As filed with the Securities and Exchange Commission on March 31, 2000
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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TRISM, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3491658
(State or other (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or
organization)
COPY TO:
4174 JILES ROAD JAMES G. OVERLEY ALLAN R. WILLIAMS, ESQ.
KENNESAW, GEORGIA 30144 4174 JILES ROAD PROSKAUER ROSE LLP
(770) 795-4600 KENNESAW, GEORGIA 30144 1585 BROADWAY
(770) 795-4650 NEW YORK, NEW YORK 10036
(212) 969-3000
(Address, including zip (Name, address, including
code, and telephone number, zip code, and telephone
including area code, of number, including area
registrant's principal code, of agent for service)
executive offices)
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after the effective date of this Registration Statement.
If the 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: [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act Registration Statement number of the earlier
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: [ ]
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Title of each class of Amount to be Proposed maximum Proposed maximum Amount of
securities to be registered registered offering price per aggregate offering registration
unit(1) price(1) fee
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.01 564,492 $3.6875(2) $2,081,564 $ 550
per share
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12% Senior Subordinated $8,913,024 100% $8,913,024 $2,353
Notes Due 2005
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Total -- -- -- $2,903
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</TABLE>
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(1) Estimated solely for purposes of calculation of the registration fee.
(2) Calculated pursuant to Rule 457(c) based upon the average of the high and
low sales prices for the Company's common stock as reported on the OTC
Bulletin Board on March 30, 2000.
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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 THEREAFTER BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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<PAGE>
Information contained herein is subject to completion or amendment. A
Registration Statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the Registration Statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION, DATED MARCH 31, 2000
TRISM, INC.
564,492 SHARES OF COMMON STOCK
$8,913,024
12% SENIOR SUBORDINATED NOTES DUE 2005
This prospectus relates to $8,913,024 principal amount of 12% Senior
Subordinated Notes due 2005 of TRISM, Inc. and 564,492 shares of common stock of
TRISM, Inc., each held by the selling securityholders identified in this
prospectus. The selling securityholders may sell these securities from time to
time on the over-the-counter market in regular brokerage transactions, in
transactions directly with market makers, in privately negotiated transactions,
or otherwise. For additional information on the methods of sale, you should
refer to the section entitled "Plan of Distribution" on page 8. We will not
receive any of the proceeds from the sale of these securities.
The common stock is quoted on the OTC Bulletin Board under the symbol
"TSMX." On March 30, 2000, the last sale price of the common stock reported on
the OTC Bulletin Board was $3.50. The 12% Senior Subordinated Notes due 2005 are
not listed or quoted on any trading market.
INVESTING IN TRISM'S SECURITIES INVOLVES RISKS. YOU SHOULD CAREFULLY
CONSIDER THE RISK FACTORS BEGINNING ON PAGE 5 IN DETERMINING WHETHER TO PURCHASE
TRISM'S SECURITIES.
-----------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
-----------
THE DATE OF THIS PROSPECTUS IS __________ ___, 2000.
<PAGE>
TABLE OF CONTENTS
The Company....................................................................3
Risk Factors...................................................................5
Use of Proceeds................................................................8
Ratio of Earnings to Fixed Charges.............................................8
Description of Notes...........................................................8
Selling Securityholders.......................................................31
Plan of Distribution..........................................................32
Experts.......................................................................34
Legal Matters.................................................................34
Where to Find Additional Information..........................................34
Incorporation of Certain Documents by Reference...............................35
Forward-Looking Statements....................................................36
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THE COMPANY
TRISM, Inc. is the nation's largest trucking company that specializes in
the transportation of heavy and over-dimensional freight and equipment, as well
as materials such as munitions, explosives and radioactive and hazardous waste.
In addition, TRISM offers worldwide logistics services in specialized markets
and super heavy-haul project capacity in conjunction with Econofreight Group
Limited, one of the largest over-dimensional transporters in the world.
TRISM operates the largest, most diversified fleet of specialized
equipment in the industry, which includes more than 1,800 tractors with
satellite communications, 3,000 open trailers and 1,200 vans. From 44
strategically located owned or leased facilities, TRISM ships cargo to
destinations throughout the continental United States and Canada. TRISM also
arranges for shipments within Mexico through agreements it maintains with
Mexican trucking companies. TRISM employs approximately 620 management and staff
and 1,600 drivers, and engages approximately 350 independent contractors. TRISM
owns or leases properties in 23 states with its principal offices located in
Kennesaw, Georgia and Joplin, Missouri.
TRISM operates its principal lines of business through its specialized
transportation group, secured transportation group and logistics group.
TRISM SPECIALIZED TRANSPORTATION GROUP. The Trism Specialized
Transportation group primarily operates through Trism Specialized Carriers, Inc.
Specialized Carriers is the largest single transporter in the over-dimensional
and heavy-haul market segments of the industry. Specialized Carriers provides
general freight and heavy specialized transportation on a national and
international basis, serving markets that include manufacturers of large
machinery and equipment, suppliers and contractors to industrial and public
construction, importers of industrial durable goods and the United States
government.
TRISM Super Heavy Haul specializes in the transportation of
extraordinarily heavy or oversized loads that have unique handling requirements.
Through a collaboration with Econofreight Group Limited, a United Kingdom-based,
over-dimensional transporter, TRISM offers complete transportation services for
super heavy haul commodities throughout the world. The market comprises goods
and equipment ranging in weight from 80 to more than 12,000 tons. Heavy Haul's
largest customers are manufacturers of large machinery and equipment, suppliers
and contractors to industrial and public construction, importers of industrial
durable goods, manufacturers of agricultural equipment, electric utilities and
the Department of Defense.
TRISM SECURED TRANSPORTATION GROUP. The Trism Secured Transportation
group primarily operates through Trism Secured Transportation, Inc. Secured
Transportation is an industry leader in the transportation of cargo with special
handling requirements, such as munitions, explosives and radioactive and
hazardous waste. Secured Transportation is comprised of three companies: (1)
Tri-State Motor Transit Co., (2) Diablo Systems, Inc. and
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(3) C.I. Whitten Transfer. Together, this group of companies handles a
significant share of the North American military munitions market and represents
the largest transporters of Department of Defense munitions in the continental
United States. Trism Environmental Services, a division of Tri-State Motor
Transit Co., provides service to customers in the hazardous waste and
radioactive materials market. The group has operating authority throughout the
United States and certain provinces of Canada and maintains trailer-interchange
agreements with key Mexican carriers to provide through-trailer service to
points within Mexico. The group's largest customers are the United States
government and various governmental agencies, waste generators and environmental
clean-up firms.
In addition to these transportation services, Secured Transportation
offers dedicated fleet-management services as a cost-effective alternative to
operating capital-intensive private fleets, a particularly attractive concept
for smaller to mid-sized companies in specialty markets. The dedicated fleet
alternative enables customers to ensure an adequate, flexible supply of quality
equipment and drivers at the same time that it reduces liability and the need
for capital investment.
TRISM LOGISTICS GROUP. The Trism Logistics group primarily operates
through Trism Logistics, Inc. Trism Logistics offers logistical and intermodal
support for shippers and TRISM's operating divisions, as well as other
transportation companies. Trism Logistics' management services include offering
seamless transportation solutions in management of freight moving by truck, rail
and water in international markets as well as in the United States and
specializes in handling particularly complex moves and special projects that
involve hazardous materials and equipment, offering its customers an extremely
high level of expertise in compliance procedures, international regulations and
supply-chain analysis. Intermodal support services includes a wide range of
support services to the industry, such as high-quality terminal gate inspections
and coordination of terminal administration, container-yard operations,
maintenance-and-repair administration, rail-terminal operations, chassis-pool
management and asset disposal. Trism Logistics' customer base includes
engineering and construction companies, suppliers to the European community,
Fortune 500 companies and major utility companies.
TRISM's executive offices are located at 4174 Jiles Road, Kennesaw,
Georgia 30144. TRISM's telephone number is (770) 795-4600.
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RISK FACTORS
IN ADDITION TO THE OTHER INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS, POTENTIAL PURCHASERS OF THE COMPANY'S COMMON STOCK
SHOULD CONSIDER THE FOLLOWING RISK FACTORS.
LEVERAGE AND FINANCIAL COVENANTS. TRISM has indebtedness that could
adversely affect its ability to respond to changing business and economic
conditions. In addition, a substantial portion of TRISM's cash flow from
operations will be dedicated to the payment of principal and interest on its
indebtedness. At February 15, 2000, TRISM had an aggregate of approximately
$87.3 million in long-term indebtedness outstanding, approximately $10.6 million
in off-balance sheet lease obligations and stockholders' equity of approximately
$20.0 million. TRISM's subordinated note indenture and working capital credit
facility contain operating and financial restrictions on TRISM. Such
restrictions affect, and in many respects limit or prohibit, among other things,
the ability of TRISM to incur additional indebtedness, create liens, sell
assets, engage in mergers or acquisitions, make capital expenditures and pay
dividends.
AVAILABILITY OF DRIVERS. Competition for drivers is intense within the
transportation industry. TRISM occasionally experiences difficulty attracting
and retaining qualified drivers. When this occurs, TRISM's trucks are under
utilized, and TRISM must reduce the level of service to its existing customers.
In addition, a shortage of qualified drivers reduces TRISM's ability to obtain
new business. TRISM incurs significant expenses in recruiting new drivers, and
from time to time, TRISM must increase compensation to attract and retain
drivers. Difficulty in attracting and retaining qualified drivers may adversely
impact TRISM's business, financial condition and results of operations.
DEPENDENCE ON KEY CUSTOMERS. TRISM's largest customer is the United
States government (principally the Department of Defense), which accounted for
approximately 15 percent of TRISM's consolidated revenues for the fiscal year
ended December 31, 1999. The loss of the United States government as a customer
would cause a substantial decrease in business and would have a material adverse
effect on TRISM.
