state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption date
upon surrender of such Note, a new Note or Notes in principal amount equal to
the unredeemed portion shall be issued upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
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(e) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and after
the redemption date;
(g) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Issuers shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section
3.03 hereof, Notes called for redemption become irrevocably due and payable on
the redemption date at the redemption price. A notice of redemption may not be
conditional.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE
One Business Day prior to the redemption date, the Company shall
deposit with the Trustee or with the Paying Agent money sufficient to pay the
redemption price of and accrued interest on all Notes to be redeemed on that
date. The Trustee or the Paying Agent shall promptly return to the Company any
money deposited with the Trustee or the Paying Agent by the Company in excess of
the amounts necessary to pay the redemption price of, and accrued interest on,
all Notes to be redeemed.
If the Issuers comply with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Notes or the portions of Notes called for redemption. If a Note is redeemed
on or after an interest record date but on or prior to the related interest
payment date, then any accrued and unpaid interest shall be paid to the Person
in whose name such Note was registered at the close of business on such record
date. If any Note called for redemption shall not be so paid upon surrender for
redemption because of the failure of the Issuers to comply with the preceding
paragraph, interest shall be paid on the unpaid principal, from the redemption
date until such principal is paid, and to the extent lawful on any interest not
paid on such unpaid principal, in each case at the rate provided in the Notes
and in Section 4.01 hereof.
SECTION 3.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Issuers
shall issue and, upon receipt of an Authentication Order, the Trustee shall
authenticate for the Holder at the expense of the Company a new Note equal in
principal amount to the unredeemed portion of the Note surrendered.
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SECTION 3.07. OPTIONAL REDEMPTION.
(a) Except as set forth in clause (b) of this Section 3.07, the Notes
shall not be redeemable at the Issuers' option prior to October 15, 2002.
Thereafter, the Notes shall be subject to redemption at any time at the option
of the Issuers, in whole or in part, upon not less than 30 nor more than 60
days' notice, at the redemption prices (expressed as percentages of principal
amount) set forth below, plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the applicable redemption date, if redeemed during
the twelve-month period beginning on October 15 of the years indicated below:
YEAR PERCENTAGE
---- ----------
2002......................................................104.94%
2003......................................................103.29%
2004......................................................101.65%
2005 and thereafter.......................................100.00%
(b) Notwithstanding the provisions of clause (a) of this Section 3.07,
prior to October 15, 2000, the Issuers may redeem up to an aggregate of $33.0
million in principal amount of Notes at redemption price of 109.875% of the
principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the redemption date, with the net cash proceeds of
an initial public offering of common equity of the Company, provided that (i) at
least $72.0 million in principal amount of the Notes remains outstanding
immediately after the occurrence of such redemption and (ii) notice of such
redemption shall be given within 90 days of the date of the consummation of such
initial public offering.
(c) Any redemption pursuant to this Section 3.07 shall be made pursuant to
the provisions of Section 3.01 through 3.06 hereof.
SECTION 3.08. MANDATORY REDEMPTION.
Except as set forth in Sections 4.10 and 4.15 hereof, the Issuers
shall not be required to make mandatory redemption payments with respect to the
Notes.
SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
In the event that, pursuant to Section 4.10 hereof, the Issuers
shall be required to commence an Asset Sale Offer, it shall follow the
procedures specified below.
The Asset Sale Offer shall remain open for a period of 20
Business Days following its commencement and no longer, except to the extent
that a longer period is required by applicable law (the "Offer Period"). No
later than five Business Days after the termination of the Offer Period (the
"Purchase Date"), the Issuers shall purchase the principal amount of Notes
required to be purchased pursuant to Section 4.10 hereof (the "Offer Amount")
or, if less than the Offer Amount has been tendered, all Notes tendered in
response to the Asset Sale Offer. Payment for any Notes so purchased shall be
made in the same manner as interest payments are made.
If the Purchase Date is on or after an interest record date and
on or before the related interest payment date, any accrued and unpaid interest
shall be paid to the Person in whose name a
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Note is registered at the close of business on such record date, and no
additional interest shall be payable to Holders who tender Notes pursuant to the
Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company shall
send, by first class mail, a notice to the Trustee and each of the Holders, with
a copy to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Asset Sale
Offer. The Asset Sale Offer shall be made to all Holders. The notice, which
shall govern the terms of the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this Section 3.09
and Section 4.10 hereof and the length of time the Asset Sale Offer shall remain
open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall continue to
accrue interest;
(d) that, unless the Issuers default in making such payment, any Note
accepted for payment pursuant to the Asset Sale Offer shall cease to accrue
interest after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to an Asset
Sale Offer may only elect to have all of such Note purchased and may not elect
to have only a portion of such Note purchased;
(f) that Holders electing to have a Note purchased pursuant to any Asset
Sale Offer shall be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Note completed, or
transfer by book-entry transfer, to the Company, a depositary, if appointed by
the Issuers, or a Paying Agent at the address specified in the notice at least
three days before the Purchase Date;
(g) that Holders shall be entitled to withdraw their election if the
Company, the depositary or the Paying Agent, as the case may be, receives, not
later than the expiration of the Offer Period, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Note the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Note purchased;
(h) that, if the aggregate principal amount of Notes surrendered by
Holders exceeds the Offer Amount, the Trustee shall select the Notes to be
purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Company so that only Notes in denominations of $1,000, or
integral multiples thereof, shall be purchased); and
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(i) that Holders whose Notes were purchased only in part shall be issued
new Notes equal in principal amount to the unpurchased portion of the Notes
surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Issuers shall, to the extent
lawful, accept for payment, on a pro rata basis to the extent necessary, the
Offer Amount of Notes or portions thereof tendered pursuant to the Asset Sale
Offer, or if less than the Offer Amount has been tendered, all Notes tendered,
and shall deliver to the Trustee an Officers' Certificate stating that such
Notes or portions thereof were accepted for payment by the Issuers in accordance
with the terms of this Section 3.09. The Company, the Depositary or the Paying
Agent, as the case may be, shall promptly (but in any case not later than five
days after the Purchase Date) mail or deliver to each tendering Holder an amount
equal to the purchase price of the Notes tendered by such Holder and accepted by
the Issuers for purchase, and the Issuers shall promptly issue a new Note, and
the Trustee, upon written request from the Issuers shall authenticate and mail
or deliver such new Note to such Holder, in a principal amount equal to any
unpurchased portion of the Note surrendered. Any Note not so accepted shall be
promptly mailed or delivered by the Issuers to the Holder thereof. The Company
shall publicly announce the results of the Asset Sale Offer on the Purchase
Date. Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
ARTICLE 4.
COVENANTS
SECTION 4.01. PAYMENT OF NOTES.
The Issuers shall pay or cause to be paid the principal of,
premium, if any, and interest on the Notes on the dates and in the manner
provided in the Notes. Principal, premium, if any, and interest shall be
considered paid on the date due if the Paying Agent, if other than the Company
or a Subsidiary thereof, holds as of 10:00 a.m. New York Time on the due date
money deposited by the Company in immediately available funds and designated for
and sufficient to pay all principal, premium, if any, and interest then due. The
Issuers shall pay all Liquidated Damages, if any, in the same manner on the
dates and in the amounts set forth in the Registration Rights Agreement.
The Issuers shall pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue principal at the rate
equal to 1% per annum in excess of the then applicable interest rate on the
Notes to the extent lawful; it shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue installments of
interest and Liquidated Damages (without regard to any applicable grace period)
at the same rate to the extent lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Issuers shall maintain in the Borough of Manhattan, the City
of New York, an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee, Registrar or co-registrar) where Notes may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Issuers in respect of the Notes 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 Issuers shall fail to maintain any such required
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office or agency or the Company 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.
The Issuers may also from time to time designate one or more
other offices or agencies where the Notes may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Issuers of their obligation to maintain an office or agency in the
Borough of Manhattan, the City of New York for such purposes. The Company shall
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency.
The Issuers hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Issuers in accordance with Section
2.03.
SECTION 4.03. REPORTS.
(a) Whether or not required by the rules and regulations of the SEC, so
long as any Notes are outstanding, the Issuers shall furnish to the Trustee and
the Holders of Notes, within 15 days after the required filing date, (i) all
quarterly and annual financial information (excluding the exhibits and financial
schedules) that would be required to be contained in a filing with the SEC on
Forms 10-Q and 10-K if the Issuers were required to file such Forms, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" that describes the financial condition and results of operations of
the Issuers and their consolidated Subsidiaries (showing in reasonable detail,
either on the face of the financial statements or in the footnotes thereto, the
consolidated financial condition and results of operations of the Company,
UNICCO Finance and the Company's Restricted Subsidiaries separate from the
financial information and results of operations of the Unrestricted Subsidiaries
of the Company) and, with respect to the annual information only, a report
thereon by the Issuers' certified independent accountants and (ii) all current
reports that would be required to be filed with the SEC on Form 8-K if the
Issuers were required to file such reports. In addition, whether or not required
by the rules and regulations of the SEC, the Issuers shall file a copy of all
such information and reports with the SEC for public availability (unless the
SEC will not accept such a filing) and make such information available to
securities analysts and prospective investors upon request. The Issuers shall at
all times comply with TIA ss. 314(a).
(b) For so long as any Notes remain outstanding, the Issuers and the
Company's Restricted Subsidiaries shall furnish to the Holders and to securities
analysts and prospective investors, upon their request, the information required
to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
SECTION 4.04. COMPLIANCE CERTIFICATE.
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(a) The Issuers and each Guarantor (to the extent that such Guarantor is
so required under the TIA) shall deliver to the Trustee, within 90 days after
the end of each fiscal year, an Officers' Certificate stating that a review of
the activities of the Company and its Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officers with a view to
determining whether the Issuers or such Guarantor, as applicable, have kept,
observed, performed and fulfilled their obligations under this Indenture and
further stating, as to each such Officer signing such certificate, that to the
best of his or her knowledge the Issuers and the Guarantors have kept, observed,
performed and fulfilled each and every covenant contained in this Indenture and
is not in default in the performance or observance of any of the terms,
provisions and conditions of this Indenture (or, if a Default or Event of
Default shall have occurred, describing all such Defaults or Events of Default
of which he or she may have knowledge and what action the Issuers or such
Guarantor, as applicable, are taking or proposes to take with respect thereto)
and that to the best of his or her knowledge, no event has occurred and remains
in existence by reason of which payments on account of the principal of or
interest, if any, on the Notes is prohibited or if such event has occurred, a
description of the event and what action the Issuers or such Guarantor, as
applicable, are taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current standards of the American
Institute of Certified Public Accountants, the year-end financial statements
delivered pursuant to Section 4.03(a) hereof shall be accompanied by a written
statement of the Company's independent public accountants (who shall be a firm
of established national reputation) that in making the examination necessary for
certification of such financial statements, nothing has come to their attention
that would lead them to believe that the Issuers have violated any provisions of
Article 4 or Article 5 hereof or, if any such violation has occurred, specifying
the nature and period of existence thereof, it being understood that such
accountants shall not be liable directly or indirectly to any Person for any
failure to obtain knowledge of any such violation.
(c) The Issuers shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Issuers are taking or propose to take with
respect thereto.
SECTION 4.05. TAXES.
The Company shall pay, and shall cause each of its Subsidiaries
to pay, prior to delinquency, all material taxes, assessments, and governmental
levies except such as are contested in good faith and by appropriate proceedings
or where the failure to effect such payment is not adverse in any material
respect to the Holders of the Notes.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
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The Issuers and each of the Guarantors covenant (to the extent
that they may lawfully do so) that they shall not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay, extension or usury law wherever enacted, now or at any time hereafter
in force, that may affect the covenants or the performance of this Indenture;
and the Issuers and each of the Guarantors (to the extent that they may lawfully
do so) hereby expressly waives all benefit or advantage of any such law, and
covenants that they shall not, by resort to any such law, hinder, delay or
impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law has
been enacted.
SECTION 4.07. RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make
any other payment or distribution on account of the Company's Equity Interests
(including, without limitation, any payment in connection with any merger or
consolidation involving the Company) or to any direct or indirect holders of the
Company's Equity Interests in their capacity as such (other than dividends or
distributions (a) payable in Equity Interests (other than Disqualified Stock) of
the Company or (b) to the Company or any Wholly Owned Restricted Subsidiary of
the Company; (ii) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger or consolidation
involving the Company) any Equity Interests of the Company or any direct or
indirect parent of the Company (other than any such Equity Interests owned by
the Company or any Wholly Owned Restricted Subsidiary of the Company); (iii)
make any payment on or with respect to, or purchase, redeem, defease or
otherwise acquire or retire for value any Indebtedness of the Company or any
Restricted Subsidiary that is subordinated to the Notes or any Guarantee
thereof, except a payment of interest or principal at Stated Maturity; or (iv)
make any Restricted Investment (all such payments and other actions set forth in
clauses (i) through (iv) above being collectively referred to as "Restricted
Payments"), unless, at the time of and after giving effect to such Restricted
Payment:
(a) no Default or Event of Default shall have occurred and be continuing
or would occur as a consequence thereof; and
(b) the Company would, at the time of such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment has been made at
the beginning of the applicable four-quarter period, have been permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in the first paragraph of Section 4.09 hereof; and
(c) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Company and its Restricted Subsidiaries
after the date of this Indenture (excluding Restricted Payments permitted by
clause (ii) through (v) of the next succeeding paragraph), is less than the sum
of (i) 50% of the Consolidated Net Income of the Company for the period (taken
as one accounting period) from the beginning of the first fiscal quarter
commencing after the date of this Indenture to the end of the Company's most
recently ended fiscal quarter for which internal financial statements are
available at the time of such Restricted Payment (or, if such Consolidated Net
Income for such period is a deficit, less 100% of such deficit), plus (ii) 100%
of the aggregate net cash proceeds received by the Company from the issue
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or sale since the date of this Indenture of Equity Interests of the Company
(other than Disqualified Stock) or Disqualified Stock or debt securities of the
Company that have been converted into such Equity Interests (other than Equity
Interests (or Disqualified Stock or convertible debt securities) sold to a
Subsidiary of the Company and other than Disqualified Stock or convertible debt
securities that have been converted into Disqualified Stock), plus (iii) 50% of
any dividends received by the Company or a Wholly Owned Restricted Subsidiary
after the date of this Indenture from an Unrestricted Subsidiary of the Company,
to the extent that such dividends that were not otherwise included in
Consolidated Net Income of the Company for such period.
The foregoing provisions shall not prohibit (i) the payment of
any dividend within 60 days after the date of declaration thereof, if at the
date of declaration such payment would have complied with the provisions of this
Indenture; (ii) the redemption, repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness or Equity Interests of the Company
or any Restricted Subsidiary in exchange for, or out of the net cash proceeds of
the substantially concurrent sale (other than to a Subsidiary of the Company)
of, other Equity Interests of the Company (other than any Disqualified Stock);
provided that the amount of any such net cash proceeds that are utilized for any
such redemption, repurchase, retirement, defeasance or other acquisition shall
be excluded from clause (c)(ii) of the preceding paragraph; (iii) the
defeasance, redemption, repurchase or other acquisition of subordinated
Indebtedness with the net cash proceeds from an incurrence of Permitted
Refinancing Indebtedness; (iv) for any period that the Company is treated as an
"S corporation" or a partnership for federal income tax purposes, distributions
to shareholders of the Company in an amount not to exceed the Tax Amount for
such period; (v) the redemption, retirement or defeasance of indebtedness with
the net proceeds of the Offering as contemplated under the caption "Use of
Proceeds" in the Offering Memorandum and (vi) the repurchase, redemption or
other acquisition or retirement for value of any Equity Interests of the Company
or any Restricted Subsidiary of the Company held by any member of the Company's
(or any of its Restricted Subsidiaries') management or Board of Directors
pursuant to any management equity subscription agreement, shareholders'
agreement, equity incentive plan, stock option agreement or other similar
agreement; provided that the aggregate price paid for all such repurchased,
redeemed, acquired or retired Equity Interests under this clause (vi) shall not
exceed the sum of (a) $500,000 in any twelve-month period plus (b) the aggregate
net proceeds received by the Company from the issuance after the date of this
Indenture of Equity Interests of the Company to members of management or the
Board of Directors of the Company or any of its Restricted Subsidiaries
(provided that such net proceeds shall be excluded from clause (c)(ii) of the
preceding paragraph), and, for purposes of this clause (vi), in each case, no
Default or Event of Default shall have occurred and be continuing immediately
after such transaction.
The amount of all Restricted Payments (other than cash) shall be
the fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any non-cash Restricted Payment shall be determined in
good faith by the Board of Directors whose resolution with respect thereto shall
be delivered to the Trustee. Not later than the date of making any Restricted
Payment, the Company shall deliver to the Trustee an Officers' Certificate
stating that such Restricted Payment is permitted and setting forth the basis
upon which the calculations required by this Section 4.07 were computed.
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The Board of Directors may designate any Restricted Subsidiary to
be an Unrestricted Subsidiary if such designation would not cause a Default. For
purposes of making such determination, all outstanding Investments by the
Company and its Restricted Subsidiaries (except to the extent repaid in cash) in
the Subsidiary so designated shall be deemed to be Restricted Payments at the
time of such designation and shall reduce the amount available for Restricted
Payments under the first paragraph of this Section 4.07. All such outstanding
Investments shall be deemed to constitute Investments in an amount equal to the
greatest of (i) the net book value of such Investments at the time of such
designation, (ii) the fair market value of such Investments at the time of such
designation and (iii) the original fair market value of such Investments at the
time they were made. Such designation shall only be permitted if such Restricted
Payment would be permitted at such time and if such Restricted Subsidiary
otherwise meets the definition of an Unrestricted Subsidiary.
Any such designation by the Board of Directors shall be evidenced
to the Trustee by filing with the Trustee a certified copy of the board
resolution giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing conditions. If, at
any time, any Unrestricted Subsidiary would fail to meet the definition of an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date (and, if such Indebtedness is not permitted to be
incurred as of such date under Section 4.09 hereof, the Issuers shall be in
default of such Section). The Board of Directors may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such
designation shall be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation shall only be permitted if (i) such Indebtedness
is permitted under Section 4.09 hereof, calculated on a pro forma basis as if
such designation had occurred at the beginning of the four-quarter reference
period, and (ii) no Default or Event of Default would be in existence following
such designation.
SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES.
The Issuers shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to (a)(i) pay dividends or make any other distributions to
the Company or any of its Restricted Subsidiaries (A) on its Capital Stock or
(B) with respect to any other interest or participation in, or measured by, its
profits or (ii) pay any indebtedness owed to the Company or any of its
Restricted Subsidiaries, (b) make loans or advances to the Company or any of its
Restricted Subsidiaries or (c) transfer any of its properties or assets to the
Company or any of its Restricted Subsidiaries, except for such encumbrances or
restrictions existing under or by reasons of (i) Existing Indebtedness as in
effect on the date of this Indenture, (ii) the Credit Facility as in effect on
the date of this Indenture and any amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or refinancings
thereof, provided that such amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings are no more
restrictive with respect to such dividend and other payment restrictions than
those contained in the Credit Facility as in effect on the date of this
Indenture, (iii) this Indenture and the Notes, (iv) applicable law, (v) any
instrument governing Indebtedness or Capital Stock of a Person acquired by the
Company or any of its Restricted Subsidiaries as in effect at the time of such
acquisition (except to the extent such Indebtedness was incurred in connection
with or in contemplation of such acquisition), 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,
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provided that, in the case of Indebtedness, such Indebtedness was permitted by
the terms of this Indenture to be incurred, (vi) by reason of customary
non-assignment provisions in leases entered into in the ordinary course of
businesses, (vii) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions of the nature described in
clause (c) above on the property so acquired, (viii) Permitted Refinancing
Indebtedness, provided that the restrictions contained in the agreements
governing such Permitted Refinancing Indebtedness are no more restrictive than
those contained in the agreements governing the Indebtedness being refinanced,
or (ix) any Purchase Money Note, or other Indebtedness or contractual
requirements incurred with respect to a Qualified Receivable Transaction
relating to a Receivables Subsidiary.
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
Debt) and that the Company shall not permit any of its Restricted Subsidiaries
to issue any shares of preferred stock (other than to the Company or to another
Restricted Subsidiary); provided, however, that the Company and its Restricted
Subsidiaries may incur Indebtedness (including Acquired Debt) and the Company's
Restricted Subsidiaries may issue preferred stock if the Fixed Charge Coverage
Ratio for the Company's most recently ended four full fiscal quarters for which
internal financial statements are available immediately preceding the date on
which such additional Indebtedness is incurred or such preferred stock is issued
would have been at least 2.0 to 1, determined on a pro forma basis (including a
pro forma application of the net proceeds therefrom), as if the additional
Indebtedness had been incurred or the preferred stock had been issued at the
beginning of such four-quarter period.
The provisions of the first paragraph of this Section 4.09 shall
not apply to the incurrence of any of the following (collectively, "Permitted
Debt");
(i) the incurrence by the Company or its Restricted Subsidiaries of
Indebtedness under the Credit Facility; in an aggregate amount not to
exceed at any time outstanding the greater of (a) $45.0 million, less the
aggregate amount of all Net Proceeds of Asset Sales applied to repay any
such Indebtedness pursuant to clause (a) of the second paragraph of Section
4.10 and (b) 60% of the Company's and its Restricted Subsidiaries' accounts
receivable (net of reserves), as shown on the Company's most recent
consolidated balance sheet;
(ii) the incurrence by the Company of Indebtedness represented by the
Notes and this Indenture;
(iii) the incurrence by the Company and its Restricted Subsidiaries of
the Existing Indebtedness;
(iv) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the
net proceeds of which are used to refund, refinance or replace Indebtedness
that was permitted to be incurred by the first paragraph, or by clauses
(ii) through (ix) of the second paragraph of this Section 4.09;
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(v) the incurrence of Indebtedness between or among the Company and
any of its Wholly Owned Restricted Subsidiaries; provided, however, that
(a) if the Company is the obligor on such Indebtedness, such Indebtedness
is expressly subordinated to the prior payment in full of all Obligations
with respect to the Notes and (b) any subsequent issuance or transfer of
Equity Interests that results in any such Indebtedness being held by a
Person other than the Company or a Wholly Owned Restricted Subsidiary, and
any sale or other transfer of any such Indebtedness to a Person that is not
either the Company or a Wholly Owned Restricted Subsidiary, shall be
deemed, in each case, to constitute an incurrence of such Indebtedness by
the Company or such Restricted Subsidiary, as the case may be;
(vi) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred for the purpose of
fixing or hedging interest rate risk with respect to any floating rate
Indebtedness that is permitted by the terms of this Indenture to be
outstanding;
(vii) the incurrence by the Company or any of its Restricted
Subsidiaries of additional Indebtedness in an aggregate amount not to
exceed $10.0 million at any time outstanding;
(viii) the guarantee by the Company or any of its Restricted
Subsidiaries of Indebtedness that was permitted to be incurred by another
provision of this Section 4.09; and
(ix) Indebtedness of a Receivables Subsidiary that is not recourse to
the Company or any of its Restricted Subsidiaries (other than Standard
Securitization Undertakings) incurred in connection with a Qualified
Receivables Transaction.
For purposes of determining compliance with this Section 4.09, in
the event that an item of Indebtedness meets the criteria of more than one of
the categories of Permitted Debt described in clauses (i) through (ix) above or
is entitled to be incurred pursuant to the first paragraph of this Section 4.09,
the Company shall, in its sole discretion, classify such item of Indebtedness in
any manner that complies with this Section 4.09 and such item of Indebtedness
will be treated as having been incurred pursuant to only one of such clauses or
pursuant to the first paragraph hereof. Accrual of interest, the accretion of
accreted value and the payment of interest in the form of additional
Indebtedness shall not be deemed to be an incurrence of Indebtedness for
purposes of this Section 4.09.
SECTION 4.10. ASSET SALES
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless (i) the Company or 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 (evidenced by a
resolution of the Board of Directors set forth in an Officers' Certificate
delivered to the Trustee) of the assets or Equity Interests issued or sold or
otherwise disposed of and (ii) at least 80% of the consideration therefor
received by the Company or such Restricted Subsidiary is in the form of cash;
provided that the amount of (a) any liabilities (as shown on the Company's or
such Restricted Subsidiary's most recent balance sheet) of the Company or such
Restricted Subsidiary (other than contingent liabilities and liabilities that
are by their terms subordinated to the Notes or any Guarantee thereof) that are
assumed by the transferee of any such assets pursuant to a customary novation
agreement that releases the Company or such Restricted Subsidiary from further
liability and (b) any securities, notes or other obligations received by the
Company or such Restricted Subsidiary from such
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transferee that are immediately converted by the Company or such Restricted
Subsidiary into cash (to the extent of the cash received) shall be deemed to be
cash for purposes of this provision.
Within 360 days after the receipt of any Net Proceeds from an
Asset Sale, the Company may apply such Net Proceeds, at its option, (a) to repay
Senior Debt (and to correspondingly reduce commitments with respect thereto in
the case of revolving borrowings) or (b) to the acquisition of a controlling
interest in another business, the making of a capital expenditure or the
acquisition of other long-term assets. Pending the final application of any such
Net Proceeds, the Company may temporarily reduce Senior Debt or otherwise invest
such Net Proceeds in any manner that is not prohibited by this Indenture. Any
Net Proceeds from Asset Sales that are not applied or invested as provided in
the first sentence of this paragraph shall be deemed to constitute "Excess
Proceeds." When the aggregate amount of Excess Proceeds exceeds $5.0 million,
the Company shall be required to make an offer to all Holders of Notes (an
"Asset Sale Offer") to purchase the maximum principal amount of Notes that may
be purchased out of the Excess Proceeds at an offer price in cash in an amount
equal to 100% of the principal amount thereof plus accrued and unpaid interest
and Liquidated Damages, if any, thereon to the date of purchase, in accordance
with the procedures set forth in this Indenture. To the extent that the
aggregate principal amount of Notes tendered pursuant to an Asset Sale Offer is
less than the Excess Proceeds, the Company may use any remaining Excess Proceeds
for general corporate purposes. If the aggregate principal amount of Notes
surrendered by Holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes to be purchased on a pro rata basis. Upon
completion of an Asset Sale Offer, the amount of Excess Proceeds shall be reset
at zero.
SECTION 4.11. TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate (each of the foregoing, an "Affiliate Transaction"), unless
(a) such Affiliate Transaction is on terms that are no less favorable to the
Company or such Restricted Subsidiary than those that would have been obtained
in a comparable transaction by the Company or such Restricted Subsidiary with an
unrelated Person and (b) the Company delivers to the Trustee (i) with respect to
any Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $0.5 million, a resolution of the Board of
Directors set forth in an Officers' Certificate certifying that such Affiliate
Transaction complies with clause (a) above and that such Affiliate Transaction
has been approved by a majority of the disinterested members of the Board of
Directors, if any, and (ii) with respect to any Affiliate Transaction or series
of related Affiliate Transactions involving aggregate consideration in excess of
$4.0 million, an opinion as to the fairness to the Holders of such Affiliate
Transaction from a financial point of view issued by an investment banking firm
of national standing.
The foregoing provisions shall not prohibit: (i) any employment
agreement or other employment or compensation agreement entered into by the
Company or any of its Restricted Subsidiaries in the ordinary course of
business; (ii) transactions between or among the Company and/or its Restricted
Subsidiaries and/or UNICCO Finance; (iii) direct or indirect transactions
between the Company or any of its Restricted Subsidiaries, on the one hand, and
Ashmont Insurance Company, Limited or any of its subsidiaries, on the other
hand, on terms that are not materially less favorable to the Company or the
applicable Restricted Subsidiary than those that could have been obtained from
an unaffiliated third party; (iv) the transactions contemplated under the
caption "Use of Proceeds"
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contained in the Offering Memorandum; (v) notes payable to or receivable from,
and leases of real property from, Affiliates (and payments thereunder) as in
effect on the date of this Indenture, as the same may be amended, modified,
renewed or extended in a manner no less favorable to the Company and its
Restricted Subsidiaries; (vi) any Restricted Payment that is permitted by
Section 4.07 hereof; and (vii) sales of accounts receivable and other related
assets customarily transferred in an asset securitization transaction involving
accounts receivable to a Receivables Subsidiary in a Qualified Receivables
Transaction.
SECTION 4.12. LIENS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly create, incur, assume or suffer to exist
any Lien securing Indebtedness or trade payables on any asset now owned or
hereafter acquired, or any income or profits therefrom or assign or convey any
right to receive income therefrom, except Permitted Liens.
SECTION 4.13. ACTIVITIES OF UNICCO FINANCE.
UNICCO Finance shall not hold any material assets, become liable
for any material obligations or engage in any significant business activities;
provided, however, that UNICCO Finance may be a co-obligor or guarantor with
respect to, and may pledge its assets to secure, Indebtedness of which the
Company is an obligor.
SECTION 4.14. CORPORATE EXISTENCE.
Subject to Article 5 hereof, the Company shall do or cause to be
done all things necessary to preserve and keep in full force and effect (i) its
business trust existence, and the corporate, partnership or other existence of
each of its Subsidiaries, in accordance with the respective organizational
documents (as the same may be amended from time to time) of the Company or any
such Restricted Subsidiary and (ii) the rights (charter and statutory), licenses
and franchises of the Company and its Subsidiaries; provided, however, that the
Company shall not be required to preserve any such right, license or franchise,
or the corporate, partnership or other existence of any of its Subsidiaries, if
the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and its
Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any
material respect to the Holders of the Notes.
SECTION 4.15. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, the Issuers shall make an
offer (a "Change of Control Offer") to each Holder to repurchase all or any part
(equal to $1,000 or an integral multiple thereof) of such Holder's Notes at an
Offer price in cash equal to 101% of the principal amount thereof, plus accrued
and unpaid interest and Liquidated Damages, if any, thereon, to the date of
purchase (the "Change of Control Payment"). Within 30 days following a Change of
Control, the Issuers shall mail a notice to each Holder describing the
transaction or transactions that constitute the Change of Control and stating:
(1) that the Change of Control Offer is being made pursuant to this Section 4.15
and that all Notes tendered will be accepted for payment; (2) the purchase price
and the purchase date, which shall be no later than 30 business
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days from the date such notice is mailed (the "Change of Control Payment Date");
(3) that any Note not tendered will continue to accrue interest; (4) that,
unless the Issuers default in the payment of the Change of Control Payment, all
Notes accepted for payment pursuant to the Change of Control Offer shall cease
to accrue interest after the Change of Control Payment Date; (5) that Holders
electing to have any Notes purchased pursuant to a Change of Control Offer will
be required to surrender the Notes, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Notes completed, to the Paying Agent at
the address specified in the notice prior to the close of business on the third
Business Day preceding the Change of Control Payment Date; (6) that Holders will
be entitled to withdraw their election if the Paying Agent receives, not later
than the close of business on the second Business Day preceding the Change of
Control Payment Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of Notes delivered
for purchase, and a statement that such Holder is withdrawing his election to
have the Notes purchased; and (7) that Holders whose Notes are being purchased
only in part will be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered, which unpurchased portion must be
equal to $1,000 in principal amount or an integral multiple thereof. The Issuers
shall comply with the requirements of Rule 14e-1 under the Exchange Act and any
other securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of Notes in
connection with a Change of Control.
(b) On the Change of Control Payment Date, the Issuers shall, to the
extent lawful, (1) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer, (2) deposit with the Paying
Agent an amount equal to the Change of Control Payment in respect of all Notes
or portions thereof so tendered and (3) deliver or cause to be delivered to the
Trustee the Notes so accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions thereof being purchased by the
Issuers. The Paying Agent shall promptly mail to each Holder of Notes so
tendered the Change of Control Payment for such Notes, and the Trustee shall
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes, if any; provided that each such new Note shall be in a principal
amount of $1,000 or an integral multiple thereof. Prior to complying with the
provisions of this Section 4.15, but in any event within 90 days following a
Change of Control, the Issuers shall either repay all outstanding Senior Debt or
obtain the requisite consents, if any, under all agreements governing
outstanding Senior Debt to permit the repurchase of Notes required by this
Section 4.15. The Issuers shall publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control Payment
Date.
(c) Notwithstanding anything to the contrary in this Section 4.15, the
Issuers shall not be required to make a Change of Control Offer following a
Change of
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Control if a third party makes the Change of Control Offer in the manner, at the
times and otherwise in compliance with the requirements set forth in this
Section 4.15 and Section 3.09 hereof and purchases all Notes validly tendered
and not withdrawn under such Change of Control Offer.
SECTION 4.16. LIMITATION ON OTHER SENIOR SUBORDINATED DEBT.
Notwithstanding the provisions of Section 4.09 hereof, neither
the Company nor any Restricted Subsidiary shall incur any Indebtedness that is
subordinate or junior in right of payment to any Senior Debt of the Company or
such Restricted Subsidiary, as the case may be, and senior in any respect in
right of payment to the Notes or such Restricted Subsidiary's Guarantee thereof.
SECTION 4.17. PAYMENTS FOR CONSENT.
Neither the Company nor UNICCO Finance nor any of the Company's
Restricted Subsidiaries shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
of any Notes for or as an inducement to any consent, waiver or amendment of any
of the terms or provisions of this Indenture or the Notes unless such
consideration is offered to be paid or is paid to all Holders of the Notes that
consent, waive or agree to amend in the time frame set forth in the solicitation
documents relating to such consent, waiver or agreement.
SECTION 4.18. ADDITIONAL NOTE GUARANTEES.
If the Company or any of its Domestic Restricted Subsidiaries
shall acquire or create another Domestic Restricted Subsidiary after the date of
this Indenture, or any Unrestricted Subsidiary shall cease to be an Unrestricted
Subsidiary and shall become a Domestic Restricted Subsidiary, then such
Subsidiary shall execute a guarantee of the Notes and deliver an Opinion of
Counsel unless such Subsidiary shall have been designated a Receivables
Subsidiary in accordance with the terms of this Indenture.
ARTICLE 5.
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
Neither the Company, nor UNICCO Finance, nor any Guarantor shall
consolidate or merge with or into (whether or not the Company, UNICCO Finance or
such Guarantor, as the case may be, is the surviving entity), or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
properties or assets in one or more related transactions, to another
corporation, Person or entity unless (i) the Company, UNICCO Finance or such
Guarantor, as the case may be, is the surviving entity, or the entity or the
Person formed by or surviving any such consolidation or merger (if other than
the Company, UNICCO Finance or such Guarantor) or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made is a corporation, business trust or limited liability company organized or
existing under the laws of the United States, any state thereof or the District
of Columbia; (ii) the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company, UNICCO Finance or such
Guarantor) or the entity or Person to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made assumes all the
obligations of the Company, UNICCO Finance or such Guarantor, as the case may
be, under the Notes or such Guarantor's Note Guarantee thereof and this
Indenture pursuant
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to a supplemental indenture in a form reasonably satisfactory to the Trustee;
(iii) immediately after such transaction no Default or Event of Default exists;
and (iv) except in the case of a merger of the Company or a Guarantor with or
into the Company or another Guarantor, the Company, such Guarantor or the entity
or Person formed by or surviving any such consolidation or merger (if other than
the Company or such Guarantor), or to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made will, at the time of
such transaction and after giving pro forma effect thereto (including pro forma
expense and cost reductions) as if such transaction had occurred at the
beginning of the applicable four-quarter period, be permitted to incur at least
$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio
test set forth in the first paragraph of Section 4.09 hereof.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment,
transfer, lease, conveyance or other disposition of all or substantially all of
the assets of the Company, UNICCO Finance or any Guarantor in accordance with
Section 5.01 hereof, the successor corporation formed by such consolidation or
into or with which the Company, UNICCO Finance or such Guarantor is merged or to
which such sale, assignment, transfer, lease, conveyance or other disposition is
made shall succeed to, and be substituted for (so that from and after the date
of such consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company," "UNICCO Finance" or
such "Guarantor" shall refer instead to the successor corporation and not to the
Company, UNICCO Finance or such Guarantor), and may exercise every right and
power of the Company, UNICCO Finance or such Guarantor under this Indenture with
the same effect as if such successor Person had been named as the Company,
UNICCO Finance or such Guarantor herein; provided, however, that the predecessor
Company, UNICCO Finance or Guarantor shall not be relieved from the obligation
to pay the principal of and interest on the Notes except in the case of a sale
of all of the Company's, UNICCO Finance's or any Guarantor's assets that meets
the requirements of Section 5.01 hereof.
ARTICLE 6.
DEFAULTS AND REMEDIES.
SECTION 6.01. EVENTS OF DEFAULT.
An "Event of Default" occurs if:
(a) the Issuers default in the payment when due of interest on, or
Liquidated Damages, if any, with respect to, the Notes and such default
continues for a period of 30 days (whether or not prohibited by Article 10
hereof);
(b) the Issuers default in the payment when due of the principal of or
premium, if any, on the Notes (whether or not prohibited by Article 10 hereof);
(c) the Issuers fail to comply with any of the provisions of Section 4.07,
4.09, 4.10, 4.15 or 5.01 hereof;
(d) the Issuers fail to comply with any of their agreements in this
Indenture or the Notes for 60 days after written notice by the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes;
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(e) a default occurs under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or evidenced
any Indebtedness for money borrowed by the Company, UNICCO Finance or any of the
Company's Restricted Subsidiaries (or the payment of which is guaranteed by the
Company, UNICCO Finance or any of the Company's Restricted Subsidiaries),
whether such Indebtedness or guarantee now exists, or is created after the date
of this Indenture, which default (i) is caused by a failure to pay principal of
or premium, if any, or interest on such Indebtedness prior to the expiration of
the grace period provided in such Indebtedness on the date of such default (a
"Payment Default") or (ii) results in the acceleration of such Indebtedness
prior to its express maturity and, in each case, the principal amount of any
such Indebtedness, together with the principal amount of any other Indebtedness
under which there has been a Payment Default or the maturity of which has been
so accelerated, aggregates $5.0 million or more.
(f) the Company, UNICCO Finance or any of the Company's Restricted
Subsidiaries fails to pay final judgment or final judgments aggregating in
excess of $2.0 million, entered by a court or courts of competent jurisdiction
against the Company, UNICCO Finance or any of the Company's Restricted
Subsidiaries, and either (i) any creditor commences enforcement proceedings upon
any such judgment or (ii) such judgments are not paid, discharged or stayed for
a period of 45 days;
(g) the Company, UNICCO Finance, any Significant Subsidiary or any
group of Restricted Subsidiaries of the Company that, taken as a whole, would
constitute a Significant Subsidiary pursuant to or within the meaning of
Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in an
involuntary case,
(iii) consents to the appointment of a Custodian of it or for all or
substantially all of its property,
(iv) makes a general assignment for the benefit of its creditors, or
(v) generally is not paying its debts as they become due;
(h) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(i) is for relief against the Company, UNICCO Finance, any
Significant Subsidiary or any group of Restricted Subsidiaries of the
Company that, taken as a whole, would constitute a Significant Subsidiary
in an involuntary case;
(ii) appoints a Custodian of the Company, UNICCO Finance, any
Significant Subsidiary or any group of Restricted Subsidiaries of the
Company that, taken as a whole, would constitute a Significant Subsidiary
or for all or substantially all of the property of the Company, UNICCO
Finance or any Significant Subsidiary or any group of Restricted
Subsidiaries of the Company that, taken as a whole, would constitute a
Significant Subsidiary; or
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(iii) orders the liquidation of the Company, UNICCO Finance, any
Significant Subsidiary or any group of Restricted Subsidiaries of the
Company, that, taken as a whole, would constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60 consecutive
days;
(i) the Refinancing (as defined in the Offering Memorandum) shall not
have been consummated by 11:59 p.m., New York City time, on the date of this
Indenture; or
(j) except as permitted by this Indenture, any Note Guarantee is held
in any judicial proceeding to be unenforceable or invalid or shall cease for any
reason to be in full force and effect or any Restricted Subsidiary, or any
Person acting on behalf of any Restricted Subsidiary, shall deny or disaffirm
its obligations under its Note Guarantee.
SECTION 6.02. ACCELERATION.
If any Event of Default (other than an Event of Default specified
in clause (g) or (h) of Section 6.01 hereof occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes may declare all the Notes to be due and payable immediately.
Upon any such declaration, the Notes shall become due and payable immediately.
Notwithstanding the foregoing, if an Event of Default specified in clause (g) or
(h) of Section 6.01 hereof occurs with respect to the Company, UNICCO Finance,
any Significant Subsidiary or any group of Restricted Subsidiaries of the
Company that, taken as a whole, would constitute a Significant Subsidiary, all
outstanding Notes shall be due and payable immediately without further action or
notice. Holders of the Notes may not enforce this Indenture or the Notes except
as provided herein. The Holders of a majority in aggregate principal amount of
the then outstanding Notes by written notice to the Trustee may on behalf of all
of the Holders rescind an acceleration and its consequences if the rescission
would not conflict with any judgment or decree and if all existing Events of
Default (except nonpayment of principal, interest or premium that has become due
solely because of the acceleration) have been cured or waived.
If an Event of Default occurs on or after October 15, 2002 by
reason of any willful action (or inaction) taken (or not taken) by or on behalf
of the Issuers with the intention of avoiding payment of the premium that the
Issuers would have had to pay if the Issuers then had elected to redeem the
Notes pursuant to Section 3.07 hereof, then, upon acceleration of the Notes, an
equivalent premium shall also become and be immediately due and payable, to the
extent permitted by law, anything in this Indenture or in the Notes to the
contrary notwithstanding. If an Event of Default occurs prior to October 15,
2002 by reason of any willful action (or inaction) taken (or not taken) by or on
behalf of the Issuers with the intention of avoiding the prohibition on
redemption of the Notes prior to such date, then, upon acceleration of the
Notes, an additional premium shall also become and be immediately due and
payable so that the Issuers shall be obligated to pay an amount (expressed as
percentages of principal amount), for each of the years beginning on October 15
of the years set forth below, as set forth below;
YEAR PERCENTAGE
---- ----------
1997.................................................113.17%
1998.................................................111.52%
1999.................................................109.88%
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2000.................................................108.23%
2001.................................................106.58%
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal, premium, if
any, and interest on the Notes or to enforce the performance of any provision of
the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
Holders of not less than a majority in aggregate principal amount
of the then outstanding Notes by notice to the Trustee may on behalf of the
Holders of all of the Notes waive an existing Default or Event of Default and
its consequences hereunder, except a continuing Default or Event of Default in
the payment of the principal of, premium and Liquidated Damages, if any, or
interest on, the Notes (including in connection with an offer to purchase)
(provided, however, that the Holders of a majority in aggregate principal amount
of the then outstanding Notes may rescind an acceleration and its consequences,
including any related payment default that resulted from such acceleration).
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 6.05. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then outstanding
Notes may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture that the Trustee determines may be unduly
prejudicial to the rights of other Holders of Notes or that may involve the
Trustee in personal liability.
SECTION 6.06. LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this
Indenture, the Notes, or the Note Guarantees only if:
(a) the Holder of a Note gives to the Trustee written notice of
a continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the remedy;
(c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee against
any loss, liability or expense;
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(d) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Notes do not give the Trustee a
direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the
rights of another Holder of a Note or to obtain a preference or priority over
another Holder of a Note.
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right
of any Holder of a Note to receive payment of principal, premium and Liquidated
Damages, if any, and interest on the Note, on or after the respective due dates
expressed in the Note (including in connection with an offer to purchase), or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(a) or (b) occurs
and is continuing, the Trustee is authorized to recover judgment in its own name
and as trustee of an express trust against the Issuers for the whole amount of
principal of, premium and Liquidated Damages, if any, and interest remaining
unpaid on the Notes and interest on overdue principal and, to the extent lawful,
interest and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Issuers
(or any other obligor upon the Notes), their creditors or their property and
shall be entitled and empowered to collect, receive and distribute any money or
other property payable or deliverable on any such claims and any custodian in
any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee, and in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.07 hereof. To the extent that the payment of any such
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07 hereof out
of the estate in any such proceeding, shall be denied for any reason, payment of
the same shall be secured by a Lien on, and shall be paid out of, any and all
distributions, dividends, money, securities and other properties that the
Holders may be entitled to receive in such proceeding whether in liquidation or
under any plan of reorganization or arrangement or otherwise. Nothing herein
contained 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 Notes or the rights of any Holder, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
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SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article 6, it
shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due
under Section 7.07 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium and Liquidated Damages, if any, and interest,
ratably, without preference or priority of any kind, according to the amounts
due and payable on the Notes for principal, premium and Liquidated Damages, if
any and interest, respectively; and
Third: to the Issuers or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any
payment to Holders of Notes pursuant to this Section 6.10.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder of a
Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
ARTICLE 7.
TRUSTEE.
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If 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 its exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, 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
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opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements of
this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section 7.01;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), (c), (e) and (f) of this Section 7.01 and Section 7.02 hereof.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be under
no obligation to exercise any of its rights and powers under this Indenture at
the request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Issuers.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any document believed by
it to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
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(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Issuers shall be sufficient if
signed by an Officer of each of the Issuers.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Notes and may otherwise deal with the Issuers, the
Guarantors, or any Affiliate of the Issuers or the Guarantors with the same
rights it would have if it were not Trustee. However, in the event that the
Trustee acquires any conflicting interest it must eliminate such conflict within
90 days, apply to the SEC for permission to continue as trustee or resign. Any
Agent may do the same with like rights and duties. The Trustee is also subject
to Sections 7.10 and 7.11 hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture, the Notes or
the Note Guarantees, it shall not be accountable for the Company's use of the
proceeds from the Notes or any money paid to the Issuers or upon the Issuers'
direction under any provision of this Indenture, it shall not be responsible for
the use or application of any money received by any Paying Agent other than the
Trustee, and it shall not be responsible for any statement or recital herein or
any statement in the Notes or any other document in connection with the sale of
the Notes or pursuant to this Indenture other than its certificate of
authentication.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if
it is known to the Trustee, the Trustee shall mail to Holders of Notes a notice
of the Default or Event of Default within 90 days after it occurs. Except in the
case of a Default or Event of Default in payment of principal of, premium, if
any, or interest on any Note, the Trustee may withhold the notice if and so long
as a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interests of the Holders of the Notes.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each May 15 beginning with the May 15
following the date of this Indenture, and for so long as Notes remain
outstanding, the Trustee shall mail to the Holders of the Notes a brief report
dated as of such reporting date that complies with TIA ss. 313(a) (but if no
event described in TIA ss. 313(a) has occurred within the twelve months
preceding the reporting date, no
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report need be transmitted). The Trustee also shall comply with TIA ss.
313(b)(2). The Trustee shall also transmit by mail all reports as required by
TIA ss. 313(c).
A copy of each report at the time of its mailing to the Holders
of Notes shall be mailed to the Issuers and filed with the SEC and each stock
exchange on which the Notes are listed in accordance with TIA ss. 313(d). The
Issuers shall promptly notify the Trustee when the Notes are listed on any stock
exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Issuers and the Guarantors shall pay to the Trustee from time
to time reasonable compensation for its acceptance of this Indenture and
services hereunder. The Trustee's compensation shall not be limited by any law
on compensation of a trustee of an express trust. The Issuers and the Guarantors
shall reimburse the Trustee promptly upon request for all reasonable
disbursements, advances and expenses incurred or made by it in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel.
The Issuers and the Guarantors shall indemnify the Trustee
against any and all losses, liabilities or expenses incurred by it arising out
of or in connection with the acceptance or administration of its duties under
this Indenture, including the costs and expenses of enforcing this Indenture
against the Issuers and the Guarantors (including this Section 7.07) and
defending itself against any claim (whether asserted by either Issuer, any
Guarantor or any Holder or any other person) or liability in connection with the
exercise or performance of any of its powers or duties hereunder, except to the
extent any such loss, liability or expense may be attributable to its negligence
or bad faith. The Trustee shall notify the Issuers and the Guarantors promptly
of any claim for which it may seek indemnity. Failure by the Trustee to so
notify the Issuers and the Guarantors shall not relieve the Issuers and the
Guarantors of their obligations hereunder. The Issuers and the Guarantors shall
defend the claim and the Trustee shall cooperate in the defense. The Trustee may
have separate counsel and the Issuers and the Guarantors shall pay the
reasonable fees and expenses of such counsel. The Issuers and the Guarantors
need not pay for any settlement made without its consent, which consent shall
not be unreasonably withheld.
The obligations of the Issuers and the Guarantors under this
Section 7.07 shall survive the satisfaction and discharge of this Indenture.
To secure the Issuers' and the Guarantors' payment obligations in
this Section 7.07, the Trustee shall have a Lien prior to the Notes on all money
or property held or collected by the Trustee, except that held in trust to pay
principal and interest on particular Notes. Such Lien shall survive the
satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(g) or (h) hereof occurs, the expenses
and the compensation for the services (including the fees and expenses of its
agents and counsel) are intended to constitute expenses of administration under
any Bankruptcy Law.
The Trustee shall comply with the provisions of TIA ss. 313(b)(2)
to the extent applicable.
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SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged
from the trust hereby created by so notifying the Issuers. The Holders of Notes
of a majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Issuers in writing. The Issuers may
remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Issuers shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount of the then outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Issuers.
If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Issuers,
or the Holders of Notes of at least 10% in principal amount of the then
outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Note who
has been a Holder of a Note for at least six months, fails to comply with
Section 7.10, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuers. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Notes. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, provided all sums
owing to the Trustee hereunder have been paid and subject to the Lien provided
for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant
to this Section 7.08, the Issuers' and the Guarantors' obligations under Section
7.07 hereof shall continue for the benefit of the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
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If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the United States of
America or of any state thereof that is authorized under such laws to exercise
corporate trustee power, that is subject to supervision or examination by
federal or state authorities and that has a combined capital and surplus of at
least $100 million as set forth in its most recent published annual report of
condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA
ss. 310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUERS.
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Issuers may, at the option of their Board of Directors
evidenced by a resolution set forth in an Officers' Certificate, at any time,
elect to have either Section 8.02 or 8.03 hereof be applied to all outstanding
Notes upon compliance with the conditions set forth below in this Article Eight.
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Issuers' exercise under Section 8.01 hereof of the
option applicable to this Section 8.02, the Issuers and each Guarantor shall,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
be deemed to have been discharged from their obligations with respect to all
outstanding Notes and Note Guarantees on the date the conditions set forth below
are satisfied (hereinafter, "Legal Defeasance"). For this purpose, Legal
Defeasance means that the Issuers and each Guarantor shall be deemed to have
paid and discharged the entire Indebtedness represented by the outstanding Notes
and Guarantees, which shall thereafter be deemed to be "outstanding" only for
the purposes of Section 8.05 hereof and the other Sections of this Indenture
referred to in (a) and (b) below, and to have satisfied all of their other
obligations under such Notes and Note Guarantees and this Indenture (and the
Trustee, on demand of and at the expense of the Issuers, shall execute proper
instruments acknowledging the same), except for the following provisions which
shall survive until otherwise terminated or discharged hereunder: (a) the rights
of Holders of outstanding Notes to receive payments in respect of the principal
of, and premium, interest and Liquidated Damages, if any, on the Notes when such
payments are due solely from the trust fund described in Section 8.04 hereof,
and as more fully set forth in such Section, (b) the Issuers' obligations with
respect to the Notes under Article 2 and Section 4.02 hereof, (c) the rights,
powers, trusts, duties and immunities of the Trustee hereunder and the Issuers'
obligations in connection therewith and (d) this Article Eight. Subject to
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compliance with this Article Eight, the Issuers may exercise their option under
this Section 8.02 notwithstanding the prior exercise of its option under Section
8.03 hereof.
SECTION 8.03. COVENANT DEFEASANCE.
Upon the Issuers' exercise under Section 8.01 hereof of the
option applicable to this Section 8.03, the Issuers shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be released
from their obligations under the covenants contained in Sections 4.07, 4.08,
4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.17 and 4.18 hereof with respect to the
outstanding Notes and Note Guarantees on and after the date the conditions set
forth in Section 8.04 are satisfied (hereinafter, "Covenant Defeasance"), and
the Notes and Note Guarantees shall thereafter be deemed not "outstanding" for
the purposes of any direction, waiver, consent or declaration or act of Holders
(and the consequences of any thereof) in connection with such covenants, but
shall continue to be deemed "outstanding" for all other purposes hereunder (it
being understood that such Notes and Note Guarantees shall not be deemed
outstanding for accounting purposes). For this purpose, "Covenant Defeasance"
means that, with respect to the outstanding Notes and Note Guarantees, the
Issuers and Guarantors may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such covenant or by reason of any reference in any such covenant to any
other provision herein or in any other document and such omission to comply
shall not constitute a Default or an Event of Default under Section 6.01 hereof,
but, except as specified above, the remainder of this Indenture, such Notes and
Note Guarantees shall be unaffected thereby. In addition, upon the Issuers'
exercise under Section 8.01 hereof of the option applicable to this Section 8.03
hereof, subject to the satisfaction of the conditions set forth in Section 8.04
hereof, Sections 6.01(d) through 6.01(f) hereof shall not constitute Events of
Default.
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of
either Section 8.02 or 8.03 hereof to the outstanding Notes and Note Guarantees:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Issuers must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders of the Notes, cash in U. S. dollars, non-callable
Government Securities, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent public
accountants, to pay the principal of and premium, interest and Liquidated
Damages, if any, on the outstanding Notes on the stated maturity or on the
applicable redemption date, as the case may be, and the Issues must specify
whether the Notes are being defeased to maturity or to a particular redemption
date;
(b) in the case of an election under Section 8.02 hereof, the Issuers
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that (i) the Issuers have
received from, or there has been published by, the Internal Revenue Service a
ruling or (ii) since the date of this Indenture, there has been a change in the
applicable federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Legal
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Defeasance and will be subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such Legal
Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the Issuers
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Covenant Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of Default
resulting from the borrowing of funds to be applied to such deposit) or insofar
as Sections 6.01(g) or 6.01(h) hereof is concerned, at any time in the period
ending on the 91st day after the date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute a default under, any material agreement
or instrument (other than this Indenture) to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound;
(f) the Issuers shall have delivered to the Trustee an Opinion of
Counsel (which may be subject to customary 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;
(g) the Issuers shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Issuers with the intent
of preferring the Holders of Notes over any other creditors of the Issuers or
with the intent of defeating, hindering, delaying or defrauding any other
creditors of the Issuers or others; and
(h) the Issuers shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and non-callable
Government Securities (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section
8.05, the "Trustee") pursuant to Section 8.04 hereof in respect of the
outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Issuers acting as
Paying Agent) as the Trustee may determine, to the Holders of such Notes of all
sums due and to become due thereon in respect of principal, premium, if any, and
interest, but such money need not be segregated from other funds except to the
extent required by law.
The Issuers shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to
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Section 8.04 hereof or the principal and interest received in respect thereof
other than any such tax, fee or other charge which by law is for the account of
the Holders of the outstanding Notes.
Anything in this Article Eight to the contrary notwithstanding,
the Trustee shall deliver or pay to the Issuers from time to time upon the
request of the Issuers any money or non-callable Government Securities held by
it as provided in Section 8.04 hereof which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.04(a) hereof), are in excess of the amount thereof
that would then be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.
SECTION 8.06. REPAYMENT TO ISSUERS.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Issuers, in trust for the payment of the principal of, premium, if
any, or interest on any Note 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 Issuers on their request or (if then held by the Issuers) shall be
discharged from such trust; and the Holder of such Note shall thereafter, as a
secured creditor, look only to the Issuers for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Issuers 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 Issuers cause to be
published once, in the New York Times and The Wall Street Journal (national
edition), 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
notification or publication, any unclaimed balance of such money then remaining
will be repaid to the Issuers.
SECTION 8.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United
States dollars or non-callable Government Securities in accordance with Section
8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, then the Issuers' and the Guarantors' obligations
under this Indenture, the Notes and the Note Guarantees shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03
hereof until such time as the Trustee or Paying Agent is permitted to apply all
such money in accordance with Section 8.02 or 8.03 hereof, as the case may be;
provided, however, that, if the Issuers make any payment of principal of,
premium, if any, or interest on any Note following the reinstatement of its
obligations, the Issuers shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money held by the Trustee or Paying
Agent.
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 9.02 of this Indenture, the Issuers, the
Guarantors and the Trustee may amend or supplement this Indenture, the Note
Guarantees or the Notes without the consent of any Holder of a Note:
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(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
(c) to provide for the assumption of the Company's, UNICCO Finance's
or any Restricted Subsidiary's obligations to the Holders of the Notes in the
case of a merger or consolidation pursuant to Article 5 hereof;
(d) to make any change that would provide any additional rights or
benefits to the Holders of Notes or that does not adversely affect the legal
rights hereunder of any such Holder or;
(e) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.
Upon the request of the Issuers accompanied by a resolution of
their Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon receipt by the Trustee of the documents
described in Section 7.02 hereof, the Trustee shall join with the Company,
UNICCO Finance and the Guarantors in the execution of any amended or
supplemental Indenture authorized or permitted by the terms of this Indenture
and to make any further appropriate agreements and stipulations that may be
therein contained, but the Trustee shall not be obligated to enter into such
amended or supplemental Indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.
SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this Section 9.02, the Company,
UNICCO Finance, the Guarantors and the Trustee may amend or supplement this
Indenture (including Sections 3.09, 4.10 and 4.15 hereof), the Note Guarantees
and the Notes with the consent of the Holders of at least a majority in
principal amount of the Notes then outstanding (including, without limitation,
consents obtained in connection with a purchase of, or tender offer or exchange
offer for, Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing
Default or Event of Default or compliance with any provision of this Indenture,
the Note Guarantees or the Notes may be waived with the consent of the Holders
of a majority in principal amount of the then outstanding Notes (including
consents obtained in connection with a tender offer or exchange offer for
Notes).
Upon the request of the Issuers accompanied by a resolution of
the Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid,
and upon receipt by the Trustee of the documents described in Section 7.02
hereof, the Trustee shall join with the Company, UNICCO Finance and the
Guarantors in the execution of such amended or supplemental Indenture unless
such amended or supplemental Indenture directly 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 amended or supplemental Indenture.
