<PAGE>
As filed with the Securities and Exchange Commission on November 19, 1999
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
Under
the Securities Act of 1933
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THE SERVICEMASTER COMPANY
(Exact name of Registrant as specified in its charter)
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Delaware 36-3858106
(State or other jurisdiction (I.R.S. Employer
of incorporation organization) Identification No.)
One ServiceMaster Way
Downers Grove, Illinois 60519
(630) 271-1300
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)
Vernon T. Squires With a copy to:
Senior Vice President and General Donald E. Batterson
Counsel Kirkland & Ellis
The ServiceMaster Company 200 East Randolph Drive
One ServiceMaster Way Chicago, Illinois 60601
Downers Grove, Illinois 60519 (312) 861-2000
(630) 271-1300
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
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 delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
Proposed
Amount maximum Amount of
Title of each class of to be aggregate registration
securities to be registered (1) registered (2) offering price (3) fee (4)
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<S> <C> <C> <C>
Debt Securities, Common Stock,
par value $0.01 per share,
including the associated
preferred stock purchase
rights, Debt Warrants and
Common Stock Warrants......... $700,000,000 $700,000,000 $194,600
</TABLE>
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(1) We are registering an indeterminate number of shares of our Common Stock
together with the associated preferred stock purchase rights attributable
thereto. We are also registering an indeterminate number of Debt Warrants
and Common Stock Warrants and an indeterminate principal amount of Debt
Securities.
(2) Or the equivalent thereof in one or more foreign currencies. If any Debt
Securities are issued at an original issue discount, represents such
greater principal amount of such securities as shall result in net
proceeds to the Registrant of such amount.
(3) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(o).
(4) Calculated pursuant to Rule 457(o).
Pursuant to Rule 429 under the Securities Act of 1933, as amended, the
prospectus included in this Registration Statement is a combined prospectus
that also relates to the securities which were previously registered on Form
S-3 by the Registrant (Registration No. 333-32167) and filed with the
Commission on July 28, 1997, as amended by Amendment No. 1 to such
Registration Statement filed with the Commission on August 6, 1997.
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 this
Registration Statement shall become effective on such date as the Commission,
acting pursuant to Section 8(a), may determine.
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<PAGE>
Prospectus
The ServiceMaster Company
$700,000,000
Debt Securities, Common Stock, Debt Warrants
and Common Stock Warrants
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We will use this prospectus to offer and sell securities from time to time.
These may include:
. unsecured senior debt securities . warrants to purchase common stock
. common stock . warrants to purchase debt
securities
. units consisting of any
combination of these securities
We will provide the specific terms and conditions of these securities in
supplements to this prospectus prepared in connection with each offering of
securities. These terms and conditions may include:
In the case of any In the case of debt In the case of warrants:
securities: securities:
. expiration date
. price . interest rate
. exercise price
. size of offering . maturity
. conditions to
. underwriting discounts . original issue discount exercisability
and commissions
. redemption or repayment
prior to maturity
. additional covenants
The securities offered will contain other significant terms and conditions.
Please read this prospectus and the applicable prospectus supplement carefully
before you invest.
----------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.
----------------
The date of this prospectus is , 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
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Page
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<S> <C>
About This Prospectus................................................ 1
Where You Can Find More Information.................................. 2
Special Note on Forward-Looking Statements........................... 3
The ServiceMaster Company............................................ 3
Use of Proceeds...................................................... 4
Ratio of Earnings to Fixed Charges................................... 4
Description of Debt Securities....................................... 5
Description of Common Stock.......................................... 19
Description of Debt Warrants......................................... 21
Description of Stock Warrants........................................ 23
Plan of Distribution................................................. 25
Legal Matters........................................................ 26
Experts.............................................................. 26
</TABLE>
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission, which is known as the SEC, using a shelf
registration process. Under this shelf registration process, we may sell:
. unsecured senior debt securities . warrants to purchase common stock
. common stock . warrants to purchase debt
securities
. units consisting of any
combination of these securities
We may sell these securities in one or more offerings up to a total dollar
amount of $700,000,000. This prospectus provides you with a general
description of the securities we may offer. Each time we sell securities, we
will provide a prospectus supplement that will contain specific information
about the terms of that offering. The prospectus supplement may also add,
update or change information contained in this prospectus. You should read
carefully both this prospectus and the applicable prospectus supplement
together with the additional information described below under the heading
"Where You Can Find More Information."
The registration statement of which this prospectus is a part (including the
exhibits) contains additional important information about our company and the
securities offered under this prospectus. Specifically, the legal documents
that control the terms of any securities offered by this prospectus are or
will be filed with the SEC as exhibits to the registration statement. That
registration statement can be read at the web site of the SEC or at the SEC
offices mentioned under the heading "Where You Can Find More Information."
We may sell the securities to or through underwriters or dealers and may
also sell securities directly to other purchasers or through agents. See "Plan
of Distribution." The applicable prospectus supplement will contain the names
of any underwriters, dealers or agents involved in the sale of any securities
and any applicable fee, commission or discount arrangements with them.
This prospectus may not be used to consummate sales of any securities unless
accompanied by a prospectus supplement.
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file with the
SEC at its public reference facilities at:
. 450 Fifth Street, N.W., Washington, D.C. 20549
. 7 World Trade Center, Suite 1300, New York, New York 10048
. Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511
You can also obtain copies of our filings at prescribed rates by writing to
the Public Reference Section of the SEC at 450 Fifth Street, N.W., Washington,
D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on
the operation of the public reference facilities.
Our SEC filings are also available to the public over the Internet on the
web site of the SEC at http://www.sec.gov and at the office of The New York
Stock Exchange at 20 Broad Street, New York, New York 10005. For further
information on obtaining copies of our public filings at the New York Stock
Exchange, you should call (212) 656-5060.
We "incorporate by reference" into this prospectus the information we file
with the SEC, which means that we can disclose important information to you by
referring you to those documents. This information incorporated by reference
is an important part of this prospectus. You should also be aware that any
information that we file subsequently with the SEC will automatically update
this prospectus (that is, such information will be incorporated by reference
into this prospectus). We incorporate by reference:
. our Annual Report on Form 10-K for the year ended December 31, 1998
. our Quarterly Report on Form 10-Q for the periods ended March 31, 1999,
June 30, 1999 and September 30, 1999
. our Current Report on Form 8-K filed on January 6, 1999, February 2,
1999, March 16, 1999, March 18, 1999, April 27, 1999, July 28, 1999 and
August 16, 1999
. our Registration Statement on Form 8-A filed with the SEC on September
18, 1998 relating to the preferred stock purchase rights associated with
our Common Stock
. our Proxy Statement for our 1999 annual meeting of stockholders as filed
with the SEC on March 30, 1999
. any filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d)
of the Securities Exchange Act of 1934, as amended, until we sell all of
the securities offered by this prospectus
You may request a copy of these filings (other than exhibits, unless that
exhibit is specifically incorporated by reference into that filing) at no
cost, by writing to or telephoning us at the following address and telephone
number:
The ServiceMaster Company
One ServiceMaster Way
Downers Grove, Illinois 60515-1700
(630) 271-1300
Attention: General Counsel
You should rely only on the information incorporated by reference or set
forth in this prospectus or the applicable prospectus supplement. We have not
authorized anyone else to provide you with different information. We may only
use this prospectus to sell securities if it is accompanied by a prospectus
supplement. We are only offering these securities in states where such offer
is permitted. You should not assume that the information in this prospectus or
the applicable prospectus supplement is accurate as of any date other than the
dates on the front of such documents.
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SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS
This prospectus contains or incorporates by reference certain forward-
looking statements within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, and we intend that such forward-looking statements be subject to the
safe harbors created thereby. Such forward-looking statements involve risks
and uncertainties and include, but are not limited to, statements regarding
future events and our plans, goals and objectives. Such statements are
generally accompanied by words such as "intend," "anticipate," "believe,"
"estimate," "expect" or similar statements. Our actual results may differ
materially from such statements. Factors that could cause or contribute to
such differences are set forth below as well as those factors discussed
elsewhere in this prospectus and in the documents incorporated herein by
reference. Although we believe that the assumptions underlying the forward-
looking statements are reasonable, any of the assumptions could prove
inaccurate and, therefore, there can be no assurance that the results
contemplated in such forward-looking statements will be realized. The
inclusion of such forward-looking information should not be regarded as a
representation by our company or any other person that the future events,
plans or expectations contemplated by our company will be achieved.
Furthermore, past performance in operations and share price is not necessarily
predictive of future performance.
Seasonality and Impact of Weather Conditions. Our lawn care, landscaping and
pest control businesses are highly seasonal in nature, with a significant
portion of their net revenues occurring in the spring and summer months of
each year. Adverse weather conditions could have a negative impact on the
demand for our lawn care, landscaping and pest control services as well as for
our HVAC services.
Increased Competition. The service industries in which we operate are highly
competitive with limited barriers to entry. The entry of new competitors into
one or more of the markets served by us could impact the demand for our
services as well as impose additional pricing pressures.
Labor Shortages. Most of the services we provide are highly labor intensive.
In the event of a labor shortage, we may experience difficulty in delivering
our services in a high-quality manner and may be forced to increase wages in
order to attract a sufficient number of employees, which could result in
higher operating costs.
Continued Consolidation of the U.S. Hospital Market. In recent years, there
has been an ongoing consolidation of hospitals in the health care market. This
continued consolidation could adversely impact the level of demand for our
health care management services and the prices that we can charge for such
services.
Ability to Continue Acquisition Strategy. We plan to continue to pursue
opportunities to expand through acquisitions. Our ability to continue to make
acquisitions at reasonable prices and to integrate the acquired businesses are
important factors in our future growth.
THE SERVICEMASTER COMPANY
ServiceMaster, with operating revenue of approximately $4.7 billion in 1998,
is one of the largest providers of residential and commercial services to
individual customers and businesses and supportive management services to
businesses and institutions in the United States. In addition, we have
operations in 41 countries around the world.
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<PAGE>
Our consumer and commercial services businesses provide services to over
10.5 million residential and commercial customers world-wide under leading
brand names which include:
TruGreen-ChemLawn for lawn, tree and shrub care and indoor plant
maintenance;
TruGreen-LandCare for commercial landscaping services;
Terminix for termite and pest control services;
American Residential Services for heating, ventilation, air conditioning
and refrigeration services;
American Home Shield and AmeriSpec for home system and appliance warranty
contracts and home inspection services;
Rescue Rooter for plumbing and drain cleaning services;
ServiceMaster Residential and Commercial Services for heavy-duty
residential and commercial cleaning and disaster restoration services;
Merry Maids for residential maid services; and
Furniture Medic for on-site furniture repair and restoration services.
These services comprise the "ServiceMaster Quality Service Network" and may
be accessed easily by calling a single toll-free telephone number: 1-800-WE
SERVE.
Our management services business provides facilities management services to
over 2,000 facilities in the health care, education and business and
industrial markets. These services include plant operations and maintenance,
housekeeping, grounds and landscaping, clinical equipment management, food
service, laundry and linen services, total facilities management and other
services.
We are incorporated under the laws of Delaware and are a successor business
which began operations in 1947. Our principal offices are located at One
ServiceMaster Way, Downers Grove, Illinois 60515-1700 and our telephone number
is (630) 271-1300. We maintain a website on the Internet
http://www.ServiceMaster.com. Our website and the information contained in it
are not a part of this prospectus.
USE OF PROCEEDS
Unless we specify otherwise in the applicable prospectus supplement, we will
use the net proceeds from the sale of the offered securities for general
corporate purposes, including working capital, the repayment or refinancing of
our indebtedness, future acquisitions and/or capital expenditures. A
description of any indebtedness to be refinanced with the proceeds from the
sale of the securities will be set forth in the applicable prospectus
supplement. Until we apply the net proceeds for specific purposes, we may
invest such net proceeds in short-term or marketable securities.
RATIOS OF EARNINGS TO FIXED CHARGES
The following are our unaudited consolidated ratios of earnings to fixed
charges for each of the years in the five-year period ended December 31, 1998
and for the nine month periods ended September 30, 1999 and September 30,
1998.
<TABLE>
<CAPTION>
Nine Months
Ended
September
30 Year Ended December 31,
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1999 1998 1998 1997 1996 1995 1994
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<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges.... 3.67x 3.46x 3.50x 3.65x 5.16x 4.83x 4.72x
</TABLE>
4
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DESCRIPTION OF DEBT SECURITIES
The following is a general description of the terms of the debt securities
that we may offer from time to time. The particular terms of the debt
securities offered by any prospectus supplement and the extent to which the
general provisions described below may apply to such debt securities will be
outlined in the applicable prospectus supplement.
The debt securities may be issued from time to time in one or more series.
They will be issued under an indenture dated as of November 18, 1999 (the
"Indenture") between our company and Harris Trust and Savings Bank as trustee
(the "Trustee"). A copy of the Indenture is filed as an exhibit to the
registration statement of which this prospectus is a part. You should read the
Indenture carefully to fully understand the terms of the debt securities
offered by this prospectus.
The following is only a summary of certain provisions of the debt securities
and the Indenture, and does not contain all of the information that you may
find useful or necessary. For further information about the debt securities
and the Indenture, you should read the Indenture.
Capitalized terms used but not defined in this section have the meanings
assigned to them in the Indenture. Numerical references in parentheses below
are to sections in the Indenture. Wherever particular sections or defined
terms of the Indenture are referred to, such sections or defined terms are
incorporated herein by reference as part of the statement made, and the
statement is qualified in its entirety by such reference. As used in this
section "we," "us," "our," "ServiceMaster" or the "Company" refers to The
ServiceMaster Company, and not to any of our subsidiaries, unless explicitly
indicated.
General
The Indenture provides that we may issue debt securities in an unlimited
amount from time to time in one or more series. Debt securities may be
denominated and payable in foreign currencies or units based on or relating to
foreign currencies. Special United States federal income tax considerations
applicable to any debt securities so denominated will be described in the
relevant prospectus supplement.
The debt securities will be unsecured obligations exclusively of our
company. The Indenture does not limit the amount of additional indebtedness
that we may incur and does not contain provisions which would afford the
holders (the "Holders") of the debt securities protection in the event of a
decline in our credit quality resulting from highly leveraged or other
transactions involving our company.
Since virtually all of our operations are conducted through Subsidiaries,
our cash flow and therefore our ability to service debt, including the debt
securities offered by this prospectus, are dependent upon the earnings of our
Subsidiaries and the distribution of those earnings to, or upon loans or other
payments of funds by those Subsidiaries to, our Company. Our Subsidiaries are
separate and distinct legal entities and have no obligation to pay any amounts
due pursuant to the debt securities or to make any funds available to us to
repay our obligations, whether by dividends, loans or other payments. In
addition, the payment of dividends and the making of loans and advances to us
by our Subsidiaries may be subject to statutory or contractual restrictions,
are contingent upon the earnings of those Subsidiaries and are subject to
various business considerations.
Creditors of our Subsidiaries are entitled to a claim on the assets of those
Subsidiaries. Consequently, in the event of a liquidation or reorganization of
any Subsidiary, creditors of that Subsidiary are likely to be paid in full
before any distribution is made to us or you, except to the extent that we are
recognized as a creditor of such Subsidiary. If we are recognized as a
creditor, our claims would still be effectively subordinated to any security
interests in the assets of such Subsidiary and any indebtedness of such
Subsidiary senior to that held by our Company.
5
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Terms
We will prepare a prospectus supplement for each series of debt securities
that we issue. Each prospectus supplement will set forth the applicable terms
of the debt securities to which it relates, which may include the following:
(i) the specific designation, aggregate principal amount and
denomination;
(ii) currency or units based on or relating to currencies in which such
debt securities are denominated and in which principal of, premium, if any,
and any interest on such debt securities will or may be payable;
(iii) any date of maturity;
(iv) interest rate or rates, which may be fixed or variable, and the
method by which such rate or rates will be determined, if any;
(v) the dates on which any such interest will be payable;
(vi) the place or places where the principal of, premium, if any, and any
interest on the debt securities will be payable;
(vii) any redemption, repayment or sinking fund provisions;
(viii) whether the debt securities will be issuable in registered form or
bearer form ("Bearer Securities") or both and, if Bearer Securities are
issuable, any restrictions applicable to the exchange of one form for
another and to the offer, sale and delivery of Bearer Securities; and
(ix) any other specific terms of the debt securities, including any
additions to or modifications or deletions of any events of default or
covenants provided for with respect to such debt securities, and any other
terms that are not inconsistent with the terms of the Indenture (Section
2.03).
Debt securities may be presented for exchange and registered debt securities
may be presented for transfer in the manner, at the places and subject to the
restrictions set forth in the debt securities and the applicable prospectus
supplement. Subject to the limitations provided in the Indenture, such
services will be provided without charge, other than any tax or other
governmental charge payable in connection therewith. Debt securities in bearer
form and the coupons, if any, appertaining thereto will be transferable by
delivery.
Debt securities will bear interest at a fixed rate (a "Fixed Rate Security")
or a floating rate (a "Floating Rate Security"). Debt securities bearing no
interest or interest at a rate that at the time of issuance is below the
prevailing market rate will be sold at a discount below their stated principal
amount. Special United States federal income tax considerations applicable to
any such discounted debt securities or to certain debt securities issued at
par which are treated as having been issued at a discount for United States
federal income tax purposes will be described in the relevant prospectus
supplement.
We may issue debt securities from time to time with the principal amount
payable on any principal payment date, or the amount of interest payable on
any interest payment date, to be determined by reference to one or more
currency exchange rates, commodity prices, equity indices or other factors.
Holders of such debt securities may receive a principal amount on any
principal payment date, or a payment of interest on any interest payment date,
that is greater than or less than the amount of principal or interest
otherwise payable on such dates, depending upon the value on such dates of the
applicable currency, commodity, equity index or other factors. Information as
to the methods for determining the amount of principal or interest payable on
any date, the currencies, commodities, equity index or other factors to which
the amount payable on such date is linked and certain additional tax
considerations will be set forth in the applicable prospectus supplement.
6
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Ranking
The debt securities when issued will rank pari passu in right of payment
with all of our other unsecured and unsubordinated indebtedness (Section
2.03).
The debt securities may under certain circumstances be equally and ratably
secured with our other senior indebtedness. See "Certain Covenants of the
Company--Restrictions on Liens."
Global Debt Securities
We may issue registered debt securities of a series in the form of one or
more fully registered global debt securities (a "Registered Global Security")
that will be deposited with a depository (a "Depositary") or with a nominee
for a Depositary identified in the applicable prospectus supplement and
registered in the name of the Depositary or a nominee thereof. In such case,
one or more Registered Global Securities will be issued in a denomination or
aggregate denominations equal to the portion of the aggregate principal amount
of outstanding registered debt securities of the series to be represented by
such Registered Global Security or Registered Global Securities. Unless and
until it is exchanged in whole or in part for debt securities in debenture
registered form, a Registered Global Security may not be transferred except as
a whole by the Depositary for such Registered Global Security to a nominee of
such Depositary or by a nominee of such Depositary to such Depositary or
another nominee of such Depositary or such Depositary or any such nominee to a
successor of such Depositary or a nominee of such successor.
The specific terms of the depositary arrangement with respect to any portion
of a series of debt securities to be represented by a Registered Global
Security will be described in the applicable prospectus supplement. We
anticipate that the following provisions will apply to all depositary
arrangements.
Ownership of beneficial interests in a Registered Global Security will be
limited to persons that have accounts with the Depositary for such Registered
Global Security ("participants") or persons that may hold interests through
participants. Upon the issuance of a Registered Global Security, the
Depositary for such Registered Global Security will credit, on its book-entry
registration and transfer systems, the participants' accounts with the
respective principal amounts of the debt securities represented by such
Registered Global Security beneficially owned by such participants. The
accounts to be credited will be designated by any dealers, underwriters or
agents participating in the distribution of such debt securities. Ownership of
beneficial interests in such Registered Global Security will be shown on, and
the transfer of such ownership interests will be effected only through,
records maintained by the Depositary for such Registered Global Security (with
respect to interests of participants) and on the records of participants (with
respect to interests of persons holding through participants). The laws of
some states may require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and such laws may
impair the ability to own, transfer or pledge beneficial interests in
Registered Global Securities.
So long as the Depositary for a Registered Global Security, or its nominee,
is the owner of record of such Registered Global Security, such Depositary or
such nominee, as the case may be, will be considered the sole owner or holder
of the debt securities represented by such Registered Global Security for all
purposes under the Indenture. Except as set forth below, owners of beneficial
interests in a Registered Global Security will not be entitled to have the
debt securities represented by such Registered Global Security registered in
their names, and will not receive or be entitled to receive physical delivery
of such debt securities in definitive form and will not be considered the
owners or holders thereof under the Indenture. Accordingly, each person owning
a beneficial interest in a Registered Global Security must rely on the
procedures of the Depositary for such Registered Global Security and, if such
person is not a participant, on the procedures of the participant through
which such person owns its interest to exercise any rights of a holder of
record under the Indenture.
7
<PAGE>
We understand that under existing industry practices, if we request any
action of holders or if any owner of a beneficial interest in a Registered
Global Security desires to give or take any action which a holder is entitled
to give or take under the Indenture, the Depositary for such Registered Global
Security would authorize the participants holding the relevant beneficial
interests to give or take such action, and such participants would authorize
beneficial owners owning through such participants to give or take such action
or would otherwise act upon the instruction of beneficial owners holding
through them.
Payments of principal of, premium, if any, and any interest on debt
securities represented by a Registered Global Security registered in the name
of a Depositary or its nominee will be made to such Depositary or its nominee,
as the case may be, as the registered owner of such Registered Global
Security. None of our company, the Trustee or any other agent of our company
or agent of the Trustee will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests in such Registered Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
We expect that the Depositary for any debt securities represented by a
Registered Global Security, upon receipt of any payment of principal, premium,
if any, or interest in respect of such Registered Global Security, will
immediately credit participants' accounts with payments in amounts
proportionate to their respective beneficial interests in such Registered
Global Security as shown on the records of such Depositary. We also expect
that payments by participants to owners of beneficial interests in such
Registered Global Security held through such participants will be governed by
standing customer instructions and customary practices, as is now the case
with securities held for the accounts of customers in bearer form or
registered in "street name," and will be the responsibility of such
participants.
If the Depositary for any debt securities represented by a Registered Global
Security notifies us that it is at any time unwilling or unable to continue as
Depositary or ceases to be eligible under applicable law, and a successor
Depositary eligible under applicable law is not appointed by us within 90
days, we will issue such debt securities in definitive form in exchange for
such Registered Global Security. In addition, we may at any time and in our
sole discretion determine not to have any of the debt securities of a series
represented by one or more Registered Global Securities and, in such event,
will issue debt securities of such series in definitive form in exchange for
all of the Registered Global Security or Registered Global Securities
representing such debt securities. Any debt securities issued in definitive
form in exchange for a Registered Global Security will be registered in such
name or names as the Depositary shall instruct the Trustee (Section 2.07). It
is expected that such instructions will be based upon directions received by
the Depositary from participants with respect to ownership of beneficial
interests in such Registered Global Security.
The debt securities of a series may also be issued in the form of one or
more bearer global debt securities (a "Bearer Global Security") that will be
deposited with a common depositary for Euroclear and CEDEL, or with a nominee
for such depositary identified in the applicable prospectus supplement. The
specific terms and procedures, including the specific terms of the depositary
arrangement, with respect to any portion of a series of debt securities to be
represented by a Bearer Global Security will be described in the applicable
prospectus supplement.
Certain Covenants of the Company
The following restrictions apply to each series of debt securities unless
the terms of such series of debt securities provide otherwise.
8
<PAGE>
Restrictions on Liens
The Indenture provides that we will not, and will not permit any Significant
Subsidiary to, create, incur or suffer to exist any lien on any Equity
Interests, indebtedness or other obligations of a Significant Subsidiary held
by our Company or any Subsidiary or any Principal Property of our Company or a
Significant Subsidiary, whether such Equity Interests, indebtedness or other
obligations of a Significant Subsidiary or Principal Property are owned at the
date of this Indenture or hereafter acquired, unless we secure or cause such
Significant Subsidiary to secure the outstanding debt securities equally and
ratably with all indebtedness secured by such Lien, so long as such
indebtedness shall be so secured; provided, however, that this covenant shall
not apply in the case of:
(i) the creation of any Lien on any Equity Interests, indebtedness or
other obligations of a Significant Subsidiary or any Principal Property
hereafter acquired (including acquisitions by way of merger or
consolidation) by us or a Significant Subsidiary contemporaneously with
such acquisition, or within 180 days thereafter, to secure or provide for
the payment or financing of any part of the purchase price thereof, or the
assumption of any Lien upon any Equity Interests, indebtedness or other
obligations of a Significant Subsidiary or any Principal Property hereafter
acquired (including acquisition by way of merger or consolidation) existing
at the time of such acquisition, provided that every such Lien referred to
in this clause (i) shall not attach to the Equity Interests, indebtedness
or other obligations of a Significant Subsidiary or any Principal Property
other than the Equity Interests, indebtedness or other obligations of the
Significant Subsidiary or any Principal Property other than the Equity
Interests, indebtedness or other obligations of the Significant Subsidiary
or any Principal Property so acquired and fixed improvements thereon;
(ii) any Lien on any Equity Interests, indebtedness or other obligations
of a Significant Subsidiary or any Principal Property existing at the date
of this Indenture;
(iii) any Lien on any Equity Interests, indebtedness or other obligations
of a Significant Subsidiary or any Principal Property in favor of us or any
Significant Subsidiary;
(iv) any Lien on any Principal Property being constructed or improved
securing loans to finance such construction or improvements;
(v) any Lien on Equity Interests, indebtedness or other obligations of a
Significant Subsidiary or any Principal Property incurred in connection
with the issuance of tax-exempt governmental obligations;
(vi) Liens on any Principal Property for taxes not yet due or which are
being contested in good faith by appropriate proceedings and with respect
to which adequate reserves, to the extent required by GAAP, have been made;
(vii) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens on any Principal Property arising in the ordinary
course of business and securing obligations that are not due and payable or
which are being contested in good faith by appropriate proceedings and with
respect to which adequate reserves, to the extent required by GAAP, have
been made;
(viii) zoning restrictions, easements, rights-of-way, restrictions on use
of real property and other similar encumbrances incurred in the ordinary
course of business which, in the aggregate, are not substantial in amount
and do not materially detract from the value of the property subject
thereto or interfere with the ordinary conduct of business of any of the
Company or any Significant Subsidiary;
(ix) any Lien on Equity Interests, indebtedness or other obligations of a
Non-U.S. Subsidiary held by a Non-U.S. Subsidiary or any Principal Property
of a Non-U.S. Subsidiary; provided that at the time of the creation or
incurrence of any such Lien the aggregate book value of the total assets of
the Non-U.S. Subsidiaries then subject to Liens securing indebtedness for
borrowed money (and after giving effect to the proposed Lien), shall not
exceed 25% of the Total Assets of the Company and its Subsidiaries;
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(x) any Lien on Equity Interests, indebtedness or other obligations of a
Securitization Subsidiary created, incurred, assumed or suffered to exist
in connection with Permitted Receivables Financing;
(xi) Liens arising by reason of any attachment, judgment, decree or order
of any court or other governmental authority, so long as any appropriate
legal proceedings which may have been initiated for review of such
attachment, judgment, decree or order shall not have been finally
terminated or so long as the period within which such proceedings may be
initiated shall not have expired;
(xii) any Lien on Equity Interests, indebtedness or other obligations of
a Significant Subsidiary that was not a Significant Subsidiary at the time
such Lien was created or incurred; and
(xiii) any renewal of or substitution for any Lien permitted by any of
the preceding clauses (i), (ii), (iv), (v), (vi), (vii), (viii), (ix), (x),
(xi) or (xii), provided, that the indebtedness secured is not increased
(except for increases in the amount of premiums or fees payable in
connection with such renewal or substitution) nor the Lien extended to any
additional assets (other than assets as to which the creation, incurrence
or existence of Liens is not governed by this clause). (Section 4.03(a))
Notwithstanding the foregoing, our Company or any Significant Subsidiary may
create, incur, assume or suffer to exist Liens in addition to those permitted
above and renew, extend or replace such Liens, provided that at the time of
such creation, incurrence, assumption, renewal, extension or replacement, and
after giving effect thereto, the aggregate outstanding principal or face
amount of all indebtedness secured by Liens not permitted by clauses (i)
through (xiii) above does not exceed 10% of Consolidated Net Worth. (Section
4.03(b))
Restrictions on Sale and Lease-Back Transactions
The Indenture provides that we will not, and will not permit any Significant
Subsidiary to, sell or transfer, directly or indirectly, except to our Company
or a Significant Subsidiary, any Principal Property as an entirety, or any
substantial portion thereof, with the intention of taking back a lease of such
property, except a lease for a period of three years or less at the end of
which it is intended that the use of such property by the lessee will be
discontinued and any transaction for the sale and lease-back of any property
if such lease is entered into within 180 days after the later of the
acquisition, completion of construction or commencement of operation of such
property; provided that, notwithstanding the foregoing, our Company or any
Significant Subsidiary may sell any such Principal Property and lease it back
for a period longer than three years if our Company or such Significant
Subsidiary would be entitled to create a Lien on the property to be leased
securing indebtedness in an amount equal to the Attributable Debt with respect
to such sale and lease-back transaction without equally and ratably securing
the outstanding debt securities or our Company promptly informs the Trustee of
such transaction, the net proceeds of such transaction are at least equal to
the fair value (as determined by Board Resolution of the Company) of such
property and our Company causes an amount equal to the net cash proceeds of
the sale to be applied to the retirement, within 120 days after receipt of
such proceeds, of Funded Debt incurred or assumed by our Company or a
Significant Subsidiary (including the debt securities); provided further that,
in lieu of applying all of or any part of such net cash proceeds to such
retirement, our Company may, within 75 days after such sale, deliver or cause
to be delivered to the applicable trustee for cancellation either debentures
or notes evidencing Funded Debt of our Company (which may include the debt
securities) or of a Significant Subsidiary previously authenticated and
delivered by the applicable trustee, and not theretofore tendered for sinking
fund purposes or called for a sinking fund or otherwise applied as a credit
against an obligation to redeem or retire such notes or debentures, and an
Officers' Certificate (which shall be delivered to the Trustee and which need
not contain the statements prescribed by Section 10.04) stating that our
Company elects to deliver or cause to be delivered such debentures or notes in
lieu of retiring Funded Debt as
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hereinabove provided. If our Company shall so deliver debentures or notes to
the applicable trustee and our Company shall duly deliver such Officers'
Certificate, the amount of cash which we shall be required to apply to the
retirement of Funded Debt shall be reduced by an amount equal to the aggregate
of the then applicable optional redemption prices (not including any optional
sinking fund redemption prices) of such debentures or notes, or, if there are
no such redemption prices, the principal amount of such debentures or notes;
provided, that in the case of debentures or notes which provide for an amount
less than the principal amount thereof to be due and payable upon a
declaration of the maturity thereof, such amount of cash shall be reduced by
the amount of principal of such debentures or notes that would be due and
payable as of the date of such application upon a declaration of acceleration
of the maturity thereof pursuant to the terms of the indenture pursuant to
which such debentures or notes were issued. (Section 4.04)
Restrictions on Mergers and Sales of Assets
The Indenture provides that we shall not consolidate with, merge with or
into, or sell, convey, transfer, lease or otherwise dispose of all or
substantially all of our property and assets (as an entirety or substantially
as an entirety in one transaction or a series of related transactions) to, any
Person or permit any Person to merge with or into our Company unless: (i)
either (x) our company shall be the continuing Person or (y) the Person (if
other than our Company) formed by such consolidation or into which our Company
is merged or that acquired or leased such property and assets of our Company
shall be a corporation, partnership or limited liability company organized and
validly existing under the laws of the United States of America or any
jurisdiction thereof and shall expressly assume, by a supplemental indenture,
executed and delivered to the Trustee, all of the obligations of our Company
on all of the debt securities and under this Indenture and our Company shall
have delivered to the Trustee an Opinion of Counsel stating that such
consolidation, merger or transfer and such supplemental Indenture complies
with this provision and that all conditions precedent provided for herein
relating to such transaction have been complied with and that such
supplemental indenture constitutes the legal, valid and binding obligation of
our Company or such successor enforceable against such entity in accordance
with its terms, subject to customary exceptions; and (ii) immediately after
giving effect to such transaction, no Default shall have occurred and be
continuing. (Section 5.01)
Events of Default
The following are Events of Default under the Indenture with respect to the
debt securities of any series:
(a) we default in the payment of the principal of any debt securities of
such series when the same becomes due and payable at maturity, upon
acceleration, redemption or mandatory repurchase, including as a sinking
fund installment, or otherwise;
(b) we default in the payment of interest on any debt securities of such
series when the same becomes due and payable, and such default continues
for a period of 30 days;
(c) we default in the performance of or breaches any other covenant or
agreement of our Company in the Indenture with respect to any Security of
such series or in the debt securities of such series and such default or
breach continues for a period of 60 consecutive days after written notice
to our Company by the Trustee or to our Company and the Trustee by the
Holders of 25% or more in aggregate principal amount of the debt securities
of all series then outstanding affected thereby;
(d) an involuntary case or other proceeding shall be commenced against
our Company or any Significant Subsidiary with respect to it or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in
effect seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of its
property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of 60 days; or an order for relief
shall be entered against our Company or any Significant Subsidiary under
the federal bankruptcy laws as now or hereafter in effect;
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(e) our Company or any Significant Subsidiary (i) commences a voluntary
case under any applicable bankruptcy, insolvency or other similar law now
or hereafter in effect, or consents to the entry of an order for relief in
an involuntary case under any such law, (ii) consents to the appointment of
or taking possession by a receiver, liquidator, assignee, custodian,
Trustee, sequestrator or similar official of our Company or any Significant
Subsidiary or for all or substantially all of the property and assets of
our Company or any Significant Subsidiary or (iii) effects any general
assignment for the benefit of creditors; or
(f) any other Event of Default established with respect to any series of
debt securities issued pursuant to the Indenture occurs. (Section 6.01)
The Indenture provides that if an Event of Default described in clauses (a)
or (b) of the immediately preceding paragraph with respect to the debt
securities of any series then outstanding occurs and is continuing, then, and
in each and every such case, except for any series of debt securities the
principal of which shall have already become due and payable, either the
Trustee or the Holders of not less than 25% in aggregate principal amount of
the debt securities of any such affected series then outstanding under the
Indenture (each such series treated as a separate class) by notice in writing
to our Company (and to the Trustee if given by Securityholders), may declare
the entire principal (or, if the debt securities of any such series are
Original Issue Discount Securities, such portion of the principal amount as
may be specified in the terms of such series established pursuant to the
Indenture) of all debt securities of such affected series, and the interest
accrued thereon, if any, to be due and payable immediately, and upon any such
declaration the same shall become immediately due and payable. If an Event of
Default described in clauses (c) or (f) of the immediately preceding paragraph
with respect to the debt securities of one or more but not all series then
outstanding or with respect to the debt securities of all series then
outstanding occurs and is continuing, then, and in each and every such case,
except for any series of debt securities the principal of which shall have
already (or, if the debt securities of any such series are Original Issue
Discount Securities, the amount thereof accelerable as described in this
paragraph) become due and payable, either the Trustee or the Holders of not
less than 25% in aggregate principal amount of the debt securities of all such
affected series then outstanding under the Indenture (treated as a single
class) by notice in writing to our Company (and to the Trustee if given by
Securityholders), may declare the entire principal (or, if the debt securities
of any such series are Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms of such series established
pursuant to the Indenture) of all debt securities of all such affected series,
and the interest accrued thereon, if any, to be due and payable immediately,
and upon any such declaration the same shall become immediately due and
payable. If an Event of Default described in clause (d) or (e) of the
immediately preceding paragraph occurs and is continuing, then the principal
amount (or, if any debt securities are Original Issue Discount Securities,
such portion of the principal as may be specified in the terms thereof
established pursuant to the Indenture) of all the debt securities then
outstanding and interest accrued thereon, if any, shall be and become
immediately due and payable, without any notice or other action by any Holder
or the Trustee to the full extent permitted by applicable law. Upon certain
conditions such declarations may be rescinded and annulled and past defaults
may be waived by the Holders of a majority in principal of the then
outstanding debt securities of all such series that have been accelerated
(voting as a single class). (Section 6.02)
Subject to such provisions in the Indenture for the indemnification of the
Trustee and certain other limitations, the Holders of at least a majority in
aggregate principal amount (or, if any debt securities are Original Issue
Discount Securities, such portion of the principal as may be specified in the
terms thereof established pursuant to the Indenture) of the outstanding debt
securities of all series affected (voting as a single class) may direct the
time, method and place of conducting any proceeding for any remedy available
to the Trustee or exercising any trust or power conferred on the Trustee with
respect to the debt securities of such series by the Indenture; provided, that
the Trustee may refuse to follow
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any direction that conflicts with law or the Indenture, that may involve the
Trustee in personal liability or that the Trustee determines in good faith may
be unduly prejudicial to the rights of Holders not joining in the giving of
such direction, it being understood that the Trustee shall have no duty to
ascertain whether or not such actions or forbearance are unduly prejudicial to
such Holders and provided further, that the Trustee may take any other action
it deems proper that is not inconsistent with any directions received from
Holders of debt securities pursuant to this paragraph. (Section 6.05)
Subject to various provisions in the Indenture, the Holders of at least a
majority in principal amount (or, if the debt securities are Original Issue
Discount Securities, such portion of the principal as may be specified in the
terms thereof established pursuant to the Indenture) of the outstanding debt
securities of all series affected (voting as a single class), by notice to the
Trustee, may waive an existing Default or Event of Default with respect to the
debt securities of such series and its consequences, except a Default in the
payment of principal of or interest on any Security as specified in clauses
(a) or (b) of Section 6.1 of the Indenture or in respect of a covenant or
provision of the Indenture which cannot be modified or amended without the
consent of the Holder of each outstanding Security affected. Upon any such
waiver, such Default shall cease to exist, and any Event of Default with
respect to the debt securities of such series arising therefrom shall be
deemed to have been cured, for every purpose of the Indenture; but no such
waiver shall extend to any subsequent or other Default or Event of Default or
impair any right consequent thereto. (Section 6.04)
The Indenture provides that no Holder of any debt securities of any series
may institute any proceeding, judicial or otherwise, with respect to the
Indenture or the debt securities of such series, or for the appointment of a
receiver or trustee, or for any other remedy under the Indenture, unless:
(i) such Holder has previously given to the Trustee written notice of a
continuing Event of Default with respect to the debt securities of such
series;
(ii) the Holders of at least 25% in aggregate principal amount of
outstanding debt securities of all such series affected shall have made
written request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee under the Indenture;
(iii) such Holder or Holders have offered to the Trustee indemnity
reasonably satisfactory to the Trustee against any costs, liabilities or
expenses to be incurred in compliance with such request;
(iv) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(v) during such 60-day period, the Holders of a majority in aggregate
principal amount of the outstanding debt securities of all such affected
series have not given the Trustee a direction that is inconsistent with
such written request. A Holder may not use the Indenture to prejudice the
rights of another Holder or to obtain a preference or priority over such
other Holder. (Section 6.06)
The Indenture provides that we will file with the Trustee, within 15 days
after our Company is required to file the same with the Commission, copies of
the annual reports and of the information, documents and other reports which
we may be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Exchange Act. (Section 4.06)
Discharge, Defeasance and Covenant Defeasance
The Indenture provides with respect to each series of debt securities that
we may terminate our obligations under the debt securities of a series and the
Indenture with respect to debt securities of such series if: (i) all debt
securities of such series previously authenticated and delivered, with certain
exceptions, have been delivered to the Trustee for cancellation and our
Company has paid all sums payable by it under the Indenture; or (ii) (A) the
debt securities of such series mature within one year or all of them are to be
called for redemption within one year under arrangements satisfactory to the
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Trustee for giving the notice of redemption, (B) we irrevocably deposit in
trust with the Trustee, as trust funds solely for the benefit of the Holders
of such debt securities, for that purpose, money or U.S. Government
Obligations or a combination thereof sufficient (unless such funds consist
solely of money, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to
the Trustee), without consideration of any reinvestment, to pay principal of
and interest on the debt securities of such series to maturity or redemption,
as the case may be, and to pay all other sums payable by it under the
Indenture, and (C) we deliver to the Trustee an officers' certificate and an
opinion of counsel in each case stating that all conditions precedent provided
for in the Indenture relating to the satisfaction and discharge of the
Indenture with respect to the debt securities of such series have been
complied with. With respect to the foregoing clause (i), only our obligations
to compensate and indemnify the Trustee under the Indenture shall survive.
