As filed with the Securities and Exchange Commission on June 4, 1999
Registration No. 333-79041
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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Borg-Warner Security Corporation
(Exact name of registrant as specified in its charter)
Delaware 13-3408028
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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200 South Michigan Avenue
Chicago, Illinois 60604
(312) 322-8500
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
------------------------
Robert E. T. Lackey
Vice President, General Counsel and Secretary
Borg-Warner Security Corporation
200 South Michigan Avenue
Chicago, Illinois 60604
(312) 322-8500
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------
Copies to:
Charles S. Whitman, III
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
(212) 450-4000
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Approximate date of commencement of proposed sale to the public: From time
to time after this Registration Statement becomes effective.
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(c) under the Securities Act, please check the following box
and list the Securities Act registration number of the earlier effective
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. |_|
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended or until the Registration Statement shall
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<PAGE>
We will amend and complete the information in this prospectus. We may not sell
any of these securities or accept your offer to buy any of them until the
documentation filed with the SEC relating to these securities has been declared
"effective" by the SEC. This prospectus is not an offer to sell these securities
or our solicitation of your offer to buy these securities in any State or other
jurisdiction where that would not be permitted or legal.
SUBJECT TO COMPLETION, DATED JUNE 4, 1999
PROSPECTUS
, 1999
5,850,000 Shares
Borg-Warner Security Corporation
Common Stock
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This prospectus relates to the sale of up to 5,850,000 shares of common
stock, par value $.01 per share, of Borg-Warner Security Corporation by several
of our existing shareholders.
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The common stock is listed on the New York Stock Exchange under the symbol
"BOR". On June 3, 1999, the last sale price of the common stock was $157/8 per
share.
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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.
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TABLE OF CONTENTS
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Page
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About this Prospectus..........................................................3
Where You Can Find More Information............................................3
Special Note Regarding Forward-Looking Statements..............................4
Use of Proceeds................................................................4
Borg-Warner Security Corporation...............................................4
Market for Borg-Warner's Common Stock and Dividend Policy......................4
Description of Capital Stock...................................................5
Selling Shareholders...........................................................8
Plan of Distribution...........................................................9
Legal Matters.................................................................10
Experts.......................................................................10
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission utilizing a "shelf" registration process.
Under this shelf process, the selling shareholders named in this prospectus may
sell up to 5,850,000 shares of common stock from time to time. Each time any of
these selling shareholders sells common shares, 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 both this prospectus and any
prospectus supplement together with the additional information described under
the heading "Where You Can Find More Information".
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. Our SEC filings are
available to the public over the Internet at the SEC's web site at
http://www.sec.gov. You may also read and copy any document we file at the SEC's
public reference rooms in Washington, D.C., New York, New York and Chicago,
Illinois. Please call the SEC at 1-800-SEC-0330 for further information on the
public reference rooms. You may also read and copy these documents at the
offices of the New York Stock Exchange, 20 Broad Street, New York, New York
10005.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We incorporate
by reference the documents listed below and any future filings we make with the
SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of
1934 until the selling shareholders sell all of the securities covered by this
prospectus:
o Annual Report on Form 10-K for the year ended December 31, 1998
o Quarterly Report on Form 10-Q for the quarter ended March 31, 1999
You may request a copy of these filings, at no cost, by writing or
telephoning us at our principal executive offices at the following address:
Borg-Warner Security Corporation
200 South Michigan Avenue
Chicago, Illinois 60604
Attention: Corporate Secretary
Tel: (312) 322-8500
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with different information. Neither we nor the
selling shareholders are making an offer of these securities in any state where
the offer is not permitted. You should not assume that the information in this
prospectus or any prospectus supplement is accurate as of any date other than
the date on the front of these documents.
We have also filed or incorporated by reference exhibits with the
registration statement. You should read the exhibits carefully for provisions
that may be important to you.
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
We are designating any statements in this prospectus that are not
historical facts as "forward-looking statements" for the purpose of the safe
harbor provided by Section 21E of the Exchange Act and Section 27A of the
Securities Act. These forward-looking statements are necessarily estimates
reflecting the best judgment of our senior management and involve a number of
risks and uncertainties that could cause actual results to differ materially
from those suggested by the forward-looking statements. Such forward-looking
statements should, therefore, be considered in light of the risk, uncertainties
and other information listed in Exhibit 99 to our annual report on Form 10-K
incorporated into this prospectus. See "Where You Can Find More Information."
USE OF PROCEEDS
We will not receive any proceeds from the sale of these shares.
BORG-WARNER SECURITY CORPORATION
We are the largest independent provider of physical security and related
outsourced security services in North America. As a result of our significant
market presence, breadth of product offerings and strategic alliances, we are
well positioned to service local, multi-location and national accounts and
provide total security solutions to our customers.
We provide guard services, as well as background screening, contract
employment and investigative services, to approximately 14,000 clients in the
United States, Canada, United Kingdom and Colombia. We service these clients
with approximately 73,000 employees in approximately 300 offices under the Wells
Fargo(R), Burns(R), Globe(R) and other service marks.
On May 4, 1999, we announced that, subject to shareholder approval, we
plan to change our name to Burns International Services Corporation.
Our headquarters is at 200 South Michigan Avenue, Chicago, Illinois 60604,
where our telephone number is (312) 322-8500.
MARKET FOR BORG-WARNER'S COMMON STOCK AND DIVIDEND POLICY
As of April 30, 1999, there were approximately 150 holders of record of
the common stock.
We have neither paid nor declared any cash dividends on our common stock
during the last two years. The payment of dividends by us is prohibited under
the terms of some of our debt instruments. We currently intend to retain
earnings for acquisitions, working capital, capital expenditures, general
corporate purposes and reduction of outstanding indebtedness. Accordingly, we do
not expect to be able to nor do we expect to pay cash dividends in the
foreseeable future.
High and low closing sales prices (as reported on the New York Stock
Exchange composite tape) for the common stock for each quarter during 1997 and
1998 and through June 3, 1999 were:
Quarter Ended High Low
------------- ---------- --------
1997 March 31 $ 15 1/8 $ 10 1/8
June 30 18 13 3/4
September 19 9/16 16 1/8
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Quarter Ended High Low
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December 31 19 3/4 15 1/4
1998 March 31 19 7/16 15 5/16
June 30 24 3/4 17 7/8
September 30 23 1/16 13 1/4
December 31 20 1/16 13 1/16
1999 March 31 20 9/16 14 11/16
June 30 (through June 3) 18 7/8 15 1/2
DESCRIPTION OF CAPITAL STOCK
The following table shows our authorized and outstanding capital stock at
April 30, 1999:
Number of Shares Number of Shares
---------------- ----------------
Common Stock.......................... 50,000,000 23,981,816
Non-Voting Common Stock............... 25,000,000 0
Preferred Stock....................... 5,000,000 0
In addition, as of April 30, 1999, we had issued options to purchase
2,685,400 shares of common stock. On April 19, 1999, we agreed to buy-back
4,350,000 shares of the common stock from several of the selling shareholders.
See "Selling Shareholders".
Common Stock
The common stock and non-voting common stock have the same terms except
for voting rights and some of the conversion features described below.
Each share of common stock entitles the holder to one vote in the election
of directors and all other matters submitted to a vote of our shareholders.
Holders of common stock do not have cumulative voting rights. The non-voting
common stock has no voting rights, except when required by law or when a
proposed amendment to our certificate of incorporation would adversely affect
the special rights, powers or preferences of the non-voting common stock.
Holders of shares of common stock and non-voting common stock, treated as
a single class, are entitled to receive cash dividends when, as and if declared
by our board of directors out of funds legally available for the payment of
dividends. However, we do not expect to pay cash dividends in the forseeable
future. In addition, some of our debt instruments restrict our ability to pay
dividends on our capital stock. If we issue any preferred stock, the holders of
that preferred stock will be entitled to receive their dividends before any
dividends are paid on shares of common stock and non-voting common stock.
Since some of our institutional shareholders are subject to regulatory
requirements that forbid or limit their right to own our voting stock, our
certificate of incorporation allows those shareholders to convert their common
stock into non-voting common stock on a share-for-share basis to comply with
regulatory requirements. Thereafter, these investors can reconvert their
non-voting common stock into common stock on a share-for-share basis in
connection with the sale, distribution or other disposition of their shares in a
transaction meeting the requirements specified in the certificate of
incorporation and to the extent permitted by regulatory requirements.
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If we are liquidated, each share of common stock and non-voting common
stock, treated as a single class, will share equally in any assets available for
distribution after payment in full of all other claims on our assets, including
any liquidation preference payable to holders of any preferred stock outstanding
at the time of liquidation.
Holders of shares of common stock and non-voting common stock have no
preemptive rights to purchase additional shares of any class of our capital
stock or any other securities of ours. All of the outstanding shares of common
stock and non-voting common stock are fully paid and non-assessable.