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It shall not be necessary for the consent of the Holders of Notes
under this Section 9.02 to approve the particular form of any proposed amendment
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section
becomes effective, the Issuers shall mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Issuers to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the
Holders of a majority in aggregate principal amount of the Notes then
outstanding may waive compliance in a particular instance by the Issuers or the
Guarantors with any provision of this Indenture, the Notes or the Note
Guarantees. However, without the consent of each Holder affected, an amendment
or waiver under this Section 9.02 may not (with respect to any Notes or Note
Guarantees held by a non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must consent
to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Note
or alter the provisions with respect to the redemption of the Notes except as
provided above with respect to Sections 3.09, 4.10 and 4.15 hereof;
(c) reduce the rate of or change the time for payment of interest,
including default interest, on any Note;
(d) waive a Default or Event of Default in the payment of principal
of or premium, interest or Liquidated Damages, if any, on the Notes (except a
rescission of acceleration of the Notes by the Holders of at least a majority in
aggregate principal amount of the Notes and a waiver of the payment default that
resulted from such acceleration);
(e) make any Note payable in money other than that stated in the
Notes;
(f) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive payments
of principal of or premium, interest or Liquidated Damages, if any, on the
Notes;
(g) waive a redemption payment with respect to any Note (other than a
payment required by Section 3.09, 4.10, or 4.15 hereof);
(h) release any Restricted Subsidiary from any of its obligations
under its Note Guarantee, except in accordance with the terms of this Indenture;
or
(i) make any change in the foregoing amendment and waiver provisions.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture, the Notes or
the Note Guarantees shall be set forth in a amended or supplemental Indenture
that complies with the TIA as then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
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Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Note is a continuing consent by the Holder of a
Note and every subsequent Holder of a Note or portion of a Note that evidences
the same debt as the consenting Holder's Note, even if notation of the consent
is not made on any Note. However, any such Holder of a Note or subsequent Holder
of a Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Issuers in
exchange for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note
shall not affect the validity and effect of such amendment, supplement or
waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental Indenture
authorized pursuant to this Article Nine if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Issuers may not sign an amendment or supplemental Indenture until the Board
of Directors approves it. In executing any amended or supplemental indenture,
the Trustee shall be entitled to receive and (subject to Section 7.01 hereof)
shall be fully protected in relying upon, in addition to the documents required
by Section 11.04 hereof, an Officers' Certificate and an Opinion of Counsel
stating that the execution of such amended or supplemental indenture is
authorized or permitted by this Indenture.
ARTICLE 10.
SUBORDINATION
SECTION 10.01. AGREEMENT TO SUBORDINATE.
The Issuers and the Guarantors agree, and each Holder by
accepting a Note agrees, that the Indebtedness evidenced by the Notes and the
Guarantees is subordinated in right of payment, to the extent and in the manner
provided in this Article 10 and Section 11.02, to the prior payment in full of
all Senior Debt of the Issuers and the Guarantors, (in each case, whether
outstanding on the date hereof or hereafter created, incurred, assumed or
guaranteed), as applicable, and that the subordination is for the benefit of the
holders of Senior Debt.
SECTION 10.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any distribution to creditors of either Issuer in a
liquidation or dissolution of such Issuer or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to such Issuer or its
property, in an assignment for the benefit of creditors or any marshaling of
either Issuer's assets and liabilities:
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(a) holders of Senior Debt of such Issuer shall be entitled to
receive payment in full in cash or Cash Equivalents of all Obligations due in
respect of such Senior Debt (including interest after the commencement of any
such proceeding at the rate specified in the documents governing the applicable
Senior Debt) before the Holders of Notes shall be entitled to receive any
payment with respect to the Notes (except that Holders may receive (i) Permitted
Junior Securities and (ii) payments and other distributions made from any
defeasance trust created pursuant to Section 8.01 hereof); and
(b) until all Obligations with respect to Senior Debt (as provided in
subsection (1) above) are paid in full in cash or Cash Equivalents, any
distribution to which Holders would be entitled but for this Article 10 shall be
made to holders of Senior Debt (except that Holders of Notes may receive (i)
Permitted Junior Securities and (ii) payments and other distributions made from
any defeasance trust created pursuant to Section 8.01 hereof), as their
interests may appear.
SECTION 10.03. DEFAULT ON DESIGNATED SENIOR DEBT.
The Issuers may not make any payment upon or in respect of the
Notes and (other than (i) Permitted Junior Securities and (ii) payments and
other distributions made from any defeasance trust created pursuant to Section
8.01 hereof) if:
(a) a default in the payment of the principal of or premium or
interest on any Designated Senior Debt occurs and is continuing beyond any
applicable grace period; or
(b) any other default occurs and is continuing with respect to any
Designated Senior Debt that permits holders of the Designated Senior Debt as to
which such default relates to accelerate its maturity and the Trustee receives a
notice of default (a "Payment Blockage Notice") from a Representative of
Designated Senior Debt. If the Trustee receives any such Payment Blockage
Notice, no subsequent Payment Blockage Notice shall be effective for purposes of
this Section unless and until at least 360 days shall have elapsed since the
effectiveness of the immediately prior Payment Blockage Notice. No nonpayment
default that existed or was continuing on the date of delivery of any Payment
Blockage Notice to the Trustee shall be, or be made, the basis for a subsequent
Payment Blockage Notice.
The Issuers may and shall resume payments on the Notes:
(1) in the case of a payment default, upon the date which such
default is cured or waived pursuant to the terms of such Designated Senior Debt,
and
(2) in the case of a nonpayment default, the earlier of the date
on which such nonpayment default is cured or waived pursuant to the terms of
such Designated Senior Debt or 179 days after the date on which the applicable
Payment Blockage Notice is received, unless the maturity of such Designated
Senior Debt has been accelerated,
if this Article 10 otherwise permits the payment.
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SECTION 10.04. ACCELERATION OF SECURITIES.
If payment of the Securities is accelerated because of an Event
of Default, the Issuers shall promptly notify holders of Senior Debt of the
acceleration.
SECTION 10.05. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder receives any payment
of any Obligations with respect to the Notes at a time when the Trustee or such
Holder, as applicable, has actual knowledge that such payment is prohibited by
Section 10.03 hereof, such payment shall be held by the Trustee or such Holder,
in trust for the benefit of, and shall be paid forthwith over and delivered,
upon written request, to, the holders of Senior Debt of the Issuers as their
interests may appear or their Representative under this Indenture or other
agreement (if any) pursuant to which such Senior Debt may have been issued, as
their respective interests may appear, for application to the payment of all
Obligations with respect to such Senior Debt remaining unpaid to the extent
necessary to pay such Obligations in full in accordance with their terms, after
giving effect to any concurrent payment or distribution to or for the holders of
such Senior Debt.
With respect to the holders of Senior Debt of the Issuers, the
Trustee undertakes to perform only such obligations on the part of the Trustee
as are specifically set forth in this Article 10, and no implied covenants or
obligations with respect to the holders of such Senior Debt shall be read into
this Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of such Senior Debt, and shall not be liable to
any such holders if the Trustee shall pay over or distribute to or on behalf of
Holders or the Issuers or any other Person money or assets to which any holders
of such Senior Debt shall be entitled by virtue of this Article 10, except if
such payment is made when the Trustee has actual knowledge of any facts that
would cause such payment to violate this Article 10 (which shall include any
notice by BankBoston, N.A. that a default described in Section 10.03 (a) or (b)
hereof has occurred under the Credit Facility) or as a result of the willful
misconduct or gross negligence of the Trustee.
SECTION 10.06. NOTICE BY ISSUERS.
The Issuers shall promptly notify the Trustee and the Paying
Agent of any facts known to them that would cause a payment of any Obligations
with respect to the Notes to violate this Article 10, but failure to give such
notice shall not affect the subordination of the Notes to the Senior Debt of the
Issuers as provided in this Article 10.
SECTION 10.07. SUBROGATION.
After all Senior Debt of the Issuers is paid in full and until
the Notes are paid in full in cash or Cash Equivalents, Holders of Notes shall
be subrogated (equally and ratably with all other Indebtedness pari passu with
the Notes) to the rights of holders of such Senior Debt to receive distributions
applicable to such Senior Debt to the extent that distributions otherwise
payable to the Holders of Notes have been applied to the payment of such Senior
Debt. A distribution made under this Article 10 to holders of Senior Debt of the
Issuers that otherwise would have been made to Holders of Notes is not, as
between the Issuers and Holders, a payment by the Issuers on the Notes.
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SECTION 10.08. RELATIVE RIGHTS.
This Article 10 defines the relative rights of Holders of Notes
and holders of Senior Debt of the Issuers. Nothing in this Indenture shall:
(1) impair, as between the Issuers and Holders of Notes, the
obligation of the Issuers, which is absolute and unconditional, to pay principal
of and interest on the Notes in accordance with their terms;
(2) affect the relative rights of Holders of Notes and creditors
of the Issuers other than their rights in relation to holders of Senior Debt of
the Issuers; or
(3) prevent the Trustee or any Holder of Notes from exercising
its available remedies upon a Default or Event of Default, subject to the rights
of holders and owners of Senior Debt of the Issuers to receive distributions and
payments otherwise payable to Holders of Notes.
If the Issuers fail because of this Article 10 to pay principal
of or interest on a Note on the due date, the failure is still a Default or
Event of Default.
SECTION 10.09. SUBORDINATION MAY NOT BE IMPAIRED BY ISSUERS.
No right of any holder of Senior Debt of the Issuers to enforce
the subordination of the Indebtedness evidenced by the Notes shall be impaired
by any act or failure to act by the Issuers or any Holder or by the failure of
the Issuers or any Holder to comply with this Indenture.
SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to
holders of Senior Debt of the Issuers the distribution may be made and the
notice given to their Representative.
Upon any payment or distribution of assets of either Issuer
referred to in this Article 10, the Trustee and the Holders of Notes shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction or upon any certificate of such Representative or of the
liquidating trustee or agent or other Person making any distribution to the
Trustee or to the Holders of Notes for the purpose of ascertaining the Persons
entitled to participate in such distribution, the holders of the Senior Debt of
the Issuers and other Indebtedness of the Issuers, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article 10.
SECTION 10.11. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 10 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless (i) the Trustee shall have received at its
Corporate Trust Office at least five Business Days prior to the date of such
payment written notice of, or (ii) the Trustee has actual knowledge (as
described in Section 10.05 hereof) of facts that would cause the payment of any
Obligations with respect to the Notes to violate this Article 10. Only the
Issuers
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or a Representative may give the notice. Nothing in this Article 10 shall impair
the claims of, or payments to, the Trustee under or pursuant to Section 7.07
hereof.
The Trustee in its individual or any other capacity may hold
Senior Debt of the Issuers with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights.
SECTION 10.12. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of Notes, by the Holder's acceptance thereof,
authorizes and directs the Trustee on such Holder's behalf to take such action
as may be necessary or appropriate to effectuate the subordination as provided
in this Article 10, and appoints the Trustee to act as such Holder's
attorney-in-fact for any and all such purposes. If the Trustee does not file a
proper proof of claim or proof of debt in the form required in any proceeding
referred to in Section 6.09 hereof at least 30 days before the expiration of the
time to file such claim, a Representative of Designated Senior Debt is hereby
authorized to file an appropriate claim for and on behalf of the Holders of the
Notes.
SECTION 10.13. AMENDMENTS.
The provisions of this Article 10 shall not be amended or
modified without the written consent of the holders of all Senior Debt of the
Issuers. Notwithstanding the foregoing, any amendment to the provisions of this
Article 10 shall require the consent of the Holders of at least 75% in aggregate
principal amount of the Notes then outstanding if such amendment would adversely
affect the rights of Holders of Notes.
ARTICLE 11.
NOTE GUARANTEES
SECTION 11.01. GUARANTEE.
Subject to this Article 11, each of the Guarantors hereby,
jointly and severally, from and after the time such Guarantor first becomes a
Domestic Restricted Subsidiary of the Company, unconditionally guarantees to
each Holder of a Note authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns, irrespective of the validity and
enforceability of this Indenture, the Notes or the Obligations of the Issuers
hereunder or thereunder, that: (a) the principal of and premium, interest and
Liquidated Damages, if any, on the Notes will be promptly paid in full when due,
whether at maturity, by acceleration, redemption or otherwise, and interest on
the overdue principal of premium, interest (to the extent permitted by law) and
Liquidated Damages, if any, on the Notes, if any, if lawful, and all other
Obligations of the Issuers to the Holders or the Trustee hereunder or thereunder
will be promptly paid in full or performed, all in accordance with the terms
hereof and thereof; and (b) in case of any extension of time of payment or
renewal of any Notes or any of such other Obligations, the same will be promptly
paid in full when due or performed in accordance with the terms of the extension
or renewal, whether at stated maturity, by acceleration or otherwise. Failing
payment when due of any amount so guaranteed or any performance so guaranteed
for whatever reason, the Guarantors shall be jointly and severally obligated to
pay the same immediately. Each Guarantor agrees that this is a guarantee of
payment and not a guarantee of collection.
The Guarantors hereby agree that their Obligations hereunder
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Notes with respect
to any
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provisions hereof or thereof, the recovery of any judgment against either of the
Issuers, any action to enforce the same or any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of a Guarantor.
Each Guarantor hereby waives diligence, presentment, demand of payment, filing
of claims with a court in the event of insolvency or bankruptcy of the either of
the Issuers, any right to require a proceeding first against the Issuers,
protest, notice and all demands whatsoever and covenant that this Note Guarantee
shall not be discharged except by complete performance of the Obligations
contained in the Notes and this Indenture.
If any Holder or the Trustee is required by any court or
otherwise to return to the Issuers, the Guarantors or any custodian, trustee,
liquidator or other similar official acting in relation to either the Issuers or
the Guarantors, any amount paid by either to the Trustee or such Holder, this
Note Guarantee, to the extent theretofore discharged, shall be reinstated in
full force and effect.
Each Guarantor agrees that it shall not be entitled to any right
of subrogation in relation to the Holders in respect of any Obligations
guaranteed hereby until payment in full of all Obligations guaranteed hereby.
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
Obligations guaranteed hereby may be accelerated as provided in Article 6 hereof
for the purposes of this Note Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the Obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such Obligations as provided in Article 6 hereof, such Obligations (whether or
not due and payable) shall forthwith become due and payable by the Guarantors
for the purpose of this Note Guarantee. 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 the Note Guarantee.
SECTION 11.02. SUBORDINATION OF NOTE GUARANTEE.
The Obligations of each Guarantor under its Note Guarantee
pursuant to this Article 11 shall be junior and subordinated to the Senior Debt
of such Guarantor on the same basis as the Notes are junior and subordinated to
Senior Debt of the Issuers. For the purposes of the foregoing sentence, the
Trustee and the Holders shall have the right to receive and/or retain payments
by any of the Guarantors only at such times as they may receive and/or retain
payments in respect of the Notes pursuant to this Indenture, including Article
10 hereof.
SECTION 11.03. LIMITATION ON GUARANTOR LIABILITY.
Each Guarantor, and by its acceptance of Notes, each Holder,
hereby confirms that it is the intention of all such parties that the Note
Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance
for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar federal or state law to the
extent applicable to any Note Guarantee. To effectuate the foregoing intention,
the Trustee, the Holders and the Guarantors hereby irrevocably agree that the
obligations of such Guarantor under its Note Guarantee and this Article 11 shall
be limited to the maximum amount as will, after giving effect to such maximum
amount and all other contingent and fixed liabilities of such Guarantor that are
relevant under such laws, and after giving effect to any collections from,
rights to receive contribution from or payments made by or on behalf of any
other Guarantor in respect of the obligations of such other Guarantor under this
Article 11, result in the obligations of such Guarantor under its Note Guarantee
not constituting a fraudulent transfer or conveyance.
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SECTION 11.04. EXECUTION AND DELIVERY OF NOTE GUARANTEE.
To evidence its Note Guarantee set forth in Section 11.01, each
Guarantor hereby agrees that a notation of such Note Guarantee substantially in
the form included in Exhibit E shall be endorsed by an Officer of such Guarantor
on each Note authenticated and delivered by the Trustee and that this Indenture
shall be executed on behalf of such Guarantor by an Officer of such Guarantor.
Each Guarantor hereby agrees that its Note Guarantee set forth in
Section 11.01 shall remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Note Guarantee.
If an Officer whose signature is on this Indenture or on the Note
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Note Guarantee is endorsed, the Note Guarantee shall be valid
nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Note Guarantee set forth
in this Indenture on behalf of the Guarantors.
In the event that the Company or any of its Domestic Restricted
Subsidiaries creates or acquires another Domestic Restricted Subsidiary
subsequent to the date of this Indenture or any Unrestricted Subsidiary shall
cease to be an Unrestricted Subsidiary and shall become a Domestic Restricted
Subsidiary, if required by Section 4.18 hereof, the Issuers shall cause such
Subsidiaries to execute supplemental indentures to this Indenture and Note
Guarantees in accordance with Section 4.18 hereof and this Article 11, to the
extent applicable.
SECTION 11.05. CONSOLIDATION, ETC. BY GUARANTORS.
In case of any consolidation, merger, sale or conveyance by any
Guarantor in accordance with Section 5.01 hereof and upon the assumption by the
successor Person, by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the Note Guarantee endorsed
upon the Notes and the due and punctual performance of all of the covenants and
conditions of this Indenture to be performed by the Guarantor, 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. Such successor Person
thereupon may cause to be signed any or all of the Note Guarantees to be
endorsed upon all of the Notes issuable hereunder which theretofore shall not
have been signed by the Issuers and delivered to the Trustee. All the Note
Guarantees so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Note Guarantees theretofore and thereafter issued in
accordance with the terms of this Indenture as though all of such Note
Guarantees had been issued at the date of the execution hereof.
SECTION 11.06. RELEASES FOLLOWING SALE OF ASSETS.
In the event of a sale or other disposition of all of the assets
of any Guarantor, by way of merger, consolidation or otherwise, or a sale or
other disposition of all of the capital stock of any Guarantor (other than to
the Company or another Guarantor), or in the case the Company designates a
Domestic Restricted Subsidiary to be an Unrestricted Subsidiary in accordance
with this Indenture, then such Guarantor (in the event of a sale or other
disposition, by way of merger, consolidation or
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otherwise, of all of the capital stock of such Guarantor) or the corporation
acquiring the property (in the event of a sale or other disposition of all or
substantially all of the assets of such Guarantor) shall be released and
relieved of any obligations under its Note Guarantee; provided that the Net
Proceeds of such sale or other disposition are applied in accordance with the
applicable provisions of this Indenture, including without limitation Section
4.10 hereof. Upon delivery by the Issuers to the Trustee of an Officers'
Certificate and an Opinion of Counsel to the effect that such sale or other
disposition was made by the Issuers in accordance with the applicable provisions
of this Indenture, including without limitation Section 4.10 hereof, the Trustee
shall execute any documents reasonably required in order to evidence the release
of any Guarantor from its obligations under its Note Guarantee.
Any Guarantor not released from its obligations under its Note
Guarantee shall remain liable for the full amount of principal of and interest
on the Notes and for the other obligations of any Guarantor under this Indenture
as provided in this Article 10.
ARTICLE 12.
MISCELLANEOUS
SECTION 12.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by TIA ss. 318(c), the imposed duties shall control.
SECTION 12.02. NOTICES.
Any notice or communication by the Company, UNICCO Finance, any
Guarantor or the Trustee to the others is duly given if in writing and delivered
in Person or mailed by first class mail (registered or certified, return receipt
requested), telex, telecopier or overnight air courier guaranteeing next day
delivery, to the others' address
If to the Company, UNICCO Finance and/or any Guarantor:
UNICCO Service Company
Four Copley Place
Boston, Massachusetts 02116
Telecopier No.: (617) 859-0735
Attention: Chief Financial Officer
With a copy to:
Posternak, Blankstein & Lund, L.L.P.
100 Charles River Plaza
Boston, Massachusetts 02114
Telecopier No.: (617) 367-2315
Attention: Noel G. Posternak, P.C.
If to the Trustee:
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State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
Telecopier No.: (617) 664-5150
Attention: Corporate Trust Administration
The Company, UNICCO Finance, any Guarantor, or the Trustee, by
notice to the others may designate additional or different addresses for
subsequent notices or communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first
class mail, certified or registered, return receipt requested, or by overnight
air courier guaranteeing next day delivery to its address shown on the register
kept by the Registrar. Any notice or communication shall also be so mailed to
any Person described in TIA ss. 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it shall
not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided
above within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Issuers mail a notice or communication to Holders, it
shall mail a copy to the Trustee and each Agent at the same time.
SECTION 12.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.
Holders may communicate pursuant to TIA ss. 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Issuers, the Trustee, the Registrar and anyone else shall have the protection of
TIA ss. 312(c).
SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Issuers to the Trustee to
take any action under this Indenture, the Issuers shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 12.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 12.05 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied.
SECTION 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
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Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA ss. 314(a)(4)) shall comply with the provisions of TIA
ss. 314(e) and shall include:
(a) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she
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 satisfied; and
(d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied.
SECTION 12.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.
SECTION 12.07. NO PERSONAL LIABILITY OF TRUSTEES, DIRECTORS, OFFICERS, EMPLOYEES
AND STOCKHOLDERS.
No trustee, director, officer, employee, incorporator or
shareholder of either Issuer or any of the Company's Subsidiaries, as such,
shall have any liability for any obligations of the Issuers or such Subsidiary
under the Notes, the Note Guarantees, or this Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each
Holder by accepting a Note waives and releases all such liability. The waiver
and release are part of the consideration for issuance of the Notes. The Company
is a Massachusetts business trust. A copy of the Declaration of Trust
establishing such trust is on file with the Secretary of The Commonwealth of
Massachusetts. The Notes and this Indenture are executed on behalf of such trust
by officers of the trust as officers and not individually.
SECTION 12.08. GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE
USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 12.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture,
loan or debt agreement of the Issuers or its Subsidiaries or of any other
Person. Any such indenture, loan or debt agreement may not be used to interpret
this Indenture.
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SECTION 12.10. SUCCESSORS.
All agreements of the Issuers and the Guarantors in this
Indenture, the Notes and the Note Guarantees shall bind their successors. All
agreements of the Trustee in this Indenture shall bind its successors.
SECTION 12.11. SEVERABILITY.
In case any provision in this Indenture, the Notes or the Note
Guarantees 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 12.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 12.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
<PAGE> 86
SIGNATURES
DATED AS OF OCTOBER 17, 1997
UNICCO SERVICE COMPANY
BY: /s/ GEORGE A. KECHES
-------------------------------
Name: GEORGE A. KECHES
Title: CFO AND TREASURER
UNICCO FINANCE CORP.
BY: /s/ GEORGE A. KECHES
-------------------------------
Name: GEORGE A. KECHES
Title: TREASURER
USC, INC.
BY: /s/ GEORGE A. KECHES
-------------------------------
Name: GEORGE A. KECHES
Title: TREASURER
UNICCO GOVERNMENT SERVICES, INC.
BY: /s/ GEORGE A. KECHES
-------------------------------
Name: GEORGE A. KECHES
Title: TREASURER
UNICCO SECURITY SERVICES, INC.
BY: /s/ GEORGE A. KECHES
-------------------------------
Name: GEORGE A. KECHES
Title: AUTHORIZED SIGNATORY
STATE STREET BANK AND TRUST COMPANY,
as Trustee
BY: /s/ ANDREW M. SINASKY
---------------------------------
Name: ANDREW M. SINASKY
Title: ASSISTANT VICE PRESIDENT
<PAGE> 87
EXHIBIT A-1
(Face of Global Note)
CUSIP/CINS _______________
9 7/8% Series A Senior Subordinated Notes due 2007
No.____ $_____________________
UNICCO SERVICE COMPANY
UNICCO FINANCE CORP.
promise to pay to ____________________________________________________
or registered assigns,
the principal sum of _________________________________________________
Dollars on October 15, 2007.
Interest Payment Dates: April 15 and October 15
Record Dates: April 1 and October 1
DATED: OCTOBER 17, 1997
UNICCO SERVICE COMPANY
BY:
----------------------------------
Name:
Title:
BY:
----------------------------------
Name:
Title:
UNICCO FINANCE CORP.
BY:
----------------------------------
Name:
Title:
BY:
----------------------------------
Name:
Title:
This is one of the Global Notes
referred to in the within-mentioned
Indenture:
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
---------------------------------
<PAGE> 88
(Back of Note)
9 7/8% Series A Senior Subordinated Notes due 2007
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO
A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUERS.
THIS NOTE IS SUBORDINATED IN ACCORDANCE WITH THE PROVISIONS OF THE INDENTURE
GOVERNING THIS NOTE.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE
HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), (B) IT IS NOT A U.S.
PERSON, IS NOT ACQUIRING THIS NOTE FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON
AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER
THE SECURITIES ACT) (AN "IAI"), (2) AGREES THAT IT WILL NOT, WITHIN THE TIME
PERIOD REFERRED TO UNDER RULE 144(k) (TAKING INTO ACCOUNT THE PROVISIONS OF RULE
144(d) UNDER THE SECURITIES ACT, IF APPLICABLE) UNDER THE SECURITIES ACT AS IN
EFFECT ON THE DATE OF THE TRANSFER OF THIS NOTE, RESELL OR OTHERWISE TRANSFER
THIS NOTE EXCEPT (A) TO THE ISSUERS, (B) TO A PERSON WHOM THE HOLDER REASONABLY
BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT (IF AVAILABLE), (E) TO AN IAI THAT, PRIOR TO SUCH
TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE REGISTRATION OF TRANSFER OF THIS
NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH
TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES AT THE TIME OF
TRANSFER OF LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUERS
THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT OR (F) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE,
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, AND (3) AGREES THAT IT WILL
DELIVER TO
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EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF
THIS NOTE OR ANY INTEREST HEREIN WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE
HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING
TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE. AS
USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON"
HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES
ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO
REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS.
Capitalized terms used herein shall have the meanings assigned to
them in the Indenture referred to below unless otherwise indicated.
1. INTEREST. UNICCO Service Company, a Massachusetts business
trust (the "Company"), and UNICCO Finance Corp., a Delaware corporation
("Finance" and, together with the Company, the "Issuers"), promise to pay
interest on the principal amount of this Note at 9 7/8% per annum from October
17, 1997 until maturity and shall pay the Liquidated Damages payable pursuant to
Section 5 of the Registration Rights Agreement referred to below. The Issuers
will pay interest and Liquidated Damages semi-annually on April 15 and October
15 of each year, or if any such day is not a Business Day, on the next
succeeding Business Day (each an "Interest Payment Date"). Interest on the Notes
will accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of issuance; provided that if there is no
existing Default in the payment of interest, and if this Note is authenticated
between a record date referred to on the face hereof and the next succeeding
Interest Payment Date, interest shall accrue from such next succeeding Interest
Payment Date; provided, further, that the first Interest Payment Date shall be
April 15, 1998. The Issuers shall pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue principal and premium, if
any, from time to time on demand at a rate that is 1% per annum in excess of the
rate then in effect; they shall pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue installments of interest
and Liquidated Damages (without regard to any applicable grace periods) from
time to time on demand at the same rate to the extent lawful. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
2. METHOD OF PAYMENT. The Issuers will pay interest on the
Notes (except defaulted interest) and Liquidated Damages to the Persons who are
registered Holders of Notes at the close of business on the April 1 or October 1
next preceding the Interest Payment Date, even if such Notes are canceled after
such record date and on or before such Interest Payment Date, except as provided
in Section 2.12 of the Indenture with respect to defaulted interest. The Notes
will be payable as to principal, premium and Liquidated Damages, if any, and
interest at the office or agency of the Issuers maintained for such purpose
within or without the City and State of New York, or, at the option of the
Issuers, payment of interest and Liquidated Damages may be made by check mailed
to the Holders at their addresses set forth in the register of Holders, and
provided that payment by wire transfer of immediately available funds will be
required with respect to principal of and interest, premium and Liquidated
Damages on, all Global Notes and all other Notes the Holders of which shall have
provided wire transfer instructions to the Issuers or the Paying Agent. Such
payment shall be 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.
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<PAGE> 90
3. PAYING AGENT AND REGISTRAR. Initially, State Street Bank and
Trust Company, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Issuers may change any Paying Agent or Registrar without notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
4. INDENTURE. The Issuers issued the Notes under an Indenture
dated as of October 17, 1997 (the "Indenture") among the Issuers, the guarantor
named on the signature pages thereto (the "Guarantors") and the Trustee. The
terms of the Notes include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939, as amended (15
U.S. Code ss.ss. 77aaa-77bbbb) (the "TIA"). The Notes are subject to all such
terms, and Holders are referred to the Indenture and the TIA for a statement of
such terms. To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the Indenture shall govern and be
controlling. The Notes are general, unsecured obligations of the Issuers limited
to $150.0 million in aggregate principal amount.
5. OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) of this Paragraph 5,
the Notes shall not be redeemable at the Issuers' option prior to October 15,
2002. Thereafter, the Notes shall be subject to redemption at any time at the
option of the Issuers, in whole or in part, upon not less than 30 nor more than
60 days' notice, at the redemption prices (expressed as percentages of principal
amount) set forth below plus accrued and unpaid interest and Liquidated Damages,
if any, thereon to the applicable redemption date, if redeemed during the
twelve-month period beginning on October 15 of the years indicated below:
YEAR PERCENTAGE
---- ----------
2002........................................................ 104.94%
2003........................................................ 103.29%
2004........................................................ 101.65%
2005 and thereafter......................................... 100.00%
(b) Notwithstanding the provisions of subparagraph (a) of this
Paragraph 5, prior to October 15, 2002, the Issuers may redeem up to an
aggregate of $33.0 million in principal amount of Notes at a redemption price of
109.875% of the principal amount thereof, plus accrued and unpaid interest and
Liquidated Damages, if any, thereon to the redemption date, with the net cash
proceeds of an initial public offering of common equity of the Company; provided
that (i) at least $72.0 million in principal amount of Notes remains outstanding
immediately after the occurrence of such redemption and (ii) notice of such
redemption shall be given within 90 days of the date of the consummation of such
initial public offering.
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Issuers shall not
be required to make mandatory redemption payments with respect to the Notes.
7. REPURCHASE AT OPTION OF HOLDER.
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(a) Upon the occurrence of a Change of Control, the Issuers
shall be obligated to make an offer (a "Change of Control Offer") to each Holder
of Notes to repurchase all or any part (equal to $1,000 or an integral multiple
thereof) of such Holder's Notes at an offer price in cash equal to 101% of the
principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the date of purchase (the "Change of Control
Payment"). Within 30 days following a Change of Control, the Issuers shall mail
a notice to each Holder setting forth the procedures governing the Change of
Control Offer as required by the Indenture.
(b) If the Company or any of its Restricted Subsidiaries
consummates an Asset Sale, within five days of each date on which the aggregate
amount of Excess Proceeds exceeds $5 million, the Issuers shall commence an
offer to all Holders of Notes (an "Asset Sale Offer") pursuant to Section 3.09
of the Indenture to purchase the maximum principal amount of Notes that may be
purchased out of the Excess Proceeds at an offer price in cash in an amount
equal to 100% of the principal amount thereof, plus accrued and unpaid interest
and Liquidated Damages, if any, thereon to the date of purchase in accordance
with the procedures set forth in the Indenture. To the extent that the aggregate
amount of Notes tendered pursuant to an Asset Sale Offer is less than the Excess
Proceeds, the Company may use any remaining Excess Proceeds for general
corporate purposes. If the aggregate principal amount of Notes surrendered by
Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select
the Notes to be purchased on a pro rata basis. Holders of Notes that are the
subject of an offer to purchase will receive an Asset Sale Offer from the
Company prior to any related purchase date and may elect to have such Notes
purchased by completing the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Notes.
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed by
first class mail at least 30 days but not more than 60 days before the
redemption date to each Holder of Notes to be redeemed at its registered
address. Notes in denominations larger than $1,000 may be redeemed in part but
only in whole multiples of $1,000, unless all of the Notes held by a Holder are
to be redeemed. On and after the redemption date interest ceases to accrue on
Notes or portions thereof called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Notes may be registered and Notes may be
exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Issuers may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture. The Issuers need not
exchange or register the transfer of any Note or portion of a Note selected for
redemption, except for the unredeemed portion of any Note being redeemed in
part. Also, the Issuers need not exchange or register the transfer of any Notes
for a period of 15 days before a selection of Notes to be redeemed or during the
period between a record date and the corresponding Interest Payment Date.
10. SUBORDINATION. Each Holder by accepting a Note agrees that
the payment of principal of and premium, interest and Liquidated Damages, if
any, on each Note is subordinated in right of payment, to the extent and in the
manner provided in Article 10 of the Indenture, to the prior payment in full of
all Senior Debt of the Issuers (whether outstanding on the date of the Indenture
or thereafter incurred, assumed or guaranteed), and the subordination is for the
benefit of the holders of such Senior Debt.
A1-5
<PAGE> 92
11. PERSONS DEEMED OWNERS. The registered Holder of a Note may
be treated as its owner for all purposes.
12. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Indenture, the Note Guarantees or the Notes may be amended or
supplemented with the consent of the Holders of at least a majority in principal
amount of the Notes then outstanding, and any existing default or compliance
with any provision of the Indenture, the Notes or the Note Guarantees may be
waived with the consent of the Holders of a majority in principal amount of the
then outstanding Notes. Without the consent of any Holder of Notes, the Issuers,
the Company's Restricted Subsidiaries and the Trustee may amend or supplement
the Indenture, the Notes or the Note Guarantees to cure any ambiguity, defect or
inconsistency, to provide for uncertificated Notes in addition to or in place of
certificated Notes, to provide for the assumption of the Company's, UNICCO
Finance's or any Restricted Subsidiary's obligations to Holders of the Notes in
case of a merger or consolidation, to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder, to
comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the TIA.
13. DEFAULTS AND REMEDIES. Events of Default include: (i)
default for 30 days in the payment when due of interest on, or Liquidated
Damages, if any, with respect to, the Notes (whether or not prohibited by
Article 10 of the Indenture); (ii) default in payment when due of principal of
or premium, if any, on the Notes (whether or not prohibited by Article 10 of the
Indenture); (iii) failure by the Issuers to comply with Section 4.07, 4.09,
4.10, 4.15 or 5.01 of the Indenture; (iv) failure by the Issuers for 60 days
after written notice by the Trustee or the Holders of at least 25% in principal
amount of the then outstanding Notes to comply with any of their other
agreements in the Indenture or the Notes; (v) default under certain other
agreements relating to Indebtedness of the Company which default (a) is caused
by a failure to pay principal of or premium, if any, or interest on such
Indebtedness on the date of such default (a "Payment Default") or (b) results in
the acceleration of such Indebtedness prior to its express maturity and, in each
case, the principal amount of any such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
$5.0 million or more; (vi) failure by the Company, UNICCO Finance or any of the
Company's Restricted Subsidiaries to pay final judgments aggregating in excess
of $2.0 million and either (a) any creditor commences enforcement proceedings
upon any such judgment or (b) such judgments are not paid, discharged or stayed
for a period of 45 days; (vii) except as permitted by the Indenture, any
guarantee of the Notes shall be held in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason to be in full force and
effect or any Restricted Subsidiary, or any Person acting on behalf of any
Restricted Subsidiary, shall deny or disaffirm its obligations under its
guarantee; (viii) the Refinancing shall not have been consummated by 11:59 p.m.,
New York City time, on the date of the Indenture; and (ix) certain events of
bankruptcy or insolvency with respect to the Company, UNICCO Finance or any of
the Company's Restricted Subsidiaries. If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may declare all the Notes to be due and payable
immediately. Notwithstanding the foregoing, in the case of an Event of Default
arising from certain events of bankruptcy or insolvency, all outstanding Notes
will become due and payable without further action or notice. Holders of the
Notes may not enforce the Indenture or the Notes except as provided in the
Indenture. Subject to certain limitations, Holders of a majority in principal
amount of the then outstanding Notes may direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Holders of the Notes notice of
any continuing Default or Event of Default (except a Default or Event of Default
A1-6
<PAGE> 93
relating to the payment of principal or interest) if it determines that
withholding notice is in their interest. The Holders of a majority in aggregate
principal amount of the Notes then outstanding by notice to the Trustee may on
behalf of the Holders of all of the Notes waive any existing Default or Event of
Default and its consequences under the Indenture except a continuing Default or
Event of Default in the payment of interest on, or the principal of, the Notes.
The Issuers are required to deliver to the Trustee annually a statement
regarding compliance with the Indenture, and the Issuers are required, upon
becoming aware of any Default or Event of Default, to deliver to the Trustee a
statement specifying such Default or Event of Default.
14. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Issuers or their Affiliates, and may otherwise deal
with the Issuers or their Affiliates, as if it were not the Trustee.
15. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
trustee, incorporator or shareholder of either Issuer, as such, shall not have
any liability for any obligations of the Issuers or any of the Company's
Subsidiaries under the Notes, the Indenture, the Note Guarantees or for any
claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Notes.
16. AUTHENTICATION. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
17. ABBREVIATIONS. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
18. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND
RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders of
Notes under the Indenture, Holders of Restricted Global Notes and Restricted
Definitive Notes shall have all the rights set forth in the Registration Rights
Agreement dated as of October 17, 1997, among the Issuers and the parties named
on the signature pages thereof (the "Registration Rights Agreement").
18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP
numbers in notices of redemption as a convenience to Holders. No representation
is made as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Issuers will furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
UNICCO Service Company
Four Copley Place
Boston, Massachusetts 02116
Attention: Chief Financial Officer
A1-7
<PAGE> 94
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
--------------------------------------------------------
to transfer this Note on the books of the Issuers. The agent may substitute
another to act for him.
- --------------------------------------------------------------------------------
Date:
-------------------
Your Signature:
-----------------------------------
(Sign exactly as your name appears
on the Note)
SIGNATURE GUARANTEE.
A1-8
<PAGE> 95
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Issuers
pursuant to Section 4.10 or 4.15 of the Indenture, check the box below:
[ ] Section 4.10 [ ] Section 4.15
If you want to elect to have only part of the Note purchased by
the Issuers pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased: $________
Date: Your Signature:
------------- -----------------------------------
(Sign exactly as your name appears
on the Note)
Tax Identification No:
Signature Guarantee. ----------------------------
A1-9
<PAGE> 96
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
The following exchanges of a part of this Global Note for an
interest in another Global Note or for a Definitive Note, or exchanges of a part
of another Global Note or Definitive Note for an interest in this Global Note,
have been made:
<TABLE>
Amount of decrease in Amount of increase in Principal Amount of Signature of
Principal Amount Principal Amount this Global Note authorized officer
of this Global of following such of Trustee or Note
Date of Exchange Note this Global Note decrease (or increase) Custodian
- ---------------- ---- ---------------- ---------------------- ---------
<S> <C> <C> <C> <C>
</TABLE>
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<PAGE> 97
EXHIBIT A-2
(Face of Regulation S Temporary Global Note)
CUSIP/CINS ________________
9 7/8% Series A Senior Subordinated Notes due 2007
No. _________________ $ _________________
UNICCO SERVICE COMPANY
UNICCO FINANCE CORP.
promise to pay to ______________________________________________________
or registered assigns,
the principal sum of ___________________________________________________
Dollars on October 15, 2007.
Interest Payment Dates: April 15 and October 15
Record Dates: April 1 and October 1
DATED: OCTOBER 17, 1997
UNICCO SERVICE COMPANY
BY:
-------------------------------
Name:
Title:
BY:
-------------------------------
Name:
Title:
UNICCO FINANCE CORP.
BY:
-------------------------------
Name:
Title:
BY:
-------------------------------
Name:
Title:
This is one of the Global Notes referred
to in the within-mentioned Indenture:
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
---------------------------------------
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<PAGE> 98
(Back of Regulation S Temporary Global Note)
9 7/8% Series A Senior Subordinated Notes due 2007
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE PAYMENT OF INTEREST HEREON.
THIS NOTE IS SUBORDINATED IN ACCORDANCE WITH THE PROVISIONS OF THE INDENTURE
GOVERNING THIS NOTE.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"),
TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE
HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), (B) IT IS NOT A U.S.
PERSON, IS NOT ACQUIRING THIS NOTE FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON
AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER
THE SECURITIES ACT) (AN "IAI"), (2) AGREES THAT IT WILL NOT, WITHIN THE TIME
PERIOD REFERRED TO UNDER RULE 144(k) (TAKING INTO ACCOUNT THE PROVISIONS OF RULE
144(d) UNDER THE SECURITIES ACT, IF APPLICABLE) UNDER THE SECURITIES ACT AS IN
EFFECT ON THE DATE OF THE TRANSFER OF THIS NOTE, RESELL OR OTHERWISE TRANSFER
THIS NOTE EXCEPT (A) TO THE ISSUERS, (B) TO A PERSON WHOM THE HOLDER REASONABLY
BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN
A2-2
<PAGE> 99
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT (IF AVAILABLE), (E) TO AN IAI THAT, PRIOR TO SUCH
TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE REGISTRATION OF TRANSFER OF THIS
NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH
TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES AT THE TIME OF
TRANSFER OF LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUERS
THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT OR (F) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE,
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF THIS NOTE OR ANY INTEREST HEREIN WITHIN THE TIME PERIOD REFERRED TO
ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF
RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE
TRUSTEE. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND
"U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER
THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO
REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING
RESTRICTIONS.
Capitalized terms used herein shall have the meanings assigned to
them in the Indenture referred to below unless otherwise indicated.
1. INTEREST. UNICCO Service Company, a Massachusetts business
trust (the "Company"), and UNICCO Finance Corp., a Delaware corporation
("Finance" and, together with the Company, the "Issuers"), promise to pay
interest on the principal amount of this Note at 9 7/8% per annum from October
17, 1997 until maturity and shall pay the Liquidated Damages payable pursuant to
Section 5 of the Registration Rights Agreement referred to below. The Issuers
will pay interest and Liquidated Damages semi-annually on April 15 and October
15 of each year, or if any such day is not a Business Day, on the next
succeeding Business Day (each an "Interest Payment Date"). Interest on the Notes
will accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of issuance; provided that if there is no
existing Default in the payment of interest, and if this Note is authenticated
between a record date referred to on the face hereof and the next succeeding
Interest Payment Date, interest shall accrue from such next succeeding Interest
Payment Date; provided, further, that the first Interest Payment Date shall be
April 15, 1998. The Issuers shall pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue principal and premium, if
any, from time to time on demand at a rate that is 1% per annum in excess of the
rate then in effect; they shall pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue installments of interest
and Liquidated Damages (without regard to any applicable grace periods) from
time to time on demand at the same rate to the extent lawful. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
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<PAGE> 100
Until this Regulation S Temporary Global Note is exchanged for
one or more Regulation S Permanent Global Notes, the Holder hereof shall not be
entitled to receive payments of interest hereon; until so exchanged in full,
this Regulation S Temporary Global Note shall in all other respects be entitled
to the same benefits as other Notes under the Indenture.
2. METHOD OF PAYMENT. The Issuers will pay interest on the Notes
(except defaulted interest) and Liquidated Damages to the Persons who are
registered Holders of Notes at the close of business on the April 1 or October 1
next preceding the Interest Payment Date, even if such Notes are canceled after
such record date and on or before such Interest Payment Date, except as provided
in Section 2.12 of the Indenture with respect to defaulted interest. The Notes
will be payable as to principal, premium and Liquidated Damages, if any, and
interest at the office or agency of the Issuers maintained for such purpose
within or without the City and State of New York, or, at the option of the
Issuers, payment of interest and Liquidated Damages may be made by check mailed
to the Holders at their addresses set forth in the register of Holders, and
provided that payment by wire transfer of immediately available funds will be
required with respect to principal of and interest, premium and Liquidated
Damages on, all Global Notes and all other Notes the Holders of which shall have
provided wire transfer instructions to the Issuers or the Paying Agent. Such
payment shall be 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.
3. PAYING AGENT AND REGISTRAR. Initially, State Street Bank and
Trust Company, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Issuers may change any Paying Agent or Registrar without notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
4. INDENTURE. The Issuers issued the Notes under an Indenture
dated as of October 17, 1997 (the "Indenture") among the Issuers, the guarantor
named on the signature pages thereto (the "Guarantors") and the Trustee. The
terms of the Notes include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939, as amended (15
U.S. Code ss.ss. 77aaa-77bbbb) (the "TIA"). The Notes are subject to all such
terms, and Holders are referred to the Indenture and the TIA for a statement of
such terms. To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the Indenture shall govern and be
controlling. The Notes are general, unsecured obligations of the Issuers limited
to $150.0 million in aggregate principal amount.
5. OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) of this Paragraph 5,
the Notes shall not be redeemable at the Issuers' option prior to October 15,
2002. Thereafter, the Notes shall be subject to redemption at any time at the
option of the Issuers, in whole or in part, upon not less than 30 nor more than
60 days' notice, at the redemption prices (expressed as percentages of principal
amount) set forth below plus accrued and unpaid interest and Liquidated Damages,
if any, thereon to the applicable redemption date, if redeemed during the
twelve-month period beginning on October 15 of the years indicated below:
YEAR PERCENTAGE
---- ----------
2002........................................................ 104.94%
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<PAGE> 101
2003........................................................ 103.29%
2004........................................................ 101.65%
2005 and thereafter......................................... 100.00%
(b) Notwithstanding the provisions of subparagraph (a) of this
Paragraph 5, prior to October 15, 2002, the Issuers may redeem up to an
aggregate of $33.0 million in principal amount of Notes at a redemption price of
109.875% of the principal amount thereof, plus accrued and unpaid interest and
Liquidated Damages, if any, thereon to the redemption date, with the net cash
proceeds of an initial public offering of common equity of the Company; provided
that (i) at least $72.0 million in principal amount of Notes remains outstanding
immediately after the occurrence of such redemption and (ii) notice of such
redemption shall be given within 90 days of the date of the consummation of such
initial public offering.
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Issuers shall
not be required to make mandatory redemption payments with respect to the Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) Upon the occurrence of a Change of Control, the Issuers
shall be obligated to make an offer (a "Change of Control Offer") to each Holder
of Notes to repurchase all or any part (equal to $1,000 or an integral multiple
thereof) of such Holder's Notes at an offer price in cash equal to 101% of the
principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the date of purchase (the "Change of Control
Payment"). Within 30 days following a Change of Control, the Issuers shall mail
a notice to each Holder setting forth the procedures governing the Change of
Control Offer as required by the Indenture.
(b) If the Company or any of its Restricted Subsidiaries
consummates an Asset Sale, within five days of each date on which the aggregate
amount of Excess Proceeds exceeds $5 million, the Issuers shall commence an
offer to all Holders of Notes (an "Asset Sale Offer") pursuant to Section 3.09
of the Indenture to purchase the maximum principal amount of Notes that may be
purchased out of the Excess Proceeds at an offer price in cash in an amount
equal to 100% of the principal amount thereof, plus accrued and unpaid interest
and Liquidated Damages, if any, thereon to the date of purchase in accordance
with the procedures set forth in the Indenture. To the extent that the aggregate
amount of Notes tendered pursuant to an Asset Sale Offer is less than the Excess
Proceeds, the Company may use any remaining Excess Proceeds for general
corporate purposes. If the aggregate principal amount of Notes surrendered by
Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select
the Notes to be purchased on a pro rata basis. Holders of Notes that are the
subject of an offer to purchase will receive an Asset Sale Offer from the
Company prior to any related purchase date and may elect to have such Notes
purchased by completing the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Notes.
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed by
first class mail at least 30 days but not more than 60 days before the
redemption date to each Holder of Notes to be redeemed at its registered
address. Notes in denominations larger than $1,000 may be redeemed in part but
only in whole multiples of $1,000, unless all of the Notes held by a Holder are
to be
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redeemed. On and after the redemption date interest ceases to accrue on Notes
or portions thereof called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Notes may be registered and Notes may be
exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Issuers may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture. The Issuers need not
exchange or register the transfer of any Note or portion of a Note selected for
redemption, except for the unredeemed portion of any Note being redeemed in
part. Also, the Issuers need not exchange or register the transfer of any Notes
for a period of 15 days before a selection of Notes to be redeemed or during the
period between a record date and the corresponding Interest Payment Date.
This Regulation S Temporary Global Note is exchangeable in whole
or in part for one or more Global Notes only (i) on or after the termination of
the 40-day restricted period (as defined in Regulation S) and (ii) upon
presentation of certificates (accompanied by an Opinion of Counsel, if
applicable) required by Article 2 of the Indenture. Upon exchange of this
Regulation S Temporary Global Note for one or more Global Notes, the Trustee
shall cancel this Regulation S Temporary Global Note.
10. SUBORDINATION. Each Holder by accepting a Note agrees that
the payment of principal of and premium, interest and Liquidated Damages, if
any, on each Note is subordinated in right of payment, to the extent and in the
manner provided in Article 10 of the Indenture, to the prior payment in full of
all Senior Debt of the Issuers (whether outstanding on the date of the Indenture
or thereafter incurred, assumed or guaranteed), and the subordination is for the
benefit of the holders of such Senior Debt.
11. PERSONS DEEMED OWNERS. The registered Holder of a Note may
be treated as its owner for all purposes.
12. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Indenture, the Note Guarantees or the Notes may be amended or
supplemented with the consent of the Holders of at least a majority in principal
amount of the Notes then outstanding, and any existing default or compliance
with any provision of the Indenture, the Notes or the Note Guarantees may be
waived with the consent of the Holders of a majority in principal amount of the
then outstanding Notes. Without the consent of any Holder of Notes, the Issuers,
the Company's Restricted Subsidiaries and the Trustee may amend or supplement
the Indenture, the Notes or the Note Guarantees to cure any ambiguity, defect or
inconsistency, to provide for uncertificated Notes in addition to or in place of
certificated Notes, to provide for the assumption of the Company's, UNICCO
Finance's or any Restricted Subsidiary's obligations to Holders of the Notes in
case of a merger or consolidation, to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder, to
comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the TIA.
13. DEFAULTS AND REMEDIES. Events of Default include: (i)
default for 30 days in the payment when due of interest on, or Liquidated
Damages, if any, with respect to, the Notes
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<PAGE> 103
(whether or not prohibited by Article 10 of the Indenture); (ii) default in
payment when due of principal of or premium, if any, on the Notes (whether or
not prohibited by Article 10 of the Indenture); (iii) failure by the Issuers to
comply with Section 4.07, 4.09, 4.10, 4.15 or 5.01 of the Indenture; (iv)
failure by the Issuers for 60 days after written notice by the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes to
comply with any of their other agreements in the Indenture or the Notes; (v)
default under certain other agreements relating to Indebtedness of the Company
which default (a) is caused by a failure to pay principal of or premium, if any,
or interest on such Indebtedness on the date of such default (a "Payment
Default") or (b) results in the acceleration of such Indebtedness prior to its
express maturity and, in each case, the principal amount of any such
Indebtedness under which there has been a Payment Default or the maturity of
which has been so accelerated, aggregates $5.0 million or more; (vi) failure by
the Company, UNICCO Finance or any of the Company's Restricted Subsidiaries to
pay final judgments aggregating in excess of $2.0 million and either (a) any
creditor commences enforcement proceedings upon any such judgment or (b) such
judgments are not paid, discharged or stayed for a period of 45 days; (vii)
except as permitted by the Indenture, any guarantee of the Notes shall be held
in any judicial proceeding to be unenforceable or invalid or shall cease for any
reason to be in full force and effect or any Restricted Subsidiary, or any
Person acting on behalf of any Restricted Subsidiary, shall deny or disaffirm
its obligations under its guarantee; (viii) the Refinancing shall not have been
consummated by 11:59 p.m., New York City time, on the date of the Indenture; and
(ix) certain events of bankruptcy or insolvency with respect to the Company,
UNICCO Finance or any of the Company's Restricted Subsidiaries. If any Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes to be
due and payable immediately. Notwithstanding the foregoing, in the case of an
Event of Default arising from certain events of bankruptcy or insolvency, all
outstanding Notes will become due and payable without further action or notice.
Holders of the Notes may not enforce the Indenture or the Notes except as
provided in the Indenture. Subject to certain limitations, Holders of a majority
in principal amount of the then outstanding Notes may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders of the
Notes notice of any continuing Default or Event of Default (except a Default or
Event of Default relating to the payment of principal or interest) if it
determines that withholding notice is in their interest. The Holders of a
majority in aggregate principal amount of the Notes then outstanding by notice
to the Trustee may on behalf of the Holders of all of the Notes waive any
existing Default or Event of Default and its consequences under the Indenture
except a continuing Default or Event of Default in the payment of interest on,
or the principal of, the Notes. The Issuers are required to deliver to the
Trustee annually a statement regarding compliance with the Indenture, and the
Issuers are required, upon becoming aware of any Default or Event of Default, to
deliver to the Trustee a statement specifying such Default or Event of Default.
14. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Issuers or their Affiliates, and may otherwise deal
with the Issuers or their Affiliates, as if it were not the Trustee.
15. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
trustee, incorporator or shareholder of either Issuer, as such, shall not have
any liability for any obligations of the Issuers or any of the Company's
Subsidiaries under the Notes, the Indenture, the Note Guarantees or for any
claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Notes.
A2-7
<PAGE> 104
16. AUTHENTICATION. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
17. ABBREVIATIONS. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
18. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND
RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders of
Notes under the Indenture, Holders of Restricted Global Notes and Restricted
Definitive Notes shall have all the rights set forth in the Registration Rights
Agreement dated as of October 17, 1997, among the Issuers and the parties named
on the signature pages thereof (the "Registration Rights Agreement").
18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP
numbers in notices of redemption as a convenience to Holders. No representation
is made as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Issuers will furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
UNICCO Service Company
Four Copley Place
Boston, Massachusetts 02116
Attention: Chief Financial Officer
A2-8
<PAGE> 105
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
--------------------------------------------------------
to transfer this Note on the books of the Issuers. The agent may substitute
another to act for him.
- --------------------------------------------------------------------------------
Date:
-------------------
Your Signature:
-----------------------------------
(Sign exactly as your name appears
on the Note)
SIGNATURE GUARANTEE.
A2-9
<PAGE> 106
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Issuers
pursuant to Section 4.10 or 4.15 of the Indenture, check the box below:
[ ] Section 4.10 [ ] Section 4.15
If you want to elect to have only part of the Note purchased by
the Issuers pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased: $________
Date: Your Signature:
------------------- -----------------------------------
(Sign exactly as your name appears
on the Note)
Tax Identification No:
----------------------------
Signature Guarantee.
A2-10
<PAGE> 107
SCHEDULE OF EXCHANGES OF REGULATION S TEMPORARY GLOBAL NOTE
The following exchanges of a part of this Regulation S
Temporary Global Note for an interest in another Global Note, or of other
Restricted Global Notes for an interest in this Regulation S Temporary Global
Note, have been made:
<TABLE>
Amount of decrease in Amount of increase in Principal Amount of Signature of
Principal Amount Principal Amount this Global Note authorized officer
of this Global of following such of Trustee or Note
Date of Exchange Note this Global Note decrease (or increase) Custodian
- ---------------- ---- ---------------- ---------------------- ---------
<S> <C> <C> <C> <C>
</TABLE>
A2-11
<PAGE> 108
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
UNICCO Service Company
UNICCO Finance Corp.
Four Copley Place
Boston, Massachusetts 02116
State Street Bank and Trust Company
Two International Place
Boston, Massachusetts 02110
Re: 9 7/8% Senior Subordinated Notes due 2007
Reference is hereby made to the Indenture, dated as of October
17, 1997 (the "INDENTURE"), between UNICCO Service Company (the "COMPANY"),
UNICCO Finance Corp. ("FINANCE" and, together with the Company, the "ISSUERS"),
the Guarantors party thereto and State Street Bank and Trust Company, as
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.
______________, (the "TRANSFEROR") owns and proposes to transfer
the Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "TRANSFER"),
to __________ (the "TRANSFEREE"), as further specified in Annex A hereto. In
connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. [SYMBOL]CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer
is being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the 144A Global Note and/or the Definitive Note and
in the Indenture and the Securities Act.
2. [SYMBOL]CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN THE TEMPORARY REGULATION S GLOBAL NOTE, THE REGULATION S GLOBAL NOTE OR A
DEFINITIVE NOTE PURSUANT TO REGULATION S. The Transfer is being effected
pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act
and, accordingly, the Transferor hereby further certifies that (i) the Transfer
is not being made to a person in the United States and (x) at the time the buy
order was originated, the Transferee was outside the United States or such
Transferor and any Person acting on its behalf
B-1
<PAGE> 109
reasonably believed and believes that the Transferee was outside the United
States or (y) the transaction was executed in, on or through the facilities of a
designated offshore securities market and neither such Transferor nor any Person
acting on its behalf knows that the transaction was prearranged with a buyer in
the United States, (ii) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S
under the Securities Act, (iii) the transaction is not part of a plan or scheme
to evade the registration requirements of the Securities Act and (iv) if the
proposed transfer is being made prior to the expiration of the Restricted
Period, the transfer is not being made to a U.S. Person or for the account or
benefit of a U.S. Person (other than an Initial Purchaser). Upon consummation of
the proposed transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will be subject to the
restrictions on Transfer enumerated in the Private Placement Legend printed on
the Regulation S Global Note, the Temporary Regulation S Global Note and/or the
Definitive Note and in the Indenture and the Securities Act.
3. [SYMBOL]CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A
BENEFICIAL INTEREST IN THE IAI GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO ANY
PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Notes and Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act and
any applicable blue sky securities laws of any state of the United States, and
accordingly the Transferor hereby further certifies that (check one):
(a) [SYMBOL] such Transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act;
or
(b) [SYMBOL]such Transfer is being effected to the Company or a
Restricted Subsidiary thereof;
or
(c) [SYMBOL]such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act;
or
(d) [SYMBOL]such Transfer is being effected to an Institutional
Accredited Investor and pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 144A, Rule 144 or Rule 904,
and the Transferor hereby further certifies that it has not engaged in any
general solicitation within the meaning of Regulation D under the Securities Act
and the Transfer complies with the transfer restrictions applicable to
beneficial interests in a Restricted Global Note or Restricted Definitive Notes
and the requirements of the exemption claimed, which certification is supported
by (1) a certificate executed by the Transferee in the form of Exhibit D to the
Indenture and (2) if such Transfer is in respect of a principal amount of Notes
at the time of transfer of less than $250,000, an Opinion of Counsel provided by
the Transferor or the Transferee (a copy of which the Transferor has attached to
this certification), to the effect that such Transfer is in compliance with the
Securities Act. Upon consummation of the proposed transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will be subject to the restrictions on
B-2
<PAGE> 110
transfer enumerated in the Private Placement Legend printed on the IAI Global
Note and/or the Definitive Notes and in the Indenture and the Securities Act.
4. [SYMBOL]Check if Transferee will take delivery of a beneficial interest
in an Unrestricted Global Note or of an Unrestricted Definitive Note.
(a) [SYMBOL]CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The
Transfer is being effected pursuant to and in accordance with Rule 144 under the
Securities Act and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any state of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.
(b) [SYMBOL]CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws of any
state of the United States and (ii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Notes, on Restricted Definitive Notes and in the
Indenture.
(c) [SYMBOL]CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The
Transfer is being effected pursuant to and in compliance with an exemption from
the registration requirements of the Securities Act other than Rule 144, Rule
903 or Rule 904 and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Issuers.
---------------------------------------
[Insert Name of Transferor]
By:
------------------------------------
Name:
Title:
Dated:__________,___
B-3
<PAGE> 111
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [SYMBOL]a beneficial interest in the:
(i) [SYMBOL] 144A Global Note (CUSIP________), or
(ii) [SYMBOL] Regulation S Global Note (CUSIP________), or
(iii) [SYMBOL] IAI Global Note (CUSIP_________); or
(b) [SYMBOL] a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [SYMBOL]a beneficial interest in the:
(i) [SYMBOL] 144A Global Note (CUSIP_________), or
(ii) [SYMBOL] Regulation S Global Note (CUSIP _________), or
(iii) [SYMBOL] IAI Global Note (CUSIP__________); or
(iv) [SYMBOL] Unrestricted Global Note (CUSIP _________); or
(b) [SYMBOL] a Restricted Definitive Note; or
(c) [SYMBOL] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-4
<PAGE> 112
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
(CUSIP______________)
UNICCO Service Company
UNICCO Finance Corp.