With respect to the foregoing clause (ii), only our obligations to execute and
deliver debt securities of such series for authentication, to set the terms of
the debt securities of such series, to maintain an office or agency in respect
of the debt securities of such series, to have moneys held for payment in
trust, to register the transfer or exchange of debt securities of such series,
to deliver debt securities of such series for replacement or to be canceled,
to compensate and indemnify the Trustee and to appoint a successor trustee,
and its right to recover excess money held by the Trustee shall survive until
such debt securities are no longer outstanding. Thereafter, only our
obligations to compensate and indemnify the Trustee, and its right to recover
excess money held by the Trustee shall survive. (Section 8.01)
The Indenture provides that we (i) will be deemed to have paid and will be
discharged from any and all obligations in respect of the debt securities of
any series, and the provisions of the Indenture will, except as noted below,
no longer be in effect with respect to the debt securities of such series
("legal defeasance") and (ii) may omit to comply with any term, provision or
condition of the Indenture described above under "--Certain Covenants" (or any
other specific covenant relating to such series provided for in a Board
Resolution or supplemental indenture which may by its terms be defeased
pursuant to the Indenture), and such omission shall be deemed not to be an
Event of Default under clauses (c) or (f) of the first paragraph of "--Events
of Default" with respect to the outstanding debt securities of a series
("covenant defeasance"); provided that the following conditions shall have
been satisfied:
(A) we have irrevocably deposited in trust with the Trustee as trust
funds solely for the benefit of the Holders of the debt securities of such
series, for payment of the principal of and interest on the debt securities
of such series, money or U.S. Government Obligations or a combination
thereof sufficient (unless such funds consist solely of money, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee)
without consideration of any reinvestment and after payment of all federal,
state and local taxes or other charges and assessments in respect thereof
payable by the Trustee, to pay and discharge the principal of and accrued
interest on the outstanding debt securities of such series to maturity or
earlier redemption (irrevocably provided for under arrangements
satisfactory to the Trustee), as the case may be;
(B) such deposit will not result in a breach or violation of, or
constitute a default under, the Indenture or any other material agreement
or instrument to which our Company is a party or by which it is bound;
(C) no Default with respect to such debt securities of such series shall
have occurred and be continuing on the date of such deposit;
(D) we have delivered to the Trustee an opinion of counsel that (1) the
Holders of the debt securities of such series will not recognize income,
gain or loss for federal income tax purposes as a result of our exercise of
its option under this provision of the Indenture and will be subject to
federal income tax on the same amount and in the same manner and at the
same times as would
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have been the case if such deposit and defeasance had not occurred and (2)
the Holders of the Debt securities of such series have a valid security
interest in the trust funds subject to no prior liens under the Uniform
Commercial Code; and
(E) we have delivered to the Trustee an officers' certificate and an
opinion of counsel, in each case stating that all conditions precedent
provided for in the Indenture relating to the defeasance contemplated have
been complied with. In the case of legal defeasance under clause (i) above,
the opinion of counsel referred to in clause (D)(1) above may be replaced
by a ruling directed to the Trustee received from the Internal Revenue
Service to the same effect. Subsequent to legal defeasance under clause (i)
above, our obligations to execute and deliver debt securities of such
series for authentication, to set the terms of the debt securities of such
series, to maintain an office or agency in respect of the debt securities
of such series, to have moneys held for payment in trust, to register the
transfer or exchange of debt securities of such series, to deliver debt
securities of such series for replacement or to be canceled, to compensate
and indemnify the Trustee and to appoint a successor trustee, and its right
to recover excess money held by the Trustee shall survive until such debt
securities are no longer outstanding. After such debt securities are no
longer outstanding, in the case of legal defeasance under clause (i) above,
only our obligations to compensate and indemnify the Trustee and its right
to recover excess money held by the Trustee shall survive. (Sections 8.02
and 8.03)
Modification of the Indenture
The Indenture provides that our Company and the Trustee may amend or
supplement the Indenture or the debt securities of any series without notice
to or the consent of any Holder:
(1) to cure any ambiguity, defect or inconsistency in the Indenture;
provided that such amendments or supplements shall not materially and
adversely affect the interests of the Holders;
(2) to comply with Article 5 of the Indenture;
(3) to comply with any requirements of the Commission in connection with
the qualification of the Indenture under the Trust Indenture Act;
(4) to evidence and provide for the acceptance of appointments under the
Indenture with respect to the debt securities of any or all series by a
successor Trustee;
(5) to establish the form or forms or terms of debt securities of any
series or of the coupons appertaining to such debt securities as permitted
under the Indenture;
(6) to provide for uncertificated or Unregistered Securities and to make
all appropriate changes for such purpose; and
(7) to make any change that does not materially and adversely affect the
rights of any Holder. (Section 9.01)
The Indenture also contains provisions whereby our Company and the Trustee,
subject to certain conditions, without prior notice to any Holders, may amend
the Indenture and the outstanding debt securities of any series with the
written consent of the Holders of a majority in principal amount of the debt
securities then outstanding of all series affected by such supplemental
indenture (all such series voting as one class), and the Holders of a majority
in principal amount of the outstanding debt securities of all series affected
thereby (all such series voting as one class) by written notice to the Trustee
may waive future compliance by our Company with any provision of the Indenture
or the debt securities of such series. Notwithstanding the foregoing
provisions, without the consent of each Holder affected thereby, an amendment
or waiver, including a waiver pursuant to Section 6.04 of the Indenture, may
not: (i) extend the stated maturity of the principal of, or any sinking fund
obligation or any installment of interest on, such Holder's Security, or
reduce the principal amount thereof or the rate of interest thereon (including
any amount in respect of original issue discount), or any premium payable
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with respect thereto, or adversely affect the rights of such Holder under any
mandatory redemption or repurchase provision or any right of redemption or
repurchase at the option of such Holder, or reduce the amount of the principal
of an Original Issue Discount Security that would be due and payable upon an
acceleration of the maturity thereof or the amount thereof provable in
bankruptcy, or change any place of payment where, or the currency in which,
any Security or any premium or the interest thereon is payable, or impair the
right to institute suit for the enforcement of any such payment on or after
the due date therefor; (ii) reduce the percentage in principal amount of
outstanding debt securities of the relevant series the consent of whose
Holders is required for any such supplemental Indenture, for any waiver of
compliance with certain provisions of the Indenture of certain Defaults and
their consequences provided for in the Indenture; (iii) waive a Default in the
payment of principal of or interest on any Security of such Holder; or (iv)
modify any of the provisions of this section of the Indenture, except to
increase any such percentage or to provide that certain other provisions of
the Indenture cannot be modified or waived without the consent of the Holder
of each outstanding Security affected thereby. A supplemental Indenture which
changes or eliminates any covenant or other provision of the Indenture which
has expressly been included solely for the benefit of one or more particular
series of debt securities, or which modifies the rights of Holders of debt
securities of such series with respect to such covenant or provision, shall be
deemed not to affect the rights under the Indenture of the Holders of debt
securities of any other series or of the coupons appertaining to such debt
securities. It shall not be necessary for the consent of any Holder under this
section of the Indenture to approve the particular form of any proposed
amendment, supplement or waiver, but it shall be sufficient if such consent
approves the substance thereof. After an amendment, supplement or waiver under
this section of the Indenture becomes effective, our Company shall give to the
Holders affected thereby a notice briefly describing the amendment, supplement
or waiver, we will mail supplemental Indentures to Holders upon request. Any
failure of our Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such supplemental
Indenture or waiver (Section 9.02).
Concerning the Trustee
Harris Trust and Savings Bank is the Trustee under the Indenture. The
Trustee performs services for us in the ordinary course of business.
Certain Definitions
The following are certain key definitions used in this "Description of Debt
Securities" section. These and other definitions are contained in the
Indenture, which we encourage you to read carefully.
The term "Attributable Debt" as defined in the Indenture means when used in
connection with a sale and lease-back transaction referred to above under "--
Restrictions on Sale and Lease-Back Transactions," on any date as of which the
amount thereof is to be determined, the product of (a) the net proceeds from
such sale and lease-back transaction multiplied by (b) a fraction, the
numerator of which is the number of full years of the term of the lease
relating to the property involved in such sale and lease-back transaction
(without regard to any options to renew or extend such term) remaining on the
date of the making of such computation and the denominator of which is the
number of full years of the term of such lease measured from the first day of
such term.
The term "Consolidated Net Worth" as defined in the Indenture means, at any
date of determination, the consolidated stockholders' equity of the Company,
as set forth on the then most recently available consolidated balance sheet of
the Company and its consolidated Subsidiaries.
The term "Funded Debt" as defined in the Indenture means all indebtedness
for money borrowed, including purchase money indebtedness, and indebtedness
pursuant to a mandatory sinking fund or prepayment provision or otherwise,
having a maturity of more than one year from the date of its creation or
having a maturity of less than one year but by its terms being renewable or
extendible, at the option of the obligor in respect thereof, beyond one year
from the date of its creation.
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The term "Holder" or "Securityholder" as defined in the Indenture means the
registered holder of any Security with respect to registered debt securities
and the bearer of any Unregistered Security or any coupon appertaining
thereto, as the case may be.
"Non-U.S. Subsidiary" as defined in the Indenture means any Subsidiary that
is not a corporation, partnership or other entity created or organized in or
under the laws of the United States of America or any state thereof.
"Original Issue Discount Security" as defined in the Indenture means any
Security that provides for an amount less than the principal amount thereof to
be due and payable upon a declaration of acceleration of the maturity thereof.
"Permitted Receivables Financing" as defined in the Indenture means a
transaction or series of transactions (including amendments, supplements,
extensions, renewals, replacements, refinancings or modifications thereof)
pursuant to which a Securitization Subsidiary purchases Receivables and
Related Assets from the Company or any Subsidiary and finances such
Receivables and Related Assets through the issuance of Equity Interests or
indebtedness (either directly or through a trust) or through the sale of the
Receivables and Related Assets or a fractional undivided interest in the
Receivables and Related Assets; provided that (i) the Board of Directors of
the Company shall have determined in good faith that such Permitted
Receivables Financing is economically fair and reasonable to the Company, (ii)
all sales of Receivables and Related Assets to the Securitization Subsidiary
are made at fair market value (as determined in good faith by the Board of
Directors of the Company), (iii) the financing terms, covenants, termination
events and other provisions thereof shall be market terms (as determined in
good faith by the Board of Directors of the Company), (iv) no portion of the
indebtedness of a Securitization Subsidiary will be guaranteed by or will be
recourse to the Company or any Significant Subsidiary (other than recourse for
customary representations, warranties, covenants and indemnities, none of
which shall relate to the collectibility (as opposed to the status) of the
Receivables and Related Assets) and (v) neither the Company nor any Subsidiary
shall have any obligation to maintain or preserve the Securitization
Subsidiary's financial condition.
The term "Principal Property" as defined in the Indenture means the
Company's principal office building and any manufacturing plant or principal
research facility of any of the Company or any Significant Subsidiary which is
located within the United States of America, except any such principal office
building, plant or facility which the Board of Directors by resolution
declares is not of material importance to the total business conducted by the
Company and its Subsidiaries as an entirety.
"Receivables and Related Assets" as defined in the Indenture means accounts
receivable and instruments, chattel paper, obligations, general intangibles
and other similar assets, in each case, relating to such receivables,
including interest in merchandise or goods, the sale or lease of which gave
rise to such receivables, related contractual rights, guarantees, insurance
proceeds, collections, other related assets, and proceeds of all of the
foregoing.
"Securitization Subsidiary" as defined in the Indenture means a Wholly Owned
Subsidiary which is established for the limited purpose of acquiring and
financing Receivables and Related Assets and engaging in activities ancillary
thereto.
The term "Significant Subsidiary" as defined in the Indenture means, at any
time, any Subsidiary that would be a Significant Subsidiary at such time, as
such term is defined in Regulation S-X promulgated by the Commission, as in
effect on the date of the Indenture.
The term "Subsidiary" as defined in the Indenture means with respect to any
Person, any corporation, association or other business entity of which more
than 50% of the outstanding Voting Stock or other ownership interest is owned
directly or indirectly, by such Person and one or more other Subsidiaries of
such Persons.
17
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The term "Total Assets" as defined in the Indenture means, at any date of
determination, the total assets of the Company and its Subsidiaries on a
consolidated basis as set forth on the then most recently available
consolidated balance sheet of the Company and its consolidated Subsidiaries
prepared in accordance with GAAP.
"Wholly Owned Subsidiary" as defined in the Indenture means a Subsidiary all
of the Equity Interests of which (except directors' qualifying shares) is at
the time owned directly or indirectly by the Company.
18
<PAGE>
DESCRIPTION OF COMMON STOCK
We may issue, separately or together with or upon conversion of or exchange
for other securities, shares of our common stock and the associated preferred
stock purchase rights ("Rights"), all as set forth in the applicable
prospectus supplement. The following summaries do not purport to be complete
and are subject to, and are qualified in their entirety by reference to, the
following documents:
(i) our Amended and Restated Certificate of Incorporation, which we refer
to as our Charter;
(ii) our By-Laws; and
(iii) our Shareholder Rights Agreement, dated December 15, 1997, as may
subsequently be amended, between our company and Harris Trust and Savings
Bank, as Rights Agent, pursuant to which the Rights are issued, which we
refer to as our Rights Agreement.
A copy of each of our Charter, By-Laws and Rights Agreement are incorporated
by reference as exhibits. See "Where You Can Find More Information."
Authorized and Outstanding Stock
Under our Amended and Restated Certificate of Incorporation (the "Restated
Certificate"), we are authorized to issue 1,000,000,000 shares of Common
Stock, par value $0.01 per share, and 11,000,000 shares of preferred stock,
par value $0.01 per share (the "Preferred Stock"). As of September 30, 1999,
311,390,000 shares of Common Stock (excluding treasury shares) were issued and
outstanding and no shares of Preferred Stock were issued and outstanding. In
addition, as of September 30, 1999, there were 22,493,000 shares of Common
Stock reserved for issuance under our equity incentive plans of which
approximately 21,528,000 were subject to outstanding stock options. On January
1, 2000 an additional 3,750,000 shares of Common Stock will become authorized
under our 1998 Equity Incentive Plan for use in connection with stock options
granted after that date. The number of authorized shares of Preferred Stock
includes 1,000,000 authorized shares of Junior Participating Preferred Stock,
Series A (the "Series A Preferred Stock") issuable pursuant to the rights
agreement dated as of December 15, 1997 between the Company and Harris Trust
and Savings Bank (the "Rights Plan"), none of which were outstanding as of
September 30, 1999. See "--Stock Purchase Rights."
Common Stock
Subject to the rights of the holders of any Preferred Stock, each holder of
Common Stock on the applicable record date is entitled to receive such
dividends as may be declared by our Board of Directors out of funds legally
available therefor and, in the event of liquidation, to share pro rata in any
distribution of our assets after payment of liabilities. Each holder of Common
Stock is entitled to one vote for each share held of record on the applicable
record date on all matters presented to a vote of stockholders. The
outstanding Common Stock is, and the shares of Common Stock offered hereby
will be, fully paid and non-assessable. Harris Trust and Savings Bank of
Chicago, Illinois is the registrar and transfer agent for the Common Stock.
Stock Purchase Rights
Each outstanding share of Common Stock includes, and each share of Common
Stock offered hereby will include, one preferred stock purchase right
(individually a "Right" and collectively the "Rights") provided under our
Rights Agreement. Each Right entitles the holder, until the earlier of
December 11, 2007 or the redemption of the Rights, to buy one one-thousandth
of a share of Series A Preferred Stock at a price of $130 per one one-
thousandth of a share (as may be adjusted to reflect stock splits since the
issuance of the Rights). The Series A Preferred Stock is nonredeemable and
will have 1,000 votes per share (subject to adjustment). We have reserved
1,000,000 shares of Series A Preferred Stock for issuance upon exercise of
such Rights.
19
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In the event that any person becomes the beneficial owner of 15% or more of
our Common Stock, the Rights (other than Rights held by the acquiring
stockholder) would become exercisable for that number of shares of the Common
Stock having a market value of two times the exercise price of the Right.
Furthermore, if after any person becomes the beneficial owner of 15% or more
of our Common Stock, our Company is acquired in a merger or other business
combination or 50% or more of its assets or earnings power were sold, each
Right (other than Rights held by the acquiring person) would become
exercisable for that number of shares of Common Stock (or securities of the
surviving company in a business combination) having a market value of two
times the exercise price of the Right.
We may redeem the Rights at one cent per Right prior to the occurrence of an
event that causes the Rights to become exercisable for Common Stock.
One Right will be issued in respect of each share of Common Stock issued
before the earlier of December 11, 2007 or the redemption of the Rights. As of
the date of this prospectus, the Rights are not exercisable, certificates
representing the Rights have not been issued and the Rights automatically
trade with the shares of Common Stock. The Rights will expire on December 11,
2007, unless earlier redeemed.
Preferred Stock
Shares of Preferred Stock may be issued from time to time in one or more
series. Our Board is authorized to determine and alter all rights, preferences
and privileges and qualifications, limitations and restrictions thereof
(including, without limitation, voting rights and the limitation and exclusion
thereof) granted to or imposed upon any wholly unissued series of Preferred
Stock and the number of shares constituting any such series and the
designation thereof, to determine whether fractional shares can be issued in
any particular series and, if so, the nature of the fractional interests which
can be issued in that series, and to increase or decrease (but not below the
number of shares of such series then outstanding) the number of shares of any
series subsequent to the issue of shares of that series then outstanding. In
case the number of shares of any series is so decreased, the shares
constituting such reduction shall resume the status which such shares had
prior to the adoption of the resolution originally fixing the number of shares
of such series.
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DESCRIPTION OF DEBT WARRANTS
We may issue, together with other securities or separately, warrants for the
purchase of debt securities ("Debt Warrants"). The Debt Warrants are to be
issued under Debt Warrant Agreements (each a "Debt Warrant Agreement") to be
entered into between us and a bank or trust company, as Debt Warrant Agent
(the "Debt Warrant Agent"), all as set forth in the applicable prospectus
supplement. The Debt Warrant Agent will act solely as our agent in connection
with the Debt Warrants of such series and will not assume any obligations or
relationship of agency or trust for or with any holders or beneficial owners
of Debt Warrants. A copy of the form of Debt Warrant Agreement, including the
form of Warrant Certificates representing the Debt Warrants (the "Debt Warrant
Certificates"), reflecting the alternative provisions to be included in the
Debt Warrant Agreements that will be entered into with respect to particular
offerings of Debt Warrants, will be filed in an amendment to the registration
statement of which this prospectus is a part or filed in a Current Report on
Form 8-K and incorporated by reference in the registration statement of which
this prospectus is a part. Because the following is only a summary of the Debt
Warrant Agreements and the Debt Warrant Certificates, it does not contain all
of the information that you may find useful. For further information about the
Debt Warrant Agreements and the Debt Warrant Certificates, you should read the
Debt Warrant Agreements and the Debt Warrant Certificates.
General
You should look in the accompanying prospectus supplement for the following
terms of the offered Debt Warrants:
(a) the designation, aggregate principal amount and terms of the debt
securities purchasable upon exercise of such Debt Warrants and the
procedures and conditions relating to the exercise of such Debt Warrants;
(b) the specific designation and terms of any related debt securities
with which such Debt Warrants are issued and the number of such Debt
Warrants issued with each such debt security;
(c) the date, if any, on and after which such Debt Warrants and the
related debt securities will be separately transferable;
(d) the principal amount of debt securities purchasable upon exercise of
each debt warrant and the price at which such principal amount of debt
securities may be purchased upon such exercise;
(e) the date on which the right to exercise such Debt Warrants shall
commence and the date on which such right shall expire (the "Expiration
Date");
(f) if the debt securities purchasable upon exercise of such Debt
Warrants are original issue discount debt securities, a discussion of
federal income tax considerations applicable thereto; and
(g) whether the Debt Warrants represented by the Debt Warrant
Certificates will be issued in registered or bearer form, and, if
registered, where they may be transferred and registered.
Debt Warrant Certificates will be exchangeable for new Debt Warrant
Certificates of different denominations and Debt Warrants may be exercised at
the corporate trust office of the Debt Warrant Agent or any other office
indicated in the applicable prospectus supplement. Prior to the exercise of
their Debt Warrants, holders of Debt Warrants will not have any of the rights
of holders of the debt securities purchasable upon such exercise and will not
be entitled to payments of principal of (and premium, if any) or interest, if
any, on the debt securities purchasable upon such exercise.
21
<PAGE>
Exercise of Debt Warrants
Each Debt Warrant will entitle the holder to purchase for cash such
principal amount of debt securities at such exercise price as shall in each
case be set forth in, or to be determinable as set forth in the applicable
prospectus supplement. Debt Warrants may be exercised at any time up to the
close of business on the Expiration Date set forth in the applicable
prospectus supplement. After the close of business on the Expiration Date,
unexercised Debt Warrants will become void.
Debt Warrants may be exercised as set forth in the applicable prospectus
supplement relating to such Debt Warrants. Upon receipt of payment and the
Debt Warrant Certificate properly completed and duly executed at the corporate
trust office of the Debt Warrant Agent or any other office indicated in the
applicable prospectus supplement, we will, as soon as practicable, forward the
debt securities purchasable upon such exercise. If less than all of the Debt
Warrants represented by such Debt Warrant Certificate are exercised, a new
Debt Warrant Certificate will be issued for the remaining amount of Debt
Warrants.
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<PAGE>
DESCRIPTION OF STOCK WARRANTS
We may issue, together with other securities or separately, stock warrants
for the purchase of our Common Stock ("Stock Warrants"). The Stock Warrants
are to be issued under stock warrant agreements (each a "Stock Warrant
Agreement") to be entered into between us and a bank or trust company, as
stock warrant agent (the "Stock Warrant Agent"), all as set forth in the
applicable prospectus supplement. The Stock Warrant Agent will act solely as
our agent in connection with the Stock Warrants of such series and will not
assume any obligations or relationship of agency or trust for or with any
holders or beneficial owners of Stock Warrants. Copies of the forms of Stock
Warrant Agreements and the forms of warrant certificates (the "Stock Warrant
Certificates") will be filed in an amendment to the registration statement of
which this prospectus is a part or filed in a Current Report on Form 8-K and
incorporated by reference in the registration statement of which this
prospectus is a part. The following description of certain provisions of the
forms of Stock Warrant Agreements and Stock Warrant Certificates does not
purport to be complete and is subject to, and are qualified in their entirety
by reference to, all the provisions of the Stock Warrant Agreements and the
Stock Warrant Certificates to be filed in an amendment to the registration
statement of which this prospectus is a part or filed in a Current Report on
Form 8-K and incorporated by reference in the registration statement of which
this prospectus is a part.
General
If we offer warrants for the purchase of Common Stock, the applicable
prospectus supplement will describe their terms, which may include the
following:
(i) the offering price of such Stock Warrants, if any;
(ii) the procedures and conditions relating to the exercise of such Stock
Warrants;
(iii) the number of shares of Common Stock purchasable upon exercise of
each stock warrant and the initial price at which such shares may be
purchased upon exercise;
(iv) the date on which the right to exercise such Stock Warrants shall
commence and the date on which such right shall expire (the "Expiration
Date");
(v) a discussion of Federal income tax considerations applicable to the
exercise of Stock Warrants;
(vi) call provisions of such Stock Warrants, if any; and
(vii) any other terms of the Stock Warrants.
The shares of Common Stock issuable upon the exercise of the Stock Warrants
will, when issued in accordance with the Stock Warrant Agreement, be validly
issued, fully paid and nonassessable.
Prior to the exercise of their Stock Warrants, holders of Stock Warrants
will not have any of the rights of holders of the Common Stock purchasable
upon such exercise, and will not be entitled to any dividend payments on the
Common Stock purchasable upon such exercise.
Exercise of Warrants
Each stock warrant will entitle the holder to purchase for cash such number
of shares of Common Stock at such exercise price as shall in each case be set
forth in, or be determinable as set forth in, the applicable prospectus
supplement. Unless otherwise specified in the applicable prospectus
supplement, Stock Warrants may be exercised at any time up to the close of
business on the Expiration Date set forth in the applicable prospectus
supplement. After the close of business on the Expiration Date, unexercised
Stock Warrants will become void.
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Stock Warrants may be exercised as set forth in the applicable prospectus
supplement. Upon receipt of payment and the Stock Warrant Certificates
properly completed and duly executed at the corporate trust office of the
Stock Warrant Agent or any other office indicated in the applicable prospectus
supplement, we will, as soon as practicable, forward a certificate
representing the number of shares of Common Stock purchasable upon such
exercise. If less than all of the Stock Warrants represented by such Stock
Warrant Certificate are exercised, a new Stock Warrant Certificate will be
issued for the remaining amount of Stock Warrants.
Anti-Dilution Provisions
Unless otherwise specified in the applicable prospectus supplement, the
exercise price payable and the number of shares purchasable upon the exercise
of each Stock Warrant will be subject to adjustment in certain events,
including:
(i) the issuance of a stock dividend to holders of Common Stock or a
combination, subdivision or reclassification of Common Stock;
(ii) the issuance of rights, warrants or options to all holders of Common
Stock entitling the holders thereof to purchase Common Stock for an
aggregate consideration per share less than the current market price per
share of the Common Stock; or
(iii) any distribution by us to the holders of our Common Stock of
evidences of our indebtedness or of assets (excluding cash dividends or
distributions payable out of capital surplus and dividends and
distributions referred to in (i) above).
No fractional shares will be issued upon exercise of Stock Warrants, but we
will pay the cash value of any fractional shares otherwise issuable.
24
<PAGE>
PLAN OF DISTRIBUTION
The following summary of our plan for distributing the securities offered
under this prospectus will be supplemented by a description of our specific
plan for each offering in the applicable prospectus supplement. Such
description will include, among other things, the terms of any underwriting
arrangements applicable to such offering.
We may sell the securities offered under this prospectus through agents,
underwriters or dealers or directly to one or more purchasers. The prospectus
supplement with respect to the offered securities will set forth the terms of
the offering of such offered securities, including the name or names of any
underwriters, dealers or agents, the purchase price of such offered securities
and the proceeds to us from such sale, any underwriting discounts and other
items constituting compensation to underwriters, any initial public offering
price and any discounts, commissions or concessions allowed or reallowed or
paid to dealers, and any bidding or auction process. Any initial offering
price and any discounts, concessions or commissions allowed or reallowed or
paid to dealers may be changed from time to time.
If underwriters are used in an offering, the offered securities will be
acquired by the underwriters for their own account. The offered securities may
be sold from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. The offered securities may be offered to the public
either through underwriting syndicates represented by one or more managing
underwriters or directly by one or more of such firms. The specific managing
underwriter or underwriters, if any, will be set forth in the applicable
prospectus supplement together with the members of the underwriting syndicate,
if any. Unless otherwise set forth in the prospectus supplement, the
obligations of the underwriters to purchase the offered securities will be
subject to certain conditions precedent and the underwriters will be obligated
to purchase all such offered securities if any are purchased.
Offered securities may be sold directly by us or through agents designated
by us from time to time. The prospectus supplement will set forth the name of
any agent involved in the offer or sale of the offered securities in respect
of which the prospectus supplement is delivered and any commissions payable by
us to such agent. Unless otherwise indicated in the prospectus supplement, any
such agent is acting on a best efforts basis for the period of its
appointment.
Any underwriters, dealers, or agents participating in the distribution of
the offered securities may be deemed to be underwriters and any discounts or
commissions received by them on the sale or resale of the offered securities
may be deemed to be underwriting discounts and commissions under the
Securities Act of 1933, as amended.
Agents, dealers or underwriters may be entitled, under agreements entered
into with us, to indemnification by us against certain liabilities, including
liabilities under the Securities Act of 1933, as amended, and to contribution
with respect to payments which the agents, dealers or underwriters may be
required to make in respect thereof. Agents, dealers and underwriters may
engage in transactions with or perform services for us in the ordinary course
of business.
Some or all of the offered securities, other than our Common Stock, will be
a new issue or issues of securities with no established trading market. Any
Common Stock offered by this prospectus will be listed on the New York Stock
Exchange (or the then other principal trading market). Unless otherwise
indicated in a prospectus supplement, we do not currently intend to list any
offered debt securities or warrants on any securities exchange. No assurance
can be given that the underwriters, dealers or agents, if any, involved in the
sale of the offered securities will make a market in such offered securities.
Whether or not any of the offered securities are listed on a national
securities exchange or the underwriters, dealers or agents, if any, involved
in the sale of the offered securities make a market in such offered
securities, no assurance can be given as to the liquidity of the trading
market for such offered securities.
25
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Delayed Delivery Arrangements
If so indicated in the applicable prospectus supplement, we may authorize
underwriters or other persons acting as our agents to solicit offers by
certain institutions to purchase offered securities from us under contracts
providing for payment and delivery on a future date. Institutions with which
such contracts may be made include:
.commercial and savings banks,
.insurance companies,
.pension funds,
.investment companies, and
.educational and charitable institutions and others,
but in all cases will be subject to our approval. The obligations of any
purchaser under any such contract will be subject to the conditions that the
purchase of the offered securities shall not at the time of delivery be
prohibited under the laws of the jurisdiction to which such purchaser is
subject and, if the securities are also being sold to underwriters acting as
principals for their own account, the underwriters shall have purchased such
securities not sold for delayed delivery. The underwriters and such agents
will not have any responsibility in respect of the validity or performance of
such contracts.
LEGAL MATTERS
Unless otherwise indicated in the applicable prospectus supplement, certain
legal matters in connection with the securities offered hereby will be passed
upon for ServiceMaster by Vernon T. Squires, Senior Vice President and General
Counsel of ServiceMaster. As of September 30, 1999, Mr. Squires held directly
or indirectly 393,388 shares and options to acquire 225,000 shares of our
Common Stock.
EXPERTS
Arthur Andersen LLP, independent auditors, have audited our consolidated
financial statements included in our Annual Report on Form 10-K for the year
ended December 31, 1998, as set forth in their report, which is incorporated
in this prospectus by reference. Our consolidated financial statements are
incorporated by reference in reliance on their report, given on their
authority as experts in accounting and auditing in giving said report.
26
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. Other Expenses of Issuance and Distribution
The following is an estimate, subject to future contingencies, of the
expenses to be incurred by the Registrant in connection with the issuance and
distribution of the securities being registered:
<TABLE>
<S> <C>
Registration Fee*............................................... $194,600
Legal Fees and Expenses......................................... 75,000
Trustee Fees and Expenses....................................... 10,000
Accounting Fees and Expenses.................................... 30,000
Blue Sky Fees and Expenses...................................... 15,000
Printing Fees................................................... 100,000
Miscellaneous................................................... 75,400
--------
Total....................................................... $500,000
========
</TABLE>
- --------
*Actual. All other amounts are estimated pursuant to instruction to Item 511
of Regulation S-K.
ITEM 15. Indemnification of Directors and Officers
The Company is incorporated under the laws of the State of Delaware. Section
145 of the DGCL, inter alia ("Section 145") provides that a Delaware
corporation may indemnify any persons who were, are or are threatened to be
made, parties to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other
than an action by or in the right of such corporation), by reason of the fact
that such person is or was an officer, director, employee or agent of such
corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation or enterprise. The
indemnity may include expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by such person
in connection with such action, suit or proceeding, provided such person acted
in good faith and in a manner he reasonably believed to be in or not opposed
to the corporation's best interests and, with respect to any criminal action
or proceeding, had no reasonable cause to believe that his conduct was
illegal. A Delaware corporation may indemnify any persons who are, were or are
threatened to be made, a party to any threatened, pending or completed action
or suit by or in the right of the corporation by reason of the fact that such
person was a director, officer, employee or agent of such corporation, or is
or was serving at the request of such corporation as a director, officer,
employee or agent of another corporation or enterprise. The indemnity may
include expenses (including attorneys' fees) actually and reasonably incurred
by such person in connection with the defense or settlement of such action or
suit, provided such person acted in good faith and in a manner he reasonably
believed to be in or not opposed to the corporation's best interests, provided
that no indemnification is permitted without judicial approval if the officer,
director, employee or agent is adjudged to be liable to the corporation. Where
an officer, director, employee or agent is successful on the merits or
otherwise in the defense of any action referred to above, the corporation must
indemnify him against the expenses that such officer or director has actually
and reasonably incurred.
Article Ten of the Restated Certificate ("Article Ten") provides that no
person shall have any liability of any kind by reason of a Relevant Loss
(defined below) caused in whole or in part by any act or failure to act which
occurred while such person was an officer or director of the Company except:
(i) obligations arising under the express terms of any written contract to
which such person is a party; (ii) the obligation to return to the Company an
amount up to the value actually realized by such person by stealing or by any
other action which constitutes a criminal felony; (iii) any liability imposed
by contract or applicable law which is founded on, arises from or is related
to activities by such person (or such person's agents or affiliates) which are
in competition with any business of the Company or
II-1
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any of its affiliates; and (iv) any other liability from which it shall not be
possible to exempt such person under applicable law either as constituted on
the date on which the Restated Certificate was filed with the Secretary of
State of Delaware (the "Filing Date") or at any time thereafter. The term
"Relevant Loss" designates and includes any loss, damage or expense of any
kind (i) experienced for any reason by the Company or by any entity controlled
by the Company; (ii) which any person may experience by reason of any purchase
(or failure to purchase), maintenance of an interest in, sale (or failure to
sell) or failure to obtain payment of any amount due on any note, debenture,
preferred stock, common stock or other security issued or issuable by the
Company or (iii) which shall otherwise be caused in whole or in part by or
arise in connection with (or would not have occurred but for) such person's
service as a director or officer of the Company. In addition, Article Ten
provides that every director of the Company shall be exempt (except to the
extent expressly set forth therein) from any personal liability to the Company
or any of the Company's stockholders for monetary damages for breach of
fiduciary duty as a director to the fullest extent permitted by (i) Section
102(b)(7) of the DGCL as constituted on the Filing Date or (ii) any provision
of the law of the State of Delaware as constituted at any time after the
December 11, 1991.
Except as otherwise provided in the Restated Certificate, Article Eleven of
the Restated Certificate ("Article Eleven") provides that the Company shall
indemnify any person against, and shall reimburse, such person for any amount
which such person shall pay to satisfy, settle or otherwise deal with, any
attempt to impose any liability or obligation of any kind upon such person if
such attempt or such liability or obligation or both shall arise in connection
with or by reason of, or would not have arisen but for, Covered Service
(defined below) by such person (or any agreement by such person to serve as a
director or officer of the Company or to provide other Covered Service)
including, but not limited to: (i) any claim resulting from any loss, injury,
damage, harm or other disadvantage which the Company, any affiliate, any
employee plan or any person who acquires, holds, or disposes of any interest
in any security issued by the Company suffers or is alleged to have suffered;
(ii) any claim resulting from any act or failure to act by any person which is
(or is alleged to be) beyond the scope of his or her authority, contrary to
instructions or orders or contrary to his or her duties or applicable law; and
(iii) any attempt by any governmental authority or other person to impose any
fine or penalty or to obtain any other recovery by reason of any actual or
alleged breach of any law or other governmental requirement.
The term "Covered Service" designates and includes: (a) service as a
director or officer of the Company; (b) service by a person while he or she is
an officer or director of the Company (i) as an agent or representative of the
Company, (ii) in any other capacity with the Company, (iii) as a director,
officer, employee, agent or representative of, or in any other capacity with,
any affiliate, (iv) in any capacity with any Employee Plan (as defined
therein), and (v) in any other capacity in which such person shall have been
asked to serve by the Company's Board of Directors or Chief Executive Officer;
(c) any services which constituted "Covered Service" under the Amended and
Restated Agreement of United Partnership for ServiceMaster Limited
Partnership; and (d) any other service of any kind by any person with any
organization or entity of any kind (whether or not affiliated with the
Company) which shall be designated in writing as Covered Service by a majority
of the members of the Company's Board of Directors or by the Company's Chief
Executive Officer. Service is deemed to constitute "Covered Service" if it is
so designated by the terms in the preceding sentence regardless of whether it
shall have been performed prior to, at, or after the time Article Eleven
became part of the Company's Certificate of Incorporation. Any person is
entitled to rely upon any written confirmation provided by the Company's Chief
Executive Officer or by the Company's Board of Directors that service by such
person in any capacity specified in such confirmation will constitute Covered
Service and to rely upon the protection afforded by Article Eleven in
connection with such service.
Except to the extent the Company shall otherwise expressly agree in writing,
the Company is not obligated under Article Eleven to reimburse any person for
or otherwise indemnify any person against: (a) any obligation the person may
have under any written contract except to the extent such obligation
II-2
<PAGE>
arises by reason of any action taken by such person to satisfy, settle or
otherwise deal with any claim against which such person is entitled to
indemnification from the Company under Article Eleven or otherwise; (b) any
income taxes payable by reason of salary, bonus or other income or gain
actually realized by such person in connection with any Covered Service; (c)
any liability imposed by contract or applicable law which is founded on,
arises from or is related to activities by such person (or such person's
agents or affiliates) which are in competition with any business of the
Company or any of its affiliates; and (d) any obligation to pay an amount up
to the value personally realized by such person by stealing or by any other
action which constitutes a criminal felony. Except as otherwise provided in
the Restated Certificate, the Company is not obligated under Article Eleven to
indemnify any person in connection with a proceeding (or part thereof)
initiated by such person unless such proceeding (or part thereof) was
authorized by the Board of Directors of the Company.
Article Eleven provides that each person who was or is made a party or is
threatened to be made a party to or is otherwise involved in any action, suit
or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he or she is or was a director or officer of the
Company, agreed to serve as a director or officer of the Company or is or was
providing any other Covered Service, whether the basis of such proceeding is
alleged action in an official capacity as a director or officer of the Company
or in any other Covered Service position, shall, except as otherwise provided
therein, be indemnified and held harmless by the Company to the fullest extent
authorized by Delaware law against all expense, liability and loss (including
attorneys' fees, judgments, fines, excise taxes or penalties arising under the
Employee Retirement Income Security Act, as amended from time to time, and
amounts paid in settlement) reasonably incurred or suffered by such person in
connection therewith and such indemnification shall continue as to a person
who has ceased to be a director or officer of the Company or to provide any
other Covered Service and shall inure to the heirs, executors and
administrators of such person.