INCREASES IN FUEL COSTS. TRISM depends on diesel fuel to operate its
tractors. During the first quarter of 2000, the cost of fuel increased
significantly. TRISM will recover a portion of the increased cost through a fuel
surcharge from its customers. However, the increased fuel costs may adversely
affect TRISM's results of operations. If the cost of fuel continues to increase,
TRISM's results of operations will continue to be adversely affected even though
TRISM may be able to recover a portion of the fuel increase from its customers.
CAPITAL REQUIREMENTS. The transportation industry is capital intensive.
TRISM relies upon loans and leases to purchase new equipment, and TRISM has
granted its lenders a lien on substantially all of its assets. If TRISM is
unable to attract capital at acceptable interest rates or raise additional
equity on acceptable terms, or if there is a significant increase in interest
rates,
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TRISM may be forced to limit its growth and operate its tractors and trailers
for a longer period, which could adversely affect TRISM's business, financial
condition and results of operations.
DEPENDENCE ON KEY PERSONNEL. TRISM is dependent on the continued
services of certain senior executives, who have short term employment agreements
with TRISM. The loss of services of one or more senior executives could have a
material adverse effect on TRISM.
COMPETITIVE CONDITIONS. The transportation industry is highly
competitive. TRISM believes that competition is based primarily on price,
technology and service diversification. TRISM has a significant number of
competitors, both locally and regionally. Some of TRISM's competitors have
greater financial resources than TRISM.
ABSENCE OF DIVIDENDS. TRISM has not paid any cash dividends on its
common stock. As a holding company, the ability of TRISM to pay dividends is
dependent upon the receipt of dividends or other payments from its subsidiaries.
TRISM's subordinated note indenture contains a prohibition on TRISM's ability to
pay dividends.
SEASONALITY. TRISM's operations are subject to seasonal trends common to
the transportation industry. Results of operations for quarters ending in
December and March are significantly lower than the quarters ending in June and
September due to reduced shipments and higher operating costs as a percentage of
revenues in winter months.
ABSENCE OF MARKET FOR THE NOTES. There is no existing trading market for
TRISM's 12% Senior Subordinated Notes due 2005, and there can be no assurance as
to the liquidity of any such market that may develop, the ability of the holders
of Notes to sell such securities, the price at which the holders of Notes would
be able to sell such securities or whether a trading market, if it develops,
will continue. If such market were to exist, the Notes could trade at prices
higher or lower than their principal amount, depending on many factors,
including prevailing interest rates, the market for similar securities and
TRISM's operating results. TRISM does not intend to apply for listing of the
Notes on any securities exchange or for inclusion of the Notes on any automated
quotation system.
ADVERSE IMPACT OF YEAR 2000 COMPUTER SYSTEMS COMPLIANCE. Many older
computer software programs refer to years in terms of the final two digits only.
Such programs may incorrectly interpret the year 2000 to mean the year 1900 or
some other incorrect date. If not corrected, such programs could cause
date-related transaction failures and other problems. TRISM evaluated its
internal date-sensitive systems and equipment for year 2000 compliance. The
assessment and testing phase of TRISM's year 2000 project is complete and
included both information technology equipment and non-information technology
equipment. Based on TRISM's assessment, TRISM determined that its critical
software, hardware and information technology equipment was in compliance with
year 2000 requirements. TRISM's operations incurred no disruption of their
ability to transport product, process financial transactions or engage in normal
business activities. Likewise, TRISM experienced no significant problems
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with its non-information technology systems or key suppliers and customers as a
result of the year 2000 issue. TRISM continues to assess the potential impact of
the year 2000 on its management and information systems. The failure to correct
any material year 2000 problems could result in an interruption in normal
business activity. TRISM's continuing review of its management and information
systems is expected to reduce the risks associated with the year 2000. However,
due to the inherent uncertainty of the year 2000 issue, no assurance can be
given that potential year 2000 failures will not adversely impact TRISM's
business, financial condition and results of operations.
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USE OF PROCEEDS
The selling stockholders will receive all the net proceeds from any sale
of the securities offered by this prospectus. TRISM will not receive any
proceeds from any sale of the securities.
RATIO OF EARNINGS TO FIXED CHARGES
The following sets forth the ratio of earnings to fixed charges for each
of the last five fiscal years.
<TABLE>
<CAPTION>
Pro Forma FISCAL YEAR ENDED DECEMBER 31,
twelve --------------------------------------------------
months
ended
DECEMBER 31,
1999 1999 1998 1997 1996 1995
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to
Fixed Charges(1) --(2) -- -- -- -- 1.3x
</TABLE>
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(1) Coverage of fixed charges is determined by dividing income from
continuing operations before income taxes and extraordinary items,
cumulative effect of accounting change, interest expense, debt issuance
cost amortization and the interest portion of rental expense deemed
representative of the interest factor by the sum of interest expense,
debt issuance cost amortization and the portion of the rental expense
deemed representative of the interest factor. For the twelve months
ended December 31, 1999, 1998, 1997 and 1996, earnings available for
fixed charges were inadequate to cover fixed charges by $18.2, $8.4,
$8.1 and $9.9 million, respectively.
(2) The Pro forma ratio of earnings to fixed charges for the twelve months
ended December 31, 1999 reflects the Company's emergence from bankruptcy
and adoption of fresh-start reporting. For the Pro forma twelve months
ended December 31, 1999, earnings available for fixed charges were
inadequate to cover fixed charges by $5.6 million.
DESCRIPTION OF NOTES
The Notes were issued under an Indenture, dated as of February 15, 2000
(the "Indenture"), between TRISM, Inc. (the "Company"), the guarantors named
therein and U.S. Bank Trust National Association, as trustee (the "Trustee").
The following is a summary of the material provisions of the Indenture and is
qualified in its entirety by reference to the full text of the Indenture filed
with the Securities and Exchange Commission as an exhibit to the Registration
Statement of which the prospectus is a part and incorporated herein by
reference. Terms not otherwise defined herein shall have the meanings ascribed
to them in the Indenture.
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GENERAL
The Notes are senior subordinated obligations of the Company, limited to
$30,000,000 aggregate principal amount, and mature on February 15, 2005. Payment
in full of the principal amount of the Notes is due on February 15, 2005. The
Notes bear interest at the rate of 12% per annum from February 15, 2000, payable
semiannually on March 15 and September 15 of each year, commencing on March 15,
2000.
OPTIONAL REDEMPTION
The Notes may be redeemed, at the option of the Company, in whole at any
time or in part, at any time or from time to time, at a Redemption Price equal
to 101% of the principal amount thereof, plus, in each case, accrued interest
thereon to the Redemption Date.
If at any time fewer than all of the Notes then outstanding are to be
redeemed, the Trustee shall select the Notes or portions thereof to be redeemed
by any method the Trustee shall deem fair and reasonable. Notes in denominations
larger than $1,000 may be redeemed in part in integral multiples of $1,000.
Notice of redemption will be mailed to each Holder of Notes to be
redeemed at such Holder's registered address at least 30, but not more than 60,
days before the Redemption Date. On or after the Redemption Date, interest will
cease to accrue on Notes or portions thereof called for redemption.
In addition to optional redemptions, the Company may from time to time
purchase the Notes in the open market, in private transactions or otherwise, as
permitted by applicable law.
MANDATORY REDEMPTION
The Notes will be mandatorily purchased by the Company, in whole or in
part, upon certain Asset Sales.
CERTAIN COVENANTS
The Indenture contains, among others, the following covenants:
LIMITATION ON RESTRICTED PAYMENTS. The Company shall not, and shall
cause each of its Subsidiaries not to, directly or indirectly, make any
Restricted Payment.
MINIMUM NET WORTH.
(a) If the Company's Net Worth at the end of any fiscal quarter is
equal to or less than the Minimum Net Worth, then, commencing on the date on
which the Company shall give the
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Trustee written notice of any such deficiency, the Notes shall thereafter bear
interest at the rate of 13% per annum. The Notes shall bear interest at such
rate until the date (the "Deficiency Correction Date") on which the Company
shall give the Trustee written notice that its Net Worth, calculated as of the
end of the fiscal quarter immediately preceding, is greater than the Minimum Net
Worth. The Trustee shall notify the Holders that it has received such a notice
from the Company within 10 days after it receives such notice. Subject to
certain exceptions, from and after the Deficiency Correction Date, the Notes
shall bear interest at the rate specified therein.
(b) The Company is required to give the Trustee notice that its Net
Worth is equal to or less than the Minimum Net Worth at the end of any fiscal
quarter in which its Net Worth is equal to or less than such amount if such
quarter is one of the first three quarters of any fiscal year of the Company,
within 45 days after the end of such quarter and, if such quarter is the fourth
quarter of any fiscal year of the Company, within 90 days after the end of such
fiscal year. The Trustee shall notify the Holders that it has received such a
notice from the Company within 10 days after it receives such notice
LIMITATIONS ON INCURRENCE OF ADDITIONAL INDEBTEDNESS.
