<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 5, 1996
EMCOR GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-2315 11-2125338
(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
101 Merritt Seven, Norwalk, CT 06851
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number (including area code) (203) 849-7800
N/A
(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events
On February 5, 1996, EMCOR Group, Inc. (the "Registrant") mailed to
holders of (x) its 7% Senior Secured Notes, Seriers A, due 1997 ("Series A
Notes"), issued under an Indenture (the "Series A Indenture") dated as of
December 15, 1994 among the Registrant, its subsidiaries MES Holdings
Corporation and SellCo Corporation, as Guarantors, and IBJ Schroder Bank & Trust
Company, as Trustee, and (y) its 11% Series C Notes, due 2001 ("Series C
Notes"), issued under an Indenture dated as of December 15, 1994, as amended by
a First Supplemental Indenture dated as of June 28, 1995 (collectively, the
Series C Indenture), among the Registrant, its subsidiary MES Holdings
Corporation, as Guarantor, and Fleet National Bank of Connecticut (successor in
interest to Shawmut Bank Connection, National Association) Consent Solicitation
Statements soliciting the consents of the holders of such notes to certain
proposed amendments.
As discussed in more detail in the respective Consent Solicitation
Statements under "The Proposed Amendments and Background and Purpose Thereof",
the proposed amendments will (i) reduce the ratio required to be maintained by
the Registrant and certain of its subsidiaries under a Consolidated Fixed Charge
Coverage Ratio covenant (as defined in the Indentures) contained in each of the
Indentures and (ii) exclude from the interest component of that calculation
certain non-cash interest payments which are payable by the issuance of
additional Series A Notes and Series C Notes. See the copies of the Consent
Solicitation Statements which are filed as Exhibits to this Current Report on
Form 8-K and are incorporated herein by reference thereto.
Consent of holders of a majority in aggregate principal amount of the
outstanding Series A Notes and Series C Notes are required to approve the
proposed amendments to the Series A Indenture and the Seriers C Indenture,
respectively.
Item 7. Financial Statements and Exhibits
(c) Exhibits
99.1 Consent Solicitation Statement for Holders of Series A Notes.
99.2 Consent Solicitation Statement for Holders of Series C Notes.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
EMCOR GROUP, INC.
By: /s/ Frank T. MacInnis
Frank T. MacInnis
Chairman, President and
Chief Exceutive Officer
Dated: February 5, 1996
<PAGE>
EXHIBIT 99.1
FEBRUARY 5, 1996
CONSENT SOLICITATION STATEMENT
EMCOR GROUP, INC.
7% SERIES A NOTES
DUE DECEMBER 15, 1997
(CUSIP NO. 29084QAA8)
------------------------
THIS CONSENT SOLICITATION WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
THURSDAY, FEBRUARY 29, 1996, UNLESS EXTENDED.
This Consent Solicitation Statement is being furnished by EMCOR Group,
Inc., a Delaware corporation ('EMCOR'), to, and the accompanying Consent Form is
to be used by, Registered Holders (as hereinafter defined under 'Registered
Holders') of EMCOR's 7% Series A Notes Due December 15, 1997 (the 'Series A
Notes'). EMCOR is soliciting the consent (the 'Consent Solicitation') of the
Registered Holders to amendments (collectively, the 'Proposed Amendments' and
individually each a 'Proposed Amendment') to the Indenture, pursuant to which
the Series A Notes were issued, dated as of December 15, 1994 (the 'Series A
Indenture'), among EMCOR, its subsidiaries MES Holdings Corporation ('MES') and
SellCo Corporation ('SellCo'), as Guarantors, and IBJ Schroder Bank & Trust
Company, as trustee (the 'Trustee'). Capitalized terms used in this Consent
Solicitation Statement and not otherwise defined herein are used herein as
defined in the Series A Indenture. For the convenience of the reader certain
relevant definitions contained in Section 1.01 (Definitions) of the Series A
Indenture, including the definition proposed to be amended by the Proposed
Amendments, are set forth in Appendix A hereto. Section 4.15 of the Series A
Indenture, as proposed to be amended by the Proposed Amendments, is set forth in
Appendix B hereto.
As discussed in more detail below under 'The Proposed Amendments and
Background and Purpose Thereof,' the Proposed Amendments will reduce the
possibility of a default by EMCOR under a covenant requiring it and certain of
its subsidiaries to maintain a Consolidated Fixed Charge Ratio (as defined) by
reducing the required ratio and by excluding from the interest component of the
calculation certain non-cash interest payments which are payable by the issuance
of additional EMCOR Series A Notes and EMCOR's outstanding 11% Series C Notes,
due 2001 (the 'Series C Notes'). EMCOR is currently not in default under such
covenant; however, its projections for calendar 1996 indicate that such a
default may occur in respect of the rolling four fiscal quarter periods ending
March 31, 1996 and June 30, 1996. These periods include fiscal quarters of 1995
during which EMCOR's business continued to be significantly adversely impacted
by its Chapter 11 reorganization proceeding which concluded upon its Plan of
Reorganization becoming effective on December 15, 1994. EMCOR believes a less
stringent covenant is appropriate, particularly in light of the highly cyclical
and competitive nature of EMCOR's construction business as well as the adverse
effect on its business of its Chapter 11 reorganization proceeding.
The Proposed Amendments require the consent of Registered Holders of not
less than a majority in aggregate principal amount of the outstanding Series A
Notes ($64,877,300 total outstanding as of the date hereof) and are to be set
forth in a supplemental indenture (the 'Series A Supplemental Indenture') to be
executed by EMCOR, MES, SellCo, and the Trustee if the requisite number of
consents are obtained.
EMCOR GROUP, INC.
101 Merritt Seven, 7th Floor o Norwalk, CT 06851 o Tel: (203) 849-7800 o Fax
(203) 849-7900
<PAGE>
THE BOARDS OF DIRECTORS OF EMCOR, MES AND SELLCO HAVE UNANIMOUSLY APPROVED
THE PROPOSED AMENDMENTS AND RECOMMEND THAT HOLDERS OF THE SERIES A NOTES CONSENT
TO THEIR ADOPTION.
SINCE FAILURE TO CONSENT TO THE PROPOSED AMENDMENTS WOULD HAVE THE SAME
EFFECT AS A VOTE AGAINST THE PROPOSED AMENDMENTS, YOU ARE URGED TO RETURN THE
CONSENT FORM PROMPTLY.
Registered Holders are requested to read and carefully consider the
information contained herein and to give their consent to the Proposed
Amendments by executing the accompanying Consent Form and delivering same to the
Information Agent ( as hereinafter defined) at its address set forth in the
Consent Form, by hand, overnight courier, mail or other means of delivery that
will ensure receipt no later than 5:00 P.M., New York City time, on Thursday,
February 29, 1996, unless extended as herein provided (the 'Expiration Time').
Any beneficial owner whose Series A Notes are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee or whose Series
A Notes are otherwise registered in other than his own name and who wishes to
consent to the Proposed Amendments should contact such nominee or record owner
promptly and either instruct such person, as the Registered Holder of the Series
A Notes, to execute and deliver the Consent Form to the Information Agent on
such beneficial owner's behalf or effect a valid transfer of registered
ownership of the Series A Notes to himself prior to executing and delivering the
Consent Form directly, in each case, prior to the Expiration Time. A TRANSFER OF
REGISTERED OWNERSHIP OF THE SERIES A NOTES MAY TAKE CONSIDERABLE TIME TO EFFECT.
REGARDLESS OF WHETHER THE PROPOSED AMENDMENTS BECOME EFFECTIVE, THE SERIES
A NOTES WILL CONTINUE TO BE OUTSTANDING IN ACCORDANCE WITH ALL OTHER TERMS OF
THE SERIES A NOTES AND THE SERIES A INDENTURE. THE CHANGES SOUGHT TO BE EFFECTED
BY THE PROPOSED AMENDMENTS WILL NOT ALTER EMCOR'S OBLIGATION TO PAY THE
PRINCIPAL OF AND INTEREST ON THE SERIES A NOTES OR ALTER THE INTEREST RATE,
REDEMPTION TERMS OR MATURITY DATE THEREOF.
The statements contained in this Consent Solicitation Statement are made as
of the date hereof, and the delivery of this Consent Solicitation Statement and
the accompanying materials will not, under any circumstances, create any
implication that the information contained herein is correct at any time
subsequent to the date hereof.
No person has been authorized to furnish any information or make any
representation in connection with this Consent Solicitation other than as
contained herein. If furnished or made, any such information or representation
must not be relied upon as having been authorized by the Company.
Set forth below is a description of the Proposed Amendments for which the
approval of the Registered Holders of the Series A Notes is being sought. The
description below is qualified in its entirety by reference to the relevant
portions of the Series A Indenture, as currently in effect, copies of which may
be obtained upon written or telephonic request to the Information Agent (as
hereinafter defined) at the address set forth on the last page of this Consent
Solicitation Statement. Copies of certain definitions contained in Section 1.01
(Definitions) of the Series A Indenture are attached hereto as Appendix A, and
Section 4.15 (Maintenance of Coverage Ratios) of the Series A Indenture is
attached hereto as Appendix B. The Sections of the Series A Indenture set forth
in the Appendices are marked to show additions to and deletions from such
sections to be made by the Proposed Amendments.