Four Copley Place
Boston, Massachusetts 02116
State Street Bank and Trust Company
Two International Place
Boston, Massachusetts 02110
Re: 9 7/8% Senior Subordinated Notes due 2007
Reference is hereby made to the Indenture, dated as of October 17,
1997 (the "INDENTURE"), between UNICCO Service Company (the "COMPANY"), UNICCO
Finance Corp. ("FINANCE" and, together with the Company, the "ISSUERS"), the
Guarantors party thereto and State Street Bank and Trust Company, as trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
____________, (the "OWNER") owns and proposes to exchange the
Note[s] or interest in such Note[s] specified herein, in the principal amount of
$____________ in such Note[s] or interests (the "EXCHANGE"). In connection with
the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN AN UNRESTRICTED GLOBAL NOTE
(a) [SYMBOL] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In
connection with the Exchange of the Owner's beneficial interest in a Restricted
Global Note for a beneficial interest in an Unrestricted Global Note in an equal
principal amount, the Owner hereby certifies (i) the beneficial interest is
being acquired for the Owner's own account without transfer, (ii) such Exchange
has been effected in compliance with the transfer restrictions applicable to the
Global Notes and pursuant to and in accordance with the United States Securities
Act of 1933, as amended (the "SECURITIES ACT"), (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
beneficial interest in an Unrestricted Global Note is being acquired in
compliance with any applicable blue sky securities laws of any state of the
United States.
(b) [SYMBOL] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for an
Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive Note
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with
C-1
<PAGE> 113
the Securities Act and (iv) the Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.
(c) [SYMBOL] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE
NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with
the Owner's Exchange of a Restricted Definitive Note for a beneficial interest
in an Unrestricted Global Note, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner's own account without transfer, (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(d) [SYMBOL] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE
NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of
a Restricted Definitive Note for an Unrestricted Definitive Note, the Owner
hereby certifies (i) the Unrestricted Definitive Note is being acquired for the
Owner's own account without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to Restricted Definitive
Notes and pursuant to and in accordance with the Securities Act, (iii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act
and (iv) the Unrestricted Definitive Note is being acquired in compliance with
any applicable blue sky securities laws of any state of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN RESTRICTED GLOBAL NOTES
(a) [SYMBOL] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for a
Restricted Definitive Note with an equal principal amount, the Owner hereby
certifies that the Restricted Definitive Note is being acquired for the Owner's
own account without transfer. Upon consummation of the proposed Exchange in
accordance with the terms of the Indenture, the Restricted Definitive Note
issued will continue to be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the Restricted Definitive Note and in
the Indenture and the Securities Act.
(b) [SYMBOL] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE
NOTE TO BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the
Exchange of the Owner's Restricted Definitive Note for a beneficial interest in
the [CHECK ONE] "144A Global Note, "Regulation S Global Note, "IAI Global Note
with an equal principal amount, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner's own account without transfer and (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, and in compliance with any applicable blue sky securities
laws of any state of the United States. Upon consummation of the proposed
Exchange in accordance with the terms of the Indenture, the beneficial interest
issued will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the relevant Restricted Global Note and in the
Indenture and the Securities Act.
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<PAGE> 114
This certificate and the statements contained herein are made for
your benefit and the benefit of the Issuers.
----------------------------------
[Insert Name of Owner]
By:
-------------------------------
Name:
Title:
Dated: ________________, ____
C-3
<PAGE> 115
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
UNICCO Service Company
UNICCO Finance Corp.
Four Copley Place
Boston, Massachusetts 02116
State Street Bank and Trust Company
Two International Place
Boston, Massachusetts 02110
Re: 9 7/8% Senior Subordinated Notes due 2007
Reference is hereby made to the Indenture, dated as of October 17,
1997 (the "INDENTURE"), between UNICCO Service Company (the "COMPANY"), UNICCO
Finance Corp. ("FINANCE" and, together with the Company, the "ISSUERS"), the
Guarantors party thereto and State Street Bank and Trust Company, as trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
In connection with our proposed purchase of $____________
aggregate principal amount of:
(a) [SYMBOL] a beneficial interest in a Global Note, or
(b) [SYMBOL] a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the
Notes or any interest therein is subject to certain restrictions and conditions
set forth in the Indenture and the undersigned agrees to be bound by, and not to
resell, pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "SECURITIES ACT").
2. We understand that the offer and sale of the Notes
have not been registered under the Securities Act, and that the Notes and any
interest therein may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for which we
are acting as hereinafter stated, that if we should sell the Notes or any
interest therein, we will do so only (A) to the Issuers or any Restricted
Subsidiary thereof, (B) in accordance with Rule 144A under the Securities Act to
a "qualified institutional buyer" (as defined therein), (c) to an institutional
"accredited investor" (as defined below) that, prior to such transfer, furnishes
(or has furnished on its behalf by a U.S. broker-dealer) to you and to the
Issuers a signed letter substantially in the form of this letter and, if such
transfer is in respect of a principal amount of Notes, at the time of transfer
of less than $250,000, an Opinion of Counsel in form reasonably acceptable to
the Issuers to
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the effect that such transfer is in compliance with the Securities Act, (D)
outside the United States in accordance with Rule 904 of Regulation S under the
Securities Act, (E) pursuant to the provisions of Rule 144(k) under the
Securities Act or (F) pursuant to an effective registration statement under the
Securities Act, and we further agree to provide to any person purchasing the
Definitive Note or beneficial interest in a Global Note from us in a transaction
meeting the requirements of clauses (A) through (E) of this paragraph a notice
advising such purchaser that resales thereof are restricted as stated herein.
3. We understand that, on any proposed resale of the
Notes or beneficial interest therein, we will be required to furnish to you and
the Issuers such certifications, legal opinions and other information as you and
the Issuers may reasonably require to confirm that the proposed sale complies
with the foregoing restrictions. We further understand that the Notes purchased
by us will bear a legend to the foregoing effect. We further understand that any
subsequent transfer by us of the Notes or beneficial interest therein acquired
by us must be effected through one of the Placement Agents.
4. We are an institutional "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act) and have such knowledge and experience in financial and business matters as
to be capable of evaluating the merits and risks of our investment in the Notes,
and we and any accounts for which we are acting are each able to bear the
economic risk of our or its investment.
5. We are acquiring the Notes or beneficial interest
therein purchased by us for our own account or for one or more accounts (each of
which is an institutional "accredited investor") as to each of which we exercise
sole investment discretion.
You and the Issuers 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.
------------------------------------
[Insert Name of Accredited Investor]
By:
---------------------------------
Name:
Title:
Dated: __________________, ____
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<PAGE> 117
EXHIBIT E
FORM OF NOTATION OF GUARANTEE
For value received, each Guarantor (which term includes any
successor Person under the Indenture) has, jointly and severally,
unconditionally guaranteed, to the extent set forth in the Indenture and subject
to the provisions in the Indenture dated as of October 17, 1997 (the
"Indenture") among UNICCO Service Company (the "Company"), UNICCO Finance Corp.
("Finance" and, together with the Company, the "Issuers"), USC, Inc., UNICCO
Government Security Services, Inc., UNICCO Security Services, Inc.
(collectively, the "Guarantors") and State Street Bank and Trust Company, as
trustee (the "Trustee"), that (a) the principal of and premium, interest and
Liquidated Damages, if any, on the Notes will be promptly paid in full when due,
whether at maturity, by acceleration, redemption or otherwise, and interest on
the overdue principal of premium, interest (to the extent permitted by law) and
Liquidated Damages, if any, on the Notes, if any, if lawful, and all other
Obligations of the Issuers to the Holders or the Trustee hereunder or thereunder
will be promptly paid in full or performed, all in accordance with the terms
hereof and thereof; and (b) in case of any extension of time of payment or
renewal of any Notes or any of such other Obligations, the same will be promptly
paid in full when due or performed in accordance with the terms of the extension
or renewal, whether at stated maturity, by acceleration or otherwise. The
Obligations of the Guarantors to the Holders of Notes and to the Trustee
pursuant to the Note Guarantee and the Indenture are expressly set forth in
Article 11 of the Indenture and reference is hereby made to the Indenture for
the precise terms of the Note Guarantee. Each Holder of a Note, by accepting the
same, (a) agrees to and shall be bound by such provisions, (b) authorizes and
directs the Trustee, on behalf of such Holder, to take such action as may be
necessary or appropriate to effectuate the subordination as provided in the
Indenture and (c) appoints the Trustee attorney-in-fact of such Holder for such
purpose; provided, however, that the Indebtedness evidenced by this Note
Guarantee shall cease to be so subordinated and subject in right of payment upon
any defeasance of this Note in accordance with the provisions of the Indenture.
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<PAGE> 118
USC, INC.
BY:
-------------------------------------
Name:
Title:
UNICCO GOVERNMENT SERVICES, INC.
BY:
-------------------------------------
Name:
Title:
UNICCO SECURITY SERVICES, INC.
BY:
-------------------------------------
Name:
Title:
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<PAGE> 119
EXHIBIT F
FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as
of ________________, among __________________ (the "Guaranteeing Restricted
Subsidiary"), a Domestic Restricted Subsidiary of UNICCO Service Company (or its
permitted successor), a Massachusetts business trust (the "Company"), UNICCO
Finance Corp. a Delaware corporation ("Finance" and, together with the Company,
the "Issuers"), the other Guarantors (as defined in the Indenture referred to
herein) and State Street Bank and Trust Company, as trustee under the indenture
referred to below (the "Trustee").
W I T N E S S E T H
WHEREAS, the Issuers have heretofore executed and delivered to the
Trustee an indenture (the "Indenture"), dated as of October 17, 1997 providing
for the issuance of an aggregate principal amount of up to $150.0 million of
9 7/8% Senior Subordinated Notes due 2007 (the "Notes");
WHEREAS, the Indenture provides that under certain circumstances
the Guaranteeing Restricted Subsidiary shall execute and deliver to the Trustee
a supplemental indenture pursuant to which the Guaranteeing Restricted
Subsidiary shall unconditionally guarantee all of the Issuers' Obligations under
the Notes and the Indenture on the terms and conditions set forth herein (the
"Note Guarantee"); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
the Guaranteeing Restricted Subsidiary and the Trustee mutually covenant and
agree for the equal and ratable benefit of the Holders of the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO GUARANTEE. The Guaranteeing Restricted
Subsidiary hereby agrees as follows:
(a) Along with all the Guarantors named in the Indenture, to
jointly and severally Guarantee to each Holder of a Note
authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns, irrespective of the
validity and enforceability of the Indenture, the Notes or
the obligations of the Issuers hereunder or thereunder,
that:
(i) the principal of and premium, interest and
Liquidated Damages, if any, on the Notes will be
promptly paid in full when due, whether at maturity,
by acceleration, redemption or otherwise, and
interest on the
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<PAGE> 120
overdue principal of, premium, interest and
Liquidated Damages, if any, on the Notes, if any, if
lawful, and all other obligations of the Issuers to
the Holders or the Trustee hereunder or thereunder
will be promptly paid in full or performed, all in
accordance with the terms hereof and thereof; and
(ii) in case of any extension of time of payment or
renewal of any Notes or any of such other
Obligations, the same will be promptly paid in full
when due or performed in accordance with the terms
of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. Failing
payment when due of any amount so guaranteed or any
performance so guaranteed for whatever reason, the
Guarantors shall be jointly and severally obligated
to pay the same immediately.
(b) The obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability
of the Notes or the Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of
the Notes with respect to any provisions hereof or thereof,
the recovery of any judgment against either of the Issuers,
any action to enforce the same or any other circumstance
which might otherwise constitute a legal or equitable
discharge or defense of a Guarantor.
(c) The following is hereby waived: diligence presentment,
demand of payment, filing of claims with a court in the
event of insolvency or bankruptcy of either of the Issuers,
any right to require a proceeding first against the
Issuers, protest, notice and all demands whatsoever.
(d) This Note Guarantee shall not be discharged except by
complete performance of the Obligations contained in the
Notes and the Indenture.
(e) If any Holder or the Trustee is required by any court or
otherwise to return to the Issuers, the Guarantors, or any
custodian, trustee, liquidator or other similar official
acting in relation to either the Issuers or the Guarantors,
any amount paid by either to the Trustee or such Holder,
this Note Guarantee, to the extent theretofore discharged,
shall be reinstated in full force and effect.
(f) The Guaranteeing Restricted Subsidiary shall not be
entitled to any right of subrogation in relation to the
Holders in respect of any obligations guaranteed hereby
until payment in full of all Obligations guaranteed hereby.
(g) As between the Guarantors, on the one hand, and the Holders
and the Trustee, on the other hand, (x) the maturity of the
Obligations guaranteed hereby may be accelerated as
provided in Article 6 of the Indenture for the purposes of
this Note Guarantee, notwithstanding any stay, injunction
or other prohibition preventing such acceleration in
respect of the Obligations guaranteed hereby, and (y) in
the event of any declaration of acceleration of such
Obligations as provided in Article 6 of the Indenture, such
Obligations (whether or not due
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<PAGE> 121
and payable) shall forthwith become due and payable by the
Guarantors for the purpose of this Note Guarantee.
(h) 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
the Note Guarantee.
(i) Pursuant to Section 11.03 of the Indenture, after giving
effect to any maximum amount and any other contingent and
fixed liabilities that are relevant under any applicable
Bankruptcy or fraudulent conveyance laws, and after giving
effect to any collections from, rights to receive
contribution from or payments made by or on behalf of any
other Guarantor in respect of the Obligations of such other
Guarantor under Article 11 of the Indenture the Obligations
of the Guarantors shall be limited to the maximum amount as
shall result in the Obligations of such Guarantor under its
Note Guarantee not constituting a fraudulent transfer or
conveyance.
3 EXECUTION AND DELIVERY. Each Guaranteeing Restricted
Subsidiary agrees that the Note Guarantees shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of such Note
Guarantee.
4. GUARANTEEING RESTRICTED SUBSIDIARY MAY CONSOLIDATE, ETC. ON
CERTAIN TERMS.
(a) The Guaranteeing Restricted Subsidiary may not consolidate with or
merge with or into (whether or not such Guarantor is the surviving
Person) another corporation, Person or entity whether or not
affiliated with such Guarantor unless:
(i) subject to Section 11.05 of the Indenture, the Person
formed by or surviving any such consolidation or merger (if
other than a Guarantor or the Issuers) unconditionally
assumes all the obligations of such Guarantor, pursuant to
a supplemental indenture in form and substance reasonably
satisfactory to the Trustee, under the Notes, the Indenture
and the Note Guarantee on the terms set forth herein or
therein; and
(ii) immediately after giving effect to such transaction, no
Default or Event of Default exists.
(b) In case of any such consolidation, merger, sale or conveyance and
upon the assumption by the successor corporation, by supplemental
indenture, executed and delivered to the Trustee and satisfactory
in form to the Trustee, of the Note Guarantee endorsed upon the
Notes and the due and punctual performance of all of the covenants
and conditions of the Indenture to be performed by the Guarantor,
such successor corporation shall succeed to and be substituted for
the Guarantor with the same effect as if it had been named herein
as a Guarantor. Such successor corporation thereupon may cause to
be signed any or all of the Note Guarantees to be endorsed upon
all of the Notes issuable hereunder which theretofore shall not
have been signed by the Issuers and delivered to the Trustee. All
the Note Guarantees so issued shall in all respects have the same
legal
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<PAGE> 122
rank and benefit under the Indenture as the Note Guarantees
theretofore and thereafter issued in accordance with the terms of
the Indenture as though all of such Note Guarantees had been
issued at the date of the execution hereof.
(c) Except as set forth in Articles 4 and 5 of the Indenture,
and notwithstanding clauses (a) and (b) above, nothing contained in the
Indenture or in any of the Notes shall prevent any consolidation or merger of a
Guarantor with or into the Issuers or another Guarantor, or shall prevent any
sale or conveyance of the property of a Guarantor as an entirety or
substantially as an entirety to the Issuers or another Guarantor.
5. RELEASES.
(a) In the event of a sale or other disposition of all of the assets
of any Guarantor, by way of merger, consolidation or otherwise, or
a sale or other disposition of all of the capital stock of any
Guarantor (other than to the Company or another Guarantor), or in
the case the Company designates a Domestic Restricted Subsidiary
to be an Unrestricted Subsidiary in accordance with the Indenture,
then such Guarantor (in the event of a sale or other disposition,
by way of merger, consolidation or otherwise, of all of the
capital stock of such Guarantor) or the corporation acquiring the
property (in the event of a sale or other disposition of all or
substantially all of the assets of such Guarantor) shall be
released and relieved of any obligations under its Note Guarantee;
provided that the Net Proceeds of such sale or other disposition
are applied in accordance with the applicable provisions of the
Indenture, including without limitation Section 4.10 of the
Indenture. Upon delivery by the Issuers to the Trustee of an
Officers' Certificate and an Opinion of Counsel to the effect that
such sale or other disposition was made by the Issuers in
accordance with the provisions of the Indenture, including without
limitation Section 4.10 of the Indenture, the Trustee shall
execute any documents reasonably required in order to evidence the
release of any Guarantor from its obligations under its Note
Guarantee.
(b) Any Guarantor not released from its obligations under its Note
Guarantee shall remain liable for the full amount of principal of
and interest on the Notes and for the other obligations of any
Guarantor under the Indenture as provided in Article 10 of the
Indenture.
6. NO RECOURSE AGAINST OTHERS. No past, present or future
director, officer, employee, trustee, incorporator, shareholder or agent of the
Guaranteeing Restricted Subsidiary, as such, shall have any liability for any
obligations of the Issuers or any Guaranteeing Restricted Subsidiary under the
Notes, any Note Guarantees, the Indenture or this Supplemental Indenture or for
any claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder of the Notes by accepting a Note waives and releases all
such liability. The waiver and release are part of the consideration for
issuance of the Notes. Such waiver may not be effective to waive liabilities
under the federal securities laws and it is the view of the Commission that such
a waiver is against public policy.
7. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF
NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT
WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO
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<PAGE> 123
THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
8. COUNTERPARTS. The parties may sign any number of copies of
this Supplemental Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.
9. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.
10. THE TRUSTEE. The Trustee shall not be responsible in any
manner whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or for or in respect of the recitals contained herein,
all of which recitals are made solely by the Guaranteeing Restricted Subsidiary
and the Issuers.
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<PAGE> 124
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed and attested, all as of the date
first above written.
Dated: _______________, ____
[Guaranteeing Restricted Subsidiary]
By:
-------------------------------------
Name:
Title:
UNICCO SERVICE COMPANY
By:
-------------------------------------
Name:
Title:
UNICCO FINANCE CORP.
By:
-------------------------------------
Name:
Title:
[EXISTING GUARANTORS]
By:
-------------------------------------
Name:
Title:
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
-------------------------------------
Name:
Title:
F-6
<PAGE> 1
EXHIBIT 4.4
EXECUTION COPY
================================================================================
REGISTRATION RIGHTS AGREEMENT
Dated as of October 17, 1997
by and among
UNICCO Service Company,
UNICCO Finance Corp.,
the Guarantors Named on the Signature Pages Hereto
and
BancBoston Securities Inc.
================================================================================
<PAGE> 2
This Registration Rights Agreement (this "AGREEMENT") is made and
entered into as of October 17, 1997 by and among UNICCO Service Company, a
Massachusetts business trust (the "COMPANY"), UNICCO Finance Corp., a Delaware
corporation ("FINANCE" and, together with the Company, the ISSUERS"), the
guarantors named on the signature pages hereto (collectively, the "GUARANTORS"),
and BancBoston Securities Inc. (the "INITIAL PURCHASER"), who has agreed to
purchase the Company's 97/8% Series A Senior Subordinated Notes due 2007 (the
"SERIES A NOTES") pursuant to the Purchase Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement, dated
October 14, 1997 (the "PURCHASE AGREEMENT"), by and among the Issuers and the
Initial Purchaser. In order to induce the Initial Purchaser to purchase the
Series A Notes, the Issuers and the Guarantors have agreed to provide the
registration rights set forth in this Agreement. The execution and delivery of
this Agreement is a condition to the obligations of the Initial Purchaser set
forth in Section 3 of the Purchase Agreement.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
ACT: The Securities Act of 1933, as amended.
BROKER-DEALER: Any broker or dealer registered under the Exchange Act.
CLOSING DATE: The date of this Agreement.
COMMISSION: The Securities and Exchange Commission.
CONSUMMATE: An Exchange Offer shall be deemed "Consummated" for
purposes of this Agreement upon the occurrence of (a) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Series B Notes to be issued in the Exchange Offer, (b) the
maintenance of such Registration Statement as continuously effective and the
keeping of the Exchange Offer open for a period not less than the minimum period
required pursuant to Section 3(b) hereof, and (c) the delivery by the Issuers to
the Registrar under the Indenture of Series B Notes in the same aggregate
principal amount as the aggregate principal amount of Series A Notes that were
tendered by Holders thereof pursuant to the Exchange Offer.
DAMAGES PAYMENT DATE: With respect to the Series A Notes, each Interest
Payment Date.
EFFECTIVENESS TARGET DATE: As defined in Section 5.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
EXCHANGE OFFER: The registration by the Issuers under the Act of the
Series B Notes pursuant to the Exchange Offer Registration Statement pursuant to
which the Issuers offer the Holders of all outstanding Transfer Restricted
Securities the opportunity to exchange all such outstanding Transfer Restricted
Securities held by such Holders for Series B Notes in an aggregate principal
amount equal to the aggregate principal amount of the Transfer Restricted
Securities tendered in such exchange offer by such Holders.
<PAGE> 3
EXCHANGE OFFER REGISTRATION STATEMENT: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
EXEMPT RESALES: The transactions in which the Initial Purchaser
proposes to sell the Series A Notes to (a) certain other "qualified
institutional buyers," as such term is defined in Rule 144A under the Act, (b)
certain institutional "accredited investors," as such term is defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Act ("ACCREDITED
INSTITUTIONS"), and (c) non-U.S. persons outside the United States in reliance
upon Regulation S under the Act.
HOLDERS: As defined in Section 2(b) hereof.
INDENTURE: The Indenture, dated as of October 17, 1997, among the
Issuers and State Street Bank and Trust Company, as trustee (the "TRUSTEE"), and
the Guarantors, pursuant to which the Notes are to be issued, as such Indenture
is amended or supplemented from time to time in accordance with the terms
thereof.
INTEREST PAYMENT DATE: As defined in the Indenture and the Notes.
NASD: National Association of Securities Dealers, Inc.
NOTES: The Series A Notes and the Series B Notes.
PERSON: An individual, partnership, corporation, limited liability
company, trust or unincorporated organization, or a government or agency or
political subdivision thereof.
PROSPECTUS: The prospectus included in a Registration Statement, as
amended or supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments, and all material incorporated by
reference into such Prospectus.
RECORD HOLDER: With respect to any Damages Payment Date relating to
Notes, each Person who is a Holder of Notes as listed on the books of the
Trustee as of the close of business on the record date with respect to the
Interest Payment Date corresponding to such Damages Payment Date.
REGISTRATION DEFAULT: As defined in Section 5 hereof.
REGISTRATION STATEMENT: Any registration statement of the Issuers
relating to (a) an offering of Series B Notes pursuant to an Exchange Offer or
(b) the registration for resale of Transfer Restricted Securities pursuant to
the Shelf Registration Statement, which is filed pursuant to the provisions of
this Agreement, in each case, including the Prospectus included therein, all
amendments and supplements thereto (including post-effective amendments) and all
exhibits and material incorporated by reference therein.
SERIES B NOTES: The Issuers' 97/8% Series B Senior Subordinated Notes
due 2007 to be issued pursuant to the Indenture (a) in the Exchange Offer or (b)
pursuant to a Shelf Registration Statement, in each case, in exchange for Series
A Notes.
SHELF FILING DEADLINE: As defined in Section 4 hereof.
2
<PAGE> 4
SHELF REGISTRATION STATEMENT: As defined in Section 4 hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb)
as in effect on the date of the Indenture.
TRANSFER RESTRICTED SECURITIES: Each Note, until the earliest to occur
of (a) the date on which such Note is exchanged in the Exchange Offer and
entitled to be resold to the public by the Holder thereof without complying with
the prospectus delivery requirements of the Act, (b) the date on which such Note
has been effectively registered under the Act and disposed of in accordance with
a Shelf Registration Statement and (c) the date on which such Note is first
eligible to be distributed to the public pursuant to Rule 144 under the Act or
by a Broker-Dealer pursuant to the "Plan of Distribution" contemplated by the
Exchange Offer Registration Statement (including delivery of the Prospectus
contained therein).
UNDERWRITTEN REGISTRATION or UNDERWRITTEN OFFERING: A registration in
which securities of the Issuers are sold to an underwriter for reoffering to the
public.
SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT
(a) TRANSFER RESTRICTED SECURITIES. The securities entitled to the
benefits of this Agreement are the Transfer Restricted Securities.
(b) HOLDERS OF TRANSFER RESTRICTED SECURITIES. A Person is deemed to be
a holder of Transfer Restricted Securities (each, a "HOLDER") whenever such
Person owns Transfer Restricted Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permissible under applicable
law or Commission policy (after the procedures set forth in Section 6(a) below
have been complied with), the Issuers and the Guarantors shall (i) cause to be
filed with the Commission as soon as practicable after the Closing Date, but in
no event later than 45 days after the Closing Date, the Exchange Offer
Registration Statement, (ii) use their best efforts to cause such Exchange Offer
Registration Statement to become effective at the earliest possible time, but in
no event later than 120 days after the Closing Date, (iii) in connection with
the foregoing, file (A) all pre-effective amendments to such Exchange Offer
Registration Statement as may be necessary in order to cause such Exchange Offer
Registration Statement to become effective, (B) if applicable, a post-effective
amendment to such Exchange Offer Registration Statement pursuant to Rule 430A
under the Act and (C) cause all necessary filings in connection with the
registration and qualification of the Series B Notes to be made under the Blue
Sky laws of such jurisdictions as are necessary to permit Consummation of the
Exchange Offer, and (iv) upon the effectiveness of such Exchange Offer
Registration Statement, commence and Consummate the Exchange Offer. The Exchange
Offer shall be on the appropriate form permitting registration of the Series B
Notes to be offered in exchange for the Transfer Restricted Securities and to
permit resales of Notes held by Broker-Dealers as contemplated by Section 3(c)
below.
(b) The Issuers shall cause the Exchange Offer Registration Statement
to be effective continuously and shall keep the Exchange Offer open for a period
of not less than the minimum period
3
<PAGE> 5
required under applicable federal and state securities laws to Consummate the
Exchange Offer; provided, however, that in no event shall such period be less
than 20 business days. The Issuers shall cause the Exchange Offer to comply with
all applicable federal and state securities laws. No securities other than the
Notes shall be included in the Exchange Offer Registration Statement. The
Issuers shall use their best efforts to cause the Exchange Offer to be
Consummated on the earliest practicable date after the Exchange Offer
Registration Statement has become effective, but in no event later than 30
business days thereafter.
(c) The Issuers shall include a "Plan of Distribution" section in the
Prospectus contained in the Exchange Offer Registration Statement and indicate
therein that any Broker-Dealer who holds Series A Notes that are Transfer
Restricted Securities and that were acquired for its own account as a result of
market-making activities or other trading activities (other than Transfer
Restricted Securities acquired directly from the Issuers) may exchange such
Series A Notes pursuant to the Exchange Offer; however, such Broker-Dealer may
be deemed to be an "underwriter" within the meaning of the Act and must,
therefore, deliver a prospectus meeting the requirements of the Act in
connection with any resales of the Series B Notes received by such Broker-Dealer
in the Exchange Offer, which prospectus delivery requirement may be satisfied by
the delivery by such Broker-Dealer of the Prospectus contained in the Exchange
Offer Registration Statement. Such "Plan of Distribution" section shall also
contain all other information with respect to such resales by Broker-Dealers
that the Commission may require in order to permit such resales pursuant
thereto, but such "Plan of Distribution" shall not name any such Broker-Dealer
or disclose the amount of Notes held by any such Broker-Dealer except to the
extent required by the Commission as a result of a change in policy after the
date of this Agreement.
If requested by any Broker-Dealer, the Issuers and the Guarantors shall
use their best efforts to keep the Exchange Offer Registration Statement
continuously effective, supplemented and amended as required by the provisions
of Section 6(c) below to the extent necessary to ensure that it is available for
resales of Notes acquired by Broker-Dealers for their own accounts as a result
of market-making activities or other trading activities, and to ensure that it
conforms with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time, for a
period of one year from the date on which the Exchange Offer Registration
Statement is declared effective.
The Issuers shall provide sufficient copies of the latest version of
such Prospectus to Broker-Dealers promptly upon request at any time during such
one-year period in order to facilitate such resales.
SECTION 4. SHELF REGISTRATION
(a) SHELF REGISTRATION. If (i) the Issuers and the Guarantors are not
required to file an Exchange Offer Registration Statement or permitted to
consummate the Exchange Offer because the Exchange Offer is not permitted by
applicable law or Commission policy (after the procedures set forth in Section
6(a) below have been complied with) or (ii) any Holder of Transfer Restricted
Securities notifies the Company on or prior to the 20th business day following
the Consummation of the Exchange Offer (A) that such Holder is prohibited by
applicable law or Commission policy from participating in the Exchange Offer, or
(B) that such Holder may not resell the Series B Notes acquired by it in the
Exchange Offer to the public without delivering a prospectus and that the
Prospectus contained in the Exchange Offer Registration Statement is not
appropriate or available for such resales by such Holder, or (C) that such
Holder is a Broker-Dealer and holds Series A Notes acquired directly from the
Issuers or one of their affiliates, then the Issuers and the Guarantors shall:
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(x) Use their best efforts to file a shelf registration
statement with the Commission pursuant to Rule 415 under the Act, which
may be an amendment to the Exchange Offer Registration Statement (in any
event, the "SHELF REGISTRATION STATEMENT") on or prior to the earliest to
occur of (1) the 45th day after the date on which the Issuers and the
Guarantors determine that they are not required to file the Exchange Offer
Registration Statement and (2) the 45th day after the date on which the
Issuers receive notice from a Holder of Transfer Restricted Securities as
contemplated by clause (ii) above (such earliest date being the "SHELF
FILING DEADLINE"), which Shelf Registration Statement shall provide for
resales of all Transfer Restricted Securities the Holders of which shall
have provided the information required pursuant to Section 4(b) hereof;
and
(y) Cause such Shelf Registration Statement to be declared
effective by the Commission on or prior to the 120th day after the Shelf
Filing Deadline.
The Issuers and the Guarantors shall use their best efforts to keep such Shelf
Registration Statement continuously effective, supplemented and amended as
required by the provisions of Sections 6(b) and (c) hereof to the extent
necessary to ensure that it is available for resales of Notes by the Holders of
Transfer Restricted Securities entitled to the benefit of this Section 4(a), and
to ensure that it conforms with the requirements of this Agreement, the Act and
the policies, rules and regulations of the Commission as announced from time to
time, for a period until the earlier to occur of (i) the date all of the
Transfer Restricted Securities registered under such Shelf Registration
Statement have been sold and (ii) the second anniversary following the Closing
Date.
(b) PROVISION BY HOLDERS OF CERTAIN INFORMATION IN CONNECTION WITH THE
SHELF REGISTRATION STATEMENT. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Issuers in writing, within 20 business days after receipt of a request
therefor, such information as the Issuers may reasonably request for use in
connection with any Shelf Registration Statement or Prospectus or preliminary
Prospectus included therein. No Holder of Transfer Restricted Securities shall
be entitled to Liquidated Damages pursuant to Section 5 hereof unless and until
such Holder shall have used its best efforts to provide all such reasonably
requested information. Each Holder of Notes as to which any Shelf Registration
Statement is being effected, by its participation in the Shelf Registration
Statement, shall be deemed to agree to furnish promptly to the Issuers all
information required to be disclosed in order to make the information previously
furnished to the Issuers by such Holder not materially misleading.
SECTION 5. LIQUIDATED DAMAGES
If (a) any of the Registration Statements required by this Agreement is
not filed with the Commission on or prior to the date specified for such filing
in this Agreement, (b) any of such Registration Statements has not been declared
effective by the Commission on or prior to the date specified for such
effectiveness in this Agreement (the "EFFECTIVENESS TARGET DATE"), (c) the
Exchange Offer has not been Consummated within 30 business days after the
Effectiveness Target Date with respect to the Exchange Offer Registration
Statement or (d) any Registration Statement required by this Agreement is filed
and declared effective but shall thereafter cease to be effective or fail to be
usable for its intended purpose without being succeeded immediately by a
post-effective amendment to such Registration Statement that cures such failure
and that is itself immediately declared effective (each such
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<PAGE> 7
event referred to in clauses (a) through (d), a "REGISTRATION DEFAULT"), the
Issuers and the Guarantors hereby jointly and severally agree to pay liquidated
damages to each Holder of Transfer Restricted Securities affected by such
Registration Default with respect to the first 90-day period immediately
following the occurrence of such Registration Default, in an amount equal to
$.05 per week per $1,000 principal amount of Transfer Restricted Securities held
by such Holder. The amount of the liquidated damages shall increase by an
additional $.05 per week per $1,000 principal amount of Transfer Restricted
Securities with respect to each subsequent 90-day period until all Registration
Defaults affecting such Holder have been cured, up to a maximum amount of
liquidated damages of $.50 per week per $1,000 principal amount of Transfer
Restricted Securities. All accrued liquidated damages shall be paid by the
Issuers on each Damages Payment Date to Record Holders by wire transfer of
immediately available funds or by federal funds check and to Holders of
Certificated Securities by wire transfers to the accounts specified by them or
by mailing checks to their registered addresses if no such accounts have been
specified on each Damages Payment Date, as provided in the Indenture. Following
the cure of all Registration Defaults relating to any particular Transfer
Restricted Securities, the accrual of liquidated damages with respect to such
Transfer Restricted Securities will cease.
All obligations of the Issuers and the Guarantors set forth in the
preceding paragraph that are outstanding with respect to any Transfer Restricted
Security at the time such security ceases to be a Transfer Restricted Security
shall survive until such time as all such obligations with respect to such
security shall have been satisfied in full.
SECTION 6. REGISTRATION PROCEDURES
(a) EXCHANGE OFFER REGISTRATION STATEMENT. In connection with the
Exchange Offer, the Issuers and the Guarantors shall comply with all of the
provisions of Section 6(c) below, shall use their best efforts to effect such
exchange to permit the sale of Transfer Restricted Securities being sold in
accordance with the intended method or methods of distribution thereof, and
shall comply with all of the following provisions:
(i) If in the reasonable opinion of counsel to the Issuers there
is a question as to whether the Exchange Offer is permitted by applicable
law, the Issuers and the Guarantors hereby agree to seek a no-action
letter or other favorable decision from the Commission allowing the
Issuers and the Guarantors to Consummate an Exchange Offer for such Series
A Notes. Each of the Issuers and the Guarantors hereby agrees to pursue
the issuance of such a decision to the Commission staff level but shall
not be required to take commercially unreasonable action to effect a
change of Commission policy. Each of the Issuers and the Guarantors hereby
agrees, however, to (A) participate in telephonic conferences with the
Commission, (B) deliver to the Commission staff an analysis prepared by
counsel to the Issuers setting forth the legal bases, if any, upon which
such counsel has concluded that such an Exchange Offer should be permitted
and (C) diligently pursue a resolution (which need not be favorable) by
the Commission staff of such submission.
(ii) As a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer
Restricted Securities shall furnish, upon the request of the Issuers,
prior to the Consummation thereof, a written representation to the Issuers
(which may be contained in the letter of transmittal contemplated by the
Exchange Offer Registration Statement) to the effect that (A) it is not an
affiliate of either of the Issuers or any Guarantor, (B) it is not engaged
in, and does not intend to engage in, and has no arrangement or
understanding with any person to
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participate in, a distribution of the Series B Notes to be issued in the
Exchange Offer and (C) it is acquiring the Series B Notes in its ordinary
course of business. In addition, all such Holders of Transfer Restricted
Securities shall otherwise cooperate in the Issuers' preparations for the
Exchange Offer. Each Holder shall be deemed to acknowledge and agree that
any Broker-Dealer and any such Holder using the Exchange Offer to
participate in a distribution of the securities to be acquired in the
Exchange Offer (1) could not under Commission policy as in effect on the
date of this Agreement rely on the position of the Commission enunciated
in MORGAN STANLEY AND CO., INC. (available June 5, 1991) and EXXON CAPITAL
HOLDINGS CORPORATION (available May 13, 1988), as interpreted in the
Commission's letter to Shearman & Sterling dated July 2, 1993, and similar
no-action letters (including any no-action letter obtained pursuant to
clause (i) above), and (2) must comply with the registration and
prospectus delivery requirements of the Act in connection with a secondary
resale transaction and that such a secondary resale transaction should be
covered by an effective registration statement containing the selling
security holder information required by Item 507 or 508, as applicable, of
Regulation S-K if the resales are of Series B Notes obtained by such
Holder in exchange for Series A Notes acquired by such Holder directly
from the Issuers.
(iii) Prior to effectiveness of the Exchange Offer Registration
Statement, the Issuers and the Guarantors shall provide a supplemental
letter to the Commission (A) stating that the Issuers and the Guarantors
are registering the Exchange Offer in reliance on the position of the
Commission enunciated in EXXON CAPITAL HOLDINGS CORPORATION (available May
13, 1988), MORGAN STANLEY AND CO., INC. (available June 5, 1991) and, if
applicable, any no-action letter obtained pursuant to clause (i) above and
(B) including a representation that neither of the Issuers nor any of the
Guarantors has entered into any arrangement or understanding with any
Person to distribute the Series B Notes to be received in the Exchange
Offer and that, to the best of the Issuers' and the Guarantors'
information and belief, each Holder participating in the Exchange Offer is
acquiring the Series B Notes in its ordinary course of business and has no
arrangement or understanding with any Person to participate in the
distribution of the Series B Notes received in the Exchange Offer.
(b) SHELF REGISTRATION STATEMENT. In connection with the Shelf
Registration Statement, the Issuers and the Guarantors shall comply with all the
provisions of Section 6(c) below and shall use their best efforts to effect such
registration to permit the sale of the Transfer Restricted Securities being sold
in accordance with the intended method or methods of distribution thereof, and
pursuant thereto the Issuers will within the time periods specified herein
prepare and file with the Commission a Registration Statement relating to the
registration on any appropriate form under the Act, which form shall be
available for the sale of the Transfer Restricted Securities in accordance with
the intended method or methods of distribution thereof.
(c) GENERAL PROVISIONS. In connection with any Registration Statement
and any Prospectus required by this Agreement to permit the sale or resale of
Transfer Restricted Securities (including, without limitation, any Registration
Statement and the related Prospectus required to permit resales of Notes by
Broker-Dealers), the Issuers and the Guarantors shall:
(i) use their best efforts to keep such Registration Statement
continuously effective and provide all requisite financial statements
(including, if required by the Act or any regulation thereunder, financial
statements of the Guarantors) for the period specified in Section 3 or 4
hereof, as applicable; upon the occurrence of any event that would cause
any such Registration Statement or the Prospectus contained therein (A) to
contain a material misstatement or omission or (B) not to be effective and
usable for resale of Transfer Restricted Securities during the period
required by this
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<PAGE> 9
Agreement, the Issuers shall file promptly an appropriate amendment to
such Registration Statement, in the case of clause (A), correcting any
such misstatement or omission, and, in the case of either clause (A) or
(B), use their best efforts to cause such amendment to be declared
effective and such Registration Statement and the related Prospectus to
become usable for their intended purpose(s) as soon as practicable
thereafter;
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement as may be
necessary to keep the Registration Statement effective for the applicable
period set forth in Section 3 or 4 hereof, as applicable, or such shorter
period as will terminate when all Transfer Restricted Securities covered
by such Registration Statement have been sold; cause the Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented
to be filed pursuant to Rule 424 under the Act, and to comply fully with
the applicable provisions of Rules 424 and 430A under the Act in a timely
manner; and comply with the provisions of the Act with respect to the
disposition of all securities covered by such Registration Statement
during the applicable period in accordance with the intended method or
methods of distribution by the sellers thereof set forth in such
Registration Statement or supplement to the Prospectus;
(iii) advise the underwriter(s), if any, and selling Holders (in
the case of a Shelf Registration Statement) promptly and, if requested by
such Persons, to confirm such advice in writing, (A) when the Prospectus
or any Prospectus supplement or post-effective amendment has been filed,
and, with respect to any Registration Statement or any post-effective
amendment thereto, when the same has become effective, (B) of any request
by the Commission for amendments to the Registration Statement or
amendments or supplements to the Prospectus or for additional information
relating thereto, (C) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement under the Act
or of the suspension by any state securities commission of the
qualification of the Transfer Restricted Securities for offering or sale
in any jurisdiction, or the initiation of any proceeding for any of the
preceding purposes, (D) of the existence of any fact or the happening of
any event that makes any statement of a material fact made in the
Registration Statement, the Prospectus, any amendment or supplement
thereto, or any document incorporated by reference therein untrue, or that
requires the making of any additions to or changes in the Registration
Statement in order to make the statements therein not misleading, or that
requires the making of any additions to or changes in the Prospectus in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading. If at any time the Commission shall
issue any stop order suspending the effectiveness of the Registration
Statement, or any state securities commission or other regulatory
authority shall issue an order suspending the qualification or exemption
from qualification of the Transfer Restricted Securities under state
securities or Blue Sky laws, the Issuers and the Guarantors shall use
their reasonable best efforts to obtain the withdrawal or lifting of such
order at the earliest possible time;
(iv) furnish to each of the selling Holders and each of the
underwriter(s), if any, before filing with the Commission, copies of any
Shelf Registration Statement or any Prospectus included therein or any
amendments or supplements to any such Registration Statement or Prospectus
(including all documents incorporated by reference after the initial
filing of such Registration Statement), which documents will be subject to
the review and comment of such Holders and underwriter(s), if any, for a
period of at least five business days, and the Issuers will not file any
such Registration Statement or Prospectus or any amendment or supplement
to any such Registration Statement or Prospectus (including all such
documents incorporated by reference) to which a selling Holder of Transfer
Restricted Securities covered by such Registration Statement or the
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<PAGE> 10
underwriter(s), if any, shall reasonably object within five business days
after the receipt thereof. An objection from a selling Holder or
underwriter, if any, shall be deemed to be reasonable if such Registration
Statement, amendment, Prospectus or supplement, as applicable, as proposed
to be filed, contains a material misstatement or omission or fails to
comply with the applicable requirements of the Act;
(v) promptly prior to the filing of any document that is to be
incorporated by reference into a Shelf Registration Statement or
Prospectus, provide copies of such document to the selling Holders and to
the underwriter(s), if any, make the Issuers' representatives available
(and representatives of the Guarantors) for discussion of such document
and other customary due diligence matters, and include such information in
such document prior to the filing thereof as such selling Holders or
underwriter(s), if any, reasonably may request;
(vi) make available at reasonable times for inspection by the
selling Holders, any underwriter participating in any disposition pursuant
to such Registration Statement, and any attorney or accountant retained by
such selling Holders or any of the underwriter(s), all financial and other
records, pertinent corporate documents and properties of the Issuers and
the Guarantors and cause the Issuers' and the Guarantors' officers,
directors and employees to supply all information reasonably requested by
any such Holder, underwriter, attorney or accountant in connection with
such Registration Statement subsequent to the filing thereof and prior to
its effectiveness;
(vii) if requested by any selling Holders or the underwriter(s),
if any, promptly include in any Registration Statement or Prospectus,
pursuant to a supplement or post-effective amendment if necessary, such
information as such selling Holders and underwriter(s), if any, may
reasonably request to have included therein, including, without
limitation, information relating to the "Plan of Distribution" of the
Transfer Restricted Securities, information with respect to the principal
amount of Transfer Restricted Securities being sold to such
underwriter(s), the purchase price being paid therefor and any other terms
of the offering of the Transfer Restricted Securities to be sold in such
offering; and make all required filings of such Prospectus supplement or
post-effective amendment as soon as practicable after the Issuers are
notified of the matters to be included in such Prospectus supplement or
post-effective amendment;
(viii) furnish to each selling Holder and each of the
underwriter(s), if any, without charge, at least one copy of the Shelf
Registration Statement, as first filed with the Commission, and of each
amendment thereto, including all documents incorporated by reference
therein and all exhibits (including exhibits incorporated therein by
reference);
(ix) deliver to each selling Holder and each of the
underwriter(s), if any, without charge, as many copies of the Prospectus
(including each preliminary prospectus) and any amendment or supplement
thereto as such Persons reasonably may request; the Issuers and the
Guarantors hereby consent to the use of the Prospectus and any amendment
or supplement thereto by each of the selling Holders and each of the
underwriter(s), if any, in connection with the offering and the sale of
the Transfer Restricted Securities covered by the Prospectus or any
amendment or supplement thereto;
(x) enter into such agreements (including an underwriting
agreement on customary terms), and make such representations and
warranties, and take all such other actions in connection therewith in
order to expedite or facilitate the disposition of the Transfer Restricted
Securities pursuant to any Shelf Registration Statement contemplated by
this Agreement, all to such extent as may be
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reasonably requested by the Initial Purchaser or by any Holder of Transfer
Restricted Securities or underwriter in connection with any sale or resale
pursuant to any Shelf Registration Statement contemplated by this
Agreement; and whether or not an underwriting agreement is entered into
and whether or not the registration is an Underwritten Registration, in
connection with any Shelf Registration Statement, the Issuers and the
Guarantors shall:
(A) furnish to each selling Holder and each underwriter, if any,
in such substance and scope as they may request and as are
customarily made by issuers to underwriters in primary underwritten
offerings, upon the date of the effectiveness of the Shelf
Registration Statement:
(1) a certificate, dated the date of effectiveness of the
Shelf Registration Statement, signed by (x) the President or any
Vice President and (y) a principal financial or accounting
officer of each of the Issuers and the Guarantors, confirming,
as of the date thereof, the matters set forth in paragraphs (a),
(b), (c) and (d) of Section 8 of the Purchase Agreement and such
other matters as such parties may reasonably request;
(2) an opinion, dated the date of effectiveness of the Shelf
Registration Statement, of counsel for the Issuers and the
Guarantors, covering the matters set forth in the opinion
rendedered pursuant to paragraph (f) of Section 8 of the
Purchase Agreement, as applicable, and such other matters as
such parties may reasonably request, and in any event including
a statement to the effect that such counsel has participated in
conferences with officers and other representatives of the
Issuers and the Guarantors, representatives of the independent
public accountants for the Issuers, the Initial Purchaser's
representatives and the Initial Purchaser's counsel in
connection with the preparation of such Shelf Registration
Statement and the related Prospectus and have considered the
matters required to be stated therein and the statements
contained therein, although such counsel has not independently
verified the accuracy, completeness or fairness of such
statements; and that such counsel advises that, on the basis of
the foregoing (relying as to materiality to the extent such
counsel deems appropriate upon facts provided to such counsel by
officers and other representatives of the Issuers and the
Guarantors and without independent check or verification), no
facts came to such counsel's attention that caused such counsel
to believe that the applicable Shelf Registration Statement, at
the time such Shelf Registration Statement or any post-effective
amendment thereto became effective, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus
contained in such Shelf Registration Statement as of its date
contained an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading. Without limiting the foregoing, such
counsel may state further that such counsel assumes no
responsibility for, and has not independently verified, the
accuracy, completeness or fairness of the financial statements,
notes and schedules and other financial data included in any
Shelf Registration Statement contemplated by this Agreement or
the related Prospectus; and
(3) a customary comfort letter, dated as of the date of
effectiveness of the Shelf Registration Statement, from the
Issuers' independent accountants, in the customary form and
covering matters of the type customarily covered in comfort
letters by underwriters in connection with primary underwritten
offerings, and affirming the matters set forth in
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the comfort letters delivered pursuant to Section 8 of the
Purchase Agreement, without exception;
(B) set forth in full or incorporate by reference in the
underwriting agreement, if any, the indemnification provisions and
procedures of Section 8 hereof with respect to all parties to be
indemnified pursuant to said Section; and
(C) deliver such other documents and certificates as may be
reasonably requested by such parties to evidence compliance with
clause (A) above and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Issuers
pursuant to this clause (xi), if any.
If at any time the representations and warranties of the Issuers and
the Guarantors contemplated in clause (A)(1) above cease to be true and
correct, the Issuers or the Guarantors shall so advise the underwriter(s),
if any, and each selling Holder promptly and, if requested by such
Persons, shall confirm such advice in writing;
(xi) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders, the underwriter(s), if
any, and their respective counsel in connection with the registration and
qualification of the Transfer Restricted Securities under the securities
or Blue Sky laws of such jurisdictions as the selling Holders or
underwriter(s) may request and do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions of
the Transfer Restricted Securities covered by the Shelf Registration
Statement; provided, however, that neither of the Issuers nor any of the
Guarantors shall be required to register or qualify as a foreign
corporation where it is not now so qualified or to take any action that
would subject it to the service of process in suits or to taxation, other
than as to matters and transactions relating to the Registration
Statement, in any jurisdiction where it is not now so subject;
(xii) shall issue, upon the request of any Holder of Series A
Notes covered by the Shelf Registration Statement, Series B Notes, having
an aggregate principal amount equal to the aggregate principal amount of
Series A Notes surrendered to the Issuers by such Holder in exchange
therefor or being sold by such Holder; such Series B Notes to be
registered in the name of such Holder or in the name of the purchaser(s)
of such Notes, as the case may be; in return, the Series A Notes held by
such Holder shall be surrendered to the Issuers for cancellation;
(xiii) cooperate with the selling Holders and the
underwriter(s), if any, to facilitate the timely preparation and delivery
of certificates representing Transfer Restricted Securities to be sold and
not bearing any restrictive legends; and enable such Transfer Restricted
Securities to be in such denominations and registered in such names as the
Holders or the underwriter(s), if any, may request at least two business
days prior to any sale of Transfer Restricted Securities made by such
underwriter(s);
(xiv) use their reasonable best efforts to cause the Transfer
Restricted Securities covered by the Registration Statement to be
registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the seller or sellers thereof or
the underwriter(s), if any, to consummate the disposition of such Transfer
Restricted Securities, subject to the proviso contained in clause (viii)
above;
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(xv) if any fact or event contemplated by clause (c)(iii)(D)
above shall exist or have occurred, prepare a supplement or post-effective
amendment to the Registration Statement or related Prospectus or any
document incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of Transfer
Restricted Securities, the Prospectus will not contain an untrue statement
of a material fact or omit to state any material fact necessary to make
the statements therein, in light of the circumstances under which they
were made, not misleading;
(xvi) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of the Registration Statement
and provide the Trustee under the Indenture with printed certificates for
the Transfer Restricted Securities which are in a form eligible for
deposit with the Depositary Trust Company;
(xvii) cooperate and assist in any filings required to be made
with the NASD and in the performance of any due diligence investigation by
any underwriter (including any "qualified independent underwriter") that
is required to be retained in accordance with the rules and regulations of
the NASD, and use their reasonable best efforts to cause such Registration
Statement to become effective and approved by such governmental agencies
or authorities as may be necessary to enable the Holders selling Transfer
Restricted Securities to consummate the disposition of such Transfer
Restricted Securities;
(xviii) otherwise use their best efforts to comply with all
applicable rules and regulations of the Commission, and make generally
available to their security holders, as soon as practicable, a
consolidated earnings statement meeting the requirements of Rule 158
(which need not be audited) for the twelve-month period (A) commencing at
the end of any fiscal quarter in which Transfer Restricted Securities are
sold to underwriters in a firm or best efforts Underwritten Offering or
(B) if not sold to underwriters in such an offering, beginning with the
first month of the Company's first fiscal quarter commencing after the
effective date of the Registration Statement;
(xix) cause the Indenture to be qualified under the TIA not
later than the effective date of the first Registration Statement required
by this Agreement, and, in connection therewith, cooperate with the
Trustee and the Holders of Notes to effect such changes to the Indenture
as may be required for such Indenture to be so qualified in accordance
with the terms of the TIA; and execute and use their best efforts to cause
the Trustee to execute, all documents that may be required to effect such
changes and all other forms and documents required to be filed with the
Commission to enable such Indenture to be so qualified in a timely manner;
and
(xx) cause all Transfer Restricted Securities covered by the
Registration Statement to be listed on each securities exchange on which
similar securities issued by the Issuers are then listed if requested by
the Holders of a majority in aggregate principal amount of Series A Notes
or the managing underwriter(s), if any.
Each Holder shall be deemed to agree by acquisition of a Transfer
Restricted Security that, upon receipt of any notice from the Issuers of the
existence of any fact of the kind described in Section 6(c)(iii)(D) hereof, such
Holder will forthwith discontinue disposition of Transfer Restricted Securities
pursuant to the applicable Registration Statement until such Holder's receipt of
the copies of the supplemented or amended Prospectus contemplated by Section
6(c)(xvi) hereof, or until it is advised in writing (the "ADVICE") by the
Issuers that the use of the Prospectus may be resumed, and has received copies
of any additional or supplemental filings that are incorporated by reference in
the Prospectus. If
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so directed by the Issuers, each Holder will deliver to the Issuers (at the
Issuers' expense) all copies, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of such notice. In the event
the Issuers shall give any such notice, the time period regarding the
effectiveness of such Registration Statement set forth in Section 3 or 4 hereof,
as applicable, shall be extended by the number of days during the period from
and including the date of the giving of such notice pursuant to Section
6(c)(iii)(D) hereof to and including the date when each selling Holder covered
by such Registration Statement shall have received the copies of the
supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof or
shall have received the Advice.
SECTION 7. REGISTRATION EXPENSES
(a) All expenses incident to the Issuers' or the Guarantors'
performance of or compliance with this Agreement will be borne by the Issuers
and the Guarantors, regardless of whether a Registration Statement becomes
effective, including without limitation: (i) all registration and filing fees
and expenses (including filings made by the Initial Purchaser or any Holder with
the NASD (and, if applicable, the fees and expenses of any "qualified
independent underwriter" and its counsel that may be required by the rules and
regulations of the NASD)); (ii) all fees and expenses of compliance with federal
securities and state Blue Sky or securities laws; (iii) all expenses of printing
(including printing certificates for the Series B Notes to be issued in the
Exchange Offer and printing of Prospectuses), messenger and delivery services
and telephone; (iv) all fees and disbursements of counsel for the Issuers, the
Guarantors and, subject to Section 7(b) below, the Holders of Transfer
Restricted Securities; (v) all application and filing fees in connection with
listing Notes on a national securities exchange or automated quotation system
pursuant to the requirements hereof; and (vi) all fees and disbursements of
independent certified public accountants of the Issuers and the Guarantors
(including the expenses of any special audit and comfort letters required by or
incident to such performance).
The Issuers and the Guarantors will, in any event, bear their internal
expenses (including, without limitation, all salaries and expenses of their
officers and employees performing legal or accounting duties), the expenses of
any annual audit and the fees and expenses of any Person, including special
experts, retained by the Issuers.
(b) In connection with any Shelf Registration Statement required by
this Agreement, the Issuers and the Guarantors will reimburse the Holders of
Transfer Restricted Securities being registered pursuant to the Shelf
Registration Statement, as applicable, for the reasonable fees and disbursements
of not more than one counsel, who shall be Latham & Watkins or such other
counsel as may be chosen by the Holders of a majority in aggregate principal
amount of the Transfer Restricted Securities for whose benefit such Shelf
Registration Statement is being prepared.
SECTION 8. INDEMNIFICATION
(a) The Issuers and the Guarantors, jointly and severally, agree to
indemnify and hold harmless (i) each Holder, (ii) each person, if any, who
controls any Holder within the meaning of Section 15 of the Act or Section 20(a)
of the Exchange Act and (iii) the respective officers, directors, partners,
employees, representatives and agents of each Holder or any controlling person
to the fullest extent lawful, from and against any and all losses, liabilities,
claims, damages and expenses whatsoever
13
<PAGE> 15
(including but not limited to reasonable attorneys' fees and any and all
expenses whatsoever incurred in investigating, preparing or defending against
any investigation or litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement or Prospectus, or in any
supplement thereto or amendment thereof, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that the Issuers will not be liable in any such case to the extent, but only to
the extent, that any such loss, liability, claim, damage or expense arises out
of or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity
with information relating to any Holder furnished to the Issuers in writing by
or on behalf of such Holder expressly for use therein. This indemnity agreement
will be in addition to any liability which the Issuers and the Guarantors may
otherwise have, including, under this Agreement.
(b) Each Holder by its participation in the Shelf Registration
Statement shall be deemed to acknowledge and agree, severally and not jointly,
to indemnify and hold harmless the Issuers and the Guarantors and each person,
if any, who controls the Issuers and the Guarantors within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act and the respective
officers, directors, trustees, partners, employees, representatives and agents
of any of them, against any losses, liabilities, claims, damages and expenses
whatsoever (including but not limited to reasonable attorneys' fees and any and
all expenses whatsoever incurred in investigating, preparing or defending
against any investigation or litigation, commenced or threatened, or any claim
whatsoever and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement or Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, in each case to the
extent, but only to the extent, that any such loss, liability, claim, damage or
expense arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with information relating to any Holder furnished to the Issuers in
writing by or on behalf of such Holder expressly for use therein; provided,
however, that in no case shall any Holder be liable or responsible for any
amount in excess of the dollar amount of the proceeds received by such Holder
upon the sale of the Notes giving rise to such indemnification obligation. This
indemnity will be in addition to any liability which any Holder may otherwise
have, including under this Agreement.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify each party against whom indemnification is
to be sought in writing of the commencement thereof (but the failure so to
notify an indemnifying party shall not relieve it from any liability which it
may have under this Section 8 except to the extent that it has been prejudiced
in any material respect by such failure or from any liability which it may
otherwise have). In case any such action is brought against any indemnified
party, and it notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate
14
<PAGE> 16
therein, and to the extent it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. Notwithstanding the foregoing, the
indemnified party or parties shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such indemnified party or parties unless (i) the employment of
such counsel shall have been authorized in writing by the indemnifying parties
in connection with the defense of such action, (ii) the indemnifying parties
shall not have employed counsel to take charge of the defense of such action
within a reasonable time after notice of commencement of the action, or (iii)
such indemnified party or parties shall have reasonably concluded, based upon
the advice of counsel, that there may be defenses available to it or them which
are different from or additional to those available to one or all of the
indemnifying parties (in which case the indemnifying party or parties shall not
have the right to direct the defense of such action on behalf of the indemnified
party or parties), in any of which events such fees and expenses of counsel
shall be borne by the indemnifying parties; provided, however, that the
indemnifying party under subsection (a) or (b) above shall only be liable for
the legal expenses of one counsel (in addition to any local counsel) for all
indemnified parties in each jurisdiction in which any claim or action is
brought. Anything in this subsection to the contrary notwithstanding, an
indemnifying party shall not be liable for any settlement of any claim or action
effected without its prior written consent; provided, however, that such consent
was not unreasonably withheld.