The transfer agent for the common stock is The Bank of New York.
Preferred Stock
Our certificate of incorporation authorizes our board of directors to
establish one or more series of preferred stock to determine the terms and
rights of that series, including
o the designation of that series
o the number of shares of that series, including any right of the
board of directors to increase or decrease that number
o the dividend rate of that series and whether dividends will be
cumulative or non-cumulative
o dividend payment dates
o any redemption rights and redemption prices, including any
provisions for a sinking fund
o whether the shares of that series will be convertible into any
other security of our company or any other company, and the terms
and conditions of any conversion, including the conversion price
or conversion rate
o any restrictions on issuance of shares of the same series or any
other class or series
o any voting rights
The board of directors can issue authorized shares of preferred stock and
common stock without any further action by the stockholders, except when
stockholder action is required by applicable law or the rules of any stock
exchange or automated quotation system on which our securities are listed or
traded.
Although our board of directors has no intention at the present time of
doing so, it could issue a series of preferred stock that could, depending on
the terms of that series, impede the completion of a merger, tender offer or
other takeover attempt. The board of directors will decide to issue any shares
of preferred stock based on its judgment as to the best interests of our company
and its stockholders. However, it is possible that an issuance of preferred
stock may discourage an acquisition attempt or other transaction that some, or a
even a majority, of our stockholders believe to be in their best interests or in
which stockholders might receive a premium for their stock over the then current
market price of the stock.
The Delaware General Corporation Law
Our company is a Delaware corporation subject to Section 203 of the
Delaware General Corporation Law. Section 203 provides, in general, that a
corporation may not engage in any business combination with any "interested
stockholder" for a three-year period following the date that person becomes an
interested stockholder unless
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o the board of directors approves the business combination or the
transaction which resulted in the person becoming an interested
stockholder prior to the time the person becomes an interested
stockholder
o upon consummation of the transaction which results in the person
becoming an interested stockholder, the interested stockholder
owns at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced or
o on or after the date the person becomes an interested stockholder,
the business combination is approved by the board of directors and
the affirmative vote of at least 662/3% of the outstanding voting
stock not owned by the interested stockholder.
An interested stockholder is generally defined to mean any person who is
the owner of 15% or more of the outstanding voting stock of the corporation or
any affiliate or associate of that person. Section 203 may make it more
difficult for an "interested stockholder" to effect a business combination with
our company for a three-year period unless the stockholders elect to exclude our
company from the provisions of Section 203.
Certificate of Incorporation and Bylaws
Our certificate of incorporation and bylaws contain some provisions that
could make an acquisition of our company by means of a tender offer or proxy
contest more difficult. Some of these provisions include:
Classified Board. Our board of directors is divided into three classes. As
a result, approximately one-third of the board of directors is elected each
year, making it more difficult for stockholders to change the composition of the
board. The bylaws provide that the total number of directors will be fixed by a
majority of the board of the directors, but cannot consist of more than
seventeen or less than three directors. In addition, under our certificate of
incorporation, vacancies on the board will be filled by an affirmative vote of a
majority of the remaining directors, even if they make up less than a quorum. If
we issue any preferred stock, and that preferred stock has the right to elect
directors, the provisions described in this paragraph may be modified.
Removal of Directors. Under our certificate of incorporation and bylaws,
directors can be removed only for cause and only by the affirmative vote of the
holders of at least 80% of the outstanding voting stock, voting as a single
class.
Stockholder Action. Stockholders can only take action at annual or
special meetings of stockholders and cannot take action through written consents
in lieu of a meeting. The bylaws provide that special meetings of stockholders
can be called only by the board of directors pursuant to a resolution adopted by
three or more directors. Stockholders cannot call a special meeting or order the
board of directors to call a special meeting. In addition, the only business
that can be conducted at a special meeting of stockholders is the business
specified in the notice of meeting given by the board of directors.
Advance Notice Procedures. The Bylaws establish a stockholder notice
procedure for stockholders to make nominations of candidates for election as
directors or bring other business before an annual meeting of shareholders. The
only nominations or other business proposed by stockholders that will be
considered at an annual meeting are those for which proper notice has been
given. In general, notice has to be given no more than 90 days and no less than
60 days prior to the first anniversary of the previous year's annual meeting,
except when the meeting is advanced by more than 20 days or delayed by more than
60 days. If the meeting is so advanced or delayed or if the meeting is a special
meeting, then notice has to be given no earlier than 90 days before the meeting
and not later than the later of (i) 60 days prior to the meeting and (ii) 10
days after public announcement of the meeting.
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Amendment. The certificate of incorporation provides that the affirmative
vote of at least 80% of the outstanding voting stock, voting as a single class,
is required to amend the provisions described above relating to prohibition of
stockholder action without a meeting, the number, election and term of the
directors, and the removal of the directors. In addition, the bylaws can be
amended by the vote of the board of the directors or the holders of at least 80%
of the outstanding voting stock, voting as a single class.
Further Information
In addition to the above summary, you should refer to our certificate of
incorporation and bylaws, which we have filed as exhibits to our annual report
on Form 10-K, for other provisions that may be important to you. See
"Where You Can Find More Information".
SELLING SHAREHOLDERS
The shares being offered by this prospectus may be offered by the
shareholders listed below or by pledgees, donees, transferees or other
successors in interest that receive the shares as a gift, partnership
distribution or other non-sale related transfer.
<TABLE>
<CAPTION>
Percentage of
Outstanding
Shares Owned Stock prior to Shares
prior to Share Share Buy- Shares Sold Maximum Owned
Buy-back and back and the In Share Amount After the
Name the Offering Offering Buy-back Offered Offering**
- ---- -------------- -------------- ----------- ------- ----------
<S> <C> <C> <C> <C> <C>
Merrill Lynch KECALP L.P. 1986.................... 40,000 * -- 40,000 0
Merrill Lynch KECALP L.P. 1987.................... 200,000 * -- 200,000 0
Merchant Banking L.P. No. I....................... 500,000 2.1% 263,317 236,683 0
ML Venture Partners II, L.P....................... 500,000 2.1% -- 500,000 0
Merrill Lynch Capital Appreciation Partnership
No. VIII, L.P.................................. 6,628,615 27.7% 3,490,856 3,137,759 0
ML Offshore LBO Partnership No. VIII.............. 168,524 * 88,751 79,773 0
ML Employees LBO Partnership No. I, L.P........... 164,779 * 86,778 78,001 0
ML IBK Positions, Inc............................. 1,998,082 8.4 420,298 1,577,784 0
---------- ---- --------- ---------
10,200,000 42.7% 4,350,000 5,850,000 0
========== ==== ========= ========= =
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* Represents less than one percent.
** Assuming all the shares are sold.
</TABLE>
On April 19, 1999, we entered into a stock purchase agreement with
Merchant Banking L.P. No. I, Merrill Lynch Capital Appreciation Partnership No.
VIII, L.P., ML Offshore LBO Partnership No. VIII, ML Employees LBO Partnership
No. I, L.P. and ML IBK Positions, Inc. pursuant to which we agreed to buy back
4,350,000 shares of our common stock from those selling shareholders at a
purchase price of $18.375 per share, subject to our obtaining necessary consents
from our lending banks and holders of our outstanding senior subordinated notes.
The stock purchase agreement may be terminated by either the selling
shareholders or us if the closing does not occur by July 20, 1999.
The selling shareholders may sell all or part of the shares covered by
this prospectus and as a result no estimate can be given as to the number of
shares that will be held by any selling shareholder upon the termination of any
offering made by this prospectus.
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The selling shareholders acquired the shares being offered by this
prospectus in connection with a leveraged buy-out of our predecessor company in
1987. In 1993, we completed our initial public offering, including the listing
of our shares on the New York Stock Exchange. As indicated above, on April 19,
1999 we agreed to purchase 4,350,000 shares of our common stock, and to use
commercially reasonable efforts to file a registration statement with the SEC to
enable the selling shareholders to sell their remaining shares in one or more
transactions. We expect to execute a registration rights agreement in connection
with the closing of the share purchase.
Messrs. Burke, Fitzgibbons and Michas, three of our directors, are also
directors of Merrill Lynch Capital Partners Inc., which manages Merrill Lynch
Capital Appreciation Partnership No. VIII, L.P. and ML Offshore LBO Partnership
No. VIII. Pursuant to the stock purchase agreement, one of these three directors
will resign from our board on the first anniversary of the closing of the share
purchase, and the other two on the second and third anniversaries, respectively.
PLAN OF DISTRIBUTION
The selling shareholders (and donees, transferees or other successors in
interest that receive shares from a selling shareholder as a gift, partnership
distribution or other non-sale related transfer) may distribute the shares
covered by this prospectus from time to time in one or more of the following
transactions:
o through brokers, acting as principal or agent, in transactions (which
may involve block transactions) on the New York Stock Exchange, in the
over-the-counter market or through private sales or special offerings
o to underwriters who will acquire the shares for their own account and
resell them in one or more transactions
o to lenders, if the selling shareholders have pledged shares as
collateral to secure loans, credit or other financing arrangements and
the creditor forecloses on the shares
o put or call options written by the selling shareholders on the shares
o short sales of shares or
o any other legally available means.