THE PROPOSED AMENDMENTS AND BACKGROUND AND PURPOSE THEREOF
The Proposed Amendments consist of: (i) an amendment to Section 4.15(b)
(Maintenance of Coverage Ratios) of the Series A Indenture and (ii) an amendment
to the definition of 'Consolidated Fixed Charge Coverage Ratio' contained in
Section 1.01 (Definitions) of the Series A Indenture. The covenants contained in
the Series A Indenture were required by the Official Committee of Unsecured
Creditors of EMCOR during EMCOR's Chapter 11 proceeding, and in the view of
EMCOR's management the provisions proposed to be amended failed to reflect
accurately EMCOR's financial condition following its emergence from its Chapter
11 proceeding on December 15, 1994, the adverse effect of the Chapter 11
proceeding on EMCOR's business, and the highly cyclical and competitive nature
of the construction industry in which it operates.
2
<PAGE>
Section 4.15(b) of the Series A Indenture requires that the Operating
Companies of EMCOR maintain a Consolidated Fixed Charge Coverage Ratio for each
rolling four fiscal quarter period (a 'Reference Period') ending after December
31, 1995 of 1.50:1. Operating Companies are defined as EMCOR, individually, and
each of the mechanical and electrical direct and indirect subsidiaries of EMCOR
that are not owned by its subsidiary SellCo, which SellCo subsidiaries are held
for sale. Consolidated Fixed Charge Coverage Ratio is defined, in effect, as the
ratio of (x) the net income of the Operating Companies increased by their income
tax and interest expense and depreciation and amortization and reduced by their
capital expenditures for the Reference Period to (y) the sum of (i) their
Consolidated Cash Interest Expense, (ii) certain interest payable by the
issuance of additional Series A Notes to the holders of EMCOR's Series A Notes
('Series A Pik Interest'), additional Series C Notes to the holders of EMCOR's
Series C Notes (other than interest on $16,000,000 principal amount of the
Series C Notes) ('Series C Pik Interest'), and additional EMCOR Series B notes
to the holders of EMCOR's Series B notes (all of which have been retired) and
(iii) cash dividends (including on any preferred stock) paid by the Operating
Companies to a person other than an Operating Company. Consolidated Cash
Interest Expense is defined, in effect, as interest expense payable in cash.
The Proposed Amendment to Section 4.15(b) of the Series A Indenture would
reduce the Operating Companies' required Consolidated Fixed Charge Ratio for
each rolling four fiscal quarter period ending after December 31, 1995 from
1.50:1 to 1.0:1. The Proposed Amendment to the definition of Consolidated Cash
Interest Expense would eliminate any requirement to include Series A Pik
Interest and Series C Pik Interest in computing the Consolidated Fixed Charge
Ratio (i) for the period January 1, 1995--December 31, 1995 and (ii) for each
rolling four fiscal quarter period ending thereafter.
It is expected that the Series A Notes will be paid in full from the sale
of EMCOR's water supply subsidiaries. EMCOR has previously announced it has
reached agreement in principle to sell substantially all the assets of EMCOR's
principal water supply subsidiary, Jamaica Water Supply Company, to The City of
New York and the Water Authority of Western Nassau County, and it is expected
those sales will close before the end of the second quarter of 1996.
Accordingly, the elimination of Series A Pik Interest in computing the
Consolidated Fixed Charge Ratio should not have a significant impact on this
test inasmuch as the Series A Notes should be discharged shortly. In addition,
the Series C Notes provide for the payment of Series C Pik Interest only through
June 15, 1996; thereafter the Series C Notes require interest to be paid in
cash. Accordingly, the elimination of Series C Pik Interest in computing the
Consolidated Fixed Charge Ratio should not have a significant impact in the
future because Series C Pik Interest will cease to be payable after June 15,
1996.
The Proposed Amendments are intended to afford EMCOR greater financial
flexibility and reduce the possibility of a default under the Fixed Charge
Coverage Ratio covenant. As noted above, the Series A Notes are expected to be
paid in full during 1996 and EMCOR does not believe a default in the covenants
contained in the Series A Indenture would be in the interests of the holders of
the Series A Notes. Any default under the Series A Indenture would also
constitute a default under other indebtedness of EMCOR, including indebtedness
under its Revolving Credit Agreement, and could, among other things, delay the
sale of the assets of Jamaica Water Supply Company and as a consequence the
anticipated repayment in full of the Series A Notes during this year.
APPROVAL OF PROPOSED AMENDMENTS
Pursuant to Section 9.02 of the Series A Indenture, consents of the
Registered Holders of a majority in aggregate principal amount of the
outstanding Series A Notes ('Requisite Holders') are required to approve the
Proposed Amendments.
There will be no fixed record date for the determination of Registered
Holders of Series A Notes entitled to give consents. If at or prior to the
Expiration Time, valid consents of the Requisite Holders are received by the
Information Agent (and not revoked), EMCOR and the Trustee will proceed promptly
to enter into the Series A Supplemental Indenture required to give effect to the
Proposed Amendments.
3
<PAGE>
OUTSTANDING SECURITIES
As of the date of this Consent Solicitation Statement, the principal amount
of Series A Notes outstanding is $64,877,300. The principal amount of the Series
A Notes for which the consent of the Registered Holders is required is
$32,438,651.
REGISTERED HOLDERS
EMCOR is soliciting consents only from Registered Holders. The term
'Registered Holder' means a person (other than the Company or any Affiliate) in
whose name Series A Notes are registered in a register maintained by the Trustee
in its capacity as Registrar under the Series A Indenture.
With respect to Series A Notes registered in the name of CEDE & Co., which
is the nominee for The Depository Trust Company ('DTC'), 'DTC Participants'
(i.e. brokers, banks and other financial institutions that participate in DTC),
rather than DTC, must execute the Consent Form. Participants in The Midwest
Depository Trust Company and Philadelphia Depository Trust Company should
inquire of those institutions regarding the procedure for executing Consent
Forms for Series A Notes registered in the name of their respective nominees.
CONSENT PROCEDURES
Registered Holders desiring to consent to the Proposed Amendments should
sign and date the accompanying Consent Form and deliver it to the Information
Agent in accordance with the instructions contained therein by hand, overnight
courier, mail or other means of delivery acceptable to the Information Agent
that will ensure receipt by the Information Agent no later than 5:00 P.M., New
York City time, on Thursday, February 29, 1996, subject to extension as herein
provided. DO NOT SEND IN CERTIFICATES REPRESENTING SERIES A NOTES.
SINCE FAILURE TO CONSENT TO THE PROPOSED AMENDMENTS WOULD HAVE THE SAME
EFFECT AS A VOTE AGAINST THE PROPOSED AMENDMENTS, YOU ARE URGED TO RETURN THE
CONSENT FORM PROMPTLY.
REVOCATION OF CONSENTS
Consent Forms may be revoked at any time prior to EMCOR certifying to the
Trustee that Consent Forms properly executed and completed (and not revoked)
have been received from the Requisite Holders, but may not be revoked
thereafter, by delivering to the Information Agent prior to such time a written
notice of revocation signed by the Registered Holder of the Series A Notes. The
notice of revocation must indicate the certificate number or numbers of the
Series A Notes to which such revocation relates (or information sufficient to
enable EMCOR to identify such Series A Notes) as well as the aggregate principal
amount represented by such Series A Notes.
A Consent Form will be binding on the holder of Series A Notes who gives
the consent, on any holder of the Series A Notes issued upon registration of
transfer of the Series A Notes with respect to which such consent is given, or
in exchange therefor, and on any other transferee or transferees of such Series
A Notes, subject only to revocation in writing as aforesaid. If a Consent Form
is not revoked, it will be counted along with all other validly delivered
Consent Forms in determining whether consents from the Requisite Holders have
been obtained.
EXPIRATION, EXTENSION, MODIFICATION AND TERMINATION
This Consent Solicitation will expire at 5:00 P.M., New York City time, on
Thursday, February 29, 1996, unless extended by EMCOR in its sole discretion.
EMCOR expressly reserves the absolute right to extend or modify this Consent
Solicitation, at any time and from time to time, in its sole discretion, by
giving oral or written notice to the Information Agent on the business day next
following any previously scheduled Expiration Time.
4
<PAGE>
CONSENTS TO BE BINDING
At such time at or prior to the Expiration Time as EMCOR certifies to the
Trustee that Consent Forms properly executed and completed (and not revoked)
have been received from the Requisite Holders, such consents shall become
irrevocable and binding on all holders of the Series A Notes and every
subsequent transferee thereof, whether or not such holders gave their consent
with respect thereto. As promptly thereafter as practicable, the Company and the
Trustee will execute and deliver the Series A Supplemental Indenture and send
notice thereof to all Registered Holders of Series A Notes.
INFORMATION AGENT
Morrow & Co. ('Morrow') has been retained to act as information agent with
respect to this Consent Solicitation (the 'Information Agent'). For the services
of Morrow as Information Agent, EMCOR has agreed to pay Morrow reasonable and
customary fees and to reimburse the Information Agent for its reasonable out-of-
pocket expenses in connection with such services. EMCOR has also agreed to
indemnify Morrow and its affiliates against certain liabilities and expenses,
including liabilities under the federal securities laws, arising from its
services as Information Agent.
Questions and requests for assistance may be directed to the Information
Agent at its address and telephone number set forth below. Registered Holders
may also contact their broker, dealer, commercial bank, trust company or other
nominee for assistance concerning the Consent Solicitation. Requests for
additional copies of this Consent Solicitation Statement and Consent Form and
other related documents should be directed to the Information Agent. ALL
EXECUTED CONSENT FORMS SHOULD BE SENT TO THE INFORMATION AGENT AT THE ADDRESS
SET FORTH IN THE CONSENT FORM.