Article Eleven provides that the Company shall reimburse any Covered Person
(as defined therein) for any payment made by such person for any legal fees or
other expenses reasonably incurred by such person in order to investigate,
evaluate, defend against, pay in full, settle or otherwise deal with (i) any
Covered Claim (as defined therein) or (ii) any development or state of facts
which could give rise to a Covered Claim.
Article Eleven also provides that any officer of the Company or any member
of its Board of Directors shall have the right and power to execute on behalf
of the Company any written contract with any other person providing
indemnification or other protection to such other person in connection with
service by such other person as a director or officer of the Company or in
connection with any other Covered Service by such person, and any such
contract shall be legal, valid and binding upon the Company and shall be
enforceable against the Company in accordance with its terms to the maximum
extent permitted by Article Eleven or by applicable law, if it shall be
approved by a majority of the members of the Company's Board of Directors
exclusive of the person to whom indemnification is provided by such contract.
The rights of any person under any particular contract made in accordance with
the provisions of the preceding sentence shall not be impaired or eliminated
(i) by reason of the fact that all or any one or more of the members of the
Board who approved such contracts shall be parties to contracts affording them
similar protection (regardless of when those other contracts shall have been
approved or signed) or shall otherwise have been provided with protection
similar to that provided in the particular contract or shall be subject to the
same claims against which the particular contract is intended to protect or
(ii) for any other reason whatsoever. It is expressly intended that each
person with whom the Company shall enter into a written contract to provide
indemnification or other protection in connection with such person's service
as an officer or director of the Company or in connection with other Covered
Service by such person shall be entitled to rely upon (and shall conclusively
be presumed to have relied upon) the rights which such contract purports to
provide to such person. No separate written contract shall however be
necessary in order for any person to obtain any indemnification or payment to
which Article Eleven purports to entitle such person, and any
II-3
<PAGE>
Covered Person who has no separate contact of any kind with the Company shall
be entitled to receive all indemnification, payments and other benefits which
the provisions in Article Eleven purport to provide to such Covered Person.
The rights to indemnification and payment provided by Article Eleven are not
exclusive of any other right of any kind which any person may have or at any
time acquire under or by reason of any other provision in the Restated
Certificate, the Company's By-Laws, any agreement, any law or other action by
any governmental authority, or otherwise.
Article Eleven authorizes the Company to purchase and maintain insurance on
behalf of any person who is or was a director or officer of the Company, or is
or was serving in any other capacity with the Company, any Employee Plan or
any other organization against any expense, liability or loss, whether or not
the Company would have the power to indemnify such person against such
expense, liability or loss under the provisions of Article Eleven, under
applicable law or otherwise.
In addition, Section 145 further authorizes a corporation to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee or agent of another
corporation or enterprise, against any liability asserted against him and
incurred by him in any such capacity, arising out of his status as such,
whether or not the corporation would otherwise have the power to indemnify him
under Section 145.
All of the Company's directors and the officers are covered by insurance
policies maintained and held in effect by the Company against certain
liabilities for actions taken in such capacities, including liabilities under
the Securities Act of 1933.
The form of Underwriting Agreement included as an exhibit to this
registration statement provides for indemnification of directors and officers
of the Company against certain liabilities.
ITEM 16. Exhibits
See Exhibit Index.
ITEM 17. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of Securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimate
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
II-4
<PAGE>
(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;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished
to the Commission by the registrant pursuant to section 13 or section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference
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) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of
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) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
(d) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) pursuant to the Securities Act shall be deemed to be part of
this registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
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.
(e) The undersigned registrant hereby undertakes to file an application for
the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with
the rules and regulations prescribed by the Securities and Exchange Commission
under Section 305(b)(2) of the Trust Indenture Act.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Company certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this
registration statement, or amendment thereto, to be signed on its behalf by
the undersigned, duly authorized, in the City of Downers Grove, State of
Illinois, on November 19, 1999.
The ServiceMaster Company
/s/ Vernon T. Squires
By: _________________________________
Vernon T. Squires
Senior Vice President and General
Counsel
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed on November 19, 1999 by the following
persons in the capacities indicated:
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C> <C>
* Chairman, Chief Executive Officer and
__________________________________________Director_of The ServiceMaster Company
C. William Pollard
* Vice Chairman and Director of The
__________________________________________ServiceMaster_Company
Charles W. Stair
* Vice Chairman and Director of The
__________________________________________ServiceMaster_Company
Phillip B. Rooney
/s/ Steven C. Preston Executive Vice President and Chief
__________________________________________Financial_Officer of The ServiceMaster
Steven C. Preston Company
* Director of The ServiceMaster Company
___________________________________________
Paul W. Berezny, Jr.
* Director of The ServiceMaster Company
___________________________________________
Carlos H. Cantu
* Director of The ServiceMaster Company
___________________________________________
Brian Griffiths
* Director of The ServiceMaster Company
___________________________________________
Sidney E. Harris
* Director of The ServiceMaster Company
___________________________________________
Herbert P. Hess
* Director of The ServiceMaster Company
___________________________________________
Michelle M. Hunt
</TABLE>
II-6
<PAGE>
<TABLE>
<S> <C> <C>
* Director of The ServiceMaster Company
___________________________________________
Gunther H. Knoedler
* Director of The ServiceMaster Company
___________________________________________
James D. McLennan
* Director of The ServiceMaster Company
___________________________________________
Vincent C. Nelson
* Director of The ServiceMaster Company
___________________________________________
Dallen W. Peterson
* Director of The ServiceMaster Company
___________________________________________
Steven S Reinemund
* Director of The ServiceMaster Company
___________________________________________
Burton E. Sorensen
* Director of The ServiceMaster Company
___________________________________________
David K. Wessner
</TABLE>
*The undersigned, by signing his name hereto, does sign and execute this
Registration Statement pursuant to the Powers of Attorney executed by the
above-named officers and directors of The ServiceMaster Company and filed
with the Securities and Exchange Commission on behalf of such officers and
directors.
/s/ Vernon T. Squires
By: _________________________________
Vernon T. Squires
Attorney-in-fact
II-7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
------- ----------------------
<C> <S> <C>
1.1 Form of Debt Securities Underwriting Agreement.+
4.1 Amended and Restated Certificate of Incorporation of The
ServiceMaster Company, a Delaware corporation, as filed with
the Secretary of State, State of Delaware, on November 6, 1997
is incorporated by reference to Exhibit 1 to the ServiceMaster
Limited Partnership ("SMLP") December 23, 1997 8-K and to
Exhibit 1 to the Current Report on Form 8-K as filed by the
Company on February 26, 1998--the second of three 8-K reports
field on that date (the "Company February 26, 1998 8-K, No.
2").
4.2 Bylaws of The ServiceMaster Company as adopted on November 3,
1997 are incorporated by reference to Exhibit 2 to the SMLP
December 23, 1997 8-K and to Exhibit 2 to the Company February
26, 1998 8-K, No. 2.
4.3 Shareholder Rights Agreement between The ServiceMaster Company
and the Harris Trust and Savings Bank as adopted on December
12, 1997 is incorporated by reference to Exhibit 3 to the SMLP
December 29, 1997 8-K and to Exhibit 3 to the Company February
26, 1998 8-K, No. 2.
4.4 The ServiceMaster Company: Certificate of Designation,
Preferences and Rights of Junior Participating Preferred
Stock, Series A, is incorporated by reference to Exhibit 4 to
the SMLP December 29, 1997 8-K and to Exhibit 4 to the Company
February 26, 1998 8-K, No. 2.
4.5 Indenture dated as of August 15, 1997 among The ServiceMaster
Company (as successor to ServiceMaster Limited Partnership and
The ServiceMaster Company Limited Partnership) and the Harris
Trust and Savings Bank as trustee is incorporated by reference
to Exhibit 4.1 to the July 28, 1997 Registration Statement.
4.6 First Supplemental Indenture dated as of August 15, 1997 among
The ServiceMaster Company (as successor to ServiceMaster
Limited Partnership and The ServiceMaster Company Limited
Partnership) and the Harris Trust and Savings Bank as trustee
is incorporated by reference to Exhibit 4.4 to the Annual
Report on Form 10-K for the year ended December 31, 1997 as
filed by The ServiceMaster Company.
4.8 Second Supplemental Indenture dated as of January 1, 1998
among The ServiceMaster Company (as successor to ServiceMaster
Limited Partnership and The ServiceMaster Company Limited
Partnership) and the Harris Trust and Savings Bank as trustee
is incorporated by reference to Exhibit 2 to the Current
Report on Form 8-K as filed by The ServiceMaster Company on
Form 8-K on February 26, 1998--first of three 8-K reports
filed on that date.
4.9 Third Supplemental Indenture dated as of March 2, 1998 among
The ServiceMaster Company and the Harris Trust and Savings
Bank as trustee is incorporated by reference to Exhibit 4.3 to
the Current Report on Form 8-K as filed by The ServiceMaster
Company on February 27, 1998 (the "Company February 27, 1998
8-K").
4.10 Fourth Supplemental Indenture dated as of August 10, 1999
among The ServiceMaster Company and Harris Trust and Savings
Bank as trustee is incorporated by reference to Exhibit 4.3 to
the Current Report on Form 8-K as filed by The ServiceMaster
Company on August 16, 1999.
4.11 Form of 6.95% Note due August 14, 2007 is incorporated by
reference to Exhibit 4.2 to the July 28, 1997 Registration
Statement.
4.12 Form of 7.45% Note due August 14, 2027 is incorporated by
reference to Exhibit 4.2 to the July 28, 1997 Registration
Statement.
</TABLE>
II-8
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
------- ----------------------
<C> <S> <C>
4.13 Form of 7.10% Note due March 1, 2018 is incorporated by
reference to Exhibit 4.1 to the Company February 27, 1998 8-K.
4.14 Form of 7.25% Note due March 1, 2038 is incorporated by
reference to Exhibit 4.2 to the Company February 27, 1998 8-K.
4.15 Form of 7.857% Note due August 15, 2009 is incorporated by
reference to Exhibit 4.2 to the Current Report on Form 8-K
filed by The ServiceMaster Company on August 16, 1999.
4.16 Form of Indenture, dated as of November 18, 1999, by and among
the Company, as issuer, and Harris Trust and Savings Bank, as
Trustee.+
4.17 Form of Debt Securities (included in Exhibit 4.14).
4.18 Form of Debt Warrant Agreement, including form of Debt Warrant
Certificate.*
4.19 Form of Stock Warrant Agreement, including form of Stock
Warrant Certificate.*
5.1 Opinion of Vernon T. Squires, Senior Vice President and
General Counsel of the Company.+
12.1 Computation of Ratio of Earnings to Fixed Charges.+
23.1 Consent of Arthur Andersen LLP.+
23.2 Consent of Vernon T. Squires (included in Exhibit 5.1).
24.1 Powers of Attorney.+
25.1 Form T-1 Statement of Eligibility of the Trustee.+
</TABLE>
- --------
+ Filed herewith.
* To be filed, if necessary, subsequent to the effectiveness of this
registration statement by an amendment to the registration statement or
incorporated by reference pursuant to a Current Report on Form 8-K in
connection with the offering of securities.
II-9
<PAGE>
Exhibit 1.1
-----------
THE SERVICEMASTER COMPANY
Underwriting Agreement
[Insert Date]
To the Representatives named
in Schedule I hereto of the
Underwriters named in
Schedule II hereto
Ladies and Gentlemen:
The ServiceMaster Company, a Delaware corporation (the "Company"), proposes
to issue and sell to the underwriters named in Schedule II hereto (the
"Underwriters"), for whom you are acting as representatives (the
"Representatives"), the principal amount of its debt securities identified in
Schedule I hereto (the "Securities"), to be issued under the indenture specified
in Schedule I hereto between the Company and the trustee identified in such
Schedule (the "Trustee") (as heretofore amended or supplemented as specified in
Schedule I hereto, the "Indenture"). If the firm or firms listed in Schedule II
hereto include only the firm or firms listed in Schedule I hereto, then the
terms "Underwriters" and "Representatives" as used herein, shall each be deemed
to refer to such firm or firms.
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"), a registration
statement (the file number of which is set forth in Schedule I hereto) on Form
S-3, relating to certain debt securities (the "Shelf Securities") that may be
issued from time to time by the Company. The Company has also filed with, or
proposes to file with, the Commission pursuant to Rule 424 under the Securities
Act a prospectus supplement specifically relating to the Securities so issued by
the Company. The registration statement referenced above as amended to the date
of this Agreement is hereinafter referred to as the "Registration Statement" and
the related prospectus covering the Shelf Securities in the form first used to
confirm sales of the Securities is hereinafter referred to as the "Basic
Prospectus."
The Basic Prospectus as supplemented by the prospectus supplement
specifically relating to the Securities in the form first used to confirm sales
of the Securities is hereinafter referred to as the "Prospectus." If the Company
has filed an abbreviated registration statement pursuant to Rule 462(b) under
the Securities Act (the "Rule 462 Registration Statement"), then any reference
herein to the term "Registration Statement" shall be deemed to include such Rule
462 Registration Statement. Any reference in this Agreement to the Registration
Statement, the Basic Prospectus, any preliminary form of Prospectus (a
"preliminary prospectus") previously filed with the Commission pursuant to Rule
<PAGE>
424 or the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the
Securities Act which were filed under the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder
(collectively, the "Exchange Act") on or before the date of this Agreement or
the date of the Basic Prospectus, any preliminary prospectus or the Prospectus,
as the case may be; and any reference to "amend," "amendment" or "supplement"
with respect to the Registration Statement, the Basic Prospectus, any
preliminary prospectus or the Prospectus shall be deemed to refer to and include
any documents filed under the Exchange Act after the date of this Agreement, or
the date of the Basic Prospectus, any preliminary prospectus or the Prospectus,
as the case may be, which are deemed to be incorporated by reference therein.
The Company hereby agrees with the Underwriters as follows:
1. The Company agrees to issue and sell the Securities to the several
Underwriters, as hereinafter provided, and each Underwriter, on the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated agrees to purchase, severally and not jointly, from the
Company the respective principal amount of Securities set forth opposite such
Underwriter's name in Schedule II hereto at the purchase price set forth in
Schedule I hereto plus accrued interest, if any, from the date specified in
Schedule I hereto to the date of payment and delivery.
2. The Company understands that the several Underwriters intend (i) to
make a public offering of their respective portions of the Securities and (ii)
initially to offer the Securities upon the terms set forth in the Prospectus.
3. Payment for the Securities shall be made by wire transfer in
immediately available funds to the account specified by the Company to the
Representatives, no later than noon on the date and at the time and place set
forth in Schedule I hereto (or at such other time and place on the same or such
other date, not later than the fifth Business Day (as defined below) thereafter,
as you and the Company may agree in writing). As used herein, the term "Business
Day" means any day other than a day on which banks are permitted or required to
be closed in New York City. The time and date of such payment and delivery with
respect to the Securities are referred to herein as the "Closing Date."
Payment for the Securities shall be made against delivery to the nominee of
The Depository Trust Company for the respective accounts of the several
Underwriters of the Securities of one or more global notes (the "Global Note")
representing the Securities, with any transfer taxes payable in connection with
the transfer to the Underwriters of the Securities duly paid by the Company. The
Global Note will be made available for inspection by the Representatives at the
office of J.P. Morgan Securities Inc., 60 Wall Street, New York, New York 10260,
on the Business Day prior to the Closing Date.
4. The Company represents and warrants to each Underwriter that:
(a) the Registration Statement has been declared effective by the
Commission under the Securities Act; no stop order suspending the effectiveness
of the Registration Statement
2
<PAGE>
has been issued and no proceeding for that purpose has been instituted or, to
the knowledge of the Company, threatened by the Commission; and the Registration
Statement and Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) comply, or will comply, as the
case may be, in all material respects with the Securities Act and the Trust
Indenture Act of 1939, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Trust Indenture Act"), and do not and
will not, as of the applicable effective date as to the Registration Statement
and any amendment or supplement thereto and as of the date of the Prospectus and
any amendment or supplement thereto, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, and the Prospectus, as amended or
supplemented at the Closing Date, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading; provided, however, that the foregoing representations and
warranties shall not apply to (i) that part of the Registration Statement which
constitutes the Statement of Eligibility and Qualification (Form T-1) under the
Trust Indenture Act of the Trustee and (ii) statements or omissions in the
Registration Statement or the Prospectus made in reliance upon and in conformity
with information relating to any Underwriter furnished to the Company in writing
by such Underwriter through the Representatives expressly for use therein;
(b) the documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Securities Act or
the Exchange Act, as applicable, and none of such documents 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, in light of the
circumstances under which they were made, not misleading; and any further
documents so filed and incorporated by reference in the Prospectus or any
further amendment or supplement thereto, when such documents become effective or
are filed with the Commission, as the case may be, will conform in all material
respects to the requirements of the Securities Act or the Exchange Act, as
applicable, and will not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading;
(c) the financial statements, and the related notes thereto, of the
Company included or incorporated by reference in the Registration Statement and
the Prospectus present fairly in all material respects the consolidated
financial position of the Company and its consolidated subsidiaries as of the
dates indicated and the results of their operations and the changes in their
consolidated cash flows for the periods specified; said financial statements
have been prepared in conformity with generally accepted accounting principles
applied on a consistent basis, and the supporting schedules included or
incorporated by reference in the Registration Statement present fairly in all
material respects the information required to be stated therein; and the pro
forma financial information, and the related notes thereto, if any, included or
incorporated by reference in the Registration Statement and the Prospectus has
been prepared in accordance with the applicable requirements of the Securities
Act and the Exchange Act, as applicable and is based upon good faith estimates
and assumptions believed by the Company to be reasonable;
3
<PAGE>
(d) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any material
change in the capital stock or long-term debt of the Company or any of its
significant subsidiaries (as defined in the Commission's Regulation S-X), or any
material adverse change, or any development involving a prospective material
adverse change, in or affecting the general affairs, business, prospects,
management, financial position, stockholders' equity or results of operations of
the Company and its subsidiaries, taken as a whole, otherwise than as set forth
or contemplated in the Prospectus; and except as set forth or contemplated in
the Prospectus neither the Company nor any of its subsidiaries has entered into
any transaction or agreement (whether or not in the ordinary course of business)
material to the Company and its subsidiaries taken as a whole;
(e) the Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of its jurisdiction of
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and has been
duly qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business, so as to require such
qualification, other than where the failure to be so qualified or in good
standing would not have a material adverse effect on the Company and its
subsidiaries taken as a whole.
(f) each of the Company's significant subsidiaries (as defined in the
Commission's Regulation S-X) has been duly incorporated or organized and is
validly existing as a corporation, limited liability company or limited
partnership under the laws of its jurisdiction of incorporation or organization,
with power and authority (corporate or partnership or other) to own its
properties and conduct its business, as described in the Prospectus, and has
been duly qualified as a foreign corporation, limited liability company or
limited partnership for the transaction of business and is in good standing
under the laws of each jurisdiction in which it owns or leases properties, or
conducts any business so as to require such qualification, other than where the
failure to be so qualified or in good standing would not have a material adverse
effect on the Company and its subsidiaries taken as a whole; and all the
outstanding shares of capital stock, limited liability company interests or
partnership interests, as the case may be, of each significant subsidiary of the
Company have been duly authorized and validly issued, are fully-paid and non-
assessable, and (except as described in the Prospectus) are owned by the
Company, directly or indirectly, free and clear of all liens, encumbrances,
security interests and claims;
(g) this Agreement has been duly authorized, executed and delivered by
the Company;
(h) the Securities have been duly authorized, and, when executed,
authenticated and issued under the Indenture and delivered to and paid for in
accordance with this Agreement, will have been duly executed, issued and
delivered by the Company and will constitute valid and binding obligations of
the Company entitled to the benefits provided by the Indenture; the Indenture
has been duly authorized, executed and delivered by the Company and qualified
under the Trust Indenture Act and constitutes a valid and binding instrument;
and the Indenture conforms to the descriptions thereof in the Prospectus;
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(i) neither the Company nor any of its subsidiaries is, or with the
giving of notice or lapse of time or both would be, in violation of or in
default under, its certificate of incorporation or by-laws or agreement of
limited partnership or other organization document, as the case may be, or any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which it or any of them or any of their respective properties is bound, except
for violations and defaults which individually and in the aggregate would not
reasonably be expected to have a material adverse effect on the Company and its
subsidiaries taken as a whole; the issue and sale of the Securities and the
performance by the Company of all of its obligations under the Securities, the
Indenture and this Agreement, and the consummation of the transactions herein
and therein contemplated will not conflict with or result in a breach of any of
the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject, that is material for the
Company and its subsidiaries taken as a whole, nor will such action result in
any violation of the provisions of the certificate of incorporation or the by-
laws of the Company or any applicable law or statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Company, its subsidiaries or any of their respective properties, except
where such would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole (a "Material Adverse Effect"); and no consent,
approval, authorization, order, license, registration or qualification of or
with any such court or governmental agency or body is required for the issue and
sale of the Securities or the consummation by the Company of the transactions
contemplated by this Agreement or the Indenture, except such consents,
approvals, authorizations, orders, licenses, registrations or qualifications as
have been obtained under the Securities Act or the Trust Indenture Act and as
may be required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Securities;
(j) other than as set forth or contemplated in the Prospectus, there
are no legal or governmental investigations, actions, suits or proceedings
pending or, to the knowledge of the Company, threatened against or affecting the
Company or any of its subsidiaries or any of their respective properties or to
which the Company or any of its subsidiaries is or may be a party or to which
any property of the Company or any of its subsidiaries is or may be the subject
which, if determined adversely to the Company or any of its subsidiaries, could
individually or in the aggregate reasonably be expected to have, a material
adverse effect on the general affairs, business, prospects, management,
financial position, stockholders' equity or results of operations of the Company
and its subsidiaries taken as a whole and, to the best of the Company's
knowledge, no such proceedings are threatened or contemplated by governmental
authorities or threatened by others; and there are no statutes, regulations,
contracts or other documents that are required to be filed as an exhibit to the
Registration Statement or required to be described in the Registration Statement
or the Prospectus which are not filed or described as required;
(k) immediately after any sale of Securities by the Company hereunder,
the aggregate amount of Securities which have been issued and sold by the
Company hereunder and of any securities of the Company (other than the
Securities) that shall have been issued and sold pursuant to the Registration
Statement will not exceed the amount of securities registered under the
Registration Statement;
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(l) Arthur Andersen LLP, who have certified certain financial
statements of the Company and its subsidiaries are independent public
accountants as required by the Securities Act;
(m) the Company and its subsidiaries have good and marketable title in
fee simple to all items of real property and good and marketable title to all
personal property owned by them, in each case free and clear of all liens,
encumbrances and defects except such as are described or referred to in the
Prospectus or such as do not materially affect the value of such property or do
not interfere with the use made or proposed to be made of such property by the
Company and its subsidiaries; and any real property and buildings held under
lease by the Company and its subsidiaries are held by them under valid, existing
and enforceable leases with such exceptions as are not material to the Company
and its subsidiaries taken as a whole or do not interfere with the use made or
proposed to be made of such property and buildings by the Company or its
subsidiaries;
(n) the Company is not and, after giving effect to the offering and
sale of the Securities, will not be an "investment company" or, to the Company's
knowledge, an entity "controlled" by an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended (the "Investment
Company Act");
(o) the Company has complied with all provisions of Section 517.075,
Florida Statutes (Chapter 92-198, Laws of Florida) relating to doing business
with the Government of Cuba or with any person or affiliate located in Cuba;
(p) the Company (including its predecessors) and its subsidiaries have
filed all federal, state or material local and foreign tax returns which have
been required to be filed and have paid all taxes shown thereon and all
assessments received by them or any of them to the extent that such taxes have
become due and are not being contested in good faith; and, except as disclosed
in the Registration Statement and the Prospectus, to the knowledge of the
Company there is no tax deficiency which has been or might reasonably be
expected to be asserted or threatened against the Company or any of its
subsidiaries;
(q) each of the Company and its subsidiaries owns, possesses or has
obtained all licenses, permits, certificates, consents, orders, approvals and
other authorizations from, and has made all declarations and filings with, all
federal, state, local and other governmental authorities (including foreign
regulatory agencies), all self-regulatory organizations and all courts and other
tribunals, domestic or foreign, necessary to own or lease, as the case may be,
and to operate its properties and to carry on its business as conducted as of
the date hereof, except where such would not cause a Material Adverse Effect,
and neither the Company nor any such subsidiary has received any actual notice
of any proceeding relating to revocation or modification of any such license,
permit, certificate, consent, order, approval or other authorization, except as
described in the Registration Statement and the Prospectus; and each of the
Company and its subsidiaries is in compliance in all material respects with all
laws and regulations relating to the conduct of its business as conducted as of
the date hereof;
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(r) there are no existing or, to the best knowledge of the Company,
threatened labor disputes with the employees of the Company or any of its
subsidiaries which would reasonably be expected to have a material adverse
effect on the Company and its subsidiaries taken as a whole;
(s) the Company and its subsidiaries (i) are in compliance with any
and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their
respective businesses and (iii) are in compliance with all terms and conditions
of any such permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, reasonably be
expected to have a material adverse effect on the Company and its subsidiaries,
taken as a whole;
(t) in the ordinary course of its business, the Company conducts a
periodic review of the effect of Environmental Laws on the business, operations
and properties of the Company and its subsidiaries, in the course of which it
identifies and evaluates associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for clean-up, closure
of properties or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties). On the basis of such review and except as
disclosed in the Form 10-K of the Company for the year ended December 31,
[____], the Company has reasonably concluded that such associated costs and
liabilities would not, singly or in the aggregate, reasonably be expected to
have a material adverse effect on the Company and its subsidiaries, taken as a
whole;
(u) each employee benefit plan, within the meaning of Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), that
is maintained, administered or contributed to by the Company or any of its
affiliates for employees or former employees of the Company and its affiliates
has been maintained in compliance in all material respects with its terms and
the requirements of any applicable statutes, orders, rules and regulations,
including but not limited to ERISA and the Internal Revenue Code of 1986, as
amended (the "Code"). No prohibited transaction, within the meaning of Section
406 of ERISA or Section 4975 of the Code has occurred with respect to any such
plan excluding transactions effected pursuant to a statutory or administrative
exemption. For each such plan which is subject to the funding rules of Section
412 of the Code or Section 302 of ERISA no "accumulated funding deficiency" as
defined in Section 412 of the Code has been incurred, whether or not waived, and
the fair market value of the assets of each such plan (excluding for these
purposes accrued but unpaid contributions) exceeded the present value of all
benefits accrued under such plan determined using reasonable actuarial
assumptions.
(v) Each of the Company and its subsidiaries owns or possesses, or can
acquire, or reasonably believes it can acquire, on reasonable terms, rights
adequate to the present operations of the businesses now operated by it under
the patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks and
trade names (collectively, the "Intellectual Property") presently employed by
it in connection with the businesses
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now operated by it, except to the extent that the failure to own, possess or
acquire such rights would not, singly or in the aggregate, reasonably be
expected to have a material adverse effect on the Company and its subsidiaries
taken as a whole, and to the knowledge of the Company neither the Company nor
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.
5. The Company covenants and agrees with each of the several Underwriters
as follows:
(a) to file the Prospectus in a form approved by you pursuant to Rule
424 under the Securities Act not later than the Commission's close of business
on the second Business Day following the date of determination of the offering
price of the Securities or, if applicable, such earlier time as may be required
by Rule 424(b);
(b) to furnish to each Representative and counsel for the Underwriters
a signed copy of the Registration Statement (as originally filed) and each
amendment thereto, in each case including exhibits and documents incorporated by
reference therein and, during the period mentioned in paragraph (e) below, to
furnish each of the Underwriters as many copies of the Prospectus (including all
amendments and supplements thereto) and documents incorporated by reference
therein as you may reasonably request;
(c) from the date hereof and prior to the Closing Date, to furnish to
you a copy of any proposed amendment or supplement to the Registration Statement
or the Prospectus, for your review, and not to file any such proposed amendment
or supplement to which you reasonably object;
(d) to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as
the delivery of a prospectus is required in connection with the offering or sale
of the Securities, and during such same period, to advise you promptly, and to
confirm such advice in writing, (i) when any amendment to the Registration
Statement shall have become effective, (ii) of any request by the Commission for
any amendment to the Registration Statement or any amendment or supplement to
the Prospectus or for any additional information, (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the initiation or threatening of any proceeding for that purpose
and (iv) of the receipt by the Company of any notification with respect to any
suspension of the qualification of the Securities for offer and sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; and to use its reasonable best efforts to prevent the issuance of any
such stop order or notification and, if issued, to obtain as soon as possible
the withdrawal thereof;
(e) if, during such period after the first date of the public offering
of the Securities as in the opinion of counsel for the Underwriters a prospectus
relating to the Securities is required by law to be delivered in connection with
sales by an Underwriter or dealer, any event shall occur as a result of which it
is necessary to amend or supplement the Prospectus in order to make the
statements therein, in light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading, or if it is necessary to amend or
supplement the Prospectus to comply with law, forthwith to prepare and furnish
to the Underwriters and to the dealers (whose names and addresses you will
furnish to the Company) to which Securities may have been sold by you on behalf
of the Underwriters
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<PAGE>
and to any other dealers upon request, such amendments or supplements to the
Prospectus as may be necessary so that the statements in the Prospectus as so
amended or supplemented will not, in light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the Prospectus
will comply with law;
(f) to endeavor to qualify the Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request and to continue such qualification in effect so long as reasonably
required for distribution of the Securities; provided that the Company shall not
be required to file a general consent to service of process in any jurisdiction;
(g) to make generally available to its security holders and to you as
soon as practicable an earnings statement which shall satisfy the provisions of
Section 11 (a) of the Securities Act and Rule 158 of the Commission promulgated
thereunder covering a period of at least twelve months beginning with the first
fiscal quarter of the Company and its subsidiaries occurring after the
"effective date" (as defined in Rule 158) of the Registration Statement;
(h) so long as the Securities are outstanding, to furnish to you upon
request copies of all reports or other communications (financial or other)
furnished to holders of Securities and copies of any reports and financial
statements furnished to or filed with the Commission or any national securities
exchange;
(i) during the period beginning on the date hereof and continuing to
and including the Business Day following the Closing Date, not to offer, sell,
contract to sell or otherwise dispose of any debt securities of or guaranteed by
the Company which are substantially similar to the Securities;
(j) to use the net proceeds received by the Company from the sale of
the Securities pursuant to this Agreement in the manner specified in the
Prospectus under the caption "Use of Proceeds";
(k) whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
costs and expenses incident to the performance of its obligations hereunder,
including without limiting the generality of the foregoing, all costs and
expenses (i) incident to the preparation, issuance, execution, authentication
and delivery of the Securities, including any expenses of the Trustee, (ii)
incident to the preparation, printing and filing under the Securities Act of the
Registration Statement, the Prospectus and any preliminary prospectus (including
in each case all exhibits, amendments and supplements thereto), (iii) incurred
in connection with the registration or qualification and determination of
eligibility for investment of the Securities under the laws of such
jurisdictions as the Underwriters may designate (including reasonable fees of
counsel for the Underwriters and their disbursements), (iv) related to any
filing with National Association of Securities Dealers, Inc., (v) in connection
with the printing (including word processing and duplication costs) and delivery
of this Agreement, the Indenture, the preliminary and supplemental blue sky
memoranda and any legal investment survey and the furnishing to Underwriters and
dealers of a reasonable number of copies of the Registration Statement and the
Prospectus, (vi) payable to rating agencies in connection with the rating of the
Securities and (vii) the cost and charges of any transfer agent.
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6. The several obligations of the Underwriters hereunder shall be subject
to the following conditions:
(a) the representations and warranties of the Company contained herein
are true and correct on and as of the Closing Date as if made on and as of the
Closing Date and the Company shall have complied in all material respects with
all agreements and all conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date;
(b) the Prospectus shall have been filed with the Commission pursuant
to Rule 424 within the applicable time period prescribed for such filing by the
rules and regulations under the Securities Act; no stop order suspending the
effectiveness of the Registration Statement shall be in effect, and no
proceedings for such purpose shall be pending before or threatened by the
Commission, and all requests for additional information on the part of the
Commission shall have been complied with to your reasonable satisfaction;
(c) subsequent to the execution and delivery of this Agreement, there
shall not have occurred any downgrading, nor shall any notice have been given of
(i) any downgrading, (ii) any intended or potential downgrading or (iii) any
review or possible change that does not indicate an improvement in the rating
accorded any securities of or guaranteed by the Company by any "nationally
recognized statistical rating organization," as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act;
(d) since the respective dates as of which information is given in the
Prospectus there shall not have been any material change in capital stock or
other equity interests or long-term debt of the Company or any of its
significant subsidiaries (as defined in the Commission's Regulation S-X) or any
material adverse change or any development involving a material adverse change,
in or affecting the general affairs, business, prospects, management, financial
position, stockholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole, otherwise than as set forth or contemplated in
the Prospectus, the effect of which in the judgment of the Representatives makes
it impracticable or inadvisable to proceed with the public offering or the
delivery of the Securities on the terms and in the manner contemplated in the
Prospectus; and neither the Company nor any of its subsidiaries, has sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or interference
with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the Prospectus;
(e) the Representatives shall have received from the Company, on and
as of the Closing Date, a certificate of an authorized officer of the Company,
holding the office or title equal or more senior in rank to that of vice
president, with specific knowledge about the financial matters of the Company
satisfactory to you to the effect set forth in subsections (a) through (c) of
this Section and to the further effect that there has not occurred any material
adverse change, or any development involving a prospective material adverse
change, in or affecting the general affairs, business, prospects, management,
financial position, stockholders' equity or results of operations of the Company
and its subsidiaries, taken as a whole from that set forth or contemplated in
the Registration Statement or the Prospectus;
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(f) the General Counsel of the Company shall have furnished to you his
written opinion, dated the Closing Date, in form and substance satisfactory to
you, to the effect as set forth in Exhibit A hereto;
(g) Kirkland & Ellis, counsel for the Company, shall have furnished to
you their written opinion, dated the Closing Date, in form and substance
satisfactory to you, to the effect as set forth in Exhibit B hereto;
(h) on the Closing Date, Arthur Andersen LLP shall have furnished to
you a letter, dated such date, in form and substance satisfactory to you,
containing statements and information of the type customarily included in
accountants' "comfort letters" to underwriters with respect to the financial
statements and certain financial information contained in the Registration
Statement and the Prospectus;
(i) you shall have received on and as of the Closing Date an opinion
of Davis Polk & Wardwell, counsel to the Underwriters, with respect to the
validity of the Indenture, the Securities, the Registration Statement, the
Prospectus and other related matters as the Representatives may reasonably
request, and such counsel shall have received such papers and information as
they may reasonably request to enable them to pass upon such matters; and
(j) on or prior to the Closing Date, the Company shall have furnished
to the Representatives such further certificates and documents as the
Representatives shall reasonably request.
7. The Company will indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages and liabilities (including without
limitation the reasonable legal fees and other expenses incurred in connection
with any suit, action or proceeding or any claim asserted) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through the Representatives expressly for use therein; provided
that the foregoing indemnity with respect to any preliminary prospectus shall
not inure to the benefit of any Underwriter (or to the benefit of any person
controlling such Underwriter) from whom the person asserting any such losses,
claims, damages or liabilities purchased Securities if such untrue statement or
omission or alleged untrue statement or omission made in such preliminary
prospectus is eliminated or remedied in the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) and if a copy of the Prospectus (as so amended or supplemented, but
excluding the documents incorporated by reference therein), if required by law
to have been furnished to such person at or prior to the written confirmation of
the sale of such Securities to such person, shall not have been so furnished.
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Each Underwriter agrees, severally and not jointly, to indemnify and hold
harmless the Company and the directors and officers of the Company who sign the
Registration Statement and each person who controls the Company within the
meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act,
to the same extent as the foregoing indemnity from the Company to each
Underwriter, but only with reference to information relating to such Underwriter
furnished to the Company in writing by such Underwriter through the
Representatives expressly for use in the Registration Statement, the Prospectus,
any amendment or supplement thereto, or any preliminary prospectus.
If any suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any person
in respect of which indemnity may be sought pursuant to either of the two
preceding paragraphs, such person (the "Indemnified Person") shall promptly
notify the person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary, (ii) the Indemnifying Person has failed within
a reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person or (iii) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It is
understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one separate firm (in addition to any
local counsel) for all Indemnified Persons, and that all such reasonable fees
and expenses shall be reimbursed as they are incurred. Any such separate firm
for the Underwriters and such control persons of Underwriters shall be
designated in writing by the first of the named Representatives on Schedule I
hereto and any such separate firm for the Company and the directors and officers
of the Company who sign the Registration Statement and such control persons of
the Company or authorized representatives shall be designated in writing by the
Company. The Indemnifying Person shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there shall be a final judgment for the plaintiff, the
Indemnifying Person agrees to indemnify any Indemnified Person from and against
any loss or liability by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an Indemnified Person shall have
requested an Indemnifying Person to reimburse the Indemnified Person for fees
and expenses of counsel as contemplated by the third sentence of this paragraph,
the Indemnifying Person agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 60 days after receipt by such Indemnifying Person of the
aforesaid request and (ii) such Indemnifying Person shall not have reimbursed
the Indemnified Person in accordance with such request prior to the date of such
settlement (or delivered a notice to such Indemnified Person setting forth its
good faith objection to such request's conformity to the provisions of this
Section). No Indemnifying Person shall, without the prior written consent of
the Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party and indemnity could have been sought
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hereunder by such Indemnified Person, unless such settlement includes an
unconditional release of such Indemnified Person from all liability on claims
that are the subject matter of such proceeding.
If the indemnification provided for in the first and second paragraphs of
this Section 7 is unavailable to an Indemnified Person or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other hand from the offering of the Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and the Underwriters on the other in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Underwriters on the other shall be deemed
to be in the same respective proportions as the net proceeds from the offering
of such Securities (before deducting expenses) received by the Company and the
total underwriting discounts and the commissions received by the Underwriters
bear to the aggregate public offering price of the Securities. The relative
fault of the Company on the one hand and the Underwriters on the other 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 Company or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Person as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any reasonable legal or other expenses incurred by such Indemnified
Person in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall an
Underwriter be required to contribute any amount in excess of the amount by
which the total price at which the Securities underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages that
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 7 are several in proportion to the
respective principal amount of the Securities set forth opposite their names in
Schedule I hereto, and not joint.
The remedies provided for in this Section 7 are not exclusive and shall not
limit any rights or remedies which may otherwise be available to any indemnified
party at law or in equity.
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The indemnity and contribution agreements contained in this Section 7 and
the representations and warranties of the Company set forth in this Agreement
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Underwriter or any person controlling any Underwriter or by or on behalf of
the Company, its officers or directors or any other person controlling the
Company and (iii) acceptance of and payment for any of the Securities.
8. Notwithstanding anything herein contained, this Agreement may be
terminated in the absolute discretion of the Representatives, by notice given to
the Company, if after the execution and delivery of this Agreement (i) trading
generally shall have been suspended or materially limited on or by, as the case
may be, any of the New York Stock Exchange, the American Stock Exchange, the
National Association of Securities Dealers, Inc., the Chicago Board Options
Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii)
trading of any securities of or guaranteed by the Company shall have been
suspended on any exchange or in any over-the-counter market, (iii) a general
moratorium on commercial banking activities in New York shall have been declared
by either Federal or New York State authorities or (iv) there shall have
occurred any outbreak or escalation of hostilities or any change in financial
markets or any calamity or crisis that, in the judgment of the Representatives,
is material and adverse and which, in the judgment of the Representatives, makes
it impracticable to market the Securities on the terms and in the manner
contemplated in the Prospectus.