(d) In order to provide for contribution in circumstances in which the
indemnification provided for in this Section 8 is for any reason held to be
unavailable from the Issuers and the Guarantors or is insufficient to hold
harmless a party indemnified hereunder, the Issuers and the Guarantors, on the
one hand, and each Holder (who shall be deemed to agree to these terms by its
participation in the Exchange Offer or the Shelf Registration Statement), on the
other hand, shall contribute to the aggregate losses, claims, damages,
liabilities and expenses of the nature contemplated by such indemnification
provision (including any investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claims asserted, but after deducting in the case of losses,
claims, damages, liabilities and expenses suffered by the Issuers and the
Guarantors, any contribution received by the Issuers and the Guarantors from
persons, other than the Holders, who may also be liable for contribution,
including persons who control the Issuers and the Guarantors within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act) to which the
Issuers, the Guarantors and such Holder may be subject, in such proportion as is
appropriate to reflect the relative benefits received by the Issuers and the
Guarantors, on one hand, and such Holder, on the other hand, if such allocation
is not permitted by applicable law or indemnification is not available as a
result of the indemnifying party not having received notice as provided in this
Section 8, in such proportion as is appropriate to reflect not only the relative
benefits referred to above but also the relative fault of the Issuers and the
Guarantors, on the one hand, and such Holder, on the other hand, in connection
with the statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Issuers and the Guarantors, on one hand,
and each Holder, on the other hand, shall be deemed to be in the same proportion
as (i) the total proceeds from the offering of the Notes (net of discounts but
before deducting expenses) received by the Issuers and the Guarantors and (ii)
the total proceeds received by such Holder upon the sale of the Notes giving
rise to such indemnification obligation. The relative fault of the Issuers and
the Guarantors, on the one hand, and of each Holder, on the other hand, shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Issuers, the Guarantors
or such Holder and the parties' relative intent, knowledge, access to
information and
15
<PAGE> 17
opportunity to correct or prevent such statement or omission. The Issuers and
the Guarantors agree and the Holders shall be deemed to agree by their
participation in the Exchange Offer or the Shelf Registration Statement that it
would not be just and equitable if contribution pursuant to this Section 8(d)
were determined by pro rata allocation or by any other method of allocation
which does not take into account the equitable considerations referred to above.
Notwithstanding the provisions of this Section 8(d), (i) in no case shall any
Holder be required to contribute any amount in excess of the dollar amount by
which the proceeds received by such Holder upon the sale of the Notes exceeds
the amount of any damages which such Holder has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission and (ii) no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 8(d), (A) each person, if any, who controls any Holder within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act and (B)
the respective officers, directors, trustees, partners, employees,
representatives and agents of each Holder or any controlling person shall have
the same rights to contribution as such Holder, and each person, if any, who
controls the Issuers and the Guarantors within the meaning of Section 15 of the
Act or Section 20(a) of the Exchange Act shall have the same rights to
contribution as the Issuers and the Guarantors, subject in each case to clauses
(i) and (ii) of this Section 8(d). Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties under this Section 8(d), notify such
party or parties from whom contribution may be sought, but the failure to so
notify such party or parties shall not relieve the party or parties from whom
contribution may be sought from any obligation it or they may have under this
Section 8(d) or otherwise. No party shall be liable for contribution with
respect to any action or claim settled without its prior written consent;
provided, however, that such written consent was not unreasonably withheld.
SECTION 9. RULE 144A
The Issuers and the Guarantors hereby agree with each Holder, for so
long as any Transfer Restricted Securities remain outstanding, to make available
to any Holder or beneficial owner of Transfer Restricted Securities in
connection with any sale thereof and any prospective purchaser of such Transfer
Restricted Securities from such Holder or beneficial owner, the information
required by Rule 144A(d)(4) under the Act in order to permit resales of such
Transfer Restricted Securities pursuant to Rule 144A.
SECTION 10. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Registration hereunder
unless such Holder (a) agrees to sell such Holder's Transfer Restricted
Securities on the basis provided in any underwriting arrangements approved by
the Persons entitled hereunder to approve such arrangements and (b) completes
and executes all reasonable questionnaires, powers of attorney, custody
agreements, indemnities, underwriting agreements, lock-up letters and other
documents required under the terms of such underwriting arrangements.
16
<PAGE> 18
SECTION 11. SELECTION OF UNDERWRITERS
The Holders of Transfer Restricted Securities covered by a Shelf
Registration Statement who desire to do so may sell such Transfer Restricted
Securities in an Underwritten Offering. In any such Underwritten Offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be selected by the Holders of a majority in
aggregate principal amount of the Transfer Restricted Securities included in
such offering; provided, that such investment bankers and managers must be
reasonably satisfactory to the Issuers.
SECTION 12. MISCELLANEOUS
(a) REMEDIES. The Issuers and the Guarantors agree that monetary
damages (including the liquidated damages contemplated hereby) would not be
adequate compensation for any loss incurred by reason of a breach by it of the
provisions of this Agreement and hereby agree to waive the defense in any action
for specific performance that a remedy at law would be adequate.
(b) NO INCONSISTENT AGREEMENTS. The Issuers and the Guarantors will
not, on or after the date of this Agreement, enter into any agreement with
respect to their respective securities that is inconsistent with the rights
granted to the Holders in this Agreement or otherwise conflicts with the
provisions hereof. Neither of the Issuers nor any of the Guarantors has
previously entered into any agreement granting any registration rights with
respect to its securities to any Person. The rights granted to the Holders
hereunder do not in any way conflict with and are not inconsistent with the
rights granted to the holders of the Issuers' securities under any agreement in
effect on the date hereof.
(c) ADJUSTMENTS AFFECTING THE NOTES. Neither of the Issuers nor any
Guarantor will take any action, or permit any change to occur, with respect to
the terms of the Notes that would materially and adversely affect the ability of
the Holders to Consummate any Exchange Offer.
(d) AMENDMENTS AND WAIVERS. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given unless the Issuers have obtained the
written consent of Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities. Notwithstanding the foregoing, a waiver or
consent to departure from the provisions hereof that relates exclusively to the
rights of Holders whose securities are being tendered pursuant to the Exchange
Offer and that does not affect directly or indirectly the rights of other
Holders whose securities are not being tendered pursuant to such Exchange Offer
may be given by the Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities being tendered or registered.
(e) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of the
Registrar under the Indenture, with a copy to the Registrar under the
Indenture; and
17
<PAGE> 19
(ii) if to the Issuers or any of the Guarantors:
UNICCO Service Company
Four Copley Place
Boston, Massachusetts 02116
Telecopy No.: (617) 859-0735
Attention: Chief Financial Officer
With copies to:
Posternak, Blankstein & Lund, L.L.P.
100 Charles River Plaza
Boston, Massachusetts 02114
Telecopy No.: (617) 367-2315
Attention: Noel G. Posternak, P.C.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt acknowledged, if telecopied; and on the
next business day, if timely delivered to an air courier guaranteeing overnight
delivery.
(f) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties,
including without limitation and without the need for an express assignment,
subsequent Holders of Transfer Restricted Securities; provided, however, that
this Agreement shall not inure to the benefit of or be binding upon a successor
or assign of a Holder unless and to the extent such successor or assign acquired
Transfer Restricted Securities from such Holder.
(g) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.
(j) SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(k) ENTIRE AGREEMENT. This Agreement, together with the other Operative
Documents (as defined in the Purchase Agreement), is intended by the parties as
a final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein with respect to the registration rights
18
<PAGE> 20
granted by the Issuers with respect to the Transfer Restricted Securities. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to such subject matter.
[signature page follows]
19
<PAGE> 21
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
UNICCO SERVICE COMPANY
By: /s/ George A. Keches
----------------------------------
Name: GEORGE A. Keches
Title: CFO AND TREASURER
UNICCO FINANCE CORP.
By: /s/ George A. Keches
----------------------------------
Name: GEORGE A. KECHES
Title: TREASURER
USC, INC.
By: /s/ George A. Keches
----------------------------------
Name: GEORGE A. Keches
Title: TREASURER
UNICCO GOVERNMENT SERVICES, INC.
By: /s/ George A. Keches
----------------------------------
Name: GEORGE A. Keches
Title: TREASURER
UNICCO SECURITY SERVICES, INC.
By: /s/ George A. Keches
----------------------------------
Name: GEORGE A. Keches
Title: AUTHORIZED SIGNATORY
<PAGE> 1
EXHIBIT 5.1
Posternak, Blankstein & Lund, L.L.P.
Attorneys at Law
----------------
100 Charles River Plaza
Boston, Massachusetts 02114-2723
December 15, 1997
UNICCO Service Company
UNICCO Finance Corp.
Four Copley Place
Boston, MA 02116
RE: REGISTRATION STATEMENT ON FORM S-4
Gentlemen:
This opinion is rendered to you in connection with the preparation of
the registration statement (the "Registration Statement") on Form S-4 under the
Securities Act of 1933, as amended (the "Act"), with respect to the offering by
UNICCO Service Company, a Massachusetts business trust (the "Company") and
UNICCO Finance Corp., a Delaware corporation ("U-Finance"), of up to
$105,000,000 aggregate principal amount of their 9-7/8% Senior Subordinated
Notes, Series B due 2007 (the "Notes") and the related guarantees of the Notes
(the "Guarantees") by certain subsidiaries of the Company (the "Subsidiary
Guarantors"). The Notes and the Guarantees will be issued under an indenture
(the "Indenture") entered into among the Company, the Subsidiary Guarantors and
State Street Bank and Trust Company, as Trustee, in exchange for the Company's
and U-Finance's 9-7/8% Senior Subordinated Notes due 2007 pursuant to the
exchange offer set forth in the Registration Statement (the "Exchange Offer").
We have acted as counsel to the Company and the Subsidiary Guarantors in
connection with the preparation of the Registration Statement and the proposed
issuance and sale of the Notes. For purposes of this opinion we have reviewed
the Company's Declaration of Trust and By-laws and the charter documents and
By-laws of U-Finance and each of the Subsidiary Guarantors, each as amended to
date. We have also examined such records of corporate proceedings of the
Company, U-Finance and the Subsidiary Guarantors and such other documents as we
have deemed necessary to enable us to render this opinion.
<PAGE> 2
POSTERNAK, BLANKSTEIN & LUND, L.L.P.
UNICCO Service Company
UNICCO Finance Corp.
December 15, 1997
Page 2
In rendering this opinion, we have assumed that (i) the Board of
Directors of each of the Subsidiary Guarantors has determined that the
Guarantees are necessary or convenient to the conduct, promotion or attainment
of the business of the Subsidiary Guarantors, and (ii) at the time the
Subsidiary Guarantors incur the Guarantees, none of the Subsidiary Guarantors
(a)(1) will be insolvent or rendered insolvent by reason of such incurrence,
(2) will be engaged in a business or transaction for which the assets remaining
with any such Subsidiary Guarantor constitute unreasonably small capital or
(3) intends to incur, or believes that it will incur, debts beyond its ability
to pay such debts as they mature, and (b) will receive less than reasonably
equivalent value or fair consideration.
We are attorneys admitted to practice in the Commonwealth of
Massachusetts. We express no opinion concerning the laws of any jurisdiction
other than the laws of the United States of America and the Commonwealth of
Massachusetts and the General Corporation Law of the State of Delaware.
Based upon and subject to the foregoing, and having regard for such
legal considerations as we have deemed relevant, it is our opinion that the
Notes and the Guarantees have been duly authorized for issuance by all necessary
corporate action on the part of the Company, U-Finance and the Subsidiary
Guarantors and, upon execution and authentication of the Notes as provided in
the Indenture and issuance of the Notes in accordance with the terms of the
Exchange Offer (subject to the effectiveness of the Registration Statement), the
Notes will be the legal, valid and binding obligations of the Company and
U-Finance and the Guarantees will be the legal, valid and binding obligations of
the Subsidiary Guarantors, in each case entitled to the benefits of the
Indenture, except that (i) enforcement of the rights and remedies created
thereby may be limited by bankruptcy, insolvency, reorganization, fraudulent
conveyance or similar laws affecting creditors' rights generally and by
equitable principles which may limit the right to obtain the remedy of specific
performance or other injunctive relief and (ii) we express no opinion as to the
legality, validity or binding nature of any choice of law provision.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our name under the caption "Legal
Matters" in the prospectus contained in the Registration Statement.
Very truly yours,
POSTERNAK, BLANKSTEIN & LUND, L.L.P.
By: /s/ Noel G. Posternak, P.C.
------------------------------------
A partner thereof
<PAGE> 1
EXHIBIT 10.1
AMENDED AND RESTATED REVOLVING
CREDIT AGREEMENT
UNICCO SERVICE COMPANY
USC, INC.
UNICCO SECURITY SERVICES, INC.
UNICCO GOVERNMENT SERVICES, INC.
UNICCO FINANCE CORP.
AS BORROWERS
Dated as of October 17, 1997
------------
BANKBOSTON, N.A.
AND
OTHER BANKS WHICH MAY BECOME
PARTIES TO THIS AGREEMENT
AS BANKS
AND
BANKBOSTON, N.A.
AS AGENT
<PAGE> 2
TABLE OF CONTENTS
Section Title Page
- ------- ----- ----
SECTION I - DEFINITIONS
1.1 Definitions................................................... 2
1.2 Terms of General Application.................................. 23
SECTION II - DESCRIPTION OF CREDIT
2.1 The Loans..................................................... 23
2.2 The Notes..................................................... 24
2.3 Conversion.................................................... 25
2.4 Notice and Manner of Borrowing or
Conversion of Loans........................................ 25
2.5 Commitment Fee................................................ 26
2.6 [Intentionally Omitted]....................................... 27
2.7 Administrative Agent's Fees................................... 27
2.8 Reduction of Revolving Credit Commitment...................... 27
2.9 Duration of Interest Periods.................................. 27
2.10 Interest Rates and Payments of Interest....................... 27
2.11 Changed Circumstances......................................... 30
2.12 Capital Requirements.......................................... 31
2.13 Payments and Prepayments of the Loans......................... 32
2.14 Method of Payment............................................. 32
2.15 Overdue Payments.............................................. 33
2.16 Payments not at End of Interest Period........................ 33
2.17 Computation of Interest and Fees.............................. 34
2.18 Letters of Credit............................................. 34
2.19 Letter of Credit Fees......................................... 35
SECTION III - CONDITIONS OF LOAN
3.1 Conditions Precedent to Initial Revolving Loan or
Initial Continuation of Revolving Loan.................... 35
3.2 Conditions Precedent to all Loans and Letters of Credit....... 39
SECTION IV - REPRESENTATIONS AND WARRANTIES
4.1 Organization and Qualification................................ 39
4.2 Corporate Authority........................................... 40
4.3 Valid Obligations............................................. 40
4.4 Consents or Approvals......................................... 40
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<PAGE> 3
4.5 Title to Properties; Absence of Encumbrances.................. 40
4.6 Location of Records and Collateral;
Name Change............................................... 41
4.7 Financial Statements.......................................... 41
4.8 Changes....................................................... 42
4.9 Defaults...................................................... 42
4.10 Taxes......................................................... 42
4.11 Litigation.................................................... 42
4.12 Subsidiaries.................................................. 42
4.13 Investment Company Act........................................ 42
4.14 Compliance with ERISA......................................... 43
4.15 Environmental Matters......................................... 43
4.16 Disclosure.................................................... 45
4.17 Solvency...................................................... 45
4.18 Compliance with Statutes, etc................................. 45
4.19 Capitalization................................................ 45
4.20 Labor Relations............................................... 47
4.21 Certain Transactions.......................................... 47
4.22 Restrictions on the Borrower Affiliated Group................. 47
4.23 Leases........................................................ 47
4.24 Franchises, Patents, Copyrights, Etc.......................... 48
4.25 Collateral.................................................... 48
4.26 Material Contracts............................................ 48
4.27 Interdependence of the Borrower Affiliated Group.............. 48
SECTION V - AFFIRMATIVE COVENANTS
5.1 Financial Statements and other Reporting Requirements......... 49
5.2 Conduct of Business........................................... 52
5.3 Maintenance and Insurance..................................... 53
5.4 Taxes......................................................... 53
5.5 Inspection by the Agent....................................... 54
5.6 Maintenance of Books and Records.............................. 54
5.7 [Intentionally Omitted]....................................... 54
5.8 Environmental Indemnification................................. 54
5.9 Use of Proceeds............................................... 54
5.10 Pension Plans................................................. 55
5.11 Fiscal Year................................................... 55
5.12 Net Proceeds.................................................. 55
5.13 Further Assurances............................................ 55
SECTION VI - NEGATIVE COVENANTS
6.1 Indebtedness.................................................. 56
6.2 Contingent Liabilities........................................ 56
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<PAGE> 4
6.3 Leases........................................................ 57
6.4 Sale and Leaseback............................................ 57
6.5 Encumbrances.................................................. 57
6.6 Merger; Consolidation; Sale or Lease of Assets;
Acquisitions.............................................. 58
6.7 Total Debt Ratio.............................................. 59
6.8 Minimum Fixed Charge Coverage................................. 59
6.9 Minimum Interest Coverage..................................... 60
6.10 Restricted Payments........................................... 61
6.11 Investments................................................... 62
6.12 ERISA......................................................... 62
6.13 Transactions with Affiliates.................................. 62
6.14 Loans......................................................... 62
6.15 Borrowing Base................................................ 62
6.16 No Amendments to Certain Documents............................ 63
6.17 Maximum Capital Expenditures.................................. 63
6.18 Prohibited Events............................................. 63
SECTION VII - DEFAULTS
7.1 Events of Default............................................. 64
7.2 Remedies...................................................... 68
SECTION VIII - CONCERNING THE AGENT AND THE BANKS
8.1 Appointment and Authorization................................. 68
8.2 Agent and Affiliates.......................................... 68
8.3 Future Advances............................................... 69
8.4 Delinquent Bank............................................... 69
8.5 Payments...................................................... 70
8.6 Action by Agent............................................... 70
8.7 Notification of Defaults and Events of Default................ 71
8.8 Consultation with Experts..................................... 71
8.9 Liability of Agent............................................ 71
8.10 Indemnification............................................... 72
8.11 Independent Credit Decision................................... 72
8.12 Successor Agent............................................... 72
SECTION IX - UNICCO AS AGENT FOR BORROWER AFFILIATED GROUP
9.1 Unicco as Agent for the Borrower Affiliated Group............. 73
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<PAGE> 5
SECTION X - MISCELLANEOUS
10.1 Notices....................................................... 73
10.2 Expenses...................................................... 74
10.3 Indemnification............................................... 75
10.4 Set-Off....................................................... 75
10.5 Term of Agreement............................................. 75
10.6 No Waivers.................................................... 75
10.7 Governing Law................................................. 76
10.8 Amendments, Waivers, Etc...................................... 76
10.9 Binding Effect of Agreement................................... 76
10.10 Successors and Assigns........................................ 76
10.11 Syndication of the Loans...................................... 78
10.12 Counterparts.................................................. 78
10.13 Partial Invalidity............................................ 78
10.14 Captions...................................................... 78
10.15 Waiver of Jury Trial.......................................... 78
10.16 Waiver of Special Damages..................................... 79
10.17 Entire Agreement.............................................. 79
10.18 Business Trust................................................ 79
EXHIBITS
EXHIBIT A - Form of Revolving Credit Note
EXHIBIT B - Form of Notice of Borrowing or Conversion
EXHIBIT C - Indebtedness; Encumbrances
EXHIBIT D - Disclosure
EXHIBIT E - Form of Borrowing Base Report
EXHIBIT F - Form of Report of Chief Financial Officer
SCHEDULES
SCHEDULE 1 - Commitments and Commitment Percentages
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<PAGE> 6
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
Dated as of October 17, 1997
THIS AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT is made as of
October 17, 1997, by and among UNICCO SERVICE COMPANY ("Unicco"), a
Massachusetts business trust having its chief executive office at Four Copley
Place, Boston, Massachusetts 02116, USC, INC. ("USC"), a Massachusetts
corporation having its chief executive office at Four Copley Place, Boston,
Massachusetts 02116, UNICCO SECURITY SERVICES, INC. (f/k/a Ogden Allied Security
Services, Inc.) ("U-Security"), a Delaware corporation, having its chief
executive office at Four Copley Place, Boston, Massachusetts 02116, UNICCO
GOVERNMENT SERVICES, INC. (f/k/a Ogden Allied Eastern States Maintenance
Corporation) ("U-Government"), a Delaware corporation having its chief executive
office at Four Copley Place, Boston, Massachusetts 02116, UNICCO FINANCE CORP.
("U-Finance"), a Delaware corporation having its chief executive office at Four
Copley Place, Boston, Massachusetts 02116, (collectively, the "Borrowers");
BANKBOSTON, N.A. ("BankBoston" ), a national bank having its head office at 100
Federal Street, Boston, Massachusetts 02110, and the other lending institutions
which may become parties hereto pursuant to Section 10.10 (individually a "Bank"
and collectively, the "Banks"); and BankBoston as agent for itself and each
other Bank and joined in for certain purposes by UNICCO FACILITY SERVICES CANADA
COMPANY ("U-Canada"), a Nova Scotia unlimited liability company having its chief
executive office at 411 Richmond Street East, Suite 107, Toronto, Canada M5A
3S5.
WHEREAS, Unicco and certain of its affiliates are existing customers of
BankBoston and certain other lenders pursuant to a Revolving Credit and Term
Loan Agreement dated as of June 28, 1996 (the "Existing Loan Agreement");
WHEREAS, Unicco and such affiliates have requested financing from
BankBoston in connection with refinancing the indebtedness under the Existing
Loan Agreement;
WHEREAS, in connection with the proposed refinancing, Unicco and such
affiliates and BankBoston desire to amend and restate the Existing Loan
Agreement in its entirety and to add U-Finance as a Borrower;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto hereby agree that the Existing Loan
Agreement shall be amended and restated effective as of the date hereof to read
as follows:
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SECTION I
DEFINITIONS
1.1. DEFINITIONS.
All capitalized terms used in this Agreement, in the Notes or in any
other Security Document, or in any certificate, report or other document made or
delivered pursuant to this Agreement (unless otherwise defined therein) shall
have the respective meanings assigned to them below:
ACCOUNT OR ACCOUNTS RECEIVABLE. Individually and collectively, all
rights of a Person to payment for goods sold or leased or for services rendered
(including, without limitation, all accounts receivable, notes, bills, drafts,
acceptances, instruments, documents, chattel paper and all other debts,
obligations and liabilities in whatever form owing to any person for goods sold
by it or for services rendered by it), all sums of money or other proceeds due
or becoming due thereon, all guaranties and security therefor, and all right,
title and interest of such person in the goods or services giving rise thereto
and the rights pertaining to such goods, including rights of reclamation and
stoppage in transit, and all related insurance, whether any of the foregoing be
now existing or hereafter arising, now or hereafter received by or owing or
belonging to such person.
ACQUIRED PARTY. Any Person, 100% of the outstanding capital stock or
beneficial interests or substantially all of the assets of which, are acquired
by a Borrower (other than U-Finance) in connection with a Permitted Acquisition.
ACQUISITION DOCUMENTS. Collectively, each of the documents entered into
or delivered in connection with any Permitted Acquisition.
ADJUSTED EURODOLLAR RATE. Applicable to any Interest Period, shall mean
a rate PER ANNUM determined pursuant to the following formula:
AER = [ IOR ]*
---------
l.00 - RP
AER = Adjusted Eurodollar Rate
IOR = Interbank Offered Rate
RP = Reserve Percentage
*The amount in brackets shall be rounded upwards, if necessary,
to the next higher l/l00 of l%.
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Where:
"Interbank Offered Rate" applicable to any Eurodollar Loan for
any Interest Period means the rate of interest determined by the
Administrative Agent to be the prevailing rate per annum at
which deposits in U.S. dollars are offered to the Administrative
Agent by first-class banks in the interbank Eurodollar market on
or about 10:00 a.m. (Boston time) 2 Business Days before the
first day of such Interest Period in an amount approximately
equal to the principal amount of the Eurodollar Loan to which
such Interest Period is to apply for a period of time
approximately equal to such Interest Period.
"Reserve Percentage" applicable to any Interest Period means the
rate (expressed as a decimal) applicable to the Administrative
Agent during such Interest Period under regulations issued from
time to time by the Board of Governors of the Federal Reserve
System for determining the maximum reserve requirement
(including, without limitation, any basic, supplemental,
emergency or marginal reserve requirement) of the Administrative
Agent with respect to "Eurocurrency liabilities" as that term is
defined under such regulations.
The Adjusted Eurodollar Rate shall be adjusted automatically as of the effective
date of any change in the Reserve Percentage.
ADMINISTRATIVE AGENT. BankBoston in its capacity as administrative
agent for the Banks and the Agent under this Agreement and the other Loan
Documents and Security Documents in connection with administering and servicing
the Loans, and includes (where the context so admits) any other person or
persons succeeding to the functions of the Administrative Agent under this
Agreement.
ADMINISTRATIVE AGENT'S FEE. The Administrative Agent's fee payable by
the Borrowers pursuant to Section 2.7.
AFFECTED LOANS. See Section 2.11(a).
AFFILIATE. With reference to any person, (i) any director, officer or
employee of that person, (ii) any other person controlling, controlled by or
under direct or indirect common control with that person, (iii) any other person
directly or indirectly holding 5% or more of any class of the capital stock or
other equity interests (including options, warrants, convertible securities and
similar rights) of that person and (iv) any other person 5% or more of any class
of whose capital stock or other equity interests (including options, warrants,
convertible securities and similar rights) is held directly or indirectly by
that person, and including, in any event, (a) any Subsidiary of such person, (b)
each member of the Borrower Affiliated Group, and (c) Ashmont.
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AGENCY AGREEMENTS. Collectively, the one or more agency agreements
entered into from time to time by a member of the Borrower Affiliated Group, the
Agent and a local bank or other financial institution approved by the
Administrative Agent at which a member of the Borrower Affiliated Group has a
deposit account.
AGREEMENT. This Agreement, as the same may be supplemented or amended
from time to time.
AMENDMENT TO LOAN DOCUMENTS. That certain Amendment to Loan Documents
of even date herewith among the members of the Borrower Affiliated Group, the
Agent and the Banks.
ANCILLARY DOCUMENTS. Collectively, (i) the Purchase Documents, (ii) the
Subordinated Debt Documents, (iii) the Acquisition Documents, and (iv) all other
agreements, instruments and contracts which shall from time to time be
identified by the Agent and the Borrowers as "Ancillary Documents" for purposes
of this Agreement, as the foregoing may be amended from time to time in
accordance with Section 6.16.
APPLICABLE BASE RATE MARGIN. See Section 2.10.
APPLICABLE EURODOLLAR MARGIN. See Section 2.10.
APPROVED ACQUISITION EBITDA. In relation to any particular Permitted
Acquisition, the EBITDA of the Acquired Party for the most recently completed
four (4) fiscal quarters prior to the consummation of such Permitted
Acquisition, as such EBITDA is adjusted in accordance with clause (ix) of the
definition of Permitted Acquisition.
ASHMONT. Ashmont Insurance Company Limited, an exempted company
incorporated under the laws of Bermuda.
ASHMONT SHARES. Collectively, all of the shares of any class of capital
stock of Ashmont now or hereafter owned by the Equity Owners or any other
person.
ASSIGNMENTS OF SPLIT DOLLAR LIFE INSURANCE. Collectively, the one or
more Assignments of Split Dollar Life Insurance Policy as Collateral dated as of
the date hereof in favor of the Collateral Agent.
BANKS. Collectively, (i) BankBoston, and (ii) each of the other
financial institutions which may provide additional commitments and become a
party to this Agreement as a Bank hereunder, as shown on SCHEDULE 1 as it may be
amended from time to time.
BASE ACCOUNT. Accounts Receivable of the Borrower Affiliated Group as
to which the Collateral Agent has a valid and perfected first-priority security
interest and the Borrower Affiliated Group has furnished to the Agent the
information required by Section 5.1(e).
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BASE RATE. The greater of (i) the rate of interest announced from time
to time by the Administrative Agent at its head office as its Base Rate, and
(ii) the Federal Funds Effective Rate plus 1/2 of 1% per annum (rounded upwards,
if necessary, to the next 1/8 of 1%).
BASE RATE LOAN. Any Revolving Loan bearing interest calculated by
reference to the Base Rate.
BORROWER AFFILIATED GROUP. Collectively, (i) Unicco, (ii) USC, (iii)
the USC Subsidiaries, (iv) U-Canada, and (v) U-Finance.
BORROWERS. See Preamble.
BORROWING BASE. In relation to the Borrower Affiliated Group as at any
particular date, an amount equal to the lesser of (i) the aggregate Revolving
Credit Commitments as in effect on such date, and (ii) 80% of the Net
Outstanding Amount of Base Accounts as at such date, as determined by the Agent,
PROVIDED that the Agents reserves the right, in its reasonable discretion
exercised in good faith and in accordance with its customary practices, to
increase or decrease the foregoing percentages or to modify the eligibility
requirements for such Net Outstanding Amount of Base Accounts based upon a
determination that a material adverse change in the Collateral has occurred.
Whenever the Borrowing Base is used as a measure of Revolving Loans, it
shall be computed as of, and the Revolving Loans referred to shall be those
reflected in the Loan Account at, the time in question.
BORROWING BASE REPORT. See Section 5.1(e).
BUSINESS DAY. (i) For all purposes other than as covered by clause (ii)
below, any day other than a Saturday, Sunday or legal holiday on which banks in
Boston, Massachusetts are open for the conduct of a substantial part of their
commercial banking business; and (ii) with respect to all notices and
determinations in connection with, and payments of principal and interest on,
Eurodollar Loans, any day that is a Business Day described in clause (i) and
that is also a day for trading by and between banks in United States dollar
deposits in the interbank Eurodollar market.
CANADIAN GAAP. Generally accepted accounting principles as applied in
Canada, consistently applied.
CANADIAN SECURITY DOCUMENTS. Collectively, (i) the General Assignment
of Book Debts dated as of June 28, 1996 by U-Canada in favor of the Collateral
Agent, (ii) the Debenture dated as of June 28, 1996 by U-Canada in favor of the
Collateral Agent, (iii) the Pledge Agreement dated as of June 28, 1996 by
U-Canada in favor of the Collateral Agent, (iv) the Undertaking dated as of June
28, 1996 by U-Canada in favor of the Collateral Agent, and (v) all other
documents, agreements, instruments or contracts entered into by U-
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<PAGE> 11
Canada by which any of the Obligations shall be evidenced or under or in respect
of which the Collateral Agent or any of its nominees, agents or representatives
shall have, at such time, any rights or interests as security of the payment or
performance of all or any part of the Obligations, each of the foregoing as
amended by the Amendment to Loan Documents.
CAPITAL EXPENDITURES. Any expenditure for fixed assets which are
capitalized in accordance with GAAP (or Canadian GAAP, as applicable), including
assets being constructed (whether or not completed), leasehold improvements,
capital leases under GAAP (or Canadian GAAP, as applicable), installment
purchases of machinery and equipment, acquisitions of real estate and other
similar expenditures, including (i) in the case of a purchase, the entire
purchase price, whether or not paid during the fiscal period in question, (ii)
in the case of a capital lease, the amount required to be capitalized in
accordance with GAAP (or Canadian GAAP, as applicable) for the fiscal period in
question, and (iii) without duplication, expenditures in or from any
construction-in-process account of any member of the Borrower Affiliated Group
during the fiscal period in question.
CASH MANAGEMENT AGREEMENTS. Collectively, those agreements between any
member of the Borrower Affiliated Group and the Administrative Agent relating to
the cash management of such member, including, without limitation, the Lockbox
Agreement, the Collection Account Agreement and the Agency Agreements.
CLOSING DATE. The first date on which all of the conditions set forth
in Section 3.1 have been satisfied and any Loans are to be made or continued
hereunder.
CO-AGENTS. From June 28, 1996 through the date hereof, BankBoston and
Fleet National Bank, in their respective capacities as Co-Agents under the
Existing Loan Agreement, and from and after the date hereof, BankBoston in its
capacity as Agent.
CODE. The Internal Revenue Code of 1986 and the rules and regulations
thereunder, collectively, as the same may from time to time be supplemented or
amended and remain in effect.
COLLATERAL. Collectively, all of the agreements, instruments,
contracts, property (real and personal), assets, accounts and monies, and all of
the income, proceeds and products of any thereof, under or in respect of which
the Agent (including, without limitation, the Collateral Agent), any Bank or any
of the nominees, agents or legal representatives of the Co-Agents, the Agent
(including, without limitation, the Collateral Agent) or any Bank shall have at
the relevant time of reference to the term "Collateral," any rights or interest
as security for the payment or performance of all or any part of the
Obligations.
COLLATERAL AGENT. BankBoston in its capacity as collateral agent for
the Banks and the Agent under this Agreement and the other Loan Documents and
Security Documents, and includes (where the context so admits) any other person
or persons succeeding to the functions of the Collateral Agent under this
Agreement.
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<PAGE> 12
COLLATERAL ASSIGNMENTS. Collectively, (i) the separate Collateral
Assignments of Purchase Documents dated as of June 28, 1996 and executed and
delivered by each of Unicco, USC and U-Canada in favor of the Collateral Agent,
for the ratable benefit of the Banks and the Co-Agents, and (ii) the Assignments
of Split Dollar Life Insurance, each of the foregoing as amended by the
Amendment to Loan Documents.
COLLECTION ACCOUNT AGREEMENT. The Collection Account Agreement entered
into in July, 1996 among the Collateral Agent, U-Canada and Royal Bank of
Canada.
COMBINED AND COMBINING. The terms Combined and Combining shall have the
meanings ascribed thereto under GAAP, and when used in any Loan Document, shall
be deemed to refer to the Borrower Affiliated Group, in all cases, net of any
intercompany accounts.
COMMITMENT. With respect to each Bank, the aggregate amount set forth
on SCHEDULE 1 as such Bank's Revolving Credit Commitment, as such Bank's
Commitment may be modified pursuant hereto and in effect from time to time.
COMMITMENT FEE. The commitment fee payable by the Borrowers pursuant to
Section 2.5.
COMMITMENT PERCENTAGE. With respect to each Bank, the percentage set
forth on SCHEDULE 1 hereto as such Bank's percentage of the aggregate Revolving
Credit Commitments. SCHEDULE 1 shall be amended from time to time to reflect any
changes to the Commitment Percentages.
CONSOLIDATED AND CONSOLIDATING. The terms Consolidated and
Consolidating shall have the meanings ascribed thereto under GAAP and Canadian
GAAP, as applicable.
CONTROLLED GROUP. All trades or businesses (whether or not
incorporated) under common control that, together with any member of the
Borrower Affiliated Group, are treated as a single employer under Section 414(b)
or 414(c) of the Code or Section 400l of ERISA.
DEFAULT. An event or condition that, but for the requirement that time
elapse or notice be given, or both, would constitute an Event of Default.
DOLLAR OR $. Dollars in lawful currency of the United States of
America.
EBITDA. In relation to the Borrower Affiliated Group for any period, an
amount equal to Combined net income determined in accordance with GAAP (on a
basis consistent with the method of determination by the Borrower Affiliated
Group for the financial statements delivered to the Agent prior to the date
hereof and with Inventory, if any, being determined on a "first-in, first-out"
basis), plus the following to the extent deducted in computing such Combined net
income for such period: (i) Interest Charges of the Borrower
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Affiliated Group for such period, (ii) taxes on income of the Borrower
Affiliated Group for such period, (iii) without double-counting amounts under
clause (ii) above, Tax Distribution Amounts for such period, (iv) depreciation
of the Borrower Affiliated Group for such period, (v) amortization of the
Borrower Affiliated Group for such period, and (vi) other non-cash charges of
the Borrower Affiliated Group for such period, but , in any event, exclusive of
all extraordinary gains or losses of the Borrower Affiliated Group for such
period (including, without limitation, all gains attributable to the sale or
other disposition of assets by the Borrower Affiliated Group during such
period).
ENCUMBRANCES. See Section 6.5.
ERISA. The Employee Retirement Income Security Act of 1974 and the rules
and regulations thereunder, collectively, as the same may from time to time be
supplemented or amended and remain in effect.
ENVIRONMENTAL LAWS. Any and all applicable foreign, federal, state and
local environmental, health or safety statutes, laws, regulations, ordinances,
policies and rules or common law (whether now existing or hereafter enacted or
promulgated), of all federal, state and local governmental authorities,
agencies, commissions, boards, bureaus or departments which may now or hereafter
have jurisdiction over any member of the Borrower Affiliated Group or any
landlord under any real property Lease under which any member of the Borrower
Affiliated Group is a tenant, and all applicable judicial and administrative and
regulatory decrees, judgments and orders, including common law rulings and
determinations, relating to injury to, or the protection of, real or personal
property or human health or the environment, including, without limitation, all
requirements pertaining to reporting, licensing, permitting, investigation,
remediation and removal of emissions, discharges, releases or threatened
releases of Hazardous Materials, chemical substances, pollutants or contaminants
whether solid, liquid or gaseous in nature, into the environment or relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of such Hazardous Materials, chemical substances,
pollutants or contaminants.
EQUITY OWNERS. Collectively, (i) Steven C. Kletjian, (ii) Robert P.
Kletjian, (iii) Richard J. Kletjian, (iv) George A. Keches, (v) John Feitor, and
(vi) any other person who at any time becomes the legal or beneficial owner of
any Ashmont Shares or Unicco Shares.
EQUITY SECURITIES. As to any person, any shares of any class of capital
stock of such person, voting or non-voting, or any options or warrants with
respect to any such shares.
EURODOLLAR LOAN. Any Revolving Loan bearing interest at a rate
determined with reference to the Adjusted Eurodollar Rate.
EVENT OF DEFAULT. Any event described in Section 7.1.
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EXCESS CASH BALANCES. As at any date of determination, the aggregate
amount of cash balances of the Borrowers in deposit accounts maintained with the
Agent in excess of $1,000,000.
EXISTING LOAN AGREEMENT. See Preamble.
FDICIA. The Federal Deposit Insurance Corporation Improvement Act of
1991, as amended and in effect.
FEDERAL FUNDS EFFECTIVE RATE. For any day, a fluctuating interest rate
per annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day that is a Business Day, the
average of the quotations for such day on such transactions received by the
Administrative Agent from 3 Federal funds brokers of recognized standing
selected by the Administrative Agent.
FIRREA. The Financial Institutions Reform, Recovery, and Enforcement Act
of 1989, as amended and in effect.
FIXED CHARGE COVERAGE RATIO. For any period, the ratio of (i) Operating
Cash Flow for such period, to (ii) Total Debt Service for such period.
FUNDED DEBT RATIO. As at the end of any fiscal quarter of the Borrower
Affiliated Group, the ratio of (i) Combined Total Funded Debt as at the end of
such fiscal quarter, to (ii) Combined EBITDA for the four consecutive fiscal
quarters of the Borrower Affiliated Group ending on the last day of such fiscal
quarter.
GAAP. Unless the context otherwise requires, with reference to (i) each
member of the Borrower Affiliated Group other than U-Canada, United States
generally accepted accounting principles, consistently applied, and (ii)
U-Canada, Canadian GAAP.
GUARANTEES. As applied to any person, without duplication, all
guarantees, endorsements or other contingent or surety obligations with respect
to obligations of others whether or not reflected on such persons balance sheet,
including any obligation to furnish funds, directly or indirectly (whether by
virtue of partnership arrangements, by agreement to keep-well or otherwise),
through the purchase of goods, supplies or services, or by way of stock
purchase, capital contribution, advance or loan, or to enter into a contract for
any of the foregoing, for the purpose of payment of obligations of any other
person.
HAZARDOUS MATERIAL. Any substance (i) the presence of which requires or
may hereafter require notification, investigation or remediation under any
Environmental Law; (ii) which is or becomes defined as a "hazardous waste" or
"hazardous material" or "hazardous substance" or "controlled industrial waste"
or "pollutant" or "contaminant"
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under any present or future Environmental Law or amendments thereto or
jurisdictional equivalent thereof, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C.
Section 9601 ET SEQ.) and any applicable local statutes and the regulations
promulgated thereunder; (iii) which is toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic or otherwise hazardous and is
or becomes regulated by any governmental authority, department, commission,
board, agency or instrumentality of any foreign country, the United States, any
state of the United States, or any political subdivision thereof to the extent
any of the foregoing has or had jurisdiction over any member of the Borrower
Affiliated Group or any landlord under any real property Lease under which any
member of the Borrower Affiliated Group is a tenant; or (iv) without limitation,
which contains gasoline, diesel fuel or other petroleum products, asbestos or
polychlorinated biphenyls ("PCB's").
HIGH YIELD INDENTURE. The Senior Subordinated Note Indenture dated as of
the date hereof by and between UNICCO, U-Finance, the other members of the
Borrower Affiliated Group who are guarantors thereunder and State Street Bank
and Trust Company as Trustee, providing for the issuance of the High Yield
Subordinated Debt.
HIGH YIELD SUBORDINATED DEBT DOCUMENTS. Collectively, (i) the High Yield
Subordinated Debt, (ii) the High Yield Indenture, and (iii) each of any other
agreements, contracts and other instruments executed and delivered in connection
with the foregoing or relating thereto, as the same may be amended or modified
in accordance with Section 6.16 and the terms of the High Yield Subordinated
Debt.
HIGH YIELD SUBORDINATED DEBT. Collectively, the separate Senior
Subordinated Notes due 2007 in the aggregate original principal amount of up to
$105,000,000 and bearing interest at 9-7/8% (nine and seven-eighths percent) per
annum, issued by Unicco and U-Finance, as any of the same may be amended or
modified in accordance with Section 6.16 and the terms of the High Yield
Subordinated Debt.
HIGH YIELD SUBORDINATED DEBT TRANSACTIONS. The transactions evidenced by
the High Yield Subordinated Debt Documents.
INDEBTEDNESS. As applied to any person, (i) all obligations for borrowed
money or other extensions of credit whether or not secured or unsecured,
absolute or contingent, recourse or non-recourse, including, without limitation,
unmatured reimbursement obligations with respect to letters of credit or
guarantees issued for the account of or on behalf of such person, and all
obligations representing the deferred purchase price of property and services,
other than accounts payable arising in the ordinary course of business, (ii) all
obligations evidenced by bonds, notes, debentures or other similar instruments,
(iii) all obligations secured by any mortgage, pledge, security interest or
other lien on property owned or acquired by such person, whether or not the
obligations secured thereby shall have been assumed, (iv) that portion of all
obligations arising under capital leases that is required to be capitalized on
the balance sheets of such person, (v) all
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Guarantees by such person, and (vi) without double-counting any of the foregoing
Indebtedness, all obligations that are immediately due and payable out of the
proceeds of or production from property now or hereafter owned or acquired by
such person.
INELIGIBLE ACCOUNT PARTY. Any account debtor or consolidated group
including such account debtor who has 20% or more of its aggregate accounts
owing to the Borrower Affiliated Group excluded from the definition of "Net
Outstanding Amount of Base Accounts" pursuant to any of the provisions of that
definition.
INITIAL FINANCIAL STATEMENT. See Section 4.7.
INSOLVENT OR INSOLVENCY. The occurrence of one or more of the following
events with respect to a person: death; dissolution; termination of existence;
insolvency within the meaning of the United States Bankruptcy Code or other
applicable statutes (or any jurisdictional equivalent thereof); such person's
inability to pay its debts as they come due; appointment of a receiver of any
part of the property of, execution of a trust mortgage or an assignment for the
benefit of creditors by, or the entry of an order for relief or the filing of a
petition in bankruptcy or the commencement of any proceedings under any
bankruptcy or insolvency laws, or any laws relating to the relief of debtors,
readjustment of indebtedness or reorganization of debtors, or the offering of a
plan to creditors for composition or extension, except for an involuntary
proceeding commenced against such person which is dismissed within 45 days after
the commencement thereof without the entry or an order for relief or the
appointment of a trustee.
INTEREST CHARGES. For any period, means, without duplication, all
interest (other than, if any, any so-called payment-in-kind interest) and all
amortization of debt discount, deferred financing charges and expense (including
commitment fees, balance deficiency fees, letter of credit fees and similar
expenses) on any particular Indebtedness for which such calculations are being
made, all as determined in accordance with GAAP (or Canadian GAAP, as
applicable). Computations of Interest Charges on a PRO FORMA basis for
Indebtedness having a variable interest rate shall be calculated at the rate in
effect on the date of any determination.
INTEREST COVERAGE RATIO. For any period, the ratio of (i) EBITDA for
such period, to (ii) the aggregate Interest Charges on all Indebtedness of the
Borrower Affiliated Group for such period.
INTEREST PERIOD. With respect to each Eurodollar Loan, the period
commencing on the date of the making or continuation of or conversion to such
Eurodollar Loan and ending one, two, three or six months thereafter, as the
Borrowers may elect in the applicable Notice of Borrowing or Conversion;
PROVIDED that:
(i) any Interest Period (other than an Interest Period determined
pursuant to clause (iii) below) that would otherwise end on a day
that is not a Business Day shall be extended to the next
succeeding Business Day unless such
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Business Day falls in the next calendar month, in which case such
Interest Period shall end on the immediately preceding Business
Day;
(ii) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (iii) below, end on the
last Business Day of a calendar month;
(iii) any Interest Period applicable to Revolving Loans that would
otherwise end after the Revolving Credit Maturity Date shall end
on the Revolving Credit Maturity Date; and
(iv) notwithstanding clause (iii) above, no Interest Period shall have
a duration of less than one month; and if any Interest Period
would be for a shorter period, such Interest Period shall not be
available hereunder.
INTEREST RATE PROTECTION ARRANGEMENTS. The obligations of any Borrower
under any so-called interest rate swap agreements, interest rate cap agreements,
interest rate collar agreements and similar arrangements designed to protect
such Borrower against fluctuations in interest rates.
INVENTORY. Goods, merchandise and other personal property, now owned or
hereafter acquired by a person, which are held for sale or lease or are
furnished or to be furnished under a contract of service or are raw materials,
work in process or materials used or consumed or to be used or consumed in such
person's business.
INVESTMENT. As applied to any person, the purchase or acquisition of any
share of capital stock, partnership interest, evidence of indebtedness or other
Equity Security of any other person or entity, any loan, advance or extension of
credit to, or contribution to the capital of, any other person or entity, any
real estate held for sale or investment, any commodities futures contracts held
other than in connection with bona fide hedging transactions, any other
investment in any other person or entity, and the making of any commitment or
acquisition of any option to make an Investment.
LANDLORD WAIVERS. Collectively, the separate landlord waivers which have
been or are executed and delivered to the Collateral Agent, for the ratable
benefit of the Banks and the Agent, by the landlord under any real property
Lease under which any member of the Borrower Affiliated Group is a tenant.
LEASES OR LEASE. Any agreement granting a person the right to occupy
space in a structure or real estate for any period of time or any capital lease,
operating lease or other lease of or agreement to use personal property,
including, but not limited to, machinery, equipment, furniture and fixtures,
whether evidenced by written or oral lease, contract, sales agreement or other
agreement no matter how characterized.
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LETTERS OF CREDIT. Letters of Credit in the form customarily issued by
the Administrative Agent as standby letters of credit, issued by the
Administrative Agent under the joint responsibilities of the Banks, at the
request and for the account of any Borrower.
LOAN. A Base Rate Loan or a Eurodollar Loan made to the Borrowers by any
Bank pursuant to Section II of this Agreement, and "Loans" means all of such
Base Rate Loans or Eurodollar Loans, collectively.
LOAN ACCOUNT. The account or accounts on the books of the Administrative
Agent in which will be recorded loans and advances made by the Banks to the
Borrowers pursuant to this Agreement, payments made on such loans and other
appropriate debits and credits as provided by this Agreement or other Loan
Documents.
LOAN DOCUMENTS. Collectively, this Agreement (including, without
limitation, the agreements and other instruments listed or described in Section
3), the Notes, the Amendment to Loan Documents, the Security Agreements, the
Canadian Security Documents, the U-Canada Guaranty, the Pledge Agreements, the
Subordination Agreements, the Collateral Assignments, the Landlord Waivers, the
Letters of Credit (and all letter of credit applications and agreements executed
and delivered in connection therewith), the Cash Management Agreements, and the
Solvency Certificates, together with all agreements and other instruments
contemplated thereby and all schedules, exhibits and annexes thereto, as the
same may from time to time be amended and in effect.
LOCKBOX AGREEMENT. The Lockbox Agreement dated as of July 1, 1996 by the
Borrower Affiliated Group in favor of the Collateral Agent, for the ratable
benefit of the Banks and the Co-Agents.
MCRC. Massachusetts Capital Resource Company, a Massachusetts special
purpose limited partnership.
MCRC GUARANTIES. The guaranty from U-Canada dated as of June 28, 1996 in
favor of MCRC, which shall be subordinate to any and all Guaranties in favor of
the Co-Agents, the Agent or the Banks pursuant to the MCRC Subordination
Agreement.
MCRC SUBORDINATED DEBT AGREEMENT. The Note Purchase Agreement dated as
of June 28, 1996 between MCRC, Unicco and the other members of the Borrower
Affiliated Group (other than U-Finance), as the same has been amended on the
date hereof and may be further amended or modified from time to time in
accordance with Section 6.16 and the MCRC Subordination Agreement.
MCRC SUBORDINATED DEBT DOCUMENTS. Collectively, (i) the MCRC
Subordinated Debt Agreement, (ii) the MCRC Subordinated Notes, (iii) the MCRC
Guaranties, and (iv) each of any other agreements, contracts and other
instruments executed and delivered
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in connection with any of the foregoing or relating thereto, as the same may be
amended or modified in accordance with the terms of the MCRC Subordination
Agreement.
MCRC SUBORDINATED NOTES. The separate Promissory Notes due 2001 in the
aggregate original principal amount of $5,000,000 and bearing interest at 14%
per annum, with scheduled interest payments due on each October 15, January 15,
April 15, and July 15 of each year, commencing October 15, 1996, and scheduled
principal due on September 30, 2001, issued by certain of the Borrowers to MCRC
on June 28, 1996, as the same have been amended on the date hereof and may be
further amended or modified in accordance with Section 6.16 and the MCRC
Subordination Agreement.
MCRC SUBORDINATION AGREEMENT. The Subordination Agreement dated as of
June 28, 1996 among the Co-Agents, the Banks and MCRC, and countersigned by the
Borrower Affiliated Group, as amended by the Amendment to Loan Documents.
MAJORITY BANKS. Those Banks whose aggregate Commitments constitute at
least fifty-one percent (51%) of the Total Commitment in effect at the relevant
time of reference.
MATERIAL CONTRACTS. Those agreements and contracts of the Borrower
Affiliated Group, whether written or oral, listed and described on EXHIBIT D.
NET OUTSTANDING AMOUNT OF BASE ACCOUNTS. The net amount of Base Accounts
outstanding after eliminating from the aggregate amount of outstanding Base
Accounts any Account which:
(a) is unpaid more than 90 days after the original invoice date,
(b) did not arise in the ordinary course of business of a member of the
Borrower Affiliated Group as a result of services which have been performed for,
or the sale of goods which have been shipped to, the account debtor;
(c) is not the legal, valid and binding obligation of the account debtor
thereunder, the right to payment for which is not assignable, is subject to a
lien of the kind described in Section 6.5(h), is not owned by a member of the
Borrower Affiliated Group free and clear of all Encumbrances (except in favor of
the Collateral Agent) or is evidenced by a promissory note or other instrument;
(d) has been reduced or against which a reduction is being sought, as
against any member of the Borrower Affiliated Group or its respective agents, by
any offset, counterclaim, adjustment, credit, allowance or other defense, or as
to which there is any (or any basis for any) return, rejection, loss or damage
of or to the goods giving rise thereto, or any request for credit or
adjustments;
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(e) is uncollectible for any reason, including, without limitation, any
bankruptcy, insolvency or other financial difficulty of the account debtor, or
any impediment to the assertion of a claim or commencement of an action against
the account debtor (including as a consequence of a failure of any member of the
Borrower Affiliated Group to be qualified or licensed in any jurisdiction where
such qualification or licensing is required), all as determined by the Agent in
their reasonable discretion;
(f) is owing from any Affiliate of or supplier to any other member of
the Borrower Affiliated Group or any Ineligible Account Party;
(g) is owing from an account debtor not located in the United States,
Canada or Puerto Rico, except to the extent that such account debtor is an
account debtor of U-Canada and the Collateral Agent has a valid, perfected
first-priority security interest in the Accounts owing from such account debtor;
(h) is owing from an account debtor which is the United States of
America or any department, agency or instrumentality thereof, unless the Account
has been properly assigned to the Collateral Agent by compliance with the
federal Assignment of Claims Act in a manner satisfactory to the Agent; and
(i) has been designated by the Agent in its reasonable discretion as
unacceptable for any reason by notice to the Borrowers, all as determined in
good faith by the Agent in accordance with its customary practices, which
determination shall be final and binding upon the Borrowers.
NET PROCEEDS. With respect to the sale, transfer or other disposition by
any member of the Borrower Affiliated Group of any asset or group of assets
(other than Inventory in the ordinary course of business, but including, without
limitation, any sale of Equity Securities), means the amount of cash (freely
convertible into United States dollars) received by any member of the Borrower
Affiliated Group, its respective agents or the Collateral Agent, from such sale
or other disposition (including, without limitation, any tax refund), after (i)
provision for all income or other taxes of such member of the Borrower
Affiliated Group measured by or resulting from such sale or other disposition
(including taking into account the tax benefit, if any, resulting from a loss on
such sale or other disposition as and when such tax benefit is realized, (ii)
payment of all reasonable brokerage commissions and other reasonable fees and
expenses related to such sale or other disposition, and (iii) deduction of
appropriate amounts to be provided by such member of the Borrower Affiliated
Group as an escrow deposit in conjunction with any such sale or other
disposition unless and until such escrow deposit is returned or as a reserve, in
accordance with GAAP (or Canadian GAAP, as applicable), against any liabilities
associated with such sale, transfer or other disposition and retained by such
any member of the Borrower Affiliated Group after such sale or other
disposition.
NOTES. Collectively, the Revolving Credit Notes.
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NOTICE OF BORROWING OR CONVERSION. See Section 2.4.
OBLIGATIONS. Any and all obligations of any member of the Borrower
Affiliated Group to the Agent or any Bank of every kind and description
(including obligations in respect of Letters of Credit and fees relating
thereto, direct or indirect, absolute or contingent, primary or secondary, due
or to become due, now existing or hereafter arising, regardless of how they
arise or by what agreement or instrument, if any, and including obligations to
perform acts and refrain from taking action as well as obligations to pay money.
OGDEN. Ogden Services Corporation, a Delaware corporation.
OPERATING CASH FLOW. For any period, an amount equal to EBITDA for such
period, (i) minus all Capital Expenditures made by the Borrower Affiliated Group
during such period, and (ii) minus, without double-counting, the sum of (a) cash
taxes on income paid by the Borrower Affiliated Group during such period and (b)
the aggregate Tax Distribution Amounts distributed by Unicco during such period.
PBGC. The Pension Benefit Guaranty Corporation or any entity succeeding
to any or all of its functions under ERISA.
PERMITTED ACQUISITION. An acquisition by the Borrower which meets all of
the following criteria:
(i) is an acquisition of a facilities management business or of a
facilities services business;
(ii) the Agent shall have received at least ten (10) Business Days'
written notice of the proposed acquisition;
(iii) the properties and assets acquired by the Borrowers in connection
with such acquisition shall be free from all liens, charges and
encumbrances whatsoever, other than Encumbrances expressly
permitted by Section 6.5(g) and subject to the limitations set
forth therein;
(iv) the Agent shall have a valid, perfected, first-priority security
interest in all of the properties and assets being acquired by
the Borrowers;
(v) no Indebtedness shall be assumed by the Borrowers in connection
with such acquisition, other than Indebtedness expressly
permitted to be incurred by Section 6.1(c) and subject to the
limitations set forth therein (including, without limitation,
that the aggregate amount of Indebtedness permitted by such
Section 6.1(c) is limited to $750,000, whether incurred in
connection with one or more Permitted Acquisitions or otherwise);
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(vi) immediately prior to, and after giving effect to such
acquisition, no Default or Event of Default shall exist (it being
agreed that, for financial covenant test purposes, the Borrowers
shall be permitted to include the Approved Acquisition EBITDA);
(vii) prior to such acquisition, the Agent shall have received
computations from the Borrowers (in satisfactory detail and based
on a compliance certificate in the form of EXHIBIT F hereto)
showing PRO FORMA compliance as of the date of, and after giving
effect to, such acquisition with the financial covenants set
forth in Sections 6.7 through 6.9, inclusive, and Section 6.17;
(viii) the total purchase price (taking into account all assumed
liabilities) shall not exceed $15,000,000; and
(ix) the Approved Acquisition EBITDA used by the Borrowers in the
compliance certificate delivered pursuant to clause (vii) above
shall be such EBITDA as determined in accordance with GAAP, or,
if the Borrowers have made adjustments to such GAAP EBITDA in
such compliance certificate, the Agent has reviewed and approved
such adjustments in its reasonable discretion (it being agreed
that, without limitation, contractual, adequately documented
reductions in the compensation of the sellers under the Permitted
Acquisition and/or contractual, adequately documented reductions
in rental expenses which, in each case, are effective as of the
date of the consummation of the Permitted Acquisition, will be
deemed to be acceptable adjustments to such GAAP EBITDA).
PERMITTED ENCUMBRANCES. See Section 6.5.
PERSON or PERSON. An individual, a company, a corporation, a limited
liability company, an unlimited liability company, an association, a
partnership, a limited liability partnership, a joint venture, an unincorporated
trade or business enterprise, a trust (including, without limitation, a business
trust), an estate, or a government (national, regional or local) or an agency,
instrumentality or official thereof.
PLAN. At any time, an employee pension or other benefit plan that is
subject to Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code and is either (i) maintained by any member of the
Borrower Affiliated Group or any member of the Controlled Group for employees of
any member of the Borrower Affiliated Group or any member of the Controlled
Group or (ii) if such Plan is established, maintained pursuant to a collective
bargaining agreement or any other arrangement under which more than one employer
makes contributions and to which any member of the Borrower Affiliated Group or
any member of the Controlled Group is then making or accruing an obligation to
make contributions or has within the preceding five Plan years made
contributions.
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PLEDGE AGREEMENTS Collectively, (i) the Unicco Pledge Agreement, and
(ii) the USC Pledge Agreement.
PRO FORMA FINANCIAL STATEMENT. The Combined and Combining PRO FORMA
balance sheet of the Borrower Affiliated Group, dated the Closing Date, prepared
in accordance with GAAP, assuming that the High Yield Subordinated Debt
Transactions had occurred as of such date.
PURCHASE AGREEMENT. The Purchase Agreement dated May 3, 1996 among the
Purchaser and the Sellers (each as defined therein), as amended on or prior to
the Closing Date and as further amended from time to time in accordance with
Section 6.16.
PURCHASE DOCUMENTS. Collectively, (i) the Purchase Agreement, and (ii)
all of the other documents, instruments and agreements executed and/or delivered
in connection with or contemplated by the Purchase Agreement.
PURCHASE TRANSACTIONS. The purchase by the Purchaser of the Acquired
Assets and the Business (all as defined in the Purchase Agreement) on June 28,
1996, pursuant to and as more fully described in the Purchase Agreement and the
other Purchase Documents.