FINANCIAL INFORMATION
Copies of EMCOR's 1994 Annual Report, which includes audited consolidated
financial statements for the years 1993 and 1994 and unaudited consolidated
financial statements for the six-month periods ended June 30, 1994 and 1995, and
EMCOR's Quarterly Report on Form 10-Q for the nine-month period ended September
30, 1995 as filed with the Securities and Exchange Commission (the 'Commission')
pursuant to the Securities Exchange Act of 1934, as amended (the 'Exchange
Act'), accompany this Consent Solicitation Statement. Registered Holders are
urged to read and carefully consider the information contained in the 1994
Annual Report and the Quarterly Report on Form 10-Q.
The Company is subject to the informational requirements of the Exchange
Act, and, in accordance therewith, files reports, proxy statements and other
information with the Commission. The reports, proxy statements and other
information filed by EMCOR with the Commission can be inspected and copied at
the public reference facilities maintained by the Commission's Regional Offices
at Seven World Trade Center, 13th Floor, New York, New York 10048 and
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material can also be obtained from the Public
Reference Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. References contained in this
Consent Solicitation Statement to the Series A Indenture are not necessarily
complete and, in each instance, reference is made to the original document, each
such statement being qualified in all respects by such reference.
MISCELLANEOUS
Consents are being solicited by and on behalf of EMCOR. Costs of the
Consent Solicitation will be borne by EMCOR. In addition to solicitation by use
of the mails, consents may be solicited by officers and employees of EMCOR in
person or by telephone, facsimile transmission or other means of communication.
Such officers and employees of EMCOR will not be additionally compensated, but
will be reimbursed for out-of-pocket expenses in connection with such
solicitation. Arrangements will also be made with brokers and dealers,
custodians, nominees and fiduciaries to assist EMCOR in the solicitation of
consents, including for forwarding of Consent Solicitation materials to
beneficial owners of the Series A Notes held of record by such persons, and
EMCOR will reimburse such brokers, dealers, custodians, nominees and fiduciaries
for reasonable expenses incurred in connection therewith but will not otherwise
compensate such persons.
5
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION IN CONNECTION WITH THIS CONSENT SOLICITATION OTHER THAN AS
CONTAINED HEREIN OR IN THE CONSENT FORM. IF GIVEN OR MADE, ANY SUCH INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY EMCOR.
------------------------
INFORMATION AGENT:
Morrow & Co.
909 Third Avenue
New York, New York 10022
Telephone: (800) 662-5200
Collect: (212) 754-8000
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APPENDIX A
CERTAIN DEFINITIONS
Set forth below is the text of the definition of 'Consolidated Fixed Charge
Coverage Ratio' in respect of which EMCOR is seeking to obtain one of the
Proposed Amendments, which definition is marked to show the proposed deletions
from such definition. Set forth following such definition are certain other
relevant definitions which would remain unchanged.
'Consolidated Fixed Charge Coverage Ratio' at any date means the ratio of
(a) Consolidated EBIT plus depreciation and amortization of the Operating
Companies less any Capital Expenditures of the Operating Companies for the
applicable quarters immediately preceding such determination date (the
'Reference Period') to (b) the sum of (i) Consolidated Cash Interest Expense
incurred by the Operating Companies calculated on a pro forma basis for the
Reference Period;[ (ii) (A) for the Reference Period from January 1, 1995
through December 31, 1995, stated interest on the Securities, the Software House
Notes and the Subordinated Notes (excluding interest on $16,000,000 principal
amount of Subordinated Notes) accreted during the period from October 1, 1995
through December 31, 1995, (B) for the Reference Period from April 1, 1995
through March 31, 1996, stated interest on the Securities,* Software House Notes
and the Subordinated Notes, (excluding interest on $16,000,000 principal amount
of the Subordinated Notes) accreted from October 1, 1995 through March 31, 1996,
(C) for the Reference Period from July 1, 1995 through June 30, 1996, stated
interest on the Securities, the Software House Notes and the Subordinated Notes
(excluding interest on $16,000,000 principal amount of the Subordinated Notes)
accreted from October 1, 1995 through June 30, 1996, (D) for the Reference
Period from October 1, 1995 through September 30, 1996 and for each Reference
Period thereafter, stated interest on the Securities, the Software House Notes
and the Subordinated Notes (excluding interest on $16,000,000 principal amount
of the Subordinated Notes), accreted during such Reference Period, and
(iii)]**** (ii) cash dividends (including on any preferred stock) paid by the
Operating Companies during the Reference Period to a Person other than an
Operating Company. For purposes of this definition, the factors set forth in (a)
and (b) above (other than cash dividends) shall be calculated after giving
effect on a pro forma basis (as if the same occurred at the beginning of the
Reference Period) to (i) the acquisition by any Operating Company of any Person
which, as a result of such acquisition, becomes a wholly-owned Subsidiary or the
acquisition of assets constituting a business by any Operating Company during
such Reference Period and (ii) any Asset Sales by an Operating Company
(excluding gains or losses recognized from Asset Sales) occurring during the
Reference Period. In calculating cash interest expense for purposes of
determining the denominator of this ratio, interest on Indebtedness of any
Operating Company determined on a fluctuating basis, to the extent such interest
is covered by an agreement relating to an interest swap obligation, shall be
deemed to accrue at the rate per annum resulting after giving effect to the
operation of such agreement.
OTHER RELEVANT DEFINITIONS
'Asset Sale' has the meaning ascribed thereto in Section 4.11.**
'Bankruptcy Law' has the meaning set forth in Section 6.01(b).***
'Bankruptcy Plan' means the Third Amended Joint Plan of Reorganization of
the Company and SellCo under Chapter 11 of the Bankruptcy Code (Chapter 11 Case
No. 94 B 46404 (JHG)) as amended, supplemented or otherwise modified from time
to time.
- ------------------
* Securities is defined elsewhere in the Series A Indenture as the Series A
Notes, including Series A Notes issued in respect of interest payments.
** Section 4.11 provides in part 'Subject to Section 4.12, the Company shall
not, and shall not permit any of its Subsidiaries to, sell, lease, convey
or otherwise dispose of any assets (which shall include the Capital Stock
of any Subsidiary (an 'Asset Sale'), other than the sale or disposition of
inventory or equipment sold in each case in the ordinary course of business
or equipment or motor vehicles that have become obsolete or replaced in the
ordinary course of business....'
*** Section 6.01(b) provides in part 'The term 'Bankruptcy Law' means Title 11,
U.S. Code, or any similar federal or state law for the relief of
debtors....'
**** Bracketed material proposed to be deleted.
A-1
<PAGE>
'Capital Expenditures' means, for any Person for any period, the aggregate
(without duplication) of (a) all expenditures by such Person, except interest
capitalized during construction, during such period for property, plant or
equipment, including, without limitation, renewals, improvements, replacements
and capitalized repairs, that would be reflected as additions to property, plant
or equipment on a consolidated balance sheet of such Person prepared in
conformity with GAAP, and (b) the principal amount of all Indebtedness incurred
or assumed in connection with any such additions to property, plant and
equipment. For the purpose of this definition, the purchase price of equipment
which is acquired simultaneously with the trade-in of existing equipment owned
by such Person or with insurance proceeds shall be included in Capital
Expenditures only to the extent of the gross amount of such purchase price less
the credit granted by the seller of such equipment being traded in at such time
or the amount of such proceeds, as the case may be.
'Capital Lease' means, as to any Person, any lease of property, real or
personal, in respect of which the present value of the minimum rental commitment
would be capitalized on a balance sheet of such Person in accordance with GAAP.
'Capital Lease Obligation' means, as to any Person, the amount of the
liability in respect of a Capital Lease which would at such time be required to
be capitalized on a balance sheet of such Person in accordance with GAAP.
'Capital Stock' means any and all shares, interests, participations, rights
or other equivalents (however designated) of any Person.
'Company' means EMCOR Group, Inc. (formerly known as JWP Inc.), a Delaware
corporation, and its successor.
'Consolidated Cash Interest Expense' means, for any period, total accrued
interest expense (including the interest component of Capital Lease Obligations)
of the Operating Companies on a consolidated basis during such period,
including, without limitation, all commissions, discounts and other fees and
charges (to the extent such commissions, fees and charges are included in
'interest' under GAAP) owed with respect to letters of credit, and net costs
under interest rate contracts, but excluding, however, (a) amortization of debt
discount, (b) interest paid in property other than cash, (c) any other interest
expense not payable in cash, (d) interest on $16,000,000 principal amount of the
Subordinated Notes and (e) commitment fees payable under the Revolving Credit
Agreement and the Dynalectric Revolving Credit Agreement, all as determined in
conformity with GAAP.
'Consolidated EBIT' for any period means Consolidated Net Income (Loss) for
such period increased (to the extent already deducted therefrom) by the sum, on
a consolidated basis, of (a) all income tax expense for such period to the
extent included in Consolidated Net Income (Loss), and (b) all interest expense
for such period to the extent included in Consolidated Net Income (Loss).
'Consolidated Net Income (Loss)' means, for any period, the aggregate of
the net income (loss) of the Operating Companies for such period, determined on
a consolidated basis in accordance with GAAP, provided that there shall be
excluded from such net income (to the extent otherwise included therein) (a) any
gain or loss realized upon the sale or other disposition (including without
limitation dispositions pursuant to sale-leaseback transactions and costs
related to closings of operations, if incurred) of any real property or
equipment of the Operating Companies which is not sold or otherwise disposed of
in the ordinary course of business or of any Capital Stock of any Person owned
by any Operating Company; (b) the net income (loss) of any such Person accounted
for by the equity method of accounting (other than a venture permitted under
Section 4.14(k)), except to the extent of the amount of dividends or
distributions paid to an Operating Company; and (c) the net income (loss) of any
other Person acquired by any Operating Company in a pooling of interests
transaction for any period prior to the date of such acquisition.