The price at which any of the shares are sold in any of the transactions
described above will be negotiated at the time of transaction and may be based
on the market price of the shares at that time.
Underwriters or other agents participating in an offering made pursuant to
this prospectus (as amended or supplemented from time to time) may receive
underwriting discounts and commissions under the Securities Act, and they may
allow or reallow discounts or concessions to other dealers. Brokers or agents
participating in transactions described by this prospectus may receive brokerage
or agent's commissions or fees. The selling shareholders may sell shares to or
through broker-dealers who may receive compensation in the form of discounts,
concessions or commissions from the selling shareholders and/or the purchasers
of the shares and that compensation might be in excess of customary commissions.
At the time a particular offering of any shares is made with this
prospectus, to the extent required by law, we will prepare and deliver a
prospectus supplement setting forth the amount of shares being offered and the
terms of the offering, including the purchase price or public offering price,
the name or names of any underwriters, dealers or agents, the purchase price
paid by any underwriter for any shares purchased from the selling shareholders,
any
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discounts, commissions and other items constituting compensation from the
selling shareholders and any discounts, commissions or concessions allowed or
filed or paid to dealers.
We have been advised that, as of the date hereof, the selling shareholders
have made no arrangement with any broker for the sale of their shares. The
selling shareholders and any underwriters, brokers or dealers involved in the
sale of the shares may be considered "underwriters" as that term is defined by
the Securities Act, although the selling shareholders disclaim such status. We
may agree in the registration rights agreement or in an underwriting agreement
to indemnify the selling shareholders, their officers, directors, partners, and
agents, any underwriter and each person or entity who controls such selling
shareholder or underwriter, against certain liabilities which may be incurred in
connection with the sale of the shares under this prospectus. In addition, the
selling shareholders may agree to indemnify us against certain liabilities. The
registration rights agreement or underwriting agreement may also provide for
rights of contribution if indemnification is not available.
If Merrill, Lynch, Pierce, Fenner & Smith Incorporated, an affiliate of
some of the selling shareholders, participates in any offering of our shares,
that offering will be conducted in compliance with Section 2720 of the Conduct
Rules of the National Association of Securities Dealers, Inc.
LEGAL MATTERS
Davis Polk & Wardwell, New York, New York will pass upon the validity of
the shares of common stock for us. Arthur F. Golden, one of our directors, is a
partner of Davis Polk & Wardwell.
EXPERTS
The financial statements and the related financial statement schedule
incorporated in this prospectus by reference from our Annual Report on Form 10-K
for the year ended December 31, 1998, have been audited by Deloitte & Touche
LLP, independent auditors, as stated in their reports, which are incorporated
herein by reference, and have been so incorporated in reliance upon the reports
of such firm given upon their authority as experts in accounting and auditing.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuances and Distribution
The following table sets forth the fees and expenses payable by the
Registrant in connection with the issuance and distribution of the securities
other than underwriting discounts and commissions.
Securities and Exchange Commission registration fee........... $ 28,206
Blue Sky fees and expenses.................................... 3,000*
Printing expense.............................................. 50,000*
Accounting fees and expenses.................................. 75,000*
Legal fees and expenses....................................... 125,000*
National Association of Securities Dealers Inc. filing fee.... 10,646
Miscellaneous................................................. 18,148*
-------
Total.................................................... $310,000*
=======
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* Estimated.
Item 15. Indemnification of Directors and Officers
Reference is made to Section 102(b)(7) of the Delaware General Corporation
Law (the "DGCL"), which enables a corporation in its original certificate of
incorporation or an amendment thereto to eliminate or limit the personal
liability of a director for violations of the director's fiduciary duty, except
(i) for any breach of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) pursuant to Section
174 of the DGCL (providing for liability of directors for the unlawful payment
of dividends or unlawful stock purchases or redemptions) or (iv) for any
transaction from which a director derived an improper personal benefit.
Section 145 of the DGCL empowers the Company to indemnify, subject to the
standards set forth therein, any person in connection with any action, suit or
proceeding brought before or threatened by reason of the fact that the person
was a director, officer, employee or agent of such company, or is or was serving
as such with respect to another entity at the request of such company. The DGCL
also provides that the Company may purchase insurance on behalf of any such
director, officer, employee or agent.
Our Amended and Restated Certificate of Incorporation provides in effect
for the indemnification by us of each of our directors and officers to the
fullest extent permitted by applicable law.
Item 16. Exhibits
Exhibit
No. Description
- ------- -----------
4.1 Registration Rights Agreement dated as of July 27, 1987
4.2 Form of Stock Purchase Agreement Amendment
5.1 Opinion of Davis Polk & Wardwell
23.1 Consent of Deloitte & Touche LLP*
23.2 Consent of Davis Polk & Wardwell (included in Exhibit 5.1)
24.1 Powers of Attorney (included on the signature page of the
Registration Statement)*
- --------------------
* Previously filed.
<PAGE>
Item 17. Undertakings
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.
(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 the undertakings set forth in paragraph (i) and (ii)
above 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 registrants pursuant to Section
13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in this 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 the registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
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 the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
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 provisions described in Item 15 above or
otherwise, the registrant has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 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 in the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Borg-Warner
Security Corporation 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 amendment to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Chicago, State of Illinois, on June 4,
1999.
BORG-WARNER SECURITY CORPORATION
By: /s/ Timothy M. Wood
------------------------------
Name: Timothy M. Wood
Title: Vice President, Finance
Pursuant to the Requirements of the Securities Act of 1933, this registration
statement amendment has been signed by the following persons in the capacities
and on the dates indicated.
Signature Title Date
--------- ----- ----
* Chairman of the Board, Chief June 4, 1999
- ------------------------- Executive Officer and President
John A. Edwardson (Principal Executive Officer)
/s/ Timothy M. Wood Vice President, Finance (Principal June 4, 1999
- ------------------------- Financial and Accounting Officer)
Timothy M. Wood
/s/ J. Joe Adorjan Director June 4, 1999
- -------------------------
J. Joe Adorjan
* Director June 4, 1999
- -------------------------
James J. Burke, Jr.
* Director June 4, 1999
- -------------------------
Albert J. Fitzgibbons, III
* Director June 4, 1999
- -------------------------
Arthur F. Golden
* Director June 4, 1999
- -------------------------
Dale W. Lang
* Director June 4, 1999
- -------------------------
Robert A. McCabe
II-3
<PAGE>
Signature Title Date
--------- ----- ----
* Director June 4, 1999
- -------------------------
Andrew McNally IV
* Director June 4, 1999
- -------------------------
Alexis P. Michas
Director June 4, 1999
- -------------------------
H. Norman Schwarzkopf
* Director June 4, 1999
- -------------------------
Donald C. Trauscht
- ------------
* /s/ Timothy M. Wood
---------------------
Timothy M. Wood
Attorney-in-fact
II-4
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description
- ------- -----------
4.1 Registration Rights Agreement dated as of July 27, 1987
4.2 Form of Stock Purchase Agreement Amendment
5.1 Opinion of Davis Polk & Wardwell
23.1 Consent of Deloitte & Touche LLP*
23.2 Consent of Davis Polk & Wardwell (included in Exhibit 5.1)
24.1 Powers of Attorney (included on the signature page of the
Registration Statement)*
- ------------
* Previously filed.
E-1
EXHIBIT C
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT dated as of July 27, 1987 by and among
Borg-Warner Holdings Corporation, a Delaware corporation ("Holdings"); Merrill
Lynch Interfunding Inc., a Delaware corporation ("Interfunding"), Merrill Lynch
Capital Appreciation Partnership No. VIII, L.P., a Delaware limited partnership
("ML Domestic Partnership"), ML Offshore LBO Partnership No. VIII, a Cayman
Islands limited partnership ("ML Offshore Partnership"), ML Employees LBO
Partnership No. I, L.P., a Delaware limited partnership ("ML Employees
Partnership" and, collectively with ML Domestic Partnership, ML Offshore
Partnership and Interfunding, the "ML Entities"), Merrill Lynch Venture Capital
Inc., a Delaware corporation ("ML Venture Partners") and KECALP Inc., a
Delaware corporation ("KECALP" and, collectively with ML Venture Partners and
the ML Entities, the "ML Affiliates"); the Institutional Investors (as defined
herein); the Management Investors and The Northern Trust Company, as Trustee,
under the Trust Agreement dated as of July 27, 1987 by and among Holdings, the
Trustee and Noble, Lowndes, Inc.