(a) Except as permitted by the Indenture, the Company will not, and
will not permit any of its subsidiaries to, create, incur, assume or, directly
or indirectly, guarantee the payment of any Indebtedness, except that the
Company and its subsidiaries may incur Indebtedness if at the time of such event
and after giving effect thereto on a PRO FORMA basis the Company's Fixed Charge
Coverage Ratio for the four full fiscal quarters immediately preceding such
event, taken as one period (and calculated on the assumptions that (a) such
Indebtedness had been incurred on the first day of such four-quarter period, (b)
if applicable, the proceeds therefrom had been used to repay, on the first day
of such four-quarter period, Indebtedness actually repaid with such proceeds,
(c) in the case of acquisitions which occurred during such four-quarter period
or subsequent to such four-quarter period and/or prior to the date of the
transaction giving rise to the need to calculate the Fixed Charge Coverage Ratio
on a PRO FORMA basis, on the assumption that such transaction occurred on the
first day of such four-quarter period, (d) in the case of the incurrence of any
Indebtedness during such four-quarter period or subsequent to such four-quarter
period and on or prior to the date of the transaction giving rise to the need to
calculate the Fixed Charge Coverage Ratio on a PRO FORMA basis, on the
assumption that such transaction occurred on the first day of such four-quarter
period, and (e) in the case of any disposition of assets during such
four-quarter period (or subsequent to such four-quarter period and/or prior to
the date of the transaction giving rise to the need to calculate the Fixed
Charge Coverage Ratio) which would require PRO FORMA financial information under
applicable accounting rules of the Commission or which results in the
assumption, repayment, defeasance or discharge of any Indebtedness, on the
assumptions that such disposition had occurred on the first day of such
four-quarter period with the appropriate adjustments with respect to such
disposition being included in such PRO FORMA calculation, and that any
Indebtedness assumed, repaid, defeased or otherwise retired in connection with
such disposition was also retired on such date), would have been at least equal
to 2.0:1.0 if incurred during the period from the Issue Date through December
31, 2000 and 2.25:1.0 if incurred thereafter. For purposes of this Indenture,
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Indebtedness incurred by any person that is not the Company or a subsidiary,
which Indebtedness is outstanding at the time such person is acquired as a
subsidiary by, becomes, or is merged into or consolidated with, such subsidiary
or the Company, shall be deemed to have been incurred or issued, as the case may
be, at the time such person is acquired as a subsidiary by, becomes, or is
merged into or consolidated with, such subsidiary or the Company.
(b) (i) Notwithstanding the provisions of paragraph (a) above, the
Company and any of its wholly-owned subsidiaries that are Guarantors may incur
Indebtedness pursuant to the Senior Secured Credit Facility in an aggregate
principal amount at any time outstanding not to exceed $45 million subject to
permanent reduction as provided under "Limitation on Asset Sales"; and
(ii) The Company shall promptly notify the Trustee in
writing of any reduction, refunding or refinancing of the Senior
Secured Credit Facility.
(c) Notwithstanding the provisions of paragraph (a) above, the Company
and its subsidiaries may incur Indebtedness evidenced by the Notes and the
Guarantor's guarantee of the Company's obligations under the Indenture.
(d) Notwithstanding the provisions of paragraph (a) above, the Company
may incur Indebtedness to any Guarantor, to the extent permitted by the
Indenture.
(e) Notwithstanding the provisions of paragraph (a) above, the Company
and its wholly-owned subsidiaries that are Guarantors may incur Indebtedness if
such Indebtedness was incurred in connection with the grant of Liens of the type
described in clause (xiii) of the definition of the term "Permitted Liens" and
the transaction pursuant to which such Indebtedness was incurred, and the amount
of such Indebtedness, satisfies and complies with all of the requirements of
such clause (xiii).
RESTRICTIONS ON SALE AND OWNERSHIP OF SUBSIDIARIES. The Company shall
not permit any of its subsidiaries to issue any capital stock or partnership
interest (other than to the Company or to a wholly-owned subsidiary that is a
Guarantor as of the Issue Date) or permit any person (other than the Company or
a wholly-owned subsidiary that is a Guarantor as of the Issue Date) to own any
capital stock or partnership interest of any subsidiary of the Company, and the
Company shall not, and shall cause its subsidiaries not to, own, acquire or
permit to exist any subsidiary that is not a wholly-owned subsidiary and a
Guarantor, in each case other than (i) a sale of 100% of the capital stock or
partnership interests of a subsidiary which is not otherwise prohibited by this
Indenture, and (ii) any subsidiary (A) formed after the Issue Date, (B) in which
all Investments made or held by the Company and its subsidiaries constitute
Permitted Business Investments made pursuant to and in compliance with the
definition of such term, and (C) the formation and capitalization of which does
not cause or constitute a default or event of default under the Indenture.
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LIMITATION ON ASSET SALES.
(a) The Company will not, and will not permit any of its subsidiaries
to, consummate any Asset Sale unless (i) the Company or the applicable
subsidiary receives consideration at the time of such Asset Sale (the "Asset
Sale Closing Date") at least equal to the fair market value of the assets sold
or otherwise disposed of or issued (as determined in good faith by the Board of
Directors of the Company or, with respect to assets having a fair market value
in excess of $5 million, an independent financial advisor) and at least 90% of
the fair market value (as so determined) of the consideration so received by the
Company or such subsidiary is in the form of cash; provided, however, that the
amount of (A) any liabilities of the Company or its subsidiaries (other than
liabilities owed to the Company, any of its subsidiaries or any of their
affiliates) that are assumed by the transferee in any such transaction (as shown
on the Company's or such subsidiary's most recent balance sheet) pursuant to a
customary novation agreement that irrevocably releases the Company and its
subsidiaries from further liability and (B) any cash equivalents received by the
Company or any subsidiary from such transferee that are immediately converted by
the Company or such subsidiary into cash shall both be deemed to be cash for
purposes of this paragraph; and (ii) the Net Cash Proceeds received by the
Company or such subsidiary from such Asset Sale are applied in compliance with
paragraph (b) below.
(b) (i) If the Company or any of its subsidiaries engages in an Asset
Sale, the Company or such subsidiary shall apply the Net Cash Proceeds thereof
in the following order:
(A) first, toward the payment of the Indebtedness
(other than Indebtedness under the Senior Secured Credit Facility
or the Notes) which is senior in right of payment to the payment
of the Notes; and
(B) second, toward the payment of the Indebtedness
under the Senior Secured Credit Facility; provided, however, that
any such payment shall result in a permanent reduction of the
Lender's commitment thereunder and a corresponding permanent
reduction in the maximum amount of Indebtedness permitted under
"Limitations on Incurrence of Additional Indebtedness".
(ii) All Net Cash Proceeds not applied pursuant to paragraph
(b)(i) above ("Excess Proceeds") shall be delivered to the Trustee not
later than 90 days after the applicable Asset Sale Closing Date (or 30
days after such later date it is first deemed to be an Asset Sale), and
shall be applied to the purchase of Notes pursuant to a Net Proceeds
Purchase as set forth below. To the extent that any such Excess
Proceeds remain after the application of the Net Cash Proceeds
described in paragraph (b)(i) above, the Company shall purchase Notes
as described in paragraph (c) below (a "Net Proceeds Purchase") at a
price equal to 101% of the aggregate principal amount thereof, plus
accrued interest to the date of purchase, which shall in the aggregate
equal the amount of Excess Proceeds required by to be made available to
purchase Notes in a Net Proceeds Purchase.
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(c) Notice of a Net Proceeds Purchase shall be mailed, by first class
mail, by the Company not more than 91 days after the relevant Asset Sale Closing
Date to all Holders at their last registered addresses, with a copy to the
Trustee.
(d) If at any time any non-cash consideration received by the Company
or any Subsidiary in connection with any Asset Sale is converted into or sold or
otherwise disposed of for cash, or if cash dividends or interest or other cash
payments are received with respect thereto, then such cash shall constitute Net
Cash Proceeds.
GUARANTEES BY SUBSIDIARIES. The Company will cause each of its
subsidiaries, whether existing on the Issue Date or thereafter formed or
acquired, other than subsidiaries formed after the Issue Date to become a
Guarantor by executing and delivering a supplemental indenture evidencing such
subsidiary's guarantee.
LIMITATION ON ISSUANCE OF OTHER SUBORDINATED INDEBTEDNESS SENIOR TO
THE NOTES.
(a) The Company will not create, incur, assume, guarantee or in any
other manner become liable with respect to any Indebtedness, other than the
Notes, that is subordinate in right of payment to any Senior Indebtedness,
unless such Indebtedness is permitted under "Limitations on Incurrence of
Additional Indebtedness" and expressly by its terms is also subordinate or ranks
PARI PASSU in right of payment to the Notes.
(b) The Company will not permit any subsidiary to create, incur,
assume, guarantee or in any other manner become liable with respect to any
Indebtedness, other than the Guarantor's guarantees, that is subordinate in
right of payment to any Guarantor Senior Indebtedness, unless: (a) such
Indebtedness is permitted under "Limitations on Incurrence of Additional
Indebtedness" and expressly by its terms is also subordinate or ranks PARI PASSU
in right of payment to the Guarantor's guarantees; or (b) such Indebtedness is
incurred by a Subsidiary that is a Guarantor in connection with the lease of
tractors, trailers, vans or other equipment used in the ordinary course of the
Company's business.
LIMITATION OF GUARANTEES BY SUBSIDIARIES.
(a) The Company will not permit any subsidiary, directly or
indirectly, to assume, guarantee or in any other manner become liable with
respect to any Indebtedness of the Company or any other Subsidiary unless (i)
such assumption, guarantee or other liability is permitted under "Limitations on
Incurrence of Additional Indebtedness", (ii) each such subsidiary which is not
then a Guarantor simultaneously executes and delivers to the Trustee a guarantee
in favor of the Trustee (and, if requested by the Trustee, a supplemental
indenture in form and substance reasonably satisfactory to the Trustee),
providing for the guarantee of payment of the Notes by such subsidiary and (iii)
(a) if any such assumption, guarantee or other liability of such subsidiary is
provided in respect of Senior Indebtedness, the guarantee or other instrument
provided by such subsidiary in respect of such Senior Indebtedness may be
superior to the Guarantee, pursuant to
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subordination provisions no less favorable than those contained in this
Indenture and (b) if such assumption, guarantee or other liability of such
subsidiary is provided in respect of Subordinated Indebtedness, the guarantee or
other instrument provided by such Subsidiary in respect of such Subordinated
Indebtedness shall be subordinated to the Guarantor's guarantee, pursuant to
subordination provisions not less favorable than those contained in this
Indenture.