9. If, on the Closing Date, any one or more of the Underwriters shall
fail or refuse to purchase Securities which it or they have agreed to purchase
under this Agreement, and the aggregate principal amount of Securities which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase is not more than one-tenth of the aggregate principal amount of the
Securities, the other Underwriters shall be obligated severally in the
proportions that the principal amount of Securities set forth opposite their
respective names in Schedule I hereto bears to the aggregate principal amount of
Securities set forth opposite the names of all such non-defaulting Underwriters,
or in such other proportions as the Representatives may specify, to purchase the
Securities which such defaulting Underwriter or Underwriters agreed but failed
or refused to purchase on such date; provided that in no event shall the
principal amount of Securities that any Underwriter has agreed to purchase
pursuant to Section 1 be increased pursuant to this Section 9 by an amount in
excess of one-tenth of such principal amount of Securities without the written
consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Securities and the aggregate
principal amount of Securities with respect to which such default occurs is more
than one-tenth of the aggregate principal amount of Securities to be purchased,
and arrangements satisfactory to the Representatives and the Company for the
purchase of such Securities are not made within 36 hours after such default,
this Agreement shall terminate without liability on the part of any non-
defaulting Underwriter or the Company. In any such case either the
Representatives or the Company shall have the right to postpone the Closing
Date, but in no event for longer than seven days, in order that the required
changes, if any, in the Registration Statement and in the Prospectus or in any
other documents or arrangements may be effected. Any action taken under this
paragraph shall not relieve any defaulting Underwriter from liability in respect
of any default of such Underwriter under this Agreement.
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<PAGE>
10. If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement or any condition of the Underwriters' obligations cannot be fulfilled,
the Company agrees to reimburse the Underwriters or such Underwriters as have so
terminated this Agreement with respect to themselves, severally, for all out-of-
pocket expenses (including the fees and expenses of their counsel) reasonably
incurred by such Underwriters in connection with this Agreement or the offering
of Securities. Notwithstanding the foregoing, the Company shall not be liable
for the expenses of the Underwriters if the Underwriters terminate this
Agreement pursuant to Section 8(i), 8(iii) or 8(iv).
11. This Agreement shall inure to the benefit of and be binding upon the
Company, the Underwriters, any controlling persons referred to herein and their
respective successors and assigns. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person, firm or
corporation any legal or equitable right, remedy or claim under or in respect of
this Agreement or any provision herein contained. No purchaser of Securities
from any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
12. Any action by the Underwriters hereunder may be taken by you jointly
or by the first of the named Representatives set forth in Schedule I hereto
alone on behalf of the Underwriters, and any such action taken by you jointly or
by the first of the named Representatives set forth in Schedule I hereto alone
shall be binding upon the Underwriters. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be given at the address set forth in Schedule II hereto.
Notices to the Company shall be given to it at One ServiceMaster Way, Downers
Grove, Illinois 60515; Attention: General Counsel and Attention: Treasurer.
13. This Agreement may be signed in counterparts, each of which shall be
an original and all of which together shall constitute one and the same
instrument.
14. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without giving effect to the conflicts of
laws provisions thereof.
* * * *
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<PAGE>
Very truly yours,
THE SERVICEMASTER COMPANY
By: ______________________________
Name:
Title:
Accepted:[___________, ____]
Acting severally on behalf of
[itself/themselves] and the
several Underwriters listed in
Schedule II hereto.
By: [LEAD MANAGER]
By:
Name:
Title:
By: [CO-MANAGER]
By:
Name:
Title:
16
<PAGE>
SCHEDULE I
Representatives: [______________]
Underwriting Agreement dated: [_________, ____]
Registration Statement No: [333-____]
Title of Securities: [__]% [Floating Rate] [Zero Coupon] [Notes]
[Debentures] due [_____].
Aggregate principal amount: $[__________________________]
Price to Public: [__% of the principal amount of the
Securities, plus accrued interest, if any,
from ______, ____, to the Closing Date].
Indenture: Indenture dated as of September [__], 1999
by and between the Company and Harris as
Trustee.
Maturity: [_______________]
Interest Rate: [__]% [Zero Coupon] [See Floating Rate
Provisions]
Interest Payment Dates: [Months and dates]
Optional Redemption Provisions: [No provisions for redemption]
[The Securities may be redeemed, otherwise
than through the sinking fund, in whole or
in part at the option of the Company, [in
the amount of [$] or an integral multiple
thereof,] [on or after , at the
following redemption prices (expressed in
percentages of principal amount). If
[redeemed on or before , %, and if]
redeemed during the 12-month period
beginning ,
17
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Redemption
Year Price
---- ----------
and thereafter] at 100% of their principal
amount, together in each case with accrued
interest to the redemption date] [on any
interest payment date falling in or after
, , at the election of
the Company, at a redemption price equal to
the principal amount thereof, plus accrued
interest to the date of redemption.] [Other
possible redemption provisions, such as
mandatory redemption upon occurrence of
certain events or redemption for changes in
tax law] [Restriction on refunding]
Sinking Fund Provisions: [No sinking fund provisions]
[The Securities are entitled to the benefit
of a sinking fund to retire [$] principal
amount of Securities on in each of
the years through at 100% of their principal
amount plus accrued interest] [,together
with [cumulative] [noncumulative]
redemptions at the option of the Company to
retire an additional [$] principal amount of
Securities in the years through at 100% of
their principal amount plus accrued
interest.]
Other Provisions: [For floating rate securities, initial
annual interest rate will be % through [and
thereafter will be adjusted [monthly] [on
each , , and ] [to
an annual rate of % above the average rate
for year [month] [securities] [certificates
of deposit] issued by and [insert names of
banks].] [and the annual interest rate
[thereafter] [from through ]
will be the interest yield equivalent of the
weekly average per annum market discount
rate for -month Treasury bills plus % of
Interest Differential (the excess, if any,
of (i) then current weekly average per annum
secondary market yield for-month
certificates of deposit over (ii) then
current interest yield equivalent of the
weekly average per annum market discount
rate for month Treasury bills); [from and
thereafter the rate will be the then
18
<PAGE>
current interest yield equivalent plus % of
Interest Differential].]
Closing Date and Time of Delivery: [_________________________]
Closing Location: [_________________________]
Address for Notices to Underwriters: [_________________________]
19
<PAGE>
SCHEDULE II
Principal Amount of Securities
To Be Purchased
Underwriter $___________
Total $___________
20
<PAGE>
EXHIBIT A
Form of ServiceMaster General Counsel Opinion
[Lead Manager]
[Co-Manager]
As Representatives of the
Underwriters named in Schedule II
c/o [Lead Manager]
[Address]
Ladies and Gentlemen:
I am rendering this opinion in my capacity as Senior Vice President and
General Counsel of The ServiceMaster Company (the "Company") in response to the
requirement in Section 6(f) of the Underwriting Agreement dated [___________]
(the "Underwriting Agreement") by and among the Company and the underwriters
named in Schedule II thereto (the "Underwriters"). Every term which is defined
or given a special meaning in the Underwriting Agreement and which is not given
a different meaning in this letter has the same meaning whenever it is used in
this letter as the meaning it is given in the Underwriting Agreement.
In connection with the preparation of this letter, I have, among other
things, read:
(a) the registration statement on Form S-3 (Registration No. 333-
[_______]) filed by the Company with the Securities and Exchange Commission
(the "Commission") on November 19, 1999 for the purpose of registering
the offering of the shelf securities under the Securities Act of 1933, as
amended (the "Securities Act") (which registration statement, including the
information incorporated therein by reference, and as constituted at the
time it became effective is herein called the "Registration Statement");
(b) the Prospectus Supplement of the Company dated [_____________]
(including the information incorporated therein by reference, the
"Prospectus Supplement") to the Basic Prospectus covering the offering of
the Securities through the Underwriters, in the form which includes the
initial offering price and related terms (which Basic Prospectus, as
supplemented by the Prospectus Supplement, including the information
incorporated therein by reference, is herein called the "Prospectus");
(c) an executed copy of the Underwriting Agreement;
(d) an executed copy of the Indenture dated as of November 18, 1999
in the form executed and delivered by the Company and Harris Trust and
Savings Bank as Trustee (the "Trustee") (the "Indenture");
(e) a certified copy of resolutions adopted on [_______________] by
the Board of Directors of the Company, a certified copy of resolutions
adopted on [_______________]
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by the [_________] Committee of the Board of Directors of the Company and a
certified copy of resolutions adopted on [_____________] by the [_________]
Committee of the Board of Directors of the Company (together, the "Board
Resolutions"); and
(f) copies of all certificates and other documents delivered today at
the closing of the purchase and sale of the Securities under the
Underwriting Agreement.
Subject to the assumptions, qualifications and limitations which are
identified in this letter, I advise you that:
1. The Company is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation. The Company is qualified to
do business and is in good standing in the State of Illinois. The Company is not
required to qualify to do business under the laws of any other jurisdiction
other than where the failure to be so qualified would not have a material
adverse effect on the Company.
2. Each of the significant subsidiaries of the Company (the
"Subsidiaries") is a limited partnership, limited liability company or
corporation existing and in good standing under the laws of its respective
jurisdiction of organization. The Company and each Subsidiary is qualified to do
business and is in good standing under the laws of each other jurisdiction in
which it owns or leases properties or conducts any business, so as to require
such qualification, other than where the failure to be so qualified would not
have a material adverse effect on the Company and its subsidiaries taken as a
whole. The equity of each of the Subsidiaries is wholly-owned by the Company,
except as may be indicated in Schedule A attached hereto. The term "significant
subsidiaries" means the subsidiaries listed as significant subsidiaries in
Schedule B attached hereto. The Company's Treasurer has advised me that he has
determined that the subsidiaries listed on Schedule B are the only subsidiaries
of the Company which constitute "significant subsidiaries" of the Company within
the meaning of that term under the Commission's Regulation S-X.
3. The Company and each of the Subsidiaries has the power to own and
lease its properties and to conduct its business as described in the Prospectus.
4. The execution of the Transaction Documents by the Company has been
duly authorized by all necessary actions by the Board of Directors of the
Company, the Finance Committee of the Board of Directors of the Company and by
authorized officers qualified to act under the resolutions relevant to the
issuance and sale of the Securities pursuant to the Underwriting Agreement. No
other approval is required under the certificate of incorporation of the
Company.
5. Neither the Company nor any of its Subsidiaries is, or with the giving
of notice or lapse of time or both would be, in violation of or in default
under, its charter or certificate of incorporation or by-laws or agreement of
limited partnership or other organizational documents, as the case may be. The
execution and delivery of the Underwriting Agreement by the Company, the
performance of its obligations under the Underwriting Agreement, the Indenture,
the Securities and the Company's sale of the Securities to you in accordance
with the Underwriting Agreement do not (i) violate the certificate of
incorporation of the Company or (ii) constitute a violation by the Company of
any applicable provision of any law, statute, rule, regulation or court order
(except that
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I express no opinion in this paragraph as to (A) any prohibition against fraud
or misrepresentation or (B) whether performance of the indemnification or
contribution provisions in the Underwriting Agreement would be permitted or (C)
compliance with any disclosure requirement, but I refer you to the third
paragraph following clause (D) of numbered paragraph 9 hereof) or (iii)
materially breach, or result in a material default under, any existing
obligation of the Company or any of its subsidiaries under any of the agreements
with which I am familiar.
6. After due inquiry, I have no knowledge about any legal or governmental
proceeding that is pending or threatened against the Company or any of its
subsidiaries that has caused me to conclude that such proceeding is required by
Item 103 of Regulation S-K to be described in the Prospectus but that is not so
described. I have no knowledge of any contract, document, or court order to
which the Company is a party or to which any of its properties is subject that
has caused me to conclude that such contract, document or court order is
required to be described in the Prospectus or Registration Statement but is not
so described or is required to be filed as an exhibit to the Registration
Statement but has not been so filed.
7. The Company was not required to obtain any consent, approval,
authorization or order of governmental agency for the issuance, delivery and
sale of the Securities under the Underwriting Agreement except for the order by
the Commission declaring the Registration Statement effective.
8. The Company has received a copy of an order entered for the
Commission by the Division of Corporate Finance that the Commission pursuant to
delegated authority declaring the Registration Statement effective under the
Securities Act on [______________], 1999 (the "effective date") and I have no
knowledge that any stop order suspending its effectiveness has been issued or
that any proceedings for that purpose are pending before, or overtly threatened
by, the Commission. Section 309(a) of the Trust Indenture Act provides that the
Indenture shall be deemed to have been qualified under that Act when the
Registration Statement became effective under the Securities Act.
9. The statements under Item 1 in the Company's Form 10-Q Quarterly
Report for the fiscal quarter ended [_______________] were correct in all
material respects on the date that such Report was filed with the Commission.
Insofar as the statements constitute a summary of the legal matters, documents
or proceedings referred to therein, such statements adequately present the
information called for with respect to such legal matters, documents or
proceedings.
10. Nothing has come to my attention that has caused me to conclude that
any of the Company or any of its subsidiaries:
(a) does not own or have the rights under any material license,
permit, certificate, consent, order, approval or other authorization from
or has not made any declaration or filing with, any federal, state, local
or other governmental authority (including foreign regulatory agencies) or
any court or tribunal, domestic or foreign, necessary to own or lease, as
the case may be, and to operate its properties and to carry on its business
as conducted as of the date hereof;
A-3
<PAGE>
(b) has received any actual notice of any proceeding relating to
revocation or modification of any license, permit, certificate, consent,
order, approval or other authorization cited in immediately preceding
clause (a);
(c) does not have any material right required to use the Intellectual
Property employed by it in connection with the business conducted by it as
of the date hereof; or
(d) is, or with the giving of notice or lapse of time or both would
be, in violation of or in default under any material indenture, mortgage,
deed of trust, loan agreement or other material agreement or instrument
known to me to which the Company or any of its subsidiaries, is a party or
by which it or any of them or any of them or any of their respective
subsidiaries is bound.
I make no representation that I have independently verified the accuracy,
completeness or fairness of the Prospectus or Registration Statement or that the
actions taken in connection with the preparation of the Registration Statement
or Prospectus (including the actions described in the next paragraph) were
sufficient to cause the Prospectus or Registration Statement to be accurate,
complete or fair. I am not passing upon and do not assume any responsibility for
the accuracy, completeness or fairness of the Prospectus or the Registration
Statement except to the extent otherwise explicitly indicated in numbered
paragraph 9 above.
I can however confirm that I have participated in conferences with
representatives of the Company, representatives of the Underwriters, counsel for
the Underwriters and representatives of the independent accountants for the
Company during which disclosures in the Registration Statement and Prospectus
and related matters were discussed. In addition, I have reviewed certain records
maintained by the Company.
Based upon my participation in the conferences and my document review
identified in the preceding paragraph, my understanding of applicable law and
the experience I have gained in my practice thereunder, I can, however, advise
you that nothing has come to my attention that has caused me to conclude that
(i) the Registration Statement at its effective date 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
(ii) the Basic Prospectus on the date it bears or on the date of this letter or
the Prospectus Supplement on the date it bears or on the date of this letter
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 or (iii) the
Registration Statement or the Basic Prospectus, each as of the effective date of
the Registration Statement, or the Prospectus Supplement on the date it bears,
did not comply in all material respects with the form and the requirements of
Form S-3 or (iv) any of the periodic reports incorporated by reference into the
Registration Statement as of the date of the filing of such report with the
Commission appeared on its face not to comply as to form in all material
respects with the Exchange Act, and the rules and regulations of the Commission
thereunder.
Except for the activities described in the immediately preceding section of
this letter, I have not undertaken any investigation to determine the facts upon
which the advice in this letter is based. I have not undertaken any
investigation or search of court records for purposes of this letter.
A-4
<PAGE>
I have assumed for purposes of this letter: each document I have reviewed
for purposes of this letter is accurate and complete, each such document that is
an original is authentic, each such document that is a copy conforms to an
authentic original, and all signatures on each such document are genuine; that
the Underwriting Agreement and every other agreement I have examined for
purposes of this letter constitutes a valid and binding obligation of each party
to that document and that each such party has satisfied all legal requirements
that are applicable to such party to the extent necessary to entitle such party
to enforce such agreement (except that I make no such assumption with respect to
the Company); and that you have acted in good faith and without notice of any
fact which has caused you to reach any conclusion contrary to any of the
conclusions provided in this letter. I have also made other assumptions which I
believe to be appropriate for purposes of this letter.
In preparing this letter I have relied without independent verification
upon: (i) information contained in certificates obtained from governmental
authorities; (ii) factual information represented to be true in the Underwriting
Agreement and other documents specifically identified at the beginning of this
letter as having been read by me; (iii) factual information provided to me by
the other representatives of the Company; and (iv) factual information I have
obtained from such other sources as I have deemed reasonable. I have assumed
that the information upon which I have relied is accurate and does not omit
disclosures necessary to prevent such information from being misleading. For
purposes of numbered paragraphs 1 and 2 (other than the last sentence of
paragraph 2), I have relied exclusively upon certificates issued by governmental
authorities in the relevant jurisdictions and such opinion is not intended to
provide any conclusion or assurance beyond that conveyed by those certificates.
I confirm that I do not have knowledge that has caused me to conclude that
my reliance and assumptions cited in the two immediately preceding paragraphs
are unwarranted. Whenever this letter provides advice about (or based upon) my
knowledge of any particular information or about any information which has or
has not come to my attention such advice is based entirely on my conscious
awareness at the time this letter is delivered on the date it bears.
My advice on every legal issue addressed in this letter is based
exclusively on the internal law of Illinois, the General Corporation Law of the
State of Delaware, or the federal law of the United States, and represents my
opinion as to how that issue would be resolved were it to be considered by the
highest court in the jurisdiction that enacted such law. I express no opinion
with respect to any state securities (or "blue sky") laws or regulations or any
laws, statutes governmental rules or regulations which in my experience are not
applicable generally to transactions of the kind covered by the Underwriting
Agreement. None of the opinions or other advice contained in this letter
considers or covers (i) any financial statements or supporting schedules (or any
notes to any such statements or schedules) or other financial or statistical
information set forth or incorporated by reference in (or omitted from) the
Registration Statement or the Prospectus or (ii) any rules and regulations of
the National Association of Securities Dealers, Inc. relating to the
compensation of underwriters.
My advice on each legal issue addressed in this letter represents my
opinion as to how that issue would be resolved were it to be considered by the
highest court of the jurisdiction upon whose law my opinion on that issue is
based. The manner in which any particular issue would be treated in
A-5
<PAGE>
any actual court case would depend in part on facts and circumstances particular
to the case, and this letter is not intended to guarantee the outcome of any
legal dispute which may arise in the future.
This letter speaks as of the time of its delivery on the date it bears. I
do not assume any obligation to provide you with any subsequent opinion or
advice by reason of any fact about which I did not have knowledge at that time,
by reason of any change subsequent to that time in any law other governmental
requirement or interpretation thereof covered by any of my opinions or advice,
or for any other reason.
This letter may be relied upon by the Underwriters only for the purpose
served by the provision in the Underwriting Agreement cited in the initial
paragraph of this letter in response to which it has been delivered. Without my
written consent: (i) no person other than the Underwriters may rely on this
letter for any purpose; (ii) this letter may not be cited or quoted in any
financial statement, prospectus, private placement memorandum or other similar
document; (iii) this letter may not be cited or quoted in any other document or
communication which might encourage reliance upon this letter by any person or
for any purpose excluded by the restrictions in this paragraph; and (iv) copies
of this letter may not be furnished to anyone for purposes of encouraging such
reliance.
Sincerely,
A-6
<PAGE>
EXHIBIT B
Form of Kirkland & Ellis Opinion
[Lead Manager]
[Co-Manager]
As Representatives of the
Underwriters named in Schedule II
c/o [Lead Manager]
[address]
Ladies and Gentlemen:
We are issuing this letter in our capacity as special counsel for The
ServiceMaster Company (the "Company") in response to the requirement in Section
6(g) of the Underwriting Agreement dated [_______________], 1999 (the
"Underwriting Agreement") by and between the Company and the underwriters named
in Schedule II thereto (the "Underwriters"). Every term which is defined or
given a special meaning in the Underwriting Agreement and which is not given a
different meaning in this letter has the same meaning whenever it is used in
this letter as the meaning it is given in the Underwriting Agreement.
In connection with the preparation of this letter, we have, among other
things, read:
(a) the registration statement on Form S-3 (Registration No. 333-
[______]), filed by the Company with the Securities and Exchange Commission
(the "Commission") on September [__], 1999 for the purpose of registering
the offering of the shelf securities under the Securities Act of 1933, as
amended (the "Securities Act") (which registration statement, including the
information incorporated therein by reference, and as constituted at the
time it became effective is herein called the "Registration Statement");
(b) the Company's prospectus supplement dated [_______________]
(including the information incorporated therein by reference, the
"Prospectus Supplement") to the Basic Prospectus covering the offering of
the Securities through the Underwriters, in the form which includes the
initial offering price and related terms (which Basic Prospectus, as
supplemented by the Prospectus Supplement, is herein called the
"Prospectus");
(c) an executed copy of the Underwriting Agreement;
(d) an executed copy of the Indenture dated as of September [__], 1999
in the form executed and delivered by the Company and Harris Trust and
Savings Bank as Trustee (the "Trustee") (the "Indenture");
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<PAGE>
(e) a certified copy of resolutions adopted on [_______________] by
the Board of Directors of the Company, a certified copy of resolutions
adopted on [_______________] by the [_________] Committee of the Board of
Directors of the Company and a certified copy of resolutions adopted on
[_____________] by the [_________] Committee of the Board of Directors of
the Company (together, the "Board Resolutions"); and
(f) copies of all certificates and other documents delivered today at
the closing of the purchase and sale of the Securities under the
Underwriting Agreement.
Subject to the assumptions, qualifications and limitations which are
identified in this letter, we advise you that:
1. The Company is validly existing as a corporation in good standing
under Delaware General Corporation Law.
2. Under its certificate of incorporation and by-laws, the Company has
the corporate power necessary to own and lease its properties and to conduct its
business as described in the Prospectus.
3. The Underwriting Agreement has been duly authorized, executed and
delivered on behalf of the Company.
4. The Indenture has been duly executed and delivered on behalf of the
Company. The Indenture is a valid and binding obligation of the Company, and
(assuming the due authorization, execution and delivery thereof by the Trustee)
is enforceable against the Company in accordance with its terms.
5. The Securities have been duly executed and delivered by the Company
and, when paid for by the Underwriters in accordance with the terms of the
Underwriting Agreement (assuming the due authorization, execution and delivery
of the Indenture by the Trustee and due authentication and delivery of the
Securities by the Trustee in accordance with the Indenture), will constitute
Securities under the terms of the Indenture, will constitute the valid and
binding obligations of the Company, and will be enforceable against the Company
in accordance with their terms.
6. The execution and delivery of the Underwriting Agreement on behalf of
the Company, the performance of the respective obligations of the Company under
the Underwriting Agreement, the Indenture, and the Securities, and the Company's
sale of the Securities to you in accordance with the Underwriting Agreement do
not (i) violate the certificate of incorporation and by-laws of the Company or
(ii) constitute a violation by the Company of any applicable provision of any
law, statute, rule or regulation (except that we express no opinion in this
paragraph as to compliance with any disclosure requirement or any prohibition
against fraud or misrepresentation or as to whether performance of the
indemnification or contribution provisions in the Underwriting Agreement would
be permitted) or (iii) breach, or result in a default under, any existing
obligation of the Company or any of its subsidiaries under any of the agreements
set forth on Schedule A attached hereto which representatives of the Company
have advised us include all material debt agreements and instruments of or
binding on the Company or any of the Company's subsidiaries. The agreements in
Schedule A
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contain debt incurrence tests and/or other financial covenants and tests; we
have not attempted to independently apply any of those covenants or tests.
Representatives of the Company have however advised us that they have applied
all of those tests and covenants and have determined that none of those tests or
covenants will be breached by the Company's sale of the Securities to you or by
any of the other actions cited at the beginning of this paragraph, and we have
assumed without investigation that such advice and determinations are correct.
7. We have no knowledge about any legal action or any governmental
action, investigation or proceeding that is pending or threatened against the
Company or any of the Company's subsidiaries that has caused us to conclude that
such proceeding is required by Item 103 of Regulation S-K to be described in the
Prospectus but that is not so described. We have no knowledge about any
contract, document or court order to which the Company is a party or to which
any of its properties is subject that has caused us to conclude that such
contract, document or court order is required to be described in the Prospectus
or the Registration Statement but is not so described or is required to be filed
as an exhibit to the Registration Statement but has not been so filed.
8. The Company is not and, immediately after the sale of the Securities
to the Underwriters and application of the net proceeds therefrom as described
in the Prospectus Supplement under the caption "Use of Proceeds" will not be, an
"investment company" as such term is defined in the Investment Company Act of
1940, as amended.
9. The Company was not required to obtain any consent, approval,
authorization or order of governmental agency for the issuance, delivery and
sale of the Securities under the Underwriting Agreement except for the order by
the Commission declaring the Registration Statement effective.
10. The Company has informed us that it has received a copy of an order
entered for the Commission by the Division of Corporate Finance that the
Commission pursuant to delegated authority declaring the Registration Statement
effective under the Securities Act on [____________], 1999 (the "effective
date") and we have no knowledge that any stop order suspending its effectiveness
has been issued or that any proceedings for that purpose are pending before, or
overtly threatened by, the Commission. Section 309(a) of the Trust Indenture
Act provides that the Indenture shall be deemed to have been qualified under
that Act when the Registration Statement became effective under the Securities
Act.
11. The statements in the Basic Prospectus under the heading "Description
of Debt Securities" to the extent that those statements summarize laws,
governmental rules or regulations or documents, are correct in all material
respects.
* * *
The purpose of our professional engagement was not to establish factual
matters, and preparation of the Registration Statement and the Prospectus
involved many determinations of a wholly or partially nonlegal character. We
make no representation that we have independently verified the accuracy,
completeness or fairness of the Prospectus or Registration Statement or that the
actions taken in connection with the preparation of the Registration Statement
or Prospectus (including the
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<PAGE>
actions described in the next paragraph) were sufficient to cause the Prospectus
or Registration Statement to be accurate, complete or fair. We are not passing
upon and do not assume any responsibility for the accuracy, completeness or
fairness of the Prospectus or the Registration Statement except to the extent
otherwise explicitly indicated in numbered paragraph 10 above.
We can however confirm that we have participated in brief conferences with
representatives of the Company, representatives of the Underwriters, counsel for
the Underwriters and representatives of the independent accountants for the
Company which involved discussions relevant to the Registration Statement and
the Prospectus. In addition, we have reviewed certain corporate records
furnished to us by the Company. We were not retained by the Company to prepare
the periodic reports, or other materials incorporated in the Prospectus or the
Registration Statement, and our knowledge about these materials is limited. We
were not present at any meeting of the ServiceMaster Board or its Finance or
Executive Committee at which any resolution relevant to this letter was
discussed or adopted.
Based upon our participation in the conferences and our document review
identified in the preceding paragraph, our understanding of applicable law and
the experience we have gained in our practice thereunder and relying as to
materiality to a large extent upon the opinions and statements of officers of
the Company, we can, however, advise you that nothing has come to our attention
that has caused us to conclude that (i) the Registration Statement at its
effective date 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, (ii) the Basic Prospectus on the date it
bears or on the date of this letter 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 or (iii) the Registration Statement as of its effective date or
the Prospectus Supplement on the date it bears, did not comply in all material
respects with the form and the requirements of Form S-3.
* * *
Except for the activities described in the immediately preceding section of
this letter, we have not undertaken any investigation to determine the facts
upon which the advice in this letter is based. We have not undertaken any
investigation or search of court records for purposes of this letter.
We have assumed for purposes of this letter: each document we have reviewed
for purposes of this letter is accurate and complete, each such document that is
an original is authentic, each such document that is a copy conforms to an
authentic original, and all signatures on each such document are genuine; that
the Underwriting Agreement and every other agreement we have examined for
purposes of this letter constitutes a valid and binding obligation of each party
to that document and that each such party has satisfied all legal requirements
that are applicable to such party to the extent necessary to entitle such party
to enforce such agreement (except that we make no such assumption with respect
to the Company); and that you have acted in good faith and without notice of any
fact which has caused you to reach any conclusion contrary to any of the
conclusions provided in this letter. We have also made other assumptions which
we believe to be appropriate for purposes of this letter.
B-4
<PAGE>
In preparing this letter we have relied without independent verification
upon: (i) information contained in certificates obtained from governmental
authorities; (ii) factual information represented to be true in the Underwriting
Agreement and other documents specifically identified at the beginning of this
letter as having been read by us; (iii) factual information provided to us by
the Company or its representatives as of the date of this letter; and (iv)
factual information from such other sources as we have deemed reasonable. We
have assumed that there has been no relevant change or development between the
dates as of which the information cited in the preceding sentence was given and
the date of this letter and that the information upon which we have relied is
accurate and does not omit disclosures necessary to prevent such information
from being misleading. For purposes of numbered paragraph 1, we have relied
exclusively upon the certificate issued by the Delaware Secretary of State at
the closing and such opinion is not intended to provide any conclusion or
assurance beyond that conveyed by that certificate.
We confirm that nothing has come to our attention that has caused us to
conclude that our reliance and assumptions cited in the two immediately
preceding paragraphs are unwarranted. Whenever this letter provides advice about
(or based upon) our knowledge of any particular information or about any
information which has or has not come to our attention such advice is based
entirely on the conscious awareness at the time this letter is delivered on the
date it bears by the lawyers with Kirkland & Ellis at that time who spent
substantial time representing the Company in connection with the offering
effected pursuant to the Prospectus.
Each opinion in this letter that any particular agreement is a valid and
binding obligation or is enforceable in accordance with its terms is subject to:
(i) the effect of bankruptcy, insolvency, fraudulent conveyance and other
similar laws and judicially developed doctrines in this area such as substantive
consolidation and equitable subordination; (ii) the effect of general principles
of equity; and (iii) other commonly recognized statutory and judicial
constraints on enforceability including statutes of limitations. "General
principles of equity" include but are not limited to: principles limiting the
availability of specific performance and injunctive relief; principles which
limit the availability of specific performance and injunctive relief; principles
which limit the availability of a remedy under certain circumstances where
another remedy has been elected; principles requiring reasonableness, good faith
and fair dealing in the performance and enforcement of an agreement by the party
seeking enforcement; principles which may permit a party to cure a material
failure to perform its obligations; and principles affording equitable defenses
such as waiver, laches and estoppel.
Our advice on every legal issue addressed in this letter is based
exclusively on the internal law of New York, the General Corporation Law of the
State of Delaware and the federal law of the United States, and represents our
opinion as to how that issue would be resolved were it to be considered by the
highest court in the jurisdiction which enacted such law. We express no opinion
with respect to any state securities (or "blue sky") laws or regulations or any
laws, statutes governmental rules or regulations which in our experience are not
applicable generally to transactions of the kind covered by the Underwriting
Agreement. None of the opinions or other advice contained in this letter
considers or covers (i) any financial statements or supporting schedules (or any
notes to any such statements or schedules) or other financial or statistical
information set forth or incorporated by reference in (or omitted from) the
Registration Statement or the Prospectus or (ii) any rules and regulations of
the National Association of Securities Dealers, Inc. relating to the
compensation of underwriters.
B-5
<PAGE>
Our advice on each legal issue addressed in this letter represents our
opinion as to how that issue would be resolved were it to be considered by the
highest court of the jurisdiction upon whose law our opinion on that issue is
based. The manner in which any particular issue would be treated in any actual
court case would depend in part on facts and circumstances particular to the
case, and this letter is not intended to guarantee the outcome of any legal
dispute which may arise in the future. It is possible that some terms of the
Indenture or the Securities may not prove enforceable for reasons other than
those cited in this letter should an actual enforcement action be brought, but
(subject to all the exceptions, qualifications, exclusions and other limitations
contained in this letter) such unenforceability would not in our opinion prevent
the Underwriters from realizing the principal benefits purported to be provided
by the Indenture or the Securities.
This letter speaks as of the time of its delivery on the date it bears. We
do not assume any obligation to provide you with any subsequent opinion or
advice by reason of any fact about which we did not have knowledge at that time,
by reason of any change subsequent to that time in any law other governmental
requirement or interpretation thereof covered by any of our opinions or advice,
or for any other reason.
B-6
<PAGE>
This letter may be relied upon by the Underwriters only for the purpose
served by the provision in the Underwriting Agreement cited in the initial
paragraph of this letter in response to which it has been delivered. Without our
written consent: (i) no person other than the Underwriters may rely on this
letter for any purpose; (ii) this letter may not be cited or quoted in any
financial statement, prospectus, private placement memorandum or other similar
document; (iii) this letter may not be cited or quoted in any other document or
communication which might encourage reliance upon this letter by any person or
for any purpose excluded by the restrictions in this paragraph; and (iv) copies
of this letter may not be furnished to anyone for purposes of encouraging such
reliance.
KIRKLAND & ELLIS
B-7
<PAGE>
Schedule A
Specified Contracts
1. Note Agreements dated as of September 15, 1988, as amended through
Third Amendments thereto dated as of July 15, 1996 (relating to the Company's
$45 million, 10.57% Senior Notes, Series A, due October 1, 2000).
2. Exchange Agreements dated as of August 1, 1990, as amended through
Third Amendments thereto dated as of July 15, 1996, and related Guaranty
Agreements dated as of August 1, 1990, as amended through Third Amendments
thereto dated as of July 15, 1996 (relating to the $55 million, 10.8125% Senior
Notes, due October 1, 2002, of American Home Shield Corporation (as successor by
merger to SVM Holding Corp.) and guaranteed by the Company).
3. Note Agreements dated as of April 1, 1992, as amended through Second
Amendments thereto dated as of July 15, 1996 (relating to the Company's $50
million, 8.38% Senior Notes, due July 15, 2001).
4. Participation, Master Lease and Construction Agreement dated as of
October 28, 1996, as amended by first amendment thereto dated as of December 5,
1997 (relating to the Company's $80 million line of credit) by second amendment
thereto dated as of March 23, 1998 and by third amendment thereto dated as of
August 31, 1998.
5. Note Agreements dated as of January 15, 1994, as amended through First
Amendments thereto dated as of July 15, 1996 (relating to the Company's $70
million, 6.65% Senior Notes, due January 31, 2004).
6. Note Agreements dated as of July 16, 1996, as amended through First
Amendments thereto dated as of March 1, 1997 (relating to the Company's $100
million, 7.40% Senior Notes, Series A, due July 16, 2006, and the Company's $25
million, 7.40% Senior Notes, Series B, due September 26, 2006).
7. $100 million 6.95% Notes due August 15, 2007.
8. $200 million 7.45% Notes due August 15, 2027.
9. $750 million Five-Year Credit Agreement dated as of April 1, 1997
among The ServiceMaster Company, the Lenders party thereto, The First National
Bank of Chicago as Administrative Agent and Morgan Guaranty Trust Company of New
York as Documentation Agent.
10. $150 million 7.10% Notes due 2018.
11. $150 million 7.25% Notes due 2038.
12. $250 million 7.875% Notes due 2009.
B-8
<PAGE>
Exhibit 4.16
================================================================================
THE SERVICEMASTER COMPANY
as the Company
and
HARRIS TRUST AND SAVINGS BANK
as Trustee
----------------
INDENTURE
Dated as of November 18, 1999
----------------
================================================================================
<PAGE>
CROSS-REFERENCE TABLE
---------------------
<TABLE>
<CAPTION>
TIA SECTION INDENTURE SECTION
- ----------- -----------------
<S> <C>
(S) 310 (a).......................................................... 7.10
(b).......................................................... 7.03
(S) 311.............................................................. 7.03
(b)(4)....................................................... 7.03
(b)(5)....................................................... 7.03
(b)(6)....................................................... 7.03
(S) 313.............................................................. 7.05
(a).......................................................... 7.06
(c).................................................... 7.05; 7.06
(c)(2)................................................ 3.02;.10.02
(S) 314.............................................................. 1.01
(S) 315.............................................................. 7.01
(a).......................................................... 7.02
(S) 316.............................................................. 7.01
</TABLE>
Note: The Cross-Reference Table shall not for any purpose be deemed to be a
part of the Indenture.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
RECITALS......................................................................... 1
ARTICLE 1
Definitions and Incorporation by Reference.................................. 1
Section 1.01 Definitions................................................ 1
Section 1.02 Other Definitions.......................................... 8
Section 1.03 Incorporation by Reference of Trust Indenture Act.......... 8
ARTICLE 2
The Securities.............................................................. 9
Section 2.01 Form and Dating............................................ 9
Section 2.02 Execution and Authentication............................... 9
Section 2.03 Amount Unlimited; Issuable in Series.......................11
Section 2.04 Denomination and Date of Securities; Payments of Interest..13
Section 2.05 Registrar and Paying Agent; Agents Generally...............14
Section 2.06 Paying Agent to Hold Money in Trust........................14
Section 2.07 Transfer and Exchange......................................15
Section 2.08 Replacement Securities.....................................18
Section 2.09 Outstanding Securities.....................................18
Section 2.10 Temporary Securities.......................................19
Section 2.11 Cancellation...............................................19
Section 2.12 CUSIP Numbers..............................................19
Section 2.13 Defaulted Interest.........................................19
Section 2.14 Series May Include Tranches................................20
ARTICLE 3
Redemption..................................................................20
Section 3.01 Applicability of Article...................................20
Section 3.02 Notice of Redemption; Partial Redemptions..................20
Section 3.03 Payment of Securities Called for Redemption................22
Section 3.04 Exclusion of Certain Securities from Eligibility
for Selection for Redemption...............................23
Section 3.05 Mandatory and Optional Sinking Funds.......................23
ARTICLE 4
Covenants...................................................................25
Section 4.01 Payment of Securities......................................25
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Section 4.02 Maintenance of Office or Agency................26
Section 4.03 Negative Pledge................................27
Section 4.04 Certain Sale and Lease-back Transactions.......29
Section 4.05 Certificate to Trustee.........................30
Section 4.06 Reports by the Company.........................30
ARTICLE 5
Successor Corporation................................................30
Section 5.01 When Company May Merge, Etc. ..................30
Section 5.02 Successor Substituted..........................31
ARTICLE 6
Default and Remedies.................................................31
Section 6.01 Events of Default..............................31
Section 6.02 Acceleration...................................32
Section 6.03 Other Remedies.................................34
Section 6.04 Waiver of Past Defaults........................34
Section 6.05 Control by Majority............................34
Section 6.06 Limitations on Suits...........................34
Section 6.07 Rights of Holders to Receive Payment...........35
Section 6.08 Collection Suit by Trustee.....................35
Section 6.09 Trustee May File Proofs of Claim...............35
Section 6.10 Application of Proceeds........................36
Section 6.11 Restoration of Rights and Remedies.............37
Section 6.12 Undertaking for Costs..........................37
Section 6.13 Rights and Remedies Cumulative.................37
Section 6.14 Delay or Omission Not Waiver...................37
ARTICLE 7
Trustee..............................................................37
Section 7.01 General........................................37
Section 7.02 Certain Rights of Trustee......................38
Section 7.03 Individual Rights of Trustee...................40
Section 7.04 Trustee's Disclaimer...........................40
Section 7.05 Notice of Default..............................40
Section 7.06 Reports by Trustee to Holders..................41
Section 7.07 Compensation and Indemnity.....................41
Section 7.08 Replacement of Trustee.........................42
Section 7.09 Successor Trustee by Merger, Etc. .............43
Section 7.10 Eligibility....................................43
Section 7.11 Money Held in Trust............................43
</TABLE>
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<PAGE>
ARTICLE 8
Discharge of Indenture...................................................43
Section 8.01 Defeasance Within One Year of Payment.............43
Section 8.02 Defeasance........................................44
Section 8.03 Covenant Defeasance...............................45
Section 8.04 Application of Trust Money........................46
Section 8.05 Repayment to Company..............................46
ARTICLE 9
Amendments, Supplements and Waivers......................................47
Section 9.01 Without Consent of Holders........................47
Section 9.02 With Consent of Holders...........................47
Section 9.03 Revocation and Effect of Consent..................49
Section 9.04 Notation on or Exchange of Securities.............49
Section 9.05 Trustee to Sign Amendments, Etc...................49
Section 9.06 Conformity with Trust Indenture...................50
ARTICLE 10
Miscellaneous............................................................50
Section 10.01 Trust Indenture Act of 1939............................50
Section 10.02 Notices................................................50
Section 10.03 Certificate and Opinion as to Conditions Precedent.....51
Section 10.04 Statements Required in Certificate or Opinion..........51
Section 10.05 Evidence of Ownership..................................52
Section 10.06 Rules by Trustee, Paying Agent or Registrar............52
Section 10.07 Payment Date Other than a Business Day.................53
Section 10.08 Governing Law..........................................53
Section 10.09 No Adverse Interpretation of Other Agreements..........53
Section 10.10 Successors.............................................53
Section 10.11 Duplicate Originals....................................53
Section 10.12 Severability...........................................53
Section 10.13 Table of Contents, Headings, Etc.......................53
Section 10.14 Incorporators, Stockholders, Officers and Directors
of Company Exempt from Individual Liability............53
Section 10.15 Judgment Currency......................................54
SIGNATURES....................................................................55
-iii-
<PAGE>
INDENTURE, dated as of November 18, 1999, by and between The ServiceMaster
Company, a Delaware corporation, as the Company, and Harris Trust and Savings
Bank, an Illinois banking corporation, as Trustee.