1. Background. Holdings is a party to (i) a Management Stock Subscription
Agreement dated as of July 27, 1987 (the "Management Subscription Agreement") ,
by and among Holdings and the Management Investors pursuant to which Holdings
has agreed, among other things, to issue to the Management Investors 2,000,000
shares of Class A Common Stock, par value $0.01 per share, of Holdings (the
"Shares"), (ii) the Institutional Investor Stock Subscription Agreement dated
as of July 27, 1987 (the "Institutional Investor Subscription Agreement") by
and between Holdings and each of the Institutional Investors, pursuant to which
Holdings has agreed, among other things, to issue an aggregate of 7,800,000
Shares and Series I Non-Voting Common Stock, par value $.01 per share, of
Holdings ("Series I Non-Voting Shares") to the Institutional Investors, (iii) a
Stock Purchase Agreement dated as of May 18, 1987 by and among Holdings and the
ML Entities (the "ML Entities Stock Purchase Agreement") pursuant to which
Holdings issued an aggregate of 10,000 Shares to the ML Entities (which Shares
will, due to a dividend of 999 Shares to be declared for each Share
outstanding, be increased to 10,000,000 prior to the Closing) and (iv) a Stock
Subscription Agreement dated as of July 27, 1987 (the "ML Investor Subscription
Agreement") by and between Holdings and the ML Affiliates pursuant to which (i)
Holdings has agreed, among other things, to issue an aggregate of 200,000
Shares to the ML Affiliates, and (ii) certain of the ML Affiliates will sell
Shares to other ML Affiliates.
<PAGE>
2. Definitions. As used in this Agreement, the following capitalized terms
shall have the meanings ascribed to them below:
Acquiring - AV Acquiring Corporation, a Delaware corporation and a wholly
owned indirect subsidiary of Holdings.
Common Stock - Shares, Series I Non-Voting Shares and shares of the Series
II Non-Voting Common Stock, par value $.01 per share, of Holdings ("Series II
Non-Voting Shares").
Effective Time - The effective time of the merger of Acquiring with and
into the Company pursuant to the Merger Agreement.
Exchange Act - The Securities Exchange Act of 1934, as amended, or any
similar federal statute then in effect, and a reference to a particular section
thereof shall be deemed to include a reference to the comparable section, if
any, of any such similar federal statute.
Institutional Holders - The Institutional Investors, any of their
subsidiaries, affiliates and associates (as such terms are defined in the rules
and regulations under the Exchange Act) and each of their successors, assigns
and transferees who agree in writing, in form and substance satisfactory to
Holdings, to become bound, and do become bound, hereby.
Institutional Investors - The institutional investors listed in Schedule I
to the Institutional Investor Agreement, excluding their successors, assigns
and transferees.
Management Investors - The persons listed in Schedule I to the Management
Subscription Agreement, excluding their successors, assigns and transferees.
Management Holders - The Management Investors and their Permitted
Transferees (as such term is defined in the Management Subscription Agreement).
Merger Agreement - The Agreement and Plan of Merger dated as of April 10,
1987, by and among Holdings (formerly AV Holdings Corporation), Acquiring and
the Company.
Merrill Lynch - Merrill Lynch & Co., Inc., a Delaware corporation.
Merrill Lynch Holders - The Merrill Lynch Investors, any of their
subsidiaries, affiliates and associates (as such terms are defined in the rules
and
2
<PAGE>
regulations under the Exchange Act) and any of their partners (general or
limited) and each of their successors, assigns and transferees who agrees in
writing, in form and substance satisfactory to Holdings, to become bound, and
does become bound, hereby.
Merrill Lynch Investors - The ML Affiliates, excluding their successors,
assigns and transferees.
Non-Voting Shares - Series I Non-Voting Shares and Series II Non-Voting
Shares.
Person - An individual, partnership, joint venture, corporation, trust,
unincorporated organization or government or any department or agency thereof.
Registrable Securities - Any Shares purchased pursuant to the Stock
Subscription Agreements (as hereinafter defined) and any Shares issued upon the
conversion of, or after a series of conversions of, Shares or Non-Voting Shares
purchased pursuant to the Stock Subscription Agreements. As to any particular
Registrable Securities, once issued such securities shall cease to be
Registrable Securities when (i) a registration statement with respect to the
sale of such securities shall have become effective under the Securities Act
and such securities shall have been disposed of in accordance with such
registration statement, (ii) such securities shall have been sold pursuant to
Rule 144 (or any successor provision) under the Securities Act (as hereinafter
defined), (iii) such securities shall have been otherwise transferred and new
certificates for such securities not bearing a legend restricting further
transfer shall have been delivered by Holdings, (iv) such securities shall have
ceased to be outstanding or (v) in the case of Shares issued pursuant to the
Management Subscription Agreement to the Management Holders, such securities
shall have been transferred to any Person other than a Management Holder.
Registration Expenses - Any and all expenses incident to performance of or
compliance with this Agreement, including without limitation, (i) all SEC (as
hereinafter defined) and stock exchange or National Association of Securities
Dealers, Inc. registration and filing fees, (ii) all fees and expenses of
complying with securities or blue sky laws (including reasonable fees and
disbursements of counsel for the underwriters in connection with blue sky
qualifications of the Registrable Securities), (iii) all printing, messenger
and delivery expenses, (iv) the fees and disbursements of counsel for Holdings
and of Holdings's independent public accountants, including the expenses of any
special audits and/or "cold comfort" letters required by or incident to such
performance and compliance, (v)
3
<PAGE>
the reasonable fees and disbursements of one counsel retained by each of the
Merrill Lynch Holders, the Institutional Holders and the Management Holders in
connection with each such registration and (vi) any fees and disbursements of
underwriters customarily paid by issuers or sellers of securities and the
reasonable fees and expenses of any special experts retained in connection with
the requested registration, but excluding underwriting discounts and
commissions and transfer taxes, if any.
Requisite Share Number - With respect to (a) the initial registration of
Shares under the Securities Act, at least thirty-five percent (35%) of the
Registrable Securities then outstanding (assuming, for purposes of determining
the Requisite Share Number only, that all then outstanding Non-Voting Shares
have been converted into Shares); and (b) any other registration of Shares
under the Securities Act, at least fifteen percent (15%)- of the Registrable
Securities then outstanding, but in no event less than 1,000,000 Shares.
Securities Act - The Securities Act of 1933, as amended, or any similar
federal statute then in effect, and a reference to a particular section thereof
shall be deemed to include a reference to the comparable section, if any, of
any such similar federal statute.
SEC - The Securities and Exchange Commission or any other federal agency
at the time administering the Securities Act or the Exchange Act.
Stockholders - The Merrill Lynch, Holders, the Institutional Holders and
the Management Holders.
Stock Subscription Agreements - The Management Subscription Agreement, the
Institutional Investor Subscription Agreement, the ML Entities Stock Purchase
Agreement, the ML Investor Subscription Agreement and the ML Affiliates Stock
Purchase Agreement.
3. Registration on Request of the Stockholders.
(a) Request by the Stockholders. Upon the written request (the "Section 3
Request") of Stockholders who hold of record Holdings Common Stock representing
(assuming the conversion of all Non-Voting Shares into Shares) in the aggregate
at least the Requisite Share Number that Holdings effect the registration under
the Securities Act of all or part of such Stockholders' Registrable Securities,
Holdings will promptly give written notice of such requested registration (a
"Section 3 Notice") to all other Stockholders of record who hold any
Registrable Securities or Non-Voting Shares, and thereupon will use its best
efforts to effect, as promptly as practicable (but in no event later than
4
<PAGE>
120 days after Holdings receives such request), the registration under the
Securities Act of:
(i) the Registrable Securities that Holdings has been requested to
register by the Section 3 Request, and
(ii) all other Registrable Securities that Holdings has been requested to
register by any other Stockholder by written request given to Holdings within
15 days after the giving of the Section 3 Notice,
all to the extent necessary to permit the disposition of the Registrable
Securities so to be registered pursuant to an underwritten public offering;
provided, however, that (A) Holdings shall not be obligated to file a
registration statement relating to any registration request under this Section
3 prior to three years after of the Effective Time, (B) Holdings shall not be
obligated to file a registration statement relating to a registration request
under this Section 3 within a period of six months after the effective date of
any other registration statement of Holdings (other than registration
statements on Form S-4 or Form S-8, or any successor or similar forms), (C)
Holdings shall not be obligated to effect more than four registration
statements pursuant to this Section 3 and (D) Holdings may postpone filing a
registration statement relating to a registration request under this Section 3
for a reasonable period (not in excess of 90 days) if in its judgment such
filing would require the disclosure of material information that Holdings has a
bona fide business purpose for preserving as confidential.
(b) Registration Statement Form. Registrations under this Section 3 shall
be on such appropriate registration form of the SEC for the disposition of the
Registrable Securities in an underwritten public offering as shall be selected
by Holdings and shall be reasonably acceptable to Stockholders who are the
registered holders of Holdings Common Stock representing (assuming the
conversion of all then outstanding Non-voting Shares into Shares) in the
aggregate at least the Requisite Share Number.