(b) Notwithstanding the foregoing, any such guarantee by a subsidiary
of the Notes shall provide by its terms that it shall be automatically and
unconditionally released and discharged, without any further action required on
the part of the Trustee or any Holder, upon any sale or other disposition (by
merger or otherwise) to any person which is not a subsidiary or affiliate of the
Company, of all of the Company's capital stock in, or all or substantially all
of the assets of, such subsidiary; PROVIDED, that (a) such sale or disposition
of such capital stock or assets is otherwise in compliance with the terms of
this Indenture and (b) such assumption, guarantee or other liability of such
subsidiary has been released by the holders of the other Indebtedness so
guaranteed.
MAINTENANCE CAPITAL EXPENDITURES. The Company shall not, and shall cause
its subsidiaries not to, make Maintenance Capital Expenditures in any yearly
period in an aggregate amount in excess of eh corresponding limit for such
yearly period as set forth in the second column below (or, in the case of a
yearly period consisting of less than 365 days, a proportionally lower amount
based upon the number of days in such yearly period); provided, however, that at
the end of each yearly period the amounts set forth in the second column below
for the following yearly period shall be deemed to be (i) reduced in the event
of one or more Asset Sales by the Company or its subsidiaries during the yearly
period most recently ended by multiplying such number by a fraction, the
numerator of which is equal to the consolidated assets of the Company on the
last day of the yearly period most recently ended, without considering the
proceeds of the Asset Sales, and the denominator of which is equal to the
consolidated assets of the Company on the last day of the yearly period
immediately preceding the yearly period most recently ended, and (ii) increased
in the event of one or more acquisitions by the Company of its subsidiaries of
tractors, trailers, vans or other equipment used by the Company or any of its
subsidiaries in the operations of Trism's business by multiplying such number by
a fraction, the numerator of which is equal to the consolidated assets of the
Company on the last day of such calendar year and the denominator of which is
equal to the consolidated assets of the Company on the last day of the
immediately preceding calendar year.
MINIMUM MAINTENANCE
YEARLY PERIOD ENDING CAPITAL EXPENDITURES
December 31, 2000 $35,000,000
December 31, 2001 $35,000,000
December 31, 2002 $35,000,000
December 31, 2003 $35,000,000
December 31, 2004 $35,000,000
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Maturity Date $ 3,355,000
ADDITIONAL COVENANTS. The Indenture will also contain covenants with
respect to, among other things, the following matters: (i) payment of Notes;
(ii) maintenance of office or agency; (iii) corporate existence; (iv) payment of
taxes and other claims; (v) compliance certificate; notice of default; (vi)
compliance with laws; (vii) waiver of stay, extension of usury laws; (viii)
limitation on transactions with affiliates; (ix) limitations on liens; (x)
payments for consent; (xi) subsidiaries; (xii) prohibition on Company and
Guarantors becoming an Investment company; (xiii) maintenance of capital
expenditures, and (xiv) provision of reports.
MERGER AND CONSOLIDATION
The Indenture provides that the Company, the Guarantors and their
subsidiaries shall not in a single transaction or through a series of related
transactions, consolidate with or merge with or into any other person, or
transfer all or substantially all of its properties and assets as an entirety or
substantially as an entirety to another person or group of affiliated persons or
adopt a plan of liquidation, unless (i) the Company shall be the continuing
person, or the person formed by such consolidation or into which the Company is
merged or to which all or substantially all of the properties and assets of the
Company as an entirety or substantially as an entirety are transferred (or, in
the case of a plan of liquidation, any person to which assets are transferred)
(the Company or such other Person being hereinafter referred to as the
"Surviving Person") shall be a corporation organized and validly existing under
the laws of the United States, any State thereof or the District of Columbia,
and shall expressly assume all the obligations of the Company under the Notes
and this Indenture; (ii) (A) the Surviving Person shall have a Net Worth equal
to or greater than the Net Worth of the Company immediately preceding the
transaction, (B) no default or event of default shall have occurred and be
continuing, (C) all guarantees of the Guarantors remain in full force and effect
and (D) the incurrence or anticipated incurrence of any Indebtedness to be
incurred in connection therewith, the ratio of the Surviving Company's
consolidated liabilities to the Surviving Person's consolidated assets shall be
equal to or less than the ratio of the Company's Consolidated Liabilities to the
Company's consolidated assets immediately prior to such transaction; (iii) the
Company shall have delivered to the Trustee an officers' certificate and an
opinion of counsel, each stating that such consolidation, merger, transfer or
adoption and such supplemental indenture comply with the Indenture, that the
Surviving Person agrees to be bound hereby, that such supplemental indenture and
the Indenture, as modified by such supplemental indenture, are enforceable
against the Surviving Person and the Guarantors in accordance with their
respective terms, and that all conditions precedent herein provided relating to
such transaction have been satisfied; and (v) none of the Company, any Guarantor
or any of their respective subsidiaries or the Surviving Person would thereupon
become obligated with respect to any Indebtedness (including acquired
indebtedness) nor would any of its assets of properties become subject to a
Lien, unless such person could incur such Indebtedness (including acquired
indebtedness) or create such Lien under the Indenture (after giving effect to
such person being bound by all the terms of the Indenture).
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MODIFICATION OF THE INDENTURE; WAIVER OF COVENANTS
Modifications and amendments of the Indenture may be made by the
Company, the Guarantors and the Trustee with the consent of the Holders of at
least 50% in aggregate principal amount of the Notes then outstanding; provided,
however, that no such modification or amendment may, without the consent of the
Holder of each outstanding Note affected thereby, (i) reduce the principal of or
change the fixed maturity of any Note or alter the provisions with respect to
the redemption of Notes or alter the provisions, including the purchase price
payable, with respect to repurchases of the Notes; (ii) reduce the rate of or
change the time for payment of interest, including default interest, on any
Note; (iii) waive a default or event of default in the payment of principal of
or premium, if any, or interest on the Notes or that resulted from a failure to
comply with "Limitations on Incurrence of Additional Indebtedness" (except a
rescission of acceleration of the Notes by the Holders of at least a majority in
aggregate principal amount of the Notes and a waiver of the payment default that
resulted from such acceleration); (iv) make the principal of, or the interest
on, any Note payable in any manner other than that stated in this Indenture and
the Notes on the Issue Date; (v) make any change in the provisions of this
Indenture relating to waivers of past defaults or the rights of Holders of Notes
to receive payments of principal of or interest on the Notes; (vi) waive a
redemption payment with respect to any Note; (vii) alter the ranking of the
Notes relative to other Indebtedness of the Company or the Guarantors; (viii)
make any change in the amendment and waiver provisions of this Indenture or the
Notes; (ix) impair the right of any Holder to receive payment of principal of
and interest on such Holder's Notes on or after the due dates therefor or to
institute suit for the enforcement of any payment on or with respect to such
Holder's Notes; (x) release any Guarantor from its guarantee, except as provided
herein; or (xi) make any change to the provisions in the Indenture regarding
notification of events of default and defaults under the Indenture or modify any
of the provisions of this paragraph.
Notwithstanding the foregoing, without the consent of any Holders of the
Notes, the Company, the Guarantors and the Trustee may modify or amend the
Indenture (i) to evidence the succession of another Person to the Company and
the Guarantors and the assumption by any such successor of the covenants and
obligations of the Company in the Indenture and in the Notes and of the
Guarantors; (ii) to add to the covenants of the Company, for the benefit of the
Holders of the Notes, or to surrender any right or power herein conferred upon
the Company or the Guarantors in the Indenture; (iii) to add any additional
events of default; (iv) to provide for uncertificated notes in addition to or in
place of certificates Notes; (v) to evidence and provide the acceptance of the
appointment of a successor Trustee under the Indenture; (vi) to secure the Notes
and/or the guarantees; (vii) to cure any ambiguity, to correct or supplement any
provision in the Indenture which may be defective or inconsistent with any other
provision in the Indenture or in the Notes, provided that any such action shall
not adversely affect in any material respect the interests of any Holder of any
Note; (viii) to add or release any Guarantor pursuant to the terms of the
Indenture or (vi) to comply with the requirements of the Securities and Exchange
Commission to effect or maintain the qualification of the Indenture under the
Trust Indenture Act of 1939.
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SUBORDINATION
The Company covenants and agrees, and each Holder of a Note, by his
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner set forth in the Indenture, the Indebtedness represented by the Notes
and the payment of the principal of, premium, if any, and interest on each and
all of the Notes are hereby expressly made subordinate and subject in right of
payment as provided in the Indenture to the prior payment in full in cash or
cash equivalents of all Senior Indebtedness.
The provisions of this paragraph shall constitute a continuing offer to
all persons who, in reliance upon such provisions, become holders of, or
continue to hold Senior Indebtedness; and such provisions are made for the
benefit of the holders of Senior Indebtedness; and such holders are made
obligees hereunder and they or each of them may enforce such provisions.
The provisions of this paragraph shall not be applicable from and after
the date of legal defeasance or covenant defeasance.