'Dynalectric Company' means, for so long as it is a Subsidiary of the
Company, each of the following: Dynalectric Company, Dynalectric Company of
Nevada, Inc., Dyn Specialty Contracting, Inc., Contra Costa Electric, Inc., JWP
Systems/Kirkwood Electric Company, Inc., B&B Contracting and Supply Company, and
their respective successors.
'Dynalectric Revolving Credit Agreement' means the Credit Agreement, dated
as of December 14, 1994, by and among the Company, the Dynalectric Companies
named therein and the other parties thereto and their
A-2
<PAGE>
respective successors and assigns, and any refinancings, replacements or
renewals thereof permitted by Section 4.09.
'GAAP' means Generally Accepted Accounting Principles as in effect on the
Issue Date.
'Generally Accepted Accounting Principles' means generally accepted
accounting principles in the United States of America as in effect from time to
time set forth in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and the
statements and pronouncements of the Financial Accounting Standards Board, or in
such other statements by such other entity as may be in general use by
significant segments of the accounting profession, which are applicable to the
circumstances as of the date of determination.
'Guarantors' means, collectively, MES and SellCo and their respective
successors, and 'Guarantor' means either of the Guarantors individually.
'Guaranty' or 'guaranty' means, as applied to any obligation, (a) a
guaranty (other than (i) by endorsement of negotiable instruments for collection
in the ordinary course of business, and (ii) a Performance Guaranty), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of any part or all of such
obligation including, without limitation, the Guaranty pursuant to Article 11
hereof, and (b) an agreement, direct or indirect, contingent or otherwise, the
practical effect of which is to assure in any way the payment or performance (or
payment of damages in the event of nonperformance) of any part or all of such
obligation, including, without limiting the foregoing, the payment of amounts
drawn down by letters of credit, but excluding any Performance Guaranty. The
amount of a guaranty shall be deemed to be the maximum amount of the obligation
guarantied for which the guarantor could be held liable under such guaranty.
'Indebtedness' means, when used with reference to any Person, any
indebtedness, contingent or otherwise, in respect of borrowed money (whether or
not the recourse of the lender is to the whole of the assets of such Person or
only to a portion thereof) or evidenced by bonds (other than bonds constituting
Performance Guaranties), notes, debentures or similar instruments or obligations
to provide cash collateral for or to cover or to reimburse for drawings under
letters of credit or representing the balance deferred and unpaid of the
purchase price of any property (except any such balance that constitutes a trade
payable), and shall also include, without limitation (but without duplication),
(a) any Capital Lease Obligations of such Person, (b) (to the extent not
otherwise included in this definition) Guaranties of items which would be
included within this definition (regardless of whether such items would appear
upon such balance sheet), and (c) all Indebtedness referred to above secured by
(or for which the holder of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien upon or in property (including, without
limitation, accounts and general intangibles) owned by such Person even though
such Person has not assumed or become liable for the payment of such
Indebtedness, provided, that for purposes of computing Indebtedness outstanding
at any time, such items shall be excluded to the extent that they would
otherwise be eliminated as intercompany items in consolidation.
'Indenture' means this Indenture as amended, supplemented, or otherwise
modified from time to time.
'Issue Date' means December 15, 1994.
'Lien' means any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, security interest, lien, charge, encumbrance or
other preferential arrangement of any kind intended to assure payment of any
Indebtedness or other obligation or to assure any performance by any Person
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, and any agreement to give any security interest).
'Malaysian Subsidiaries' means, so long as such corporation is a Subsidiary
of the Company, (a) the corporation to be organized by the Company or any
Subsidiary of the Company in Malaysia in connection with the operation and
maintenance of power plants in Malaysia, and (b) if organized by a Subsidiary of
the Company, the immediate parent corporation of such corporation so long as the
principal asset of such parent corporation is such corporation, each of such
corporation's Subsidiaries, and their respective successors.
'MES Companies' means MES and each of its Subsidiaries.
A-3
<PAGE>
'Middle-East Subsidiaries' means, so long as such Persons are Subsidiaries
of the Company, Lunar Drake & Scull (UAE), a United Arab Emirates corporation,
Drake & Scull Assarain, an Omani corporation, Drake & Scull (Cayman Islands)
Ltd., a Cayman Islands corporation, JWP-Nesma Ltd., a Saudi Arabia corporation,
JWP (Cayman Islands), Ltd., a Cayman Islands corporation and their respective
successors.
'Operating Companies' means the Company, individually, each of the MES
Companies and each of the Dynalectric Companies.
'Performance Guaranties' means, in respect of the Company or any of its
Subsidiaries, contingent obligations arising from the issuance of performance
guaranties, assurances, indemnities, bonds, letters of credit or similar
agreements in the ordinary course of business in respect of the contracts (other
than for borrowed money) of the Company, any Subsidiaries of the Company, or
Unique Construction for the benefit of surety companies or for the benefit of
others to induce such others to forego the issuance of a surety bond in their
favor.
'Person' means any individual, corporation, limited liability company,
partnership, joint venture, trust, unincorporated organization or government or
any agency or political subdivision thereof.
'Revolving Credit Agreement' means the Credit Agreement, dated as of
December 14, 1994, by and among the Company, MES and the other parties thereto
and their respective successors and assigns, and any refinancings, replacements
or renewals thereof permitted by Section 4.09.
'SellCo' means SellCo Corporation, a Delaware corporation, and its
sucessors.
'Software House Indenture' means the Indenture, dated the Issue Date, among
the Company, as issuer, MES and SellCo, as guarantors, and United States Trust
Company of New York, as trustee, pursuant to which the Company issued the
Software House Notes.
'Software House Notes' means the Company's 7% Senior Secured Notes, Series
B, Due 1997, issued by the Company pursuant to the Software House Indenture in
an aggregate principal amount not exceeding $11,357,000 plus the Additional
Interest Amount (as defined in the Bankruptcy Plan) in respect thereof, together
with any pay-in-kind interest accrued thereon pursuant to the terms thereof.
'Subordinated Notes' means the Company's 11% Series C Notes, Due 2001,
issued by the Company pursuant to the Subordinated Note Indenture in an
aggregate principal amount not exceeding the sum of $60,000,000 plus the
Additional Interest Amount (as defined in the Bankruptcy Plan) in respect
thereof, together with any pay-in-kind interest accrued thereon pursuant of the
terms hereof.
'Subordinated Note Indenture' means the Indenture, dated the Issue Date,
between the Company, as issuer, MES, as guarantor, and Shawmut Bank Connecticut,
National Association, as trustee, pursuant to which the Company issued the
Subordinated Notes.
'Subsidiary' of a Person means (a) any corporation of which the outstanding
Capital Stock having at least a majority of the votes entitled to be cast in the
election of directors, under the ordinary circumstances, shall at the time be
owned or controlled, directly or indirectly, by such Person, by such Person and
one or more of its Subsidiaries or by one or more of its Subsidiaries; (b) any
other Person the power to direct the policies, management or affairs of which is
contractually held by such Person, or by such Person and one or more of its
Subsidiaries or by one or more of its Subsidiaries; or (c) any other Person of
which at least a majority of voting interest, under ordinary circumstances, is
at the time , directly or indirectly, owned or controlled by such Person, or by
such Person and one or more of its Subsidiaries or by one or more of its
Subsidiaries. Notwithstanding the foregoing, for purposes of this Indenture, (i)
none of JWP Information Services, Inc., Antwerp Education Center, N.V., Microcom
N.V., Sivea Benelux, Micro Avenue or JWP Information Systems S.A.R.L. shall be
deemed Subsidiaries of the Company or any of its Subsidiaries, and (ii) any
Middle East Subsidiary and any Malaysian Subsidiary and its respective
Subsidiaries shall be deemed Subsidiaries of the Company and certain of its
Subsidiaries so long as the Company, individually or together with any other
Subsidiaries of the Company, owns or controls Capital Stock entitling it to cast
at least one-third of the votes entitled to be cast at the election of directors
of such Middle East Subsidiary or such Malaysian Subsidiary, respectively.
'Unique Construction' means Unique Construction Company, an Illinois
corporation, and its successors.
A-4
<PAGE>
APPENDIX B
Set forth below is the text of Section 4.15 in respect of which EMCOR is
seeking to obtain one of the Proposed Amendments. The Section set forth below is
marked to show the proposed addition to and deletion from such section.
Section 4.15 Maintenance of Coverage Ratios.
(a) The Operating Companies shall maintain an Unrestricted Cash Coverage
Ratio for each of the periods listed below of not less than the following ratio,
calculated as of the last date of the periods indicated below:
<TABLE>
<CAPTION>
CONSOLIDATED
FIXED CHARGE
COVERAGE
MEASUREMENT PERIOD RATIO
- ---------------------------------------------------------------------------------- --------------------
<S> <C> <C>
January 1, 1995--September 30, 1995............................................... 1.00:1
January 1, 1995--December 31, 1995................................................ 1.00:1
Each Rolling Four Fiscal Quarter Period ending thereafter......................... 1.00:1
</TABLE>
(b) The Operating Companies shall maintain a Consolidated Fixed Charge
Coverage Ratio for each of the periods listed below of not less than the
following ratio, calculated as of the last date of the periods indicated below;
<TABLE>
<CAPTION>
CONSOLIDATED
FIXED CHARGE
COVERAGE
MEASUREMENT PERIOD RATIO
- ---------------------------------------------------------------------------------- --------------------
<S> <C> <C>
January 1, 1995--September 30, 1995............................................... 1.00:1
January 1, 1995--December 31, 1995................................................ 1.00:1
Each Rolling Four Fiscal Quarter Period ending thereafter......................... [1.50:1]* 1.00:1
</TABLE>
* Bracketed material proposed to be deleted.