(c) Expenses. Holdings shall pay all Registration Expenses in connection
with a registration requested pursuant to this Section 3; provided, however,
that each Stockholder shall pay all underwriting discounts and commissions and
transfer taxes, if any, relating to the sale or disposition of such
Stockholder's Registrable Securities pursuant to a registration statement
requested pursuant to this Section 3.
(d) Effective Registration Statement. A registration requested pursuant to
this Section 3 will not be deemed to have been effected unless it has become
effective; provided, however, that if, after a registration has become
effective, the
5
<PAGE>
offering of Registrable Securities pursuant to such registration is interfered
with by any stop order, injunction or other order or requirement of the SEC or
any other governmental agency or court, such registration will be deemed not to
have been effected.
(e) Underwriters. Merrill Lynch, Pierce, Fenner & Smith, Incorporated, a
Delaware corporation ("MLPF&S"), shall act as the underwriter in the public
underwritten offering of Registrable Securities requested to be registered
pursuant to this Section 3. If MLPF&S is unwilling or unable to so act,
Holdings shall have the right to select any nationally recognized investment
banker(s) to administer the offering. Holdings shall use its best efforts to
ensure that the Shares sold in any underwritten public offering pursuant to
this Agreement shall be widely disseminated.
(f) Priority in Requested Registrations. If the managing underwriter for a
requested registration pursuant to this Section 3 shall advise Holdings in
writing that, in its opinion, the number of Registrable Securities requested to
be included in such registration exceeds the number that can be sold in an
orderly manner in such offering within a price range acceptable to Stockholders
who are the regis tered holders of Holdings Common Stock representing (assuming
the conversion of all Non-Voting Shares into Shares) in the aggregate at least
the Requisite Share Number, then the number of such Registrable Securities to
be included in such registration shall be allocated pro rata among all
Stockholders requesting that Registrable Securities be included in such
registration on the basis of the relative number of shares of such Registrable
Securities each such Stockholder has requested to be included in such
registration. If, as a result of the proration provisions of this Section 3(f),
any Stockholder shall not be entitled to include all Registrable Securities in
a registration that such Stockholder has requested be included, such
Stockholder may elect to withdraw his request to include Registrable Securities
in such registration (a "Withdrawal Election"); provided, however, that a
Withdrawal Election shall be irrevocable and, after making a Withdrawal
Election, a Stockholder shall no longer have any right to include Registrable
Securities in the registration as to which such Withdrawal Election was made.
(g) Termination by Holdings. If as a result of Withdrawal Elections (but
after Holdings shall have included in such registration in place of such
withdrawn Registrable Securities such additional Registrable Securities held by
other Stockholders whose Registrable Securities were excluded as a result of
the proration provisions of Section 3(f)), less than the Requisite Share Number
of Registrable Securities are requested to be included in a registration,
Holdings may, at its election, give written notice to all Stockholders who have
requested that Registrable Securities be included in a registration and who
have not made a
6
<PAGE>
Withdrawal Election that Holdings has determined not to proceed with such
registration and, thereupon, shall be relieved of its obligation to register
any Registrable Securities in connection with such abandoned registration,
without prejudice, however, to the Stockholders' rights to have Registrable
Securities registered pursuant to this Section 3 in the future.
4. Incidental Registration.
(a) Right to Include Registrable Securities. If Holdings at any time
proposes to register any of its equity securities under the Securities Act,
whether or not for sale for its own account (other than a registration on Form
S-4 or Form S-8, or any successor or similar forms and other than pursuant to a
registration under Section 3 hereof), in a manner that would permit
registration of Registrable Securities for sale to the public under the
Securities Act, it will each such time promptly give written notice to all
Stockholders who hold of record any Registrable Securities or Non-Voting Shares
of its intention to do so, of the registration form of the SEC that has been
selected by Holdings and of such holders' rights under this Section 4 (the
"Section 4 Notice"). Holdings will use its best efforts to include in the
proposed registration all Registrable Securities that Holdings is requested in
writing, within 15 days after the Section 4 Notice is given, to register by the
Stockholders thereof; provided, however, that (i) if, at any time after giving
written notice of its intention to register any equity securities and prior to
the effective date of the registration statement filed in connection with such
registration, Holdings shall determine for any reason not to register such
equity securities, Holdings may, at its election, give written notice of such
determination to all Stockholders who hold of record any Registrable Securities
or Non-Voting Shares and, thereupon, shall be relieved of its obligation to
register any Registrable Securities in connection with such abandoned
registration, without prejudice, however, to the rights of Stockholders under
Section 3 hereof and (ii) in case of a determination by Holdings to delay
registration of its equity securities, Holdings shall be permitted to delay the
registration of such Registrable Securities for the same period as the delay in
registering such other equity securities. No registration effected under this
Section 4 shall relieve Holdings of its obligations to effect registrations
upon request under Section 3 and, notwithstanding anything to the contrary in
Section 3, no Stockholder shall have the right to require Holdings to register
any Registrable Securities pursuant to Section 3 during each six month-period
commencing on the date each registration statement effected under this Section
4 is declared effective.
(b) Expenses. Holdings shall pay all Registration Expenses in connection
with each registration of Registrable Securities requested pursuant to this
Section 4; provided, however, that each Stockholder shall pay all underwriting
discounts and commissions and transfer taxes, if any, relating to the sale or
disposition of
7
<PAGE>
such Stockholder's Registrable Securities pursuant to a registration statement
effected pursuant to this Section 4.
(c) Priority in Incidental Registrations. If the managing underwriter for
a registration pursuant to this Section 4 that involves an underwritten
offering shall advise Holdings in writing that, in its opinion, the number of
securities requested to be included in such registration exceeds the number
(the "Section 4 Sale Number") that can be sold in an orderly manner in such
offering within a price range acceptable to Holdings, Holdings shall include in
such offering (i) first, all the securities Holdings proposes to register, and
(ii) second, to the extent that the Registrable Securities to be included by
Holdings are less than the Section 4 Sale Number, all Registrable Securities
requested to be included by all Stockholders, provided, however, that if the
number of such Registrable Securities exceeds the Section 4 Sale Number less
the number of securities included pursuant to clause (i) hereof, then the
number of such Registrable Securities included in such registration shall be
allocated pro rata among all requesting Stockholders, on the basis of the
relative number of shares of such Registrable Securities each such Stockholder
has requested to be included in such registration. If, as a result of the
proration provisions of this Section 4(c), any Stockholder shall not be
entitled to include all Registrable Securities in a registration pursuant to
this Section 4 that such Stockholder has requested be included, such
Stockholder may make a Withdrawal Election; provided, however, that such
Withdrawal Election shall be irrevocable and, after making a Withdrawal
Election, a Stockholder shall no longer have any right to include Registrable
Securities in the registration as to which such Withdrawal Election was made.
5. Registration Procedures. If and whenever Holdings is required to use
its best efforts to effect or cause the registration of any Registrable
Securities under the Securities Act as provided in this Agreement, Holdings
will, as soon as practicable:
(a) promptly prepare and file with the SEC (in any event within 60 days
after the end of the period within which requests for registration may be given
to Holdings), the requisite registration statement with respect to such
Registrable Securities and use its best efforts to cause such registration
statement to become and remain effective, provided, however, that Holdings may
discontinue any registration of its securities that is being effected pursuant
to Section 4 herein at any time prior to the effective date of the registration
statement relating thereto;
(b) prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may
be necessary to keep such registration statement effective for such period
(which in no event shall exceed 120 days) as any seller of such Registrable
8
<PAGE>
Securities shall request and to comply with the provisions of the Securities Act
with respect to the sale or other disposition of all securities covered by such
registration statement during such period;
(c) furnish to each seller of such Registrable Securities and each
underwriter, if any, of the securities being sold by such seller such number of
copies of such registration statement and of each amendment and supplement
thereto (in each case including all exhibits), such number of copies of the
prospectus included in such registration statement (including each preliminary
prospectus and summary prospectus), in conformity with the requirements of the
Securities Act, and such other documents as such seller and underwriter may
reasonably request in order to facilitate the public sale of the Registrable
Securities owned by such seller;
(d) use its best efforts to register or qualify such Registrable
Securities covered by such registration statement under such other securities
or "blue sky" laws of such jurisdictions as any sellers of Registrable
Securities representing more than 15% of the total number of securities covered
by such registration statement or any managing underwriter shall reasonably
request, and do any and all other acts and things that may be necessary or
advisable to enable such seller and each managing underwriter, if any, to
consummate the disposition in such jurisdictions of such Registrable Securities
owned by such seller, provided, however, that Holdings shall not for any such
purpose be required to qualify generally to do business as a foreign
corporation in any jurisdiction wherein it would not but for the requirements
of this clause (d) be obligated to be so qualified, to subject itself to
taxation in any such jurisdiction or to consent to general service of process
in any such jurisdiction;
(e) notify each seller of any such Registrable Securities covered by such
registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of Holdings's becoming aware
that the prospectus, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and at the request of
any such seller promptly prepare and furnish to such seller a reasonable number
of copies of a prospectus supplemented or amended so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus
shall not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading;
9
<PAGE>
(f) otherwise use its best efforts to comply with all applicable rules and
regulations of the SEC, and make available to its security holders, as soon as
rea sonably practicable, an earning statement covering the period of at least
twelve months, but not more than eighteen months, beginning with the first day
of Holdings's first calendar quarter after the effective date of the
registration statement, which earning statement shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder;
(g) use its best efforts to cause all such Registrable Securities covered
by such registration statement to be listed on the principal securities
exchange on which similar equity securities issued by Holdings are then listed
or eligible for listing, if the listing of such securities is then permitted
under the rules of such exchange;
(h) provide a transfer agent and registrar for all such Registrable
Securities covered by such registration statement not later than the effective
date of such registration statement;
(i) in connection with any underwritten offering, enter into an
underwriting agreement with the underwriter of such offering in the form
customary for such underwriter for similar offerings, including such
representations and warranties by Holdings, provisions regarding the delivery
of opinions of counsel for Holdings and accountants' letters, provisions
regarding indemnification and contribution, and such other terms and conditions
as are at the time customarily contained in such underwriter's underwriting
agreements for similar offerings (the sellers of Registrable Securities which
are to be distributed by such underwriter(s) may, at their option, require that
any or all of the representations and warranties by, and the other agreements
on the part of, Holdings to and for the benefit of such underwriter(s) shall
also be made to and for the benefit of such sellers of Registrable Securities.