<PAGE>
RECITALS
WHEREAS, the Company has duly authorized the issuance from time to time of
its debentures, notes or other evidences of indebtedness to be issued in one or
more series (the "Securities") up to such principal amount or amounts as may
from time to time be authorized in accordance with the terms of this Indenture
and to provide, among other things, for the authentication, delivery and
administration thereof, the Company has duly authorized the execution and
delivery of this Indenture; and
WHEREAS, all things necessary to make this Indenture a valid indenture and
agreement according to its terms have been done;
NOW, THEREFORE:
In consideration of the premises and the purchases of the Securities by
the holders thereof, the Company and the Trustee mutually covenant and agree for
the equal and proportionate benefit of the respective holders from time to time
of the Securities or of any and all series thereof and of the coupons, if any,
appertaining thereto as follows:
ARTICLE 1
Definitions and Incorporation by Reference
------------------------------------------
Section 1.01 Definitions.
-----------
"Agent" means any Registrar, Paying Agent, transfer agent or
Authenticating Agent.
"Attributable Debt" means, when used in connection with a sale and lease-
back transaction referred to in Section 4.04, on any date as of which the amount
thereof is to be determined, the product of (a) the net cash proceeds from such
sale and lease-back transaction multiplied by (b) a fraction, the numerator of
which is the number of full years of the term of the lease relating to the
property involved in such sale and lease-back transaction (without regard to any
options to renew or extend such term) remaining on the date of the making of
such computation and the denominator of which is the number of full years of the
term of such lease measured from the first day of such term.
"Authorized Newspaper" means a newspaper (which, in the case of The City
of New York, will, if practicable, be The Wall Street Journal (Eastern Edition)
and in the case of London, will, if practicable, be the Financial Times (London
Edition), published in an official language of the country of publication
customarily published at least once a day for at least five days in each
calendar week and of general circulation in The City of New York or London, as
applicable. If it shall be impractical in the opinion of the Trustee to make any
publication of any notice required
-2-
<PAGE>
hereby in an Authorized Newspaper, any publication or other notice in lieu
thereof which is made or given with the approval of the Trustee shall constitute
a sufficient publication of such notice.
"Board of Directors" means the Board of Directors of the Company or any
committee of such Board duly authorized to act hereunder.
"Board Resolution" means one or more resolutions of the Board of
Directors, or any authorized committee thereof, certified by the secretary or an
assistant secretary to have been duly adopted and to be in full force and effect
on the date of certification, and delivered to the Trustee.
"Business Day" means any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which banking institutions are authorized
or required by law or regulation to close in The City of New York or Chicago,
with respect to any Security the interest on which is based on the offered
quotations in the interbank Eurodollar market for dollar deposits in London, or
with respect to Securities denominated in a specified currency other than United
States dollars, in the principal financial center of the country of the
specified currency.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's capital stock or equity, including,
without limitation, all Common Stock and Preferred Stock.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act or, if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Common Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's common stock, whether now outstanding or
issued after the date of this Indenture, including, without limitation, all
series and classes of such common stock.
"Company" means the party named as such in the first paragraph of this
Indenture until a successor replaces it pursuant to Article 5 of this Indenture
and thereafter means the successor.
"Consolidated Net Worth" means, at any date of determination, the
consolidated stockholders' equity of the Company, as set forth on the then most
recently available consolidated balance sheet of the Company and its
consolidated Subsidiaries.
"Corporate Trust Office" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date of this Indenture,
located at Harris Trust & Savings Bank, Attention Indenture Trust, 311 West
Monroe, 12th Floor, Chicago, Illinois 60606.
-3-
<PAGE>
"Default" means any Event of Default as defined in Section 6.01 and any
event that is, or after notice or passage of time or both would be, an Event of
Default.
"Depositary" means, with respect to the Securities of any series issuable
or issued in the form of one or more Registered Global Securities, the Person
designated as Depositary by the Company pursuant to Section 2.03 until a
successor Depositary shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Depositary" shall mean or include
each Person who is then a Depositary hereunder, and if at any time there is more
than one such Person, "Depositary" as used with respect to the Securities of any
such series shall mean the Depositary with respect to the Registered Global
Securities of that series.
"Equity Interests" means (i) in the case of a corporation, capital stock,
(ii) in the case of a partnership, partnership interests (whether general or
limited) and (iii) in the case of an association or business entity other than a
corporation or a partnership, any and all shares, interests, participations,
rights or other equivalents (however designated) of corporate stock or
partnership interests or other interest or participation that confers on the
holder thereof the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Funded Debt" means all indebtedness for money borrowed, including
purchase money indebtedness and indebtedness pursuant to a mandatory sinking
fund or prepayment provision or otherwise, having a maturity of more than one
year from the date of its creation or having a maturity of less than one year
but by its terms being renewable or extendible, at the option of the obligor in
respect thereof, beyond one year from the date of its creation.
"GAAP" means generally accepted accounting principles in the United States
of America at the date of any computation required or permitted hereunder.
"Holder" or "Securityholder" means the registered holder of any Security
with respect to Registered Securities and the bearer of any Unregistered
Security or any coupon appertaining thereto, as the case may be.
"Indenture" means this Indenture as originally executed or as it may be
amended or supplemented from time to time by one or more indentures supplemental
to this Indenture entered into pursuant to the applicable provisions of this
Indenture and shall include the forms and terms of the Securities of each series
established as contemplated pursuant to Sections 2.01 and 2.03.
"Lien" means, with respect to any property or asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind. For the purposes
of this Indenture, the Company or any Subsidiary shall be deemed to own subject
to a Lien any property or asset which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such asset.
-4-
<PAGE>
"Non-U.S. Subsidiary" means any Subsidiary that is not a corporation,
partnership or other entity created or organized in or under the laws of the
United States of America or any state thereof.
"Officer" means, with respect to the Company, the chairman of the board of
directors, the president or chief executive officer, any vice president, the
chief financial officer, the treasurer or any assistant treasurer, or the
secretary or any assistant secretary.
"Officers' Certificate" means a certificate signed in the name of the
Company (i) by the chairman of the board of directors, the president or chief
executive officer or a vice president and (ii) by the chief financial officer,
the treasurer or any assistant treasurer, or the secretary or any assistant
secretary, complying with Section 10.04 and delivered to the Trustee. Each such
certificate shall comply with Section 314 of the Trust Indenture Act and include
(except as otherwise expressly provided in this Indenture) the statements
provided in Section 10.04.
"Opinion of Counsel" means a written opinion signed by legal counsel, who
may be an employee of or counsel to the Company, satisfactory to the Trustee and
complying with Section 10.04. Each such opinion shall comply with Section 314
of the Trust Indenture Act and include the statements provided in Section 10.04,
if and to the extent required thereby.
"original issue date" of any Security (or portion thereof) means the
earlier of (a) the date of authentication of such Security or (b) the date of
any Security (or portion thereof) for which such Security was issued (directly
or indirectly) on registration of transfer, exchange or substitution.
"Original Issue Discount Security" means any Security that provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the maturity thereof pursuant to Section 6.02.
"Periodic Offering" means an offering of Securities of a series from time
to time, the specific terms of which Securities, including, without limitation,
the rate or rates of interest, if any, thereon, the stated maturity or
maturities thereof and the redemption provisions, if any, with respect thereto,
are to be determined by the Company or its agents upon the issuance of such
Securities.
"Permitted Receivables Financing" means a transaction or series of
transactions (including amendments, supplements, extensions, renewals,
replacements, refinancings or modifications thereof) pursuant to which a
Securitization Subsidiary purchases Receivables and Related Assets from the
Company or any Subsidiary and finances such Receivables and Related Assets
through the issuance of Equity Interests or indebtedness (either directly or
through a trust) or through the sale of the Receivables and Related Assets or a
fractional undivided interest in the Receivables and Related Assets; provided
that (i) the Board of Directors of the Company shall have determined in good
faith that such Permitted Receivables Financing is economically fair and
reasonable to the Company, (ii) all sales of Receivables and Related Assets to
the Securitization
-5-
<PAGE>
Subsidiary shall be made at fair market value (as determined in good faith by
the Board of Directors of the Company), (iii) the financing terms, covenants,
termination events and other provisions thereof shall be market terms (as
determined in good faith by the Board of Directors of the Company), (iv) no
portion of the indebtedness of a Securitization Subsidiary will be guaranteed by
or will be recourse to the Company or any Significant Subsidiary (other than
recourse for customary representations, warranties, covenants and indemnities,
none of which shall relate to the collectibility (as opposed to the status) of
the Receivables and Related Assets) and (v) neither the Company nor any
Subsidiary shall have any obligation to maintain or preserve the Securitization
Subsidiary's financial condition.
"Person" means an individual, a corporation, a partnership, a limited
liability company, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"Preferred Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's preferred or preference stock, whether
now outstanding or issued after the date of the Indenture, including, without
limitation, all series and classes of such preferred or preference stock.
"Principal" of a Security means the principal amount of, and, unless the
context indicates otherwise, includes any premium payable on, the Security.
"Principal Property" means the Company's principal office building and any
manufacturing plant or principal research facility of any of the Company or any
Significant Subsidiary which is located within the United States of America,
except any such principal office building, plant or facility which the Board of
Directors by resolution declares is not of material importance to the total
business conducted by the Company and its Subsidiaries as an entirety.
"Prospectus" means the Prospectus dated November[__], 1999 issued by the
Company in connection with its issuance, from time to time, of Securities under
this Indenture.
"Receivables and Related Assets" means accounts receivable and
instruments, chattel paper, obligations, general intangibles and other similar
assets, in each case, relating to such receivables, including interest in
merchandise or goods, the sale or lease of which gave rise to such receivables,
related contractual rights, guarantees, insurance proceeds, collections, other
related assets, and proceeds of all of the foregoing.
"Registered Global Security" means a Security evidencing all or a part of
a series of Registered Securities, issued to the Depositary for such series in
accordance with Section 2.02, and bearing the legend prescribed in Section 2.02.
"Registered Security" means any Security registered on the Security
Register (as defined in Section 2.05).
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"Responsible Officer" means, when used with respect to the Trustee, any
senior trust officer, any vice president, any trust officer, any assistant trust
officer, or any other officer or assistant officer of the Trustee customarily
performing functions similar to those performed by the persons who at the time
shall be such officers, respectively, or to whom any corporate trust matter is
referred because of his knowledge of and familiarity with the particular
subject.
"Securities" means any of the securities, as defined in the first
paragraph of the recitals hereof, that are authenticated and delivered under
this Indenture and, unless the context indicates otherwise, shall include any
coupon appertaining thereto.
"Securities Act" means the Securities Act of 1933, as amended.
"Securitization Subsidiary" means a Wholly Owned Subsidiary which is
established for the limited purpose of acquiring and financing Receivables and
Related Assets and engaging in activities ancillary thereto.
"Significant Subsidiary" means, at any time, any Subsidiary that would be
a Significant Subsidiary at such time, as such term is defined in Regulation S-X
promulgated by the Commission, as in effect on the date of the Indenture.
"Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the outstanding
Voting Stock (in the case of a corporation) or other ownership interest is
owned, directly or indirectly, by such Person and one or more other Subsidiaries
of such Person.
"Total Assets" means, at any date of determination, the total assets of
the Company and its Subsidiaries on a consolidated basis as set forth on the
then most recently available consolidated balance sheet of the Company and its
consolidated Subsidiaries prepared in accordance with GAAP.
"Trustee" means the party named as such in the first paragraph of this
Indenture until a successor replaces it in accordance with the provisions of
Article 7 and thereafter means such successor.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
(15 U.S. Code (S)(S) 77aaa-77bbbb), as it may be amended from time to time.
"UCC" means the Uniform Commercial Code, as in effect in each applicable
jurisdiction.
"United States Bankruptcy Code" means the Bankruptcy Reform Act of 1978,
as amended and as codified in Title 11 of the United States Code, as amended
from time to time hereafter, or any successor federal bankruptcy law.
"Unregistered Security" means any Security other than a Registered
Security.
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"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of an agency or instrumentality
of the United States of America the payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States of
America, and shall also include a depository receipt issued by a bank or trust
company as custodian with respect to any such U.S. Government Obligation or a
specific payment of interest on or principal of any such U.S. Government
Obligation held by such custodian for the account of the holder of a depository
receipt; provided that (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in respect of the
U.S. Government Obligation or the specific payment of interest on or principal
of the U.S. Government Obligation evidenced by such depository receipt.
"Voting Stock" means with respect to any Person, Capital Stock of any
class or kind ordinarily having the power to vote for the election of directors,
managers or other voting members of the governing body of such Person.
"Wholly Owned Subsidiary" means a Subsidiary all of the Equity Interests
of which (except directors' qualifying shares) is at the time owned directly or
indirectly by the Company.
"Yield to Maturity" means, as the context may require, the yield to
maturity (i) on a series of Securities or (ii) if the Securities of a series are
issuable from time to time, on a Security of such series, calculated at the time
of issuance of such series in the case of clause (i) or at the time of issuance
of such Security of such series in the case of clause (ii), or, if applicable,
at the most recent redetermination of interest on such series or on such
Security, and calculated in accordance with the constant interest method or such
other accepted financial practice as is specified in the terms of such Security.
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Section 1.02 Other Definitions. Each of the following terms is defined in
the section set forth opposite such term:
<TABLE>
<CAPTION>
Term Section
------------------------------- -------
<S> <C>
Authenticating Agent 2.02
cash transaction 7.03
Dollars 4.02
Event of Default 6.01
Judgment Currency 10.15
mandatory sinking fund payment 3.05
optional sinking fund payment 3.05
Paying Agent 2.05
record date 2.04
Registrar 2.05
Required Currency 10.15
Security Register 2.05
self-liquidating paper 7.03
sinking fund payment date 3.05
tranche 2.14
</TABLE>
Section 1.03 Incorporation by Reference of Trust Indenture Act. Whenever
this Indenture refers to a provision of the Trust Indenture Act, the provision
is incorporated by reference in and made a part of this Indenture. The following
terms used in this Indenture that are defined by the Trust Indenture Act have
the following meanings:
"indenture securities" means the Securities;
"indenture security holder" means a Holder or a Securityholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the indenture securities means the Company or any other
obligor on the Securities.
All other terms used in this Indenture that are defined by the Trust
Indenture Act, defined by reference in the Trust Indenture Act to another
statute or defined by a rule of the Commission and not otherwise defined herein
have the meanings assigned to them therein.
Section 1.04 Rules of Construction. Unless the context otherwise
requires:
(i) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
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(ii) words in the singular include the plural, and words in the plural
include the singular;
(ii) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or
other subdivision;
(iv) all references to Sections or Articles refer to Sections or
Articles of this Indenture unless otherwise indicated; and
(v) use of masculine, feminine or neuter pronouns should not be
deemed a limitation, and the use of any such pronouns should be construed
to include, where appropriate, the other pronouns.
ARTICLE 2
The Securities
--------------
Section 2.01 Form and Dating. The Securities of each series shall be
substantially in such form or forms (not inconsistent with this Indenture) as
shall be established by or pursuant to one or more Board Resolutions or in one
or more indentures supplemental hereto, in each case with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture and may have imprinted or otherwise reproduced
thereon such legend or legends or endorsements, not inconsistent with the
provisions of this Indenture, as may be required to comply with any law, or with
any rules of any securities exchange or usage, all as may be determined by the
officers executing such Securities as evidenced by their execution of the
Securities. Unless otherwise so established, Unregistered Securities shall have
coupons attached.
Section 2.02 Execution and Authentication. Two Officers shall execute
the Securities (other than coupons) for the Company by facsimile or manual
signature in the name and on behalf of the Company. The seal of the Company, if
any, shall be reproduced on the Securities. If an Officer whose signature is on
a Security no longer holds that office at the time the Security is
authenticated, the Security shall nevertheless be valid.
The Trustee, at the expense of the Company, may appoint an authenticating
agent (the "Authenticating Agent") to authenticate Securities (other than
coupons). The Authenticating Agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such Authenticating Agent.
A Security (other than coupons) shall not be valid until the Trustee or
Authenticating Agent manually signs the certificate of authentication on the
Security. The signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.
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At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series having attached
thereto appropriate coupons, if any, and executed by the Company to the Trustee
for authentication together with the applicable documents referred to below in
this Section, and the Trustee shall thereupon authenticate and deliver such
Securities to or upon the written order of the Company. In authenticating any
Securities of a series, the Trustee shall be entitled to receive prior to the
first authentication of any Securities of such series, and (subject to Article
7) shall be fully protected in relying upon, unless and until such documents
have been superseded or revoked:
(1) any Board Resolution and/or executed supplemental indenture
referred to in Sections 2.01 and 2.03 by or pursuant to which the forms
and terms of the Securities of that series were established;
(2) an Officers' Certificate setting forth the form or forms and terms
of the Securities, stating that the form or forms and terms of the
Securities of such series have been, or will be when established in
accordance with such procedures as shall be referred to therein,
established in compliance with this Indenture; and
(3) an Opinion of Counsel substantially to the effect that (i) the form
or forms and terms of the Securities of such series have been, or will be
when established in accordance with such procedures as shall be referred
to therein, established in compliance with this Indenture and (ii) that
the supplemental indenture, to the extent applicable, and Securities have
been duly authorized and, if executed and authenticated in accordance with
the provisions of the Indenture and delivered to and duly paid for by the
purchasers thereof on the date of such opinion, would be entitled to the
benefits of the Indenture and would be valid and binding obligations of
the Company, enforceable against the Company in accordance with their
respective terms, subject to bankruptcy, insolvency, reorganization,
receivership, moratorium and other similar laws affecting creditors'
rights generally, general principles of equity, and such other matters as
shall be specified therein.
If the Company shall establish pursuant to Section 2.03 that the
Securities of a series or a portion thereof are to be issued in the form of one
or more Registered Global Securities, then the Company shall execute and the
Trustee shall authenticate and deliver one or more Registered Global Securities
that (i) shall represent and shall be denominated in an amount equal to the
aggregate principal amount of all of the Securities of such series issued in
such form and not yet canceled, (ii) shall be registered in the name of the
Depositary for such Registered Global Security or Securities or the nominee of
such Depositary, (iii) shall be delivered by the Trustee to such Depositary or
its custodian or pursuant to such Depositary's instructions and (iv) shall bear
a legend substantially to the following effect: "Unless and until it is
exchanged in whole or in part for Securities in definitive registered form, this
Security may not be transferred except as a whole by the Depositary to the
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."
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Section 2.03 Amount Unlimited; Issuable in Series. The aggregate
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited. The Securities may be issued in one or more series
and each such series shall rank equally and pari passu with all other unsecured
and unsubordinated debt of the Company. There shall be established in or
pursuant to Board Resolution (or pursuant to the action of Persons to whom such
authority is delegated in such Board Resolution) or one or more indentures
supplemental hereto, prior to the initial issuance of Securities of any series,
subject to the last sentence of this Section 2.03,
(1) the designation of the Securities of the series, which shall
distinguish the Securities of the series from the Securities of all other
series;
(2) any limit upon the aggregate principal amount of the Securities
of the series that may be authenticated and delivered under this Indenture
and any limitation on the ability of the Company to increase such
aggregate principal amount after the initial issuance of the Securities of
that series (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, or upon
redemption of, other Securities of the series pursuant hereto);
(3) the date or dates on which the principal of the Securities of the
series is payable (which date or dates may be fixed or extendible);
(4) the rate or rates (which may be fixed or variable) per annum at
which the Securities of the series shall bear interest, if any, the date
or dates from which such interest shall accrue, on which such interest
shall be payable and (in the case of Registered Securities) on which a
record shall be taken for the determination of Holders to whom interest is
payable and/or the method by which such rate or rates or date or dates
shall be determined;
(5) if other than as provided in Section 4.02, the place or places
where the principal of and any interest on Securities of the series shall
be payable, any Registered Securities of the series may be surrendered for
exchange, notices, demands to or upon the Company in respect of the
Securities of the series and this Indenture may be served and notice to
Holders may be published;
(6) the right, if any, of the Company to redeem Securities of the
series, in whole or in part, at its option and the period or periods
within which, the price or prices at which and any terms and conditions
upon which Securities of the series may be so redeemed, pursuant to any
sinking fund or otherwise;
(7) the obligation, if any, of the Company to redeem, purchase or
repay Securities of the series pursuant to any mandatory redemption,
sinking fund or analogous provisions or at the option of a Holder thereof
and the price or prices at which and the period or periods within which
and any of the terms and conditions upon
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which Securities of the series shall be redeemed, purchased or repaid, in
whole or in part, pursuant to such obligation;
(8) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Securities of the series shall be
issuable;
(9) if other than the Principal thereof, the portion of the Principal
of Securities of the series which shall be payable upon declaration of
acceleration of the maturity thereof;
(10) if other than the coin or currency in which the Securities of the
series are denominated, the coin or currency in which payment of the
Principal of or interest on the Securities of the series shall be payable
or if the amount of payments of Principal of and/or interest on the
Securities of the series may be determined with reference to an index
based on a coin or currency other than that in which the Securities of the
series are denominated, the manner in which such amounts shall be
determined;
(11) if other than the currency of the United States of America, the
currency or currencies, including composite currencies, in which payment
of the Principal of and interest on the Securities of the series shall be
payable, and the manner in which any such currencies shall be valued
against other currencies in which any other Securities shall be payable;
(12) whether the Securities of the series or any portion thereof will
be issuable as Registered Securities (and if so, whether such Securities
will be issuable as Registered Global Securities) or Unregistered
Securities (with or without coupons), or any combination of the foregoing,
any restrictions applicable to the offer, sale or delivery of Unregistered
Securities or the payment of interest thereon and, if other than as
provided herein, the terms upon which Unregistered Securities of any
series may be exchanged for Registered Securities of such series and vice
versa;
(13) whether and under what circumstances the Company will pay
additional amounts on the Securities of the series held by a person who is
not a U.S. person in respect of any tax, assessment or governmental charge
withheld or deducted and, if so, whether the Company will have the option
to redeem such Securities rather than pay such additional amounts;
(14) if the Securities of the series are to be issuable in definitive
form (whether upon original issue or upon exchange of a temporary Security
of such series) only upon receipt of certain certificates or other
documents or satisfaction of other conditions, the form and terms of such
certificates, documents or conditions;
(15) any trustees, depositaries, authenticating or paying agents,
transfer agents or the registrar or any other agents with respect to the
Securities of the series;
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(16) provisions, if any, for the defeasance of the Securities of the
series (including provisions permitting defeasance of less than all
Securities of the series), which provisions may be in addition to, in
substitution for, or in modification of (or any combination of the
foregoing) the provisions of Article 8;
(17) if the Securities of the series are issuable in whole or in part
as one or more Registered Global Securities, the identity of the
Depositary for such Registered Global Security or Securities;
(18) any addition to or modification or deletion of any Events of
Default set forth in Article 6 or covenant set forth in Article 4
pertaining to the Securities of the series; and
(19) any other terms of the Securities of the series (which terms
shall not be inconsistent with the provisions of this Indenture).
All Securities of any one series and coupons, if any, appertaining thereto
shall be substantially identical, except in the case of Registered Securities as
to date and denomination, except in the case of any Periodic Offering and except
as may otherwise be provided by or pursuant to the Board Resolution referred to
above or as set forth in any such indenture supplemental hereto. All Securities
of any one series need not be issued at the same time and may be issued from
time to time, consistent with the terms of this Indenture, if so provided by or
pursuant to such Board Resolution or in any such indenture supplemental hereto
and any forms and terms of Securities to be issued from time to time may be
completed and established from time to time prior to the issuance thereof by
procedures described in such Board Resolution or supplemental indenture.
Section 2.04 Denomination and Date of Securities; Payments of Interest.
The Securities of each series shall be issuable as Registered Securities or
Unregistered Securities in denominations established as contemplated by Section
2.03 or, if not so established with respect to Securities of any series, in
denominations of $1,000 and any integral multiple thereof. The Securities of
each series shall be numbered, lettered or otherwise distinguished in such
manner or in accordance with such plan as the Officers of the Company executing
the same may determine, as evidenced by their execution thereof.
Each Security shall be dated the date of its authentication. The
Securities of each series shall bear interest, if any, from the date, and such
interest and shall be payable on the dates, established as contemplated by
Section 2.03.
The person in whose name any Registered Security of any series is
registered at the close of business on any record date applicable to a
particular series with respect to any interest payment date for such series
shall be entitled to receive the interest, if any, payable on such interest
payment date notwithstanding any transfer or exchange of such Registered
Security
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subsequent to the record date and prior to such interest payment date, except if
and to the extent the Company shall default in the payment of the interest due
on such interest payment date for such series, in which case the provisions of
Section 2.13 shall apply. The term "record date" as used with respect to any
interest payment date (except a date for payment of defaulted interest) for the
Securities of any series shall mean the date specified as such in the terms of
the Registered Securities of such series established as contemplated by Section
2.03, or, if no such date is so established, the fifteenth day next preceding
such interest payment date, whether or not such record date is a Business Day.
Section 2.05 Registrar and Paying Agent; Agents Generally. The Company
shall maintain an office or agency where Securities may be presented for
registration, registration of transfer or for exchange (the "Registrar") and an
office or agency where Securities may be presented for payment (the "Paying
Agent"), which shall be in the Borough of Manhattan, The City of New York. The
Company shall cause the Registrar to keep a register of the Registered
Securities and of their registration, transfer and exchange (the "Security
Register"). The Company may have one or more additional Paying Agents or
transfer agents with respect to any series.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture and the Trust Indenture Act that relate to such
Agent. The Company shall give prompt written notice to the Trustee of the name
and address of any Agent and any change in the name or address of an Agent. If
the Company fails to maintain a Registrar or Paying Agent, the Trustee shall act
as such. The Company may remove any Agent upon written notice to such Agent and
the Trustee; provided that no such removal shall become effective until (i) the
acceptance of an appointment by a successor Agent to such Agent as evidenced by
an appropriate agency agreement entered into by the Company and such successor
Agent and delivered to the Trustee or (ii) notification to the Trustee that the
Trustee shall serve as such Agent until the appointment of a successor Agent in
accordance with clause (i) of this proviso. The Company or any affiliate of the
Company may act as Paying Agent or Registrar; provided that neither the Company
nor an affiliate of the Company shall act as Paying Agent in connection with the
defeasance of the Securities or the discharge of this Indenture under Article 8.
The Company initially appoints the Trustee as Registrar, Paying Agent and
Authenticating Agent. If, at any time, the Trustee is not the Registrar, the
Registrar shall make available to the Trustee ten days prior to each interest
payment date and at such other times as the Trustee may reasonably request the
names and addresses of the Holders as they appear in the Security Register.
Section 2.07 Paying Agent to Hold Money in Trust. Not later than 10:00
a.m. New York City time on each due date of any Principal or interest on any
Securities, the Company shall deposit with the Paying Agent money in immediately
available funds sufficient to pay such Principal or interest. The Company shall
require each Paying Agent other than the Trustee to agree in writing that such
Paying Agent shall hold in trust for the benefit of the Holders of such
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Securities or the Trustee all money held by the Paying Agent for the payment of
Principal of and interest on such Securities and shall promptly notify the
Trustee of any default by the Company in making any such payment. The Company at
any time may require a Paying Agent to pay all money held by it to the Trustee
and account for any funds disbursed, and the Trustee may at any time during the
continuance of any payment default, upon written request to a Paying Agent,
require such Paying Agent to pay all money held by it to the Trustee and to
account for any funds disbursed. Upon doing so, the Paying Agent shall have no
further liability for the money so paid over to the Trustee. If the Company or
any affiliate of the Company acts as Paying Agent, it will, on or before each
due date of any Principal of or interest on any Securities, segregate and hold
in a separate trust fund for the benefit of the Holders thereof a sum of money
sufficient to pay such Principal or interest so becoming due until such sum of
money shall be paid to such Holders or otherwise disposed of as provided in this
Indenture, and will promptly notify the Trustee in writing of its action or
failure to act as required by this Section.
Section 2.07 Transfer and Exchange. Unregistered Securities (except for
any temporary global Unregistered Securities) and coupons (except for coupons
attached to any temporary global Unregistered Securities) shall be transferable
by delivery.
At the option of the Holder thereof, Registered Securities of any series
(other than a Registered Global Security, except as set forth below) may be
exchanged for a Registered Security or Registered Securities of such series and
tenor having authorized denominations and an equal aggregate principal amount,
upon surrender of such Registered Securities to be exchanged at the agency of
the Company that shall be maintained for such purpose in accordance with Section
2.05 and upon payment, if the Company shall so require, of the charges
hereinafter provided. If the Securities of any series are issued in both
registered and unregistered form, except as otherwise established pursuant to
Section 2.03, at the option of the Holder thereof, Unregistered Securities of
any series may be exchanged for Registered Securities of such series and tenor
having authorized denominations and an equal aggregate principal amount, upon
surrender of such Unregistered Securities to be exchanged at the agency of the
Company that shall be maintained for such purpose in accordance with Section
4.02, with, in the case of Unregistered Securities that have coupons attached,
all unmatured coupons and all matured coupons in default thereto appertaining,
and upon payment, if the Company shall so require, of the charges hereinafter
provided. At the option of the Holder thereof, if Unregistered Securities of any
series, maturity date, interest rate and original issue date are issued in more
than one authorized denomination, except as otherwise established pursuant to
Section 2.03, such Unregistered Securities may be exchanged for Unregistered
Securities of such series and tenor having authorized denominations and an equal
aggregate principal amount, upon surrender of such Unregistered Securities to be
exchanged at the agency of the Company that shall be maintained for such purpose
in accordance with Section 4.02, with, in the case of Unregistered Securities
that have coupons attached, all unmatured coupons and all matured coupons in
default thereto appertaining, and upon payment, if the Company shall so require,
of the charges hereinafter provided. Registered Securities of any series may not
be exchanged for Unregistered Securities of such series. Whenever any Securities
are so surrendered for exchange, the Company
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shall execute, and the Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive.
All Registered Securities presented for registration of transfer,
exchange, redemption or payment shall be duly endorsed by, or be accompanied by
a written instrument or instruments of transfer in form satisfactory to the
Company and the Trustee duly executed by, the holder or his attorney duly
authorized in writing.
The Company may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any exchange or
registration of transfer of Securities. No service charge shall be made for any
such transaction.
Notwithstanding any other provision of this Section 2.07, unless and until
it is exchanged in whole or in part for Securities in definitive registered
form, a Registered Global Security representing all or a portion of the
Securities of a series may not be transferred except as a whole by the
Depositary for such series to a nominee of such Depositary or by a nominee of
such Depositary to such Depositary or another nominee of such Depositary or by
such Depositary or any such nominee to a successor Depositary for such series or
a nominee of such successor Depositary.
If at any time the Depositary for any Registered Global Securities of any
series notifies the Company that it is unwilling or unable to continue as
Depositary for such Registered Global Securities or if at any time the
Depositary for such Registered Global Securities shall no longer be eligible
under applicable law, the Company shall appoint a successor Depositary eligible
under applicable law with respect to such Registered Global Securities. If a
successor Depositary eligible under applicable law for such Registered Global
Securities is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such ineligibility, the Company will
execute, and the Trustee, upon receipt of the Company's order for the
authentication and delivery of definitive Registered Securities of such series
and tenor, will authenticate and deliver Registered Securities of such series
and tenor, in any authorized denominations, in an aggregate principal amount
equal to the principal amount of such Registered Global Securities, in exchange
for such Registered Global Securities.
The Company may at any time and in its sole discretion determine that any
Registered Global Securities of any series shall no longer be maintained in
global form. In such event, the Company will execute, and the Trustee, upon
receipt of the Company's order for the authentication and delivery of definitive
Registered Securities of such series and tenor, will authenticate and deliver,
Registered Securities of such series and tenor in any authorized denominations,
in an aggregate principal amount equal to the principal amount of such
Registered Global Securities, in exchange for such Registered Global Securities.
Any time the Registered Securities of any series are not in the form of
Registered Global Securities pursuant to the preceding two paragraphs, the
Company agrees to supply the Trustee with a reasonable supply of certificated
Registered Securities without the legend required by
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Section 2.02 and the Trustee agrees to hold such Registered Securities in
safekeeping until authenticated and delivered pursuant to the terms of this
Indenture.
If established by the Company pursuant to Section 2.03 with respect to any
Registered Global Security, the Depositary for such Registered Global Security
may surrender such Registered Global Security in exchange in whole or in part
for Registered Securities of the same series and tenor in definitive registered
form on such terms as are acceptable to the Company and such Depositary.
Thereupon, the Company shall execute, and the Trustee shall authenticate and
deliver, without service charge,
(i) to the Person specified by such Depositary new Registered
Securities of the same series and tenor, of any authorized denominations
as requested by such Person, in an aggregate principal amount equal to and
in exchange for such Person's beneficial interest in the Registered Global
Security; and
(ii) to such Depositary a new Registered Global Security in a
denomination equal to the difference, if any, between the principal amount
of the surrendered Registered Global Security and the aggregate principal
amount of Registered Securities authenticated and delivered pursuant to
clause (i) above.
Registered Securities issued in exchange for a Registered Global Security
pursuant to this Section 2.07 shall be registered in such names and in such
authorized denominations as the Depositary for such Registered Global Security,
pursuant to instructions from its direct or indirect participants or otherwise,
shall instruct the Trustee or an agent of the Company or the Trustee. The
Trustee or such agent shall deliver such Securities to or as directed by the
Persons in whose names such Securities are so registered.
All Securities issued upon any transfer or exchange of Securities shall be
valid obligations of the Company, evidencing the same debt, and entitled to the
same benefits under this Indenture, as the Securities surrendered upon such
transfer or exchange.
Notwithstanding anything herein or in the forms or terms of any Securities
to the contrary, none of the Company, the Trustee or any agent of the Company or
the Trustee shall be required to exchange any Unregistered Security for a
Registered Security if such exchange would result in adverse Federal income tax
consequences to the Company (such as, for example, the inability of the Company
to deduct from its income, as computed for Federal income tax purposes, the
interest payable on the Unregistered Securities) under then applicable United
States Federal income tax laws. The Trustee and any such agent shall be entitled
to rely on an Officers' Certificate or an Opinion of Counsel in determining such
result.
The Registrar shall not be required (i) to issue, authenticate, register
the transfer of or exchange Securities of any series for a period of 15 days
before a selection of such Securities to be redeemed or (ii) to register the
transfer of or exchange any Security selected for redemption in whole or in
part.
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Section 2.08 Replacement Securities. If a defaced or mutilated Security
of any series is surrendered to the Trustee or if a Holder claims that its
Security of any series has been lost, destroyed or wrongfully taken, the Company
shall issue and the Trustee shall authenticate a replacement Security of such
series and tenor and principal amount bearing a number not contemporaneously
outstanding. If required by the Trustee or the Company, an indemnity bond must
be furnished that is sufficient in the judgment of both the Trustee and the
Company to protect the Company, the Trustee and any Agent from any loss that any
of them may suffer if a Security is replaced. The Company may charge such Holder
for its expenses and the expenses of the Trustee (including without limitation
attorneys' fees and expenses) in replacing a Security. In case any such
mutilated, defaced, lost, destroyed or wrongfully taken Security has become or
is about to become due and payable, the Company in its discretion may pay such
Security instead of issuing a new Security in replacement thereof.
Every replacement Security is an additional obligation of the Company and
shall be entitled to the benefits of this Indenture.
To the extent permitted by law, the foregoing provisions of this Section
are exclusive with respect to the replacement or payment of mutilated,
destroyed, lost or wrongfully taken Securities.
Section 2.09 Outstanding Securities. Securities outstanding at any time
are all Securities that have been authenticated by the Trustee except for those
canceled by it, those delivered to it for cancellation and those described in
this Section as not outstanding.
If a Security is replaced pursuant to Section 2.08, it ceases to be
outstanding unless and until the Trustee and the Company receive proof
satisfactory to them that the replaced Security is held by a holder in due
course.
If the Paying Agent (other than the Company or an affiliate of the
Company) holds on the maturity date or any redemption date or date for
repurchase of the Securities money sufficient to pay Securities payable or to be
redeemed or repurchased on that date, then on and after that date such
Securities cease to be outstanding and interest on them shall cease to accrue.
A Security does not cease to be outstanding because the Company or one of
its affiliates holds such Security, provided, however, that, in determining
whether the Holders of the requisite principal amount of the outstanding
Securities have given any request, demand, authorization, direction, notice,
consent or waiver hereunder, Securities owned by the Company or any affiliate of
the Company shall be disregarded and deemed not to be outstanding, except that,
in determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Securities as to which a Responsible Officer of the Trustee has received written
notice to be so owned shall be so disregarded. Any Securities so owned which are
pledged by the Company, or by any affiliate of the Company, as security for
loans or other obligations, otherwise than to another such affiliate of the
Company, shall be deemed to be outstanding, if the pledgee is entitled pursuant
to the terms of its pledge
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agreement and is free to exercise in its or his discretion the right to vote
such securities, uncontrolled by the Company or by any such affiliate.