EVENTS OF DEFAULT
An "Event of Default" will occur if:
1. the Company defaults in the payment of interest on any Notes when
the same becomes due and payable, and the default continues for a period of 30
days;
2. the Company defaults in the payment of the principal of (or
premium, if any, on) any Note when the same becomes due and payable, at
maturity, upon acceleration, redemption or otherwise (including the failure to
purchase (or offer to purchase) Notes tendered pursuant to the terms of the
Indenture);
3. the Company or any Guarantor under the Indenture fails to comply
with any other agreement or covenant contained in the Notes, the Indenture or
the registration rights agreement, and the default continues for the period and
after the notice specified in the Indenture;
4. there shall be a default under any bond, debenture or other
evidence of indebtedness of the Company or any Guarantor under the Indenture
having an aggregate amount in excess of $3,000,000, or under any mortgage,
security agreement, indenture or other instrument under which there may be
issued or by which there may be secured or evidenced any such indebtedness, if
such default either (A) results from the failure to pay principal or interest on
any indebtedness or (B) relates to an obligation other than the obligation to
pay principal or interest on any indebtedness and results in the holder or
holders of such indebtedness causing such indebtedness to become due prior to
its stated maturity;
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5. any guarantee under the Indenture required to be in full force and
effect by the terms of the Indenture ceases to be in full force and effect or is
declared null and void or otherwise not enforceable against any Guarantor under
the Indenture in accordance with its terms, or any of the Guarantors under the
Indenture repudiates its obligations under its guarantee or denies that it has
any further liability under the guarantee or gives notice to such effect (other
than by reason of the termination of the Indenture or the release of any such
Guarantor), or any guarantor under the Indenture repudiates its obligations
under its guarantee of the Notes or if a final judicial determination is made
that such guarantee is not enforceable against any guarantor in accordance with
its terms;
6. the Company or any Guarantor under the Indenture pursuant to or
within the meaning of any bankruptcy law:
(a) admits in writing its inability to pay its debts generally
as they become due;
(b) commences a voluntary case or proceeding;
(c) consents to the entry of a judgment, decree or order for
relief against it in an involuntary case or proceeding;
(d) consents to the appointment of a custodian of it or for
all or substantially all of its property;
(e) consents to or acquiesces in the institution of a
bankruptcy or an insolvency proceeding against it;
(f) makes a general assignment for the benefit of its
creditors; or
(g) takes any corporate action to authorize or effect any of
the foregoing;
7. a court of competent jurisdiction enters a judgment, decree or
order under any bankruptcy law that is for relief against the Company or any
guarantor under the Indenture, in an involuntary case or proceeding which shall
(A) approve a petition seeking reorganization, arrangement, adjustment or
composition in respect of the Company or any Guarantor, (B) appoint a custodian
of the Company or any Guarantor, or for substantially all of its property, or
(C) order the winding-up or liquidation of its affairs, and in each case the
judgment, order or decree remains unstayed and in effect for 60 days;
8. any warrant of attachment is issued against any property of the
Company or any guarantor under the Indenture having a value of at least $3
million, which warrant is not released, stayed or bonded against within 60 days
after service of process with respect thereto;
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9. any final judgments or orders not covered by insurance (which
insurance has been issued by a financially sound insurer that is not an
affiliate of the Company and that has not disclaimed or threatened to disclaim
coverage) for the payment in money which individually or in an aggregate amount
at any one time exceeds, $3 million shall be rendered against the Company, any
Guarantor under or any of their respective subsidiaries by a court of competent
jurisdiction shall remain unstayed, undischarged or unbonded for a period of 60
days after judgement becomes final and nonappealable; or
10. there shall be any failure to procure and maintain property and
liability insurance continuing, in the case of failure to maintain such
insurance, until the earlier of (A) 30 days after notice to the Company or any
of its subsidiaries or the trustee of the lapse or cancellation of such
insurance, and (B) the date such lapse or cancellation is effective as to the
trustee.
If a default or event of default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to each holder of Notes notice of
the uncured default or event of default within 90 days after such default or
event of default occurs. Except in the case of a default or an event of default
in payment of principal of, or interest on, any Note, including the failure to
make a net proceeds purchase, the Trustee may withhold the notice if and so long
as its Board of Directors, the executive committee of its Board of Directors or
a committee of its directors and/or trust officers in good faith determines that
withholding the notice is in the interest of the holders.
DEFEASANCE OR COVENANT DEFEASANCE OF THE INDENTURE
The Company may, at its option and at any time, elect to have its
obligations and the obligations of the Guarantors and any of its Subsidiaries
with respect to the outstanding Notes discharged ("defeasance"). Such defeasance
means that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by the outstanding Notes, except for the rights of
Holders of outstanding Notes to receive payments in respect of the principal of,
premium, if any, and interest on such Notes when such payments are due and
certain provisions of the Indenture with respect to the registration and
transfer of the Notes. In addition, the Company may, at its option and at any
time, elect to have its obligations and the obligations of the Guarantors and
any of its subsidiaries with respect to certain covenants described in the
Indenture released ("covenant defeasance") and thereafter any failure to comply
with such covenants shall not constitute a default or an event of default. In
the event of a covenant defeasance, certain other events (not including
prepayment, bankruptcy, receivership or insolvency events) described under
"Events of Default" will no longer constitute a default or an event of default
with respect to the Notes.
In order to exercise either defeasance or covenant defeasance:
1. the Company must irrevocably deposit with the Trustee or paying
agent, in trust, for the benefit of the holders, U.S. legal tender, U.S.
government obligations which, through the
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scheduled payment of principal and interest in respect as will be sufficient to
pay the principal of, premium, if any, and interest on the Notes on the stated
date for payment thereof or on the applicable redemption date, as the case may
be;
2. in the case of a legal defeasance, the Company shall have
delivered to the Trustee an opinion of counsel in the United States reasonably
acceptable to the Trustee confirming that (A) the Company has received from, or
there has been published by, the Internal Revenue Service a ruling or (B) since
the date of the Indenture, there has been a change in the applicable federal
income tax law, in either case to the effect that the holders of the Notes will
not recognize income, gain or loss for U.S. federal income tax purposes as a
result of such legal defeasance and will be subject to U.S. federal income tax
on the same amounts, in the same manner and at the same time as would have been
the case if such legal defeasance had not occurred.
3. in the case of a covenant defeasance, the Company shall have delivered
to the Trustee an opinion of counsel reasonably acceptable to the Trustee
confirming that the Holders of the Notes will not recognize income, gain or loss
for U.S. federal income tax purposes as a result of such covenant defeasance and
will be subject to U.S. federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such covenant
defeasance had not occurred;
4. no default or event of default shall have occurred and be
continuing on the date of such deposit (other than a default or event of default
resulting from the incurrence of Indebtedness) all or a portion of the proceeds
of which will be used to defease the Notes;
5. such legal defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, the Indenture, or a
default under any other material agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound;
6. the Company shall have delivered to the Trustee an opinion of
counsel to the effect that the trust funds will not be subject to any rights of
holders of indebtedness which is senior to the Notes, and to the effect that
after the 91st day following the deposit, such trust funds will not be subject
to the effect of any applicable bankruptcy, insolvency, reorganization or
similar laws affecting creditors' rights generally;
7. the Company shall have delivered to the Trustee an officers'
certificate stating that the deposit was not made by the Company with the intent
of preferring the holders over any other creditors of the Company or with the
intent of defeating, hindering, delaying or defrauding any other creditors of
the Company;
8. the Company shall have delivered to the Trustee an officers'
certificate and an opinion of counsel, each stating that all conditions
precedent provided for or relating to the legal defeasance or covenant
defeasance have been complied with;
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9. such legal defeasance or covenant defeasance shall not cause the
Trustee to have a conflicting interest within the meaning of the Trust Indenture
Act of 1939, as amended; and
10. such legal or covenant defeasance shall not result in the trust
arising from such constituting an investment company within the meaning of the
Investment Company Act of 1940, as amended.
TRUSTEE
U.S. Bank Trust National Association is the Trustee for the Holders of
the Notes under the Indenture. The address of the principal corporate trust
office of the Trustee is U.S. Bank Trust Center, 180 East 5th Street, St. Paul,
Minnesota 55101.
Subject to a Holder's right to bring suit for enforcement of payments
required to be made under the Indenture, a Holder may not pursue any remedy with
respect to this Indenture or the Notes unless: (1) the Holder gives to the
Trustee notice of a continuing Event of Default; (2) the Holder or Holders of at
least 25% in principal amount of the outstanding Notes make a written request to
the Trustee to pursue the remedy; (3) such Holder or Holders offer to the
Trustee indemnity satisfactory to the Trustee against any loss, liability or
expense to be incurred in compliance with such request; (4) the Trustee does not
comply with the request within 60 days after receipt of the request and the
offer of indemnity; and (5) during such 60-day period the Holder or Holders of a
majority in principal amount of the outstanding Notes do not give the Trustee a
direction which, in the opinion of the Trustee, is inconsistent with the
request.
CERTAIN DEFINITIONS
"ASSET SALE" means the disposition by the Company or any subsidiary to
any person other than the Company or a Guarantor, in one transaction, or a
series of related transactions, of (i) any capital stock of any subsidiary
(except for directors' qualifying shares or certain minority interests sold to
other persons solely due to local law requirements that there be more than one
stockholder, but which are not in excess of what is required for such purpose),
or (ii) any other property or assets of the Company or any subsidiary, other
than (A) sales of obsolete or worn out equipment in the ordinary course of
business or other assets that, in the Company's reasonable judgment, are no
longer used or useful in the conduct of the business of the Company and its
subsidiaries, (B) any sale or lease of property or other assets entered into by
the Company or any subsidiary in the ordinary course of business, other than any
lease that provides for the acquisition of the property for less than the fair
market value, (C) a payment permitted under "Limitation on Payment Restrictions
Affecting Subsidiaries", and (D) a consolidation or merger or any transfer of
assets (including pursuant to a plan of liquidation) in compliance with Article
Five of this Indenture. An Asset Sale shall include the requisition of title to,
seizure of or forfeiture of any property or assets, or any actual or
constructive total loss or an agreed or compromised total loss of any property
or assets. Notwithstanding the foregoing, a disposition by the Company or any
subsidiary to any person other than the Company or a Guarantor, in one
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transaction, or a series of related transactions, of any tractors, trailers,
vans or other equipment used by the Company or any of its subsidiaries in the
operation of TRISM's business shall not be deemed to be an Asset Sale unless and
until the Net Cash Proceeds so received by the Company or such subsidiary have
not been applied by the Company or such subsidiary, within one year of the date
of such disposition, toward the acquisition of tractors, trailers, vans or other
equipment that replace the properties that were the subject of such disposition.