Such sellers of Registrable Securities shall not be required to make any
representations or warranties to or agreements with Holdings or the
underwriters other than representations, warranties or agreements regarding
such sellers and such sellers' intended methods of distribution);
(j) upon receipt of such confidentiality agreements as Holdings may
reasonably request, make available for inspection by any seller of such
Registrable Securities covered by such registration statement and by any
attorney, accountant or other agent retained by any such seller, all pertinent
financial and other records, pertinent corporate documents and properties of
Holdings and its subsidiaries, and cause all of Holdings's and its
subsidiaries' officers, directors and employees to supply all information
reasonably requested by any such seller, attorney, accountant or agent in
connection with such registration statement; and
10
<PAGE>
(k) permit any holder of Registrable Securities who, in the sole judgment,
exercised in good faith, of such holder, might be deemed to be a controlling
person of Holdings, to participate in the preparation of such registration or
comparable statement and to require the insertion therein of material,
furnished to Holdings in writing, that in the judgment of such holder, as
aforesaid, should be included.
Holdings may require each seller of Registrable Securities as to which any
registration is being effected to furnish Holdings such information regarding
such seller and the distribution of such securities as Holdings may from time
to time reasonably request in writing.
Each holder of Registrable Securities agrees that upon receipt of any
notice from Holdings of the happening of any event of the kind described in
clause (e) of this Section 5, such holder will forthwith discontinue
disposition of Registrable Securities pursuant to the registration statement
covering such Registrable Securities until such holder's receipt of the copies
of the supplemented or amended prospectus contemplated by clause (e) of this
Section 5, and, if so directed by Holdings, such holder will deliver to
Holdings (at Holdings's expense) all copies, other than permanent file copies
then in such holder's possession, of the prospectus covering such Registrable
Securities that was in effect prior to such amendment or supplement. In the
event Holdings shall give any such notice, the period set forth in clause (b)
of this Section 5 shall be extended by the number of days during the period
from and including the date of the giving of such notice pursuant to clause (e)
of this Section 5 to and including the date when each seller of Registrable
Securities covered by such registration statement shall have received the
copies of the supplemented or amended prospectus contemplated by clause (e) of
this Section 5.
6. Indemnification.
(a) Indemnification by Holdings. In the event of any registration of any
securities of Holdings under the Securities Act pursuant to Section 3 or 4
hereof, Holdings will, and hereby does, indemnify and hold harmless, to the
extent permitted by law, the seller of any Registrable Securities covered by
such registration statement, its directors and officers or general and limited
partners (and the directors and officers thereof), each other Person who
participates as an underwriter, if any, in the offering or sale of such
securities and each other Person, if any, who controls such seller or any such
underwriter within the meaning of the Securities Act, against any and all
losses, claims, damages or liabilities, joint or several, and expenses
(including any amounts paid in any settlement effected with Holdings' consent,
which consent shall not be unreasonably withheld) to which such seller, any
such director of officer or general or limited partner or any such
11
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underwriter or controlling Person may become subject under the Securities Act,
common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions or proceedings in respect thereof) arise out of or are based upon
(a) any untrue statement or alleged untrue statement of a material fact
contained in any registration statement under which such securities were
registered under the Securities Act or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, (b) any untrue statement or alleged
untrue statement of a material fact contained in any preliminary prospectus,
together with the documents incorporated by reference therein (as amended or
supplemented if Holdings shall have filed with the SEC any amendment thereof or
supplement thereto), if used prior to the effective date of such registration
statement, or contained in the prospectus, together with the documents
incorporated by reference therein (as amended or supplemented if Holdings shall
have filed with the SEC any amendment thereof or supplement thereto), or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading or (c)
any violation by Holdings of any federal, state or common law rule or
regulation applicable to Holdings and relating to action required of or
inaction by Holdings in connection with any such registration, and Holdings
will reimburse such seller and each such director, officer, general or limited
partner, underwriter and controlling Person for any legal or any other expenses
reasonably incurred by any of them in connection with investigating or
defending any such loss, claim, liability, action or proceeding; provided, that
Holdings shall not be liable to any such seller or any such director, officer,
general or limited partner, underwriter or controlling Person in any such case
to the extent that any such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense arises out of or is based upon any
untrue statement or alleged untrue statement or omission or alleged omission
made in such registration statement or amendment thereof or supplement thereto
or in any such preliminary, final or summary prospectus in reliance upon and in
conformity with written information furnished to Holdings by or on behalf of
any such seller or any such director, officer, general or limited partner,
underwriter or controlling Person, specifically stating that it is for use in
the preparation thereof; and provided further, that Holdings will not be liable
to any Person who participates as an underwriter in the offering or sale of
Registrable Securities, if any, or any other Person, if any, who controls such
underwriter within the meaning of the Securities Act, under the indemnity
agreement in this Section 6(a) with respect to any preliminary prospectus or
the final prospectus or the final prospectus as amended or supplemented as the
case may be, to the extent that any such loss, claim, damage or liability of
such underwriter or controlling Person results from the fact that such
underwriter sold Registrable Securities to a person to whom there was not sent
or given, at or prior to the written confirmation of such sale, a copy of the
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final prospectus or of the final prospectus as then amended or supplemented,
whichever is most recent, if Holdings has previously furnished copies thereof
to such underwriter and such final prospectus, as then amended or supplemented,
has corrected any such misstatement or omission. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
such seller or any director, officer, general or limited partner, underwriter
or controlling Person and shall survive the transfer of such securities by such
seller.
(b) Indemnification by the Sellers. Holdings may require, as a condition
to including any Registrable Securities in any registration statement filed in
accordance with Section 3 or 4 hereof, that Holdings shall have received an
undertaking reasonably satisfactory to it from the prospective seller of such
Registrable Securities and any underwriter, to indemnify and hold harmless (in
the same manner and to the same extent as set forth in paragraph (a) of this
Section 6) Holdings and its directors and officers and each person controlling
Holdings within the meaning of the Securities Act and all other prospective
sellers and their directors, officers, general and limited partners and
respective controlling Persons with respect to any statement or alleged
statement in or omission or alleged omission from such registration statement,
any preliminary, final or summary prospectus contained therein, or any
amendment or supplement, if such statement or alleged statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to Holdings or its representatives by or on behalf of
such seller or underwriter specifically stating that it is for use in the
preparation of such registration statement, preliminary, final or summary
prospectus or amendment or supplement. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of
Holdings or any of the prospective sellers or any of their respective
directors, officers, general or limited partners or controlling Persons and
shall survive the transfer or such securities by such seller.