B-1
<PAGE>
EXHIBIT 99.2
FEBRUARY 5, 1996
CONSENT SOLICITATION STATEMENT
EMCOR GROUP, INC.
11% SERIES C NOTES
DUE DECEMBER 15, 2001
(CUSIP NO. 29084QAB6)
------------------------
THIS CONSENT SOLICITATION WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
THURSDAY, FEBRUARY 29, 1996, UNLESS EXTENDED.
This Consent Solicitation Statement is being furnished by EMCOR Group,
Inc., a Delaware corporation ('EMCOR'), to, and the accompanying Consent Form is
to be used by, Registered Holders (as hereinafter defined under 'Registered
Holders') of EMCOR's 11% Series C Notes Due December 15, 2001 (the 'Series C
Notes'). EMCOR is soliciting the consent (the 'Consent Solicitation') of the
Registered Holders to amendments (collectively, the 'Proposed Amendments' and
individually each a 'Proposed Amendment') to the Indenture, pursuant to which
the Series C Notes were issued, dated as of December 15, 1994, as amended by the
First Supplemental Indenture dated as of June 28, 1995 (collectively, the
'Series C Indenture'), among EMCOR, its subsidiary MES Holdings Corporation
('MES'), as Guarantor, and Fleet National Bank of Connecticut (successor in
interest to Shawmut Bank Connecticut, National Association), as trustee (the
'Trustee'). Capitalized terms used in this Consent Solicitation Statement and
not otherwise defined herein are used herein as defined in the Series C
Indenture. For the convenience of the reader certain relevant definitions
contained in Section 1.01 (Definitions) of the Series C Indenture, including the
definition proposed to be amended by the Proposed Amendments, are set forth in
Appendix A hereto. Section 4.11 of the Series C Indenture, as proposed to be
amended by the Proposed Amendments, is set forth in Appendix B hereto.
As discussed in more detail below under 'The Proposed Amendments and
Background and Purpose Thereof,' the Proposed Amendments will reduce the
possibility of a default by EMCOR under a covenant requiring it and certain of
its subsidiaries to maintain a Consolidated Fixed Charge Ratio (as defined) by
reducing the required ratio and by excluding from the interest component of the
calculation certain non-cash interest payments which are payable by the issuance
of additional EMCOR's outstanding 7% Senior Secured Notes, Series A, due 1997
(the 'Series A Notes') and EMCOR Series C Notes. EMCOR is currently not in
default under such covenant; however its projections for calendar 1996 indicate
that such a default may occur in respect of the rolling four fiscal quarter
periods ending March 31, 1996 and June 30, 1996. These periods include fiscal
quarters of 1995 during which EMCOR's business continued to be significantly
adversely impacted by its Chapter 11 reorganization proceeding which concluded
upon its Plan of Reorganization becoming effective on December 15, 1994. EMCOR
believes a less stringent covenant is appropriate, particularly in light of the
highly cyclical and competitive nature of EMCOR's construction business as well
as the adverse effect on its business of its Chapter 11 reorganization
proceeding.
The Proposed Amendments require the consent of Registered Holders of not
less than a majority in aggregate principal amount of the outstanding Series C
Notes ($69,019,900 total outstanding as of the date hereof) and are to be set
forth in a supplemental indenture (the 'Series C Supplemental Indenture') to be
executed by EMCOR, MES, and the Trustee if the requisite number of consents are
obtained.
EMCOR GROUP, INC.
101 Merritt Seven, 7th Floor o Norwalk, CT 06851 o Tel: (203) 849-7800 o Fax
(203) 849-7900
<PAGE>
THE BOARDS OF DIRECTORS OF EMCOR AND MES HAVE UNANIMOUSLY APPROVED THE
PROPOSED AMENDMENTS AND RECOMMEND THAT HOLDERS OF THE SERIES C NOTES CONSENT TO
THEIR ADOPTION.
SINCE FAILURE TO CONSENT TO THE PROPOSED AMENDMENTS WOULD HAVE THE SAME
EFFECT AS A VOTE AGAINST THE PROPOSED AMENDMENTS, YOU ARE URGED TO RETURN THE
CONSENT FORM PROMPTLY.
Registered Holders are requested to read and carefully consider the
information contained herein and to give their consent to the Proposed
Amendments by executing the accompanying Consent Form and delivering same to the
Information Agent (as hereinafter defined) at its address set forth in the
Consent Form by hand, overnight courier, mail or other means of delivery that
will ensure receipt no later than 5:00 P.M., New York City time, on Thursday,
February 29, 1996, unless extended as herein provided (the 'Expiration Time').
Any beneficial owner whose Series C Notes are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee or whose Series
C Notes are otherwise registered in other than his own name and who wishes to
consent to the Proposed Amendments should contact such nominee or record owner
promptly and either instruct such person, as the Registered Holder of the Series
C Notes, to execute and deliver the Consent Form to the Information Agent on
such beneficial owner's behalf or effect a valid transfer of registered
ownership of the Series C Notes to himself prior to executing and delivering the
Consent Form directly, in each case, prior to the Expiration Time. A TRANSFER OF
REGISTERED OWNERSHIP OF THE SERIES C NOTES MAY TAKE CONSIDERABLE TIME TO EFFECT.
REGARDLESS OF WHETHER THE PROPOSED AMENDMENTS BECOME EFFECTIVE, THE SERIES
C NOTES WILL CONTINUE TO BE OUTSTANDING IN ACCORDANCE WITH ALL OTHER TERMS OF
THE SERIES C NOTES AND THE SERIES C INDENTURE. THE CHANGES SOUGHT TO BE EFFECTED
BY THE PROPOSED AMENDMENTS WILL NOT ALTER EMCOR'S OBLIGATION TO PAY THE
PRINCIPAL OF AND INTEREST ON THE SERIES C NOTES OR ALTER THE INTEREST RATE,
REDEMPTION TERMS OR MATURITY DATE THEREOF.
The statements contained in this Consent Solicitation Statement are made as
of the date hereof, and the delivery of this Consent Solicitation Statement and
the accompanying materials will not, under any circumstances, create any
implication that the information contained herein is correct at any time
subsequent to the date hereof.
No person has been authorized to furnish any information or make any
representation in connection with this Consent Solicitation other than as
contained herein. If furnished or made, any such information or representation
must not be relied upon as having been authorized by the Company.
Set forth below is a description of the Proposed Amendments for which the
approval of the Registered Holders of the Series C Notes is being sought. The
description below is qualified in its entirety by reference to the relevant
portions of the Series C Indenture, as currently in effect, copies of which may
be obtained upon written or telephonic request to the Information Agent (as
hereinafter defined) at the address set forth on the last page of this Consent
Solicitation Statement. Copies of certain definitions contained in Section 1.01
(Definitions) of the Series C Indenture are attached hereto as Appendix A, and
Section 4.11 (Maintenance of Coverage Ratios) of the Series C Indenture is
attached hereto as Appendix B. The Sections of the Series C Indenture set forth
in the Appendices are marked to show additions to and deletions from such
sections to be made by the Proposed Amendments.
THE PROPOSED AMENDMENTS AND BACKGROUND AND PURPOSE THEREOF
The Proposed Amendments consist of: (i) an amendment to Section 4.11(b)
(Maintenance of Coverage Ratios) of the Series C Indenture and (ii) an amendment
to the definition of 'Consolidated Fixed Charge Coverage Ratio' contained in
Section 1.01 (Definitions) of the Series C Indenture. The covenants contained in
the Series C Indenture were required by the Official Committee of Unsecured
Creditors of EMCOR during EMCOR's Chapter 11 proceeding, and in the view of
EMCOR's management the provisions proposed to be amended failed to reflect
accurately EMCOR's financial condition following its emergence from its Chapter
11 proceeding on December 15, 1994, the adverse effect of the Chapter 11
proceeding on EMCOR's business, and the highly cyclical and competitive nature
of the construction industry in which it operates.
2
<PAGE>
Section 4.11(b) of the Series C Indenture requires that the Operating
Companies of EMCOR maintain a Consolidated Fixed Charge Coverage Ratio for each
rolling four fiscal quarter period (a 'Reference Period') ending after December
31, 1995 of 1.50:1. Operating Companies are defined as EMCOR, individually, and
each of the mechanical and electrical direct and indirect subsidiaries of EMCOR
that are not owned by its subsidiary SellCo Corporation, which SellCo
subsidiaries are held for sale. Consolidated Fixed Charge Coverage Ratio is
defined, in effect, as the ratio of (x) the net income of the Operating
Companies increased by their income tax and interest expense and depreciation
and amortization and reduced by their capital expenditures for the Reference
Period to (y) the sum of (i) their Consolidated Cash Interest Expense, (ii)
certain interest payable by the issuance of additional Series A Notes to holders
of EMCOR's Series A Notes ('Series A Pik Interest'), additional Series C Notes
to holders of EMCOR's Series C Notes (other than interest on $16,000,000
principal amount of the Series C Notes) ('Series C Pik Interest'), and
additional EMCOR Series B notes to holders of EMCOR's Series B notes (all of
which have been retired) and (iii) cash dividends (including on any preferred
stock) paid by the Operating Companies to a person other than an Operating
Company. Consolidated Cash Interest Expense is defined, in effect, as interest
expense payable in cash.
The Proposed Amendment to Section 4.11(b) of the Series C Indenture would
reduce the Operating Companies' required Consolidated Fixed Charge Ratio for
each rolling four fiscal quarter period ending after December 31, 1995 from
1.50:1 to 1.0:1. The Proposed Amendment to the definition of Consolidated Cash
Interest Expense would eliminate any requirement to include Series A Pik
Interest and Series C Pik Interest in computing the Consolidated Fixed Charge
Ratio (i) for the period January 1, 1995--December 31, 1995 and (ii) for each
rolling four fiscal quarter period ending thereafter.