"CONSOLIDATED INCOME TAX EXPENSE" means for any period, as applied to
the Company, the provision for federal, state, local or foreign income taxes of
the Company and its consolidated subsidiaries for such period as determined in
accordance with GAAP.
"CONSOLIDATED INTEREST EXPENSE" means, without duplication, for any
period, as applied to the Company, the sum of (a) the interest expense of the
Company and its consolidated subsidiaries for such period as determined in
accordance with GAAP including, without limitation, (i) amortization of debt
discount, (ii) the net cost under interest swap obligations (including
amortization of discounts), (iii) the interest portion of any deferred payment
obligation, (iv) accrued interest, (v) noncash interest payments and (vi)
commissions, discounts, and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing, plus (b) the interest portion of
capitalized lease obligations paid or accrued by the Company and its
consolidated subsidiaries, plus (c) amortization of capitalized interest, plus
(d) dividends in respect of preferred stock of the Company or any subsidiary
held by persons other than the Company or a wholly owned subsidiary.
"CONSOLIDATED NET INCOME (LOSS)" means, for any period, the Consolidated
net income (or loss) of the Company and its consolidated subsidiaries for such
period as determined in accordance with GAAP, adjusted, to the extent included
in calculating such net income (or loss), by excluding without duplication (i)
all extraordinary gains or losses; (ii) any net income of any person if such
person is not a subsidiary, in which the Company or any of its subsidiaries has
an interest, except to the extent of the amount of any dividends or
distributions actually paid in cash to the Company or a subsidiary of the
Company during such period, but not in excess of the Company's PRO RATA share of
such person's net income (or loss) subsequent to the Issue Date; (iii) net
income (or loss) of any person combined with the Company or any of its
subsidiaries in a "pooling of interests" basis attributable to any period prior
to the date of combination; (iv) any gain or loss, net of taxes, realized upon
the termination of any employee pension benefit plan; (v) net gains or losses in
respect of dispositions of assets other than in the ordinary course of business;
(vi) the net income of any Subsidiary to the extent that the declaration of
dividends or similar distributions by that subsidiary of that income is not at
the time permitted, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulations applicable to that Subsidiary or its shareholders.
"CONSOLIDATED RENTAL PAYMENTS" of any person means, for any period, the
aggregate rental obligations of such person and its consolidated subsidiaries
(not including taxes,
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insurance, maintenance and similar expenses that the lessee is obligated to pay
under the terms of the relevant leases), determined on a consolidated basis in
accordance with GAAP, payable in respect of such period (net of income from
subleases thereof, not including taxes, insurance, maintenance and similar
expenses that the sublessee is obligated to pay under the terms of such
sublease), whether or not such obligations are reflected as liabilities or
commitments on a consolidated balance sheet of such person and its subsidiaries
or in the notes thereto, EXCLUDING, HOWEVER, in any event, (i) that portion of
Consolidated Interest Expense of such person representing payments by such
person or any of its consolidated subsidiaries in respect of capitalized lease
obligations (net of payments to such person or any of its consolidated
subsidiaries under subleases qualifying as capitalized lease subleases to the
extent that such payments would be deducted in determining Consolidated Interest
Expense) and (ii) the aggregate amount of amortization of obligations of such
Person and its consolidated subsidiaries in respect of such capitalized lease
obligations for such period (net of payments to such person or any of its
consolidated subsidiaries and subleases qualifying as capitalized lease
subleases to the extent that such payments could be deducted in determining such
amortization amount).
"DISQUALIFIED CAPITAL STOCK" means, with respect to any person, any
capital stock or partnership interest of such person that, by its terms, by the
terms of any agreement related thereto or by the terms of any security into
which it is convertible, puttable or exchangeable, is, or upon the happening of
an event or the passage of time would be, required to be redeemed or repurchased
by such person or its subsidiaries, including at the option of the holder, in
whole or in part, or matures or has, or upon the happening of an event or
passage of time would have, a redemption or similar payment due, in each
instance on or prior to one year following February 15, 2005, in cash or
securities constituting Indebtedness.
"FIXED CHARGE COVERAGE RATIO" means for any period the ratio of (a) the
sum of Consolidated Net Income (Loss), Consolidated Interest Expense, one-third
of Consolidated Rental Payments, and Consolidated Income Tax Expense plus,
without duplication, all depreciation, amortization and all other noncash
charges (excluding any such noncash charge constituting an extraordinary item of
loss or any noncash charge which requires an accrual of or a reserve for cash
charges for any future period), in each case, for such period, of the Company
and its subsidiaries on a Consolidated basis, all determined in accordance with
GAAP to (b) Consolidated Interest Expense and one-third of Consolidated Rental
Payments for such period; PROVIDED that in making such computation, the
Consolidated Interest Expense attributable to interest on any Indebtedness
computed on a PRO FORMA basis and bearing a floating interest rate shall be
computed as if the rate in effect on the date of computation had been the
applicable rate for the entire period.
"GAAP" means at any date, United States generally accepted accounting
principles, consistently applied.
"GUARANTOR" means (i) as of the Issue Date, the initial Guarantors under
the Indemnitees, and (ii) thereafter, unless released from the Guarantee as
permitted by this
23
<PAGE>
Indenture, the Initial Guarantors and any other person that becomes a guarantor
of the Notes in compliance with the provisions of this Indenture and executes a
supplemental indenture agreeing to be bound by the terms of this Indenture.
"GUARANTOR SENIOR INDEBTEDNESS" means, with respect to any Guarantor,
the principal of, premium, if any, and interest (including interest to the
extent allowable, accruing after the filing of a petition initiating any
proceeding under any state, federal or foreign bankruptcy laws) of any
Indebtedness of such Guarantor (other than as otherwise provided in this
definition), whether outstanding on the Issue Date or thereafter, created,
incurred or assumed, unless, in the case of any particular Indebtedness, the
instrument creating or evidencing the same or pursuant to which the same is
outstanding expressly provides that such Indebtedness shall not be senior in
right of payment to the Guarantee of such Guarantor. Without limiting the
foregoing, in the case of the Senior Credit Facility, "Guarantor Senior
Indebtedness" means and includes all obligations of any guarantor thereunder,
including, without limitation, principal, premium, if any, interest (including
interest accruing after the filing of a petition initiating any proceeding under
state, federal or foreign bankruptcy laws), fees, breakage costs, reimbursement
obligations, indemnities, and all other obligations of such parties to the
Lenders. Notwithstanding the foregoing, "Guarantor Senior Indebtedness" does not
include (i) Indebtedness evidenced by the guarantee of such Guarantor, (ii)
Indebtedness that is subordinate or junior in right of payment to any
Indebtedness of such Guarantor, (iii) Indebtedness which when incurred and
without respect to any election under Section 1111(b) of Title 11, United States
Code, is without recourse to such Guarantor, (iv) Indebtedness which is
represented by redeemable capital stock, (v) any liability for federal, state,
local or other taxes owed or owing by such Guarantor, (vi) any accounts payable
to trade creditors created, incurred, or assumed by such Guarantor in the
ordinary course of business in connection with obtaining goods, materials or
services, (vii) Indebtedness of such Guarantor to a subsidiary of the Company,
(viii) amounts payable on any Indebtedness to any employee or affiliate of such
Guarantor other than as provided in clause (vii) (except for any Indebtedness
evidenced by any debt securities of such Guarantor purchased by such employee or
affiliate after such debt securities have been registered under the Securities
Act, PROVIDED that such debt securities rank senior in right of payment to the
Guarantee of such Guarantor and the issuance of the securities was permitted by
the covenant described in "Limitations on Incurrence of Additional
Indebtedness", (ix) that portion of any Indebtedness which is issued by such
Guarantor in violation of this Indenture, PROVIDED, HOWEVER, that in the case of
the preceding clause (ix), any Indebtedness issued to any Person who had no
actual knowledge that the incurrence of such Indebtedness was not permitted
under "Limitations on Incurrence of Additional Indebtedness" and who received on
the date of issuance thereof a certificate from an officer of the Company to the
effect that the issuance of such Indebtedness would not violate such Section
shall constitute Guarantor Senior Indebtedness and (x) Indebtedness of such
Guarantor representing a guarantee of Subordinated Indebtedness of the Company
or any other Guarantor, or a guarantee of Indebtedness that ranks PARI PASSU
with the Notes.
24
<PAGE>
"HOLDER" means the person in whose name a Note is registered on the
registrar's books.