(c) Notices of Claims, Etc. As soon as possible after receipt by an
indemnified party hereunder of written notice of the commencement of any action
or proceeding with respect to which a claim for indemnification may be made
pursuant to this Section 6, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party, give written notice to the
latter of the commencement of such action; provided, that the failure of any
indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under the preceding paragraphs of this
Section 6, except to the extent that the indemnifying party is actually
prejudiced by such failure to give notice. If any such claim or action shall be
brought against an indemnified party, and it shall notify the indemnifying
party thereof, the indemnifying party shall be entitled to participate therein,
and, to the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the
13
<PAGE>
defense thereof with counsel reasonably satisfactory to the indemnified party;
provided that the indemnifying party shall not be entitled to so participate or
so assume the defense if, in the indemnified party's reasonable judgment, a
conflict of interest between the indemnified party and the indemnifying party
exists in respect of such claim. After notice from the indemnifying party to
such indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified party
under this Section 6 for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof; and provided
further that the sellers and their respective officers, directors, general and
limited partners and controlling Persons or Holdings and its officers,
directors and controlling Persons, as the case may be, shall have the right to
employ one counsel to represent such indemnified parties if, in such
indemnified parties' reasonable judgment, a conflict of interest between the
indemnified parties and the indemnifying parties exists in respect of such
claim, and in that event the fees and expenses of such separate counsel shall
be paid by the indemnifying party; and provided further that if, in the
reasonable judgment of any of the indemnified parties, a conflict of interest
between such indemnified parties and any other indemnified parties exists in
respect of such claim, such indemnified parties shall be entitled to additional
counsel or counsels and the indemnifying party shall be obligated to pay the
fees and expenses of such additional counsel or counsels. No indemnifying party
will consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability in respect
to such claim or litigation.
(d) Other Indemnification. Indemnification similar to that specified in
the preceding paragraphs of this Section 6 (with appropriate modifications)
shall be given by Holdings and each seller of Registrable Securities with
respect to any required registration or other qualification of securities under
any state securities and "blue sky" laws.
(e) Contribution. If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under Section
6(a) or (b) of this Agreement, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in Section 6(a) or (b) in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and the indemnified party on the other hand in connection
with statements or omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative fault 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 indemnifying party or the indemnified
14
<PAGE>
party and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statements or omission. The
parties hereto agree that it would not be just and equitable if contributions
pursuant to this Section 6(e) were to be determined by pro rata allocation or
by any other method of allocation which does not take account of the equitable
considerations referred to in the first sentence of this Section 6(e). The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities referred to in the first sentence of this Section 6(e) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action or
claim (which shall be limited as provided in Section 6(c) if the indemnifying
party has assumed the defense of any such action in accordance with the
provisions thereof) which is the subject of this Section 6(e). 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. Promptly after receipt by an
indemnified party under this Section 6(e) of notice of the commencement of any
action against such party in respect of which a claim for contribution may be
made against an indemnifying party under this Section 6(e), such indemnified
party shall notify the indemnifying party in writing of the commencement
thereof if the notice specified in Section 6(c) has not been given with respect
to such action; provided that the omission so to notify the indemnifying party
shall not relieve the indemnifying party from any liability which it may have
to any indemnified party otherwise under this Section 6(e), except to the
extent that the indemnifying party is actually prejudiced by such failure to
give notice. Notwithstanding anything in this Section 6(e) to the contrary, no
indemnifying party (other than Holdings) shall be required pursuant to this
Section 6(e) to contribute any amount in excess of the proceeds received by
such indemnifying party from the sale of Registrable Securities in the offering
to which the losses, claims, damages or liabilities of the indemnified parties
relate.
7. Miscellaneous.
(a) Holdback Agreement. If requested in writing by Holdings or the
underwriter, if any, of any offering effected pursuant to Section 3 or 4, each
Stockholder owning securities of Holdings representing or convertible into or
exchangeable or exercisable for, in the aggregate, more than 1% of the Shares
then outstanding (assuming all then outstanding Non-Voting Shares have been
converted into Shares) agrees not to effect any public sale or distribution,
including any sale pursuant to Rule 144 under the Securities Act, of any
Registrable Securities or any other equity security of Holdings or of any
security convertible into or exchangeable or exercisable for any equity
security of Holdings (in each case, other than as part of such underwritten
public offering) within 7 days before or 120 days after the effective date of a
registration statement
15
<PAGE>
filed pursuant to Section 3 or 4, and Holdings hereby also so agrees and agrees
to cause other holders of any equity security, or of any security convertible
into or exchangeable or exercisable for any equity security, of Holdings
purchased from Holdings (at any time other than in a public offering) to so
agree.
(b) Amendments and Waivers. This Agreement may be amended and Holdings may
take any action herein prohibited, or omit to perform any act herein required
to be performed by it, only if Holdings shall have obtained the written consent
to such amendment, action or omission to act, of the Stockholders owning at
least seventy-five percent of the then outstanding shares of Holdings Common
Stock (and, in the case of any amendment, action or omission to act that
adversely affects any Stockholder or group of Stockholders differently from any
of the other Stockholders, the written consent of such Stockholder or group of
Stockholders). Stockholders shall be bound from and after the date of the
receipt of a written notice from Holdings setting forth such amendment or
waiver by any consent authorized by this Section 7(b), whether or not such
shares of Holdings Common Stock shall have been marked to indicate such
consent.
(c) Successors, Assigns and Transferees. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors, assigns and transferees, provided, however, that the Management
Holders may not transfer, by operation of law or otherwise, any of their rights
hereunder to any Person other than a Management Holder.
(d) Integration. This Agreement and the documents referred to herein or
delivered pursuant hereto that form a part hereof contain the entire
understanding of the parties with respect to its subject matter. There are no
restrictions, agreements, promises, representations, warranties, covenants or
undertakings with respect to the subject matter hereof other than those
expressly set forth herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to its subject matter.
(e) Notices. All notices and other communications provided for hereunder
shall be in writing and shall be sent by first class mail, telex, telecopier or
hand delivery:
(i) if to Holdings, to:
Borg-Warner Holdings
c/o Merrill Lynch Capital Partners, Inc.
250 Vesey Street
New York, New York 10281-1201
Attention: James J. Burke, Jr.
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with a copy to:
Wachtell, Lipton, Rosen & Katz
299 Park Avenue
New York, New York 10171
Attention: Andrew R. Brownstein, Esq.
(ii) if to any of the Management Holders, to the address of such
Management Holder, as shown in the stock record book of Holdings, or to such
other address as any of the Management Holders shall have designated in writing
to Holdings.
(iii) if to any of the Merrill Lynch Holders, to the address of such
Merrill Lynch Holder as shown in the stock record book of Holdings, or to such
other address as any of the Merrill Lynch Holders shall have designated in
writing to Holdings.
with copies to:
Merrill Lynch Capital Partners, Inc.
250 Vesey Street
New York, New York 10281-1201
Attention: James J. Burke, Jr.
(iv) if to any of the Institutional Holders, to the address of such
Institutional Holder, as shown in the stock record book of Holdings, or to such
other address as any of the Institutional Holders shall have designated in
writing to Holdings.
17
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All such notices and communications shall be deemed to have been given or made
(1) when delivered by hand, (2) five business days after being deposited in the
mail, postage prepaid, (3) when telexed answer-back received or (4) when
telecopied, receipt acknowledged.
(f) Descriptive Headings. The headings in this Agreement are for
convenience of reference only and shall not limit, expand or otherwise affect
the meaning of the terms contained herein.
(g) Severability. In the event that any one or more of the provisions,
paragraphs, words, clauses, phrases or sentences contained herein, or the
application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision, paragraph, word, clause, phrase or
sentence in every other respect and of the remaining provisions, paragraphs,
words, clauses, phrases or sentences hereof shall not be in any way impaired,
it being intended that all rights, powers and privileges of the parties hereto
shall be enforceable to the fullest extent permitted by law.
(h) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument, and it shall not be necessary in making
proof of this Agreement to produce or account for more than one such
counterpart.
(i) Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware, without regard
to the principles of conflicts of laws thereof.
(j) Recapitalizations, Exchanges, Etc. Affecting Shares. The provisions of
this Agreement regarding Holdings Common Stock shall apply to any and all
shares of capital stock of Holdings or any successor or assign of Holdings
(whether by merger, consolidation, sale of assets or otherwise) that may be
issued in respect of, in exchange for, or in substitution of the Holdings
Common Stock, by reason of any stock dividend, stock split, stock issuance,
reverse stock split, combination, recapitalization, reclassification, merger,
consolidation or otherwise. Upon the occurrence of any of such events, the
definitions of Holdings Common Stock, Shares, Non-Voting Shares, Registrable
Securities and Requisite Share Number shall be appropriately modified.
(k) Termination. This Agreement shall terminate, and thereby become null
and void, on the fifteenth anniversary of the date hereof; provided, however,
that the provisions of Section 6 shall survive the termination of this
Agreement.
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<PAGE>
IN WITNESS WHEREOF, each of the undersigned has executed this Agreement or
caused this Agreement to be executed on its behalf as of the date first written
above.
BORG-WARNER HOLDINGS
CORPORATION
By:________________________________
By:________________________________
MERRILL LYNCH CAPITAL ML EMPLOYEES LBO PARTNERSHIP
APPRECIATION PARTNERSHIP NO. I, L.P.