It is expected that the Series A Notes will be paid in full from the sale
of EMCOR's water supply subsidiaries. EMCOR has previously announced it has
reached agreement in principle to sell substantially all the assets of EMCOR's
principal water supply subsidiary, Jamaica Water Supply Company, to The City of
New York and the Water Authority of Western Nassau County, and it is expected
those sales will close before the end of the second quarter of 1996.
Accordingly, the elimination of Series A Pik Interest in computing Consolidated
Fixed Charge Ratio should not have a significant impact on this test inasmuch as
the Series A Notes should be discharged shortly. In addition, the Series C Notes
provide for the payment of Series C Pik Interest only through June 15, 1996;
thereafter the Series C Notes require interest to be paid in cash. Accordingly,
the elimination of Series C Pik Interest in computing the Consolidated Fixed
Charge Ratio test should not have a significant impact in the future because
Series C Pik Interest will cease to be payable after June 15, 1996.
The Proposed Amendments are intended to afford EMCOR greater financial
flexibility and reduce the possibility of a default under the Fixed Charge
Coverage Ratio covenant during 1996 and thereafter during the term of the Series
C Notes. The Series C Notes are subordinated to Senior Indebtedness which is
defined as consisting principally of obligations under EMCOR's Series A Notes,
of which $64,877,300 aggregate principal is currently outstanding, and
obligations under EMCOR's existing $35 million Revolving Credit Agreement, of
which $25 million is currently outstanding, and any refinancings or replacements
thereof not in excess of $100 million (less indebtedness outstanding under a
separate credit agreement of certain of the Operating Subsidiaries). Among other
reasons, because the Series C Notes are subordinated indebtedness, EMCOR does
not believe a default in the covenants contained in the Series C Indenture would
be in the interests of the holders of the Series C Notes. Any default in the
Series C Indenture covenants would also constitute a default under other
indebtedness of EMCOR, including its senior obligations under the Series A Notes
and its Revolving Credit Agreement.
APPROVAL OF PROPOSED AMENDMENTS
Pursuant to Section 9.02 of the Series C Indenture, consents of the
Registered Holders of a majority in aggregate principal amount of the
outstanding Series C Notes (the 'Requisite Holders') are required to approve the
Proposed Amendments.
There will be no fixed record date for the determination of Registered
Holders of Series C Notes entitled to give consents. If at or prior to the
Expiration Time, valid consents of the Requisite Holders are received by the
Information Agent (and not revoked), EMCOR and the Trustee will proceed promptly
to enter into the Series C Supplemental Indenture required to give effect to the
Proposed Amendments.
3
<PAGE>
OUTSTANDING SECURITIES
As of the date of this Consent Solicitation Statement, the principal amount
of Series C Notes outstanding is $69,019,900. The principal amount of the Series
C Notes for which the consent of the Registered Holders is required is
$34,509,951.
REGISTERED HOLDERS
EMCOR is soliciting consents only from Registered Holders. The term
'Registered Holder' means a person (other than the Company or any Affiliate) in
whose name Series C Notes are registered in a register maintained by the Trustee
in its capacity as Registrar under the Series C Indenture.
With respect to Series C Notes registered in the name of CEDE & Co., which
is the nominee for The Depository Trust Company ('DTC'), 'DTC Participants'
(i.e. brokers, banks and other financial institutions that participate in DTC),
rather than DTC, must execute the Consent Form. Participants in The Midwest
Depository Trust Company and Philadelphia Depository Trust Company should
inquire of those institutions regarding the procedure for executing Consent
Forms for Series C Notes registered in the name of their respective nominees.
CONSENT PROCEDURES
Registered Holders desiring to consent to the Proposed Amendments should
sign and date the accompanying Consent Form and deliver it to the Information
Agent in accordance with the instructions contained therein by hand, overnight
courier, mail or other means of delivery acceptable to the Information Agent
that will ensure receipt by the Information Agent no later than 5:00 P.M., New
York City time, on Thursday, February 29, 1996, subject to extension as herein
provided. DO NOT SEND IN CERTIFICATES REPRESENTING SERIES C NOTES.
SINCE FAILURE TO CONSENT TO THE PROPOSED AMENDMENTS WOULD HAVE THE SAME
EFFECT AS A VOTE AGAINST THE PROPOSED AMENDMENTS, YOU ARE URGED TO RETURN THE
CONSENT FORM PROMPTLY.
REVOCATION OF CONSENTS
Consent Forms may be revoked at any time prior to EMCOR certifying to the
Trustee that Consent Forms properly executed and completed (and not revoked)
have been received from the Requisite Holders, but may not be revoked
thereafter, by delivering to the Information Agent prior to such time a written
notice of revocation signed by the Registered Holder of the Series C Notes. The
notice of revocation must indicate the certificate number or numbers of the
Series C Notes to which such revocation relates (or information sufficient to
enable the Information Agent to identify such Series C Notes) as well as the
aggregate principal amount represented by such Series C Notes.
A Consent Form will be binding on a holder of the Series C Notes who gives
the consent, on any holder of the Series C Notes issued upon registration of
transfer of the Series C Notes with respect to which such consent is given, or
in exchange therefor, and on any other transferee or transferees of such Series
C Notes, subject only to revocation in writing as aforesaid. If a Consent Form
is not revoked, it will be counted along with all other validly delivered
Consent Forms in determining whether consents from the Requisite Holders have
been obtained.
4
<PAGE>
EXPIRATION, EXTENSION, MODIFICATION AND TERMINATION
This Consent Solicitation will expire at 5:00 P.M., New York City time, on
Thursday, February 29, 1996, unless extended by EMCOR in its sole discretion.
EMCOR expressly reserves the absolute right to extend or modify this Consent
Solicitation, at any time and from time to time, in its sole discretion, by
giving oral or written notice to the Information Agent on the business day next
following any previously scheduled Expiration Time.
CONSENTS TO BE BINDING
At such time at or prior to the Expiration Time as EMCOR certifies to the
Trustee that Consent Forms properly executed and completed (and not revoked)
have been received from the Requisite Holders, such consents shall become
irrevocable and binding on all holders of the Series C Notes and every
subsequent transferee thereof, whether or not such holders gave their consent
with respect thereto. As promptly thereafter as practicable, the Company and the
Trustee will execute and deliver the Series C Supplemental Indenture and send
notice thereof to all Registered Holders of Series C Notes.
INFORMATION AGENT
Morrow & Co. ('Morrow') has been retained to act as information agent with
respect to this Consent Solicitation (the 'Information Agent'). For the services
of Morrow as Information Agent, EMCOR has agreed to pay Morrow reasonable and
customary fees and to reimburse the Information Agent for its reasonable out-of-
pocket expenses in connection with such services. EMCOR has also agreed to
indemnify Morrow and its affiliates against certain liabilities and expenses,
including liabilities under the federal securities laws, arising from its
services as Information Agent.
Questions and requests for assistance may be directed to the Information
Agent at its address and telephone number set forth on the last page of this
Consent Solicitation Statement. Registered Holders may also contact their
broker, dealer, commercial bank, trust company or other nominee for assistance
concerning the Consent Solicitation. Requests for additional copies of this
Consent Solicitation Statement and Consent Form and other related documents
should be directed to the Information Agent. ALL EXECUTED CONSENT FORMS SHOULD
BE SENT TO THE INFORMATION AGENT AT THE ADDRESS SET FORTH IN THE CONSENT FORM.
FINANCIAL INFORMATION
Copies of EMCOR's 1994 Annual Report, which includes audited consolidated
financial statements for the years 1993 and 1994 and unaudited consolidated
financial statements for the six-month periods ended June 30, 1994 and 1995, and
EMCOR's Quarterly Report on Form 10-Q for the nine-month period ended September
30, 1995 as filed with the Securities and Exchange Commission (the 'Commission')
pursuant to the Securities Exchange Act of 1934, as amended (the 'Exchange
Act'), accompany this Consent Solicitation Statement. Registered Holders are
urged to read and carefully consider the information contained in the 1994
Annual Report and the Quarterly Report on Form 10-Q.
The Company is subject to the informational requirements of the Exchange
Act and, in accordance therewith, files reports, proxy statements and other
information with the Commission. The reports, proxy statements and other
information filed by EMCOR with the Commission can be inspected and copied at
the public reference facilities maintained by the Commission's Regional Offices
at Seven World Trade Center, 13th Floor, New York, New York 10048 and
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material can also be obtained from the Public
Reference Section of the Commission at Judiciary Plaza, 450 Fifth Street, NW,
Washington, DC 20549, at prescribed rates. References contained in this Consent
Solicitation Statement to the Series C Indenture are not necessarily complete
and, in each instance, reference is made to the original document, each such
statement being qualified in all respects by such reference.
5
<PAGE>
MISCELLANEOUS
Consents are being solicited by and on behalf of EMCOR. Costs of the
Consent Solicitation will be borne by EMCOR. In addition to solicitation by use
of the mails, consents may be solicited by officers and employees of EMCOR in
person or by telephone, facsimile transmission or other means of communication.
Such officers and employees of EMCOR will not be additionally compensated, but
will be reimbursed for out-of-pocket expenses in connection with such
solicitation. Arrangements will also be made with brokers and dealers,
custodians, nominees and fiduciaries to assist EMCOR in the solicitation of
consents, including for forwarding of Consent Solicitation materials to
beneficial owners of the Series C Notes held of record by such persons, and
EMCOR will reimburse such brokers, dealers, custodians, nominees and fiduciaries
for reasonable expenses incurred in connection therewith but will not otherwise
compensate such persons.