Section 2.10 Temporary Securities. Until definitive Securities of any
series are ready for delivery, the Company may prepare and the Trustee shall
authenticate temporary Securities of such series. Temporary Securities of any
series shall be substantially in the form of definitive Securities of such
series but may have insertions, substitutions, omissions and other variations
determined to be appropriate by the Officers executing the temporary Securities,
as evidenced by their execution of such temporary Securities. If temporary
Securities of any series are issued, the Company will cause definitive
Securities of such series to be prepared without unreasonable delay. After the
preparation of definitive Securities of any series, the temporary Securities of
such series shall be exchangeable for definitive Securities of such series and
tenor upon surrender of such temporary Securities at the office or agency of the
Company designated for such purpose pursuant to Section 4.02, without charge to
the Holder. Upon surrender for cancellation of any one or more temporary
Securities of any series the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of such series and tenor and authorized denominations.
Until so exchanged, the temporary Securities of any series shall be entitled to
the same benefits under this Indenture as definitive Securities of such series.
Section 2.11 Cancellation. The Company at any time may deliver to the
Trustee for cancellation any Securities previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and may
deliver to the Trustee for cancellation any Securities previously authenticated
hereunder which the Company has not issued and sold. The Registrar, any transfer
agent and the Paying Agent shall forward to the Trustee any Securities
surrendered to them for transfer, exchange or payment. The Trustee shall cancel
and destroy all Securities surrendered for transfer, exchange, payment or
cancellation and shall deliver a certificate of destruction to the Company. The
Company may not issue new Securities to replace Securities it has paid in full
or delivered to the Trustee for cancellation.
Section 2.12 CUSIP Numbers. The Company in issuing the Securities may
use "CUSIP" and "CINS" numbers (if then generally in use), and the Trustee shall
use CUSIP numbers or CINS numbers, as the case may be, in notices of redemption
or exchange as a convenience to Holders and no representation shall be made as
to the correctness of such numbers either as printed on the Securities or as
contained in any notice of redemption or exchange.
Section 2.13 Defaulted Interest. If the Company defaults in a payment of
interest on the Securities, it shall pay, or shall deposit with the Paying Agent
money in immediately available funds sufficient to pay, the defaulted interest
plus (to the extent lawful) any interest payable on the defaulted interest (as
may be specified in the terms thereof, established pursuant to Section 2.03) to
the Persons who are Holders on a subsequent special record date, which shall
mean the 15th day next preceding the date fixed by the Company for the payment
of defaulted interest, whether or not such day is a Business Day. At least 15
days before such
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special record date, the Company shall mail to each Holder and to the Trustee a
notice that states the special record date, the payment date and the amount of
defaulted interest to be paid.
Section 2.14 Series May Include Tranches. A series of Securities may
include one or more tranches (each a "tranche") of Securities, including
Securities issued in a Periodic Offering. The Securities of different tranches
may have one or more different terms, including authentication dates and public
offering prices, but all the Securities within each such tranche shall have
identical terms, including authentication date and public offering price.
Notwithstanding any other provision of this Indenture, with respect to Sections
2.02 (other than the fourth paragraph thereof) through 2.04, 2.07, 2.08, 2.10,
3.01 through 3.05, 4.02, 6.01 through 6.14, 8.01 through 8.05 and 9.02, if any
series of Securities includes more than one tranche, all provisions of such
sections applicable to any series of Securities shall be deemed equally
applicable to each tranche of any series of Securities in the same manner as
though originally designated a series unless otherwise provided with respect to
such series or tranche pursuant to Section 2.03. In particular, and without
limiting the scope of the next preceding sentence, any of the provisions of such
sections which provide for or permit action to be taken with respect to a series
of Securities shall also be deemed to provide for and permit such action to be
taken instead only with respect to Securities of one or more tranches within
that series (and such provisions shall be deemed satisfied thereby), even if no
comparable action is taken with respect to Securities in the remaining tranches
of that series.
ARTICLE 3
Redemption
----------
Section 3.01 Applicability of Article. The provisions of this Article
shall be applicable to the Securities of any series which are redeemable before
their maturity or to any sinking fund for the retirement of Securities of a
series except as otherwise specified as contemplated by Section 2.03 for
Securities of such series.
Section 3.02 Notice of Redemption; Partial Redemptions. Notice of
redemption to the Holders of Registered Securities of any series to be redeemed
as a whole or in part at the option of the Company shall be given by mailing
notice of such redemption by first class mail, postage prepaid, at least 30 days
and not more than 60 days prior to the date fixed for redemption to such Holders
of Registered Securities of such series at their last addresses as they shall
appear upon the registry books. Notice of redemption to the Holders of
Unregistered Securities of any series to be redeemed as a whole or in part who
have filed their names and addresses with the Trustee pursuant to Section
313(c)(2) of the Trust Indenture Act, shall be given by mailing notice of such
redemption, by first class mail, postage prepaid, at least 30 days and not more
than 60 days prior to the date fixed for redemption, to such Holders at such
addresses as were so furnished to the Trustee (and, in the case of any such
notice given by the Company, the Trustee shall make such information available
to the Company for such purpose). Notice of redemption to all other Holders of
Unregistered Securities of any series to be redeemed as a whole or in part shall
be published in an Authorized Newspaper in The City of New York or with respect
to any
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Security the interest on which is based on the offered quotations in the
interbank Eurodollar market for dollar deposits in an Authorized Newspaper in
London, in each case, once in each of three successive calendar weeks, the first
publication to be not less than 30 days nor more than 60 days prior to the date
fixed for redemption. Any notice which is mailed or published in the manner
herein provided shall be conclusively presumed to have been duly given, whether
or not the Holder receives the notice. Failure to give notice by mail, or any
defect in the notice to the Holder of any Security of a series designated for
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Security of such series.
The notice of redemption to each such Holder shall specify the principal
amount of each Security of such series held by such Holder to be redeemed, the
CUSIP numbers of the Securities to be redeemed, the date fixed for redemption,
the redemption price, the place or places of payment, that payment will be made
upon presentation and surrender of such Securities and, in the case of
Securities with coupons attached thereto, of all coupons appertaining thereto
maturing after the date fixed for redemption, that such redemption is pursuant
to the mandatory or optional sinking fund, or both, if such be the case, that
interest accrued to the date fixed for redemption will be paid as specified in
such notice and that on and after said date interest thereon or on the portions
thereof to be redeemed will cease to accrue. In case any Security of a series
is to be redeemed in part only, the notice of redemption shall state the portion
of the principal amount thereof to be redeemed and shall state that on and after
the date fixed for redemption, upon surrender of such Security, a new Security
or Securities of such series and tenor in principal amount equal to the
unredeemed portion thereof will be issued.
The notice of redemption of Securities of any series to be redeemed at the
option of the Company shall be given by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company.
On or before 10:00 a.m. New York City time on the redemption date
specified in the notice of redemption given as provided in this Section, the
Company will deposit with the Trustee or with one or more Paying Agents (or, if
the Company is acting as its own Paying Agent, set aside, segregate and hold in
trust as provided in Section 2.06) an amount of money sufficient to redeem on
the redemption date all the Securities of such series so called for redemption
at the appropriate redemption price, together with accrued interest to the date
fixed for redemption. If all of the outstanding Securities of a series are to
be redeemed, the Company will deliver to the Trustee at least 10 days prior to
the last date on which notice of redemption may be given to Holders pursuant to
the first paragraph of this Section 3.02 (or such shorter period as shall be
acceptable to the Trustee) an Officers' Certificate stating that all such
Securities are to be redeemed. If less than all the outstanding Securities of a
series are to be redeemed, the Company will deliver to the Trustee at least 15
days prior to the last date on which notice of redemption may be given to
Holders pursuant to the first paragraph of this Section 3.02 (or such shorter
period as shall be acceptable to the Trustee) an Officers' Certificate stating
the aggregate principal amount of such Securities to be redeemed. In case of a
redemption at the election of the Company prior to the expiration of any
restriction on such redemption, the Company shall deliver
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to the Trustee, prior to the giving of any notice of redemption to Holders
pursuant to this Section, an Officers' Certificate stating that such redemption
is not prohibited by such restriction.
If less than all the Securities of a series are to be redeemed, the
Trustee shall select, pro rata, by lot or in such manner as it shall deem
appropriate and fair, Securities of such series to be redeemed in whole or in
part. Securities may be redeemed in part in multiples equal to the minimum
authorized denomination for Securities of such series or any multiple thereof.
The Trustee shall promptly notify the Company in writing of the Securities of
such series selected for redemption and, in the case of any Securities of such
series selected for partial redemption, the principal amount thereof to be
redeemed. For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security which has been or is to be
redeemed.
Section 3.03 Payment of Securities Called for Redemption. If notice of
redemption has been given as above provided, the Securities or portions of
Securities specified in such notice shall become due and payable on the date and
at the place stated in such notice at the applicable redemption price, together
with interest accrued to the date fixed for redemption, and on and after such
date (unless the Company shall default in the payment of such Securities at the
redemption price, together with interest accrued to such date) interest on the
Securities or portions of Securities so called for redemption shall cease to
accrue, and the unmatured coupons, if any, appertaining thereto shall be void
and, except as provided in Sections 7.11 and 8.04, such Securities shall cease
from and after the date fixed for redemption to be entitled to any benefit under
this Indenture, and the Holders thereof shall have no right in respect of such
Securities except the right to receive the redemption price thereof and unpaid
interest to the date fixed for redemption. On presentation and surrender of
such Securities at a place of payment specified in said notice, together with
all coupons, if any, appertaining thereto maturing after the date fixed for
redemption, said Securities or the specified portions thereof shall be paid and
redeemed by the Company at the applicable redemption price, together with
interest accrued thereon to the date fixed for redemption; provided that payment
of interest becoming due on or prior to the date fixed for redemption shall be
payable in the case of Securities with coupons attached thereto, to the Holders
of the coupons for such interest upon surrender thereof, and in the case of
Registered Securities, to the Holders of such Registered Securities registered
as such on the relevant record date subject to the terms and provisions of
Sections 2.04 and 2.13 hereof.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal shall, until paid or duly provided for,
bear interest from the date fixed for redemption at the rate of interest or
Yield to Maturity (in the case of an Original Issue Discount Security) borne by
such Security.
If any Security with coupons attached thereto is surrendered for
redemption and is not accompanied by all appurtenant coupons maturing after the
date fixed for redemption, the surrender of such missing coupon or coupons may
be waived by the Company and the Trustee, if
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there be furnished to each of them such security or indemnity as they may
require to save each of them harmless.
Upon presentation of any Security of any series redeemed in part only, the
Company shall execute and the Trustee shall authenticate and deliver to or on
the order of the Holder thereof, at the expense of the Company, a new Security
or Securities of such series and tenor (with any unmatured coupons attached), of
authorized denominations, in principal amount equal to the unredeemed portion of
the Security so presented.
Section 3.04 Exclusion of Certain Securities from Eligibility for
Selection for Redemption. Securities shall be excluded from eligibility for
selection for redemption if they are identified by registration and certificate
number in a written statement signed by an authorized officer of the Company and
delivered to the Trustee at least 40 days prior to the last date on which notice
of redemption may be given as being owned of record and beneficially by, and not
pledged or hypothecated by either (a) the Company or (b) an entity specifically
identified in such written statement as directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company.
Section 3.05 Mandatory and Optional Sinking Funds. The minimum amount of
any sinking fund payment provided for by the terms of Securities of any series
is herein referred to as a "mandatory sinking fund payment," and any payment in
excess of such minimum amount provided for by the terms of the Securities of any
series is herein referred to as an "optional sinking fund payment." The date on
which a sinking fund payment is to be made is herein referred to as the "sinking
fund payment date."
In lieu of making all or any part of any mandatory sinking fund payment
with respect to any series of Securities in cash, the Company may at its option
(a) deliver to the Trustee Securities of such series theretofore purchased or
otherwise acquired (except through a mandatory sinking fund payment) by the
Company or receive credit for Securities of such series (not previously so
credited) theretofore purchased or otherwise acquired (except as aforesaid) by
the Company and delivered to the Trustee for cancellation pursuant to Section
2.11, (b) receive credit for optional sinking fund payments (not previously so
credited) made pursuant to this Section, or (c) receive credit for Securities of
such series (not previously so credited) redeemed by the Company through any
optional sinking fund payment. Securities so delivered or credited shall be
received or credited by the Trustee at the sinking fund redemption price
specified in such Securities.
On or before the sixtieth day next preceding each sinking fund payment
date for any series, or such shorter period as shall be acceptable to the
Trustee, the Company will deliver to the Trustee an Officers' Certificate (a)
specifying the portion of the mandatory sinking fund payment to be satisfied by
payment of cash and the portion to be satisfied by credit of specified
Securities of such series and the basis for such credit, (b) stating that none
of the specified Securities of such series has theretofore been so credited, (c)
stating that no defaults in the payment of interest or Events of Default with
respect to such series have occurred (which have
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not been waived or cured) and are continuing and (d) stating whether or not the
Company intends to exercise its right to make an optional sinking fund payment
with respect to such series and, if so, specifying the amount of such optional
sinking fund payment which the Company intends to pay on or before the next
succeeding sinking fund payment date. The Trustee shall have no duty to verify
the facts set forth in such Officer's Certificate and may conclusively rely on
such Officer's Certificate. Any Securities of such series to be credited and
required to be delivered to the Trustee in order for the Company to be entitled
to credit therefor as aforesaid which have not theretofore been delivered to the
Trustee shall be delivered for cancellation pursuant to Section 2.11 to the
Trustee with such Officers' Certificate (or reasonably promptly thereafter if
acceptable to the Trustee). Such Officers' Certificate shall be irrevocable and
upon its receipt by the Trustee the Company shall become unconditionally
obligated to make all the cash payments or delivery of securities therein
referred to, if any, on or before the next succeeding sinking fund payment date.
Failure of the Company, on or before any such sixtieth day, to deliver such
Officer's Certificate and Securities specified in this paragraph, if any, shall
not constitute a default but shall constitute, on and as of such date, the
irrevocable election of the Company (i) that the mandatory sinking fund payment
for such series due on the next succeeding sinking fund payment date shall be
paid entirely in cash without the option to deliver or credit Securities of such
series in respect thereof and (ii) that the Company will make no optional
sinking fund payment with respect to such series as provided in this Section.
If the sinking fund payment or payments (mandatory or optional or both) to
be made in cash on the next succeeding sinking fund payment date plus any unused
balance of any preceding sinking fund payments made in cash shall exceed $50,000
(or a lesser sum if the Company shall so request with respect to the Securities
of any series), such cash shall be applied on the next succeeding sinking fund
payment date to the redemption of Securities of such series at the sinking fund
redemption price thereof together with accrued interest thereon to the date
fixed for redemption. If such amount shall be $50,000 (or such lesser sum) or
less and the Company makes no such request then it shall be carried over until a
sum in excess of $50,000 (or such lesser sum) is available. The Trustee shall
select, in the manner provided in Section 3.02, for redemption on such sinking
fund payment date a sufficient principal amount of Securities of such series to
absorb said cash, as nearly as may be, and shall (if requested in writing by the
Company) inform the Company of the serial numbers of the Securities of such
series (or portions thereof) so selected. Securities shall be excluded from
eligibility for redemption under this Section if they are identified by
registration and certificate number in an Officers' Certificate delivered to the
Trustee at least 60 days prior to the sinking fund payment date as being owned
of record and beneficially by, and not pledged or hypothecated by either (a) the
Company or (b) an entity specifically identified in such Officers' Certificate
as directly or indirectly controlling or controlled by or under direct or
indirect common control with the Company. The Trustee, in the name and at the
expense of the Company (or the Company, if it shall so request the Trustee in
writing) shall cause notice of redemption of the Securities of such series to be
given in substantially the manner provided in Section 3.02 (and with the effect
provided in Section 3.03) for the redemption of Securities of such series in
part at the option of the Company. The amount of any sinking fund payments not
so applied or allocated to the redemption of Securities of such series shall be
added to the next cash sinking fund payment for such series and, together with
such payment, shall be applied in accordance with the
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provisions of this Section. Any and all sinking fund moneys held on the stated
maturity date of the Securities of any particular series (or earlier, if such
maturity is accelerated), which are not held for the payment or redemption of
particular Securities of such series shall be applied, together with other
moneys, if necessary, sufficient for the purpose, to the payment of the
Principal of, and interest on, the Securities of such series at maturity.
On or before 10:00 a.m. New York City time on each sinking fund payment
date, the Company shall pay to the Trustee in cash or shall otherwise provide
for the payment of all interest accrued to the date fixed for redemption on
Securities to be redeemed on the next following sinking fund payment date.
The Trustee shall not redeem or cause to be redeemed any Securities of a
series with sinking fund moneys or mail any notice of redemption of Securities
of such series by operation of the sinking fund during the continuance of a
Default in payment of interest on such Securities or of any Event of Default
except that, where the mailing of notice of redemption of any Securities shall
theretofore have been made, the Trustee shall redeem or cause to be redeemed
such Securities, provided that it shall have received from the Company a sum
sufficient for such redemption. Except as aforesaid, any moneys in the sinking
fund for such series at the time when any such Default or Event of Default shall
occur, and any moneys thereafter paid into the sinking fund, shall, during the
continuance of such default or Event of Default, be deemed to have been
collected under Article 6 and held for the payment of all such Securities. In
case such Event of Default shall have been waived as provided in Section 6.04 or
the Default cured on or before the sixtieth day preceding the sinking fund
payment date in any year, such moneys shall thereafter be applied on the next
succeeding sinking fund payment date in accordance with this Section to the
redemption of such Securities.
ARTICLE 4
Covenants
---------
Section 4.01 Payment of Securities. The Company shall pay the Principal
of and interest on the Securities on the dates and in the manner provided in the
Securities and this Indenture. The interest on Securities with coupons attached
(together with any additional amounts payable pursuant to the terms of such
Securities) shall be payable only upon presentation and surrender of the several
coupons for such interest installments as are evidenced thereby as they
severally mature. The interest on any temporary Unregistered Securities
(together with any additional amounts payable pursuant to the terms of such
Securities) shall be paid, as to the installments of interest evidenced by
coupons attached thereto, if any, only upon presentation and surrender thereof,
and, as to the other installments of interest, if any, only upon presentation of
such Unregistered Securities for notation thereon of the payment of such
interest. The interest on Registered Securities (together with any additional
amounts payable pursuant to the terms of such Securities) shall be payable only
to the Holders thereof and at the option of the Company may be paid by mailing
checks for such interest payable to or upon the written order of such Holders at
their last addresses as they appear on the Security Register of the Company.
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Notwithstanding any provisions of this Indenture and the Securities of any
series to the contrary, if the Company and a Holder of any Registered Security
so agree, payments of interest on, and any portion of the Principal of, such
Holder's Registered Security (other than interest payable at maturity or on any
redemption or repayment date or the final payment of Principal on such Security)
shall be made by the Paying Agent, upon receipt from the Company of immediately
available funds by 11:00 a.m., New York City time (or such other time as may be
agreed to between the Company and the Paying Agent), directly to the Holder of
such Security (by Federal funds wire transfer or otherwise) if the Holder has
delivered written instructions to the Trustee 15 days prior to such payment date
requesting that such payment will be so made and designating the bank account to
which such payments shall be so made and in the case of payments of Principal
surrenders the same to the Trustee in exchange for a Security or Securities
aggregating the same principal amount as the unredeemed principal amount of the
Securities surrendered. The Trustee shall be entitled to rely on the last
instruction delivered by the Holder pursuant to this Section 4.01 unless a new
instruction is delivered 15 days prior to a payment date. The Company will
indemnify and hold each of the Trustee and any Paying Agent harmless against any
loss, liability or expense (including attorneys' fees) resulting from any act or
omission to act on the part of the Company or any such Holder in connection with
any such agreement or from making any payment in accordance with any such
agreement.
The Company shall pay interest on overdue Principal, and interest on
overdue installments of interest, to the extent lawful, at the rate per annum
specified in the Securities.
Section 4.02 Maintenance of Office or Agency. The Company will maintain
in the Borough of Manhattan, The City of New York, an office or agency where
Securities may be surrendered for registration of transfer or exchange or for
presentation for payment and where notices and demands to or upon the Company in
respect of the Securities and this Indenture may be served. The Company hereby
initially designates the Corporate Trust Office of the Trustee, located in the
Borough of Manhattan, The City of New York, as such office or agency of the
Company. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the address of the
Trustee set forth in Section 10.02.
The Company will maintain one or more agencies in a city or cities located
outside the United States (including any city in which such an agency is
required to be maintained under the rules of any stock exchange on which the
Securities of any series are listed) where the Unregistered Securities, if any,
of each series and coupons, if any, appertaining thereto may be presented for
payment. No payment on any Unregistered Security or coupon will be made upon
presentation of such Unregistered Security or coupon at an agency of the Company
within the United States nor will any payment be made by transfer to an account
in, or by mail to an address in, the United States unless, pursuant to
applicable United States laws and regulations then in effect, such payment can
be made without adverse tax consequences to the Company.
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Notwithstanding the foregoing, if full payment in United States Dollars
("Dollars") at each agency maintained by the Company outside the United States
for payment on such Unregistered Securities or coupons appertaining thereto is
illegal or effectively precluded by exchange controls or other similar
restrictions, payments in Dollars of Unregistered Securities of any series and
coupons appertaining thereto which are payable in Dollars may be made at an
agency of the Company maintained in the Borough of Manhattan, The City of New
York.
The Company may also from time to time designate one or more other offices
or agencies where the Securities of any series may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations; provided that no such designation or rescission shall in any
manner relieve the Company of its obligation to maintain an office or agency in
the Borough of Manhattan, The City of New York for such purposes. The Company
will give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or agency.
Section 4.03 Negative Pledge. (a) The Company will not, and will not
permit any Significant Subsidiary to, create, incur or suffer to exist any Lien
on any Equity Interests, indebtedness or other obligations of a Significant
Subsidiary held by the Company or any Subsidiary or any Principal Property of
the Company or a Significant Subsidiary, whether such Equity Interests,
indebtedness or other obligations of a Significant Subsidiary or Principal
Property are owned at the date of this Indenture or hereafter acquired, unless
the Company secures or causes such Significant Subsidiary to secure the
outstanding Securities equally and ratably with all indebtedness secured by such
Lien, so long as such indebtedness shall be so secured; provided, however, that
this covenant shall not apply in the case of:
(i) (a) the creation of any Lien on any Equity Interests,
indebtedness or other obligations of a Significant Subsidiary or any
Principal Property hereafter acquired (including acquisitions by way of
merger or consolidation) by the Company or a Significant Subsidiary
contemporaneously with such acquisition, or within 180 days thereafter, to
secure or provide for the payment or financing of any part of the purchase
price thereof, or (b) the assumption of any Lien upon any Equity Interests,
indebtedness or other obligations of a Significant Subsidiary or any
Principal Property hereafter acquired (including acquisitions by way of
merger or consolidation) existing at the time of such acquisition, provided
that every such Lien referred to in subclause (a) or (b) of this clause (i)
shall not attach to Equity Interests, indebtedness or other obligations of
a Significant Subsidiary or any Principal Property other than the Equity
Interests, indebtedness or other obligations of the Significant Subsidiary
or any Principal Property so acquired and fixed improvements thereon;
(ii) any Lien on any Equity Interests, indebtedness or other
obligations of a Significant Subsidiary or any Principal Property existing
at the date of this Indenture;
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(iii) any Lien on any Equity Interests, indebtedness or other
obligations of a Significant Subsidiary or any Principal Property in favor
of the Company or any Significant Subsidiary;
(iv) any Lien on any Principal Property being constructed or
improved securing loans to finance such construction or improvements;
(v) any Lien on Equity Interests, indebtedness or other
obligations of a Significant Subsidiary or any Principal Property incurred
in connection with the issuance of tax-exempt governmental obligations;
(vi) Liens on any Principal Property for taxes not yet due or which
are being contested in good faith by appropriate proceedings and with
respect to which adequate reserves, to the extent required by GAAP, have
been made;
(vii) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens on any Principal Property arising in the
ordinary course of business and securing obligations that are not due and
payable or which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves, to the extent
required by GAAP, have been made;
(viii) zoning restrictions, easements, rights-of-way, restrictions on
use of real property and other similar encumbrances incurred in the
ordinary course of business which, in the aggregate, are not substantial in
amount and do not materially detract from the value of the property subject
thereto or interfere with the ordinary conduct of the business of any of
the Company or any Significant Subsidiary;
(ix) any Lien on Equity Interests, indebtedness or other
obligations of a Non-U.S. Subsidiary held by a Non-U.S. Subsidiary or any
Principal Property of a Non-U.S. Subsidiary; provided that, at the time of
the creation or incurrence of any such Lien, the aggregate book value of
the total assets of the Non-U.S. Subsidiaries then subject to Liens
securing indebtedness for borrowed money (and after giving effect to the
proposed Lien) shall not exceed 25% of the Total Assets of the Company and
its Subsidiaries;
(x) any Lien on Equity Interests, indebtedness or other
obligations of a Securitization Subsidiary created, incurred, assumed or
suffered to exist in connection with a Permitted Receivables Financing;
(xi) Liens arising by reason of any attachment, judgment, decree or
order of any court or other governmental authority, so long as any
appropriate legal proceedings which may have been initiated for review of
such attachment, judgment, decree or order shall not have been finally
terminated or so long as the period within which such proceedings may be
initiated shall not have expired;
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(xii) any Lien on Equity Interests, indebtedness or other obligations
of a Significant Subsidiary that was not a Significant Subsidiary at the
time such Lien was created or incurred; and
(xiii) any renewal of or substitution for any Lien permitted by any of
the preceding clauses (i), (ii), (iv), (v), (vi), (vii), (viii), (ix), (x),
(xi) or (xii), provided, that the indebtedness secured is not increased
(except for increases in the amount of premiums or fees payable in
connection with such renewal or substitution) nor the Lien extended to any
additional assets (other than assets as to which the creation, incurrence
or existence of Liens is not governed by this Section).
(b) Notwithstanding the provisions of paragraph (a) of this Section, the
Company or any Significant Subsidiary may create, incur, assume or suffer to
exist Liens in addition to those permitted by clauses (i) through (xiii) of
paragraph (a) of this Section, and renew, extend or replace such Liens, provided
that at the time of such creation, incurrence, assumption, renewal, extension or
replacement, and after giving effect thereto, the aggregate outstanding
principal or face amount of all indebtedness secured by Liens governed by clause
(a) and not permitted by clauses (i) through (xiii) thereof does not exceed 10%
of Consolidated Net Worth.
Section 4.04 Certain Sale and Lease-back Transactions. The Company will
not, and will not permit any Significant Subsidiary to, sell or transfer,
directly or indirectly, except to the Company or a Significant Subsidiary, any
Principal Property as an entirety, or any substantial portion thereof, with the
intention of taking back a lease of such property, except a lease for a period
of three years or less at the end of which it is intended that the use of such
property by the lessee will be discontinued and any transaction for the sale and
lease-back of any property if such lease is entered into within 180 days after
the later of the acquisition, completion of construction or commencement of
operation of such property; provided that, notwithstanding the foregoing, the
Company or any Significant Subsidiary may sell any such Principal Property and
lease it back for a period longer than three years (i) if the Company or such
Significant Subsidiary would be entitled, pursuant to the provisions of Section
4.03, to create a Lien on the property to be leased securing indebtedness in an
amount equal to the Attributable Debt with respect to such sale and lease-back
transaction without equally and ratably securing the outstanding Securities or
(ii)(A) the Company promptly informs the Trustee of such transaction, (B) the
net proceeds of such transaction are at least equal to the fair value (as
determined by Board Resolution of the Company) of such property and (C) the
Company causes an amount equal to the net cash proceeds of the sale to be
applied to the retirement, within 120 days after receipt of such proceeds, of
Funded Debt incurred or assumed by the Company or a Significant Subsidiary
(including the Securities); provided further that, in lieu of applying all of or
any part of such net cash proceeds to such retirement, the Company may, within
75 days after such sale, deliver or cause to be delivered to the applicable
trustee for cancellation either debentures or notes evidencing Funded Debt of
the Company (which may include the Securities) or of a Significant Subsidiary
previously authenticated and delivered by the applicable trustee, and not
theretofore tendered for sinking fund purposes or called for a sinking fund or
otherwise applied as a credit
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against an obligation to redeem or retire such notes or debentures, and an
Officers' Certificate (which shall be delivered to the Trustee and which need
not contain the statements prescribed by Section 11.04) stating that the Company
elects to deliver or cause to be delivered such debentures or notes in lieu of
retiring Funded Debt as hereinabove provided. If the Company shall so deliver
debentures or notes to the applicable trustee and the Company shall duly deliver
such Officers' Certificate, the amount of cash which the Company shall be
required to apply to the retirement of Funded Debt under this Section 4.04 shall
be reduced by an amount equal to the aggregate of the then applicable optional
redemption prices (not including any optional sinking fund redemption prices) of
such debentures or notes, or, if there are no such redemption prices, the
principal amount of such debentures or notes; provided, that in the case of
debentures or notes which provide for an amount less than the principal amount
thereof to be due and payable upon a declaration of the maturity thereof, such
amount of cash shall be reduced by the amount of principal of such debentures or
notes that would be due and payable as of the date of such application upon a
declaration of acceleration of the maturity thereof pursuant to the terms of the
indenture pursuant to which such debentures or notes were issued.
Section 4.05 Certificate to Trustee. The Company will furnish to the
Trustee annually, on or before a date not more than four months after the end of
its fiscal year (which, on the date hereof, is a calendar year), a brief
certificate (which need not contain the statements required by Section 10.04)
from its principal executive, financial or accounting officer or its treasurer
as to his or her knowledge of the compliance of the Company with all conditions
and covenants under this Indenture (such compliance to be determined without
regard to any period of grace or requirement of notice provided under this
Indenture) which certificate shall comply with the requirements of the Trust
Indenture Act.
Section 4.06 Reports by the Company. The Company covenants to file with
the Trustee, within 15 days after the Company is required to file the same with
the Commission, copies of the annual reports and of the information, documents,
and other reports that the Company may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Exchange Act.
ARTICLE 5
Successor Corporation
Section 5.01 When Company May Merge, Etc. The Company shall not
consolidate with, merge with or into, or sell, convey, transfer, lease or
otherwise dispose of all or substantially all of its property and assets (as an
entirety or substantially as an entirety in one transaction or a series of
related transactions) to, any Person or permit any Person to merge with or into
the Company unless:
(i) either (x) the Company shall be the continuing Person or (y) the
Person (if other than the Company) formed by such consolidation or into
which the Company is merged or that acquired or leased such property and
assets of the Company shall be a
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corporation, partnership or limited liability company organized and validly
existing under the laws of the United States of America or any jurisdiction
thereof and shall expressly assume, by a supplemental indenture, executed
and delivered to the Trustee, all of the obligations of the Company on all
of the Securities and under this Indenture and the Company shall have
delivered to the Trustee an Opinion of Counsel stating that such
consolidation, merger or transfer and such supplemental indenture complies
with this provision and that all conditions precedent provided for herein
relating to such transaction have been complied with and that such
supplemental indenture constitutes the legal, valid and binding obligation
of the Company or such successor enforceable against such entity in
accordance with its terms, subject to customary exceptions; and
(ii) immediately after giving effect to such transaction, no Default
shall have occurred and be continuing.
Section 5.02 Successor Substituted. Upon any consolidation or merger, or
any sale, conveyance, transfer, lease or other disposition of all or
substantially all of the property and assets of the Company in accordance with
Section 5.01 of this Indenture, the successor Person formed by such
consolidation or into which the Company is merged or to which such sale,
conveyance, transfer, lease or other disposition is made shall succeed to, and
be substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor Person had been named
as the Company herein.
ARTICLE 6
Default and Remedies
Section 6.01 Events of Default. An "Event of Default" shall occur with
respect to the Securities of any series if:
(a) the Company defaults in the payment of the Principal of any Security
of such series when the same becomes due and payable at maturity, upon
acceleration, redemption or mandatory repurchase, including as a sinking fund
installment, or otherwise;
(b) the Company defaults in the payment of interest on any Security of
such series when the same becomes due and payable, and such default continues
for a period of 30 days;
(c) the Company defaults in the performance of or breaches any other
covenant or agreement of the Company in this Indenture with respect to any
Security of such series or in the Securities of such series and such default or
breach continues for a period of 60 consecutive days after written notice to the
Company by the Trustee or to the Company and the Trustee by the Holders of 25%
or more in aggregate principal amount of the Securities of all series then
outstanding affected thereby;
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(d) an involuntary case or other proceeding shall be commenced against the
Company or any Significant Subsidiary with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect seeking
the appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, and such involuntary
case or other proceeding shall remain undismissed and unstayed for a period of
60 days; or an order for relief shall be entered against the Company or any
Significant Subsidiary under the federal bankruptcy laws as now or hereafter in
effect;
(e) the Company or any Significant Subsidiary (A) commences a voluntary
case under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consents to the entry of an order for relief in an
involuntary case under any such law, (B) consents to the appointment of or
taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Company or any Significant Subsidiary or
for all or substantially all of the property and assets of the Company or any
Significant Subsidiary or (C) effects any general assignment for the benefit of
creditors; or
(f) any other Event of Default established pursuant to Section 2.03 with
respect to the Securities of such series occurs.
Section 6.02 Acceleration.
(a) If an Event of Default described in clauses (a) or (b) of Section 6.01
with respect to the Securities of any series then outstanding occurs and is
continuing, then, and in each and every such case, except for any series of
Securities the Principal of which shall have already become due and payable,
either the Trustee or the Holders of not less than 25% in aggregate principal
amount of the Securities of any such affected series then outstanding hereunder
(each such series treated as a separate class) by notice in writing to the
Company (and to the Trustee if given by Securityholders), may declare the entire
Principal (or, if the Securities of any such series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of such series established pursuant to Section 2.03) of all Securities of
such affected series, and the interest accrued thereon, if any, to be due and
payable immediately, and upon any such declaration the same shall become
immediately due and payable.
(b) If an Event of Default described in clauses (c) or (f) of Section 6.01
with respect to the Securities of one or more but not all series then
outstanding, or with respect to the Securities of all series then outstanding,
occurs and is continuing, then, and in each and every such case, except for any
series of Securities the Principal of which shall have already become due and
payable, either the Trustee or the Holders of not less than 25% in aggregate
principal amount (or, if the Securities of any such series are Original Issue
Discount Securities, the amount thereof accelerable under this Section) of the
Securities of all such affected series then outstanding hereunder (treated as a
single class) by notice in writing to the Company (and to the Trustee if given
by Securityholders), may declare the entire Principal (or, if the Securities of
any such series are Original Issue Discount Securities, such portion of the
Principal as may be specified in the terms of such series established pursuant
to Section 2.03) of all Securities of all such affected
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series, and the interest accrued thereon, if any, to be due and payable
immediately, and upon any such declaration the same shall become immediately due
and payable.
(c) If an Event of Default described in clause (d) or (e) of Section 6.01
occurs and is continuing, then the Principal (or, if any Securities are Original
Issue Discount Securities, such portion of the Principal as may be specified in
the terms thereof established pursuant to Section 2.03) of all the Securities
then outstanding and interest accrued thereon, if any, shall be and become
immediately due and payable, without any notice or other action by any Holder or
the Trustee, to the full extent permitted by applicable law.
The foregoing provisions, however, are subject to the condition that if, at
any time after the Principal (or, if the Securities are Original Issue Discount
Securities, such portion of the Principal as may be specified in the terms
thereof established pursuant to Section 2.03) of the Securities of any series
(or of all the Securities, as the case may be) shall have been so declared due
and payable, and before any judgment or decree for the payment of the moneys due
shall have been obtained or entered as hereinafter provided, the Company shall
pay or shall deposit with the Trustee a sum sufficient to pay all matured
installments of interest upon all the Securities of each such series (or of all
the Securities, as the case may be) and the Principal of any and all Securities
of each such series (or of all the Securities, as the case may be) which shall
have become due otherwise than by acceleration (with interest upon such
Principal and, to the extent that payment of such interest is enforceable under
applicable law, on overdue installments of interest, at the same rate as the
rate of interest or Yield to Maturity (in the case of Original Issue Discount
Securities) specified in the Securities of each such series to the date of such
payment or deposit) and such amount as shall be sufficient to cover all amounts
owing the Trustee under Section 7.07, and if any and all Events of Default under
the Indenture, other than the non-payment of the Principal of Securities which
shall have become due by acceleration, shall have been cured, waived or
otherwise remedied as provided herein, then and in every such case the Holders
of a majority in aggregate principal amount of all the then outstanding
Securities of all such series that have been accelerated (voting as a single
class), by written notice to the Company and to the Trustee, may waive all
defaults with respect to all such series (or with respect to all the Securities,
as the case may be) and rescind and annul such declaration and its consequences,
but no such waiver or rescission and annulment shall extend to or shall affect
any subsequent default or shall impair any right consequent thereon.
For all purposes under this Indenture, if a portion of the Principal of any
Original Issue Discount Securities shall have been accelerated and declared due
and payable pursuant to the provisions hereof, then, from and after such
declaration, unless such declaration has been rescinded and annulled, the
Principal of such Original Issue Discount Securities shall be deemed, for all
purposes hereunder, to be such portion of the Principal thereof as shall be due
and payable as a result of such acceleration, and payment of such portion of the
Principal thereof as shall be due and payable as a result of such acceleration,
together with interest, if any, thereon and all other amounts owing thereunder,
shall constitute payment in full of such Original Issue Discount Securities.
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Section 6.03 Other Remedies. If a payment default or an Event of Default
with respect to the Securities of any series occurs and is continuing, the
Trustee may pursue, in its own name or as trustee of an express trust, any
available remedy by proceeding at law or in equity to collect the payment of
principal of and interest on the Securities of such series or to enforce the
performance of any provision of the Securities of such series or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Securities or does not produce any of them in the proceeding.
Section 6.04 Waiver of Past Defaults. Subject to Sections 6.02, 6.07 and
9.02, the Holders of at least a majority in Principal amount (or, if the
Securities are Original Issue Discount Securities, such portion of the Principal
as is then accelerable under Section 6.02) of the outstanding Securities of all
series affected (voting as a single class), by notice to the Trustee, may waive
an existing Default or Event of Default with respect to the Securities of such
series and its consequences, except a Default in the payment of Principal of or
interest on any Security as specified in clauses (a) or (b) of Section 6.01 or
in respect of a covenant or provision of this Indenture which cannot be modified
or amended without the consent of the Holder of each outstanding Security
affected. Upon any such waiver, such Default shall cease to exist, and any Event
of Default with respect to the Securities of such series 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 Event of Default or
impair any right consequent thereto.
Section 6.05 Control by Majority. Subject to Sections 7.01 and 7.02(a)(v),
the Holders of at least a majority in aggregate Principal amount (or, if any
Securities are Original Issue Discount Securities, such portion of the Principal
as is then accelerable under Section 6.02) of the outstanding Securities of all
series affected (voting as a single class) may direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee with respect to the
Securities of such series by this Indenture; provided, that the Trustee may
refuse to follow any direction that conflicts with law or this Indenture, that
may involve the Trustee in personal liability or that the Trustee determines in
good faith may be unduly prejudicial to the rights of Holders not joining in the
giving of such direction, it being understood that the Trustee shall have no
duty to ascertain whether or not such actions or forebearance are unduly
prejudicial to such Holders; and provided further, that the Trustee may take any
other action it deems proper that is not inconsistent with any directions
received from Holders of Securities pursuant to this Section 6.05.