NO. VIII, L.P.
by: Merrill Lynch LBO by: ML Employees LBO
Partners No. II, L.P., Managers, Inc.
as General Partner General Partner
by: Merrill Lynch Capital By:________________________________
Partners, Inc.
General Partner
By:____________________________
James J. Burke, Jr.
President
19
<PAGE>
ML OFFSHORE LBO MERRILL LYNCH INTERFUNDING
PARTNERSHIP NO. VIII INC.
by: Merrill Lynch LBO By:_______________________________
Partners No. II, L.P.,
as General Partner
by: Merrill Lynch Capital KECALP, INC.
Partners, Inc.
General Partner
By:_________________________________ By:_______________________________
James J. Burke, Jr.
President
MERRILL LYNCH VENTURE
CAPITAL INC.
By:_______________________________
20
EXHIBIT 4.2
AMENDMENT TO STOCK PURCHASE AGREEMENT
THIS AMENDMENT entered into as of _______________________, 1999, by and
among Borg-Warner Security Corporation, a Delaware corporation (the "Company"),
and each of the entities set forth under the heading "Sellers" on the signature
pages hereto (each, a "Seller" and collectively, the "Sellers"), hereby amends
the Stock Purchase Agreement (the "Stock Purchase Agreement") entered into as
of April 19, 1999, by and among the Company and each of the Sellers. The
Company and the Sellers are referred to collectively herein as the "Parties."
WHEREAS, under the Stock Purchase Agreement, the Company agreed to
purchase an aggregate of 4,350,000 shares of common stock of the Company (the
"Common Stock"), and agreed to provide certain registration rights to the
Sellers and certain other Merrill Lynch Holders (as defined in the Registration
Rights Agreement dated as of July 27, 1987 by and among the Company and the
other parties thereto (the "Registration Rights Agreement")) with respect to
their remaining shares of Common Stock.
WHEREAS, this Amendment hereby amends the registration rights provisions
set forth in the Stock Purchase Agreement.
NOW, THEREFORE, in consideration of the premises and the actual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows:
Section 1. Amendment. Section 5(b) of the Stock Purchase Agreement is
hereby amended and restated in its entirety to read as follows:
(a) Registration Statement. The Parties hereby acknowledge that pursuant
to Section 3 of the Registration Rights Agreement, the Merrill Lynch Holders
have made a request that the Company effect a registration under the Securities
Act of 1933, as amended (the "Securities Act"), to register 5,850,000 shares of
Common Stock constituting Registrable Securities (as such term is defined in
the Registration Rights Agreement), and on May 21, 1999 the Company filed an
S-3 Resale Registration Statement with the Securities and Exchange Commission
(the "SEC") pursuant to Rule 415 under the Securities Act (the "Shelf
Registration"). The Shelf Registration Statement became effective with the SEC
on June 8, 1999.
(b) Except as otherwise provided herein, the Company shall use all
reasonable efforts to keep the Shelf Registration Statement continuously
effective until the earlier of (A) such time as all of the remaining
Registrable Securities subject to the Shelf Registration Statement have been
disposed of or are no longer Registrable Securities (as defined in the
Registration Rights Agreement), or (B) 365 days after the date on which such
Shelf Registration Statement becomes effective.
(c) If the continued effectiveness of the Shelf Registration Statement at
any time would require the Company to make an Adverse Disclosure, then the
Company may, upon giving prompt written notice of such action to the Merrill
Lynch Holders, delay filing the Shelf Registration Statement or suspend use of
the Shelf Registration Statement (in either case, a
<PAGE>
"Suspension"); provided, however, the Company shall not be permitted to
exercise a Suspension (i) more than three times during any twelve (12) month
period, or (ii) for a period exceeding ninety (90) days on any one occasion, or
(iii) for an aggregate period exceeding one hundred fifty (150) days in the
twelve (12) month period during which the Shelf Registration Statement is to be
effective. In the case of a Suspension, the notice required above shall request
the Merrill Lynch Holders to suspend any sale or purchase, or offer to sell or
purchase of the Registrable Shares subject to the Shelf Registration Statement,
and to suspend use of the Prospectus related to the Shelf Registration
Statement in connection with any such sale or purchase or offer to sell or
purchase. The Company shall immediately notify the Merrill Lynch Holders upon
the termination of any Suspension, amend or supplement the Prospectus, if
necessary, so it does not contain any untrue statement or omission therein and
furnish to the Merrill Lynch Holders such numbers of copies of the Prospectus
as so amended or supplemented as the Merrill Lynch Holders may reasonably
request. "Adverse Disclosure" means the public disclosure of material
non-public information relating to a significant transaction, which disclosure
(i) would be required to be made in any registration statement filed with the
SEC by the Company so that such registration statement would not be materially
misleading; (ii) would not be required to be made at such time but for the
filing of such registration statement; and (iii) would, in the good faith
judgment of the Company's Board of Directors, have a material adverse effect
upon the Company's ability to complete such significant transaction or upon the
terms on which such significant transaction could be completed.
(d) The Company agrees to pay for all Registration Expenses (as defined in
the Registration Rights Agreement) with respect to the Shelf Registration
Statement; provided, however, that the Merrill Lynch Holders shall pay all
underwriting discounts, brokers fees and commissions and transfer taxes, if
any, relating to the sale or disposition of shares offered or sold under the
Shelf Registration Statement.
(e) Except as provided herein to the contrary and except to the extent
that such terms not apply to resale registration statements filed under Rule
415 under the Securities Act, the terms and conditions governing the
registration procedures of the Shelf Registration Statement and the
indemnification rights provided with respect to the Shelf Registration
Statement shall be as set forth in Sections 5 and 6 of the Registration Rights
Agreement.
Section 2. Miscellaneous.
(a) Entire Agreement. The Registration Rights Agreement and the Stock
Purchase Agreement, as amended hereunder, constitute the entire agreement
between the Parties with respect to the subject matter hereof and supersedes
any prior understandings, agreements, or representations by or between the
Parties, written or oral, to the extent they relate in any way to the subject
matter hereof. Unless otherwise expressly provided for herein the Stock
Purchase Agreement shall remain in full force and effort.
2
<PAGE>
(b) Counterparts This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
* * * * *
3
<PAGE>
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the date first above written.
BORG-WARNER SECURITY CORPORATION
By:________________________________________________
Name: Timothy M. Wood
Title: Vice President and Chief Financial Officer
SELLERS:
MERCHANT BANKING L.P. NO. I
By: Merrill Lynch MBP Inc., General Partner
By:________________________________________________
Name:______________________________________________
Title:_____________________________________________
MERRILL LYNCH CAPITAL APPRECIATION
PARTNERSHIP NO. VIII, L.P.
By: Merrill Lynch LBO Partners, No. II, L.P., General Partner
By:________________________________________________
Name:______________________________________________
Title:_____________________________________________
ML OFFSHORE LBO PARTNERSHIP NO. VIII
By: Merrill Lynch LBO Partners, No. II, L.P., Investment General Partner
By: Merrill Lynch Capital Partners, Inc., General Partner
By:________________________________________________
Name:______________________________________________
Title:_____________________________________________
4
<PAGE>
ML EMPLOYEES LBO PARTNERSHIP NO. I, L.P.
By: ML Employees LBO Managers, Inc., General Partner
By:________________________________________________
Name:______________________________________________
Title:_____________________________________________
ML IBK POSITIONS, INC.
By:________________________________________________
Name:______________________________________________
Title:_____________________________________________
EXHIBIT 5.1
Davis Polk & Wardwell
450 Lexington Avenue
New York, N.Y. 10017
212-450-4000
June 4, 1999
Borg-Warner Security Corporation
200 South Michigan Avenue
Chicago, IL 60604
Dear Sirs:
We have acted as counsel for Borg-Warner Security Corporation, a Delaware
corporation (the "Company"), in connection with the preparation of the
Registration Statement of the Company on Form S-3 (File No. 333-79041) (the
"Registration Statement"), as filed with the Securities and Exchange Commission
(the "Commission") on May 21, 1999, as amended, relating to the registration
under the Securities Act of 1933, as amended (the "Securities Act"), of
5,850,000 shares (the "Shares") of the Company's common stock, par value $.01
per share, to be sold pursuant to the Registration Statement by the selling
shareholders named therein.
In this connection, we have examined originals or copies, certified or
otherwise identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments as we have deemed
necessary for the purposes of rendering this opinion.
With reference to the Registration Statement, we are of the opinion that:
(i) the Company is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Delaware;
(ii) the Shares have been duly authorized and legally issued, and are
fully paid and nonassessable.
<PAGE>
We are members of the Bar of the State of New York and the foregoing
opinion is limited to the laws of the State of New York, the General
Corporation Law of the State of Delaware and the federal laws of the United
States.
We hereby consent to the filing of this opinion with the Commission in
connection with the Registration Statement.
Very truly yours,