QUALIFIED INVESTMENTS. As applied to any person, Investments in (i)
notes, bonds or other obligations of the United States of America or any agency
thereof that as to principal and interest constitute direct obligations of or
are guaranteed by the United States of America, (ii) certificates of deposit or
other deposit instruments or accounts of banks or trust companies organized
under the laws of the United States or any state thereof that have capital and
surplus of at least $100,000,000, (iii) commercial paper that is rated not less
than prime-one or A-1 or their equivalents by Moody's Investors Service, Inc. or
Standard & Poor's Corporation, respectively, or their successors, (iv) any
repurchase agreement secured by any one or more of the foregoing, (v)
Investments made in connection with (and in accordance with the requirements
for) a Permitted Acquisition, and (vi) Investments made in connection with
transactions expressly permitted by (and in accordance with the terms of)
Section 6.6.
RATE PERIOD. The period beginning on the day following delivery to the
Agent of the annual or quarterly financial statements required to be delivered
pursuant to Section 5.1(a) or Section 5.1(b) and ending one day after the day on
which the next such quarterly (or annual, as applicable) financial statements
are delivered to the Agent.
RESTATEMENT DOCUMENTS. Collectively, this Agreement, the Revolving
Credit Notes, the Amendment to Loan Documents, the U-Finance Security Agreement
and the Solvency Certificates.
RESTRICTED PAYMENT. (i) Any cash or property dividend, distribution or
other payment, direct or indirect, to any person who now or in the future may
hold an equity interest in any member of the Borrower Affiliated Group or
Ashmont, whether evidenced
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by a security or not, other than regular compensation and bonuses and
reimbursable business expenses paid to employees of any member of the Borrower
Affiliated Group in the ordinary course of business and consistent with past
practices, and (ii) any payment on account of the purchase, redemption,
retirement or other acquisition for value of any capital stock of any member of
the Borrower Affiliated Group, or any other payment or distribution made in
respect thereof, either directly or indirectly.
REVOLVING CREDIT COMMITMENT. In relation to any Bank, the maximum
liability from time to time of such Bank, as set forth on SCHEDULE 1, to
participate in making Revolving Loans to the Borrowers upon the terms and
subject to the conditions contained in this Agreement. SCHEDULE 1 shall be
amended from time to time to reflect any changes to the Revolving Credit
Commitments.
REVOLVING CREDIT COMMITMENT PERCENTAGE. With respect to each Bank having
a Revolving Credit Commitment, the percentage set forth on SCHEDULE 1 as such
Bank's percentage of the aggregate Revolving Credit Commitments of all the
Banks. SCHEDULE 1 shall be amended from time to time to reflect any changes to
the Revolving Credit Commitment Percentages.
REVOLVING CREDIT MATURITY DATE. October 14, 2002.
REVOLVING CREDIT NOTES. See Section 2.2.
REVOLVING LOANS. Collectively, the revolving credit loans in the maximum
aggregate principal amount of $45,000,000 made or to be made to the Borrowers by
the Banks pursuant to Section 2.1(a), and subject to the limitations contained
herein.
SECURITY AGREEMENTS. Collectively, (i) the separate Security Agreements,
each dated as of June 28, 1996, and executed and delivered by each of the
Borrowers (other than U-Finance) and U-Canada to the Co-Agents, for the ratable
benefit of the Banks and the Co-Agents, as amended by the Amendment to Loan
Documents, and (ii) the Security Agreement, dated as of the date hereof, and
executed and delivered by U-Finance to the Agent, for the ratable benefit of the
Banks and the Agent.
SECURITY DOCUMENTS. Collectively, (i) the Loan Documents and (ii) all
other agreements, instruments or contracts by which any of the Obligations shall
be evidenced or under or in respect of which the Banks, the Agent or the
Co-Agents (including, without limitation, the Collateral Agent) or any of the
nominees, agents, or representatives of the Banks, the Agent or the Co-Agents
(including, without limitation, the Collateral Agent) shall have, at such time,
any rights or interests as security for the payment or performance of all or any
part of the Obligations.
SENIOR DEBT. All Indebtedness of the Borrower Affiliated Group which is
not Subordinated Debt.
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SOLVENCY CERTIFICATES. Collectively, the separate solvency certificates
dated as of the date hereof and executed and delivered by the chief financial
officer of each of the members of the Borrower Affiliated Group to the Agent,
for the ratable benefit of the Banks and the Agent.
SPECIAL PAYMENT CONDITIONS. Collectively, the conditions that: (i) all
sums which shall have become due and payable by the Borrowers to the Agent or
the Banks under any of the Security Documents on or prior to such date shall
have been paid in full on or prior to such date; and (ii) no event or condition
which constitutes a Default or an Event of Default shall be continuing on or as
of such date or shall occur by reason of the making of the payment on or as of
the date on which any particular dividend, distribution or other payment is
proposed to be made or shall occur by reason of the making of such dividend,
distribution or other payment on such date.
STATED AMOUNT. With respect to each Letter of Credit outstanding at any
time, the maximum amount then available to be drawn thereunder (without regard
to whether any conditions for drawing could then be met).
SUBORDINATED DEBT. Indebtedness (including any Indebtedness evidenced by
payment-in-kind promissory notes, if any) of the Borrower Affiliated Group which
is expressly subordinated and made junior to the payment and performance in full
of the Obligations on terms and conditions satisfactory to the Agent and the
Banks, including, without limitation, Indebtedness under the High Yield
Subordinated Debt and the MCRC Subordinated Notes.
SUBORDINATED DEBT DOCUMENTS. Collectively, (i) the MCRC Subordinated
Debt Documents, and (ii) the High Yield Subordinated Debt Documents.
SUBORDINATED DEBT TRANSACTIONS. Collectively, the transactions evidenced
by (i) the MCRC Subordinated Debt Documents, and (ii) the High Yield
Subordinated Debt Documents.
SUBORDINATION AGREEMENTS. Collectively, (i) the MCRC Subordination
Agreement, and (ii) Article 10 and Article 11.02 of the High Yield Indenture, as
in effect on the date hereof and delivered to the Agent.
SUBSIDIARY. Any corporation, association, joint stock company, business
trust or other similar organization of which 50% or more of the ordinary voting
power for the election of a majority of the members of the board of directors or
other governing body of such entity is held or controlled by a person or a
Subsidiary of such person; or any other such organization the management of
which is directly or indirectly controlled by a person or a Subsidiary of such
person through the exercise of voting power or otherwise; or any joint venture,
whether incorporated or not, in which a person has a 50% or more ownership
interest.
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TAX DISTRIBUTION AMOUNT. For any period, an amount equal to the minimum
amount sufficient to cover payment of the expected federal (and state, if any)
income taxes attributable to the ownership of Unicco's capital stock, based on
the highest federal (and state, if applicable) income tax rate that could be
applicable to any holder of such capital stock for such period, and taking into
consideration the deduction of any income tax in computing another income tax
that could be applicable to any holder of such capital stock, as determined
through the end of the period in question.
TOTAL COMMITMENT. As of any date, the aggregate sum of the then-current
Commitments of the Banks, PROVIDED that the Total Commitment shall not at any
time exceed $45,000,000.
TOTAL DEBT. As at any date of determination, on a Combined basis for the
Borrower Affiliated Group, the aggregate amount of Indebtedness outstanding on
such date.
TOTAL DEBT RATIO. As at the end of any fiscal quarter of the Borrower
Affiliated Group, the ratio of (i) Total Debt as at the end of such fiscal
quarter, to (ii) EBITDA for the four consecutive fiscal quarters ending on the
last day of such fiscal quarter.
TOTAL DEBT SERVICE. For any period, the sum of (a) the aggregate amount
of scheduled principal payments required to be made by the Borrower Affiliated
Group during such period with respect to all Indebtedness, plus (b) the
aggregate Interest Charges paid by the Borrower Affiliated Group during such
period with respect to all Indebtedness.
TOTAL FUNDED DEBT. As at any date of determination, on a Combined basis
for the Borrower Affiliated Group, the sum of (i) the aggregate amount of all
Senior Debt outstanding on such date, including, without limitation, the
aggregate amount of the Loans outstanding on such date, plus (ii) the Stated
Amount of Letters of Credit outstanding on such date, plus (iii) all obligations
arising under capital leases in effect on such date required to be capitalized
in accordance with GAAP (or Canadian GAAP, as applicable), plus (iv) all
Subordinated Debt outstanding on such date, including, without limitation, all
Indebtedness evidenced by the MCRC Subordinated Debt Documents and the High
Yield Subordinated Debt Documents, plus (v) all other Guarantees and
Indebtedness for borrowed money of the Borrower Affiliated Group outstanding on
such date, but less the Excess Cash Balances on such date.
TOTAL LIABILITIES. As at any date of determination, all obligations that
should, in accordance with GAAP (or Canadian GAAP, as applicable), be classified
as liabilities on the Combined balance sheet of the Borrower Affiliated Group,
including in any event all Indebtedness.
U-CANADA. See Preamble.
U-CANADA GUARANTY. Collectively, the separate Unlimited Guarantees dated
as of June 28, 1996 and executed and delivered by U-Canada to the Collateral
Agent, for the
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ratable benefit of the Banks and the Co-Agents, which such Unlimited Guarantees
are governed by Massachusetts law and Nova Scotia law, respectively each of the
foregoing as amended by the Amendment to Loan Documents.
U- CANADA SHARES. Collectively, all of the shares of any class of
capital stock of U-Canada now or hereafter owned by Unicco or USC or any other
person.
U-FINANCE. See Preamble.
U-FINANCE SHARES. Collectively, all of the shares of any class of stock
of U-Finance now or hereafter owned by Unicco or any other person.
U-GOVERNMENT. See Preamble.
U-GOVERNMENT SHARES. Collectively, all of the shares of any class of
capital stock of U-Government now or hereafter owned by USC or any other person.
U-SECURITY. See Preamble.
U-SECURITY SHARES. Collectively, all of the shares of any class of
capital stock of U-Security now or hereafter owned by USC or any other person.
UNICCO. See Preamble.
UNICCO PLEDGE AGREEMENT. The Share Pledge Agreement dated as of June 28,
1996 and executed and delivered by Unicco to the Collateral Agent, for the
ratable benefit of the Banks and the Co-Agents, as amended by the Amendment to
Loan Documents, pursuant to which all of the U-Canada Shares owned by Unicco are
pledged to the Collateral Agent.
UNICCO SHARES. Collectively, all of the shares of any class of capital
stock of Unicco now or hereafter owned by the Equity Owners or any other person.
USC. See Preamble.
USC PLEDGE AGREEMENT. The Share Pledge Agreement dated as of June 28,
1996 and executed and delivered by USC to the Collateral Agent, for the ratable
benefit of the Banks and the Co-Agents, as amended by the Amendment to Loan
Documents, pursuant to which all of the U-Canada Shares owned by USC are pledged
to the Collateral Agent.
USC SHARES. Collectively, all of the shares of any class of capital
stock of USC now or hereafter owned by Unicco or any other person.
USC SUBSIDIARIES. Collectively, (i) Unicco Security Services, Inc., and
(ii) Unicco Government Services, Inc.
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1.2. TERMS OF GENERAL APPLICATION. For all purposes of this Agreement
and the other Security Documents, except as otherwise expressly provided herein
or therein or unless the context otherwise requires:
(i) references to any person defined in this Agreement refer to such
person and its successor in title and assigns or (as the case may be) his
successors, assigns, heirs, executors, administrators and other legal
representatives;
(ii) references to any agreement, instrument or document defined in
this Agreement refer to such document as originally executed, or if subsequently
varied, extended, renewed, modified, amended, restated or supplemented from time
to time, as so varied, extended, renewed, modified, amended, restated or
supplemented and in effect at the relevant time of reference thereto;
(iii) words importing the singular only shall include the plural and
VICE VERSA, and the words importing the masculine gender shall include the
feminine gender and VICE VERSA, and all references to dollars, $, U.S. Dollars
or United States Dollars, shall be to Dollars;
(iv) accounting terms not otherwise defined in this Agreement or any
of the other Security Documents have the meanings assigned to them in accordance
with GAAP or Canadian GAAP, as the case may be, on a basis consistent with the
financial statements referred to in Section 4.7 of this Agreement;
(v) as used herein, unless otherwise specifically stated to the
contrary, references to GAAP shall be applicable to Unicco, USC, U-Finance and
the USC Subsidiaries, and references to Canadian GAAP shall be applicable to
U-Canada; and
(vi) all financial statements and other financial information
provided by the Borrower or any other member of the Borrower Affiliated Group to
the Agent or any Bank shall be provided with reference to Dollars.
SECTION II
DESCRIPTION OF CREDIT
2. THE CREDIT FACILITY.
2.1. THE LOANS.
(a) REVOLVING CREDIT LOANS. Subject to the terms and conditions set
forth in this Agreement, each of the Banks severally agrees to lend to the
Borrowers and the Borrowers may borrow, repay and reborrow from time to time
during the period beginning on the Closing Date and ending on the Revolving
Credit Maturity Date, such
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amounts as requested by the Borrowers up to a maximum aggregate principal amount
outstanding (after giving effect to all amounts requested) at any one time equal
to such Bank's Revolving Credit Commitment; PROVIDED, HOWEVER, that the maximum
aggregate principal amount of all Revolving Loans outstanding (after giving
effect to the amounts requested), plus the aggregate Stated Amount of Letters of
Credit outstanding at such time, plus the aggregate amount of any unreimbursed
draws under outstanding Letters of Credit, shall not at any time exceed the
lesser of (i) the aggregate amount of the Revolving Credit Commitments of all of
the Banks, and (ii) the Borrowing Base; and PROVIDED, FURTHER, that at the time
any Borrower requests a Revolving Loan and after giving effect to the making
thereof, no Default or Event of Default has occurred and is continuing.
The Revolving Loans shall be made PRO RATA in accordance with the
Revolving Credit Commitment Percentage of each Bank. If the aggregate principal
amount of Revolving Loans outstanding, plus the aggregate Stated Amount of
Letters of Credit outstanding at such time, plus the aggregate amount of any
unreimbursed draws under outstanding Letters of Credit shall at any time exceed
the Revolving Credit Commitments of all the Banks then in effect or the then
Borrowing Base, the Borrowers shall immediately pay to the Administrative Agent
for the respective accounts of the Banks the amount of such excess. Failure to
make such payment on demand shall be an Event of Default hereunder.
(b) LOAN ACCOUNT. The Administrative Agent shall enter Loans and
advances made by the Banks to the Borrowers pursuant to this Agreement as debits
in the Loan Account. The Administrative Agent shall also record in the Loan
Account all payments made by the Borrowers on account of the Loans and may also
record therein, in accordance with customary accounting practices, other debits
and credits, including customary banking charges and all interest, fees, charges
and expenses chargeable to the Borrowers under this Agreement. The balance of
the Loan Account shall reflect the amount of the Borrowers' Obligations
hereunder and shall be considered correct absent manifest error.
2.2. THE NOTES.
(a) THE REVOLVING CREDIT NOTES. The Revolving Loans shall be evidenced
by separate Amended and Restated Revolving Credit Notes of the Borrowers to each
Bank in or substantially in the form of EXHIBIT A hereto (collectively, the
"Revolving Credit Notes"), with appropriate insertions.
(b) NOTE SCHEDULES. The Administrative Agent and the Banks shall, and
are hereby irrevocably authorized by the Borrowers to, enter on the schedule
forming a part of its respective Note or otherwise in its records, appropriate
notations evidencing the date and the amount of each Loan, as applicable, the
interest rate applicable thereto and the date and amount of each payment of
principal made by the Borrowers with respect thereto; and in the absence of
manifest error, such notations shall constitute conclusive evidence thereof. The
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Administrative Agent and each Bank is hereby irrevocably authorized by the
Borrowers to attach to and make a part of its respective Note a continuation of
any such schedule as and when required. No failure on the part of the
Administrative Agent or any Bank to make any notation as provided in this
subsection (b) shall in any way affect any Loan or the rights or obligations of
the Banks or the Borrowers with respect thereto.
2.3. CONVERSION. Provided that no Default or Event of Default shall have
occurred be continuing, and subject to and in accordance with the provisions of
Section 2.4(a), the Borrowers may convert all or any part (in integral multiples
of $100,000) of any outstanding Loan into a Loan of the other type provided for
in this Agreement in the same aggregate principal amount, on any Business Day
(which, in the case of a conversion of a Eurodollar Loan, shall be the last day
of the Interest Period applicable to such Eurodollar Loan). The Borrowers shall
give the Administrative Agent prior notice of each such conversion (which notice
shall be effective upon receipt) in accordance with Section 2.4. All such
conversions shall be made PRO RATA in accordance with each Bank's Commitment
Percentage.
2.4. NOTICE AND MANNER OF BORROWING OR CONVERSION OF LOANS.
(a) Whenever the Borrowers desire to obtain or continue a Loan hereunder
or convert an outstanding Loan into a Loan of the other type provided for in
this Agreement, the Borrowers shall notify the Administrative Agent (which
notice shall be irrevocable) by telecopy and telephone received no later than
12:00 p.m. (Boston time) on the day on which the requested Loan is to be made or
continued as or converted to a Base Rate Loan, and received no later than 12:00
p.m. (Boston time) on the date three Business Days before the day on which the
requested Loan is to be made or continued as or converted to a Eurodollar Loan,
PROVIDED that no more than five Eurodollar Loans may be outstanding at any one
time. Such notice by the Borrowers shall specify (i) the effective date and
amount of each Loan to be obtained, continued or converted (or portion thereof
to be continued or converted, as the case may be), subject to the limitations
set forth in Section 2.1, (ii) the interest rate option to be applicable
thereto, and (iii) the duration of the applicable Interest Period, if any
(subject to the provisions of the definition of Interest Period and Section
2.9). Each Eurodollar Loan must be for an amount equal to at least $500,000 or
an integral multiple thereof. Each such telephonic notification shall be
immediately followed by a written confirmation thereof by the Borrowers in
substantially the form of EXHIBIT B hereto (a "Notice of Borrowing or
Conversion"), PROVIDED that if such written confirmation differs in any material
respect from the action taken by the Administrative Agent, the records of the
Administrative Agent shall be conclusive absent manifest error. The
Administrative Agent agrees that upon receipt of any such telephonic or written
notice of borrowing, it shall notify the other Banks thereof with reasonable
promptness.
(b) Subject to the terms and conditions hereof, each Bank shall make
available to the Administrative Agent, in immediately available funds, no later
than 2:00 p.m. (Boston time) on the date upon which any Base Rate Loan or
Eurodollar Loan is to be made, such Bank's Commitment Percentage of the
requested Loan. The Administrative
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<PAGE> 31
Agent shall, in turn, make each Loan on the effective date specified therefor by
crediting the amount of such Loan to the Borrowers' demand deposit account with
the Administrative Agent. In no event shall the BankBoston (in its capacity as
Administrative Agent) have any obligation to make any funding or shall any Bank
be obligated to fund more than its applicable Commitment Percentage of the
requested Base Rate Loan or Eurodollar Loan.
2.5. COMMITMENT FEE. The Borrowers shall pay to the Administrative
Agent, for the accounts of the Banks in accordance with their respective
Revolving Credit Commitment Percentages, from the Closing Date through the
Revolving Credit Maturity Date, a commitment fee on the average daily amount of
the unborrowed portion of the Revolving Credit Commitments during each fiscal
quarter or portion thereof. Such commitment fee shall be computed by multiplying
such unborrowed portion of the Revolving Credit Commitments in each fiscal
quarter by the rate per annum determined for each quarter by reference to Table
1 below, based upon the Funded Debt Ratio on the last day of the immediately
preceding fiscal quarter:
TABLE 1
Funded Debt Ratio at the end of the Commitment Fee
----------------------------------- --------------
immediately preceding quarter
-----------------------------
a) greater than or equal to 4.00 to 1 .50%
b) less than 4.00 to 1 but greater than .375%
or equal to 3.00 to 1
c) less than 3.00 to 1 .25%
Commitment fees shall be payable quarterly in arrears, on the last day of March,
June, September and December of each year beginning December 31, 1997, and on
the Revolving Credit Maturity Date. From the Closing Date through the date after
the day on which the quarterly financial statements are delivered to the Agent,
the Commitment Fee shall equal .50%. Without prejudice to the rights of the
Banks and the Agent under Section 7 or otherwise, if the Borrowers have failed
to deliver the financial statements when required to be delivered by them
pursuant to Section 5.1(a) or Section 5.1(b), and such financial statements,
when delivered, evidence that the Commitment Fee (x) should have been increased
for the applicable quarter, any such increase shall be implemented retroactively
from the date on which such financial statements were required to be delivered,
or (y) should have been decreased, any such decrease shall be effective only
from the date on which such financial statements are actually received by the
Agent. The Borrowers shall notify the Agent in writing of any change in the
Commitment Fee when they submit the financial statements upon which such change
in the Commitment Fee is based, but the
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failure of the Borrowers to give such notification shall not affect the right of
any party to an adjustment (if applicable).
2.6. [Intentionally Omitted.]
2.7. ADMINISTRATIVE AGENT'S FEES. The Borrowers shall pay to the
Administrative Agent, for its own account, the fees (the "Administrative Agent's
Fees") in the amounts and at the times outlined in the agent's fee letter.
2.8. REDUCTION OF REVOLVING CREDIT COMMITMENT. The Borrowers may from
time to time by written notice delivered to the Administrative Agent at least
three Business Days prior to the date of the requested reduction, reduce by
integral multiples of $100,000 any unborrowed portion of the aggregate Revolving
Credit Commitments. Any such reduction shall be PRO RATA based on the Revolving
Credit Commitment Percentage of each of the Banks. No reduction of the Revolving
Credit Commitments shall be subject to reinstatement.
2.9. DURATION OF INTEREST PERIODS.
(a) Subject to the provisions of the definition of Interest Period, the
duration of each Interest Period applicable to a Eurodollar Loan shall be as
specified in the applicable Notice of Borrowing or Conversion. The Borrowers
shall have the option to elect a subsequent Interest Period to be applicable to
such Loan by giving notice of such election to the Administrative Agent received
no later than 10:00 a.m. Boston time on the date three Business Days before the
end of the then applicable Interest Period if such Loan is to be continued as or
converted to a Eurodollar Loan.
(b) If the Administrative Agent does not receive a notice of election of
duration of an Interest Period for a Eurodollar Loan pursuant to subsection (a)
above within the applicable time limits specified therein, or if, when such
notice must be given, a Default or Event of Default exists, the Borrowers shall
be deemed to have elected to convert such Loan in whole into a Base Rate Loan on
the last day of the then current Interest Period with respect thereto.
(c) Notwithstanding the foregoing, the Borrower may not select an
Interest Period that would end, but for the provisions of the definition of
Interest Period, after the Revolving Credit Maturity Date.
2.10. INTEREST RATES AND PAYMENTS OF INTEREST.
(a) Each Revolving Loan which is a Base Rate Loan shall bear interest on
the outstanding principal amount thereof at a rate per annum equal to the Base
Rate plus the Applicable Base Rate Margin, which rate shall change
contemporaneously with any change in the Base Rate. Such interest shall be
payable quarterly in arrears on the first day of each succeeding quarter in
which a Base Rate Loan is outstanding hereunder, beginning
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January 1, 1998, and when such Loan is due (whether at maturity, by reason of
acceleration or otherwise).
(b) Each Revolving Loan which is a Eurodollar Loan shall bear interest
on the outstanding principal amount thereof, for each Interest Period applicable
thereto, at a rate per annum equal to the Adjusted Eurodollar Rate plus the
Applicable Eurodollar Margin. Such interest shall be payable for such Interest
Period on the last day thereof and when such Eurodollar Loan is due (whether at
maturity, by reason of acceleration or otherwise) and, if such Interest Period
is longer than 3 months, at intervals of 3 months after the first day thereof.
(c) For purposes of this Section 2.10, (i) the "Applicable Base Rate
Margin" shall be equal to (A) from the Closing Date through the day after the
date on which the quarterly financial statements required to be delivered
pursuant to Section 5.1(b) for the quarter ending September 30, 1997 (the
"September 30 Financial Statements") are delivered to the Agent, a percentage
equal to 0.50%, and (B) thereafter, the percentage determined for each Rate
Period by reference to Table 2 below, and (ii) the "Applicable Eurodollar
Margin" shall be (A) from the Closing Date through the day after which the
September 30 Financial Statements are required to be delivered are delivered to
the Agent, a percentage equal to 2.00%, and (B) thereafter, the percentage
determined for each Rate Period by reference to Table 2 below:
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<PAGE> 34
TABLE 2
Applicable Applicable
Funded Debt Ratio Base Rate Eurodollar
----------------- Margin Margin
------ ------
a) greater than or equal to 5.00 to 1 1.00% 2.50%
b) less than 5.00 to 1 but greater than 0.75% 2.25%
or equal to 4.50 to 1
c) less than 4.50 to 1 but greater than 0.50% 2.00%
or equal to 4.00 to 1
d) less than 4.00 to 1 but greater than 0.25% 1.75%
or equal to 3.50 to 1
e) less than 3.50 to 1 but greater than 0.00% 1.50%
or equal to 3.00 to 1
f) less than 3.00 to 1 0.00% 1.25%
For purposes of determining the Applicable Base Rate Margin and the Applicable
Eurodollar Margin, the Funded Debt Ratio will be tested as of the end of each
fiscal quarter of the Borrowers, commencing with the fiscal quarter ending
September 30, 1997, based on the annual or quarterly financial statements
required to be delivered pursuant to Section 5.1(a) or Section 5.1(b),
respectively. For purposes of determining the interest rate for any Rate Period
hereunder, any interest rate change shall be effective on the date after the
date on which the financial statements required to be delivered pursuant to
Section 5.1(a) or Section 5.1(b) are delivered to the Agent. Without prejudice
to the rights of the Banks and the Agent under Section 7 or otherwise, if the
Borrowers have failed to deliver the financial statements when required to be
delivered by them pursuant to Section 5.1(a) or Section 5.1(b), and such
financial statements, when delivered, evidence that the Applicable Base Rate
Margin and the Applicable Eurodollar Margin (x) should have been increased for
the applicable Rate Period, any such increase shall be implemented retroactively
from the date on which such financial statements were required to be delivered,
or (y) should have been decreased, any such decrease shall be effective only
from the date on which such financial statements are actually received by the
Agent. The Borrowers shall notify the Agent in writing of any change in the
Applicable Base Rate Margin and the Applicable Eurodollar Margin when they
submit the financial statements upon which such change in the Applicable Base
Rate Margin and the Applicable Eurodollar Margin is based, but the failure of
the Borrowers to give such notification shall not affect the right of any party
to an adjustment (if applicable).
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2.11. CHANGED CIRCUMSTANCES.
(a) In the event that:
(i) on any date on which the Adjusted Eurodollar Rate would otherwise
be set the Administrative Agent shall have determined in good
faith (which determination shall be final and conclusive) that
adequate and fair means do not exist for ascertaining the
Interbank Offered Rate, or
(ii) at any time the Administrative Agent (or, in the case of
subclause (ii) below, any Bank) shall have determined in good
faith (which determination shall be final and conclusive) that:
(A) the making or continuation of, or conversion of any Loan
to, a Eurodollar Loan has been made impracticable or
unlawful by (l) the occurrence of a contingency that
materially and adversely affects the Interbank Eurodollar
market or (2) compliance by the Agent or any Bank in good
faith with any applicable law or governmental regulation,
guideline or order or interpretation or change thereof by
any governmental authority charged with the
interpretation or administration thereof or with any
request or directive of any such governmental authority
(whether or not having the force of law); or
(B) the Adjusted Eurodollar Rate shall no longer represent
the effective cost to the Administrative Agent or any
Bank for United States dollar deposits in the interbank
Eurodollar market;
then, and in any such event, the Administrative Agent shall forthwith so notify
the Borrowers thereof. Until the Administrative Agent notifies the Borrowers
that the circumstances giving rise to such notice no longer apply, the
obligation of each Bank to allow selection by the Borrowers of the type of Loan
affected by the contingencies described in this Section 2.11(a) (herein called
"AFFECTED LOANS") shall be suspended. If at the time the Administrative Agent so
notifies the Borrowers, the Borrowers have previously given the Administrative
Agent a Notice of Borrowing or Conversion with respect to one or more Affected
Loans but such Loans have not yet gone into effect, such notification shall be
deemed to be void and the Borrowers may borrow Loans of a non-affected type by
giving a substitute Notice of Borrowing or Conversion pursuant to Section 2.4.
Upon such date as shall be specified in such notice (which shall not be
earlier than the date such notice is given) the Borrowers shall, with respect to
the outstanding Affected Loans, prepay the same, together with interest thereon
and any amounts required to be paid pursuant to Section 2.16, and may borrow a
Loan of another type in accordance with Section 2.1 hereof by giving a Notice of
Borrowing or Conversion pursuant to Section 2.4.
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<PAGE> 36
(b) In case any law, regulation, treaty or official directive or the
interpretation or application thereof by any court or by any governmental
authority charged with the administration thereof or the compliance with any
guideline or request of any central bank or other governmental authority
(whether or not having the force of law):
(i) subjects the Agent, any Bank or any member of the Borrower
Affiliated Group to any tax (including, without limitation, any
withholding tax) with respect to payments of principal or
interest or any other amounts payable hereunder or under any of
the Security Documents by any member of the Borrower Affiliated
Group or otherwise with respect to the transactions contemplated
hereby (except for taxes on the overall net income of the Agent
or such Bank imposed by the United States of America or any
political subdivision thereof), or
(ii) imposes, modifies or deems applicable any deposit insurance,
reserve, special deposit or similar requirement against assets
held by, or deposits in or for the account of, or loans by, the
Agent or any Bank (other than such requirements as are already
included in the determination of the Adjusted Eurodollar Rate),
or
(iii) imposes upon the Agent or any Bank any other condition with
respect to its performance under this Agreement,
and the result of any of the foregoing is to increase the cost to the Agent or
such Bank, reduce the income receivable by the Agent or such Bank or impose any
expense upon the Agent or such Bank with respect to any Loans, the
Administrative Agent shall notify the Borrower thereof. The Borrowers jointly
and severally agree to pay to the Agent or such Bank the amount of such increase
in cost, reduction in income or additional expense as and when such cost,
reduction or expense is incurred or determined, upon presentation by the Agent
or such Bank of a statement in the amount and setting forth the Agent's or such
Bank's calculation thereof, which statement shall be deemed true and correct
absent manifest error.
2.12. CAPITAL REQUIREMENTS. If after the date hereof the Agent or any
Bank determines that (i) the adoption of or change in any law, rule, regulation
or guideline regarding capital requirements for banks or bank holding companies,
or any change in the interpretation or application thereof by any governmental
authority charged with the administration thereof, or (ii) compliance by the
Agent or any Bank or its parent bank holding company with any guideline, request
or directive of any such entity regarding capital adequacy (whether or not
having the force of law), has the effect of reducing the return on the Agent's
or such Bank's or such holding company's capital as a consequence of the Agent's
or such Bank's commitment to make Loans hereunder to a level below that which
the Agent or such Bank or such holding company could have achieved but for such
adoption, change or compliance (taking into consideration the Agent's or such
Bank's or such holding company's then existing policies with respect to capital
adequacy and
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assuming the full utilization of such entity's capital) by any amount deemed by
the Agent or such Bank to be material, then the Administrative Agent shall
notify the Borrowers thereof. The Borrowers agree to pay to the Agent or such
Bank the amount of such reduction of capital as and when such reduction is
determined, upon presentation by the Agent or such Bank of a statement in the
amount and setting forth the Agent's or such Bank's calculation thereof, which
statement shall be deemed true and correct absent manifest error. In determining
such amount, the Agent or such Bank may use any reasonable averaging and
attribution methods.
2.13. PAYMENTS AND PREPAYMENTS OF THE LOANS.
(a) The entire principal of the Revolving Credit Notes shall be
absolutely due and payable by the Borrowers to the Banks having Revolving Credit
Commitments on the Revolving Credit Maturity Date. All of the other Indebtedness
evidenced by the Revolving Credit Notes shall, if not sooner paid, also be
absolutely due and payable by the Borrowers to such Banks on the Revolving
Credit Maturity Date.
(b) Revolving Loans that are Base Rate Loans may be voluntarily prepaid
at any time, without premium or penalty, upon one Business Day's prior written
notice to the Administrative Agent. Subject to the provisions of Section 2.16,
Revolving Loans that are Eurodollar Loans may be voluntarily prepaid at any
time, without premium or penalty, on the last day of any Interest Period
applicable thereto, upon three Business Days' prior written notice to the
Administrative Agent. Any interest accrued on the amounts so prepaid on
Revolving Loans that are Base Rate Loans (if and to the extent that the
Revolving Credit Commitments are reduced simultaneously with such prepayment)
and on Revolving Loans that are Eurodollar Loans, to the date of such payment,
must be paid at the time of any such payment. No prepayment of the Revolving
Loans prior to the Revolving Credit Maturity Date shall affect the Total
Commitment unless so elected by the Borrowers in accordance with the terms
hereof or impair the Borrowers' right to borrow as set forth in Section 2.l.
Partial prepayments of the Revolving Loans (other than as a result of sweeps
made into the Loan Account from any account of any member of the Borrower
Affiliated Group pursuant to the Lockbox Agreement or other Cash Management
Agreement by the Collateral Agent) shall be in an amount equal to $100,000 or an
integral multiple thereof. In the case of any partial payment of the Revolving
Loans, the total amount of such partial payment shall be allocable among the
Revolving Loans, subject to adjustment as provided in Section 8.5, PRO RATA in
accordance with the Revolving Credit Commitment Percentage of each Bank.
2.14. METHOD OF PAYMENT. All payments and prepayments of principal and
all payments of interest and other amounts shall be made by the Borrowers to the
Administrative Agent, for the respective accounts of the Banks or (as the case
may be) the Agent, at 100 Federal Street, Boston, Massachusetts 02110, in
immediately available funds, on or before 12:00 p.m. (Boston time) on the due
date thereof, free and clear of, and without any deduction or withholding for,
any taxes or other payments. The Borrowers authorize the Agent and each Bank, in
the Agent's or such Bank's sole discretion, to charge to any deposit account
which any member of the Borrower Affiliated Group may maintain with
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the Agent or such Bank the principal, interest, fees, charges, taxes and
expenses provided for in this Agreement or any other Loan Document or Security
Document, or to advance to the Borrowers and to charge to them as a Revolving
Loan a sum sufficient to pay such principal, interest, fees, charges, taxes and
expenses, with advice thereafter sent to Unicco's chief financial officer in
accordance with the Agent's or such Bank's customary practice.
2.15. OVERDUE PAYMENTS.
(a) Overdue principal (whether at maturity, by reason of acceleration or
otherwise) and, to the extent permitted by applicable law, overdue interest and
fees or any other amounts payable hereunder or under any Note shall bear
interest from and including the due date thereof until paid, compounded monthly
and payable on demand, at a rate per annum equal to (i) if such due date occurs
prior to the end of an Interest Period, 2% above the interest rate applicable to
such Loan for such Interest Period until the expiration of such Interest Period,
and thereafter, 2% above the rate then applicable to Base Rate Loans; and (ii)
in all other cases, 2% above the rate then applicable to Base Rate Loans, which
interest shall be payable on demand.
(b) If a payment of principal or interest hereunder is not made within
10 days after its due date, the Borrowers will also pay on demand a late payment
charge equal to 2.5% of the amount of such payment. Nothing in the preceding
sentence shall affect the Agent's or any Bank's right to exercise any of its
rights or remedies, including those provided in Section 7.2, if an Event of
Default has occurred and is continuing.
2.16. PAYMENTS NOT AT END OF INTEREST PERIOD. If the Borrowers for any
reason make any payment of principal with respect to any Eurodollar Loan on any
day other than the last day of an Interest Period applicable to such Eurodollar
Loan, or fail to borrow or continue or convert to a Eurodollar Loan after giving
a Notice of Borrowing or Conversion pursuant to Section 2.4, the Borrowers shall
pay to the Administrative Agent for the respective accounts of the Banks an
amount computed pursuant to the following formula:
L = (R - T) X P X D
---------------
360
L = amount payable to the Administrative Agent for the accounts of the
Banks
R = interest rate on such Loan
T = effective interest rate per annum at which any readily marketable
bond or other obligation of the United States, selected at the
Administrative Agent's sole discretion, maturing on or near the
last day of the then applicable Interest Period of such Loan and
in approximately the same amount as such Loan can be purchased by
the Administrative Agent on the day of such payment of principal
or failure to borrow or continue or convert
P = the amount of principal prepaid or the amount of the requested
Loan
D = the number of days remaining in the Interest Period as of the date
of such payment or the number of days of the requested Interest
Period
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<PAGE> 39
The Borrowers shall pay such amount upon presentation by the Administrative
Agent of a statement setting forth the amount and the Administrative Agent's
calculation thereof pursuant hereto, which statement shall be deemed true and
correct absent manifest error.
2.17. COMPUTATION OF INTEREST AND FEES. Interest and all fees payable
hereunder shall be computed daily on the basis of a year of 360 days and paid
for the actual number of days for which due. If the due date for any payment of
principal is extended by operation of law, interest shall be payable for such
extended time. If any payment required by this Agreement becomes due on a day
that is not a Business Day such payment may be made on the next succeeding
Business Day (subject to clause (i) of the definition of Interest Period), and
such extension shall be included in computing interest in connection with such
payment.
2.18. LETTERS OF CREDIT. Upon the terms and subject to the conditions of
this Agreement, and in reliance upon the representations, warranties and
covenants of the Borrowers made herein, the Administrative Agent agrees to
issue, under the joint responsibilities of the Banks, to the extent permitted by
law and the Uniform Customs and Practices of the International Chamber of
Commerce governing Letters of Credit (Publication No. 500 or any successor
thereto), one or more Letters of Credit on the application and for the account
of any Borrower, during the period from the date hereof to the Revolving Credit
Maturity Date; PROVIDED that the Stated Amount of Letters of Credit outstanding
at any time, PLUS the aggregate amount of all unreimbursed draws under such
outstanding Letters of Credit, shall not at any time (i) exceed $2,500,000 in
the aggregate or (ii) when added to the aggregate debit balance in the Loan
Account relating to Revolving Loans at such time, exceed the lesser of (x) the
aggregate Revolving Credit Commitments of all the Banks or (y) the Borrowing
Base; and PROVIDED, FURTHER that at the time the Borrowers request the issuance
of a Letter of Credit and after giving effect to the issuance thereof, there has
not occurred and is not continuing a Default or an Event of Default. It is
understood and agreed by the parties hereto that amounts drawn under such
Letters of Credit shall become immediately due and payable by the Borrowers to
the Administrative Agent, for the ratable accounts of the Agent and the Banks,
and shall bear interest at the rate then applicable to Revolving Loans that are
Eurodollar Loans, and, if not paid forthwith, shall, to the extent there is
availability under the Borrowing Base, be added to the Loan Account as Revolving
Loans and shall be immediately due and payable upon the maturity of the
Revolving Credit Notes. The issuance of any such Letter of Credit shall result
in a reduction of availability under the Borrowing Base in accordance with
Section 2.1. In addition, all Letters of Credit shall, unless the Agent and the
Banks otherwise agree in writing, have a stated expiration date not to exceed
one year and shall, in any event, expire not later than the Revolving Credit
Maturity Date.
In order to evidence such Letters of Credit, the Borrower shall enter
into, with the Agent (including the Administrative Agent) and the Banks, such
agreements and execute such instruments and documents as the Agent (including
the Administrative Agent) and the Banks require, including, but not limited to,
a letter of credit application and agreement.
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2.19. LETTER OF CREDIT FEES. A Letter of Credit fee shall be payable to
the Administrative Agent, for the ratable accounts of the Banks having Revolving
Credit Commitments, on each Letter of Credit issued at a rate per annum equal to
the Applicable Eurodollar Margin then in effect multiplied by the face amount of
such Letter of Credit, PROVIDED that the Applicable Eurodollar Margin referenced
above shall be reduced by 1/2 of 1% on Letters of Credit issued solely as a
guaranty of the performance by any member of the Borrower Affiliated Group under
any contract of service. In addition a Letter of Credit fee will be payable to
the Administrative Agent, for its own account, for each Letter of Credit issued
by such Administrative Agent, equal to 1/8 of 1% of the face amount of such
Letter of Credit, along with such other fees as are customarily charged by the
Administrative Agent on Letters of Credit. All such Letter of Credit Fees shall
be payable quarterly in arrears, on the last day of each quarter in which any
Letter of Credit is outstanding.
SECTION III
CONDITIONS OF LOANS
3.1. CONDITIONS PRECEDENT TO INITIAL REVOLVING LOAN OR INITIAL
CONTINUATION OF REVOLVING LOAN. The obligation of the Banks to make or continue
the initial Revolving Loan on the Closing Date is subject to the fulfillment on
the date hereof of each of the following conditions precedent:
3.1.1 LOAN DOCUMENTS, ETC.
(i) Each of (A) the Restatement Documents, (B) the High Yield
Subordinated Debt Documents, and (c) all amendments or modifications to the MCRC
Subordinated Debt Documents, shall have been duly and properly authorized,
executed and delivered by the respective parties thereto and shall be in full
force and effect on and as of the Closing Date.
(ii) Executed original counterparts of each of the Restatement
Documents, and copies of each of the High Yield Subordinated Debt Documents and
all amendments or modifications to the MCRC Subordinated Debt Documents, as
executed and delivered by the respective parties thereto, shall have been
furnished to the Agent.
3.1.2 LEGALITY OF TRANSACTIONS. No change in applicable law or
regulation shall have occurred as a consequence of which it shall have become
and continue to be unlawful (i) for the Agent or the Banks to perform any of
their agreements or obligations under any of the Loan Documents to which they
are a party on the Closing Date, or (ii) for any member of the Borrower
Affiliated Group to perform any of its agreements or obligations under any of
the Loan Documents or Ancillary Documents to which it is a party on the Closing
Date.
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<PAGE> 41
3.1.3 REPRESENTATIONS AND WARRANTIES. Each of the representations
and warranties made by or on behalf of each member of the Borrower Affiliated
Group to the Agent and the Banks in this Agreement or the other Loan Documents
shall be true and correct when made, shall, for all purposes of this Agreement,
be deemed to be repeated on and as of the Closing Date, and shall be true and
correct on and as of such date.
3.1.4 PERFORMANCE, ETC. Each member of the Borrower Affiliated
Group shall have duly and properly performed, complied with and observed each of
its covenants, agreements and obligations contained in any of the Loan Documents
or Ancillary Documents to which it is a party or by which it is bound which are
required to be performed on or prior to the Closing Date. No event shall have
occurred on or prior to the Closing Date and be continuing on such Closing Date,
and no condition shall exist on such Closing Date, which constitutes a Default
or an Event of Default.
3.1.5 CERTIFIED COPIES OF CHARTER DOCUMENTS. The Agent shall have
received from (i) U-Finance a copy, certified by a duly authorized officer to be
true and complete on the Closing Date, of (a) its charter, as in effect on such
date of certification, certified by the Secretary of State of the jurisdiction
of incorporation or formation, and (b) its by-laws as in effect on such date and
(ii) from Unicco, a copy, certified by a duly authorized officer to be true and
complete on the Closing Date, of its by-laws as in effect on such date. The
Agent shall also have received evidence that USC is to become a wholly-owned
Subsidiary of Unicco effective on the Closing Date.
3.1.6 PROOF OF CORPORATE ACTION; BRINGDOWN. The Agent shall have
received (A) from each member of the Borrower Affiliated Group a certificate
including a copy, certified by a duly authorized officer of each such person to
be true and complete on the Closing Date, of records of all corporate, trust or
limited liability company action taken by such member of the Borrower Affiliated
Group to authorize (i) its execution and delivery of the Restatement Documents
and the new Ancillary Documents to which it is or is to become a party, (ii) its
performance of all of its agreements and obligation under each of such
documents, and (iii) any borrowings and other transactions contemplated by this
Agreement and (B) from each member of the Borrower Affiliated Group (other than
U-Finance) a certification that the charter documents and other incorporation or
other organizational documents of each member of the Borrower Affiliated Group
(other than U-Finance) have not been amended or modified since June 28, 1996
(other than the adoption of by-laws by Unicco).
3.1.7 INCUMBENCY CERTIFICATE. The Agent shall have received from
each member of the Borrower Affiliated Group an incumbency certificate, dated
the Closing Date and signed by a duly authorized officer of each such person,
and giving the name and bearing a specimen signature of each individual who
shall be authorized: (i) to sign, in the name and on behalf of each such person,
each of the Restatement Documents and each of the new Ancillary Documents to
which it is or is to become a party; (ii) with respect to the Borrowers, to make
application for the Loans or conversion thereof; and (iii) to give notices to
take other action on its behalf under the Loan Documents.
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3.1.8 PROCEEDINGS AND DOCUMENTS. All corporate, governmental and
other proceedings in connection with the transactions contemplated by the Loan
Documents, the Ancillary Documents and all instruments and documents incidental
thereto, shall be in form and substance reasonably satisfactory to the Agent,
and the Agent shall have received all such counterpart originals or certified or
other copies of all such instruments and documents as the Agent shall have
reasonably requested.
3.1.9 GOOD STANDING, ETC. The Agent shall have received a
long-form certificate of the Secretary of State of the respective jurisdictions
of incorporation or formation of each member of the Borrower Affiliated Group as
to such member's legal existence and good standing in such state and listing all
documents on file for each such person in the office of said Secretary of State.
The Agent shall also have received a certificate from an officer of each member
of the Borrower Affiliated Group certifying as to the jurisdictions in which
each such member of the Borrower Affiliated Group is qualified to do business
and certifying that such member of the Borrower Affiliated Group is qualified in
each jurisdiction where it is required to be qualified, except to the extent the
failure to so qualify could not reasonably be expected to have a material
adverse effect on any member of the Borrower Affiliated Group, together with
copies of the certificates of foreign qualification for each member of the
Borrower Affiliated Group from the five jurisdictions in which the revenues are
the highest for such member.
3.1.10 FEES. The Borrowers shall have complied with their
obligations under Section 2.7 to pay Administrative Agent's Fees.
3.1.11 LEGAL OPINIONS. The Agent shall have received (i) a
written legal opinion, addressed to the Agent and the Banks, dated the Closing
Date, from Messrs. Posternak, Blankstein & Lund, L.L.P. counsel to the Borrower
Affiliated Group, in form and substance satisfactory to the Agent and the Bank,
and (ii) a written legal opinion, addressed to the Agent and the Banks, dated
the Closing Date, from Messrs. Green Parish, Canadian counsel to U-Canada, each
in form and substance satisfactory to the Agent. The Agent shall have also
received copies of all of the legal opinions delivered in connection with the
High Yield Subordinated Debt Transactions and the amendments to the MCRC
Subordinated Debt, and shall be entitled to rely on each thereon.
3.1.12 FINANCIAL CONDITION. The Banks shall be satisfied (i) that
the financial statements referred to in Section 4.7 fairly present the business
and financial condition of the Borrower Affiliated Group as at the close of
business on the date thereof and the results of operations for the periods then
ended, (ii) that, assuming the High Yield Subordinated Debt Transactions had
occurred as of the Closing Date, the PRO FORMA financial statements referred to
in Section 4.7 fairly present the business and financial condition of the
Borrower Affiliated Group as at the close of business on such date and the
results of operations for the periods then ended, and (iii) that there has been
no material adverse change in the assets, business or financial condition of any
member of the Borrower Affiliated Group since the most recent financial
statements referred to therein.
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3.1.13 SECURITY DOCUMENTS; INSURANCE. The Security Documents and
the appropriate financing statements or jurisdictional equivalents (in the name
of U-Finance) and other documents in respect thereof and necessary to enable the
Collateral Agent to perfect a legal, valid and enforceable first-priority
security interest thereunder for the benefit of the Banks and the Agent, shall
have been duly executed by U-Finance, and filed or recorded, as applicable, in
all appropriate filing offices or other locations necessary for the perfection
of such first-priority interests, and all other actions necessary for the
perfection of such interests shall have been completed and all actions, if any,
necessary to enable the Collateral Agent to maintain a perfected legal, valid
and enforceable first-priority security interest in the assets of each member of
the Borrower Affiliated Group (other than U-Finance) shall have been taken, it
being acknowledged by the Agent and the Banks that the Borrowers will not have
complied with the Federal Assignment of Claims Act on the Closing Date. In
addition, the Collateral Agent shall have received satisfactory evidence that
all Cash Management Agreements have been delivered, and that all necessary
arrangements thereunder shall have become effective. The Collateral Agent shall
also have received satisfactory evidence that such insurance as is required by
the Security Documents to be in effect in respect of all property and fixtures
of each member of the Borrower Affiliated Group is in effect and the interest of
the Collateral Agent as loss payee and additional insured has been duly endorsed
upon all instruments of insurance issued in respect of such property, PROVIDED
that with respect to the members of the Borrower Affiliated Group other than
U-Finance, such satisfactory evidence may be provided by way of a certification
from an officer of each such member of the Borrower Affiliated Group. All such
insurance shall provide for 30 days' advance written notice to the Collateral
Agent of any cancellation thereof.
3.1.14 BORROWING BASE REPORT. The Borrowers shall have delivered
to the Agent, on behalf of the Borrower Affiliated Group, a Borrowing Base
Report in form and substance satisfactory to the Banks, dated as of the Closing
Date.
3.1.15 CONSUMMATION OF CORPORATE TRANSACTIONS. The High Yield
Subordinated Debt Transactions (including all funding thereunder) and the
amendments to the MCRC Subordinated Debt Documents shall have been completed and
become effective as of the Closing Date upon the terms set forth in the High
Yield Subordinated Debt Documents and the amendments to the MCRC Subordinated
Debt Documents (in the form delivered to and approved by the Agent), without
recourse to any provision of said High Yield Subordinated Debt Documents or said
amendments permitting the waiver by any party thereto of any condition,
obligation, covenant or other requirement without the Agent's prior written
consent. The outstanding Obligations under the Existing Loan Agreement shall
have been paid in full in cash.
3.1.16 SHAREHOLDERS' EQUITY. The Agent shall have received
satisfactory evidence that the shareholders' equity in Unicco, as determined in
accordance with GAAP, is no less than $8,750,000.
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3.2. CONDITIONS PRECEDENT TO ALL LOANS AND LETTERS OF CREDIT. The
obligation of each Bank to make each Loan and issue each Letter of Credit,
including the initial Loan and Letter of Credit, or continue or convert Loans to
Loans of the other type, is further subject to the following conditions:
(a) timely receipt by the Administrative Agent of the Notice of
Borrowing or Conversion as provided in Section 2.4;
(b) the representations and warranties contained in Section IV shall be
true and accurate in all material respects on and as of the date of such Notice
of Borrowing or Conversion and on the effective date of the making, continuation
or conversion of each Loan or issuance of each Letter of Credit as though made
at and as of each such date (except to the extent that such representations and
warranties expressly relate to an earlier date), and no Default or Event of
Default shall have occurred and be continuing, or would result from such Loan;
(c) the resolutions referred to in Section 3.1.6 shall remain in full
force and effect; and
(d) no change shall have occurred in any law or regulation or
interpretation thereof that, in the opinion of counsel for the Agent or any
Bank, would make it illegal or against the policy of any governmental agency or
authority for the Agent or such Bank to make Loans or issue Letters of Credit
hereunder.
The making, continuation or conversion of each Loan and issuance of each
Letter of Credit shall be deemed to be a representation and warranty by each
member of the Borrower Affiliated Group on the date of the making, continuation
or conversion of such Loan or issuance of such Letter of Credit as to the
accuracy of the facts referred to in subsection (b) of this Section 3.2.
SECTION IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Agent and the Banks to enter into this Agreement
and to make Loans and issue Letters of Credit hereunder, each member of the
Borrower Affiliated Group jointly and severally represents and warrants to the
Agent and each Bank that:
4.1. ORGANIZATION AND QUALIFICATION. Each member of the Borrower
Affiliated Group (a) is a corporation, business trust or unlimited liability
company duly organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation or formation as indicated on EXHIBIT D,
(b) has all requisite corporate, trust or unlimited liability company, as
applicable, power to own its property and conduct its business as now conducted
and as presently contemplated to be conducted (both before and after giving
effect to the High Yield Subordinated Debt Transactions) and (c) is duly
qualified and in
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good standing as a foreign corporation, trust or unlimited liability company, as
applicable, and is duly authorized to do business in each jurisdiction (which
jurisdictions are listed on the Certificate referred to in the second sentence
of Section 3.1.9) where the nature of its properties or business requires such
qualification, except where the failure to be so qualified would not have a
material adverse effect on the business, financial condition, assets or
properties of any member of the Borrower Affiliated Group.
4.2. CORPORATE OR TRUST AUTHORITY. The execution, delivery and
performance of each of the Loan Documents and Ancillary Documents to which any
member of the Borrower Affiliated Group is or is to become a party and the
transactions contemplated hereby and thereby (including, without limitation, the
High Yield Subordinated Debt Transactions) are within the corporate, trust or
limited liability company, as applicable, power and authority of each member of
the Borrower Affiliated Group and have been authorized by all necessary
corporate or trust, as applicable, proceedings, and do not and will not (a)
require any consent or approval of any trustees, creditors, trustees for
creditors or shareholders of such member of the Borrower Affiliated Group (other
than any such consent that has been duly obtained prior to the Closing Date and
remains in full force and effect), (b) contravene any provision of the charter
or trust documents or by-laws of such member of the Borrower Affiliated Group or
any law, rule or regulation applicable to such member of the Borrower Affiliated
Group, (c) contravene any provision of, or constitute an event of default or
event that, but for the requirement that time elapse or notice be given, or
both, would constitute an event of default under, any other agreement,
instrument, order or undertaking binding on such member of the Borrower
Affiliated Group, or (d) result in or require the imposition of any Encumbrance
on any of the properties, assets or rights of such member of the Borrower
Affiliated Group, other than in favor of the Agent.
4.3. VALID OBLIGATIONS. Each of the Loan Documents and Ancillary
Documents to which each member of the Borrower Affiliated Group is or is to
become a party and all of their respective terms and provisions are the legal,
valid and binding obligations of such member of the Borrower Affiliated Group,
enforceable in accordance with their respective terms, except as limited by
bankruptcy, insolvency, reorganization, moratorium or other laws affecting the
enforcement of creditors' rights generally, and except as the remedy of specific
performance or of injunctive relief is subject to the discretion of the court
before which any proceeding therefor may be brought.
4.4. CONSENTS OR APPROVALS. The execution, delivery and performance of
each of the Loan Documents and Ancillary Documents to which each member of the
Borrower Affiliated Group is or is to become a party and the transactions
contemplated herein and therein do not require any approval or consent of, or
filing or registration with, any governmental or other agency or authority, or
any other party, except filings under the Uniform Commercial Code (or the
Canadian equivalent thereof) in connection with the Collateral consisting of
personalty.
4.5. TITLE TO PROPERTIES; ABSENCE OF ENCUMBRANCES. Each member of the
Borrower Affiliated Group has good and marketable title to all of the
properties, assets and rights of
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every name and nature now purported to be owned by it, including, without
limitation, such properties, assets and rights as are reflected in the Initial
Financial Statement (except such properties, assets or rights as have been
disposed of in the ordinary course of business since the date thereof), free
from all Encumbrances except Permitted Encumbrances, and, except as so
disclosed, free from all defects of title that might materially adversely affect
any of such properties, assets or rights. All such properties and assets and all
properties which are leaseholds are free and clear (other than in favor of the
Collateral Agent) of all liens, claims, charges, security interests and other
Encumbrances of any nature whatsoever, except, with respect to all such
properties and assets, (i) liens for current taxes not yet due, and (ii) as
otherwise disclosed on EXHIBIT D hereto. The rights, properties and other assets
presently owned, leased or licensed by each member of the Borrower Affiliated
Group and described elsewhere in this Agreement include all rights, properties
and other assets necessary to permit the Borrower Affiliated Group to conduct
its businesses and the Business (as such term is defined in the Purchase
Agreement) in all material respects in the same manner as its businesses and the
Business (as such term is defined in the Purchase Agreement) have been conducted
prior to the date hereof. At the time any member of the Borrower Affiliated
Group pledges, sells, assigns or transfers to the Collateral Agent any
instrument, document of title, security, chattel paper or other property
(including Inventory, contract rights and Accounts) or any proceeds or products
thereof, or any interest therein, such member of the Borrower Affiliated Group
shall be the lawful owner thereof and shall have good right to pledge, sell,
assign or transfer the same; none of such properties shall have been pledged,
sold, assigned or transferred to any person other than the Collateral Agent or
in any way encumbered (other than with respect to Permitted Encumbrances); and
such member of the Borrower Affiliated Group shall defend the same against the
claims and demands of all persons.
4.6 LOCATION OF RECORDS AND COLLATERAL; NAME CHANGE. Each member of the
Borrower Affiliated Group shall give the Collateral Agent written notice of each
location at which any material Collateral is or will be kept, including, in any
event, each office and each regional warehouse of such member of the Borrower
Affiliated Group and each office of such member of the Borrower Affiliated Group
at which the books and records of such member are kept (including, without
limitation, the books and records pertaining to Accounts Receivable and contract
rights are kept). Except as such notice is given, all Collateral owned by each
member of the Borrower Affiliated Group is and shall be kept, and all records of
each member of the Borrower Affiliated Group pertaining to Accounts Receivable
and contract rights are and shall be kept, at such location specified therefor
on EXHIBIT D and no material Collateral is kept at any location not set forth on
EXHIBIT D. The Borrowers shall give the Collateral Agent 30 days' prior written
notice of any change in the name or principal place of business or chief
executive office of any member of the Borrower Affiliated Group or any change in
the name or names under which any member of the Borrower Affiliated Group's
business is transacted.
4.7. FINANCIAL STATEMENTS. The Borrowers have furnished the Agent the
Combined and Combining balance sheet of the Borrower Affiliated Group as of June
29, 1997 and the statements of income, changes in shareholders' equity and cash
flow of the Borrower
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Affiliated Group for the fiscal year then ended, and related footnotes, audited
and certified by Price Waterhouse LLP (the "Initial Financial Statement"). The
Borrowers have also furnished to the Agent the unaudited PRO FORMA Combined and
Combining balance sheet of the Borrower Affiliated Group as at the Closing Date
and its related unaudited Combined and Combining statements of income, changes
in shareholders' equity and cash flow for the period ending on the Closing Date,
prepared as if the High Yield Subordinated Debt Transactions had occurred as of
June 29, 1997. All such financial statements were prepared in accordance with
GAAP and all such financial statements and income statements present fairly the
financial position of the Borrower Affiliated Group as of such dates and the
results of the operations of the Borrower Affiliated Group for such periods.
There are no liabilities, contingent or otherwise, not disclosed in any of such
financial statements that involve a material amount.
4.8. CHANGES. Since the date of the Initial Financial Statement, there
have been no changes in the assets, liabilities, financial condition, business
or prospects of any member of the Borrower Affiliated Group, other than changes
in the ordinary course of business, the effect of which has, individually or in
the aggregate, been materially adverse (both before and after giving effect to
the High Yield Subordinated Debt Transactions).