Section 6.06 Limitations on Suits. No Holder of any Security of any series
may institute any proceeding, judicial or otherwise, with respect to this
Indenture or the Securities of such series, or for the appointment of a receiver
or trustee, or for any other remedy hereunder, unless:
(i) such Holder has previously given to the Trustee written notice of
a continuing Event of Default with respect to the Securities of such
series;
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(ii) the Holders of at least 25% in aggregate principal amount of
outstanding Securities of all such series affected shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default in its own name as Trustee hereunder;
(iii) such Holder or Holders have offered to the Trustee indemnity
reasonably satisfactory to the Trustee against any costs, liabilities or
expenses to be incurred in compliance with such request;
(iv) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(v) during such 60-day period, the Holders of a majority in
aggregate principal amount of the outstanding Securities of all such
affected series have not given the Trustee a direction that is inconsistent
with such written request. A Holder may not use this Indenture to prejudice
the rights of another Holder or to obtain a preference or priority over
such other Holder.
Section 6.07 Rights of Holders to Receive Payment. Notwithstanding any
other provision of this Indenture, the right of any Holder of a Security to
receive payment of Principal of or interest, if any, on such Holder's Security
on or after the respective due dates expressed on such Security, or to bring
suit for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of such Holder.
Section 6.08 Collection Suit by Trustee. If an Event of Default with
respect to the Securities of any series in payment of Principal or interest
specified in clause (a) or (b) of Section 6.01 occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Company for the whole amount (or such portion thereof as specified
in the terms established pursuant to Section 2.03 of Original Issue Discount
Securities) of Principal of, and accrued interest remaining unpaid on, together
with interest on overdue Principal of, and, to the extent that payment of such
interest is lawful, interest on overdue installments of interest on, the
Securities of such series, in each case at the rate or Yield to Maturity (in the
case of Original Issue Discount Securities) specified in such Securities, and
such further amount as shall be sufficient to cover all amounts owing the
Trustee under Section 7.07.
Section 6.09 Trustee May File Proofs of Claim. The Trustee may file such
proofs of claim and other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee (including any claim for amounts due
the Trustee under Section 7.07) and the Holders allowed in any judicial
proceedings relative to the Company (or any other obligor on the Securities),
its creditors or its property and shall be entitled and empowered to collect and
receive any moneys, securities or other property payable or deliverable upon
conversion or exchange of the Securities or upon any such claims and to
distribute the same, and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial proceeding is hereby
authorized by each Holder to make such payments to the Trustee and, in the
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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 under Section 7.07.
Nothing herein contained shall be deemed to empower the Trustee to authorize or
consent to, or accept or adopt on behalf of any Holder, any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding; provided, however,
that the Trustee may, on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official and may be a member of the creditor's
committee.
Section 6.10 Application of Proceeds. Any moneys collected by the Trustee
pursuant to this Article in respect of the Securities of any series shall be
applied in the following order at the date or dates fixed by the Trustee and, in
case of the distribution of such moneys on account of Principal or interest,
upon presentation of the several Securities and coupons appertaining to such
Securities in respect of which moneys have been collected and noting thereon the
payment, or issuing Securities of such series and tenor in reduced principal
amounts in exchange for the presented Securities of such series and tenor if
only partially paid, or upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
7.07 applicable to the Securities of such series in respect of which moneys
have been collected;
SECOND: In case the Principal of the Securities of such series in
respect of which moneys have been collected shall not have become and be
then due and payable, to the payment of interest on the Securities of such
series in default in the order of the maturity of the installments of such
interest, with interest (to the extent that such interest has been
collected by the Trustee) upon the overdue installments of interest at the
same rate as the rate of interest or Yield to Maturity (in the case of
Original Issue Discount Securities) specified in such Securities, such
payments to be made ratably to the persons entitled thereto, without
discrimination or preference;
THIRD: In case the Principal of the Securities of such series in
respect of which moneys have been collected shall have become and shall be
then due and payable, to the payment of the whole amount then owing and
unpaid upon all the Securities of such series for Principal and interest,
with interest upon the overdue Principal, and (to the extent that such
interest has been collected by the Trustee) upon overdue installments of
interest at the same rate as the rate of interest or Yield to Maturity (in
the case of Original Issue Discount Securities) specified in the Securities
of such series; and in case such moneys shall be insufficient to pay in
full the whole amount so due and unpaid upon the Securities of such series,
then to the payment of such Principal and interest or Yield to Maturity,
without preference or priority of Principal over interest or Yield to
Maturity, or of interest or Yield to Maturity over Principal, or of any
installment of interest over any other installment of interest, or of any
Security of such series over any other Security of such series, ratably to
the aggregate of such Principal and accrued and unpaid interest or Yield to
Maturity; and
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FOURTH: To the payment of the remainder, if any, to the Company or any
other person lawfully entitled thereto.
Section 6.11 Restoration of Rights and Remedies. If the Trustee or any
Holder has instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Trustee or to such Holder, then, and in
every such case, subject to any determination in such proceeding, the Company,
the Trustee and the Holders shall be restored to their former positions
hereunder and thereafter all rights and remedies of the Company, the Trustee and
the Holders shall continue as though no such proceeding had been instituted.
Section 6.12 Undertaking for Costs. In any suit for the enforcement of any
right or remedy under this Indenture or in any suit against the Trustee for any
action taken or omitted by it as Trustee, in either case in respect to the
Securities of any series, a court may require any party litigant in such suit
(other than the Trustee) to file an undertaking to pay the costs of the suit,
and the court may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant (other than the Trustee) in the suit having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.12 does not apply to a suit by a Holder pursuant to
Section 6.07 or a suit by Holders of more than 10% in principal amount of the
outstanding Securities of such series.
Section 6.13 Rights and Remedies Cumulative. Except as otherwise provided
with respect to the replacement or payment of mutilated, destroyed, lost or
wrongfully taken Securities in Section 2.08, no right or remedy herein conferred
upon or reserved to the Trustee or to the Holders is intended to be exclusive of
any other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
Sectioon 6.14 Delay or Omission Not Waiver. No delay or omission of the
Trustee or of any Holder to exercise any right or remedy accruing upon any Event
of Default shall impair any such right or remedy or constitute a waiver of any
such Event of Default or an acquiescence therein. Every right and remedy given
by this Article 6 or by law to the Trustee or to the Holders may be exercised
from time to time, and as often as may be deemed expedient, by the Trustee or by
the Holders, as the case may be.
ARTICLE 7
Trustee
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Section 7.01 General. The Trustee undertakes to perform such and only such
duties and responsibilities as are specifically set forth in Sections 315 and
316 of the Trust Indenture Act and as set forth herein and no implied covenants
or obligations shall be read into
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this Indenture. Notwithstanding the foregoing, no provision of this Indenture
shall require the Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, unless it receives indemnity
satisfactory to it against any loss, liability or expense. Whether or not
therein expressly so provided, every provision of this Indenture relating to the
conduct or affecting the liability of or affording protection to the Trustee
shall be subject to the provisions of this Article 7.
Section 7.02 Certain Rights of Trustee. Subject to Trust Indenture Act
Sections 315(a) through (d):
(i) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, Officers'
Certificate, Opinion of Counsel (or both), statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed by it to
be genuine and to have been signed or presented by the proper person or
persons. The Trustee need not investigate any fact or matter stated in the
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit;
(ii) before the Trustee acts or refrains from acting, it may require
an Officers' Certificate and/or an Opinion of Counsel, which shall conform
to Section 10.04. The Trustee shall not be liable for any action it takes
or omits to take in good faith in reliance on such certificate or opinion.
Subject to Sections 7.01 and 7.02, whenever in the administration of the
trusts of this Indenture the Trustee shall deem it necessary or desirable
that a matter be proved or established prior to taking or suffering or
omitting any action hereunder, such matter (unless other evidence in
respect thereof be herein specifically prescribed) may, in the absence of
willful misconduct on the part of the Trustee, be deemed to be conclusively
proved and established by an Officers' Certificate delivered to the
Trustee, and such certificate, in the absence of willful misconduct on the
part of the Trustee, shall be full warrant to the Trustee for any action
taken, suffered or omitted by it under the provisions of this Indenture
upon the faith thereof;
(iii) the Trustee may act through its attorneys and agents not
regularly in its employ and shall not be responsible for the misconduct or
negligence of any agent or attorney appointed with due care;
(iv) any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by an Officers' Certificate (unless
other evidence in respect thereof be herein specifically prescribed); and
any Board Resolution may be evidenced to the Trustee by a copy thereof
certified by the Secretary or an Assistant Secretary of the Company;
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(v) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders, 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;
(vi) 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 its
rights or powers or for any action it takes or omits to take in accordance
with the direction of the Holders in accordance with Section 6.05 relating
to the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon
the Trustee, under this Indenture;
(vii) 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 in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(viii) prior to the occurrence of an Event of Default hereunder and
after the curing or waiving of all Events of Default, the Trustee shall not
be bound to make any investigation into the facts or matters stated in any
resolution, certificate, Officers' Certificate, Opinion of Counsel, Board
Resolution, statement, instrument, opinion, report, notice, request,
consent, order, approval, appraisal, bond, debenture, note, coupon,
security, or other paper or document unless requested in writing so to do
by the Holders of not less than a majority in aggregate principal amount of
the Securities of all series affected then outstanding; provided that, if
the payment within a reasonable time to the Trustee of the costs, expenses
or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured to
the Trustee by the security afforded to it by the terms of this Indenture,
the Trustee may require reasonable indemnity against such expenses or
liabilities as a condition to proceeding;
(ix) the Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder;
(x) the Trustee shall not be bound to ascertain or inquire as to the
performance or observance of any covenants, conditions or agreements on the
part of the Company, except as otherwise set forth herein, but the Trustee
may require of the Company reasonable information and advice as to the
performance of the covenants, conditions and agreements contained herein
and shall be entitled in connection herewith to examine the books, records
and premises of the Company;
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(xi) the permissive rights of the Trustee to do things enumerated in
this Indenture shall not be construed as a duty and the Trustee shall not
be answerable for other than its negligence or willful misconduct; and
(xii) except for any event of which the Trustee has "actual knowledge"
and which event, with the giving of notice or the passage of time or both,
would constitute an Event of Default under this Indenture, the Trustee
shall not be deemed to have notice of any default or event unless
specifically notified in writing of such event by the Company or the
Holders of not less than 25% of the Outstanding Securities; as used herein,
the term "actual knowledge" means the actual fact or statement of knowing,
without any duty to make any investigation with regard thereto.
Section 7.03 Individual Rights of Trustee. The Trustee, in its individual
or any other capacity, may become the owner or pledgee of Securities and may
otherwise deal with the Company or its affiliates with the same rights it would
have if it were not the Trustee. Any Agent may do the same with like rights.
However, the Trustee is subject to Trust Indenture Act Sections 310(b) and 311.
For purposes of Trust Indenture Act Section 311(b)(4) and (6), the following
terms are defined as follows:
(a) "cash transaction" means any transaction in which full payment for
goods or securities sold is made within seven days after delivery of the goods
or securities in currency or in checks or other orders drawn upon banks or
bankers and payable upon demand; and
(b) "self-liquidating paper" means any draft, bill of exchange, acceptance
or obligation which is made, drawn, negotiated or incurred by the Company for
the purpose of financing the purchase, processing, manufacturing, shipment,
storage or sale of goods, wares or merchandise and which is secured by documents
evidencing title to, possession of, or a lien upon, the goods, wares or
merchandise or the receivables or proceeds arising from the sale of the goods,
wares or merchandise previously constituting the security, provided the security
is received by the Trustee simultaneously with the creation of the creditor
relationship with the Company arising from the making, drawing, negotiating or
incurring of the draft, bill of exchange, acceptance or obligation.
Section 7.04 Trustee's Disclaimer. The recitals contained herein and in the
Securities (except the Trustee's certificate of authentication) shall be taken
as statements of the Company and not of the Trustee and the Trustee assumes no
responsibility for the correctness of the same. Neither the Trustee nor any of
its agents makes any representation as to the validity or adequacy of this
Indenture or the Securities and shall be accountable for the Company's use or
application of the proceeds from the Securities.
Section 7.05 Notice of Default. If any Default with respect to the
Securities of any series occurs and is continuing and if such Default is known
to the actual knowledge of a Responsible Officer with the Corporate Trust
Department of the Trustee, the Trustee shall give to each Holder of Securities
of such series notice of such Default within 90 days after it occurs (i) if any
Unregistered Securities of such series are then outstanding, to the Holders
thereof, by
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publication at least once in an Authorized Newspaper in the Borough of
Manhattan, The City of New York and at least once in an Authorized Newspaper in
London and (ii) to all Holders of Securities of such series in the manner and to
the extent provided in Section 313(c) of the Trust Indenture Act, unless such
Default shall have been cured or waived before the mailing or publication of
such notice; provided, however, that, except in the case of a Default in the
payment of the Principal of or interest on any Security, the Trustee shall be
protected in withholding such notice if the Trustee in good faith determines
that the withholding of such notice is in the interests of the Holders.
Section 7.06 Reports by Trustee to Holders. Within 60 days after each
November 18 beginning with November 18, 2000, the Trustee shall mail to each
Holder as and to the extent provided in Trust Indenture Act Section 313(c) a
brief report dated as of such November 18 if required by Trust Indenture Act
Section 313(a).
Section 7.07 Compensation and Indemnity. The Company shall pay to the
Trustee such compensation as shall be agreed upon in writing from time to time
for its services. The compensation of the Trustee shall not be limited by any
law on compensation of a Trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses,
disbursements and advances incurred or made by the Trustee. Such expenses shall
include the reasonable compensation and expenses of the Trustee's agents,
counsel and other persons not regularly in its employ.
The Company shall indemnify the Trustee for, and hold it harmless against,
any loss or liability or expense incurred by it without negligence or willful
misconduct on its part arising out of or in connection with the acceptance or
administration of this Indenture and the Securities or the issuance of the
Securities or of series thereof or the trusts hereunder and the performance of
duties under this Indenture and the Securities, including the costs and expenses
of defending itself against or investigating any claim or liability and of
complying with any process served upon it or any of its officers in connection
with the exercise or performance of any of its powers or duties under this
Indenture and the Securities.
The obligations of the Company under this Section to compensate and
indemnify the Trustee and each predecessor Trustee and to pay or reimburse the
Trustee and each predecessor Trustee for expenses, disbursements and advances
shall constitute additional indebtedness hereunder and shall survive the
satisfaction and discharge of this Indenture or the rejection or termination of
this Indenture under bankruptcy law. Such additional indebtedness shall be a
senior claim to that of the Securities upon all property and funds held or
collected by the Trustee as such, except funds held in trust for the benefit of
the Holders of particular Securities or coupons, and the Securities are hereby
subordinated to such senior claim. If the Trustee renders services and incurs
expenses following an Event of Default under Section 6.01(d) or Section 6.01(e)
hereof, the parties hereto and the holders by their acceptance of the Securities
hereby agree that such expenses are intended to constitute expenses of
administration under any bankruptcy law.
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The provisions of this Section shall survive the termination of this
Indenture, and the resignation or removal of the Trustee, and any defeasance
pursuant to Article 8.
Section 7.08 Replacement of Trustee. A resignation or removal of the
Trustee as Trustee with respect to the Securities of any series and appointment
of a successor Trustee as Trustee with respect to the Securities of any series
shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.08.
The Trustee may resign as Trustee with respect to the Securities of any
series at any time by so notifying the Company in writing. The Holders of a
majority in principal amount of the outstanding Securities of any series may
remove the Trustee as Trustee with respect to the Securities of such series by
so notifying the Trustee in writing and may appoint a successor Trustee with
respect thereto with the consent of the Company. The Company may remove the
Trustee as Trustee with respect to the Securities of any series if: (i) the
Trustee is no longer eligible under Section 7.10 of this Indenture; (ii) the
Trustee is adjudged a bankrupt or insolvent; (iii) a receiver or other public
officer takes charge of the Trustee or its property; or (iv) the Trustee becomes
incapable of acting.
If the Trustee resigns or is removed as Trustee with respect to the
Securities of any series, or if a vacancy exists in the office of Trustee with
respect to the Securities of any series for any reason, the Company shall
promptly appoint a successor Trustee with respect thereto. Within one year after
the successor Trustee takes office, the Holders of a majority in principal
amount of the outstanding Securities of such series may appoint a successor
Trustee in respect of such Securities to replace the successor Trustee appointed
by the Company. If the successor Trustee with respect to the Securities of any
series does not deliver its written acceptance required by the next succeeding
paragraph of this Section 7.08 within 30 days after the retiring Trustee resigns
or is removed, the retiring Trustee, the Company or the Holders of a majority in
principal amount of the outstanding Securities of such series may petition any
court of competent jurisdiction for the appointment of a successor Trustee with
respect thereto.
A successor Trustee with respect to the Securities of any series shall
deliver a written acceptance of its appointment to the retiring Trustee and to
the Company. Immediately after the delivery of such written acceptance, subject
to the lien provided for in Section 7.07, (i) the retiring Trustee shall
transfer all property held by it as Trustee in respect of the Securities of such
series to the successor Trustee, (ii) the resignation or removal of the retiring
Trustee in respect of the Securities of such series shall become effective and
(iii) the successor Trustee shall have all the rights, powers and duties of the
Trustee in respect of the Securities of such series under this Indenture. A
successor Trustee shall mail notice of its succession to each Holder of
Securities of such series.
Upon request of any such successor Trustee, the Company shall execute any
and all instruments for more fully and certainly vesting in and confirming to
such successor Trustee all such rights, powers and trusts referred to in the
preceding paragraph.
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The Company shall give notice of any resignation and any removal of the
Trustee with respect to the Securities of any series and each appointment of a
successor Trustee in respect of the Securities of such series to all Holders of
Securities of such series. Each notice shall include the name of the successor
Trustee and the address of its Corporate Trust Office.
Notwithstanding replacement of the Trustee with respect to the Securities
of any series pursuant to this Section 7.08, the Company's obligations under
Section 7.07 shall continue for the benefit of the retiring Trustee.
Section 7.09 Successor Trustee by Merger, Etc. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all of its
corporate trust business to, another corporation or national banking
association, the resulting, surviving or transferee corporation or national
banking association without any further act shall be the successor Trustee with
the same effect as if the successor Trustee had been named as the Trustee
herein.
Section 7.10 Eligibility. This Indenture shall always have a Trustee who
satisfies the requirements of Trust Indenture Act Section 310(a). The Trustee
shall have a combined capital and surplus of at least $50,000,000 as set forth
in its most recent published annual report of condition.
Section 7.11 Money Held in Trust. The Trustee shall not be liable for
interest on any money received by it except as the Trustee may agree in writing
with the Company. Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law and except for money held in
trust under Article 8 of this Indenture.
ARTICLE 8
Discharge of Indenture
----------------------
Section 8.01 Defeasance Within One Year of Payment. Except as otherwise
provided in this Section 8.01, the Company may terminate its obligations under
the Securities of any series and this Indenture with respect to Securities of
such series if:
(i) all Securities of such series previously authenticated and
delivered (other than destroyed, lost or wrongfully taken Securities of
such series that have been replaced or Securities of such series that are
paid pursuant to Section 4.01 or Securities of such series for whose
payment money or securities have theretofore been held in trust and
thereafter repaid to the Company, as provided in Section 8.05) have been
delivered to the Trustee for cancellation and the Company has paid all sums
payable hereunder; or
(ii) the Securities of such series mature within one year or all of
them are to be called for redemption within one year under arrangements
satisfactory to the Trustee for giving the notice of redemption, the
Company irrevocably deposits in trust with the Trustee, as trust funds
solely for the benefit of the Holders of such Securities for that
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purpose, money or U.S. Government Obligations or a combination thereof
sufficient (unless such funds consist solely of money, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee), without
consideration of any reinvestment, to pay Principal of and interest on the
Securities of such series to maturity or redemption, as the case may be,
and to pay all other sums payable hereunder, and the Company delivers to
the Trustee an Officers' Certificate and an Opinion of Counsel, in each
case stating that all conditions precedent provided for herein relating to
the satisfaction and discharge of this Indenture with respect to the
Securities of such series have been complied with.
With respect to the foregoing clause (i), only the Company's obligations
under Section 7.07 in respect of the Securities of such series shall survive.
With respect to the foregoing clause (ii), only the Company's obligations in
Sections 2.02 through 2.12, 4.02, 7.07, 7.08 and 8.05 in respect of the
Securities of such series shall survive until such Securities of such series are
no longer outstanding. Thereafter, only the Company's obligations in Sections
7.07 and 8.05 in respect of the Securities of such series shall survive. After
any such irrevocable deposit, the Trustee upon request shall acknowledge in
writing the discharge of the Company's obligations under the Securities of such
series and this Indenture with respect to the Securities of such series except
for those surviving obligations specified above.
Section 8.02 Defeasance. Except as provided below, (i) the Company will
be deemed to have paid and will be discharged from any and all obligations in
respect of the Securities of any series and (ii) the provisions of this
Indenture will no longer be in effect with respect to the Securities of such
series (and the Trustee, at the expense of the Company shall execute proper
instruments acknowledging the same); provided that the following conditions
shall have been satisfied:
(A) the Company has irrevocably deposited in trust with the Trustee as
trust funds solely for the benefit of the Holders of the Securities of such
series, for payment of the Principal of and interest on the Securities of
such series, money or U.S. Government Obligations or a combination thereof
sufficient (unless such funds consist solely of money, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee) without
consideration of any reinvestment and after payment of all federal, state
and local taxes or other charges and assessments in respect thereof payable
by the Trustee, to pay and discharge the Principal of and accrued interest
on the outstanding Securities of such series to maturity or earlier
redemption (irrevocably provided for under arrangements satisfactory to the
Trustee), as the case may be;
(B) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other material agreement
or instrument to which the Company is a party or by which it is bound;
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(C) no Default with respect to the Securities of such series shall have
occurred and be continuing on the date of such deposit;
(D) the Company shall have delivered to the Trustee (1) either (x) a
ruling directed to the Trustee received from the Internal Revenue Service
to the effect that the Holders of the Securities of such series will not
recognize income, gain or loss for federal income tax purposes as a result
of the exercise of the option under this Section 8.02 and will be subject
to federal income tax on the same amount and in the same manner and at the
same times as would have been the case if such deposit and defeasance had
not occurred or (y) an Opinion of Counsel to the same effect as the ruling
described in clause (x) above and (2) an Opinion of Counsel to the effect
that the Holders of the Securities of such series have a valid security
interest in the trust funds subject to no prior liens under the UCC; and
(E) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, stating that all conditions precedent provided
for herein relating to the defeasance contemplated by this Section 8.02 of
the Securities of such series have been complied with.
The Company's obligations in Sections 2.02 through 2.12, 4.02, 7.07, 7.08
and 8.05 with respect to the Securities of such series shall survive until such
Securities are no longer outstanding. Thereafter, only the Company's
obligations in Sections 7.07 and 8.05 shall survive.
Section 8.03 Covenant Defeasance. The Company may omit to comply with any
term, provision or condition set forth in Sections 4.03, 4.04 or 4.05 (or any
other specific covenant relating to such series provided for in a Board
Resolution or supplemental indenture pursuant to Section 2.03 which may by its
terms be defeased pursuant to this Section 8.03), and such omission shall be
deemed not to be an Event of Default under clauses (c) or (f) of Section 6.01,
with respect to the outstanding Securities of a series if:
(i) the Company has irrevocably deposited in trust with the Trustee as
trust funds solely for the benefit of the Holders of the Securities of such
series, for payment of the Principal of and interest, if any, on the
Securities of such series, money or U.S. Government Obligations or a
combination thereof in an amount sufficient (unless such funds consist
solely of money, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee) without consideration of any reinvestment and
after payment of all federal, state and local taxes or other charges and
assessments in respect thereof payable by the Trustee, to pay and discharge
the Principal of and interest on the outstanding Securities of such series
to maturity or earlier redemption (irrevocably provided for under
arrangements satisfactory to the Trustee), as the case may be;
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(ii) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other material agreement
or instrument to which the Company is a party or by which it is bound;
(iii) no Default with respect to the Securities of such series shall
have occurred and be continuing on the date of such deposit;
(iv) the Company has delivered to the Trustee an Opinion of Counsel to
the effect that the Holders of the Securities of such series have a valid
security interest in the trust funds subject to no prior liens under the
UCC and such Holders will not recognize income, gain or loss for federal
income tax purposes as a result of such deposit and covenant defeasance and
will be subject to federal income tax on the same amount and in the same
manner and at the same times as would have been the case if such deposit
and defeasance had not occurred; and
(v) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel stating that all conditions precedent provided
for herein relating to the covenant defeasance contemplated by this Section
8.03 of the Securities of such series have been complied with.
Section 8.04 Application of Trust Money. Subject to Section 8.05, the
Trustee or Paying Agent shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to Section 8.01, 8.02 or 8.03, as the case may be, in
respect of the Securities of any series and shall apply the deposited money and
the proceeds from deposited U.S. Government Obligations in accordance with the
Securities of such series and this Indenture to the payment of Principal of and
interest on the Securities of such series; but such money need not be segregated
from other funds except to the extent required by law.
Section 8.05 Repayment to Company. Subject to Sections 7.07, 8.01, 8.02
and 8.03, the Trustee and the Paying Agent shall promptly pay to the Company
upon request set forth in an Officers' Certificate any money held by them at any
time and not required to make payments hereunder and thereupon shall be relieved
from all liability with respect to such money. The Trustee and the Paying Agent
shall pay to the Company upon written request any money held by them and
required to make payments hereunder under this Indenture that remains unclaimed
for two years; provided that the Trustee or such Paying Agent before being
required to make any payment may cause to be published at the expense of the
Company once in an Authorized Newspaper in The City of New York or with respect
to any Security the interest on which is based on the offered quotations in the
interbank Eurodollar market for dollar deposits in an Authorized Newspaper in
London or mail to each Holder entitled to such money at such Holder's address
(as set forth in the Security Register) notice that such money remains unclaimed
and that after a date specified therein (which shall be at least 30 days from
the date of such publication or mailing) any unclaimed balance of such money
then remaining will be repaid to the Company. After payment to the Company,
Holders entitled to such money must look to the Company for
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payment as general creditors unless an applicable law designates another Person,
and all liability of the Trustee and such Paying Agent with respect to such
money shall cease.
ARTICLE 9
Amendments, Supplements and Waivers
-----------------------------------
Section 9.01 Without Consent of Holders. The Company and the Trustee may
amend or supplement this Indenture or the Securities of any series without
notice to or the consent of any Holder:
(1) to cure any ambiguity, defect or inconsistency in this Indenture;
provided that such amendments or supplements shall not materially and
adversely affect the interests of the Holders;
(2) to comply with Article 5;
(3) to comply with any requirements of the Commission in connection
with the qualification of this Indenture under the Trust Indenture Act;
(4) to evidence and provide for the acceptance of appointment hereunder
with respect to the Securities of any or all series by a successor
Trustee;
(5) to establish the form or forms or terms of Securities of any
series, the coupons appertaining to such Securities as permitted by Section
2.03;
(6) to provide for uncertificated or Unregistered Securities and to
make all appropriate changes for such purpose; and
(7) to make any change that does not materially and adversely affect
the rights of any Holder.
Section 9.02 With Consent of Holders. Subject to Sections 6.04 and 6.07,
without prior notice to any Holders, the Company and the Trustee may amend this
Indenture and the Securities of any series with the written consent of the
Holders of a majority in principal amount of the outstanding Securities of all
series affected by such supplemental indenture (all such series voting as one
class), and the Holders of a majority in principal amount of the outstanding
Securities of all series affected thereby (all such series voting as one class)
by written notice to the Trustee may waive future compliance by the Company with
any provision of this Indenture or the Securities of such series.
Notwithstanding the provisions of this Section 9.02, without the consent of
each Holder affected thereby, an amendment or waiver, including a waiver
pursuant to Section 7.04, may not:
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(i) extend the stated maturity of the Principal of, or any sinking fund
obligation or any installment of interest on, such Holder's Security, or
reduce the Principal amount thereof or the rate of interest thereon
(including any amount in respect of original issue discount), or any
premium payable with respect thereto, or adversely affect the rights of
such Holder under any mandatory redemption or repurchase provision or any
right of redemption or repurchase at the option of such Holder, or reduce
the amount of the Principal of an Original Issue Discount Security that
would be due and payable upon an acceleration of the maturity thereof
pursuant to Section 6.02 or the amount thereof provable in bankruptcy, or
change any place of payment where, or the currency in which, any Security
or any premium or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the due
date therefor;
(ii) reduce the percentage in principal amount of outstanding
Securities of the relevant series the consent of whose Holders is required
for any such supplemental indenture, for any waiver of compliance with
certain provisions of this Indenture or certain Defaults and their
consequences provided for in this Indenture;
(iii) waive a Default in the payment of Principal of or interest on any
Security of such Holder; or
(iv) modify any of the provisions of this Section 9.02, except to
increase any such percentage or to provide that certain other provisions
of this Indenture cannot be modified or waived without the consent of the
Holder of each outstanding Security affected thereby.
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of Holders of Securities of such series with respect to such covenant or
provision, shall be deemed not to affect the rights under this Indenture of the
Holders of Securities of any other series or of the coupons appertaining to such
Securities.
It shall not be necessary for the consent of any Holder under this Section
9.02 to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.02 becomes
effective, the Company shall give to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. The Company will mail
supplemental indentures to Holders upon request. Any failure of the Company to
mail such notice, or any defect therein, shall not, however, in any way impair
or affect the validity of any such supplemental indenture or waiver.
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Section 9.03 Revocation and Effect of Consent. Until an amendment or
waiver becomes effective, a consent to it by a Holder is a continuing consent by
the Holder and every subsequent Holder of a Security or portion of a Security
that evidences the same debt as the Security of the consenting Holder, even if
notation of the consent is not made on any Security. However, any such Holder or
subsequent Holder may revoke the consent as to its Security or portion of its
Security. Such revocation shall be effective only if the Trustee receives the
notice of revocation before the date the amendment, supplement or waiver becomes
effective. An amendment, supplement or waiver shall become effective with
respect to any Securities affected thereby on receipt by the Trustee of written
consents from the requisite Holders of outstanding Securities affected thereby.
The Company may, but shall not be obligated to, fix a record date (which
may be not less than 10 nor more than 60 days prior to the solicitation of
consents) for the purpose of determining the Holders of the Securities of any
series affected entitled to consent to any amendment, supplement or waiver. If
a record date is fixed, then, notwithstanding the immediately preceding
paragraph, those Persons who were such Holders at such record date (or their
duly designated proxies) and only those Persons shall be entitled to consent to
such amendment, supplement or waiver or to revoke any consent previously given,
whether or not such Persons continue to be such Holders after such record date.
No such consent shall be valid or effective for more than 90 days after such
record date.
After an amendment, supplement or waiver becomes effective with respect to
the Securities of any series affected thereby, it shall bind every Holder of
such Securities unless it is of the type described in any of clauses (i) through
(iv) of Section 9.02. In case of an amendment or waiver of the type described
in clauses (i) through (iv) of Section 9.02, the amendment or waiver shall bind
each such Holder who has consented to it and every subsequent Holder of a
Security that evidences the same indebtedness as the Security of the consenting
Holder.
Section 9.04 Notation on or Exchange of Securities. If an amendment,
supplement or waiver changes the terms of any Security, the Trustee may require
the Holder thereof to deliver it to the Trustee. The Trustee may place an
appropriate notation on the Security about the changed terms and return it to
the Holder and the Trustee may place an appropriate notation on any Security of
such series thereafter authenticated. Alternatively, if the Company or the
Trustee so determines, the Company in exchange for the Security shall issue and
the Trustee shall authenticate a new Security of the same series and tenor that
reflects the changed terms.
Section 9.05 Trustee to Sign Amendments, Etc. The Trustee shall be
entitled to receive, and shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of any amendment, supplement or waiver
authorized pursuant to this Article 9 is authorized or permitted by this
Indenture, stating that all requisite consents have been obtained or that no
consents are required and stating that such supplemental indenture constitutes
the legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, subject to customary exceptions. Subject
to the preceding sentence, the Trustee shall
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sign such amendment, supplement or waiver if the same does not adversely affect
the rights of the Trustee. The Trustee may, but shall not be obligated to,
execute any such amendment, supplement or waiver that affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise.
Section 9.06 Conformity with Trust Indenture. Every supplemental
indenture executed pursuant to this Article 9 shall conform to the requirements
of the Trust Indenture Act as then in effect.
ARTICLE 10
Miscellaneous
-------------
Section 10.01 Trust Indenture Act of 1939. This Indenture shall
incorporate and be governed by the provisions of the Trust Indenture Act that
are required to be part of and to govern indentures qualified under the Trust
Indenture Act.
Section 10.02 Notices. Any notice or communication shall be sufficiently
given if written and if delivered in person when received or if mailed by
certified first class mail, return receipt requested, 5 days after mailing, or
as between the Company and the Trustee if sent by facsimile transmission, when
transmission is confirmed, in each case addressed as follows:
If to the Company: One ServiceMaster Way
Downers Grove, Illinois 60515
Attention: Treasurer
If to the Trustee: 311 West Monroe
12th Floor
Chicago, Illinois 60606
Attention: Indenture Trust Department
The Company or the Trustee by written notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication shall be sufficiently given to Holders of any
Unregistered Securities, by publication at least once in an Authorized Newspaper
in The City of New York, or with respect to any Security the interest on which
is based on the offered quotations in the interbank Eurodollar market for dollar
deposits at least once in an Authorized Newspaper in London, and by mailing to
the Holders thereof who have filed their names and addresses with the Trustee
pursuant to Section 313(c)(2) of the Trust Indenture Act at such addresses as
were so furnished to the Trustee and to Holders of Registered Securities by
mailing to such Holders at their addresses as they shall appear on the Security
Register. Notice mailed shall be sufficiently
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<PAGE>
given if so mailed within the time prescribed. Copies of any such communication
or notice to a Holder shall also be mailed to the Trustee and each Agent at the
same time.
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. Except as
otherwise provided in this Indenture, if a notice or communication is mailed in
the manner provided in this Section 10.02, it is duly given, whether or not the
addressee receives it.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
In case it shall be impracticable to give notice as herein contemplated,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
Section 10.03 Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:
(i) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(ii) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
Section 10.04 Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include:
(i) a statement that each person signing such certificate or opinion
has read such covenant or condition and the definitions herein relating
thereto;
(ii) a brief statement as to the nature and scope of the examination or
investigation upon which the statement or opinion contained in such
certificate or opinion is based;
(iii) a statement that, in the opinion of each such person, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
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<PAGE>
(iv) a statement as to whether or not, in the opinion of each such
person, such condition or covenant has been complied with; provided,
however, that, with respect to matters of fact, an Opinion of Counsel may
rely on an Officers' Certificate or certificates of public officials.
Section 10.05 Evidence of Ownership. The Company, the Trustee and any
agent of the Company or the Trustee may deem and treat the Holder of any
Unregistered Security and the Holder of any coupon as the absolute owner of such
Unregistered Security or coupon (whether or not such Unregistered Security or
coupon shall be overdue) for the purpose of receiving payment thereof or on
account thereof and for all other purposes, and neither the Company, the
Trustee, nor any agent of the Company or the Trustee shall be affected by any
notice to the contrary. The fact of the holding by any Holder of an Unregistered
Security, and the identifying number of such Security and the date of his
holding the same, may be proved by the production of such Security or by a
certificate executed by any trust company, bank, banker or recognized securities
dealer wherever situated satisfactory to the Trustee, if such certificate shall
be deemed by the Trustee to be satisfactory. Each such certificate shall be
dated and shall state that on the date thereof a Security bearing a specified
identifying number was deposited with or exhibited to such trust company, bank,
banker or recognized securities dealer by the person named in such certificate.
Any such certificate may be issued in respect of one or more Unregistered
Securities specified therein. The holding by the person named in any such
certificate of any Unregistered Securities specified therein shall be presumed
to continue for a period of one year from the date of such certificate unless at
the time of any determination of such holding (1) another certificate bearing a
later date issued in respect of the same Securities shall be produced or (2) the
Security specified in such certificate shall be produced by some other Person,
or (3) the Security specified in such certificate shall have ceased to be
outstanding. Subject to Article 7, the fact and date of the execution of any
such instrument and the amount and numbers of Securities held by the Person so
executing such instrument may also be proven in accordance with such reasonable
rules and regulations as may be prescribed by the Trustee or in any other manner
which the Trustee may deem sufficient.
The Company, the Trustee and any agent of the Company, or the Trustee may
deem and treat the person in whose name any Registered Security shall be
registered upon the Security Register for such series as the absolute owner of
such Registered Security (whether or not such Registered Security shall be
overdue and notwithstanding any notation of ownership or other writing thereon)
for the purpose of receiving payment of or on account of the Principal of and,
subject to the provisions of this Indenture, interest on such Registered
Security and for all other purposes; and neither the Company, nor the Trustee
nor any agent of the Company or the Trustee shall be affected by any notice to
the contrary.
Section 10.06 Rules by Trustee, Paying Agent or Registrar. The Trustee
may make reasonable rules for action by or at a meeting of Holders. The Paying
Agent or Registrar may make reasonable rules for its functions.
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<PAGE>
Section 10.07 Payment Date Other than a Business Day. If any date for
payment of Principal or interest on any Security shall not be a Business Day at
any place of payment, then payment of Principal of or interest on such Security,
as the case may be, need not be made on such date, but may be made on the next
succeeding Business Day at any place of payment with the same force and effect
as if made on such date and no interest shall accrue in respect of such payment
for the period from and after such date.
Section 10.08 Governing Law. The laws of the State of New York shall
govern this Indenture and the Securities.
Section 10.09 No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret another indenture or loan or debt
agreement of the Company or any Subsidiary of the Company. Any such indenture or
agreement may not be used to interpret this Indenture.
Section 10.10 Successors. All agreements of the Company in this Indenture
and under or with respect to the Securities shall bind the successors of the
Company. All agreements of the Trustee in this Indenture shall bind its
successors.
Section 10.11 Duplicate 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 10.12 Severability. In case any provision in this Indenture or in
the Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
Section 10.13 Table of Contents, Headings, Etc. The Table of Contents 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 hereof and shall
in no way modify or restrict any of the terms and provisions hereof.
Section 10.14 Incorporators, Stockholders, Officers and Directors of
Company Exempt from Individual Liability. No recourse under or upon any
obligation, covenant or agreement contained in this Indenture or any indenture
supplemental hereto, in any Security or any coupons appertaining thereto, or
because of any indebtedness evidenced thereby, shall be had against any
incorporator, as such or against any past, present or future stockholder,
officer, director or employee, as such, of the Company or of any successor
thereto, either directly or through the Company or any successor thereto, under
any rule of law, statute or constitutional provision or by the enforcement of
any assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance of the
Securities and the coupons appertaining thereto by the holders thereof and as
part of the consideration for the issue of the Securities and the coupons
appertaining thereto.
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<PAGE>
Section 10.15 Judgment Currency. The Company agrees, to the fullest
extent that it may effectively do so under applicable law, that (a) if for the
purpose of obtaining judgment in any court it is necessary to convert the sum
due in respect of the Principal of or interest on the Securities of any series
(the "Required Currency") into a currency in which a judgment will be rendered
(the "Judgment Currency"), the rate of exchange used shall be the rate at which
in accordance with normal banking procedures the Trustee could purchase in The
City of New York the Required Currency with the Judgment Currency on the day on
which final unappealable judgment is entered, unless such day is not a Business
Day, then, to the extent permitted by applicable law, the rate of exchange used
shall be the rate at which in accordance with normal banking procedures the
Trustee could purchase in The City of New York the Required Currency with the
Judgment Currency on the Business Day preceding the day on which final
unappealable judgment is entered and (b) the obligations of each under this
Indenture to make payments in the Required Currency (i) shall not be discharged
or satisfied by any tender, or any recovery pursuant to any judgment (whether or
not entered in accordance with subsection (a)), in any currency other than the
Required Currency, except to the extent that such tender or recovery shall
result in the actual receipt, by the payee, of the full amount of the Required
Currency expressed to be payable in respect of such payments, (ii) shall be
enforceable as an alternative or additional cause of action for the purpose of
recovering in the Required Currency the amount, if any, by which such actual
receipt shall fall short of the full amount of the Required Currency so
expressed to be payable and (iii) shall not be affected by judgment being
obtained for any other sum due under this Indenture.