------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION IN CONNECTION WITH THIS CONSENT SOLICITATION OTHER THAN AS
CONTAINED HEREIN OR IN THE CONSENT FORM. IF GIVEN OR MADE, ANY SUCH INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY EMCOR.
------------------------
INFORMATION AGENT:
Morrow & Co.
909 Third Avenue
New York, New York 10022
Telephone: (800) 662-5200
Collect: (212) 754-8000
6
<PAGE>
APPENDIX A
CERTAIN DEFINITIONS
Set forth below is the text of the definition of 'Consolidated Fixed Charge
Coverage Ratio' in respect of which EMCOR is seeking to obtain one of the
Proposed Amendments, which definition is marked to show the proposed deletions
from such definition. Set forth following such definition are certain other
relevant definitions, which would remain unchanged.
'Consolidated Fixed Charge Coverage Ratio' at any date means the ratio of
(a) Consolidated EBIT plus depreciation and amortization of the Operating
Companies less any Capital Expenditures of the Operating Companies for the
applicable quarters immediately preceding such determination date (the
'Reference Period') to (b) the sum of (i) Consolidated Cash Interest Expense
incurred by the Operating Companies calculated on a pro forma basis for the
Reference Period,[ (ii) (A) for the Reference Period from January 1, 1995
through December 31, 1995, stated interest on the Securities* (excluding
interest on $16,000,000 principal amount of Securities), the Series A Notes and
the Series B Notes accreted during the period from October 1, 1995 through
December 31, 1995, (B) for the Reference Period from April 1, 1995 through March
31, 1996, stated interest on the Securities (excluding interest on $16,000,000
principal amount of the Securities), the Series A Notes and the Series B Notes
accreted from October 1, 1995 through March 31, 1996, (C) for the Reference
Period from July 1, 1995 through June 30, 1996, stated interest on the
Securities (excluding interest on $16,000,000 principal amount of the
Securities), the Series A Notes and the Series B Notes accreted from October 1,
1995 through June 30, 1996, and, (D) for the Reference Period from October 1,
1995 through September 30, 1996 and for each Reference Period thereafter, stated
interest on the Securities (excluding interest on $16,000,000 principal amount
of the Securities), the Series A Notes and the Series B Notes accreted during
such Reference Period, and (iii)]**** (ii) cash dividends (including on any
preferred stock) paid by the Operating Companies during the Reference Period to
a Person other than an Operating Company. For purposes of this definition, the
factors set forth in (a) and (b) above (other than cash dividends) shall be
calculated after giving effect on a pro forma basis (as if the same occurred at
the beginning of the Reference Period) to (i) the acquisition by any Operating
Company of any Person which, as a result of such acquisition, becomes a
wholly-owned Subsidiary or the acquisition of assets constituting a business by
any Operating Company during such Reference Period and (ii) any Asset Sales by
an Operating Company (excluding gains or losses recognized from such Asset
Sales) occurring during the Reference Period. In calculating cash interest
expense for purposes of determining the denominator of this ratio, interest on
Indebtedness of any Operating Company determined on a fluctuating basis, to the
extent such interest is covered by an agreement relating to an interest swap
obligation, shall be deemed to accrue at the rate per annum resulting after
giving effect to the operation of such agreement.
OTHER RELEVANT DEFINITIONS
'Asset Sale' has the meaning ascribed thereto in Section 4.10**
'Bankruptcy Law' has the meaning set forth in Section 6.01(b)***
'Bankruptcy Plan' means the Third Amended Joint Plan of Reorganization of
the Company and SellCo under Chapter 11 of the Bankruptcy Code (Chapter 11 Case
No. 94 B 46404 (JHG)) as amended, supplemented or otherwise modified from time
to time.
- ------------------
* Securities is defined elsewhere in the Series C Indenture as the Series C
Notes, including Series C Notes issued in respect of interest payments.
** Section 4.10 provides in part 'The Company shall not, and shall not permit
any of its Subsidiaries to, make any investments in or advances to any
other Person except for:...
(i) Investments of the Company or any of its Subsidiaries consisting of
notes, bonds, debentures or other securities or instruments (other than
general partnership and similar interests) acquired by the Company or
such Subsidiary in connection with a sale, lease, conveyance or other
disposition of assets (an 'Asset Sale'), by the Company or any such
Subsidiary not otherwise prohibited hereunder....'
*** Section 6.01(b) provides in part 'The term 'Bankruptcy Law' means Title 11,
U.S. Code, or any similar federal or state law for the relief of
debtors....'
**** Bracketed material proposed to be deleted.
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<PAGE>
'Capital Expenditures' means, for any Person for any period, the aggregate
(without duplication) of (a) all expenditures by such Person, except interest
capitalized during construction, during such period for property, plant or
equipment, including, without limitation, renewals, improvements, replacements
and capitalized repairs, that would be reflected as additions to property, plant
or equipment on a consolidated balance sheet of such Person prepared in
conformity with GAAP, and (b) the principal amount of all Indebtedness incurred
or assumed in connection with any such additions to property, plant and
equipment. For the purpose of this definition, the purchase price of equipment
which is acquired simultaneously with the trade-in of existing equipment owned
by such Person or with insurance proceeds shall be included in Capital
Expenditures only to the extent of the gross amount of such purchase price less
the credit granted by the seller of such equipment being traded in at such time
or the amount of such proceeds, as the case may be.
'Capital Lease' means, as to any Person, any lease of property, real or
personal, in respect of which the present value of the minimum rental commitment
would be capitalized on a balance sheet of such Person in accordance with GAAP.
'Capital Lease Obligation' means, as to any Person, the amount of the
liability in respect of a Capital Lease which would at such time be required to
be capitalized on a balance sheet of such Person in accordance with GAAP.
'Capital Stock' means any and all shares, interests, participations, rights
or other equivalents (however designated) of any Person.
'Company' means EMCOR Group, Inc. (formerly known as JWP Inc.), a Delaware
corporation and its successor.
'Consolidated Cash Interest Expense' means, for any period, total accrued
interest expense (including the interest component of Capital Lease Obligations)
of the Operating Companies on a consolidated basis during such period,
including, without limitation, all commissions, discounts and other fees and
charges (to the extent such commissions, fees and charges are included in
'interest' under GAAP) owed with respect to letters of credit, and net costs
under interest rate contracts, but excluding, however, (a) amortization of debt
discount, (b) interest paid in property other than cash, (c) any other interest
expense not payable in cash, (d) interest on $16,000,000 principal amount of the
Securities and (e) commitment fees payable under the Revolving Credit Agreement
and the Dynalectric Credit Agreement, all as determined in conformity with GAAP.
'Consolidated EBIT' for any period means Consolidated Net Income (Loss) for
such period increased (to the extent already deducted therefrom) by the sum, on
a consolidated basis, of (a) all income tax expense for such period to the
extent included in Consolidated Net Income (Loss), and (b) all interest expense
for such period to the extent included in Consolidated Net Income (Loss).
'Consolidated Net Income (Loss)' means, for any period, the aggregate of
the net income (loss) of the Operating Companies for such period, determined on
a consolidated basis in accordance with GAAP, provided that there shall be
excluded from such net income (to the extent otherwise included therein) (a) any
gain or loss realized upon the sale or other disposition (including without
limitation dispositions pursuant to sale-leaseback transactions and costs
related to closings of operations, if incurred) of any real property or
equipment of the Operating Companies which is not sold or otherwise disposed of
in the ordinary course of business or of any Capital Stock of any Person owned
by any Operating Company, (b) the net income (loss) of any such Person accounted
for by the equity method of accounting (other than a venture permitted under
Section 4.10(k)), except to the extent of the amount of dividends or
distributions paid to an Operating Company, and (c) the net income (loss) of any
other Person acquired by any Operating Company in a pooling of interests
transaction for any period prior to the date of such acquisition.
'Dynalectric Companies' means, for so long as it is a Subsidiary of the
Company, each of the following: Dynalectric Company, Dynalectric Company of
Nevada, Inc., Dyn Specialty Contracting, Inc., Contra Costa Electric, Inc., JWP
Systems/Kirkwood Electric Company, Inc., B&B Contracting & Supply Company, and
their respective successors.
'Dynalectric Revolving Credit Agreement' means the Credit Agreement, dated
as of December 14, 1994, by and among the Company, the Dynalectric Companies
named therein and the other parties thereto and their
A-2
<PAGE>
respective successors and assigns, and any refinancings, replacements or
renewals thereof permitted by Section 4.09.
'GAAP' means Generally Accepted Accounting Principles as in effect on the
Issue Date.
'Generally Accepted Accounting Principles' means generally accepted
accounting principles in the United States of America as in effect from time to
time set forth in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and the
statements and pronouncements of the Financial Accounting Standards Board, or in
such other statements by such other entity as may be in general use by
significant segments of the accounting profession, which are applicable to the
circumstances as of the date of determination.
'Guarantor' means MES Holdings Corporation, a Delaware corporation, and its
successors.
'Guaranty' or 'guaranty' means, as applied to any obligation, (a) a
guaranty (other than (i) by endorsement of negotiable instruments for collection
in the ordinary course of business, and (ii) a Performance Guaranty), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of any part or all of such
obligation including, without limitation, the Guaranty pursuant to Article 10
hereof, and (b) an agreement, direct or indirect, contingent or otherwise, the
practical effect of which is to assure in any way the payment or performance (or
payment of damages in the event of nonperformance) of any part or all of such
obligation, including, without limiting the foregoing, the payment of amounts
drawn down by letters of credit, but excluding any Performance Guaranty. The
amount of a guaranty shall be deemed to be the maximum amount of the obligation
guarantied for which the guarantor could be held liable under such guaranty.