4.9. DEFAULTS. No Default or Event of Default has occurred and is
continuing. Each member of the Borrower Affiliated Group is in compliance with
its obligations under all of its Material Contracts.
4.10. TAXES. Each member of the Borrower Affiliated Group has filed all
federal, state and other tax returns required to be filed, and all taxes,
assessments and other governmental charges due from each member of the Borrower
Affiliated Group have been fully paid or adequate reserves have been established
therefor. No member of the Borrower Affiliated Group has executed any waiver of
limitations in respect of tax liabilities. Each member of the Borrower
Affiliated Group has established on its books reserves adequate for the payment
of all federal, state and other tax liabilities.
4.11. LITIGATION. Except as set forth on EXHIBIT D hereto, there is no
litigation, arbitration, proceeding or investigation pending or threatened
against any member of the Borrower Affiliated Group that, if adversely
determined, could result in a material judgment not fully covered by insurance,
could result in a forfeiture of all or any substantial part of the property of
any member of the Borrower Affiliated Group, or could otherwise have a material
adverse effect on the assets, business or prospects of any member of the
Borrower Affiliated Group.
4.12. SUBSIDIARIES. As of the date of this Agreement, no member of the
Borrower Affiliated Group has any Subsidiaries except as set forth on EXHIBIT D
hereto.
4.13. INVESTMENT COMPANY ACT. No member of the Borrower Affiliated Group
is subject to regulation under the Investment Company Act of l940, or any
jurisdictional equivalent
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4.14. COMPLIANCE WITH ERISA. Each member of the Borrower Affiliated
Group and each member of the Controlled Group have fulfilled their obligations
under the minimum funding standards of ERISA (or any jurisdictional equivalent)
and the Code and with respect to each Plan and are in compliance in all material
respects with the applicable provisions of ERISA (or any jurisdictional
equivalent) and the Code, and have not incurred any liability to the PBGC (or
any jurisdictional equivalent) or a Plan under Title IV of ERISA (or any
jurisdictional equivalent); no "reportable event" (as such term is defined in
ERISA (or any jurisdictional equivalent)) has occurred with respect to any Plan;
and no "prohibited transaction" (as such term is defined in ERISA (or any
jurisdictional equivalent)), excluding transactions which have received an
exemption, has occurred with respect to any Plan other than any "multi-employer
pension plan" (as such term is defined in ERISA (or any jurisdictional
equivalent)) and no member of the Borrower Affiliated Group and no member of the
Controlled Group knows or has reason to know of the occurrence of any such
"prohibited transaction" with respect to any Plan that is a "multi-employer
plan".
4.15. ENVIRONMENTAL MATTERS.
(a) Each member of the Borrower Affiliated Group has obtained all
permits, licenses and other authorizations which are required under all
Environmental Laws, except to the extent failure to have any such permit,
license or authorization would not have a material adverse effect on the
business, financial condition or operations of any member of the Borrower
Affiliated Group. Each member of the Borrower Affiliated Group is in compliance
with the terms and conditions of all such permits, licenses and authorizations,
and is also in compliance with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and timetables
contained in any applicable Environmental Law or in any regulation, code, plan,
order, decree, judgment, injunction, notice or demand letter issued, entered,
promulgated or approved thereunder, except to the extent failure to comply would
not have a material adverse effect on the business, financial condition or
operations of any member of the Borrower Affiliated Group.
(b) No notice, notification, demand, request for information, citation,
summons or order has been issued, no complaint has been filed, no penalty has
been assessed and no investigation or review is pending or threatened by any
governmental or other entity with respect to any alleged failure by any member
of the Borrower Affiliated Group to have any permit, license or authorization
required in connection with the conduct of its business or with respect to any
Environmental Laws, including, without limitation, Environmental Laws relating
to the generation, treatment, storage, recycling, transportation, disposal or
release of any Hazardous Materials. No member of the Borrower Affiliated Group
has been identified in writing as a potentially responsible party (as that term
has been construed pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, or any similar state or
local laws or jurisdictional equivalent), except for at the sites listed and
described in EXHIBIT D and at no other sites. Notwithstanding the
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foregoing, the representations made in this clause (b) with respect to
U-Government and U-Security shall be deemed to be made to the best knowledge of
the members of the Borrower Affiliated Group so long as Unicco and USC are fully
indemnified by Ogden for all liabilities arising out of any event or occurrence
described in this clause (b) which would give rise to any breach of such
representations (without taking into account such knowledge standard).
(c) No material oral or written notification of a release of a Hazardous
Material has been filed by or on behalf of any member of the Borrower Affiliated
Group and no property now or previously owned, leased or used by any member of
the Borrower Affiliated Group is listed or proposed for listing on the National
Priorities List under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, or on any similar state list of sites
requiring investigation or clean-up.
(d) There are no liens or Encumbrances arising under or pursuant to any
Environmental Laws on any of the real property or properties owned by any member
of the Borrower Affiliated Group, or to the best knowledge of the Borrower
Affiliated Group, on any of the real property or properties leased or used in
day-to-day operations by any member of the Borrower Affiliated Group, and no
governmental actions have been taken or are in process which could subject any
of such owned properties to such liens or Encumbrances or, to the best knowledge
of the Borrower Affiliated Group, which could subject any of such leased or used
properties to such liens or Encumbrances, or as a result of which any member of
the Borrower Affiliated Group would be required to place any notice or
restriction relating to the presence of Hazardous Materials at any property
owned by it in any deed to such property.
(e) No member of the Borrower Affiliated Group nor, to the best
knowledge of any member of the Borrower Affiliated Group, any previous owner,
tenant, occupant or user of any property owned, leased or used by any member of
the Borrower Affiliated Group has (i) engaged in or permitted any operations or
activities upon or any use or occupancy of such property, or any portion
thereof, for the purpose of or in any way involving the handling, manufacture,
treatment, storage, use, generation, release, discharge, refining, dumping or
disposal (whether legal or illegal, accidental or intentional) of any Hazardous
Materials on, under, in or about such property, except to the extent commonly
used in day-to-day operations of such property and in such case only in
compliance with all Environmental Laws, or (ii) transported any Hazardous
Materials to, from or across such property except to the extent commonly used in
day-to-day operations of such property and, in such case, in compliance with,
all Environmental Laws; nor to the best knowledge of any member of the Borrower
Affiliated Group have any Hazardous Materials migrated from other properties
upon, about or beneath such property, nor (iii) to the best knowledge of any
member of the Borrower Affiliated Group, are any Hazardous Materials presently
constructed, deposited, stored or otherwise located on, under, in or about such
property except to the extent commonly used in day-to-day operations of such
property and, in such case, in compliance with, all Environmental Laws.
Notwithstanding the foregoing, the representations made by the Borrower
Affiliated Group in the clause (e) with respect to
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properties used, but not leased or owned, by any member of the Borrower
Affiliated Group shall apply only to material instances of manufacture,
treatment, storage, use, generation, release, discharge, refining, dumping or
disposal at such used properties.
4.16 DISCLOSURE. No representations and warranties made by any member of
the Borrower Affiliated Group in this Agreement, any other Loan Document, any
Ancillary Document or in any other agreement, instrument, document, certificate,
statement or letter furnished to the Agent or the Banks by or on behalf of any
member of the Borrower Affiliated Group, and no other factual information
heretofore or contemporaneously furnished by or on behalf of any member of the
Borrower Affiliated Group to the Agent or the Banks in connection with any of
the transactions contemplated by any of the Loan Documents or Ancillary
Documents contains any untrue statement of material fact or omits to state a
material fact necessary in order to make the statements contained therein not
misleading in light of the circumstances in which they are made. Except as
disclosed herein, there is no fact known to any member of the Borrower
Affiliated Group which materially adversely affects, or which would in the
future materially adversely affect, the financial position, business,
operations, or affairs of any member of the Borrower Affiliated Group.
4.17 SOLVENCY. Both before and after giving effect to the High Yield
Subordinated Debt Transactions, and all Indebtedness incurred by, and Guarantees
provided by, the Borrower Affiliated Group on the Closing Date, no member of the
Borrower Affiliated Group (i) is Insolvent, or will be rendered Insolvent by the
Indebtedness incurred in connection therewith, (ii) will be left with
unreasonably small capital with which to engage in its business, even allowing
for a reasonable margin of error in the projections of the future performance of
such member of the Borrower Affiliated Group, (iii) will have incurred
Indebtedness beyond its ability to pay such Indebtedness as it matures, and (iv)
will fail to have assets having a present fair salable value in excess of the
amount required to pay the probable liability on its then existing debts
(whether matured or unmatured, liquidated or unliquidated, absolute fixed or
contingent).
4.18 COMPLIANCE WITH STATUTES, ETC. Except as disclosed on EXHIBIT D,
each member of the Borrower Affiliated Group is in compliance with all
applicable statutes, regulations and orders of, and all applicable restrictions
imposed by, all governmental bodies, domestic or foreign, in respect of the
conduct of its business and the ownership of its property, except such
noncompliances as will not, individually or in the aggregate, have a material
adverse effect on the business, operations, property, assets, nature of assets,
condition (financial or otherwise) or prospects of any member of the Borrower
Affiliated Group.
4.19 CAPITALIZATION. (i) On and as of the Closing Date, the authorized
capital stock of Unicco consists of an unlimited number of voting and non-voting
common shares of beneficial interest, of which 1054 shares are issued and
outstanding and are held by the persons and in the amounts set forth in EXHIBIT
D. All such outstanding shares have been duly and validly issued, are fully paid
and non-assessable. Unicco does not have
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outstanding any other securities convertible into or exchangeable for its
capital stock or outstanding any rights to subscribe for or to purchase, or any
options for the purchase of, or any agreements providing for the issuance
(contingent or otherwise) of or, any calls, commitments or claims of any
character relating to, its capital stock.
(ii) On and as of the Closing Date, after giving effect to the
contribution by the Equity Owners of the USC Shares to Unicco, (i) the
authorized capital stock of USC consists of an aggregate of 100,000 shares of
voting and 100,000 shares of non-voting common stock, of which 1,000 voting and
54 non-voting common shares are issued and outstanding and will be held by
Unicco. All such outstanding shares have been duly and validly issued, are fully
paid and non-assessable. USC does not have outstanding any other securities
convertible into or exchangeable for its capital stock or outstanding any rights
to subscribe for or to purchase, or any options for the purchase of, or any
agreements providing for the issuance (contingent or otherwise) of or, any
calls, commitments or claims of any character relating to, its capital stock.
(iii) On and as of the Closing Date, (i) the authorized capital stock
of U-Security consists of 5,000 shares of common stock, of which 100 shares are
issued and outstanding and are held by USC. All such outstanding shares have
been duly and validly issued, are fully paid and non-assessable. U-Security does
not have outstanding any other securities convertible into or exchangeable for
its capital stock or outstanding any rights to subscribe for or to purchase, or
any options for the purchase of, or any agreements providing for the issuance
(contingent or otherwise) of or, any calls, commitments or claims of any
character relating to, its capital stock.
(iv) On and as of the Closing Date, (i) the authorized capital stock
of U-Government consists of 100 shares of common stock, of which 100 shares are
issued and outstanding and are held by USC. All such outstanding shares have
been duly and validly issued, are fully paid and non-assessable. U-Government
does not have outstanding any other securities convertible into or exchangeable
for its capital stock or outstanding any rights to subscribe for or to purchase,
or any options for the purchase of, or any agreements providing for the issuance
(contingent or otherwise) of or, any calls, commitments or claims of any
character relating to, its capital stock.
(v) On and as of the Closing Date, (i) the authorized shares of
U-Canada consist of 1,000,000 shares, of which 100 shares are issued and
outstanding and are held by the persons and in the amounts set forth in EXHIBIT
D. All such outstanding shares have been duly and validly issued, are fully paid
and non-assessable. U-Canada does not have outstanding any other securities
convertible into or exchangeable for its capital shares or outstanding any
rights to subscribe for or to purchase, or any options for the purchase of, or
any agreements providing for the issuance (contingent or otherwise) of or, any
calls, commitments or claims of any character relating to, its capital shares.
(vi) On and as of the Closing Date, (i) the authorized shares of
U-Finance consist of 200,000 shares of common stock, of which 100 shares are
issued and outstanding and are
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held by Unicco. All such outstanding shares have been duly and validly issued,
are fully paid and non-assessable. U-Finance does not have outstanding any other
securities convertible into or exchangeable for its capital shares or
outstanding any rights to subscribe for or to purchase, or any options for the
purchase of, or any agreements providing for the issuance (contingent or
otherwise) of or, any calls, commitments or claims of any character relating to,
its capital shares.
4.20 LABOR RELATIONS. No member of the Borrower Affiliated Group is
engaged in any unfair labor practice. Except as disclosed on EXHIBIT D, there is
(i) no material unfair labor practice complaint pending or threatened against
any member of the Borrower Affiliated Group before the National Labor Relations
Board or any jurisdictional equivalent, and no material grievance or arbitration
proceeding arising out of or under any collective bargaining agreement is so
pending against any member of the Borrower Affiliated Group or, to the best
knowledge of any member of the Borrower Affiliated Group, threatened against it,
(ii) no material labor dispute, slowdown or stoppage pending against any member
of the Borrower Affiliated Group or, to the best knowledge of any member of the
Borrower Affiliated Group, threatened against any member of the Borrower
Affiliated Group, and (iii) to the best knowledge of each member of the Borrower
Affiliated Group, no union representation question exists with respect to the
employees of any member of the Borrower Affiliated Group and, to the best
knowledge of each member of the Borrower Affiliated Group, no union organizing
activities are taking place.
4.21 CERTAIN TRANSACTIONS. Except as set forth on EXHIBIT D, none of the
officers, partners, directors, or employees of any member of the Borrower
Affiliated Group is presently a party to any transaction with any other member
of the Borrower Affiliated Group (other than for services as employees, officers
and directors), including any contract, agreement or other arrangement providing
for the furnishing of services to or by, providing for rental of real or
personal property to or from, or otherwise requiring payments to or from any
officer, partner, director or such employee or, to the knowledge of any member
of the Borrower Affiliated Group, any corporation, partnership, trust or other
entity in which any officer, partner, director, or any such employee or natural
person related to such officer, partner, director or employee or other person in
which such officer, partner, director or employee has a direct or indirect
beneficial interest has a substantial interest or is an officer, director,
trustee or partner.
4.22 RESTRICTIONS ON THE BORROWER AFFILIATED GROUP. No member of the
Borrower Affiliated Group is a party to or bound by any contract, agreement or
instrument, or subject to any charter or other corporate restriction, materially
and adversely affecting the business, property, assets, operations or condition
(financial or otherwise) of any member of the Borrower Affiliated Group.
4.23 LEASES. EXHIBIT D hereto contains a complete list of all material
leases, occupancy agreements and all amendments thereto and all other documents
affecting rights and obligations thereunder, including without limitation,
assignments and subleases pursuant to which any member of the Borrower
Affiliated Group leases real
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property, and license agreements pursuant to which a third party would have the
right to enter upon the leased premises (herein individually referred to as a
"Lease" and collectively referred as the "Leases"). The copies of the Leases
heretofore delivered by the Borrower Affiliated Group to the Agent are true,
correct and complete copies thereof and each of such Leases is in full force and
effect in accordance with the terms thereof. Except as disclosed on EXHIBIT D,
neither the tenant nor, to the best knowledge of any member of the Borrower
Affiliated Group, the landlord, under any Lease is in default under the
applicable Lease (beyond any applicable period of grace) or has given or
received any notice of cancellation or termination of such Lease or condemnation
of the leased premises. Each of the tenants under the Leases is in possession of
their respective premises and is open for business, and no such tenant has
assigned any of its interest in any of the Leases, as collateral or otherwise or
sublet all or any portion of the premises covered by any Lease or granted any
license with respect thereto, except as may be otherwise disclosed on EXHIBIT D
hereto. No member of the Borrower Affiliated Group knows of any material work to
be performed by the landlord under the Leases that has not been completed and no
member of the Borrower Affiliated Group has any knowledge of any claims pending
or threatened against the landlord for failure to have performed or completed
any such work.
4.24 FRANCHISES, PATENTS, COPYRIGHTS, ETC. Each member of the Borrower
Affiliated Group possesses all franchises, patents, copyrights, trademarks,
tradenames, service marks, licenses and permits, and rights in respect of the
foregoing, adequate for the conduct of its business substantially now conducted
without known conflict with any rights of others and, in each case, free of any
Encumbrance not permitted by Section 6.5, except for (i) certain security
licenses required for the operation of U-Security, the non-possession of which
would not have a material adverse effect on the business, operations, property,
assets, nature of assets, condition (financial or otherwise) or prospects of the
Borrower Affiliated Group taken as a whole, and (ii) other licenses and permits
the non-possession of which would not have a material adverse effect on the
business operations, property, assets, nature of assets, condition (financial or
otherwise) or prospects of any member of the Borrower Affiliated Group.
4.25 COLLATERAL. All of the Obligations of the members of the Borrower
Affiliated Group to the Agent and the Banks under or in respect of the Loan
Documents will, at all times from and after the execution and delivery of each
of the Security Documents, be entitled to the benefits of and be secured by each
of such Security Documents to the extent provided therein.
4.26 MATERIAL CONTRACTS. No member of the Borrower Affiliated Group is a
party to any contract that is material to the business of the Borrower
Affiliated Group taken as a whole other than the Purchase Documents, the
Restatement Documents and the Subordinated Debt Documents.
4.27 INTERDEPENDENCE OF THE BORROWER AFFILIATED GROUP. In order to
induce each of the Banks and the Agent to enter into this Agreement and the
other Loan
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Documents to which it is a party, and grant the Loans and issue the Letters of
Credit hereunder, each member of the Borrower Affiliated Group hereby represents
and warrants as follows:
(i) the business of each member of the Borrower Affiliated Group shall
benefit from the successful performance of the business of each other member of
the Borrower Affiliated Group, and of the Borrower Affiliated Group as a whole;
(ii) each member of the Borrower Affiliated Group has cooperated to the
extent necessary and shall continue to cooperate with each other member of the
Borrower Affiliated Group to the extent necessary in the development and conduct
of each other member's business, and shall to the extent necessary share and
participate in the formulation of methods of operation, distribution, leasing,
inventory control, and other similar business matters essential to each such
member's business; and
(iii) the failure of any member of the Borrower Affiliated Group to
cooperate with all other members of the Borrower Affiliated Group in the conduct
of their respective businesses shall have an adverse impact on the business of
each other member of the Borrower Affiliated Group, and the failure of any such
member to associate or cooperate with all other members of the Borrower
Affiliated Group is reasonably likely to impair the goodwill of such member and
all other parties as a group.
SECTION V
AFFIRMATIVE COVENANTS
So long as any Bank has any commitment to make loans or issue Letters of
Credit hereunder or any Loan or other Obligation hereunder remains outstanding,
each member of the Borrower Affiliated Group jointly and severally covenants as
follows:
5.1. FINANCIAL STATEMENTS AND OTHER REPORTING REQUIREMENTS. The
Borrowers shall furnish to the Agent (and the Agent shall in turn furnish to the
Banks):
(a) as soon as available to the Borrower Affiliated Group, but in any
event within 90 days after the end of each fiscal year of the Borrower
Affiliated Group, a Combined and Combining balance sheet as of the end of, and a
related Combined and Combining statement of income, changes in stockholders' (or
members') equity and cash flow for, such year (with Unicco and USC statements
being presented on a Consolidated and Consolidating basis), prepared in
accordance with GAAP (or Canadian GAAP, as the case may be, and then converted
to United States GAAP) and audited and certified by Price Waterhouse LLP or
other independent certified public accountants reasonably acceptable to the
Agent and the Banks; and, concurrently with such financial statements, a copy of
said certified public accountants' management letter, if any, and a written
statement by such accountants that, in the making of the audit necessary for
their report and opinion upon such financial statements they have obtained no
knowledge of any Default or Event of Default
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under Section 6 of this Agreement or, if in the opinion of such accountants any
such Default or Event of Default exists, they shall disclose in such written
statement the nature and status thereof;
(b) as soon as available to the Borrower Affiliated Group, but in any
event within 45 days after the end of each fiscal quarter of each fiscal year of
the Borrower Affiliated Group, a Combined and Combining unaudited balance sheet
as of the end of, and a related unaudited statement of income, changes in
shareholders' equity and cash flow for, the portion of the fiscal year then
ended and for the fiscal quarter then ended, prepared in accordance with GAAP
(or Canadian GAAP, as the case may be, and then converted to United States GAAP)
but without footnotes and certified by the chief financial officer of each
member of the Borrower Affiliated Group, but subject, however, to normal,
recurring year-end adjustments that shall not individually or in the aggregate
be material in amount;
(c) as soon as available to the Borrower Affiliated Group but, in any
event within 30 days after the end of each fiscal month of each fiscal year of
the Borrower Affiliated Group, a Combined and Combining balance sheet as of the
end of, and a related Combined and Combining statement of income, changes in
stockholders' (or members') equity and cash flow for, the portion of the fiscal
year then ended and for the fiscal month then ended, prepared in accordance with
GAAP (or Canadian GAAP, as the case may be, and then converted to United States
GAAP), subject to normal, recurring year-end adjustments that shall not in the
aggregate be material in amount;
(d) [Intentionally Omitted];
(e) as soon as practical, but in any event, within 10 days after the end
of each fiscal month of each fiscal year of the Borrower Affiliated Group, a
written report in the form of EXHIBIT E hereto (such report being hereinafter
referred to as a "Borrowing Base Report"), setting forth the Borrowing Base as
of the last day of such fiscal month, certified on behalf of the Borrower
Affiliated Group by the chief financial officer of each member of the Borrower
Affiliated Group; and the Borrower Affiliated Group shall also, if the Agent so
requests, accompany each of such reports with assignments of Accounts in form
and substance satisfactory to the Agent;
(f) on or before the first day of each fiscal year of the Borrower
Affiliated Group, PRO FORMA forecasts of the Borrower Affiliated Group for such
fiscal year (it being recognized by the Banks that projections as to future
results are not to be viewed as facts and that the actual results for the period
or periods covered by the projections may differ from the projected results);
(g) concurrently with the delivery of each financial statement pursuant
to subsections (a) and (b) of this Section 5.l, a report in substantially the
form of EXHIBIT F hereto signed on behalf of each member of the Borrower
Affiliated Group by its chief financial officer, and including, without
limitation, computations in reasonable detail
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evidencing compliance with the covenants contained in Section 6.7, Section 6.8,
Section 6.9 and Section 6.10 and Section 6.17;
(h) promptly after the receipt thereof by any member of the Borrower
Affiliated Group, copies of any reports submitted to such member of the Borrower
Affiliated Group by independent public accountants in connection with any annual
or interim review of the accounts of such member of the Borrower Affiliated
Group made by such accountants (including ,without limitation, all management
letters at any time prepared by such accountants);
(i) promptly after the same are available, copies of all financial
statements as any member of the Borrower Affiliated Group shall send to its
stockholders, trustees or members or the holders of any of the Subordinated Debt
or that any member of the Borrower Affiliated Group may file with any
governmental authority at any time having jurisdiction over such member of the
Borrower Affiliated Group (including, without limitation, each of the Forms 10-Q
and 10-K filed by any member of the Borrower Affiliated Group with the
Securities and Exchange Commission and the reports required to be delivered
under Section 4.03 of the High Yield Indenture as in effect on the date hereof);
(j) (i) promptly after the giving of any notice to, or the receipt of
any notice from, any holder of the High Yield Subordinated Debt, including,
without limitation, any notice of default under, and any request for redemption
of, any of the High Yield Subordinated Debt, a copy of each such notice, but
excluding notices by Unicco or U-Finance of the making of regularly scheduled
payments on the High Yield Subordinated Debt, and (ii) copies of all amendments,
waivers and modifications of, to or under the Subordinated Debt Documents;
(k) if and when any member of the Borrower Affiliated Group gives or is
required to give notice to the PBGC (or any jurisdictional equivalent) of any
"Reportable Event" (as defined in Section 4043 of ERISA (and any jurisdictional
equivalent)) with respect to any Plan that might constitute grounds for a
termination of such Plan under Title IV of ERISA (or any jurisdictional
equivalent), or knows that any member of the Controlled Group or the plan
administrator of any Plan has given or is required to give notice of any such
Reportable Event, a copy of the notice of such Reportable Event given or
required to be given to the PBGC (or any jurisdictional equivalent) or, if such
notice is not given to the PBGC (or any jurisdictional equivalent), a
description of the content of the notice that is or would be required to be
given;
(l) immediately upon becoming aware of the existence of any condition or
event (i) that constitutes a Default or Event of Default (including, without
limitation, a default under any Ancillary Document), written notice thereof
specifying the nature and duration thereof and the action being or proposed to
be taken with respect thereto, or (ii) affecting any member of the Borrower
Affiliated Group which could reasonably be expected to have a material adverse
effect on the assets, business or prospects of any
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member of the Borrower Affiliated Group, written notice thereof specifying the
nature thereof and the action being or proposed to be taken with respect
thereto;
(m) promptly upon becoming aware of any litigation or of any
investigative proceedings by a governmental agency or authority commenced or
threatened against any member of the Borrower Affiliated Group of which it has
notice, or of a material change in any such existing litigation or proceedings,
the outcome of which would or might have a materially adverse effect on the
assets, business or prospects of any member of the Borrower Affiliated Group,
written notice thereof and the action being or proposed to be taken with respect
thereto;
(n) promptly upon becoming aware of any investigative proceedings by a
governmental agency or authority commenced or threatened against any member of
the Borrower Affiliated Group regarding any potential violation of Environmental
Laws or any spill, release, discharge or disposal of any Hazardous Material,
written notice thereof and the action being or proposed to be taken with respect
thereto; and
(o) from time to time, with reasonable promptness, such other financial
data and other information about any member of the Borrower Affiliated Group as
the Agent or any Bank may reasonably request.
5.2. CONDUCT OF BUSINESS. Each member of the Borrower Affiliated Group
shall:
(a) duly observe and comply in all material respects with all applicable
laws and requirements of any governmental authorities relative to its corporate
existence, rights and franchises, to the conduct of its business and to its
property and assets (including without limitation all Environmental Laws,
FIRREA, FDICIA and ERISA and any jurisdictional equivalents thereof), and shall
maintain and keep in full force and effect all licenses and permits necessary in
any material respect to the proper conduct of its business;
(b) maintain its corporate, trust or unlimited liability company,
existence, as the case may be, and qualify or remain qualified in each
jurisdiction where the failure to be so qualified would have a material adverse
effect on any member of the Borrower Affiliated Group;
(c) remain engaged in the facilities management and facilities services
business, except that any member of the Borrower Affiliated Group may withdraw
from any business activity which its Board of Directors, Board of Trustees or
Board of Managers, as the case may be, reasonably deems unprofitable or unsound,
PROVIDED that promptly after such withdrawal, such member of the Borrower
Affiliated Group shall provide the Agent with written notice thereof;
(d) at least 10 Business Days prior to forming any Subsidiary, give
notice thereof to the Agent (whereupon the Agent will so notify the other Banks)
and deliver to the Agent the Borrower Affiliated Groups' and such Subsidiary's
agreement, satisfactory to
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counsel for the Agent, that the Subsidiary shall be bound by the terms of this
Agreement, the other Security Documents and the related documents and
instruments as a Borrower hereunder and thereunder and shall enter into such
Security Documents as the Agent and the Banks request; and
(e) U-Finance shall not hold any material assets, become liable for any
material obligations or engage in any significant business, other than to
provide guaranties for certain Indebtedness of Unicco and the other members of
the Borrower Affiliated Group (to the extent such Guarantees are permitted by
Section 6.2).
5.3. MAINTENANCE AND INSURANCE. Each member of the Borrower Affiliated
Group shall maintain its properties in good repair, working order and condition
(reasonable wear and tear, and damage caused by fire or other casualty to the
extent fully covered by insurance (after giving effect to any applicable
commercially reasonable deductible), excepted) as required for the normal
conduct of its business (after giving effect to the Purchase Transactions) and
from time to time the members of the Borrower Affiliated Group will make or
cause to be made all needful and proper repairs, renewals, replacements,
additions and improvements thereto so that the business of the Borrower
Affiliated Group may be properly and advantageously conducted at all times and
shall maintain or cause to be maintained all Leases as may be required for the
conduct of the Borrower Affiliated Group's business. Each member of the Borrower
Affiliated Group shall at all times maintain liability and casualty insurance
with financially sound and reputable insurers in such amounts as the officers of
the members of the Borrower Affiliated Group in the exercise of their reasonable
judgment deem to be adequate. The Collateral Agent shall be named as loss payee
and additional insured and shall be given 30 days' prior written notice of any
cancellation of insurance. If any member of the Borrower Affiliated Group fails
to provide such insurance, the Collateral Agent, in its sole and complete
discretion, may provide such insurance and charge the cost thereof to the Loan
Account or to the Borrowers' deposit account with the Agent or any Bank. Any
payment not recovered from the Borrowers shall bear interest at the Base Rate
plus the Applicable Base Rate Margin then in effect. Neither the Agent nor any
Bank shall, by the fact of approving, disapproving, accepting, obtaining or
failing to obtain any such insurance, incur liability for the form or legal
sufficiency of insurance contracts, solvency of insurance companies or payment
of lawsuits, and each member of the Borrower Affiliated Group hereby expressly
assumes full responsibility therefor and liability, if any, thereunder. Each
member of the Borrower Affiliated Group shall furnish to the Collateral Agent
certificates or other evidence satisfactory to the Agent of compliance with the
foregoing insurance provisions. The provision of this Section 5.3 shall be
deemed to be supplemental to, but not duplicative of, the provisions of any of
the Security Documents that require the maintenance of insurance.
5.4. TAXES. Each member of the Borrower Affiliated Group shall pay or
cause to be paid all taxes, assessments or governmental charges on or against it
or its properties on or prior to the time when they become due; PROVIDED that
this covenant shall not apply to any tax, assessment or charge that is being
contested in good faith by appropriate proceedings
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and with respect to which adequate reserves have been established and are being
maintained in accordance with GAAP (or Canadian GAAP, as applicable) if no lien
shall have been filed to secure such tax, assessment or charge.
5.5. INSPECTION BY THE AGENT. Each member of the Borrower Affiliated
Group shall permit the Banks, through the Agent or the Agent's designee, at any
reasonable time and from time to time, to (i) visit and inspect the properties
(including the Real Properties) of each member of the Borrower Affiliated Group,
(ii) conduct commercial finance examinations of each member of the Borrower
Affiliated Group, (iii) examine and make copies of and take abstracts from the
books and records of each member of the Borrower Affiliated Group, and (iv)
discuss the affairs, finances and accounts of each member of the Borrower
Affiliated Group with its appropriate officers, employees and accountants. In
handling such information the Agent and the Banks shall exercise the same degree
of care that each exercises with respect to its own proprietary information of
the same types so as to maintain the confidentiality of any non-public
information thereby received, except that disclosure of such information may be
made (i) to the subsidiaries or affiliates of the Agent or any Bank in
connection with their present or prospective business relations with any member
of the Borrower Affiliated Group, (ii) to prospective transferees or purchasers
of an interest in the Loans, (iii) as required by law, regulation, rule or
order, subpoena, judicial order or similar order, (iv) as may be required in
connection with the examination, audit or similar investigation of the Agent or
any Bank and (v) to legal counsel to the Agent and the Banks in connection with
their representation of the Agent and the Banks under the Security Documents and
the transactions contemplated thereby.
5.6. MAINTENANCE OF BOOKS AND RECORDS. Each member of the Borrower
Affiliated Group shall keep adequate books and records of account, in which true
and complete entries will be made reflecting all of its business and financial
transactions, and such entries will be made in accordance with GAAP (or Canadian
GAAP, as applicable) and applicable law.
5.7. [Intentionally Omitted.]
5.8. ENVIRONMENTAL INDEMNIFICATION. Each member of the Borrower
Affiliated Group covenants and agrees that it will indemnify and hold the Agent
and each Bank harmless from and against any and all claims, expense, damage,
loss or liability incurred by the Agent or any Bank in connection with
environmental matters relating to any real property or properties owned, leased,
occupied or used by any member of the Borrower Affiliated Group.
5.9. USE OF PROCEEDS. The proceeds of the Revolving Loans will be used
by the Borrowers solely (i) to repay all of Unicco's obligations for borrowed
money under the Existing Credit Agreement (except to the extent the Borrowers
elect to keep Revolving Loans outstanding to BankBoston in accordance with and
subject to the terms hereof), the Indebtedness owing to Ogden in an aggregate
amount not to exceed $11,000,000 plus accrued interest and the Indebtedness
owing to the Equity Owners in an aggregate amount not to exceed $3,000,003 plus
accrued interest, (ii) to provide funding for Permitted
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Acquisitions, (iii) to provide working capital for the Borrower Affiliated
Group, and (iv) to pay fees, costs and expenses incurred or sustained by the
Borrower Affiliated Group in connection with the consummation of the
transactions referred to herein or contemplated hereby. No portion of any Loans
shall be used for the purpose of purchasing or carrying any "margin security" or
"margin stock" as such terms are used in Regulations G, U or X of the Board of
Governors of the Federal Reserve System.
5.10. PENSION PLANS. With respect to any Plan, the benefits under which
are guaranteed, in whole or in part, by the PBGC (or any jurisdictional
equivalent) or any governmental authority succeeding to any or all of the
functions of the PBGC (or any jurisdictional equivalent), the Borrower
Affiliated Group will (i) fund each Plan as required by the provisions of
Section 412 of the Code (or any jurisdictional equivalent); (ii) cause each Plan
to pay all benefits when due; and (iii) furnish the Co-Agents (a) promptly with
a copy of any notice of each Plan's termination sent to the PBGC (or any
jurisdictional equivalent) and (b) no later than the date of submission to the
Department of Labor (or any jurisdictional equivalent) or to the Internal
Revenue Service (or any jurisdictional equivalent), as the case may be, a copy
of any request for waiver from the funding standards or extension of the
amortization periods required by Section 412 of the Code.
5.11. FISCAL YEAR. Each member of the Borrower Affiliated Group shall
have a fiscal year ending on the last Sunday in June of each year and shall
notify the Agent of any change in such fiscal year (whereupon the Agent and the
Banks shall have the right to modify the timing of the financial covenants
hereunder accordingly in order to correspond to any such change in the fiscal
year of the Borrower Affiliated Group).
5.12. NET PROCEEDS. Without prejudice to and subject to Section 6.6, if
at any time, any Net Proceeds are received by any member of the Borrower
Affiliated Group, that portion of Net Proceeds (or such lesser amount as shall
be outstanding hereunder) necessary to cause the aggregate Excess Proceeds (as
defined in the High Yield Indenture) to be less than $5,000,000 will be paid to
the Agent, for the ratable benefit of the Agent and the Banks.
5.13. FURTHER ASSURANCES. At any time and from time to time each member
of the Borrower Affiliated Group shall execute and deliver such further
instruments and take such further action as may reasonably be requested by the
Agent or any Bank to effect the purposes of the Loan Documents and the Security
Documents.
SECTION VI
NEGATIVE COVENANTS
So long as any Bank has any commitment to make Loans or issue Letters of
Credit hereunder or any Loan or other Obligation hereunder remains outstanding,
each member of the Borrower Affiliated Group jointly and severally covenants as
follows:
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6.1. INDEBTEDNESS. No member of the Borrower Affiliated Group shall
create, incur, assume, guarantee or be or remain liable with respect to any
Indebtedness other than the following:
(a) Indebtedness of the Borrower Affiliated Group to the Agent and the
Banks under the Loan Documents or any other Security Document;
(b) Indebtedness in respect of current liabilities, other than for
borrowed money, of the members of the Borrower Affiliated Group incurred in the
ordinary course of business and of a type and magnitude consistent with past
practices;
(c) Indebtedness in respect of capital leases and purchase money
security interests of the members of the Borrower Affiliated Group representing
obligations permitted to be incurred by the terms of this Agreement and incurred
in the ordinary course of business and consistent with past practices; PROVIDED
that the aggregate principal amount of Indebtedness permitted by this clause (c)
shall not exceed $750,000 at any one time outstanding;
(d) Indebtedness existing or incurred on the date of this Agreement and
disclosed on EXHIBIT C hereto;
(e) Indebtedness secured by Permitted Encumbrances; and
(f) The indebtedness evidenced by the Subordinated Debt Documents,
PROVIDED that such Indebtedness remains subject at all times to the
Subordination Agreements as in effect on the date hereof or as amended in
accordance with the terms of Section 6.16 and the respective terms thereof, and
PROVIDED, FURTHER, that the aggregate principal amount of the High Yield
Subordinated Debt may not exceed $105,000,000 at any time.
6.2. CONTINGENT LIABILITIES. No member of the Borrower Affiliated Group
shall create, incur, assume or remain liable with respect to any Guarantees
other than the following:
(a) Guarantees in favor of the Agent and the Banks under this Agreement
or the other Security Documents;
(b) Guarantees existing on the date of this Agreement and disclosed on
EXHIBIT C hereto;
(c) Guarantees resulting from the endorsement of negotiable instruments
for collection in the ordinary course of business;
(d) Guarantees with respect to (i) surety, appeal, and return-of-money
and other similar obligations incurred in the ordinary course of business
(exclusive of obligations for the payment of borrowed money) not exceeding
(exclusive of the bonds referred to in
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clause (ii) below) in the aggregate at any time $250,000, and (ii) bid,
performance and performance and payment bonds obtained in the ordinary course of
business; and
(e) the Guarantees contemplated by Article 11 of the High Yield
Indenture, PROVIDED that such Guarantees are, and at all times remain,
subordinate to the Obligations in the manner set forth in Article 11.02 and
Article 10 of the Indenture as in effect on the date hereof, and the
subordinated Guaranties entered into on June 28, 1996 in favor of MCRC in
connection with the MCRC Subordinated Debt, as in effect on June 28, 1996,
PROVIDED that such Guarantees are, and at all times remain, subject to the MCRC
Subordination Agreement.
6.3. LEASES. No member of the Borrower Affiliated Group shall during any
fiscal year enter into any leases of personal property as lessee, except for
capital leases or leases providing for payments in any one fiscal year (whether
or not such payments are termed rent) in the aggregate for the Borrower
Affiliated Group of less than $500,000. Each member of the Borrower Affiliated
Group shall cause the landlord of any premises leased by such member of the
Borrower Affiliated Group after the Closing Date to deliver to the Agent, a
Landlord Waiver or a Landlord Consent and Estoppel Certificate, as required by
the Agent and the Banks, simultaneously with the execution of any real property
Lease.
6.4. SALE AND LEASEBACK. No member of the Borrower Affiliated Group
shall enter into any arrangement, directly or indirectly, whereby it shall sell
or transfer any property owned by it in order to lease such property or lease
other property that any member of the Borrower Affiliated Group intends to use
for substantially the same purpose as the property being sold or transferred.
6.5. ENCUMBRANCES. No member of the Borrower Affiliated Group shall
create, incur, assume or suffer to exist any mortgage, pledge, security
interest, lien or other charge or encumbrance, including the lien or retained
security title of a conditional vendor upon or with respect to any of its
property or assets ("ENCUMBRANCES"), or assign or otherwise convey any right to
receive income, including the sale or discount of Accounts Receivable with or
without recourse, except the following ("PERMITTED ENCUMBRANCES"):
(a) Encumbrances in favor of the Agent and the Banks under this
Agreement or any other Security Document;
(b) Encumbrances existing on the date of this Agreement and disclosed in
EXHIBIT C hereto;
(c) Liens for taxes, fees, assessments and other governmental charges to
the extent that payment of the same may be postponed or is not required in
accordance with the provisions of Section 5.4;
(d) Landlords' and lessors' liens in respect of rent not in default, to
the extent Landlord Waivers (as and to the extent required by the Agent and the
Banks) shall have
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been delivered to the Collateral Agent, or liens in respect of pledges or
deposits under workmen's compensation, unemployment insurance, social security
laws, or similar legislation (other than ERISA or any jurisdictional equivalent)
or in connection with appeal and similar bonds incidental to litigation;
mechanics', laborers' and materialmen's and similar liens, if the obligations
secured by such liens are not then delinquent; liens securing the performance of
bids, tenders, contracts (other than for the payment of money); and statutory
obligations incidental to the conduct of its business and that do not in the
aggregate materially detract from the value of its property or materially impair
the use thereof in the operation of its business;
(e) Judgment liens that shall not have been in existence for a period
longer than 20 days after the creation thereof or, if a stay of execution shall
have been obtained, for a period longer than 20 days after the expiration of
such stay;
(f) Easements, rights of way, restrictions and other similar charges or
Encumbrances relating to real property and not interfering in a material way
with the ordinary conduct of its business;
(g) Encumbrances securing the purchase price of capital assets
(including rights of lessors under capital leases) to the extent such purchase
is permitted hereunder (including in connection with Permitted Acquisitions), or
such Encumbrances exist on the date hereof and have been disclosed to the Agent
in writing (or, if not so disclosed, relate to assets which are not,
individually or in the aggregate, material in amount), PROVIDED, HOWEVER, that
(A) each such Encumbrance is given solely to secure the purchase price of, or
the lease obligations relating to, such property, does not extend to any other
property and is given at the time of the acquisition of the property, and (B)
the Indebtedness secured thereby does not exceed the lesser of the cost of such
property or its fair market value at the time such security interest attaches;
and
(h) liens of surety bonding companies bonding for the benefit of the
Borrower Affiliated Group securing Guarantees permitted under Section 6.2(d).
6.6. MERGER; CONSOLIDATION; SALE OR LEASE OF ASSETS; ACQUISITIONS. No
member of the Borrower Affiliated Group shall sell, lease or otherwise dispose
of assets, stock or other properties (valued at the lower of cost or market),
other than (i) sales or use of Inventory wholly in the ordinary course of
business, if any, and (ii) sales of assets not in the ordinary course of
business in an aggregate amount for the Borrower Affiliated Group not to exceed
$250,000 in any fiscal year; or liquidate, merge or consolidate into or with any
other person, PROVIDED that (a) Finance, USC, any wholly-owned subsidiary of
USC, or U-Canada may merge with and into or sell its assets to Unicco so long as
Unicco is the surviving entity of each such merger and the Agent has received 30
days' prior written notice of each such sale or merger and (b) U-Canada or any
wholly owned Subsidiary of USC may merge with and into or sell its assets to USC
so long as USC is the surviving entity of each such merger and the Agent has
received 30 days' prior written notice of each such sale or merger. Without
prejudice to Section 5.2(c), no member of the Borrower Affiliated Group will
acquire all or
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substantially all of the assets or capital stock or other equity interests of
any person, except in connection with a Permitted Acquisition and transactions
permitted by Sections 6.10(iv) and (v).
6.7. TOTAL DEBT RATIO. The Borrower Affiliated Group shall not permit
the Total Debt Ratio of the Borrower Affiliated Group as at the last day of any
fiscal quarter in any fiscal period identified below to be greater than the
ratio specified below opposite such period:
Period Maximum
------ Ratio
-----
For any fiscal quarter ending on or after 6.00 to 1
September 30, 1997 through June 30, 1998
For any fiscal quarter ending on or after 5.75 to 1
September 30, 1998 through June 30, 1999
For any fiscal quarter ending on or after 5.50 to 1
September 30, 1999 through June 30, 2000
For any fiscal quarter ending on or after 5.25 to 1
September 30, 2000 through June 30, 2001
For any fiscal quarter ending on or after 5.00 to 1
September 30, 2001
6.8. FIXED CHARGE COVERAGE RATIO. The Borrower Affiliated Group shall
not permit the Fixed Charge Coverage Ratio of the Borrower Affiliated Group as
at the last day of any fiscal quarter in any fiscal period identified below to
be less than the ratio specified below opposite such period:
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Period ratio
------ -----
For any four consecutive fiscal quarters 1.30 to 1
ending on or after September 30, 1997
through June 30, 1998 (determined at the
end of each fiscal quarter for the four
quarters then ending)
For any four consecutive fiscal quarters 1.35 to 1
ending on or after September 30, 1998
through June 30, 1999 (determined at the
end of each fiscal quarter for the four
quarters then ending)
For any four consecutive fiscal quarters 1.40 to 1
ending on or after September 30, 1999
(determined at the end of each fiscal
quarter for the four quarters then ending)
6.9. MINIMUM INTEREST COVERAGE. The Borrower Affiliated Group shall not
permit the Interest Coverage Ratio of the Borrower Affiliated Group for any
fiscal period identified below to be less than the ratio specified below
opposite such period:
Period Minimum Ratio
------ -------------
For any four consecutive fiscal quarters 1.75 to 1
ending on or after September 30, 1997
through June 30, 1998 (as determined at
the end of each quarter for the four
quarters then ending)
For any four consecutive fiscal quarters 1.85 to 1
ending on or after September 30, 1998
through June 30, 1999 (as determined at
the end of each quarter for the four
quarters then ending)
For any four consecutive fiscal quarters 1.95 to 1
ending on or after September 30, 1999
through June 30, 2000 (determined at the
end of each fiscal quarter for the four
quarters then ending)
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For any four consecutive fiscal quarters 2.05 to 1
ending on or after September 30, 2000
through June 30, 2001 (determined at the
end of each fiscal quarter for the four
quarters then ending)
For any four consecutive fiscal quarters 2.15 to 1
ending on or after September 30, 2001
(determined at the end of each fiscal
quarter for the four quarters then ending)
6.10. RESTRICTED PAYMENTS. No member of the Borrower Affiliated Group
shall pay, make or declare, and no Equity Owner shall accept, any Restricted
Payment. Notwithstanding the foregoing, (i) USC, the USC Subsidiaries, U-Finance
and U-Canada may make distributions to USC and Unicco, (ii) not sooner than 15
days after receipt by the Agent of the financial statements required to be
delivered by Section 5.1(b) for any fiscal year, Unicco may make quarterly
distributions to its shareholders, and its shareholders may accept
distributions, in an amount not to exceed, in the aggregate for all such
shareholders taken together, $250,000 for each fiscal quarter during each fiscal
year), (PROVIDED, HOWEVER, that any undistributed portion of the amount
permitted for distributions in any fiscal quarter may be carried forward into
any other fiscal quarter occurring in the same fiscal year, it being agreed that
the aggregate annual distributions shall in no event exceed $1,000,000 in each
fiscal year, PROVIDED that at the time of the declaration of and payment of any
such distribution, and after giving effect thereto, each of the Special Payment
Conditions shall have been satisfied, and PROVIDED, FURTHER, that in the event
that the audited financial statements required to be delivered pursuant to
Section 5.1(a) reflect that any such distribution made in the fiscal year to
which such financial statements related was in excess of the amount permitted to
be made (as evidenced by such financial statements), each of the Equity Owners
jointly and severally agree to immediately pay to the Administrative Agent, for
the ratable benefit of the Banks, the aggregate amount of such excess for such
fiscal year, (iii) within 45 days following the end of any fiscal quarter during
which Unicco was treated as a so-called S Corporation for federal (or state, if
applicable) income tax purposes, Unicco may distribute to its shareholders, and
its shareholders may accept, in cash an amount not in excess of the Tax
Distribution Amount for the portion of the fiscal year through the end of such
fiscal quarter, minus the aggregate amount of any such distributions theretofore
made in respect of such fiscal year, with the amount of any such distribution to
be verified by the chief financial officer of Unicco in the certificate required
under Section 5.1(g), (iv) Unicco may redeem its capital stock pursuant to a
certain Share Purchase Agreement dated as of July 1, 1989 between Unicco and
John C. Feitor, as in effect on June 28, 1996 and delivered to the Agent; and
(v) Unicco may redeem its capital stock pursuant to a certain Share Purchase
Agreement dated as of June 20, 1996 between Unicco and George A. Keches, as in
effect on June 28, 1996 and delivered to the Agent, PROVIDED that the aggregate
amount that Unicco may expend or distribute under clauses (iv) and (v) above
shall not exceed $500,000.
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6.11. INVESTMENTS. No member of the Borrower Affiliated Group shall make
or maintain any Investments other than Qualified Investments.
6.12. ERISA. Neither any member of the Borrower Affiliated Group nor any
member of the Controlled Group shall permit any Plan maintained by it to (i)
engage in any "prohibited transaction" (as defined in Section 4975 of the Code
or any jurisdictional equivalent), (ii) incur any "accumulated funding
deficiency" (as defined in Section 302 of ERISA or any jurisdictional
equivalent) whether or not waived, or (iii) terminate any Plan in a manner that
could result in the imposition of a lien or encumbrance on the assets of any
member of the Borrower Affiliated Group pursuant to Section 4068 of ERISA (or
any jurisdictional equivalent).
6.13. TRANSACTIONS WITH AFFILIATES. Except as set forth on EXHIBIT D, no
member of the Borrower Affiliated Group will enter into or participate in any
agreements or transactions of any kind with any Affiliate, except (i) agreements
or transactions contemplated, required or allowed by any Loan Document or any
Ancillary Document as in effect on June 28, 1996 or entered into on the date
hereof, PROVIDED that such agreements or transactions are not otherwise
prohibited by this Agreement or any of the Security Documents; or (ii)
agreements or transactions, including insurance transactions with Ashmont, in
each case in the ordinary course of business and on an arms-length basis, and
which (A) include only terms which are fair and equitable to each member of the
Borrower Affiliated Group, (B) do not violate or otherwise conflict with any of
the terms of any of the Loan Documents, (C) require the payment of no fees,
charges or commissions by any member of the Borrower Affiliated Group to any
Affiliate except those which are reasonable and disclosed to the Co-Agents and
the Banks, (D) are disclosed on the books, accounts and records of the Borrower
Affiliated Group, and (E) involve terms no less favorable to the Borrower
Affiliated Group than would be the terms of a similar agreement or transaction
with any person other than an Affiliate. Without limitation of the foregoing,
the Borrower Affiliated Group covenants and agrees that it will not make
worker's compensation payments to Ashmont in excess of the amount in each state
of the United States in which any member of the Borrower Affiliated Group
operates equal to (i) the manual rate for each employee classification,
multiplied by (ii) such member's experience modification rating (as computed by
the applicable rating agency) applicable to such employee classification,
multiplied by (iii) such member's payroll expense in such classification.
6.14. LOANS. Except as set forth on EXHIBIT D, no member of the Borrower
Affiliated Group will make to any person any loan, advance or other transfer
with the anticipation of repayment, except for loans and advances to employees
of the Borrower Affiliated Group, made in the ordinary course of business and
consistent with past practices, not exceeding $250,000 in the aggregate;
PROVIDED, that no such advances to any single employee shall exceed $100,000 in
the aggregate.
6.15. BORROWING BASE. The Borrower Affiliated Group will not cause or
permit the aggregate principal amount of all Revolving Loans outstanding, plus
the aggregate Stated
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Amount of Letters of Credit outstanding at such time, plus the aggregate amount
of any unreimbursed draws under outstanding Letter of Credit, at any time to
exceed the Borrowing Base at such time.
6.16. NO AMENDMENTS TO CERTAIN DOCUMENTS. No member of the Borrower
Affiliated Group will at any time cause or permit (i) any of the Ancillary
Documents to be modified, amended or supplemented in any respect whatever,
except for such modification or amendment as would not, in the Agent's sole
discretion, effect any change adverse to the Agent or the Banks, or have a
material adverse effect on the business, property, assets, operations or
condition (financial or otherwise) of any member of the Borrower Affiliated
Group, or (ii) any of the charter or other incorporation documents (including
any declaration of trust) or by-laws of any member of the Borrower Affiliated
Group to be modified, amended or supplemented in any material respect whatever,
without (in each case) the express prior written agreement, consent or approval
of the Agent.
6.17 MAXIMUM CAPITAL EXPENDITURES. The Borrower Affiliated Group shall
not make any Capital Expenditures (i) any annual period identified below in
excess of the amount specified below as applicable to such annual period:
Annual Period Maximum
------------- Capital Expenditures
--------------------
Fiscal year ending $2,750,000
June 28, 1998
Fiscal year ending $3,000,000
June 27, 1999
Fiscal year ending $3,250,000
June 25, 2000
Fiscal year ending $3,500,000
June 24, 2001
Fiscal year ending $3,500,000
June 30, 2002
It is acknowledged that, in connection with a Permitted Acquisition, the
portion of the purchase price allocable to capital assets shall not constitute
Capital Expenditures for purposes of this Section 6.17.
6.18 PROHIBITED EVENTS. No member of the Borrower Affiliated Group will
form or designate any Unrestricted Subsidiary or any Receivables Subsidiary
(each as defined in the High Yield Indenture) or will enter into any Qualified
Receivables Transaction (as defined in the High Yield Indenture).
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SECTION VII
DEFAULTS
7.1. EVENTS OF DEFAULT. There shall be an Event of Default hereunder if
any of the following events occurs:
(a) any Borrower shall fail to pay (i) any amount of principal of any
Loans when due or (ii) any amount of interest thereon or any fees or expenses
payable hereunder or under any Note or any other Security Document within 3 days
after the due date therefor; or
(b) any member of the Borrower Affiliated Group shall fail to perform,
comply with or observe or shall otherwise breach any one or more of the terms,
obligations, covenants or agreements contained in Sections 5.1, 5.3, 5.5, 5.6,
5.9, 6.1 through 6.3, inclusive, 6.5 through 6.11, inclusive, and 6.13 through
6.18, inclusive; or
(c) any member of the Borrower Affiliated Group shall fail to perform,
comply with or observe or shall otherwise breach any one or more of the terms,
covenants, obligations or agreements (other than in respect of subsections
7.1(a) and (b) hereof) contained in this Agreement or in any other Security
Document and such failure shall continue for 15 days, provided, however, that in
the event of a failure by the Borrower Affiliated Group to comply with the
covenant contained in Section 5.4 with respect to local tax filings, no Default
or Event of Default shall be deemed to occur on account of any such failure
unless such failure(s) (individually or in the aggregate) is material in amount;
or
(d) any representation or warranty of any member of the Borrower
Affiliated Group made in any Security Document or any other documents or
agreements executed in connection with the transactions contemplated by this
Agreement or in any certificate delivered hereunder shall prove to have been
false in any material respect upon the date when made or deemed to have been
made; or
(e) there shall occur any material adverse change in the assets,
liabilities, financial condition, business or prospects of any member of the
Borrower Affiliated Group, as determined by the Agent and the Banks acting in
good faith and in a commercially reasonable manner; or
(f) any member of the Borrower Affiliated Group shall fail to pay at
maturity, or within any applicable period of grace (not to exceed 30 days), any
obligations in excess of $50,000 in the aggregate for borrowed monies or
advances, or for the use of real or personal property, or fail to observe or
perform any term, covenant or agreement evidencing or securing such obligations
for borrowed monies or advances, or relating to such use of real or personal
property, the result of which failure is to permit the holder or holders of
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such Indebtedness to cause such Indebtedness to become due prior to its stated
maturity upon delivery of required notice, if any; or
(g) any member of the Borrower Affiliated Group shall (i) apply for or
consent to the appointment of, or the taking of possession by, a receiver,
custodian, trustee, liquidator or similar official of itself or of all or a
substantial part of its property, (ii) be generally not paying its debts as such
debts become due, (iii) make a general assignment for the benefit of its
creditors, (iv) commence a voluntary case under the Federal Bankruptcy Code (as
now or hereafter in effect and including any jurisdictional equivalent), (v)
take any action or commence any case or proceeding under any law relating to
bankruptcy, insolvency, reorganization, winding-up or composition or adjustment
of debts, or any other law providing for the relief of debtors, (vi) fail to
contest in a timely or appropriate manner, or acquiesce in writing to, any
petition filed against it in an involuntary case under the Federal Bankruptcy
Code (as now or hereafter in effect and including any jurisdictional equivalent)
or other law, (vii) take or acquiesce in writing to any action or proceeding
under the laws of its jurisdiction of incorporation or organization similar to
any of the foregoing, (viii) be Insolvent, or (ix) take any corporate action for
the purpose of effecting any of the foregoing; or
(h) a proceeding or case shall be commenced, without the application or
consent of any member of the Borrower Affiliated Group in any court of competent
jurisdiction, seeking (i) the liquidation, reorganization, dissolution, winding
up, or composition or readjustment of the debts of such member of the Borrower
Affiliated Group, (ii) the appointment of a trustee, receiver, custodian,
liquidator or the like of it or of all or any substantial part of the assets of
such member of the Borrower Affiliated Group, or (iii) similar relief in
respect, under any law relating to bankruptcy, insolvency, reorganization,
winding-up or composition or adjustment of debts or any other law providing for
the relief of debtors, and such proceeding or case shall continue undismissed,
or unstayed and in effect, for a period of 45 days; or an order for relief shall
be entered in an involuntary case under the Federal Bankruptcy Code (as now or
hereafter in effect and including any jurisdictional equivalent), against any
member of the Borrower Affiliated Group; or action under the laws of the
jurisdiction of incorporation or organization of any member of the Borrower
Affiliated Group similar to any of the foregoing shall be taken with respect to
any member of the Borrower Affiliated Group and shall continue unstayed and in
effect for any period of 45 days; or
(i) a final, non-appealable judgment or order for the payment of money
shall be entered against any member of the Borrower Affiliated Group by any
court, or a warrant of attachment or execution or similar process shall be
issued or levied against property of any member of the Borrower Affiliated
Group, that in the aggregate exceeds $250,000 in value and such judgment, order,
warrant or process shall continue undischarged, unpaid or unstayed for 30 days;
or
(j) any member of the Borrower Affiliated Group or any member of the
Controlled Group shall fail to pay when due a material amount which it shall
have become
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liable to pay to the PBGC (or any jurisdictional equivalent) or to a
Plan under Title IV of ERISA (or any jurisdictional equivalent); or notice of
intent to terminate a Plan or Plans shall be filed under Title IV of ERISA (or
any jurisdictional equivalent) by the Borrower, any member of the Controlled
Group, any plan administrator or any combination of the foregoing; or the PBGC
(or any jurisdictional equivalent) shall institute proceedings under Title IV of
ERISA (or any jurisdictional equivalent) to terminate or to cause a trustee to
be appointed to administer any such Plan or Plans or a proceeding shall be
instituted by a fiduciary of any such Plan or Plans against any member of the
Borrower Affiliated Group and such proceedings shall not have been dismissed
within 30 days thereafter; or a condition shall exist by reason of which the
PBGC (or any jurisdictional equivalent) would be entitled to obtain a decree
adjudicating that any such Plan or Plans must be terminated; or
(k) (i) any change in equity ownership of any member of the Borrower
Affiliated Group (including the failure of USC to become and remain a
wholly-owned Subsidiary of Unicco), PROVIDED, HOWEVER, that for purposes of this
clause (i), transfers as a result of (a) permitted stock redemptions under
Sections 6.10(iv) and (v) and transfers from any Equity Owner to his spouse, his
children, his grandchildren, or any trust established solely for the benefit of
any one or more of the foregoing named persons (all as at the relative time of
determination) shall not constitute an Event of Default hereunder, PROVIDED that
each such Equity Owner must at all times continue to control all of the voting
rights in respect of said transferred shares and (b) transfers of non-voting
Unicco Shares to officers and management pursuant to a stock option or stock
incentive plan or such officer's or manager's employment agreement duly adopted
by the Board of Directors shall not constitute an Event of Default hereunder or
(ii) the filing with the Securities and Exchange Commission of a registration
statement under the Securities Act of 1933, as amended, for an initial public
offering of any Equity Securities of any member of the Borrower Affiliated
Group; or
(l) Steven C. Kletjian shall, for any reason other than death, physical
or mental disability or incapacity, (a) at any time cease to be the Chief
Executive Officer of Unicco or the President of any other member of the Borrower
Affiliated Group (other than U-Security), or (b) cease to perform substantially
all of his duties and responsibilities as Chief Executive Officer or President,
as applicable, of any member of the Borrower Affiliated Group (other than
U-Security) for a period of more than 60 days (exclusive of vacations not in
excess of Steven C. Kletjian's normal annual vacation allowance);
(m) Steven C. Kletjian shall cease to be the Chief Executive Officer of
Unicco or the President of any other member of the Borrower Affiliated Group
(other than U-Security) as a direct consequence of his death, physical or mental
disability or incapacity, unless the Majority Banks, by the 90th day following
the occurrence of any such condition or event, shall have notified the Borrowers
in writing that the Majority Banks have determined, in good faith, that the
occurrence of such event will not have a material adverse effect on any member
of the Borrower Affiliated Group;
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(n) any covenant, agreement or obligation of any member of the Borrower
Affiliated Group contained in or evidenced by any Security Document or any
Ancillary Document to which any member of the Borrower Affiliated Group is a
party shall, prior to the date on which such document shall terminate with the
express prior written agreement, consent or approval of the Agent and the Banks,
cease in any material respect to be legal, valid, binding or enforceable in
accordance with the terms thereof; or
(o) any Security Document or any Ancillary Document shall be canceled,
terminated, revoked or rescinded (or any notice of such cancellation,
termination, revocation or rescission given) otherwise than in accordance with
the express prior written agreement, consent or approval of the Agent and the
Banks; or any action at law, suit in equity or other legal proceeding to cancel,
revoke, or rescind any Security Document or any Ancillary Document shall be
commenced by or on behalf of any member of the Borrower Affiliated Group, or by
any court or any other governmental or regulatory authority or agency of
competent jurisdiction; or any court or any other governmental or regulatory
authority or agency of competent jurisdiction shall make a determination that
(which determination, in the case of an Ancillary Document only, shall be final)
or shall issue a judgment, order decree or ruling to the effect that, any one or
more of the Security Documents or Ancillary Documents or any one or more of the
obligations of any member of the Borrower Affiliated Group under any one or more
of the Security Documents and Ancillary Documents are illegal, invalid or
unenforceable in accordance with the terms thereof; or
(p) any default or event of default shall occur and be continuing (after
any applicable period of grace, if any, not to exceed 30 days) under any
Ancillary Document or the Trustee or the Paying Agent under the High Yield
Indenture fail to comply with Articles 10 and 11 thereof; or
(q) any Encumbrance shall be created or exist (i) on or with respect to
any of the Unicco Shares, U-Finance Shares, U-Government Shares, U-Security
Shares or USC Shares, (ii) on or with respect to any of the U-Canada Shares,
other than in favor of the Agent, or (iii) in favor of any of the holders of the
High Yield Subordinated Debt; or
(r) (i) any request or notice from the holders of the High Yield
Subordinated Debt (or the Trustee or Paying Agent under the Indenture) shall be
made or given for a redemption of any of the High Yield Subordinated Debt in
accordance with the terms of the High Yield Indenture, (ii) any request or
notice (including in the form of an officer's certificate) shall be made by
Unicco or U-Finance for a redemption of any of the High Yield Subordinated Debt,
(iii) any Asset Sale Offer shall be made under the Indenture, or (iv) the board
of trustees or board of directors of Unicco or U-Finance elects to have Section
8.02 (Legal Defeasance) or Section 8.03 (Covenant Defeasance) be applied to the
High Yield Subordinated Debt;
(s) any of the individual shareholders of Unicco shall fail to comply
with the provisions of Section 6.10 and their other respective obligations
hereunder.