"INDEBTEDNESS" as applied to any person means, at any time, without
duplication, whether recourse is to all or a portion of the assets of such
Person, and whether or not contingent: (i) any obligation of such person for
borrowed money; (ii) any obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments, including, without limitation,
any such obligations incurred in connection with acquisition of property, assets
or businesses, excluding accounts payable made in the ordinary course of
business which are not more than 90 days overdue or which are being contested in
good faith and by appropriate proceedings; (iii) any obligation of such person
for all or any part of the purchase price of property or assets or for the cost
of property constructed or of improvements thereto (including any obligation
under or in connection with any letter of credit related thereto), other than
accounts payable incurred in respect of property and services purchased in the
ordinary course of business which are no more than 90 days overdue or which are
being contested in good faith and by appropriate proceedings; (iv) any
obligation of such person upon which interest charges are customarily paid
(other than accounts payable incurred in the ordinary course of business); (v)
any obligation of such person under conditional sale or other title retention
agreements relating to purchased property; (vi) any obligation of such person
issued or assumed as the deferred purchase price of property or assets (other
than accounts payable incurred in the ordinary course of business which are no
more than 90 days overdue or which are being contested in good faith and by
appropriate proceedings); (vii) any capitalized lease obligation or attributable
Indebtedness pursuant to any sale and lease-back transaction of such person;
(viii) any obligation secured by (or for which the obligee thereof has an
existing right, contingent or otherwise, to be secured by) any Lien on property
owned or acquired, whether or not any obligation secured thereby has been
assumed, by such person; (ix) any obligation of such person in respect of any
letter of credit supporting any obligation of any other person; (x) the maximum
fixed repurchase price of any Disqualified Capital Stock of such person (or if
such person is a subsidiary, any preferred stock of such person); (xi) the
notional amount of any interest swap obligation or currency hedge obligation of
such person at the time of determination; and (xii) any obligation which is in
economic effect a guarantee, regardless of its characterization (other than an
endorsement in the ordinary course of business), with respect to any
Indebtedness of another person, to the extent guaranteed. For purposes of the
preceding sentence, the maximum fixed repurchase price of any Disqualified
Capital Stock or subsidiary preferred stock that does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Disqualified Capital Stock or subsidiary preferred stock as if such Disqualified
Capital Stock or subsidiary preferred stock were repurchased on any date on
which Indebtedness shall be required to be determined pursuant to the Indenture;
provided that if such Disqualified Capital Stock or subsidiary preferred stock
is not then permitted to be repurchased, the repurchase price shall be the book
value of such Disqualified Capital Stock or subsidiary preferred stock. The
amount of Indebtedness of any person at any date shall be the outstanding
balance at such date of all unconditional obligations as described above and the
maximum liability of any guarantees at such date; provided, further, that for
purposes of calculating the amount of any non-interest bearing or other discount
security, such Indebtedness
25
<PAGE>
shall be deemed to be the principal amount thereof that would be shown on the
balance sheet of the issuer dated such date prepared in accordance with GAAP but
that such security shall be deemed to have been incurred only on the date of the
original issuance thereof.
"INVESTMENT" by any person means (i) any investment or acquisition by
such person, in any transaction or series of related transactions, whether by a
purchase of capital stock, partnership interests or assets, share purchase,
capital contribution, loan, advance (other than (a) reasonable loans and
advances to employees for moving and travel expenses or as salary advances,
incurred, in each case, in the ordinary course of business consistent with past
practice, and (b) trade credit extended to customers in the ordinary course of
business of the Company or any of its subsidiaries consistent with past practice
and on terms and conditions common in the industry and no less favorable to the
Company or such subsidiary than trade credit extended by other suppliers
similarly situated) or similar credit extension constituting Indebtedness of
another person, and any guarantee of Indebtedness of any other person (other
than a guarantee of Indebtedness incurred under the Senior Secured Credit
Facility or the Indenture), and (ii) any capital expenditure. The amount of any
Investment shall be the greater of (A) the fair market value of the assets being
transferred, and (B) the gross amount of assets acquired as a result of such
Investment (or in the case of an Investment in capital stock or partnership
interests issued by another person, the appropriate proportion of the gross
assets of such other person).
"ISSUE DATE" means February 15, 2000.
"LENDER" means collectively the lenders and agent under the Senior
Secured Credit Facility.
"LIEN" means any mortgage, pledge, lien, encumbrance, charge or adverse
claim affecting title or resulting in an encumbrance against real or personal
property, or a security interest of any kind (including any lease, conditional
sale or other title retention agreement having substantially the same economic
effect as any of the foregoing, any option or other agreement to sell which is
intended to constitute or create a security interest, mortgage, pledge or lien
(other than bona fide options and agreements for the sale of assets) and any
filing of or agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statutes) of any jurisdiction).
"MAINTENANCE CAPITAL EXPENDITURES" means Capital Expenditures directly
related to maintaining, servicing, replacing and upgrading the tractors,
trailers, vans and other equipment used by the Company or any of its
Subsidiaries in the operation of the TRISM's business on the Issue Date, and
specifically excludes Capital Expenditures related to the acquisition of any
other tractors, trailers, vans and other equipment.
"MINIMUM NET WORTH" means an amount equal to 80% of the Net Worth of the
Company as of the Issue Date.
26
<PAGE>
"NET CASH PROCEEDS" means with respect to any Asset Sale, the proceeds
in the form of cash or cash equivalents including payments in respect of
deferred payment obligations when received in the form of cash or cash
equivalents received by the Company or any of its subsidiaries from such Asset
Sale, net of (i) reasonable and customary expenses directly related to such
Asset Sale, (ii) provision for the net amount of all taxes directly payable as a
result of such Asset Sale, and (iii) amounts required to be applied to the
repayment of Indebtedness (other than Indebtedness under the Indenture or any
Indebtedness that is not secured by the assets that were the subject of such
Asset Sale) secured by a Permitted Lien on the assets that were the subject of
such Asset Sale.
"NET WORTH" as of any date means, with respect to any person, the amount
of the equity of the holders of capital stock of such person that would appear
on the balance sheet of such person as of such date, determined in accordance
with GAAP, adjusted to exclude (to the extent included in such equity) the
amount of equity attributable to any Disqualified Capital Stock.
"PERMITTED BUSINESS INVESTMENT" means any Investment (other than
Maintenance Capital Expenditures) directly related to TRISM's business, as it is
conducted as of the Issue Date, made by the expenditure of cash or cash
equivalents; PROVIDED, HOWEVER, that (i) the aggregate of all Permitted Business
Investments in any yearly period shall not exceed $5 million (or, in the case of
a yearly period consisting of less than 365 days, a proportionally lower amount
based upon the number of days in such yearly period), and (ii) any Permitted
Business Investment which individually or together with any similar or related
Permitted Business Investments and Permitted Business Investments constituting
part of a common plan or series of transactions involves an Investment of an
amount of $2.5 million or more must be approved by the Company's Board of
Directors as evidenced by a board resolution.
"PERMITTED INVESTMENT" by any person means (i) any Permitted Business
Investment, (ii) cash and cash equivalents, (iii) Investments existing on the
Issue Date, (iv) Investments by the Company or any wholly-owned subsidiary of
the Company in the Company or any other wholly-owned subsidiary of the Company
that is a Guarantor (other than any such Investments which would constitute
Stock Payments or Restricted Debt Prepayments), and (v) Maintenance Capital
Expenditures permitted by, the Indenture.
"PERMITTED LIENS" shall mean (i) Liens for taxes, assessments, and
governmental charges to the extent not required to be paid under this Indenture;
(ii) statutory Liens of landlords and carriers, warehousemen, mechanics,
suppliers, materialmen, repairmen, or other like Liens arising in the ordinary
course of business and with respect to amounts not yet delinquent or being
contested in good faith by appropriate process of law, and for which a reserve
or other appropriate provision, if any, as shall be required by GAAP shall have
been made; (iii) pledges or deposits in the ordinary course of business to
secure lease obligations or nondelinquent obligations under workers'
compensation, unemployment insurance or similar legislation; (iv) Liens to
secure the performance of public statutory obligations that are not delinquent,
27
<PAGE>
appeal bonds, performance bonds or other obligations of a like nature (other
than for borrowed money); (v) Liens arising under government contracts in the
ordinary course of business that do not secure any Indebtedness; (vi) easements,
rights-of-way, restrictions, minor defects or irregularities in title and other
similar charges or encumbrances not interfering in any material respect with the
business of the Company or any subsidiary of the Company incurred or arising in
the ordinary course of business; (vii) rights of banks to set off deposits
against debts owed to said banks; (viii) any interest or title of a lessor in
the property subject to any lease, other than any such interest or title
resulting from or arising out of a default by the Company or any subsidiary of
the Company of its obligations under such lease; (ix) any other Liens imposed by
operation of law which do not materially affect the Company's or any of its
subsidiaries' ability to perform its obligations under this Indenture; (x) any
Liens arising under the Indenture, (xi) Liens arising under the Senior Secured
Credit Facility; (xii) Liens securing purchase money Indebtedness; and (xiii)
Liens on property of a person existing at the time such person is acquired by,
or merged into or consolidated with, the Company or a wholly-owned subsidiary
that is a Guarantor if (a) such Liens were in existence prior to the
contemplation of such acquisition, merger or consolidation and do not extend to
any assets other than those directly or indirectly acquired as a result of such
acquisition, merger or consolidation, (b) such acquisition, merger or
consolidation is a Permitted Business Investment, and (c) such Liens secure
Indebtedness in an aggregate principal amount at any one time outstanding of
less than 80% of the book value of the assets of such person immediately prior
to such acquisition, merger or consolidation.
"QUALIFIED CAPITAL STOCK" means, with respect to any person, any capital
stock or partnership interest of such person that is not Disqualified Capital
Stock.
"REDEMPTION DATE," when used with respect to any Note to be redeemed or
purchased, means the date fixed for such redemption or purchase pursuant to this
Indenture and the Notes.
"REDEMPTION PRICE," when used with respect to any Note to be redeemed,
means the price fixed for such redemption pursuant to this Indenture and the
Notes.