'Indebtedness' means, when used with reference to any Person, any
indebtedness, contingent or otherwise, in respect of borrowed money (whether or
not the recourse of the lender is to the whole of the assets of such Person or
only to a portion thereof) or evidenced by bonds (other than bonds constituting
Performance Guaranties), notes, debentures or similar instruments or obligations
to provide cash collateral for or to cover or to reimburse for drawings under
letters of credit or representing the balance deferred and unpaid of the
purchase price of any property (except any such balance that constitutes a trade
payable), and shall also include, without limitation (but without duplication),
(a) any Capital Lease Obligations of such Person, (b) (to the extent not
otherwise included in this definition) Guaranties of items which would be
included within this definition (regardless of whether such items would appear
upon such balance sheet), and (c) all Indebtedness referred to above secured by
(or for which the holder of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien upon or in property (including, without
limitation, accounts and general intangibles) owned by such Person even though
such Person has not assumed or become liable for the payment of such
Indebtedness; provided, however, that for purposes of computing Indebtedness
outstanding at any time, such items shall be excluded to the extent that they
would otherwise be eliminated as intercompany items in consolidation.
'Indenture' means this Indenture as amended, supplemented, or otherwise
modified from time to time.
'Issue Date' means December 15, 1994.
'Lien' means any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, security interest, lien, charge, encumbrance or
other preferential arrangement of any kind intended to assure payment of any
Indebtedness or other obligation or to assure any performance by any Person
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, and any agreement to give any security interest).
'Malaysian Subsidiaries' means, so long as such corporation is a Subsidiary
of the Company, (a) the corporation to be organized by the Company or any
Subsidiary of the Company in Malaysia in connection with the operation and
maintenance of power plants in Malaysia, and (b) if organized by a Subsidiary of
the Company, the immediate parent corporation of such corporation so long as the
principal asset of such parent corporation is such corporation, each of such
corporations Subsidiaries, and their respective successors.
'MES Companies' means the Guarantor and each of its Subsidiaries.
A-3
<PAGE>
'Middle East Subsidiaries' means, so long as such Persons are Subsidiaries
of the Company, Lunar Drake & Scull (UAE), a United Arab Emirates corporation,
Drake & Scull Assarain, an Omani corporation, Drake & Scull (Cayman Islands)
Ltd., a Cayman Islands corporation, JWP-Nesma Ltd., a Saudi Arabia corporation,
JWP (Cayman Islands), Ltd., a Cayman Islands corporation, and their respective
successors.
'Obligations' means, with respect to any Indebtedness, any principal,
premium, interest (including without limitation, interest, whether or not
allowed, after the filing of a petition initiating any proceeding referred to in
Section 6.01 (a)(vii) or (viii)), penalties, commissions, charges, expenses,
fees, indemnifications, reimbursements, and other liabilities or amounts payable
under or in respect of the documentation governing such Indebtedness.
'Operating Companies' means the Company, individually, each of the MES
Companies and each of the Dynalectric Companies.
'Performance Guaranties' means, in respect of the Company or any of its
Subsidiaries, contingent obligations arising from the issuance of performance
guaranties, assurances, indemnities, bonds, letters of credit or similar
agreements in the ordinary course of business in respect of the contracts (other
than for borrowed money) of the Company, any Subsidiaries of the Company, or
Unique Construction for the benefit of surety companies or for the benefit of
others to induce such others to forego the issuance of a surety bond in their
favor.
'Person' means any individual, corporation, limited liability company,
partnership, joint venture, trust, unincorporated organization or government or
any agency or political subdivision thereof.
'Revolving Credit Agreement' means the Revolving Credit Agreement, dated as
of December 14, 1994, by and among the Company, the Guarantor and the other
parties thereto and their respective successors and assigns, and any
refinancings, replacements or renewals thereof permitted by Section 4.09.
'SellCo' means SellCo Corporation, a Delaware corporation, and its
successors.
'Senior Indebtedness' means (a) the Indebtedness of the Company arising
under the Series A Notes and the Series A Indenture and all Obligations with
respect thereto, (b) the Indebtedness of the Company arising under the Series B
Notes and the Series B Indenture and all Obligations with respect thereto, (c)
the Indebtedness of the Guarantor arising under its guaranty of the Indebtedness
of the Company under the Series A Notes and the Series A Indenture and all
Obligations with respect thereto, (d) the Indebtedness of the Guarantor arising
under its guaranty of the Indebtedness of the Company under the Series B Notes
and the Series B Indenture and all Obligations with respect thereto, and (e)
Indebtedness of the Company incurred pursuant to the Revolving Credit Agreement
in an aggregate amount not in excess of (x) $100,000,000 minus (y) the
outstanding amount of Indebtedness of the Company incurred under the Dynalectric
Revolving Credit Agreement. The Senior Indebtedness described in clauses (a),
(b), (c), (d) and (e) above shall continue to constitute Senior Indebtedness for
all purposes of this Indenture, and the provisions of Article 11 hereof shall
continue to apply to such Senior Indebtedness, notwithstanding that such Senior
Indebtedness or any claim in respect thereof may be disallowed, avoided or
subordinated pursuant to any Bankruptcy Law or other applicable insolvency law
or equitable principles (i) as a claim for unmatured interest, or (ii) as a
fraudulent transfer or conveyance.
'Series A Indenture' means the Indenture, dated the Issue Date, between the
Company, as issuer, MES and SellCo, as guarantors, and IBJ Schroder Bank & Trust
Company, as trustee, pursuant to which the Company issued the Series A Notes.
'Series A Notes' means the Company's 7% Senior Secured Notes, Due 1997,
issued by the Company pursuant to the Series A Indenture in an aggregate
principal amount not exceeding $71,000,000, together with any pay-in-kind
interest accrued thereon pursuant to the terms thereof.
'Series B Indenture' means the Indenture, dated the Issue Date, among the
Company, as issuer, the Guarantor and SellCo, as guarantors, and United States
Trust Company of New York, as trustee, pursuant to which the Company issued the
Series B Notes.
'Series B Notes' means the Company's 7% Senior Secured Notes, Series B, Due
1997, issued by the Company pursuant to the Series B Indenture in an aggregate
principal amount not exceeding $11,357,000 plus
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<PAGE>
the Additional Interest Amount (as defined in the Bankruptcy Plan), together
with any pay-in-kind interest accrued thereon pursuant to the terms thereof.
'Subsidiary' of a Person means (a) any corporation of which the outstanding
Capital Stock having at least a majority of the votes entitled to be cast in the
election of directors, under the ordinary circumstances, shall at the time be
owned or controlled, directly or indirectly, by such Person, by such Person and
one or more of its Subsidiaries or by one or more of its Subsidiaries; (b) any
other Person the power to direct the policies, management or affairs of which is
contractually held by such Person, or by such Person and one or more of its
Subsidiaries or by one or more of its Subsidiaries; or (c) any other Person of
which at least a majority of voting interest, under ordinary circumstances, is
at the time , directly or indirectly, owned or controlled by such Person, or by
such Person and one or more of its Subsidiaries or by one or more of its
Subsidiaries. Notwithstanding the foregoing, for purposes of this Indenture, (i)
none of JWP Information Services, Inc., Antwerp Education Center, N.V., Microcom
N.V., Sivea Benelux, Micro Avenue or JWP Information Systems S.A.R.L. shall be
deemed Subsidiaries of the Company or any of its Subsidiaries, and (ii) any
Middle East Subsidiary and any Malaysian Subsidiary and its respective
Subsidiaries shall be deemed Subsidiaries of the Company and certain of its
Subsidiaries so long as the Company, individually or together with any other
Subsidiaries of the Company, owns or controls Capital Stock entitling it to cast
at least one-third of the votes entitled to be cast at the election of directors
of such Middle East Subsidiary or such Malaysian Subsidiary, respectively.
'Unique Construction' means Unique Construction Company, an Illinois
Corporation, and its successors.
A-5
<PAGE>
APPENDIX B
Set forth below is the text of Section 4.11 in respect of which EMCOR is
seeking to obtain one of the Proposed Amendments. The Section set forth below is
marked to show the proposed addition to and deletion from such section.
Section 4.11 Maintenance of Coverage Ratios.
(a) The Operating Companies shall maintain an Unrestricted Cash Coverage
Ratio for each of the periods listed below of not less than the following ratio,
calculated as of the last date of the periods indicated below:
<TABLE>
<CAPTION>
CONSOLIDATED
FIXED CHARGE
COVERAGE
MEASUREMENT PERIOD RATIO
- ---------------------------------------------------------------------------------- --------------------
<S> <C> <C>
January 1, 1995--September 30, 1995............................................... 1.00:1
January 1, 1995--December 31, 1995................................................ 1.00:1
Each Rolling Four Fiscal Quarter Period ending thereafter......................... 1.00:1
</TABLE>
(b) The Operating Companies shall maintain a Consolidated Fixed Charge
Coverage Ratio for each of the periods listed below of not less than the
following ratio, calculated as of the last date of the periods indicated below;
<TABLE>
<CAPTION>
CONSOLIDATED
FIXED CHARGE
COVERAGE
MEASUREMENT PERIOD RATIO
- ---------------------------------------------------------------------------------- --------------------
<S> <C> <C>
January 1, 1995--September 30, 1995............................................... 1.00:1
January 1, 1995--December 31, 1995................................................ 1.00:1
Each Rolling Four Fiscal Quarter Period ending thereafter......................... [1.50:1]* 1.00:1
</TABLE>
* Bracketed material proposed to be deleted.
B-1