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7.2. REMEDIES. Upon the occurrence of an Event of Default described in
subsections 7.1(g) and (h), immediately and automatically, and upon the
occurrence of any other Event of Default, at any time thereafter while such
Event of Default is continuing, at the option of the Majority Banks and upon the
Agent's declaration:
(a) each Bank's commitment to make any further Loans hereunder shall
terminate;
(b) the unpaid principal amount of the Loans together with accrued
interest, all other Obligations, and all other obligations of the Borrowers to
the Agent and each Bank of any kind shall become immediately due and payable
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived; and
(c) the Agent may exercise (on behalf of itself and the Banks) any and
all rights the Agent and the Banks have under this Agreement, the Notes, the
other Security Documents, or any other documents or agreements executed in
connection herewith, or at law or in equity, and proceed to protect and enforce
the Agent's and the Banks' rights by any action at law, in equity or other
appropriate proceeding.
No Default or Event of Default under any Loan Document shall be
effectively cured or waived until such cure has been accepted in writing by the
Agent and the Banks or such waiver has been accepted in writing by the Agent and
the Banks.
SECTION VIII
CONCERNING THE AGENT AND THE BANKS
8.1 APPOINTMENT AND AUTHORIZATION. Each of the Banks hereby appoints (i)
BankBoston to serve as Agent, Collateral Agent and Administrative Agent under
this Agreement, and irrevocably authorizes the Agent to take such action on such
Bank's behalf under this Agreement and to exercise such powers and to perform
such duties under this Agreement and the other documents and instruments
executed and delivered in connection with the consummation of the transactions
contemplated hereby as are delegated to the Agent by the terms hereof or
thereof, together with all such powers as are reasonably incidental thereto.
8.2 AGENT AND AFFILIATES. The Agent shall also have the same rights and
powers under this Agreement of a Bank and may exercise or refrain from
exercising the same as though it were not the Agent, and the Agent and its
Affiliates may accept deposits from, lend money to, and generally engage in any
kind of business with any member of the Borrower Affiliated Group or any
Affiliate of any member of the Borrower Affiliated Group as if it were not the
Agent hereunder. Except as otherwise provided by the terms of this Agreement,
nothing herein shall prohibit any Bank from accepting deposits from, lending
money to or generally engaging in any kind of business with any member of the
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Borrower Affiliated Group or any Affiliate of any member of the Borrower
Affiliated Group.
8.3 FUTURE ADVANCES.
(a) In order more conveniently to administer the Loans, the
Administrative Agent may, unless notified to the contrary by any Bank prior to
the date upon which any Revolving Loan is to be made, assume that such Bank has
made available to the Administrative Agent on such date the amount of such
Bank's share of such Revolving Loan to be made on such date as provided in this
Agreement, and the Administrative Agent may (but it shall not be required to),
in reliance upon such assumption, make available to the Borrowers a
corresponding amount. If any Bank makes available to the Administrative Agent
such amount on a date after the date upon which the Revolving Loan is made, such
Bank shall pay to the Administrative Agent on demand an amount equal to the
product of (i) the average computed for the period referred to in clause (iii)
below, of the weighted average interest rate paid by the Administrative Agent
for federal funds acquired by the Administrative Agent during each day included
in such period, MULTIPLIED BY (ii) the amount of such Bank's share of such
Revolving Loan, MULTIPLIED BY (iii) a fraction, the numerator of which is the
number of days that elapsed from and including such date to the date on which
the amount of such Bank's share of such Revolving Credit Loan shall become
immediately available to the Administrative Agent, and the denominator of which
is 365. A statement of the Administrative Agent submitted to such Bank with
respect to any amounts owing under this paragraph shall be PRIMA FACIE evidence
of the amount due and owing to the Administrative Agent by such Bank.
(b) The Administrative Agent may at any time, in its sole discretion,
upon notice to any Bank, refuse to make any Revolving Loan to the Borrower on
behalf of such Bank unless such Bank shall have provided to the Administrative
Agent immediately available federal funds equal to such Bank's share of such
Loan in accordance with this Agreement.
(c) Anything in this Agreement to the contrary notwithstanding, the
obligations to make Loans under the terms of this Agreement shall be the several
and not joint obligation of each of the Banks and any advances made by the
Administrative Agent on behalf of any Bank are strictly for the administrative
convenience of the parties and shall in no way diminish any Bank's liability to
the Administrative Agent to repay the Administrative Agent for such Loans and
advances. If the amount of any Bank's share of any Revolving Loan which the
Administrative Agent has advanced to the Borrower is not made available to the
Administrative Agent by such Bank within 1 Business Day following the date upon
which such Revolving Loan is made, the Administrative Agent shall be entitled to
recover such amount from the Borrower on demand, with interest thereon at the
rate per annum applicable to the Revolving Loans made on such date.
8.4 DELINQUENT BANK. Notwithstanding anything to the contrary contained
in this Agreement, any Bank that fails to make available to the Administrative
Agent its share of
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any Revolving Loan when and to the full extent required by the provisions of
this Agreement shall be deemed delinquent (a "Delinquent Bank") and shall be
deemed a Delinquent Bank until such time as such delinquency is satisfied. A
Delinquent Bank shall be deemed to have assigned any and all payments due to it
from the Borrower, whether on account of outstanding Loans, interest, fees or
otherwise, to the remaining non-delinquent Banks for application to, and
reduction of, their respective PRO RATA shares of all outstanding Revolving
Loans. The Delinquent Bank hereby authorizes the Administrative Agent to
distribute such payments to the non-delinquent Banks in proportion to their
respective PRO RATA shares of all outstanding Revolving Loans. A Delinquent Bank
shall be deemed to have satisfied in full a delinquency when and if, as a result
of application of the assigned payments to all outstanding Revolving Loans of
the non-delinquent Banks, the Banks' respective PRO RATA shares of all
outstanding Loans have returned to those in effect immediately prior to such
delinquency and without giving effect to the nonpayment causing such
delinquency.
8.5 PAYMENTS.
(a) All payments and prepayments of principal of and interest on
Revolving Loans received by the Administrative Agent shall be paid to each of
the Banks PRO RATA in accordance with their respective interests in such Loans;
and any other payments received by the Administrative Agent hereunder shall be
paid to the Banks or the Agent or both PRO RATA as their respective interests
appear.
(b) Each of the Banks and the Agent hereby agrees that if it should
receive any amount (whether by voluntary payment, by the exercise of the right
of set-off or banker's lien, by counterclaim or cross action, by the enforcement
of any right hereunder under or otherwise) in respect of principal of, or
interest on, the Loans or any fees which are to be shared among the Banks,
which, as compared to the amounts theretofore received by the other Banks with
respect to such principal, interest or fees, is in excess of such Bank's PRO
RATA share of such principal, interest or fees as provided in this Agreement,
such Bank shall share such excess, less the costs and expenses (including,
reasonable attorneys' fees and disbursements) incurred by such Bank in
connection with such realization, exercise, claim or action, PRO RATA with all
other Banks in proportion to their respective interests therein, and such
sharing shall be deemed a purchase (without recourse) by such sharing party of
participation interests in the Loans or such fees, as the case may be, owed to
the recipients of such shared payments to the extent of such shared payments;
PROVIDED, HOWEVER, that if all or any portion of such excess amount is
thereafter recovered from such Bank, such purchase shall be rescinded and the
purchase price restored to the extent of such recovery, but without interest.
8.6 ACTION BY AGENT.
(a) The obligations of the Agent hereunder are only those expressly set
forth herein. The Agent shall have no duty to exercise any right or power or
remedy hereunder or under any other document or instrument executed and
delivered in connection with or
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as contemplated by this Agreement or to take any affirmative action hereunder or
thereunder.
(b) The Administrative Agent shall keep all records of the Loans and
payments hereunder, and shall give and receive notices and other communications
to be given or received by the Administrative Agent hereunder on behalf of the
Banks. The Agent shall receive notices and other communications to be given or
received by the Agent hereunder on behalf of the Banks.
(c) Upon the occurrence of an Event of Default the Agent may, and upon
the direction of the Majority Banks pursuant to Section 7.2 the Agent shall,
exercise the option of the Banks pursuant to Section 7.2 to declare all Loans
and other Obligations immediately due and payable and may take such action as
may appear necessary or desirable to collect the Obligations and enforce the
rights and remedies of the Agent or the Banks.
8.7 NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT. Each Bank hereby
agrees that, upon learning of the existence of a Default or an Event of Default,
pursuant to Section 5.1(l)(i) or otherwise, it shall notify the Agent thereof.
The Agent hereby agrees that upon receipt of any notice under this Section 8.7,
it shall notify the other Banks of the existence of such Default or Event of
Default.
8.8 CONSULTATION WITH EXPERTS. The Agent shall be entitled to retain and
consult with legal counsel, independent public accountants and other experts
selected by it and shall not be liable to the Banks for any action taken,
omitted to be taken or suffered in good faith by it in accordance with the
advice of such counsel, accountants or experts. The Agent may employ agents and
attorneys-in-fact and shall not be liable to the Banks for the default or
misconduct of any such agents or attorneys.
8.9 LIABILITY OF AGENT. The Agent shall exercise the same care to
protect the interests of each Bank as it does to protect its own interests, so
that so long as such Agent exercises such care it shall not be under any
liability to any of the Banks, except for the Agent's gross negligence or
willful misconduct with respect to anything it may do or refrain from doing.
Subject to the immediately preceding sentence, neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken or
not taken by it in connection herewith in its capacity as Agent. Without
limiting the generality of the foregoing, neither the Agent nor any of its
respective directors, officers, agents or employees shall be responsible for or
have any duty to ascertain, inquire into or verify: (i) any statement, warranty
or representation made in connection with this Agreement, any other Security
Document, or any borrowing hereunder; (ii) the performance or observance of any
of the covenants or agreements of any member of the Borrower Affiliated Group;
(iii) the satisfaction of any condition specified in Sections 3.1 or 3.2, except
receipt of items required to be delivered to the Agent; (iv) the validity,
effectiveness, enforceability or genuineness of this Agreement, the Notes, any
other Loan Document or any other document or instrument executed and delivered
in connection
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with or as contemplated by this Agreement; (v) the existence, value,
collectibility or adequacy of the Collateral or any part thereof or the
validity, effectiveness, perfection or relative priority of the liens and
security interests of the Banks (through the Collateral Agent) therein; or (vi)
the filing, recording, refiling, continuing or re-recording of any financing
statement or other document or instrument evidencing or relating to the security
interests or liens of the Banks (through the Collateral Agent) in the
Collateral. The Agent shall not incur any liability by acting in reliance upon
any notice, consent, certificate, statement or other writing (which may be a
bank wire, telecopy or similar writing) believed by it to be genuine or to be
signed or sent by the proper party or parties.
8.10 INDEMNIFICATION. Each Bank agrees to indemnify the Agent (to the
extent the Agent is not reimbursed by the Borrowers), ratably in accordance with
its Commitment Percentage from and against any cost, expense (including
attorneys' fees and disbursements), claim, demand, action, loss or liability
which the Agent may suffer or incur in connection with this Agreement, or any
action taken or omitted by the Agent hereunder or under any Loan Document, or
such the Agent's relationship with the Borrowers hereunder, including, without
limitation, the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers
and duties hereunder and of taking or refraining from taking any action
hereunder, but excluding any costs, expenses or losses directly arising from the
Agent's gross negligence or willful misconduct. No payment by any Bank under
this Section shall in any way relieve the Borrowers of their obligations under
this Agreement with respect to the amounts so paid by any Bank, and the Banks
shall be subrogated to the rights of the Agent, if any, in respect thereto.
8.11 INDEPENDENT CREDIT DECISION. Each of the Banks represents and
warrants to the Agent that it has, independently and without reliance upon the
Agent or any other Bank and based on the financial statements referred to in
Section 4.7 and such other documents and information as it has deemed
appropriate, made its own independent credit analysis and decision to enter into
this Agreement. Each of the Banks acknowledges that it has not relied upon any
representation by the Agent and that the Agent shall not be responsible for any
statements in or omissions from any documents or information concerning the
Borrowers, this Agreement, the Notes, any other Loan Document or any other
document or instrument executed and delivered in connection with or as
contemplated by this Agreement. Each of the Banks acknowledges that it will,
independently and without reliance upon the Agent or other Bank and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement.
8.12 SUCCESSOR AGENT. BankBoston or any successor Agent may resign as
Agent at any time by giving written notice thereof to the Banks and to the
Borrowers. Upon any such resignation, the Banks shall have the right to appoint
a successor Agent, which successor Agent shall be reasonably acceptable to the
Borrowers, PROVIDED that if BankBoston resigns as Agent, no successor Agent
shall have been so appointed by the Banks, and shall have accepted such
appointment, within 30 days after the retiring
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Agent's giving of notice of resignation, then the retiring Agent may, on behalf
of the Banks, appoint a successor Agent, which shall be a commercial bank (or
Affiliate thereof) or savings and loan association organized under the laws of
the United States of America or any State thereof or under the laws of another
country which is doing business in the United States of America or any State
thereof and having a combined capital, surplus and undivided profits of at least
$100,000,000 and shall be reasonably acceptable to the Borrowers. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from all further duties and obligations under this
Agreement. After any retiring Agent's resignation or removal hereunder as Agent,
the provisions of this Section 8 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.
SECTION IX
9.1. UNICCO AS AGENT FOR BORROWERS. Each member of the Borrower
Affiliated Group (other than Unicco) hereby appoint Unicco as their agent with
respect to the receiving and giving of any notices, requests, instructions,
reports, schedules, revisions, financial statements or any other written or oral
communications hereunder. The Agent and each Bank is hereby entitled to rely on
any communications given or transmitted by Unicco as if such communication were
given or transmitted by each and every member of the Borrower Affiliated Group;
PROVIDED, HOWEVER, that any communication given or transmitted by any member of
the Borrower Affiliated Group other than Unicco shall be binding with respect to
such member of the Borrower Affiliated Group. Any communication given or
transmitted by either Agent or any Bank to Unicco shall be deemed given and
transmitted to each and every member of the Borrower Affiliated Group.
SECTION X
MISCELLANEOUS
10.1. NOTICES. Unless otherwise specified herein, all notices hereunder
to any party hereto shall be in writing and shall be deemed to have been given
when delivered by hand, when properly deposited in the mails postage prepaid,
when sent by electronic facsimile transmission, or when delivered to an
overnight courier, addressed to such party at its address indicated below:
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If to the Borrowers, at
c/o Unicco Service Company
Four Copley Place
Boston, Massachusetts 02116
Attention: George A. Keches, Chief Financial Officer
Telecopy: (617) 859-0735
with a copy to
Posternak, Blankstein & Lund, L.L.P.
100 Charles River Plaza
Boston, Massachusetts 02114
Attention: Noel G. Posternak, P.C.
Telecopy: (617) 367-2315
If to the Agent, Administrative Agent, Collateral Agent, or BankBoston,
at
BankBoston, N.A.
100 Federal Street
Boston, Massachusetts 02110
Attention: Henry L. Petrillo, Director
Telecopy: (617) 434-8102
in the case of notices to the Agent, Administrative Agent, Collateral
Agent, or BankBoston, with a copy to
Goulston & Storrs, P.C.
400 Atlantic Avenue
Boston, Massachusetts 02110
Attention: Philip A. Herman, Esq.
Telecopy: (617) 574-4112
or at any other address specified by such party in writing.
10.2. EXPENSES. The Borrowers will pay on demand all reasonable expenses
of the Agent or any Bank in connection with the preparation, waiver or amendment
of this Agreement, the Notes, the other Security Documents or other documents
executed in connection therewith, or the administration, default or collection
of the Loans or other Obligations or administration, default, collection in
connection with the Agent's or any Bank's exercise, preservation or enforcement
of any of its rights, remedies or options thereunder, including, without
limitation, reasonable fees of outside legal counsel, any local counsel or the
allocated costs of in-house legal counsel, accounting, consulting, brokerage or
other similar professional fees or expenses, all out-of-pocket costs and
expenses (including reasonable fees of outside counsel) of the Agent incurred in
connection with the
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syndication and/or participation of the Loans, and any fees or expenses
associated with any travel or other costs relating to any appraisals or
examinations conducted in connection with the Obligations or any Collateral
therefor, and the amount of all such expenses shall, until paid, bear interest
at the rate applicable to principal hereunder (including any default rate).
10.3. INDEMNIFICATION. The Borrowers shall absolutely and
unconditionally indemnify and hold harmless the Agent and each of the Banks
(including, for purposes of this Section, the Co-Agents and the Banks under (and
as defined in) the Existing Loan Agreement) against any and all claims, demands,
suits, actions, causes of action, damages, losses, settlement payments,
obligations, costs, expenses (including, without limitation, reasonable fees and
disbursements of counsel) and all other liabilities whatsoever which shall at
any time or times be incurred or sustained by the Agent or any of the Banks (or
such Co-Agents and Banks under the Existing Loan Agreement) or by any of their
shareholders, directors, officers, employees, subsidiaries, affiliates or agents
(other than as a result of the gross negligence or willful misconduct of the
Agent or any of the Banks (or such Co-Agents and Banks under the Existing Loan
Agreement)) on account of, or in relation to, or in any way in connection with,
any of the arrangements or transactions contemplated by, associated with or
ancillary to either this Agreement, any of the other Security Documents or any
of the Ancillary Documents, whether or not all or any of the transactions
contemplated by, associated with or ancillary to this Agreement, any of such
Security Documents or any of such Ancillary Documents, are ultimately
consummated.
10.4. SET-OFF. Regardless of the adequacy of any collateral or other
means of obtaining repayment of the Obligations, any deposits, balances or other
sums (including the proceeds of insurance on Collateral held by the Collateral
Agent in accordance with the Security Agreements) credited by or due from any
Bank or any of its branch or affiliate offices to any Borrower may, at any time
and from time to time after the occurrence and during the continuance of an
Event of Default hereunder, without notice to any Borrower or compliance with
any other condition precedent now or hereafter imposed by statute, rule of law,
or otherwise (all of which are hereby expressly waived) be set off,
appropriated, and applied by such Bank against any and all obligations of any
Borrower to the Banks or any of their respective affiliates in such manner as
the head office of such Bank or any of its branch offices in their sole
discretion may determine, and each Borrower hereby grants such Bank a continuing
security interest in such deposits, balances or other sums for the payment and
performance of all such obligations.
10.5. TERM OF AGREEMENT. This Agreement shall continue in force and
effect so long as any Bank has any commitment to make Loans hereunder or any
Loan or any Obligation shall be outstanding.
10.6. NO WAIVERS. No failure or delay by the Agent or any Bank in
exercising any right, power or privilege hereunder or under any Note or under
any other documents or agreements executed in connection herewith shall operate
as a waiver thereof; nor shall any single or partial exercise thereof preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. The rights and remedies herein and in the
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Notes provided are cumulative and not exclusive of any rights or remedies
otherwise provided by agreement or law.
10.7. GOVERNING LAW. This Agreement, the Notes and the other Loan
Documents shall be deemed to be contracts made under seal and shall be construed
in accordance with and governed by the laws of the Commonwealth of Massachusetts
(without giving effect to any conflicts of laws provisions contained therein).
Any legal action or proceeding arising out of or relating to this Agreement, any
other Loan Document or any Obligation may be instituted, in the Agent's sole
discretion, in the courts of the Commonwealth of Massachusetts or the United
States of America for the District of Massachusetts, and the Borrowers hereby
irrevocably submit to the jurisdiction of each such court in any such action or
proceeding; PROVIDED, HOWEVER, that the foregoing shall not limit the Agent's
rights to bring any legal action or proceeding in any other appropriate
jurisdiction.
10.8. AMENDMENTS, WAIVERS, ETC. Except as otherwise expressly provided
in this Agreement or any of the other Security Documents: (i) each of the
Security Documents may be modified, amended or supplemented in any respect
whatever only with the prior written consent or approval of the Majority Banks
and the Borrowers; and (ii) the performance or observance by the Borrowers of
any of their respective covenants, agreements or obligations under any of the
Security Documents may be waived only with the written consent of the Majority
Banks; PROVIDED, HOWEVER, that the following changes shall require the written
consent, agreement or approval of all of the Banks: (A) any change in the amount
or the due date of any of the Obligations; (B) any change in the interest rates
prescribed in any of the Notes; (C) any change in the Commitment or Commitment
Percentage of any of the Banks, except as permitted by Section 10.10; (D) any
release of any Guarantees or Collateral; (E) any change in the definition of
Majority Banks; and (F) any change in the terms of this Section 10.8. Any change
to Section 10 or any other provision of this Agreement affecting the rights or
obligations of the Agent shall not be amended or modified without the prior
written consent of the Agent.
10.9. BINDING EFFECT OF AGREEMENT. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns; PROVIDED that (i) no Borrower may assign or transfer its rights,
duties or obligations hereunder, and (ii) no Bank may assign or transfer its
rights or obligations hereunder to any person except in accordance with the
provisions of Section 10.10
10.10. SUCCESSORS AND ASSIGNS.
(i) Any Bank may at any time grant to one or more banks or other
financial institutions (each, a "Participant") participating interests in any of
its Commitments or any or all of its Loans in an amount and on such terms as
such Bank may think fit. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Borrowers and the Agent, such Bank shall remain responsible for the performance
of its obligations hereunder, and the Borrowers and the Agent shall continue to
deal solely and directly with such Bank in connection with such Bank's rights
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and obligations under this Agreement. Any agreement pursuant to which any Bank
may grant such a participating interest shall provide that such Bank shall
retain the sole right and responsibility to enforce the obligations of the
Borrowers hereunder including, without limitation, the right to approve any
amendment, modification or waiver of any provision of this Agreement; PROVIDED,
HOWEVER, that such participation agreement may provide that such Bank will not
agree, without the consent of the Participant, to any modification, amendment or
waiver of this Agreement requiring the consent, agreement or approval of all of
the Banks, as described in Section 10.8. The Borrowers agree that each
Participant shall be entitled to the benefits of Sections 2.11 and 2.12 with
respect to its participating interest. An assignment or other transfer which is
not permitted by paragraph (ii) below shall be given effect for purposes of this
Agreement only to the extent of a participating interest granted in accordance
with this paragraph (i).
(ii) Any Bank may at any time assign to one or more banks or other
financial institutions (each, an "Assignee") all, or a part of all, of its
rights, interests and obligations under this Agreement and the Notes (or any one
of its Notes) on such terms, as between such Bank and each of its Assignees, as
such Bank may think fit, and such Assignee shall assume such rights, interests
and obligations, pursuant to an instrument executed by such Assignee and such
transferor Bank; PROVIDED, HOWEVER, that (A) prior to assigning any interest to
any Assignee hereunder, such Bank will (x) notify the Borrowers and the Agent in
writing identifying the proposed Assignee and stating the aggregate principal
amount of the proposed interest to be assigned, and (y) receive the prior
written consent of each of the Borrowers and the Agent, which consent may not be
unreasonably withheld by either the Borrowers or the Agent (it being
acknowledged that it will be deemed reasonable to withhold consent to more than
five Banks hereunder at any one time), and (B) no Bank will assign to any
Assignee less than an aggregate amount equal to $5,000,000 of such Bank's
Commitments and interest in the Notes (or, if less, the remaining Commitment of
such Bank). It is understood and agreed that the proviso contained in the
immediately preceding sentence shall not be applicable in the case of, and this
paragraph (ii) shall not restrict, (A) an assignment or other transfer by any
Bank to an Affiliate of such Bank or to any other Bank or (B) a collateral
assignment or other similar transfer to a Federal Reserve Bank. Upon execution
and delivery of such an instrument and payment by such Assignee to such
transferor Bank of an amount equal to the purchase price agreed between such
transferor Bank and such Assignee, such Assignee shall be a Bank party to this
Agreement and to each of the other Security Documents to which any other Bank is
a party, and shall have all the rights, interests and obligations of a Bank with
the Commitments as set forth in such instrument of assumption, and the
transferor Bank shall be released from its obligations hereunder to a
corresponding extent, and no further consent or action by any party shall be
required. Upon the consummation of any assignment pursuant to this paragraph
(ii), the transferor Bank, the Administrative Agent and the Borrower shall make
appropriate arrangements so that, if required, new Notes are issued to the
Assignee.
(iii) No Assignee, Participant or other transferee of any Bank's rights
shall be entitled to receive any greater payment under Sections 2.11 and 2.12
than such Bank
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would have been entitled to receive with respect to the rights transferred,
unless such transfer is made with the Borrowers' prior written consent or at a
time when the circumstances giving rise to such greater payment did not exist.
(iv) Assignments require a fee payable by the Assignor to the
Administrative Agent, solely for the account of the Administrative Agent, in the
amount of $3,000.
10.11 SYNDICATION OR PARTICIPATION OF THE LOANS. The Agent, in
cooperation with the Borrowers, will manage all aspects of the syndication or
participation of the Loans, including, without limitation, decisions as to the
selection of financial institutions to be approached, when such financial
institutions will be approached and any titles offered to proposed financial
institutions, which financial institutions will participate (so long as such
financial institutions are reasonably acceptable to the Borrowers), the final
allocation of commitments and the final distribution of fees, and the Agent may,
on behalf of the Borrowers, accept commitments from other financial
institutions. If the Agent deems such actions advisable in order to ensure a
successful syndication or participation, the Agent may propose that this
Agreement be amended, modified or supplemented, PROVIDED that the Total
Commitment remains the same, such changes are agreeable to the Majority Banks or
all of the Banks, as applicable, and such changes are not materially adverse to
the Borrowers. The Borrowers agree to cooperate with the syndication or
participation of the Loans (including assignments and participations) and the
Borrowers will provide all information (including the financial statements
required to be delivered pursuant to Section 4.7), reasonably requested by the
Agent in a form reasonably satisfactory to the Agent. The Borrowers will also
make its management and its advisors available at reasonable times to meet with
potential banks in connection with the syndication or assignment of the Loans.
The Agent will require any potential bank or participant who receives such
information provided by the Borrower to keep such information confidential.
10.12. COUNTERPARTS. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures hereto and thereto were
upon the same instrument.
10.13. PARTIAL INVALIDITY. The invalidity or unenforceability of any one
or more phrases, clauses or sections of this Agreement shall not affect the
validity or enforceability of the remaining portions of it.
10.14. CAPTIONS. The captions and headings of the various sections and
subsections of this Agreement are provided for convenience only and shall not be
construed to modify the meaning of such sections or subsections.
10.15. WAIVER OF JURY TRIAL. EACH MEMBER OF THE BORROWER AFFILIATED
GROUP AGREES THAT NEITHER IT NOR ANY OF ITS ASSIGNEES OR SUCCESSORS SHALL (A)
SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM OR ANY OTHER ACTION
BASED UPON, OR ARISING OUT OF, THIS AGREEMENT, ANY RELATED INSTRUMENTS, ANY
COLLATERAL OR THE DEALINGS OR THE
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RELATIONSHIP BETWEEN EACH MEMBER OF THE BORROWER AFFILIATED GROUP AND ITS
ASSIGNS AND SUCCESSORS AND THE AGENT AND/OR ANY BANK, OR (B) SEEK TO CONSOLIDATE
ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT
BEEN WAIVED. THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY DISCUSSED BY THE
AGENT, THE BANKS AND EACH MEMBER OF THE BORROWER AFFILIATED GROUP, AND THESE
PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. EACH MEMBER OF THE BORROWER
AFFILIATED GROUP ACKNOWLEDGES THAT NEITHER THE AGENT NOR ANY BANK HAS AGREED
WITH OR REPRESENTED TO IT THAT THE PROVISIONS OF THIS PARAGRAPH WILL NOT BE
FULLY ENFORCED IN ALL INSTANCES.
10.16. WAIVER OF SPECIAL DAMAGES. EXCEPT AS PROHIBITED BY LAW, EACH
MEMBER OF THE BORROWER AFFILIATED GROUP HEREBY WAIVES ANY RIGHTS WHICH IT MAY
HAVE TO CLAIM OR RECOVER IN ANY LITIGATION WITH RESPECT TO ANY ACTION OR CLAIM
ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THE LOAN DOCUMENTS, INCLUDING
WITHOUT LIMITATION THIS AGREEMENT, THE NOTES AND THE SECURITY DOCUMENTS AND ANY
AMENDMENTS THEREOF, ANY SPECIAL EXEMPLARY OR PUNITIVE DAMAGES. EACH MEMBER OF
THE BORROWER AFFILIATED GROUP (A) CERTIFIES THAT NO BANK, AGENT OR
REPRESENTATIVE, AGENT OR ATTORNEY THEREOF HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH ENTITY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVERS AND (B) ACKNOWLEDGES THAT, IN ENTERING INTO THIS
AGREEMENT, THE BANKS AND THE AGENT ARE RELYING UPON, AMONG OTHER THINGS, THE
WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION 10.16.
10.17. ENTIRE AGREEMENT. This Agreement, the Notes, the other Security
Documents and the other documents and agreements executed in connection herewith
constitute the final agreement of the parties hereto and supersede any prior
agreement or understanding, written or oral, with respect to the matters
contained herein and therein.
10.18. BUSINESS TRUST. Unicco is a Massachusetts business trust. A copy
of the Declaration of Trust establishing such trust is on file with the
Secretary of the Commonwealth of Massachusetts. This Agreement is executed on
behalf of such trust by officers of the trust as officers and not individually.
Without waiving any rights the Agent or the Banks may have under applicable law,
the Agent or the Banks acknowledge that the obligations of such trust under or
arising out of this Agreement are binding upon the assets and property of the
trust and not upon any of the trustees, officers or shareholders of such trust
individually, except as specifically set forth in this Agreement as applicable
to them in such capacity.
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<PAGE> 85
(Remainder of page intentionally left blank)
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<PAGE> 86
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
THE BORROWERS:
UNICCO SERVICE COMPANY
By: /s/ GEORGE A. KECHES
__________________________________
Title: CFO and Treasurer
USC, INC.
By: /s/ GEORGE A. KECHES
__________________________________
Title: Treasurer
UNICCO SECURITY SERVICES, INC.
By: /s/ GEORGE A. KECHES
__________________________________
Title: Authorized Signatory
UNICCO GOVERNMENT SERVICES, INC.
By: /s/ GEORGE A. KECHES
__________________________________
Title: Treasurer
UNICCO FINANCE CORP.
By: /s/ GEORGE A. KECHES
____________________________________
Title: Treasurer
THE AGENT:
BANKBOSTON, N.A.,
as Agent, Administrative Agent and
Collateral Agent
By: /s/ HENRY L. PETRILLO
__________________________________
Title: Director
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<PAGE> 87
THE BANKS:
BANKBOSTON, N.A.
By: /s/ HENRY L. PETRILLO
-----------------------------------
Title: DIRECTOR
The undersigned hereby
acknowledges and agrees to each
of the terms of the foregoing Loan
Agreement applicable to it as a
member of the Borrower
Affiliated Group or otherwise:
UNICCO FACILITY SERVICES CANADA COMPANY
By: /s/ GEORGE A. KECHES
---------------------------------
Title: TREASURER
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<PAGE> 88
Each of the undersigned hereby acknowledges
and agrees to the provisions of Section 6.10
applicable to him and agrees to immediately
reimburse the Company in cash for any and all
amounts received by him in contravention of
such Section 6.10 (and to provide evidence
thereof to the Collateral Agent):
/s/ STEVEN C. KLETJIAN
- -----------------------------
Steven C. Kletjian
/s/ ROBERT P. KLETJIAN
- -----------------------------
Robert P. Kletjian
/s/ RICHARD J. KLETJIAN
- -----------------------------
Richard J. Kletjian
/s/ GEORGE A. KECHES
- -----------------------------
George A. Keches
/s/ JOHN C. FEITOR
- -----------------------------
John C. Feitor
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<PAGE> 1
EXHIBIT 10.2
June 25, 1996
Mr. John P. McGillicuddy
17 Somerset Avenue
Garden City, NY 11530
Dear Mr. McGillicuddy:
This letter is to confirm the agreement between you ("Employee") and
UNICCO Service Company ("Employer"), concerning your employment to commence
immediately following the closing of UNICCO's purchase of the Ogden Services
Corporation's Facility Service business.
1. EMPLOYMENT AND DUTIES
Employer hereby employs Employee as Chief Operating Officer. Employee
agrees to perform such services consistent with Employee's position as
shall, from time to time, be assigned to Employee by the Employer and
which are customary to such office and necessary to the operations of
the Employer. Employee shall use Employee's best efforts to promote the
interest of Employer and shall devote Employee's full business time,
energy and skill to the business and affairs of Employer during the Term
set forth below; provided, however, Employer agrees that Employee may
devote whatever time is reasonably required by Ogden Services
Corporation in the furtherance of the sale of the New York Region on
behalf of Ogden Services Corporation. Employer agrees that Employee is
not required to relocate his family to Boston until June, 1997, and that
Employee will not be required to further relocate outside of the Boston
area during the balance of the Term.
2. TERM OF EMPLOYMENT
The term of Employee's employment hereunder ("Term") shall commence on
the next business day following Employer's closing of the purchase of
the OSC business, and shall continue for a period of three years
thereafter unless terminated earlier as provided in paragraph 4 of this
agreement.
3. COMPENSATION
As compensation for Employee's services hereunder, Employer agrees to
provide the following compensation and benefits to employee:
a) SALARY. Employee shall receive a base annual salary at the rate
of $325,000 for year one, $350,000 for year two and $375,000 for
year three.
<PAGE> 2
b) FRINGE BENEFITS. During the Term, Employee shall be entitled to
use of a company car or a car allowance of $700 per month plus
all gas, maintenance, and oil expenses, car insurance and other
fringe benefits as are now, or hereafter may be, established by
Employer for the benefit of the senior executives of Employer
(collectively "Fringe Benefits") subject, however, to the
provisions of the various benefit plans and programs in effect
from time to time; provided, however, that the fringe benefits,
if revised by Employer, shall not, when viewed as a whole, be of
lesser value to Employee than what presently exists.
c) VACATION. Employee shall be entitled to four weeks of paid
vacation each year during the Term.
d) BONUS. Employee shall be eligible for a bonus according to an
incentive plan to be implemented by Employer, modeled after the
Ogden Services Corporation's plan. The plan will run on a
year-to-year basis from July 1 to the following June 30. The
measurement to be used will be a pre-debt service operating
income plan that will be agreed to by Employer and the Employee
for the fiscal year. Your incentive target for each year during
the Term will be $150,000. The Company reserves the right to
modify or change this plan from year to year but will not do so
without installing a new plan of at least equal potential value
for on plan performance.
e) LONG TERM INCENTIVE PLAN. In the event the Company institutes a
long term incentive plan, Employee will participate as a senior
manager. Such a plan is under consideration.
f) RELOCATION COSTS. Employer will reimburse Employee (on a net
after-tax basis) up to $75,000 for out-of-pocket costs and
expenses associated with selling his present home, moving
expenses (including packing and storage costs) and closing costs
associated with purchasing a new home in the Boston area. Such
costs will include without limitation real estate commissions,
transfer fees and other costs normally paid by seller, closing
costs in connection with the new home, bridge loan expenses, and
points for any loan origination fee in connection with obtaining
a mortgage for Employee's new home.
g) EXPENSES. Except as otherwise herein provided, Employer agrees to
reimburse Employee's reasonable business expenses, including
Employee's travel, meal and lodging expenses in and to Boston
during the first year of the Term.
h) STOCK OPTIONS. In the event that Employer should register its
securities in a public offering during the Term, Employer agrees
that Employee will be included in any incentive stock option plan
adopted by Employer.
4. TERMINATION
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<PAGE> 3
a) This Agreement may be terminated on written notice for either of
the following reasons:
(i) The death of the Employee; or
(ii) The physical or mental disability of Employee to such an
extent that Employee is unable to render services to
Employer for a continuous period exceeding one hundred
eighty (180) days.
b) In the event that Employer terminates this Agreement due to
Employee's death or disability, Employee or his estate, as the
case may be, shall be paid Employee's salary and shall continue
to receive all accrued Fringe Benefits hereunder through the end
of the month in which the termination event occurs.
c) Employer shall have the right at any time, by written notice to
Employee to terminate this Agreement immediately for "cause",
which for purposes of this Agreement shall be defined as:
(i) Employee's conviction of any act which constitutes a
felony under federal, state or local laws or the law of
any foreign country;
(ii) Employee's failure or refusal to adequately perform
Employee's duties and responsibilities hereunder in
accordance with the reasonable directions of the Board of
Directors of Employer which failure or refusal is within
his reasonable control and is not cured by Employee
within thirty (30) days of Employee's receipt of written
notice thereof from Employer's Board of Directors;
provided, however, that if any such failure or refusal to
adequately perform Employee's duties and responsibilities
hereunder cannot reasonably be cured within thirty (30)
days of Employee's receipt of written notice thereof,
Employer may not terminate Employee pursuant to this
paragraph 4(c)(ii) if Employee has taken appropriate
action to commence the cure of any such breach within a
ten (10) day period and completes the cure within a
reasonable period of time thereafter.
(iii) Employee's dishonesty which materially adversely affects
the business of Employer;
(iv) Employee's failure to cure any other material breach of
this Agreement within thirty (30) days of receipt of a
written notice from Employer specifying such breach.
d) In the event Employer terminates this Agreement for "cause",
Employee shall be paid Employee's salary and shall receive all
Fringe Benefits through the date of termination. Employee shall
not receive any further payments or benefits hereunder.
e) In the event of any dispute relating to whether Employee was
properly terminated for "cause" by Employer, such dispute shall
be arbitrated in accordance with the
-3-
<PAGE> 4
rules of the American Arbitration Association in Boston,
Massachusetts, and the losing party shall pay the attorneys fees
of the winning party to such arbitration.
f) Upon termination of this Agreement, Employee shall promptly
return all of Employer's property to Employer.
g) Upon termination of Employee's employment for any reason,
Employee shall tender Employee's resignation from any Board of
Directors on which Employee is then serving in connection with
his services hereunder.
h) Employer acknowledges that Employee has executed an Employment
Agreement with Ogden Services Corporation which extends to May 1,
2003, and that Ogden Services Corporation has released Employee
from its contract for the Term of this Agreement. Employer
further acknowledges that Employee may elect to return to Ogden
Services Corporation's employ at the end of the Term if a
mutually satisfactory arrangement has not been reached between
Employer and Employee. Employer acknowledges that Employee will
remain on Ogden Services Corporation's payroll during the Term in
order not to cause a break in service.
5. CONFIDENTIAL INFORMATION
a) Employee will not either during his employment by Employer or
within two (2) years thereafter disclose, use or make known for
his or another's benefit, any confidential information,
knowledge, or data of Employer or any affiliate of Employer.
b) Immediately upon the termination of his employment with Employer,
Employee shall deliver to Employer all copies of data,
information and knowledge, including, without limitation, all
documents, blueprints, photographs, correspondence, notebooks,
reports, computer programs, price lists, customer lists, samples,
lists of suppliers and craftsmen, designs, names of full-time and
part-time employees, free-lance workers and consultants, and all
other materials and copies thereof relating in any way to the
business of Employer in any way obtained by Employee in
connection with his employment with Employer.
6. SURVIVAL
Employee's duties under paragraph 5 of this Agreement shall survive the
termination of this Agreement and the termination of Employee's
employment with Employer. Employee acknowledges that a remedy at law for
any breach or threatened breach by Employee of the provisions of this
Agreement may be inadequate, and Employee therefore agrees that Employer
shall be entitled to injunctive relief in case of any such breach or
threatened breach.
7. ENTIRE UNDERSTANDING; GOVERNING LAW
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<PAGE> 5
This Agreement represents the entire agreement and understanding between
the parties with respect to the subject matter hereof and supersedes all
prior agreements and understandings. This Agreement shall be governed
by, and construed in accordance with, the laws of the Commonwealth of
Massachusetts applicable to agreements made and to be performed entirely
within Massachusetts.
8. MODIFICATIONS
This Agreement may not be amended, modified, canceled, discharged,
extended or changed except by an agreement in writing signed by the
party against whom enforcement of any such amendment, modification,
cancellation, discharge, extension or change is sought.
-5-
<PAGE> 6
9. LEGAL FEES
Employer agrees to reimburse Employee's reasonable legal fees at normal
hourly rates in connection with the negotiation of this agreement.
Please confirm your agreement to the foregoing by signing and returning
the enclosed copy of this letter.
UNICCO Service Company
By: /s/ GEORGE A. KECHES Date: June 26, 1996
____________________________
Agreement Confirmed:
By: /s/ JOHN P. McGILLICUDDY Date: June 25, 1996
___________________________
Employee
-6-
<PAGE> 1
EXHIBIT 10.3
SEVERANCE AGREEMENT
This Agreement, dated as of July 31, 1997, is by and between Robert L.
Trow ("Trow") and UNICCO Service Company, a Massachusetts Business Trust (the
"Company").
WHEREAS, Trow and the Company have a dispute regarding Trow's claims
and/or potential claims alleged pursuant to his Employment Agreement with the
Company dated May 6, 1996 ("Employment Agreement"); and
WHEREAS, Trow has resigned his employment with the Company on July
31, 1997; and
WHEREAS, the parties have reached certain agreements, as set forth herein,
relating to Trow's relationship with the Company; and
WHEREAS, said certain agreements constitute an accord and satisfaction of
Trow's claims and/or potential claims alleged pursuant to the Employment
Agreement;
NOW THEREFORE, the parties agree as follows:
1. RESIGNATION. The Company acknowledges that Trow resigned in good
standing as an officer, director and from any other position he held with the
Company and any company owned by the Company or under common control with the
Company ("Affiliate"), as of July 31, 1997, and his Employment Agreement with
the Company dated May 6, 1996 has been cancelled, except for the provisions of
paragraphs 5 and 6 thereof which shall survive as set forth in paragraph 7
thereof.
2. COMPENSATION.
(a) The Company has simultaneously paid to Trow $25,000 (less tax
withholdings), representing payment for accrued vacation, 1997 bonus,
"honeymoon reimbursement", legal fees in connection with the review of
this Agreement, tax return preparation, any balance owed to Charles River
Country Club for the outstanding assessment, and a $1500 loan to Kathy
Keefe.
(b) Trow acknowledges that no additional salary, compensation, or
any other payments are or may be payable to him on account of his
employment with the Company or any Affiliate, except as specifically set
forth herein.
3. EXPENSE REIMBURSEMENT.
Trow will be reimbursed for his business expenses incurred through
July 31, 1997. Any expenses incurred thereafter must be approved in advance by
the Company.
<PAGE> 2
4. LEASED AUTOMOBILE
Trow may retain use of his leased company car, at the Company's
rental expense, until December 31, 1997 (all gas, repairs, maintenance, etc. to
be paid by him), and thereafter he can continue use of the car during the
balance of the lease term provided he promptly reimburses the Company for all
rental charges. Compliance with all lease terms, including proper maintenance,
is Trow's responsibility.
5. MUTUAL RELEASES AND COVENANTS NOT TO SUE.
(a) In consideration of the payments to be made by the Company to
Trow under paragraphs 2, 3 and 7 of this Severance Agreement, and for
other valuable consideration, the receipt of which is hereby acknowledged,
Trow hereby covenants not to sue, and does hereby remise, release and
forever discharge the Company and its Affiliates and their respective
officers, directors, employees, trustees, beneficiaries, successors and
assigns of and from any and all claims, debts, demands, costs and expenses
that Trow has had, may now have, or may hereafter have, arising out of or
relating to his employment with the Company, from the beginning of the
world to the date hereof, except for matters to be performed in the future
as specifically set forth herein.
(b) In consideration of the accord and satisfaction of the
Employment Agreement, Trow's release and covenant not to sue the Company,
and for other valuable consideration, the receipt of which is hereby
acknowledged, the Company covenants not to sue, and does hereby remise,
release and forever discharge Trow of and from any and all claims, debts,
demands, costs and expenses that the Company has had, may now have, or may
hereafter have, arising out of or relating to Trow's employment with the
Company, from the beginning of the world to the date hereof, except for
matters to be performed in the future as specifically set forth herein.
6. COMPUTER TRANSFER. The Company does hereby transfer to Trow of its
right, title and interest in and to the following equipment previously used by
Trow: NEC Versa 6000 lap-top computer and printer. Serial No. 66016794. Such
transfer is made as-is and where-is, and THE COMPANY EXPRESSLY DISCLAIMS ANY AND
ALL EXPRESS OR IMPLIED WARRANTIES AS TO THE COMPUTER'S CONDITION, INCLUDING
WITHOUT LIMITATION ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
7. SEVERANCE. The Company will continue to pay Trow his base annual
salary of $195,000 until he finds other employment, but not beyond August 31,
1999; PROVIDED, HOWEVER, in the event of re-employment, Trow's severance benefit
will not be terminated if his total annual compensation is less than $195,000,
but rather will be reduced by the amount of such compensation received from his
new employment. PROVIDED, FURTHER, that in the event Trow obtains only part-time
employment or consulting, any compensation less than $1,667 in any
-2-
<PAGE> 3
month will not be deducted from the severance benefit. In addition, until the
first to occur of (i) the commencement of Trow's new employment or (ii) August
31, 1999, the Company will continue to provide health coverage (subject to
normal employee contribution) life insurance, 401K plan participation, long-term
disability and ADD benefits. Trow agrees to make himself available to the
Company from time to time, at reasonable times and upon reasonable notice, to
assist the Company in litigation matters, labor matters, etc., with which he was
previously involved, to the extent that such activities do not interfere with
his other employment or search therefor; all of such assistance to be without
charge to the Company until August 31, 1999, and thereafter the parties shall
establish a reasonable per diem rate.
7A. NO SET-OFF. The Company shall not be entitled to withhold any
severance payments due to Trow pursuant to the provisions of paragraph 7
in the event of any alleged breach by Trow of any covenant or commitment
made by him hereunder.
8. PUBLIC DISCLOSURE. Except as set forth in this Section 8, neither
Trow nor the Company shall disclose any of the terms of this Agreement or any of
the documents, agreements or instruments executed in connection herewith without
the express consent of the other party, or make any statements inconsistent
herewith. Consent to disclosure shall not be required to the extent such
disclosure is required to comply with any governmental requirements or to meet
bona fide financing or other business requirements of either party. The Company
agrees that it will provide an employment reference for Trow substantially as
set forth in EXHIBIT A hereto and that any public disclosure by the parties will
be substantially as follows:
Robert L. Trow resigned from UNICCO Service Company effective July
31, 1997 to pursue his own business interests.
The Company agrees not to disparage Trow, and Trow agrees not to disparage the
Company, or its officers, directors, employees, Trustees or beneficiaries.
9. COMPANY PROPERTY. Trow hereby represents and warrants that he
has delivered to the Company all documents or other items of property in
his possession or control which relate in any way to the business or
activities of the Company, as required in paragraph 6(b) of his Employment
Contract.
10. ARBITRATION. Any dispute concerning an alleged breach by either
party shall be resolved by binding arbitration commenced and conducted in
accordance with the then applicable rules of commercial arbitration of the
American Arbitration Association in an arbitration commenced and held before a
single arbitrator. Judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. The location of the
arbitration shall be in Boston, Massachusetts. The arbitrator may award costs
and attorneys fees to the prevailing party.
-3-
<PAGE> 4
11. GENERAL.
(a) Trow and the Company agree that any breach of this Agreement
could cause irreparable damage and that, in the event of such breach, each
shall have, in addition to any and all remedies at law, the right to seek
an injunction, specific performance or other equitable relief to prevent
the violation of a party's obligations hereunder.
(b) Each provision herein shall be treated as a separate and
independent clause, and the unenforceability of any one clause shall in no
way impair the enforceability of any of the other clauses herein.
Moreover, if one or more of the provisions contained in this Agreement
shall for any reason be held to be excessively broad as to scope, activity
or subject so as to be unenforceable at law, such provision or provisions
shall be construed by the appropriate judicial body by limiting and
reducing it or them, so as to be enforceable to the extent compatible with
the applicable law as it shall then appear.
(c) No waiver by a party hereto of a breach of any provision of this
Agreement shall be deemed to be a waiver of any preceding or subsequent
breach of the same or any other provision thereof.
(d) This Agreement shall be governed by the laws of Massachusetts.
This Agreement and the ancillary agreements referred to herein set forth
the entire agreement between the parties and supersede all prior
agreements and understandings relating to the subject matter hereof. Any
amendment or modification hereof will be effective only if in writing and
signed by the parties affected thereby.
(e) This Agreement shall bind and benefit the parties hereto and
their respective successors and assigns.
12. This Severance Agreement shall constitute an accord and satisfaction
of Trow's existing and/or potential claims under the Employment Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement under
seal as of the date first above written.
UNICCO SERVICE COMPANY
/s/ ROBERT L. TROW By: /s/ GEORGE A. KECHES
- ----------------------------- --------------------------------
Robert L. Trow Chief Financial Officer
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<PAGE> 1
EXHIBIT 10.4
SHARE PURCHASE AGREEMENT
(UNICCO Service Company)
This Share Purchase Agreement (the "Agreement") dated as of June 20,
1996, is between UNICCO Service Company, a Massachusetts business trust
("UNICCO") and George A. Keches (the "Purchaser").
UNICCO hereby offers to the Purchaser, and the Purchaser hereby
subscribes for, 27 Non-Voting shares (the "Shares") of UNICCO under the terms
and conditions set forth herein.
Therefore, the Parties agree as follows:
1. PURCHASE AND SALE. Upon the execution of this Agreement, UNICCO shall
issue and deliver to the Purchaser a certificate representing 27 Shares in
consideration of the Purchaser's payment of $8,035.42 per share (for a total of
$216,945.00) to be paid by delivery of a Promissory Note in the form of EXHIBIT
A hereto.
2. REPURCHASE OF SHARES. If at any time the Purchaser's employment with
UNICCO is terminated for any reason (including, without limitation, voluntary
termination, involuntary termination by UNICCO with or without cause, or death
or disability), the Purchaser shall be required to sell, and UNICCO shall be
required to purchase, for the purchase price described below, all of the Shares
sold to the purchaser hereunder. The purchase price of the Shares sold pursuant
to this Section 2 shall be the book value of such shares, determined by UNICCO's
independent public accountants (the "Accountants") as of the last day of the
month next preceding the month in which the termination of Purchaser's
employment with UNICCO shall have occurred, which determination shall be final
and binding on all parties hereto in the absence of manifest error.
Notwithstanding the foregoing provisions, if (a) UNICCO terminates the
Purchaser's employment without cause and (b) UNICCO or Steven C. Kletjian,
Robert P. Kletjian, Richard J. Kletjian, and George A. Keches (the "Existing
Stockholders") enter into an agreement within one year after the effective date
of the Purchaser's termination of employment in which (i) UNICCO agrees to sell
all or substantially all of its assets not in the ordinary course of its
business or (ii) the Existing Stockholders agree to sell more than fifty (50%)
percent of their shares of UNICCO (to persons or entities other than Permitted
Transferees, as defined below), the Purchaser shall be entitled to receive a
percentage of the consideration received by UNICCO from the sale of its assets
after satisfaction of all liabilities or received by the Existing Stockholders
for the sale of their shares, as the case may be, equivalent to the percentage
of the shares of UNICCO previously owned by the Purchaser on the effective date
of such termination as reduced by all previous payments made to the Purchaser
pursuant to this Section.
"Permitted Transferees" as used herein means (i) other Existing
Stockholders, (ii) the spouses, parents, sisters, brothers, ancestors and lineal
descendants ("Family Members") of Existing Stockholders or any trust established
for the benefit of any Family Members of Existing
<PAGE> 2
Stockholders, (iii) any corporation, partnership, trust or other entity in which
the Existing Stockholders or Family Members own more than fifty (50%) percent of
the outstanding capital stock, partnership interest or other beneficial interest
or (iv) any estate of a deceased Existing Stockholder or Family Member.
3. CLOSING OF UNICCO PURCHASE. The closing of any purchase and sale of
Shares required under the provisions of Section 2 shall be held within a
reasonable time, not to exceed sixty (60) days, after the termination of the
Purchaser's employment with UNICCO. At the closing, UNICCO shall make payment
for the Shares being purchased by delivering the full amount of the total
purchase price in cash or by certified or bank check, and the Purchaser (or his
legal representative, in the event of the Purchaser's death) shall deliver to
UNICCO the certificates for the Shares being sold, free and clear of all liens
and encumbrances, together with duly executed stock powers. At the closing, the
Purchaser shall repay UNICCO, in cash or by certified or bank check, the full
principal amount (and all accrued and unpaid interest thereon) of all loans and
advances made by UNICCO to the Purchaser.
4. RESTRICTIONS ON TRANSFER. The Purchaser agrees that, during the term
of his employment with UNICCO, he will not sell, assign, give, transfer, pledge,
hypothecate, mortgage or otherwise encumber or dispose of all or any of the
Shares (or any interest therein) transferred to him pursuant hereto. UNICCO may
at any time waive any restriction imposed by this Section 4 with respect to all
or any portion of such shares.
5. TERMINATION OF RESTRICTIONS UPON PUBLIC OFFERING. The restrictions on
transfer set forth in Section 4 hereof, and the obligations set forth in Section
2 hereof, shall terminate upon an offering and distribution (if ever) to the
public of shares of UNICCO's voting shares of Common Stock pursuant to a
registration statement filed under the Securities Act of 1933, as amended (the
"Securities Act"), or a successor statute.
6. INVESTMENT REPRESENTATION. The Purchaser represents that his
acquisition of the Shares is for his own account for investment and not with a
view to the resale or distribution thereof, and that no subsequent sale or offer
for sale of the Shares shall be made unless (i) the Shares are registered under
the Securities Act and applicable state securities laws or (ii), in the opinion
of UNICCO's counsel, an exemption from such registration is available.
7. EMPLOYMENT RIGHTS. The Purchaser's ownership of the Shares shall not
confer upon him any right with respect to his employment by UNICCO, UNICCO or
any parent or subsidiary of UNICCO nor shall such ownership interfere in any way
with the right of any of such companies to terminate the employment of the
Purchaser.
8. LEGEND ON CERTIFICATES. UNICCO shall place a legend on each
certificate representing the Shares transferred to the Purchaser hereunder
reflecting the restrictions on transfer and UNICCO's repurchase obligations set
forth herein.
9. NOTICES. Any communication or notice required or permitted to be
given under this
<PAGE> 3
Agreement shall be in writing and mailed by registered or certified mail or
delivered in hand, if to UNICCO and the Existing Stockholders, to UNICCO's
Treasurer at 4 Copley Place, Boston, Massachusetts 02116 or such other address
as UNICCO may specify in writing to the Purchaser, and if to the Purchaser, to
such address as the Purchaser shall last have furnished to UNICCO.
10. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
heirs, executors, administrators, successors and assigns of the respective
parties hereto.
Executed as a sealed instrument as of June 20, 1996.
UNICCO SERVICE COMPANY
By: /s/ STEVEN C. KLETJIAN
--------------------------------------
Steven C. Kletjian, Chairman/CEO
/s/ GEORGE A. KECHES
------------------------------------------
George A. Keches
<PAGE> 1
EXHIBIT 10.5
SHARE PURCHASE AGREEMENT
This Share Purchase Agreement ("Agreement") dated as of July 1, 1989, is
between Unicco Service Company, a Massachusetts business trust ("Unicco") and
John C. Feitor (the "Purchaser").
Unicco hereby offers to the Purchaser, and the Purchaser hereby
subscribes for, 27 shares of Non Voting Beneficial Interest (the "Shares") of
Unicco under the terms and conditions set forth herein.