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<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the date first written above.
The ServiceMaster Company, as the Company
By: /S/ ERIC ZARNIKOW
__________________________________________
Name: Eric Zarnikow
Title: Vice President and Treasurer
Harris Trust and Savings Bank, as Trustee
By: /S/ C. POTTER
__________________________________________
Name: Carolyn Potter
Title: Assistant Vice President
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<PAGE>
STATE OF ILLINOIS )
)
COUNTY OF DUPAGE )
BEFORE ME, the undersigned authority, on this 18th day of November, 1999,
personally appeared Eric Zarnikow, V.P. & Treasurer of The ServiceMaster
Company, a Delaware corporation (the "Company"), a person known to me (or proved
to me by introduction upon the oath of a person known to me) to be the person
and officer whose name is subscribed to the foregoing instrument, and
acknowledged to me that he/she executed the same as the act of such corporation
for the purposes and consideration herein expressed and in the capacity therein
stated.
GIVEN UNDER MY HAND AND SEAL THIS 18TH DAY OF NOVEMBER, 1999.
(SEAL) /s/ KATHLEEN LAZAR
________________________________
NOTARY PUBLIC, STATE OF ILLINOIS
Print Name: KATHLEEN LAZAR
Commission Expires: 07/03/00
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<PAGE>
STATE OF ILLINOIS )
)
COUNTY OF ___________ )
BEFORE ME, the undersigned authority, on this 18th day of November, 1999,
personally appeared C. Potter of Harris Trust and Savings Bank, an Assistant
Vice President, known to me (or proved to me by introduction upon the oath of a
person known to me) to be the person and officer whose name is subscribed to the
foregoing instrument, and acknowledged to me that he/she executed the same as
the act of such trust for the purposes and consideration herein expressed and in
the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL THIS 18TH DAY OF NOVEMBER, 1999.
(SEAL) /s/ LINDA ELLEN GARCIA
--------------------------------
NOTARY PUBLIC, STATE OF ILLINOIS
Print Name: LINDA ELLEN GARCIA
Commission Expires: 09/23/2002
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<PAGE>
[FORM OF FACE OF NOTE]
Exhibit 1
No.______ $_________________
The ServiceMaster Company
% Note
Due
The ServiceMaster Company, a Delaware corporation (the "Company," which
term includes any successor corporation under the Indenture hereinafter referred
to), for value received, hereby promises to pay to _______________, or
registered assigns, at the office or agency of the Company in New York, New
York, the principal sum of _______________ on _______________, in the coin or
currency of the United States, and to pay interest, semi-annually on
_______________, and _______________ of each year, commencing _______________,
on said principal sum at said office or agency, in like coin or currency, at the
rate per annum specified in the title of this Note, from the _______________ or
the _______________, as the case may be, next preceding the date of this Note to
which interest has been paid or duly provided for, unless the date hereof is a
date to which interest has been paid or duly provided for, in which case from
the date of this Note, or unless no interest has been paid or duly provided for
on these Notes, in which case from _______________, until payment of said
principal sum has been made or duly provided for; provided, that payment of
interest may be made at the option of the Company by check mailed to the address
of the person entitled thereto as such address shall appear on the Security
Register or by wire transfer as provided in the Indenture. Notwithstanding the
foregoing, if the date hereof is after the first day of _______________ or
_______________, as the case may be, and before the following _______________ or
_______________, this Note shall bear interest from such _______________ or
_______________; provided, that if the Company shall default in the payment of
interest due on such _______________ or _______________, then this Note shall
bear interest from the next preceding _______________ or _______________, to
which interest has been paid or duly provided for or, if no interest has been
paid or duly provided for on these Notes, from _______________. The interest so
payable on any _______________ or _______________ will, subject to certain
exceptions provided in the Indenture referred to on the reverse hereof, be paid
to the person in whose name this Note is registered at the close of business on
_______________ or _______________, as the case may be, next preceding such
_______________ or _______________, whether or not such day is a Business Day.
Reference is made to the further provisions of this Note set forth on the
reverse hereof. Such further provisions shall for all purposes have the same
effect as though fully set forth at this place.
-1-
<PAGE>
This Note shall not be valid or become obligatory for any purpose until the
certificate of authentication hereon shall have been manually signed by the
Trustee under the Indenture referred to on the reverse hereof.
IN WITNESS WHEREOF, The ServiceMaster Company has caused this instrument to
be signed manually or by facsimile by its duly authorized officers.
Dated: ____________________
THE SERVICEMASTER COMPANY
By___________________________________________
Attest:____________________
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<PAGE>
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
Dated: ____________________
Harris Trust and Savings Bank, as Trustee
By______________________________________
Authorized Signatory
-3-
<PAGE>
REVERSE OF NOTE
---------------
The ServiceMaster Company
% Note
Due
This Note is one of a duly authorized issue of debentures, notes, bonds or
other evidences of indebtedness of the Company (hereinafter called the
"Securities") of the series hereinafter specified, all issued or to be issued
under and pursuant to an indenture dated as of November [___], 1999 (herein
called the "Indenture"), duly executed and delivered by the Company to Harris
Trust and Savings Bank, as Trustee (herein called the "Trustee"), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the Holders of the
Securities. The Securities may be issued in one or more series, which different
series may be issued in various aggregate principal amounts, may mature at
different times, may bear interest (if any) at different rates, may be subject
to different redemption provisions (if any), may be subject to different
sinking, purchase or analogous funds (if any) and may otherwise vary as in the
Indenture provided. This Note is one of a series designated as the [___]% Notes
Due [________] of the Company, limited in aggregate principal amount to
[$______.]
Interest will be computed on the basis of a 360-day year of twelve 30-day
months. The Company shall pay interest on overdue principal and, to the extent
lawful, on overdue installments of interest at the rate per annum borne by this
Note. If a payment date is not a Business Day as defined in the Indenture at a
place of payment, payment may be made at that place on the next succeeding day
that is a Business Day, and no interest shall accrue for the intervening period.
In case an Event of Default as defined in the Indenture, with respect to
the [___]% Notes Due [________], shall have occurred and be continuing, the
principal hereof and the interest accrued hereon, if any, may be declared, and
upon such declaration shall become, due and payable in the manner, with the
effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions which provide that, without prior notice
to any Holders, the Company and the Trustee may amend the Indenture and the
Securities of any series with the written consent of the Holders of a majority
in aggregate principal amount of the outstanding Securities of all series
affected (all such series voting as one class), and the Holders of a majority in
aggregate principal amount of the outstanding Securities of all series to be
affected (all such series voting as one class) by written notice to the Trustee
may waive future compliance by the Company with any provision of the Indenture
or the Securities of such series; provided that, without the consent of each
Holder of the Securities of each series affected thereby, an amendment or
waiver, including a waiver of past defaults, may not: (i) extend the stated
maturity of the principal of, or any sinking fund obligation or any installment
of interest on, such Holder's
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<PAGE>
Security, or reduce the principal amount thereof or the rate of interest thereon
(including any amount in respect of original issue discount), or any premium
payable with respect thereto, or adversely affect the rights of such Holder
under any mandatory redemption or repurchase provision or any right of
redemption or repurchase at the option of such Holder, or reduce the amount of
the principal of an Original Issue Discount Security that would be due and
payable upon an acceleration of the maturity or the amount thereof provable in
bankruptcy, or change any place of payment where, or the currency in which, any
Security or any premium or the interest thereon is payable, or impair the right
to institute suit for the enforcement of any such payment on or after the due
date therefor; (ii) reduce the percentage in principal amount of outstanding
Securities of the relevant series the consent of whose Holders is required for
any such supplemental indenture, for any waiver of compliance with certain
provisions of the Indenture or certain Defaults and their consequences provided
for in the Indenture; (iii) waive a Default in the payment of principal of or
interest on any Security of such Holder; or (iv) modify any of the provisions of
the Indenture governing supplemental indentures with the consent of
Securityholders except to increase any such percentage or to provide that
certain other provisions of the Indenture cannot be modified or waived without
the consent of the Holder of each outstanding Security affected thereby.
It is also provided in the Indenture that, subject to certain conditions,
the Holders of at least a majority in aggregate principal amount of the
outstanding Securities of all series affected (voting as a single class), by
notice to the Trustee, may waive an existing Default or Event of Default with
respect to the Securities of such series and its consequences, except a Default
in the payment of principal of or interest on any Security or in respect of a
covenant or provision of the Indenture which cannot be modified or amended
without the consent of the Holder of each outstanding Security affected. Upon
any such waiver, such Default shall cease to exist, and any Event of Default
with respect to the Securities of such series arising therefrom shall be deemed
to have been cured, for every purpose of the Indenture; but no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
right consequent thereto.
The Indenture provides that a series of Securities may include one or more
tranches (each a "tranche") of Securities, including Securities issued in a
periodic offering. The Securities of different tranches may have one or more
different terms, including authentication dates and public offering prices, but
all the Securities within each such tranche shall have identical terms,
including authentication date and public offering price. Notwithstanding any
other provision of the Indenture, subject to certain exceptions, with respect to
sections of the Indenture concerning the execution, authentication and terms of
the Securities, redemption of the Securities, Events of Default of the
Securities, defeasance of the Securities and amendment of the Indenture, if any
series of Securities includes more than one tranche, all provisions of such
sections applicable to any series of Securities shall be deemed equally
applicable to each tranche of any series of Securities in the same manner as
though originally designated a series unless otherwise provided with respect to
such series or tranche pursuant to a board resolution or a supplemental
indenture establishing such series or tranche.
-5-
<PAGE>
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and interest
on this Note in the manner, at the place, at the respective times, at the rate
and in the coin or currency herein prescribed.
The Notes are issuable initially only in registered form without coupons in
denominations of $_____ and any multiple of $_____ at the office or agency of
the Company in the Borough of Manhattan, The City of New York, and in the manner
and subject to the limitations provided in the Indenture, but, without the
payment of any service charge, Notes may be exchanged for a like aggregate
principal amount of Notes of other authorized denominations.
[The Notes may be redeemed at the option of the Company, as a whole, or
from time to time in part, on any date [after [_______________] and] prior to
maturity, upon mailing a notice of such redemption not less than 30 nor more
than 60 days prior to the date fixed for redemption to the Holders of Notes at
their last registered addresses, all as further provided in the Indenture, at
the following optional redemption prices (expressed in percentages of the
principal amount) together in each case with accrued interest to the date fixed
for redemption:
If redeemed during the twelve-month period beginning ______, ______
<TABLE>
<CAPTION>
Year Percentage Year Percentage
_________________ __________________ __________________ __________________
<S> <C> <C> <C>
</TABLE>
[As and for a sinking fund for the retirement of the Notes and so long as
any of the Notes remain outstanding and unpaid, the Company will pay to the
Trustee in cash [(subject to the right to deliver certain Notes in credit
therefor as in the Indenture provided)], on or before ______ and on or before
______ in each year thereafter to and including ______ an amount sufficient to
redeem $_______________ principal amount of the Notes (or such lesser amount
equal to the principal amount then Outstanding) at 100% of the principal amount
thereof (the "sinking fund redemption price"), together with accrued interest
to the date fixed for redemption. The Notes shall be redeemed through the
operation of the sinking fund as herein provided on ______ and on each _______
thereafter to and including ______ on notice as set forth in the Indenture. [At
its option the Company may pay into the sinking fund for the retirement of
Notes, in cash except as provided in the Indenture, on or before ______ and on
or before ______ in each year thereafterto and including ______ an amount
sufficient to redeem an additional principal amount of Notes up to but not to
exceed $______________ at the sinking fund redemption price. To the extent that
the right to such optional sinking fund payment is not exercised in any year, it
shall not be cumulative or carried forward to any subsequent year.] The Trustee
shall select Notes for redemption, by prorating, as nearly as may be, the
principal amount of Notes to be redeemed among the Holders of Notes. The
Trustee shall make such adjustments, reallocations and eliminations to such
proration as it shall deem proper to the end that the principal amount of
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<PAGE>
Notes so redeemed shall be $1,000 or a multiple thereof, by increasing or
decreasing or eliminating the amount which would be allocable to any Holder on
the basis of exact proration by an amount not exceeding $1,000. The Trustee in
its discretion may determine the particular Notes (if there are more than one)
registered in the name of any Holder which are to be redeemed, in whole or in
part.]
Upon due presentment for registration of transfer of this Note at the
office or agency of the Company in the Borough of Manhattan, The City of New
York, a new Note or Notes of authorized denominations for an equal aggregate
principal amount will be issued to the transferee in exchange therefor, subject
to the limitations provided in the Indenture, without charge except for any tax
or other governmental charge imposed in connection therewith.
The Company, the Trustee and any agent of the Company or the Trustee may
deem and treat the registered Holder hereof as the absolute owner of this Note
(whether or not this Note shall be overdue and notwithstanding any notation of
ownership or other writing hereon), for the purpose of receiving payment of, or
on account of, the principal hereof and, subject to the provisions hereof,
interest hereon, and for all other purposes, and neither the Company nor the
Trustee nor any agent of the Company or the Trustee shall be affected by any
notice to the contrary.
No recourse under or upon any obligation, covenant or agreement of the
Company in the Indenture or any indenture supplemental thereto or in any Note,
or because of any indebtedness evidenced thereby, shall be had against any
incorporator, stockholder, officer or director, as such, past, present, or
future, of the Company or any successor corporation of the Company, either
directly or through the Company or any successor corporation of the Company,
under any rule of law, statute or constitutional provision or by the enforcement
of any assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance hereof and as
part of the consideration for the issue hereof.
Terms used herein which are defined in the Indenture shall have the
respective meanings assigned thereto in the Indenture.
-7-
<PAGE>
EXHIBIT 5.1
To: The ServiceMaster Company
One ServiceMaster Way
Downers Grove, Illinois 60515
Re: The ServiceMaster Corporation
Registration Statement on Form S-3
I am issuing this opinion in my capacity as Senior Vice President and
General Counsel of The ServiceMaster Company, a Delaware corporation (the
"Company"), in connection with the registration under the Securities Act of
1933, as amended (the "Act"), on a Registration Statement on Form S-3 to be
filed with the Securities and Exchange Commission on or about November 19,
1999 (the "Registration Statement"), of (i) senior unsecured debt securities
(the "Debt Securities"), (ii) shares of Common Stock, par value $0.01 per share,
of the Company (the "Common Stock"), (iii) warrants to purchase Debt Securities
(the "Debt Warrants") and (iv) warrants to purchase shares of Common Stock (the
"Stock Warrants"). The Debt Securities, Common Stock, Debt Warrants and Stock
Warrants (collectively, the "Securities") may be issued by the Company either
together or separately in connection with an offering or offerings from time to
time pursuant to the Registration Statement. The Securities will be offered on
terms set forth in the Registration Statement and in the prospectus contained in
the Registration Statement (the "Prospectus") and in amounts, at prices and on
other terms to be determined by the Company at the time of offering and to be
set forth in an amendment or amendments to the Registration Statement and the
Prospectus and in one or more supplements to the Prospectus (each, a "Prospectus
Supplement").
The Debt Securities will be issued under an indenture, the form of which is
filed as an exhibit to the Registration Statement (such indenture, as amended or
supplemented from time to time, the "Indenture"), between the Company and Harris
Trust and Savings Bank, as Trustee. The Indenture will be executed prior to the
offering of any Debt Securities. Each series of Debt Warrants will be issued
under a warrant agreement (each, a "Debt Warrant Agreement") to be filed prior
to the issuance of such Debt Warrants in an amendment to the Registration
Statement or incorporated by reference into the Registration Statement pursuant
to a Current Report on Form 8-K of the Company, to be executed by the Company
and a warrant agent or agents to be named by the Company prior to the offering
of any Debt Warrants of such series.
The applicable Prospectus Supplement with respect to the Securities offered
will set forth the terms of the offering of such Securities, including the name
or names of any underwriters, dealers or agents, the purchase price of such
Securities and other required information. If underwriters are used in an
offering of Securities registered by the Registration Statement, the
Registration Statement anticipates that the Company will sell such Securities
pursuant to the terms of an underwriting agreement to be executed between the
Company and underwriters. I have for purposes of this letter reviewed the
preliminary form of the underwriting agreement initially filed as an exhibit to
the Registration Statement. The term "Underwriting Agreement" is used in this
letter to mean an
<PAGE>
underwriting agreement in the form in which it will be actually executed by the
Company and the underwriters with respect to a particular underwritten offering
of Securities registered by the Registration Statement. The term "Other
Agreement" is used in this letter to mean an agreement providing for the sale of
Securities registered by the Registration Statement (other than by means of an
underwritten offering) in the form in which it will be actually executed by the
Company and the appropriate party or parties with respect to a particular
offering or offerings of Securities registered by the Registration Statement.
The term "Agreement" is used in this letter to mean either an Underwriting
Agreement or an Other Agreement. The terms "Registered Debt Securities,"
"Registered Common Stock," "Registered Debt Warrants" and "Registered Stock
Warrants" are used in this letter to mean, respectively, the Debt Securities,
the Debt Warrants, the Common Stock and the Stock Warrants that are registered
under the Registration Statement as initially filed and are sold by the Company
under an Agreement.
For purposes of this letter, I have examined originals, or copies certified
or otherwise identified to my satisfaction, of such documents, corporate records
and other instruments as I have deemed necessary for the purpose of this
opinion, including (i) the corporate and organizational documents of the
Company, (ii) minutes and records of the corporate proceedings of the Company
with respect to the issuance of the Securities and (iii) the Registration
Statement and the exhibits thereto.
Subject to the assumptions, qualifications and limitations identified in
this letter, I advise you that in my opinion:
1. The Company is a corporation validly existing and in good standing
under the General Corporation Law of the State of Delaware.
2. Registered Debt Securities of each series, when issued, will be binding
obligations of the Company, enforceable against the Company in accordance with
their terms, when, as and if (i) the Registration Statement shall have become
effective pursuant to the provisions of the Act, (ii) appropriate corporate
action shall have been taken by the Company to authorize (a) the form, terms,
execution and delivery of any necessary supplemental indenture or amendment to
the Indenture (and the Indenture and any such supplemental indenture or
amendment shall have been duly executed and delivered by the trustee thereunder)
and (b) the form and terms of such series of Registered Debt Securities, (iii)
such series of Registered Debt Securities shall have been issued in the form and
containing the terms described in the Registration Statement, any applicable
Prospectus Supplements, the Indenture and such corporate action, (iv) a
Prospectus Supplement or Prospectus Supplements with respect to such series of
Registered Debt Securities shall have been filed (or transmitted for filing)
with the Securities and Exchange Commission (the "Commission") pursuant to Rule
424(b) of the Act and any exhibits necessary under the rules and regulations of
the Commission shall have been filed with the Commission in an amendment to the
Registration Statement or incorporated by reference into the Registration
Statement pursuant to a Current Report on Form 8-K of the Company filed with the
Commission, (v) any legally required consents, approvals, authorizations and
other orders of the Commission and any other regulatory authorities shall have
been obtained and (vi)
-2-
<PAGE>
Registered Debt Securities of such series shall have been duly executed and
authenticated as provided in the Indenture and duly delivered to the purchasers
thereof against payment of the agreed consideration therefor in accordance with
the applicable Agreement.
3. Shares of Registered Common Stock will be validly issued, fully paid and
nonassessable when, as and if (i) the Registration Statement shall have become
effective pursuant to the provisions of the Act, (ii) appropriate corporate
action shall have been taken to authorize the issuance and sale of such
Registered Common Stock, (iii) a Prospectus Supplement or Prospectus Supplements
with respect to the shares of Registered Common Stock shall have been filed (or
transmitted for filing) with the Commission pursuant to Rule 424(b) of the Act
and any exhibits necessary under the rules and regulations of the Commission
shall have been filed with the Commission in an amendment to the Registration
Statement or incorporated by reference into the Registration Statement pursuant
to a Current Report on Form 8-K of the Company filed with the Commission, (iv)
any legally required consents, approvals, authorizations and other orders of the
Commission and any other regulatory authorities shall have been obtained and (v)
appropriate certificates representing the shares of Registered Common Stock are
duly executed, countersigned by the transfer agent/registrar of the Company,
registered and delivered against payment of the agreed consideration therefor in
accordance with the applicable Agreement.
4. Registered Debt Warrants of each series, when issued, will be binding
obligations of the Company, enforceable against the Company in accordance with
their terms when, as and if (i) the Registration Statement shall have become
effective pursuant to the provisions of the Act, (ii) appropriate corporate
action shall have been taken by the Company to authorize the form, terms,
execution and delivery of a Debt Warrant Agreement for such series of Registered
Debt Warrants, including a form of certificate evidencing such series of
Registered Debt Warrants (and such Debt Warrant Agreement shall have been duly
executed and delivered by the warrant agent or agents thereunder), (iii) a
Prospectus Supplement or Prospectus Supplements with respect to such series of
Registered Debt Warrants shall have been filed (or transmitted for filing) with
the Commission pursuant to Rule 424(b) of the Act and any exhibits necessary
under the rules and regulations of the Commission, including such Debt Warrant
Agreement, shall have been filed with the Commission in an amendment to the
Registration Statement or incorporated by reference into the Registration
Statement pursuant to a Current Report on Form 8-K of the Company filed with the
Commission, (iv) any legally required consents, approvals, authorizations and
other orders of the Commission and any other regulatory authorities shall have
been obtained and (v) Registered Debt Warrants of such series are duly
countersigned by the applicable warrant agent and delivered to the purchasers
thereof against payment of the agreed consideration therefor in the manner
provided for in the Registration Statement, any applicable Prospectus
Supplements, such Debt Warrant Agreement, the applicable Agreement and such
corporate action.
5. Registered Stock Warrants of each series, when issued, will be binding
obligations of the Company, enforceable against the Company in accordance with
their terms when, as and if (i) the Registration Statement shall have become
effective pursuant to the provisions of the Act, (ii) appropriate corporate
action shall have been taken by the Company to authorize the form, terms,
-3-
<PAGE>
execution and delivery of a Stock Warrant Agreement for such series of
Registered Stock Warrants, including a form of certificate evidencing such
series of Registered Stock Warrants (and such Stock Warrant Agreement shall have
been duly executed and delivered by the warrant agent or agents thereunder),
(iii) a Prospectus Supplement or Prospectus Supplements with respect to such
series of Registered Stock Warrants shall have been filed (or transmitted for
filing) with the Commission pursuant to Rule 424(b) of the Act and any exhibits
necessary under the rules and regulations of the Commission, including such
Stock Warrant Agreement, shall have been filed with the Commission in an
amendment to the Registration Statement or incorporated by reference into the
Registration Statement pursuant to a Current Report on Form 8-K of the Company
filed with the Commission, (iv) any legally required consents, approvals,
authorizations and other orders of the Commission and any other regulatory
authorities shall have been obtained and (v) Registered Stock Warrants of such
series are duly countersigned by the applicable warrant agent and delivered to
the purchasers thereof against payment of the agreed consideration therefor in
the manner provided for in the Registration Statement, any applicable Prospectus
Supplements, such Stock Warrant Agreement, the applicable Agreement and such
corporate action.
My opinions expressed above are subject to the qualifications that I
express no opinion as to the applicability of, compliance with, or effect of (i)
any bankruptcy, insolvency, reorganization, fraudulent transfer, fraudulent
conveyance, moratorium or other similar law or judicially developed doctrine in
this area (such as substantive consolidation or equitable subordination)
affecting the enforcement of creditors' rights generally, (ii) general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law), (iii) an implied covenant of good faith and
fair dealing, (iv) public policy considerations which may limit the rights of
parties to obtain certain remedies, (v) any requirement that a claim with
respect to any security denominated in other than U.S. dollars (or a judgment
denominated in other than U.S. dollars in respect of such claim) be converted
into U.S. dollars at a rate of exchange prevailing on a date determined in
accordance with applicable law and (vi) governmental authority to limit, delay
or prohibit the making of payments outside of the United States or in a foreign
currency or currency unit. Each reference in this letter to general principles
of equity includes but is not limited to: principles limiting the availability
of specific performance and injunctive relief, principles which limit the
availability of a remedy under certain circumstances where another remedy has
been elected; principles requiring reasonableness, good faith and fair dealing
in the performance and enforcement of an agreement by the party seeking
enforcement; principles which may permit a party to cure a material failure to
perform its obligations; and principles affording equitable defenses such as
waiver, laches and estoppel.
My advice on every legal issue addressed in this letter is based
exclusively on the internal law of Illinois, the General Corporation Law of the
State of Delaware or the federal law of the United States. I advise you that
issues addressed by this letter may be governed in whole or in part by other
laws, but I express no opinion as to whether any relevant difference exists
between the laws upon which my opinions are based and any other laws which may
actually govern. In particular, the Indenture provides that the Indenture and
the Debt Securities issued under the Indenture are to be governed by the law of
New York, but my advice on every state law issue with respect to the Indenture
provides that the Indenture and the Debt Securities issued under the Indenture
represents
-4-
<PAGE>
my opinion of how that issue would be resolved by the Illinois state courts if
the Indenture and the Debt Securities issued under the Indenture had instead
provided that they were governed by Illinois internal law and the Illinois state
courts applied Illinois internal law to resolve such issue.
This letter does not cover any law which in my experience would generally
not be considered by lawyers in Illinois for purposes of the opinions contained
in this letter. I do not find it necessary for purposes of this opinion, and
accordingly I do not purport to cover herein, the application of the securities
or "Blue Sky" laws of the various states to the issuance of the Securities.
For purposes of rendering my opinions expressed above, I have assumed that
(i) the Registration Statement remains effective during the offer and sale of
the particular Securities, (ii) the terms of the (a) the Indenture, as executed
or as thereafter amended, (b) any supplemental indenture to the Indenture, (c)
any Debt Warrant Agreement or (d) any Stock Warrant Agreement, each as
applicable to the particular Securities, are consistent with the description of
the terms of such indenture or agreement set forth in the Registration Statement
and in the Prospectus and the applicable Prospectus Supplement, (iii) at the
time of the issuance, sale and delivery of each such Security (x) there will not
have occurred any change in law affecting the validity, legally binding
character or enforceability of such Security and (y) the issuance, sale and
delivery of such Security, the terms of such Security and compliance by the
Company with the terms of such Security will not violate any applicable law or
any restriction imposed by any court or governmental body having jurisdiction
over the Company and (iv) any revisions to the form of Indenture filed as an
exhibit to the Registration Statement prior to the execution thereof, and any
amendments or supplemental indentures to the Indenture (as executed) will not
require requalification of such indenture under the Trust Indenture Act. I have
also made other assumptions which I believe to be appropriate for purposes of
this letter.
This opinion is limited to the specific issues addressed herein, and no
opinion may be inferred or implied beyond that expressly stated herein. I assume
no obligation to revise or supplement this opinion should the present laws of
the State of Illinois, the General Corporation Law of the State of Delaware or
the U.S. federal securities laws be changed by legislative action, judicial
decision or otherwise.
This opinion is furnished in connection with the filing of the Registration
Statement and is not to be used, circulated, quoted or otherwise relied upon for
any other purposes.
I hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement.
Sincerely,
/s/ Vernon T. Squires
Vernon T. Squires
Senior Vice President and General Counsel
-5-
<PAGE>
EXHIBIT 12.1
RATIOS OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Nine months
ended Sept. 30, Year ended December 31,
1999 1998 1998 1997 1996 1995 1994
-------- -------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
EARNINGS:
Consolidated net income before non-recurring
items, net $171,581 $142,026 $189,992 $163,470 $150,429 $105,854 $ 85,012
Provision for income taxes before non-recurring
items, net 120,647 96,262 128,765 110,809 101,968 71,753 57,626
Fixed charges less interest capitalized 109,466 96,994 127,545 104,414 62,985 57,451 49,799
Minority interest of subsidiaries with fixed charges 0 0 0 2,149 9,729 42,210 42,405
-------- -------- -------- -------- -------- -------- --------
TOTAL 401,694 335,282 446,302 380,842 325,111 277,268 234,842
======== ======== ======== ======== ======== ======== ========
FIXED CHARGES:
Interest on debt and liabilities--amount expensed 80,921 71,044 92,945 76,447 38,298 35,855 31,543
Interest on debt and liabilities--amount capitalized 0 0 0 0 0 0 0
Interest element of rentals 28,545 25,950 34,600 27,967 24,687 21,596 18,256
-------- -------- -------- -------- -------- -------- --------
TOTAL 109,466 96,994 127,545 104,414 62,985 57,451 49,799
======== ======== ======== ======== ======== ======== ========
Ratio of earnings to fixed charges 3.6696 3.4567 3.4992 3.6474 5.1617 4.8262 4.7158
Rounded 3.67 3.46 3.50 3.65 5.16 4.83 4.72
</TABLE>
<PAGE>
Exhibit 23.1
Consent of Independent Public Accountants
-----------------------------------------
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our report dated January 25, 1999
included in The ServiceMaster Company's Form 10-K for year ended December 31,
1998 and to all references to our Firm included in this registration statement.
/s/ Arthur Andersen LLP
- -----------------------
ARTHUR ANDERSEN LLP
Chicago, Illinois
November 19, 1999
II-11
<PAGE>
Exhibit 24.1
Power of Attorney
I hereby appoint each of Vernon T. Squires or Steven C. Preston or Eric R.
Zarnikow or any other person occupying the office of General Counsel, Chief
Financial Officer, Treasurer with The ServiceMaster Company ("ServiceMaster") at
the time any action hereby authorized shall be taken to act as my attorney-in-
fact and agent for all purposes specified in this Power of Attorney. I hereby
authorize each person identified by name or office in the preceding sentence
(each of whom is herein called my "authorized representative") acting alone to
sign and file on my behalf in all capacities I may at any time have with
ServiceMaster (including but not limited to the position of director or any
officership position) all or any one or more of the registration statements
prepared under the Securities Act of 1933 identified in this Power of Attorney
and any pre-effective or post-effective amendment to any such registration
statement. I hereby authorize each authorized representative in my name and on
my behalf to execute every document and take every other action which such
authorized representative deems necessary or desirable in connection with any of
the registration statements identified in this Power of Attorney and any sale of
securities or other transaction accomplished by means of any such registration
statement.
This Power of Attorney applies to the following registration statements
which may be filed by ServiceMaster under the Securities Act of 1933: (i) a
registration statement on Form S-8 which registers common stock to be issued
pursuant to the ServiceMaster Profit-Sharing and Retirement Plan; and (ii) a
registration statement on Form S-3 which registers the debt securities and the
equity securities which may be issued pursuant to the Company's 1999 universal
shelf registration statement in the approximate amount of $750 million (which
figure includes approximately $50 million from the Company's May 1997 universal
shelf registration statement).
This instrument shall remain in effect until and unless I shall give
written notice to ServiceMaster's President and Chief Executive Officer or
ServiceMaster's General Counsel or ServiceMaster's Chief Financial Officer of my
election to revoke this instrument. No such revocation shall be effective to
revoke the authority for any action taken pursuant to this Power of Attorney
prior to such delivery of such revocation.
<PAGE>
This instrument shall be governed by the law of the State of Illinois.
Dated: July 22, 1999
/s/ C. William Pollard
__________________________
C. William Pollard
/s/ Carlos H. Cantu
__________________________
Carlos H. Cantu
/s/ Phillip B. Rooney
__________________________
Phillip B. Rooney
/s/ Charles W. Stair
__________________________
Charles W. Stair
/s/ Paul W. Berezny, Jr.
__________________________
Paul W. Berezny, Jr.
/s/ Brian Griffiths
__________________________
Brian Griffiths
/s/ Sidney E. Harris
__________________________
Sidney E. Harris
/s/ Herbert P. Hess
__________________________
Herbert P. Hess
/s/ Michelle M. Hunt
__________________________
Michelle M. Hunt
<PAGE>
/s/ Gunther H. Knoedler
__________________________
Gunther H. Knoedler
/s/ James D. McLennan
__________________________
James D. McLennan
/s/ Vincent C. Nelson
__________________________
Vincent C. Nelson
/s/ Dallen W. Peterson
__________________________
Dallen W. Peterson
/s/ Steven C. Preston
__________________________
Steven C. Preston
/s/ Steven S Reinemund
__________________________
Steven S Reinemund
/s/ Burton E. Sorensen
__________________________
Burton E. Sorensen
/s/ David K. Wessner
_________________________
David K. Wessner
<PAGE>
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) ______
HARRIS TRUST AND SAVINGS BANK
(Name of Trustee)
Illinois 36-1194448
(State of Incorporation) (I.R.S. Employer Identification No.)
111 West Monroe Street, Chicago, Illinois 60603
(Address of principal executive offices)
Carolyn Potter, Harris Trust and Savings Bank,
311 West Monroe Street, Chicago, Illinois, 60606
312-461-2531 phone 312-461-3525 facsimile
(Name, address and telephone number for agent for service)
THE SERVICEMASTER COMPANY
(Name of obligor)
Delaware 36-3858106
(State of Incorporation) (I.R.S. Employer Identification No.)
One ServiceMaster Way
Downers Grove, Illinois 60519
(Address of principal executive offices)
Debt Securities
(Title of indenture securities)
<PAGE>
1. GENERAL INFORMATION. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
Commissioner of Banks and Trust Companies, State of Illinois,
Springfield, Illinois; Chicago Clearing House Association, 164
West Jackson Boulevard, Chicago, Illinois; Federal Deposit
Insurance Corporation, Washington, D.C.; The Board of Governors
of the Federal Reserve System,Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Harris Trust and Savings Bank is authorized to exercise corporate
trust powers.
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.
3. thru 15.
NO RESPONSE NECESSARY
16. LIST OF EXHIBITS.
1. A copy of the articles of association of the Trustee is now in effect
which includes the authority of the trustee to commence business and to
exercise corporate trust powers.
A copy of the Certificate of Merger dated April 1, 1972 between Harris
Trust and Savings Bank, HTS Bank and Harris Bankcorp, Inc. which
constitutes the articles of association of the Trustee as now in effect
and includes the authority of the Trustee to commence business and to
exercise corporate trust powers was filed in connection with the
Registration Statement of Louisville Gas and Electric Company, File No.
2-44295, and is incorporated herein by reference.
2. A copy of the existing by-laws of the Trustee.
A copy of the existing by-laws of the Trustee was filed in connection
with the Registration Statement of Commercial Federal Corporation, File
No. 333-20711, and is incorporated herein by reference.
3. The consents of the Trustee required by Section 321(b) of the Act.
(included as Exhibit A on page 2 of this statement)
4. A copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or examining
authority.
(included as Exhibit B on page 3 of this statement)
1
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
HARRIS TRUST AND SAVINGS BANK, a corporation organized and existing under the
laws of the State of Illinois, has duly caused this statement of eligibility to
be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago, and State of Illinois, on the 31st day of August, 1999.
HARRIS TRUST AND SAVINGS BANK
By: /S/ C. POTTER
_____________________________
C. Potter
Assistant Vice President
EXHIBIT A
The consents of the trustee required by Section 321(b) of the Act.
Harris Trust and Savings Bank, as the Trustee herein named, hereby consents that
reports of examinations of said trustee by Federal and State authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
HARRIS TRUST AND SAVINGS BANK
By: /S/ C. POTTER
_____________________________
C. Potter
Assistant Vice President
2
<PAGE>
EXHIBIT B
Attached is a true and correct copy of the statement of condition of Harris
Trust and Savings Bank as of March 31, 1999, as published in accordance with a
call made by the State Banking Authority and by the Federal Reserve Bank of the
Seventh Reserve District.
[LOGO FOR HARRIS BANK]
Harris Trust and Savings Bank
111 West Monroe Street
Chicago, Illinois 60603
of Chicago, Illinois, And Foreign and Domestic Subsidiaries, at the close of
business on March 31, 1999, a state banking institution organized and operating
under the banking laws of this State and a member of the Federal Reserve System.
Published in accordance with a call made by the Commissioner of Banks and Trust
Companies of the State of Illinois and by the Federal Reserve Bank of this
District.
Bank's Transit Number 71000288
<TABLE>
<CAPTION>
THOUSANDS
ASSETS OF DOLLARS
Cash and balances due from depository institutions:
<S> <C> <C>
Non-interest bearing balances and currency and coin..................... $ 1,237,336
Interest bearing balances............................................... $ 137,061
Securities:....................................................................
a. Held-to-maturity securities $ 0
b. Available-for-sale securities $ 5,455,837
Federal funds sold and securities purchased under agreements to resell $ 87,250
Loans and lease financing receivables:
Loans and leases, net of unearned income................................ $ 9,500,293
LESS: Allowance for loan and lease losses.............................. $ 109,979
--------------------
Loans and leases, net of unearned income, allowance, and reserve
(item 4.a minus 4.b).................................................... $ 9,390,314
Assets held in trading accounts................................................ $ 161,168
Premises and fixed assets (including capitalized leases)....................... $ 255,438
Other real estate owned........................................................ $ 243
Investments in unconsolidated subsidiaries and associated companies............ $ 75
Customer's liability to this bank on acceptances outstanding................... $ 40,869
Intangible assets.............................................................. $ 254,549
Other assets................................................................... $ 1,183,465
-------------------------
TOTAL ASSETS $18,203,605
=========================
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES
Deposits:
<S> <C> <C>
In domestic offices.......................................................... $ 9,099,851
Non-interest bearing.................................................... $ 2,743,074
Interest bearing........................................................ $ 6,356,777
In foreign offices, Edge and Agreement subsidiaries, and IBF's............... $ 1,822,400
Non-interest bearing.................................................... $ 26,371
Interest bearing........................................................ $ 1,796,029
Federal funds purchased and securities sold under agreements to repurchase in
domestic offices of the bank and of its Edge and Agreement subsidiaries, and
in IBF's:
Federal funds purchased & securities sold under agreements to repurchase....... $ 3,354,582
Trading Liabilities 96,517
Other borrowed money:..........................................................
a. With remaining maturity of one year or less $ 1,681,346
b. With remaining maturity of more than one year $ 0
Bank's liability on acceptances executed and outstanding $ 40,869
Subordinated notes and debentures.............................................. $ 225,000
Other liabilities.............................................................. $ 390,234
-------------------------
TOTAL LIABILITIES $16,890,799
=========================
EQUITY CAPITAL
Common stock................................................................... $ 100,000
Surplus........................................................................ $ 608,510
a. Undivided profits and capital reserves..................................... $ 616,084
b. Net unrealized holding gains (losses) on available-for-sale securities..... $ (11,788)
-------------------------
TOTAL EQUITY CAPITAL $ 1,312,806
=========================
Total liabilities, limited-life preferred stock, and equity capital............ $18,203,605
=========================
</TABLE>
I, Pamela Piarowski, Vice President 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.
PAMELA PIAROWSKI
4/30/99
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 the
Commissioner of Banks and Trust Companies of the State of Illinois and is true
and correct.
EDWARD W. LYMAN,
ALAN G. McNALLY,
JAMES J. GLASSER
Directors.
4