Therefore, the parties agree as follows:
1. PURCHASE AND SALE. Upon the execution of this Agreement, Unicco shall
issue and deliver to the Purchaser a certificate representing 27 Shares in
consideration of the Purchaser's payment of $70,983.00 therefor, payable ten
(10%) percent by certified or bank check and the remainder by issuance and
delivery to Unicco of a Promissory Note in the form of Exhibit A hereto, with
interest at the minimum rate which must be stated to avoid imputed interest for
Federal income tax purposes.
2. REPURCHASE OF SHARES If at any time the Purchaser's employment with
Unicco is terminated for any reason (including, without limitation, voluntary
termination, involuntary termination by Unicco with or without cause, or death
or disability), the Purchaser shall be required to sell, and Unicco shall be
required to purchase, for the purchase price described below, all of the Shares
sold to the Purchaser hereunder. The purchase price of the Shares shall be the
book value of such shares, determined by Unicco's independent public accountants
as of the last day of the month next preceding the month in which the
termination of Purchaser's employment with Unicco shall have occurred.
The closing of any purchase and sale of Shares required under the
provisions of this Section 2 shall be held within a reasonable time, not to
exceed sixty (60) days, after the termination of the Purchaser's employment with
Unicco. At the closing, Unicco shall make payment for the Shares being purchased
by delivering the full amount of the total purchase price in cash or by
certified or bank check, and the Purchaser (or his legal representative, in the
event of the Purchaser's death) shall deliver to Unicco the certificates for the
Shares being sold, free and clear of all liens and encumbrances, together with
duly executed stock powers. At the closing, the Purchaser shall repay Unicco, in
cash or by certified or bank check, the full principal amount (and all accrued
and unpaid interest thereon) of all loans and advances made by Unicco to the
Purchaser.
Notwithstanding the foregoing provisions, if (a) Unicco terminates the
Purchaser's employment without cause and (b) Unicco or Steven C. Kletjian,
Robert P. Kletjian, Richard J. Kletjian and Louis J. Lanzillo (the "Existing
Stockholders") enter into an agreement within one year after the effective date
of the Purchaser's termination of employment in which (i) Unicco agrees to sell
all or substantially all of its assets not in the ordinary course of its
business or (ii) the Existing Stockholders agree to sell more than 50% of their
shares of beneficial interest in Unicco (to persons or entities other than
Permitted Transferees, as defined below), the Purchaser shall be entitled to
receive a percentage of the consideration received by Unicco from the sale of
its assets
<PAGE> 2
after satisfaction of all corporate liabilities or received by the Existing
Stockholders for the sale of their shares, as the case may be, equivalent to the
percentage of the beneficial interest of Unicco previously owned by the
Purchaser on the effective date of such termination as reduced by all previous
payments made to the Purchaser pursuant to this Section.
-2-
<PAGE> 3
"Permitted Transferees" as used herein means (i) other Existing
Stockholders, (ii) the spouses, parents, sisters, brothers, ancestors and lineal
descendants ("Family Members") of Existing Stockholders, (iii) any corporation,
partnership, trust or other entity in which the Existing Stockholders or Family
Members own more than fifty percent (50%) of the outstanding capital stock,
partnership interest or other beneficial interest or (iv) any estate of a
deceased Existing Stockholder or Family Member.
3. RESTRICTIONS ON TRANSFER. The Purchaser agrees that, during the term
of his employment with Unicco, he will not, except pursuant to the Pledge and
Escrow Agreement of even date herewith among the Purchaser, Unicco and Noel G.
Posternak, P.C., as Escrow Agent, sell, assign, give, transfer, pledge,
hypothecate, mortgage or otherwise encumber or dispose or dispose of all or any
of the Shares (or any interest therein) transferred to him pursuant hereto.
Unicco may at any time waive any restriction imposed by this Section 3 with
respect to all or any portion of such shares.
4. TERMINATION OF RESTRICTIONS UPON PUBLIC OFFERING. The restrictions on
transfer set forth in Section 3 hereof, and the obligations imposed by Section 2
hereof, shall terminate upon an offering and distribution (if ever) to the
public of shares of Unicco's voting shares of beneficial interest pursuant to a
registration statement filed under the Securities Act of 1933, as amended (the
"Securities Act"), or a successor statute.
5. INVESTMENT REPRESENTATION. The Purchaser represents that his
acquisition of the Shares is for his own account for investment and not with a
view to the resale or distribution thereof, and that no subsequent sale or offer
for sale of the Shares shall be made unless (i) the Shares are registered under
the Securities Act and applicable state securities laws or (ii), in the opinion
of Unicco's counsel, an exemption from such registration is available.
6. EMPLOYMENT RIGHTS. The Purchaser's ownership of the Shares shall not
confer upon him any right with respect to his employment by Unicco or any parent
or subsidiary corporation of Unicco nor shall such ownership interfere in any
way with the right of any of such corporations to terminate the employment of
the Purchaser.
7. LEGEND ON CERTIFICATES. Unicco shall place a legend on each
certificate representing the Shares transferred to the Purchaser hereunder
reflecting the restrictions on transfer and Unicco's repurchase obligations set
forth herein.
8. NOTICES. Any communication or notice required or permitted to be
given under this Agreement shall be in writing and mailed by registered or
certified mail or delivered in hand, if to Unicco and the Existing Stockholders,
to Unicco's Treasurer at 41 William Linskey Way, Cambridge, Massachusetts, 02142
or such other address as Unicco may specify in writing to the Purchaser, and if
to the Purchaser, to such address as the Purchaser shall last have furnished to
Unicco.
9. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
heirs, executors, administrators, successors and assigns of the respective
parties hereto.
-3-
<PAGE> 4
Executed as a sealed instrument as of July 1, 1989.
UNICCO SERVICE COMPANY
By: /s/ STEVEN C. KLETJIAN
-------------------------------------
/s/ JOHN C. FEITOR
-------------------------------------
John C. Feitor
-4-
<PAGE> 1
EXHIBIT 12.1
UNICCO SERVICE COMPANY
CALCULATION OF EARNINGS TO FIXED CHARGES
FOR THE FIVE YEARS ENDED 6/29/97
AND FOR THE QUARTERS ENDED
9/29/96 AND 9/28/97
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
JUNE 27, 1993 JUNE 26, 1994 JUNE 25, 1995 JUNE 30, 1996 JUNE 27, 1997
<S> <C> <C> <C> <C> <C>
Calculation of earnings
Pre-tax income from continuing operations 1,801,000 2,413,000 2,688,000 1,936,000 3,522,000
Add fixed charges less capitalized
interest 425,000 405,000 413,000 543,000 12,561,000
Add PY's capitalized interest, amortized
during period --
------------------------------------------------------------------------------
EARNINGS AS DEFINED 2,226,000 2,818,000 3,101,000 2,479,000 16,083,000
------------------------------------------------------------------------------
Calculation of fixed charges
Interest Expense 144,000 110,000 80,000 178,000 10,406,000
Capitalized interest --
Amort. of debt expenses, disc., or premium 1,086,000
Rental expense representing interest 281,000 295,000 333,000 365,000 1,069,000
------------------------------------------------------------------------------
FIXED CHARGES AS DEFINED 425,000 405,000 413,000 543,000 12,561,000
------------------------------------------------------------------------------
RATIO OF EARNINGS TO FIXED CHARGES 5.2 7.0 7.5 4.6 1.3
<CAPTION>
QUARTER ENDED QUARTER ENDED
SEPTEMBER 29, 1996 SEPTEMBER 28, 1997
<S> <C> <C>
Calculation of earnings
Pre-tax income from continuing operations 2,167,000 767,000
Add fixed charges less capitalized
interest 2,459,000 3,415,000
Add PY's capitalized interest, amortized
during period -- --
------------------------------------
EARNINGS AS DEFINED 4,626,000 4,182,000
------------------------------------
Calculation of fixed charges
Interest Expense 2,187,000 2,735,000
Capitalized interest -- --
Amort. of debt expenses, disc., or premium 272,000 272,000
Rental expense representing interest 239,000 406,000
------------------------------------
FIXED CHARGES AS DEFINED 2,698,000 3,413,000
------------------------------------
RATIO OF EARNINGS TO FIXED CHARGES 1.7 1.2
</TABLE>
<PAGE> 1
EXHIBIT 16.1
December 12, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Unicco Service Company
Dear Sirs:
We have reviewed a copy of the Registration Statement on Form S-4 dated
December 12, 1997 of Unicco Service Company and are in agreement with the
statements made by it therein in response to Item 304(a) of Regulation S-K under
the Securities Act of 1933, as amended.
Very truly yours,
ARTHUR ANDERSEN LLP
<PAGE> 1
EXHIBIT 21.1
SUBSIDIARIES OF UNICCO SERVICE COMPANY
(1) UNICCO Finance Corp. (Delaware Domestic Corporation)
(2) USC, Inc. (Massachusetts Domestic Corporation)
(a) UNICCO Government Services, Inc. f/k/a Ogden Allied Eastern States
Maintenance Corporation (Delaware Domestic Corporation)
(b) UNICCO Security Services, Inc. f/k/a Ogden Allied Security Services,
Inc. (Delaware Domestic Corporation)
(3) UNICCO Facility Services Canada Company (Nova Scotia Unlimited Liability
Company)*
* UNICCO Facility Services Canada Company is owned by both UNICCO Service
Company (79%) and USC, Inc. (21%).
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form S-4 of UNICCO Service Company and UNICCO Finance
Corp. of our reports dated September 25, 1997 relating to the combined
consolidated financial statements of UNICCO Service Company and September 23,
1997 relating to the combined statements of income and of cash flows of the
Allied Facility Services Business, respectively, which appear in such
Prospectus. We also consent to the reference to us under the heading "Experts"
in such Prospectus.
Price Waterhouse L.L.P.
Boston, MA
December 15, 1997
<PAGE> 1
Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
(and to all references to our Firm) included in or made a part of this
Registration Statement.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
December 12, 1997
<PAGE> 1
EXHIBIT 25.1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
----------
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2) __
STATE STREET BANK AND TRUST COMPANY
(Exact name of trustee as specified in its charter)
Massachusetts 04-186-7445
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)
225 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
John R. Towers, Esq., Executive Vice President and General Counsel
225 Franklin Street, Boston, Massachusetts 02110
(617) 654-3253
(Name, address and telephone number of agent for service)
--------------------------
UNICCO SERVICE COMPANY
(Exact name of obligor as specified in its charter)
MASSACHUSETTS 04-287-2501
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
UNICCO FINANCE CORP.
(Exact name of obligor as specified in its charter)
DELAWARE (applied for)
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
FOUR COPLEY PLACE
BOSTON, MASSACHUSETTS 02116
(Address of principal executive offices) (Zip Code)
9 7/8% SENIOR SUBORDINATED NOTES, SERIES B
(Title of indenture securities)
<PAGE> 2
GENERAL
ITEM 1. GENERAL INFORMATION.
FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISORY
AUTHORITY TO WHICH IT IS SUBJECT.
Department of Banking and Insurance of The
Commonwealth of Massachusetts, 100 Cambridge Street,
Boston, Massachusetts.
Board of Governors of the Federal Reserve System,
Washington, D.C., Federal Deposit Insurance
Corporation, Washington, D.C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST
POWERS.
Trustee is authorized to exercise corporate trust
powers.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH
SUCH AFFILIATION.
The obligor is not an affiliate of the trustee or of its parent,
State Street Corporation. References to the "obligor" herein
shall be deemed to mean UNICCO Service Company and UNICCO
Finance Corp., its wholly-owned subsidiary.
(See note on page 4.)
ITEM 3. THROUGH ITEM 15. NOT APPLICABLE.
ITEM 16. LIST OF EXHIBITS.
LIST BELOW ALL EXHIBITS FILED AS PART OF THIS STATEMENT OF
ELIGIBILITY.
1. A COPY OF THE ARTICLES OF ASSOCIATION OF THE TRUSTEE AS
NOW IN EFFECT.
A copy of the Articles of Association of the
trustee, as now in effect, is on file with the
Securities and Exchange Commission as Exhibit 1 to
Amendment No. 1 to the Statement of Eligibility and
Qualification of Trustee (Form T-1) filed with the
Registration Statement of Morse Shoe, Inc. (File No.
22-17940) and is incorporated herein by reference
thereto.
-2-
<PAGE> 3
2. A COPY OF THE CERTIFICATE OF AUTHORITY OF THE TRUSTEE TO
COMMENCE BUSINESS, IF NOT CONTAINED IN THE ARTICLES OF
ASSOCIATION.
A copy of a Statement from the Commissioner of Banks
of Massachusetts that no certificate of authority
for the trustee to commence business was necessary
or issued is on file with the Securities and
Exchange Commission as Exhibit 2 to Amendment No. 1
to the Statement of Eligibility and Qualification of
Trustee (Form T-1) filed with the Registration
Statement of Morse Shoe, Inc. (File No. 22-17940)
and is incorporated herein by reference thereto.
3. A COPY OF THE AUTHORIZATION OF THE TRUSTEE TO EXERCISE
CORPORATE TRUST POWERS, IF SUCH AUTHORIZATION IS NOT
CONTAINED IN THE DOCUMENTS SPECIFIED IN PARAGRAPH (1) OR
(2), ABOVE.
A copy of the authorization of the trustee to
exercise corporate trust powers is on file with the
Securities and Exchange Commission as Exhibit 3 to
Amendment No. 1 to the Statement of Eligibility and
Qualification of Trustee (Form T-1) filed with the
Registration Statement of Morse Shoe, Inc. (File No.
22-17940) and is incorporated herein by reference
thereto.
4. A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE, OR
INSTRUMENTS CORRESPONDING THERETO.
A copy of the by-laws of the trustee, as now in
effect, is on file with the Securities and Exchange
Commission as Exhibit 4 to the Statement of
Eligibility and Qualification of Trustee (Form T-1)
filed with the Registration Statement of Eastern
Edison Company (File No. 33-37823) and is
incorporated herein by reference thereto.
5. A COPY OF EACH INDENTURE REFERRED TO IN ITEM 4. IF THE
OBLIGOR IS IN DEFAULT.
Not applicable.
6. THE CONSENTS OF UNITED STATES INSTITUTIONAL TRUSTEES
REQUIRED BY SECTION 321(B) OF THE ACT.
The consent of the trustee required by Section
321(b) of the Act is annexed hereto as Exhibit 6 and
made a part hereof.
7. A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE
PUBLISHED PURSUANT TO LAW OR THE REQUIREMENTS OF ITS
SUPERVISING OR EXAMINING AUTHORITY.
A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority is annexed hereto as Exhibit 7 and made a
part hereof.
-3-
<PAGE> 4
NOTES
In answering any item of this Statement of Eligibility which relates to
matters peculiarly within the knowledge of the obligor or any underwriter for
the obligor, the trustee has relied upon information furnished to it by the
obligor and the underwriters, and the trustee disclaims responsibility for the
accuracy or completeness of such information.
The answer furnished to Item 2. of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which would
have been required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, State Street Bank and Trust Company, a corporation
organized and existing under the laws of The Commonwealth of Massachusetts, has
duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Boston and The
Commonwealth of Massachusetts, on the 14th of November 1997.
STATE STREET BANK AND TRUST COMPANY
By: /s/ ANDREW M. SINASKY
------------------------------------
NAME: ANDREW M. SINASKY
TITLE: ASSISTANT VICE PRESIDENT
-4-
<PAGE> 5
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture
Act of 1939, as amended, in connection with the proposed issuance by UNICCO
SERVICE COMPANY and UNICCO FINANCE CORP. of their 9 7/8% SENIOR SUBORDINATED
NOTES, we hereby consent that reports of examination by Federal, State,
Territorial or District authorities may be furnished by such authorities to the
Securities and Exchange Commission upon request therefor.
STATE STREET BANK AND TRUST COMPANY
By: /s/ ANDREW M. SINASKY
------------------------------------
NAME: ANDREW M. SINASKY
TITLE: ASSISTANT VICE PRESIDENT
DATED: NOVEMBER 14, 1997
-5-
<PAGE> 6
EXHIBIT 7
Consolidated Report of Condition of State Street Bank and Trust
Company, Massachusetts and foreign and domestic subsidiaries, a state banking
institution organized and operating under the banking laws of this commonwealth
and a member of the Federal Reserve System, at the close of business JUNE 30,
1997, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act and in
accordance with a call made by the Commissioner of Banks under General Laws,
Chapter 172, Section 22(a).
<TABLE>
<CAPTION>
Thousands of
Dollars
<S> <C>
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin .................... 1,842,337
Interest-bearing balances ............................................. 8,771,397
Securities ..................................................................... 10,596,119
Federal funds sold and securities purchased
under agreements to resell in domestic offices
of the bank and its Edge subsidiary ................................... 5,953,036
Loans and lease financing receivables:
Loans and leases, net of unearned income .............................. 5,769,090
Allowance for loan and lease losses ................................... 74,031
Allocated transfer risk reserve ....................................... 0
Loans and leases, net of unearned income and allowances ............... 5,695,059
Assets held in trading accounts ................................................ 916,608
Premises and fixed assets ...................................................... 374,999
Other real estate owned ........................................................ 755
Investments in unconsolidated subsidiaries ..................................... 28,992
Customers' liability to this bank on acceptances outstanding ................... 99,209
Intangible assets .............................................................. 229,412
Other assets ................................................................... 1,589,526
----------
Total assets ................................................................... 36,097,449
==========
LIABILITIES
Deposits:
In domestic offices ................................................... 11,082,135
Noninterest-bearing .......................................... 8,932,019
Interest-bearing ............................................. 2,150,116
In foreign offices and Edge subsidiary ................................ 13,811,677
Noninterest-bearing .......................................... 112,281
Interest-bearing ............................................. 13,699,396
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge subsidiary ................................... 6,785,263
Demand notes issued to the U.S. Treasury and Trading Liabilities ............... 755,676
Other borrowed money ........................................................... 716,013
Subordinated notes and debentures .............................................. 0
</TABLE>
<PAGE> 7
<TABLE>
<S> <C>
Bank's liability on acceptances executed and outstanding ....................... 99,605
Other liabilities .............................................................. 841,566
Total liabilities .............................................................. 34,091,935
EQUITY CAPITAL
Perpetual preferred stock and related surplus .................................. 0
Common stock ................................................................... 29,931
Surplus ........................................................................ 437,183
Undivided profits and capital reserves/Net unrealized holding
gains (losses) ................................................................. 1,542,695
Cumulative foreign currency translation adjustments ............................ (4,295)
Total equity capital ........................................................... 2,005,514
----------
Total liabilities and equity capital ........................................... 36,097,449
</TABLE>
I, Rex S. Schuette, Senior Vice President and Comptroller of the above named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Rex S. Schuette
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
David A. Spina
Marshall N. Carter
Truman S. Casner
-7-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S AUDITED COMBINED CONSOLIDATED FINANCIAL STATEMENTS FOR THE FISCAL
YEAR ENDED JUNE 29, 1997 AND THE UNAUDITED COMBINED CONSOLIDATED FINANCIAL
STATEMENTS FOR THE THREE MONTHS ENDED SEPTEMBER 28, 1997, AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH STATEMENTS INCLUDED IN THE REGISTRATION
STATEMENT.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> YEAR 3-MOS
<FISCAL-YEAR-END> JUN-29-1997 JUN-28-1998
<PERIOD-START> JUL-01-1996 JUN-30-1997
<PERIOD-END> JUN-29-1997 SEP-28-1997
<CASH> 3,928 2,106
<SECURITIES> 0 0
<RECEIVABLES> 90,487 90,091
<ALLOWANCES> 1,561 1,838
<INVENTORY> 0 0
<CURRENT-ASSETS> 96,203 92,614
<PP&E> 11,693 11,893
<DEPRECIATION> 7,046 7,596
<TOTAL-ASSETS> 161,087 156,244
<CURRENT-LIABILITIES> 51,153 47,351
<BONDS> 99,866 99,363
0 0
0 0
<COMMON> 378 378
<OTHER-SE> 8,458 8,803
<TOTAL-LIABILITY-AND-EQUITY> 161,087 156,244
<SALES> 0 0
<TOTAL-REVENUES> 533,882 134,717
<CGS> 0 0
<TOTAL-COSTS> 482,526 121,146
<OTHER-EXPENSES> 35,205 9,518
<LOSS-PROVISION> 1,204 277
<INTEREST-EXPENSE> 11,491 3,009
<INCOME-PRETAX> 3,522 767
<INCOME-TAX> 2,339 225
<INCOME-CONTINUING> 1,183 542
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 1,183 542
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
</TABLE>
<PAGE> 1
Exhibit 99.1
LETTER OF TRANSMITTAL
UNICCO SERVICE COMPANY
AND UNICCO FINANCE CORP.
OFFER TO EXCHANGE
9 7/8% SENIOR SUBORDINATED NOTES DUE 2007, SERIES B
FOR ANY AND ALL OF THE OUTSTANDING
9 7/8% SENIOR SUBORDINATED NOTES, DUE 2007
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 5:00P.M.,
NEW YORK CITY TIME, ON[ ], 1997, UNLESS THE OFFER IS EXTENDED,
STATE STREET BANK AND TRUST COMPANY
(THE "EXCHANGE AGENT")
By Mail By Facsimile Transmission: By Hand or
Overnight Courier:
(registered or certified (617) 664-5395
mail recommended): State Street Bank and
Trust Company
Corporate Trust Department
State Street Bank Confirm by Telephone 4th Floor
and Trust Company or for Information Call: Two International Place
Corporate Trust Department (617) 664-5587 Boston, MA 021
P.O. Box 778
Boston, MA 02102-0078
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE
OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN AS SET FORTH
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
By execution hereof, the undersigned hereby acknowledges receipt of the
Prospectus dated October 14, 1997 (the "Prospectus") of Unicco Service Company
and Unicco Finance Corp. (together the "Company") and this Letter of
Transmittal, which together constitute the Company's offer (the "Exchange
Offer") to exchange $1,000 in principal amount of its 9 7/8% Senior Subordinated
Notes due 2007, Series B (the "Exchange Notes"), which have
1
<PAGE> 2
been registered under the Securities Act of 1933, as amended (the "Securities
Act"), pursuant to a Registration Statement of which the Prospectus is a part,
for each $1,000 in principal amount of its outstanding 9 7/8% Senior
Subordinated Notes due 2007 (the "Notes"). The term "Expiration Date" shall mean
5:00 p.m., New York City time, on [ ], 1997, unless the Exchange Offer is
extended, in which case the term "Expiration Date" means the latest date and
time to which the Exchange Offer is extended. Capitalized terms used but not
defined herein have the meaning given to them in the Prospectus.
YOUR BANK OR BROKER CAN ASSIST YOU IN COMPLETING THIS FORM. THE
INSTRUCTIONS INCLUDED WITH THIS LETTER OF TRANSMITTAL MUST BE FOLLOWED.
QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE PROSPECTUS
AND THIS LETTER OF TRANSMITTAL MAY BE DIRECTED TO THE EXCHANGE AGENT.
List on the next page the Notes to which this Letter of Transmittal
relates. If the space indicated is inadequate, the Certificate or Registration
Numbers and the Principal Amounts should be listed on a separately signed
schedule affixed hereto.
- -------------------------------------------------------------------------
Description of Senior Subordinated Notes Tendered Hereby
- -------------------------------------------------------------------------
NAMES(S) AND CERTIFICATE OR AGGREGATE PRINCIPAL
ADDRESS(ES) OF REGISTRATION AMOUNT REPRESENTED
REGISTERED OWNER(S) NUMBERS* BY NOTES
(PLEASE FILL IN)
TOTAL:
* Need not be completed by Book-Entry Holders.
** Unless otherwise indicated, the Holder will be deemed to have tendered
the full amount represented by such Notes. All tenders must be in
integral multiples of $1,000
This Letter of Transmittal is to be used (i) if certificates
representing Notes are to be forwarded herewith, (ii) if tender of Notes is to
be made by book-entry transfer to an
2
<PAGE> 3
account maintained by the Exchange Agent at The Depository Trust Company (the
"Depository" or "DTC"), pursuant to the procedures set forth in the Prospectus
under "The Exchange Offer -- Procedures for Tendering" or (iii) if tender of the
Notes is to be made according to the guaranteed delivery procedures described in
the Prospectus under "The Exchange Offer --Guaranteed Delivery Procedures." See
Instruction 2. DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY DOES NOT
CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
Unless the context requires otherwise, the term "Holder" with respect
to the Exchange Offer means any person (i) in whose name Notes are registered on
the books of the Company or any other person who has obtained a properly
completed bond power from the registered holder or (ii) whose Notes are held of
record by DTC who desires to deliver such Notes by book-entry transfer at DTC.
The undersigned has completed, executed and delivered this Letter of Transmittal
to indicate the action the undersigned desires to take with respect to the
Exchange Offer. Holders who wish to tender their Notes must complete this letter
in its entirety.
3
<PAGE> 4
[ ] CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO AN ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE DEPOSITORY
AND COMPLETE THE FOLLOWING:
Name of Tendering Institution___________________________________________________
Account Number__________________________________________________________________
Transaction Code Number_________________________________________________________
Holders whose Notes are not immediately available or who cannot deliver
their Notes and all other documents required hereby to the Exchange Agent on or
prior to the Expiration Date may tender their Notes according to the guaranteed
delivery procedures set forth in the Prospectus under the caption "The Exchange
Offer -- Guaranteed Delivery Procedures. "See Instruction 2.
[ ] CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE
OF GUARANTEED DELIVERY AND COMPLETE THE FOLLOWING:
Name of Registered Holder(s)____________________________________________________
Name of Eligible Institution that Guaranteed Delivery___________________________
IF DELIVERY BY BOOK-ENTRY TRANSFER:
Account Number__________________________________________________________________
Transfer Code Number____________________________________________________________
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE TEN
ADDITIONAL COPIES OF THE PROSPECTUS AND TEN COPIES OF ANY AMENDMENTS OR
SUPPLEMENTS THERETO.
Name:__________________________________________________________________
Address:_______________________________________________________________
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
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<PAGE> 5
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to the Company the principal amount of the Notes
indicated above. Subject to, and effective upon, the acceptance for exchange of
such Notes tendered hereby, the undersigned hereby exchanges, sells, assigns and
transfers to, or upon the order of, the Company all right, title and interest in
and to such Notes as are being tendered hereby, including all rights to accrued
and unpaid interest thereon as of the Expiration Date. The undersigned hereby
irrevocably constitutes and appoints the Exchange Agent as the true and lawful
agent and attorney-in-fact of the undersigned (with full knowledge that said
Exchange Agent acts as the agent of the Company in connection with the Exchange
Offer) to cause the Notes to be assigned, transferred and exchanged. The
undersigned represents and warrants that it has full power and authority to
tender, exchange, sell, assign and transfer the Notes tendered hereby and to
acquire Exchange Notes issuable upon the exchange of such tendered Notes, and
that when the same are accepted for exchange, the Company will acquire good and
unencumbered title to the tendered Notes, free and clear of all liens,
restrictions, charges and encumbrances and not subject to any adverse claim.
The undersigned represents to the Company that (i) the Exchange Notes
acquired pursuant to the Exchange Offer are being obtained in the ordinary
course of business of the person receiving such Exchange Notes, whether or not
such person is the undersigned; (ii) neither the undersigned nor any such other
person has an arrangement or understanding with any person to participate in a
distribution of such Exchange Notes; and (iii) the undersigned and any such
other person acknowledge that, if they are participating in the Exchange Offer
for the purpose of distributing the Exchange Notes, (a) they cannot rely on the
position of the staff of the Securities and Exchange Commission enunciated in
Exxon Capital Holdings Corporation (available April 13, 1989), Morgan Stanley &
Co., Inc. (available June 5, 1991) or similar no-action letters and, in the
absence of an exemption therefrom, must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with the
resale transaction and (b) failure to comply with such requirements in such
instance could result in the undersigned or any such other person incurring
liability under the Securities Act for which such persons are not indemnified by
the Company. If the undersigned or the person receiving the Exchange Notes
covered by this letter is an affiliate (as defined under Rule 405 of the
Securities Act) of the Company, the Exchange Notes may not be offered for
resale, resold or otherwise transferred by the undersigned or such other person
without registration under the Securities Act or an exemption therefrom. If the
exchange offeree is a broker-dealer holding Notes acquired for its own account
as a result of market-making activities or other trading activities, it will
deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of Exchange Notes received in respect of such Notes
pursuant to the Exchange Offer; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be
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<PAGE> 6
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act.
The undersigned also warrants that it will, upon request, execute and
deliver any additional documents deemed by the Exchange Agent or the Company to
be necessary or desirable to complete the exchange, sale, assignment and
transfer of tendered Notes or transfer ownership of such Notes on the account
books maintained by a book-entry transfer facility. The undersigned further
agrees that acceptance of any tendered Notes by the Company and the issuance of
Exchange Notes in exchange therefor shall constitute performance in full by the
Company of its obligations under the Registration Rights Agreement and that the
Company shall have no further obligations or liabilities thereunder for the
registration of the Notes or the Exchange Notes.
The Exchange Offer is subject to certain conditions set forth in the
Prospectus under the caption "The Exchange Offer -- Conditions." The undersigned
recognizes that as a result of these conditions (which may be waived, in whole
or in part, by the Company), as more particularly set forth in the Prospectus,
the Company may not be required to exchange any of the Notes tendered hereby
and, in such event, the Notes not exchanged will be returned to the undersigned
at the address shown below the signature of the undersigned.
All authority herein conferred or agreed to be conferred shall survive
the death, bankruptcy or incapacity of the undersigned and every obligation of
the undersigned hereunder shall be binding upon the heirs, personal
representatives, successors and assigns of the undersigned. TENDERED NOTES MAY
BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE.
Unless otherwise indicated in the box entitled "Special Registration
Instructions" or the box entitled "Special Delivery Instructions" in this Letter
of Transmittal, certificates for all Exchange Notes delivered in exchange for
tendered Notes, and any Notes delivered herewith but not exchanged, will be
registered in the name of the undersigned and shall be delivered to the
undersigned at the address shown below the signature of the undersigned. If an
Exchange Note is to be issued to a person other than the person(s) signing this
Letter of Transmittal, or if the Exchange Note is to be mailed to someone other
than the person(s) signing this Letter of Transmittal or to the person(s)
signing this Letter of Transmittal at an address different than the address
shown on this Letter of Transmittal, the appropriate boxes of this Letter of
Transmittal should be completed. If Notes are surrendered by Holder(s) that have
completed either the box entitled "Special Registration Instructions" or the box
entitled "Special Delivery Instructions" in this Letter of Transmittal,
signature(s) on this Letter of Transmittal must be guaranteed by an Eligible
Institution (as defined in Instruction 2).
SPECIAL REGISTRATION INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
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To be completed ONLY if the To be completed ONLY if the Exchange
Exchange Notes are to be issued Notes are to be sent to someone other than
in the name of someone other the undersigned, or to the undersigned at an
than the undersigned. address other than that shown above under
"Description of Senior Subordinated Notes
Tendered Hereby."
Issue check and/or certificate(s):
Mail check and/or certificate(s) to:
Name:________________________
(Please Print)
Address:______________________ Name:________________________
(Please Print)
_____________________________ Address:______________________
(Include Zip Code)
_____________________________ ______________________________
(Employer Identification or (Include Zip Code)
Social Security No.)
(Complete Substitute Form W-9
on the Reverse)
(Please print or type)
REGISTERED HOLDER(S) OF NOTES SIGN HERE (IN ADDITION, COMPLETE SUBSTITUTE FORM
W-9 BELOW)
X ______________________________________________________________
X ______________________________________________________________
______________________________________________________________
(Signature(s) of Registered Holder(s))
Must be signed by registered Holder(s) exactly as name(s) appear(s) on
the Notes or on a security position listing as the owner of the Notes or by
person(s) authorized to become registered Holder(s) by properly completed bond
powers transmitted herewith. If signature is by attorney-in-fact, trustee,
executor, administrator, guardian, officer of a corporation or other person
acting in a fiduciary capacity, please provide the following information.
(Please print or type):
Name and Capacity (full title):_________________________________________________
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Address (including zip code): __________________________________________________
Area Code and Telephone Number:_________________________________________________
Taxpayer Identification or Social Security Number: _____________________________
Dated:__________________________________________________________________________
SIGNATURE GUARANTEE
(If Required -- See Instruction 4)
Authorized Signature:___________________________________________________________
________________________________________________________________________________
(Signature of Representative of Signature Guarantor)
Name and Title:_________________________________________________________________
Name of Plan:___________________________________________________________________
Area Code and Telephone Number:_________________________________________________
Dated___________________________________________________________________________
PAYOR'S NAME: UNICCO SERVICE COMPANY AND UNICCO FINANCE CORP.
THIS SUBSTITUTE FORM W-9 MUST BE COMPLETED AND SIGNED
PLEASE PROVIDE YOUR SOCIAL SECURITY NUMBER OR OTHER TAXPAYER IDENTIFICATION
NUMBER ON THE FOLLOWING SUBSTITUTE FORM W-9 AND CERTIFY THEREIN THAT YOU ARE
SUBJECT TO BACKUP WITHHOLDING.
________________________________________________________________________________
PART 1 - PLEASE PROVIDE YOUR TIN IN THE BOX AT RI
SUBSTITUTE AND CERTIFY BY SIGNING AND DATING BELOW.
FORM W-9
------------------------------------
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DEPARTMENT OF THE TREASURY
PART 2 - CHECK THE BOX IF YOU ARE NOT SUBJECT TO
INTERNAL REVENUE SERVICE BACKUP WITHHOLDING UNDER THE PROVISIONS OF
SECTION 3406(A)(1)(C) OF THE INTERNAL
REVENUE CODE BECAUSE (1) YOU ARE EXEMPT FROM
BACKUP WITHHOLDING, (2) HAVE NOT BEEN
NOTIFIED THAT YOU ARE SUBJECT TO B
WITHHOLDING AS A RESULT OF FAILURE TO REPORT
ALL INTEREST OR DIVIDENDS OR (3) THE
INTERNAL REVENUE SERVICE HAS NOTIFIED YOU
THAT YOU ARE NO LONGER SUBJECT TO BACKUP
WITHHOLDING.
CERTIFICATION: UNDER PENALTIES OF PERJURY, I
PAYOR'S REQUEST FOR TAXPAYER CERTIFY THIS FORM IS TRUE, CORRECT AND COMPLETE.
IDENTIFICATION NUMBER ("TIN")
SIGNATURE:__________________
DATE:________________________
NOTE: ANY FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY CASH PAYMENTS IN EXCESS OF $10.00 MADE TO
YOU.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
PART 3 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I CERTIFY UNDER PENALTIES
OF PERJURY THAT A TAXPAYER IDENTIFICATION NUMBER HAS EITHER (A) I HAVE MAILED OR
DELIVERED AN APPLICATION TO RECEIVE A TAXPAYER ID, APPROPRIATE INTERNAL
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REVENUE SERVICE CENTER OR SOCIAL SECURITY ADMINISTRATION OR DELIVER AN
APPLICATION IN THE NEAR FUTURE. I UNDERSTAND THAT IF I DO NOT PROVIDE THE NUMBER
WITHIN 60 DAYS, 31% OF ALL REPORTABLE PAYMENTS MADE TO ME THEREAFTER WILL BE
WITHHELD UNTIL SUCH TIME AS I PROVIDE A NUMBER.
- -------------------------------------------------------------------------
SIGNATURE
- -------------------------------------------------------------------------
INSTRUCTIONS
FORMING PART OF THE TERMS AND
CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND CERTIFICATES.
All physically delivered Notes or confirmation of any book-entry
transfer to the Exchange Agent's account at a book-entry transfer facility of
Notes tendered by book-entry transfer, as well as a properly completed and duly
executed copy of this Letter of Transmittal or facsimile thereof, and any other
documents required by this Letter of Transmittal, must be received by the
Exchange Agent at any of its addresses set forth herein on or prior to the
Expiration Date. The method of delivery of this Letter of Transmittal, the
tendered Notes and all other required documents is at the election and risk of
the Holder. Instead of delivery by mail, it is recommended that Holders use an
overnight or hand delivery service. Except as otherwise provided below, the
delivery will be deemed made only when actually received by the Exchange Agent.
In all cases, sufficient time should be allowed to assure timely delivery to the
Exchange Agent before the Expiration Date.
No alternative, conditional, irregular or contingent tenders will be
accepted. All tendering Holders, by execution of this Letter of Transmittal (or
facsimile thereof), shall waive any right to receive notice of the acceptance of
the Notes for exchange.
Delivery to an address other than as set forth herein, or instructions
via a facsimile number other than the ones set forth herein, will not constitute
a valid delivery.
2. GUARANTEED DELIVERY PROCEDURES.
Holders who wish to tender their Notes, and (i) whose Notes are not
immediately available, or (ii) who cannot deliver their Notes, the Letter of
Transmittal or any other
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required documents to the Exchange Agent (or comply with the procedures for
book-entry transfer) prior to the Expiration Date, may effect a tender if:
a. the tender is made through a member firm of a registered national
securities exchange or of the National Association of Securities
Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States or an "eligible guarantor
institution" within the meaning of Rule 17Ad-15 under the Exchange Act
(an "Eligible Institution");
b. prior to the Expiration Date, the Exchange Agent receives from such
Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by facsimile transmission, mail or hand delivery)
setting forth the name and address of the Holder of the Notes, the
certificate or registration number(s) of such Notes and the principal
amount of Notes tendered, stating that the tender is being made thereby
and guaranteeing that, within five (5) business days after the
Expiration Date, the Letter of Transmittal (or facsimile thereof),
together with the certificate(s) representing the Notes to be tendered
in proper form for transfer (or a confirmation of book-entry transfer
of such Notes into the Exchange Agent's account at the Depository) and
any other documents required by the Letter of Transmittal, will be
deposited by the Eligible Institution with the Exchange Agent; and
c. such properly completed and executed Letter of Transmittal (or
facsimile thereof), as well as all tendered Notes in proper form for
transfer (or a confirmation of book-entry transfer of such Notes into
the Exchange Agent's account at the Depository) and all other documents
required by the Letter of Transmittal, are received by the Exchange
Agent within five business days after the Expiration Date.
Upon request to the Exchange Agent, a Notice of Guaranteed Delivery
will be sent to Holders who wish to tender their Notes according to the
guaranteed delivery procedures set forth above. Any Holder who wishes to tender
Notes pursuant to the guaranteed delivery procedures described above must ensure
that the Exchange Agent receives the Notice of Guaranteed Delivery relating to
such Notes prior to the Expiration Date. Failure to complete the guaranteed
delivery procedures outlined above will not, of itself, affect the validity or
effect a revocation of any Letter of Transmittal form properly completed and
executed by a Holder who attempted to use the guaranteed delivery procedures.
3. PARTIAL TENDERS; WITHDRAWALS.
If less than the entire principal amount of Notes evidenced by a
submitted certificate is tendered, the tendering Holder should fill in the
principal amount tendered in the column entitled "Principal Amount Tendered" of
the box entitled "Description of Senior
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Subordinated Notes Tendered Hereby." A newly issued Note for the principal
amount of Notes submitted but not tendered will be sent to such Holder as soon
as practicable after the Expiration Date. All Notes delivered to the Exchange
Agent will be deemed to have been tendered in full unless otherwise indicated.
Any Notes tendered pursuant to the Exchange offer may be withdrawn at
any time prior to the Expiration Date, after which tenders of Notes are
irrevocable.
To withdraw a tender of Notes in the Exchange Offer, a written or
facsimile transmission notice of withdrawal must be received by the Exchange
Agent by 5:00 p.m., New York City time, on the Expiration Date. Any such notice
of withdrawal must (i) specify the name of the person having deposited the Notes
to be withdrawn (the "Depositor"), (ii) identify the Notes to be withdrawn
(including the certificate or registration number(s) and principal amount of
such Notes, or, in the case of Notes transferred by book-entry transfer, the
name and number of the account at the DTC to be credited), (iii) be signed by
the Depositor in the same manner as the original signature on this Letter of
Transmittal (including any required signature guarantees) or be accompanied by
documents of transfer sufficient to have the Trustee with respect to the Notes
register the transfer of such Notes into the name of the Depositor withdrawing
the tender, (iv) specify the name in which such Notes are to be registered, if
different from that of the Depositor and (v) include a statement that such
Holder is withdrawing his election to have such Notes exchanged. All questions
as to the validity, form and eligibility (including time of receipt) of such
notices will be determined by the Company, whose determination shall be final
and binding on all parties. Any Notes so withdrawn will be deemed not to have
been validly tendered for purposes of the Exchange Offer, and no Exchange Notes
will be issued with respect thereto unless the Notes so withdrawn are validly
retendered. Any Notes which have been tendered but which are not accepted for
exchange, will be returned to the Holder thereof without cost to such Holder as
soon as practicable after withdrawal, rejection of tender or termination of
Exchange Offer.
4. SIGNATURE ON THIS LETTER OF TRANSMITTAL; WRITTEN INSTRUMENTS AND
ENDORSEMENTS; GUARANTEE OF SIGNATURES.
If this Letter of Transmittal is signed by the registered Holder(s) of
the Notes tendered hereby, the signature must correspond with the name(s) as
written on the face of the certificates without alteration or enlargement or any
change whatsoever. If this Letter of Transmittal is signed by a participant in
the Depository, the signature must correspond with the name as it appears on the
security position listing as the owner of the Notes. If any of the Notes
tendered hereby are owned of record by two or more joint owners, all such owners
must sign this Letter of Transmittal.
If a number of Notes registered in different names are tendered, it
will be necessary
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to complete, sign and submit as many separate copies of this Letter of
Transmittal as there are different registrations of Notes.
Signatures on this Letter of Transmittal or a notice of withdrawal, as
the case may be, must be guaranteed by an Eligible Institution unless the Notes
tendered hereby are tendered (i) by a registered Holder who has not completed
the box entitled "Special Registration Instructions" or "Special Delivery
Instructions" on the Letter of Transmittal or (ii) for the account of an
Eligible Institution.
If this Letter of Transmittal is signed by the registered Holder or
Holders of Notes (which term, for the purposes described herein, shall include a
participant in the Depository whose name appears on a security listing as the
owner of the Notes) listed and tendered hereby, no endorsements of the tendered
Notes or separate written instruments of transfer or exchange are required. In
any other case, the registered Holder (or acting Holder) must either properly
endorse the Notes or transmit properly completed bond powers with this Letter of
Transmittal (in either case, executed exactly as the name(s) of the registered
Holder(s) appear(s) on the Notes, and, with respect to a participant in the
Depository whose name appears on a security position listing as the owner of
Notes, exactly as the name of the participant appears on such security position
listing), with the signature on the Notes or bond power guaranteed by an
Eligible Institution (except where the Notes are tendered for the account of an
Eligible Institution).
If this Letter of Transmittal, any certificates or separate written
instruments of transfer or exchange are signed by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or others
acting in a fiduciary or representative capacity, such persons should so
indicate when signing, and, unless waived by the Company, proper evidence
satisfactory to the Company of their authority so to act must be submitted.
5. SPECIAL REGISTRATION AND DELIVERY INSTRUCTIONS.
Tendering Holders should indicate, in the applicable box, the name and
address (or account at the Depository) in which the Exchange Notes or substitute
Notes for principal amounts not tendered or not accepted for exchange are to be
issued (or deposited), if different from the names and addresses or accounts of
the person signing this Letter of Transmittal. In the case of issuance in a
different name, the employer identification number or social security number of
the person named must also be indicated, and the tendering Holder should
complete the applicable box.
If no instructions are given, the Exchange Notes (and any Notes not
tendered or not accepted) will be issued in the name of and sent to the acting
Holder of the Notes or deposited at such Holder's account at the Depository.
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6. TRANSFER TAXES.
The Company shall pay all transfer taxes, if any, applicable to the
exchange of Notes pursuant to the Exchange Offer. If, however, certificates
representing Exchange Notes or Notes for principal amounts not tendered or
accepted for exchange are to be delivered to, or are to be registered or issued
in the name of, any person other than the registered Holder of the Notes
tendered, or if tendered Notes are registered in the name of any person other
than the person signing the Letter of Transmittal, or if a transfer tax is
imposed for any reason other than the exchange of Notes pursuant to the Exchange
Offer, then the amount of any such transfer taxes (whether imposed on the
registered Holder or any other person) will be payable by the tendering Holder.
If satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted herewith, the amount of such transfer taxes will be billed directly to
such tendering Holder. Except as provided in this Instruction 6, it will not be
necessary for transfer stamps to be affixed to the Notes listed in the Letter of
Transmittal.
7. WAIVER OF CONDITIONS.
The Company reserves the right, in its reasonable judgment, to waive,
in whole or in part, any of the conditions to the Exchange Offer set forth in
the Prospectus. .
8. MUTILATED, LOST, STOLEN OR DESTROYED NOTES.
Any Holder whose Notes have been mutilated, lost, stolen or destroyed
should contact the Exchange Agent at the address indicated above for further
instructions.
9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.
Questions relating to the procedure for tendering, as well as requests
for additional copies of the Prospectus and this Letter of Transmittal may be
directed to the Exchange Agent at the address and telephone number set forth
above. In addition, all questions relating to the Exchange Offer, as well as
requests for assistance or additional copies of the Prospectus and this Letter
may be directed to Chief Financial Officer, Unicco Service Company, Four Copley
Place, Boston, MA 02116.
10. VALIDITY AND FORM.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance of tendered Notes and withdrawal of tendered Notes will be
determined by the Company in its sole discretion, which determination will be
final and binding. The Company reserves the absolute right to reject any and all
Notes not properly tendered or any Notes the Company's acceptance of which
would, in the opinion of counsel for the
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<PAGE> 15
Company, be unlawful. The Company also reserves the right to waive any
irregularities or conditions of tender as to particular Notes. The Company's
interpretation of the terms and conditions of the Exchange Offer (including the
instructions in this Letter of Transmittal) will be final and binding on all
parties. Unless waived, any defects or irregularities in connection with tenders
of Notes must be cured within such time as the Company shall determine. Neither
the Company, the Exchange Agent nor any other person shall be under any duty to
give notification of defects or irregularities with respect to tenders of Notes,
nor shall any of them incur any liability for failure to give such notification.
Tenders of Notes will not be deemed to have been made until such irregularities
have been cured or waived. Any Notes received by the Exchange Agent that are not
properly tendered and as to which the defects or irregularities have not been
cured or waived will be returned without cost to such holder by the Exchange
Agent to the tendering Holders of Notes, unless otherwise provided herein, as
soon as practicable following the Expiration Date.
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IMPORTANT TAX INFORMATION
Under federal income tax law, a Holder tendering Notes is required to
provide the Exchange Agent with such Holder's correct TIN on Substitute Form W-9
above. If such Holder is an individual, the TIN is the Holder's social security
number. The Certificate of Awaiting Taxpayer Identification Number should be
completed if the tendering Holder has not been issued a TIN and has applied for
a number or intends to apply for a number in the near future. If the Exchange
Agent is not provided with the correct TIN, the Holder may be subject to a $50
penalty imposed by the Internal Revenue Service. In addition, payments that are
made to such Holder with respect to tendered Notes may be subject to backup
withholding. Certain Holders (including, among others, all domestic corporations
and certain foreign individuals and foreign entities) are not subject to these
backup withholding and reporting requirements. Such a Holder, who satisfies one
or more of the conditions set forth in Part 2 of the Substitute Form W-9, should
execute the certification following such Part 2. In order for a foreign Holder
to qualify as an exempt recipient, that Holder must submit to the Exchange Agent
a properly completed Internal Revenue Service Form W-8, signed under penalties
of perjury, attesting to that Holder's exempt status. Such forms can be obtained
from the Exchange Agent.
If backup withholding applies, the Exchange Agent is required to
withhold 31% of any amounts otherwise payable to the Holder. Backup withholding
is not an additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained from the Internal
Revenue Service.
10. PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a Holder
with respect to the Exchange Notes, the Holder is required to notify the
Exchange Agent of his or her correct TIN by completing the form herein
certifying that the TIN provided on Substitute Form W-9 is correct (or that such
Holder is awaiting a TIN) and that (i) such Holder is exempt, (ii) such Holder
has not been notified by the Internal Revenue Service that he or she is subject
to backup withholding as a result of failure to report all interest or dividends
or (iii) the Internal Revenue Service has notified such Holder that he or she is
no longer subject to backup withholding.
11. WHAT NUMBER TO GIVE THE EXCHANGE AGENT
Each Holder is required to give the Exchange Agent the social security
number or employer identification number of the record Holder(s) of the Notes.
If Notes are in more than one name or are not in the name of the actual Holder,
consult the instructions on
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Internal Revenue Service Form W-9, which may be obtained from the Exchange
Agent, for additional guidance on which number to report.
12. CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
If the tendering Holder has not been issued a TIN and has applied for a
number or intends to apply for a number in the near future, write "Applied For"
in the space for the TIN on Substitute Form W-9, sign and date the form and the
Certificate of Awaiting Taxpayer Identification Number and return them to the
Exchange Agent. If such certificate is completed and the Exchange Agent is not
provided with the TIN within 60 days, the Exchange Agent will withhold 31% of
all payments made thereafter until a TIN is provided to the Exchange Agent.
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A FACSIMILE THEREOF (TOGETHER
WITH NOTES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED
DOCUMENTS) OR A NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE EXCHANGE
AGENT ON OR PRIOR TO THE EXPIRATION DATE.
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All authority herein conferred or agreed to be conferred shall survive
the death or incapacity of the undersigned and every obligation of the
undersigned hereunder shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned.
PLEASE SIGN HERE
- ---------------------------------- -----------------------------
- ----------------------------------
Signature(s) of Owner(s) _____________________________
or Authorized Signatory Date Date
Area Code and Telephone Number: ( )
--------------------
Please print name(s) and address(es)
Name(s): ________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
Capacity: ________________________________________________________
Address(es): ________________________________________________________
Account Number: __________________________________________________
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GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens: i.e.,
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e., 00-0000000. The table below will help determine the number to
give the payer.
GIVE THE
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
1. An individual's account. The individual
The actual owner of
2. Two or more individuals (joint the account or, if
account) combined funds, the
first individual on
the account (1)
3. Custodian account of a minor The minor (2)
(Uniform Gift to Minors Act)
4. a. The usual revocable savings The grantor - trustee (1)
trust account (grantor is
also trustee)
b. So-called trust account The actual owner (1)
that is not a legal or valid
trust under state law
5. Sole proprietorship account The owner (3)
6. A valid trust, estate or Legal entity
pension trust
(Do not furnish the
identifying number of the
personal representative
or trustee unless the
legal entity itself is
not designated in the
account title) (4)
________________________________________________________
________________________________________________________
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GIVE THE EMPLOYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- --------------------------------------------------------------------------------
7. Corporate account The corporation
8. Partnership account held in The partnership
the name of the business
9. Association, club or other tax The organization
exempt organization
10. A broker or registered nominee The broker or nominee
11. Account with the Department of The public entity
Agriculture in the name of a
public entity (such as a State
or local government, school
district or prison) that
receives agriculture program
payments
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Show the name of the owner. The name of the business or the "doing
business as" name may also be entered. Either the social security
number or the employer identification number may be used.
(4) List first and circle the name of the legal trust, estate or pension
trust.
Note: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
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GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
OBTAINING A NUMBER
If you don't have a taxpayer identification number ("TIN") or you don't know
your number obtain Form SS-5, Application for a Social Security Number Card, or
Form SS-4, Application for Employer Identification Number, at the local office
of the Social Security Administration or the Internal Revenue Service and apply
for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on all interest, dividends
and broker transactions payments include the following:
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(a), or an
individual retirement plan, or a custodial account under
Section 403(b)(7).
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United
States or any subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign
government or any agency or instrumentality thereof.
- An international organization or any agency or instrumentality
thereof.
- A registered dealer in securities or commodities registered in
the U.S. or a possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a).
- An exempt charitable remainder trust, or a non-exempt trust
described in section 4947(a)(1).
- An entity registered at all times under the Investment Company
Act of 1940.
- A foreign central bank of issue.
Payments of dividends and patronage dividends not generally
subject to backup withholding include the following:
- Payments to nonresident aliens subject to withholding under
section 1441.
- Payments to partnerships not engaged in a trade or business in
the U.S. and which have at least one nonresident partner.
- Payments of patronage dividends where the amount received is
not paid in money.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Payments of interest not generally subject to backup
withholding include the following:
- Payments of interest on obligations issued by individuals.
NOTE: You may be
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<PAGE> 22
subject to backup withholding if this interest is $600 or
more, and is paid in the course of the payer's trade or
business and you have not provided your correct taxpayer
identification number to the payer.
- Payments of tax-exempt interest (including exempt-interest
dividends under section 852).
- Payments described in section 6049(b)(5) to nonresident
aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
EXEMPT PAYEES DESCRIBED ABOVE SHOULD FILE FORM W-9 TO AVOID POSSIBLE ERRONEOUS
BACKUP WITHHOLDING. COMPLETE THIS SUBSTITUTE FORM W-9 AS FOLLOWS:
ENTER YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE
FORM, SIGN, DATE AND RETURN THE FORM TO THE PAYER.
Certain payments other than interest, dividends and patronage
dividends, that are not subject to information reporting are also not subject to
backup withholding. For details, see the sections 6041, 6041A(a), 6044, 6045,
6049, 6050A and 6050N and the regulations thereunder.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of
dividends, interest or other payments to give taxpayer identification numbers to
payers who must report the payments to IRS. IRS uses the numbers for
identification purposes and to help verify the accuracy of tax returns. Payers
must be given the numbers whether or not recipients are required to file tax
returns. Payers must generally withhold 31% of taxable interest, dividend and
certain other payments to a payee who does not furnish a taxpayer identification
number to a payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. If you fail
to furnish your correct taxpayer identification number to a payer, you are
subject to a penalty of $50 for each such failure which is due to reasonable
cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE STATEMENTS WITH RESPECT TO WITHHOLDING. If you make
a false statement with no reasonable basis which results in no imposition of
backup withholding, you are subject to a penalty of $500.
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<PAGE> 23
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. Willfully falsifying
certifications or affirmations, may subject you to criminal penalties including
fines and/or imprisonment.
(4) MISUSE OF TAXPAYER IDENTIFICATION NUMBERS. If the payer discloses or uses
taxpayer identification numbers in violation of Federal law, the payer may be
subject to civil and criminal penalties.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL
REVENUE SERVICE.
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<PAGE> 1
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY FOR
TENDER OF 9 7/8% SENIOR SUBORDINATED NOTES DUE
2007 (INCLUDING THOSE IN BOOK-ENTRY FORM) OF
UNICCO SERVICE COMPANY
AND UNICCO FINANCE CORP.
This form or one substantially equivalent hereto must be used to accept the
Exchange Offer of UNICCO Service Company and UNICCO Finance Corp. (the
"Issuers") made pursuant to the Prospectus, dated _____________, 1997 (the
"Prospectus"), if certificates for the outstanding 9 7/8% Senior Subordinated
Notes due 2007 of the Issuers (the "Notes") are not immediately available
or if the procedure for book-entry transfer cannot be completed on a
timely basis or time will not permit all required documents to reach the
Exchange Agent prior to 5:00 p.m., New York City time, on the Expiration Date.
Such form may be delivered or transmitted by telegram, telex, facsimile
transmission, mail or hand delivery to State Street Bank and Trust Company (the
"Exchange Agent") as set forth below. In addition, in order to utilize the
guaranteed delivery procedure to tender Notes pursuant to the Exchange Offer, a
completed, signed and dated Letter of Transmittal (or facsimile thereof) must
also be received by the Exchange Agent prior to 5:00 p.m., New York City time,
on the Expiration Date. Capitalized terms not defined herein are defined in the
Prospectus.
STATE STREET BANK AND TRUST COMPANY, EXCHANGE AGENT
<TABLE>
<S> <C> <C>
By Mail By Facsimile Transmission: By Hand or
(registered or certified recommended): (617) 664-5395 Overnight Delivery:
State Street Bank and Confirm State Street Bank and
Trust Company by Telephone or for Trust Company
Corporate Trust Department Information Call: Corporate Trust Department
PO Box 778 (617) 664-5587 4th Floor
Boston, MA 02102-0078 Two International Place
Boston, MA 02110
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR
TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE, WILL
NOT CONSTITUTE VALID DELIVERY.
<PAGE> 2
Ladies and Gentlemen:
Upon the terms and conditions set forth in the Prospectus and the
accompanying Letter of Transmittal, the undersigned hereby tenders to the
Issuers the principal amount of Notes set forth below, pursuant to the
guaranteed delivery procedure described in "The Exchange Offer - Guaranteed
Delivery Procedures" section of the Prospectus.
Principal Amount of Notes Tendered: *
$
--------------------------
Certificate No(s). (if available):
- -
- --------------------------
Total Principal Amount Represented by Certificate(s):
$
--------------------------
* must be denominations of principal amount of $1,000 and any integral multiple
thereof
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned and every obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned.
PLEASE SIGN HERE
X
-------------------------------------- --------------------------------------
X
-------------------------------------- --------------------------------------
Signatures(s) of Owner(s) Date
or Authorized Signatory
Area Code and Telephone Number: ( )
--- ----------------
Must be signed by the Holder(s) of Notes as their name(s) appear(s) on
certificates for Notes or on a security position listing, or by person(s)
authorized to become registered holder(s) by endorsement and documents
transmitted with this Notice of Guaranteed Delivery. If signature is by a
trustee, executor, administrator, guardian, attorney-in-fact, officer or other
person acting in a fiduciary or representative capacity, such person must set
forth his or her full title below. If Notes will be delivered by book-entry
transfer to The Depository Trust Company, provide account number.
Please print name(s) and address(es)
Name(s):
----------------------------- -----------------------------
----------------------------- -----------------------------
----------------------------- -----------------------------
Capacity:
----------------------------- -----------------------------
<PAGE> 3
Address(es):
----------------------------- -----------------------------
Account Number:
----------------------------- -----------------------------
<PAGE> 4
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a financial institution (including most banks, savings and
loan associations and brokerage houses) that is a participant in the Securities
Transfer Agents Medallion Program, the New York Stock Exchange Medallion
Signature Program or the Stock Exchanges Medallion Program, hereby guarantees
that the undersigned will deliver to the Exchange Agent the certificates
representing the Notes being tendered hereby or confirmation of book-entry
transfer of such Notes into the Exchange Agent's account at The Depository Trust
Company, in proper form for transfer, together with any other documents required
by the Letter of Transmittal within three New York Stock Exchange trading days
after the Expiration Date.
Name of Firm:
-------------------------------------------------------------------
Address:
------------------------------------------------------------------------
------------------------------------------------------------------------
Area Code and Telephone Number: ( )
--- ----------------------
Authorized Signature:
-----------------------------------------------------------
Name (please type or print):
----------------------------------------------------
Title:
-----------------------------------------------------------------
Dated:
-----------------------------------------------------------------
NOTE: DO NOT SEND CERTIFICATES OF NOTES WITH THIS FORM. CERTIFICATES OF NOTES
SHOULD BE SENT ONLY WITH A COPY OF THE PREVIOUSLY EXECUTED LETTER OF
TRANSMITTAL.