"RESTRICTED DEBT PREPAYMENT" means any principal payment, purchase,
redemption, defeasance (including, but not limited to, in substance or legal
defeasance) or other acquisition or retirement for value, directly or
indirectly, by the Company or any of its subsidiaries, prior to the scheduled
maturity or prior to any scheduled repayment of principal or sinking fund
payment, as the case may be, on or in respect of Indebtedness the Company or any
of its subsidiaries that is Subordinated Indebtedness or ranks PARI PASSU in
right of payment to the Notes or the Guarantee, as applicable.
"RESTRICTED PAYMENT" means any (i) Stock Payment, (ii) Investment (other
than a Permitted Investment) or (iii) Restricted Debt Prepayment.
28
<PAGE>
"SENIOR INDEBTEDNESS" means the principal of, premium, if any, and
interest (including interest, to the extent allowable, accruing after the filing
of a petition initiating any proceeding under any state, federal or foreign
bankruptcy laws) on any Indebtedness of the Company (other than as otherwise
provided in this definition), whether outstanding on the Issue Date or
thereafter created, incurred or assumed, UNLESS, in the case of any particular
Indebtedness, the instrument creating or evidencing the same or pursuant to
which the same is outstanding expressly provides that such Indebtedness shall
not be senior in right of payment to the Notes. Notwithstanding the foregoing,
"Senior Indebtedness" shall not include (i) Indebtedness evidenced by the Notes
or the Guarantor's guarantees, (ii) Indebtedness that is subordinate or junior
in right of payment to any Indebtedness of the Company or any subsidiary, (iii)
Indebtedness which when incurred and without respect to any election under
Section 1111(b) of Title 11, United States Code, is without recourse to the
Company or any subsidiary, (iv) Indebtedness which is represented by redeemable
capital stock, (v) any liability for federal, state, local, foreign or other
taxes owed or owing by the Company or any subsidiary, (vi) any accounts payable
to trade creditors created, incurred or assumed by the Company or any subsidiary
of the Company in the ordinary course of business in connection with obtaining
goods, materials or services, (vii) Indebtedness of the Company to a subsidiary,
(viii) amounts payable on any Indebtedness to any employee or affiliate of the
Company other than as provided in clause (vii) (except for any Indebtedness
evidenced by any debt securities of the Company purchased by such employee or
affiliate after such debt securities have been registered under the Securities
Act, PROVIDED that such debt securities rank senior in right of payment to the
Notes and the issuance of the securities was permitted by "Limitation on
Indebtedness"), and (ix) that portion of any Indebtedness which at the time of
issuance is issued in violation of this Indenture; PROVIDED, HOWEVER, that in
the case of this clause (ix), any Indebtedness issued to any Person who had no
actual knowledge that the incurrence of such Indebtedness was not permitted
under "Limitation on Indebtedness" and who received on the date of issuance
thereof a certificate from an officer of the Company to the effect that the
issuance of such Indebtedness would not violate "Limitation on Indebtedness"
shall constitute Senior Indebtedness. Without limiting the foregoing, in the
case of the Senior Credit Facility, "Senior Indebtedness" means and includes all
obligations of any guarantor thereunder, including, without limitation,
principal, premium, if any, interest (including interest accruing after the
filing of a petition initiating any proceeding under state, federal or foreign
bankruptcy laws), fees, breakage costs, reimbursement obligations, indemnities,
and all other obligations of such parties to the Lenders.
"SENIOR SECURED CREDIT FACILITY" means the Post-Confirmation Loan and
Security Agreement, dated as of February 15, 2000, by and among the Company, the
subsidiaries of the Company signatories thereto and Lender, together with the
notes, security agreements, guarantees and other Loan Documents (as therein
defined) related thereto, as the same may be amended, extended, renewed,
restated, supplemented or otherwise modified from time to time, pursuant to
which Lender may loan up to $45 million to the Company, and any agreement
governing Indebtedness incurred to refund or refinance the entirety of the
borrowings and commitments then outstanding or permitted to be outstanding under
such Senior Secured Credit Facility or such agreement.
29
<PAGE>
"STOCK PAYMENT" means, with respect to any person, (i) the declaration
or payment by such person, directly or indirectly, either in cash or in
property, of any dividend on (except, in the case of the Company, dividends
payable solely in Qualified Capital Stock of the Company), or the making by such
person or any of its subsidiaries of any other distribution in respect of, such
person's capital stock or partnership interests or any warrants, rights or
options to purchase or acquire shares of any class of such capital stock or
partnership interests, or (ii) the redemption, repurchase, retirement or other
acquisition for value by such person or any of its subsidiaries, directly or
indirectly, of such person's or any of its subsidiaries' or affiliates' capital
stock or partnership interests or any warrants, rights or options to purchase or
acquire shares of any class of such capital stock or partnership interests other
than, in the case of the Company, through the issuance in exchange therefor
solely of Qualified Capital Stock of the Company; provided, however, that in the
case of a subsidiary of the Company, the term "Stock Payment" shall not include
any such payment with respect to its capital stock or partnership interests or
warrants, rights or options to purchase or acquire shares of any class of its
capital stock or partnership interests if such payment is made to the Company or
a wholly-owned subsidiary of the Company that is a Guarantor as of the Issue
Date.
"SUBORDINATED INDEBTEDNESS" means (i) Indebtedness of the Company which
is subordinated in right of payment to the Notes and (ii) Indebtedness of any
subsidiary which is subordinated in right of payment to the Guarantee.
30
<PAGE>
SELLING SECURITYHOLDERS
This prospectus relates to periodic offers and sales of (1) up to
$8,913,024 principal amount of Notes and (2) up to 564,492 shares of common
stock by the selling securityholders described below and their respective
pledgees, donees and other successors in interest (collectively, the "Selling
Securityholders").
The following table sets forth certain information with respect to the
Selling Securityholders and their beneficial ownership of the Notes as of the
date of this prospectus. TRISM has obtained this information from the Selling
Securityholders.
PRINCIPAL AMOUNT OF NOTES OWNED
SELLING SECURITYHOLDERS PRIOR TO THE OFFERING AND
OFFERED BY THIS PROSPECTUS
Corporate High Yield Fund, Inc. $1,548,185
Corporate High Yield Fund II, Inc. $539,255
Corporate High Yield Fund III, Inc. $1,739,534
Debt Strategies Fund, Inc. $695,814
Merrill Lynch Debt Strategies
Portfolio $347,907
Senior High Income Portfolio, Inc. $556,651
Merrill Lynch Phoenix Fund, Inc. $3,485,678
----------
Total $8,913,024
The following table sets forth certain information with respect to the
Selling Securityholders and their beneficial ownership of the Common Stock as of
the date of this prospectus. TRISM has obtained this information from the
Selling Securityholders.
<TABLE>
<CAPTION>
SHARES PERCENTAGE OF
BENEFICIALLY COMMON STOCK
OWNED PRIOR TO BENEFICIALLY SHARES OFFERED
THE OWNED PRIOR TO BY THIS
SELLING STOCKHOLDERS OFFERING THE OFFERING PROSPECTUS
------------------------------------ --------------- -------------- --------------
<S> <C> <C> <C>
Corporate High Yield Fund, Inc. 98,052 4.9 98,052
Corporate High Yield Fund II, Inc. 34,153 1.7 34,153
Corporate High Yield Fund III, Inc. 110,170 5.5 110,170
Debt Strategies Fund, Inc. 44,068 2.2 44,068
Merrill Lynch Debt Strategies
Portfolio 22,034 1.1 22,034
Senior High Income Portfolio, Inc. 35,255 1.8 35,255
31
<PAGE>
Merrill Lynch Phoenix Fund, Inc. 220,760 11.0 220,760
------- ---- -------
Total 564,492 28.2 564,492
</TABLE>
Based upon information provided to TRISM by the Selling Securityholders,
none of the Selling Securityholders holds any position, office or has had any
other material relationship with TRISM, or any of its predecessors or
affiliates, during the past three years except that in connection with the
reorganization of TRISM, which became effective on February 15, 2000, the
Unofficial Creditors Committee, of which the Selling Securityholders were a
part, appointed four of TRISM's current five directors.
PLAN OF DISTRIBUTION
The Selling Securityholders may offer and sell the securities included
in this prospectus from time to time in one or more transactions, at prices
related to prevailing market prices at the time of the sale or at negotiated
prices. The methods by which these securities may be sold include: (1) sales in
open market or block transactions on the OTC Bulletin Board, or such other
national securities exchange or automated interdealer quotation system on which
the securities are then listed or quoted; (2) sales in the over-the-counter
market; (3) privately negotiated transactions; (4) put or call options
transactions relating to the securities, (5) short sales of the securities, (6)
hedging transactions, (7) distributions to beneficiaries, partners, members or
stockholders of the selling securityholders; or (8) a combination of such
methods of sale. These transactions may or may not involve brokers or dealers.
In addition, any of the securities covered by this prospectus which qualify for
sale under Rule 145 under the Securities Act of 1933, as amended (the
"Securities Act"), may be sold under Rule 145 rather than pursuant to this
prospectus.
The Selling Securityholders may effect such transactions by selling
securities directly to purchasers or to or through broker-dealers, which may act
as agents or principals. Such broker-dealers may receive compensation in the
form of discounts, concessions or commissions from the Selling Securityholders
or the purchasers of securities for whom such broker-dealers may act as agents
or to whom they sell as principal, or both (which compensation as to a
particular broker-dealer might be in excess of customary commissions). In
effecting sales, such broker-dealers may arrange for other broker-dealers to
participate.
The Selling Securityholders may enter into hedging transactions with
broker-dealers or other financial institutions. In connection with these
transactions, broker-dealers or other financial institutions may engage in short
sales of securities of TRISM in the course of hedging the positions they assume
with the Selling Securityholders. The Selling Securityholders may also enter
into options or other transactions with broker-dealers or other financial
institutions with respect to the securities offered by this prospectus, which
securities the broker-dealers or other
32
<PAGE>
financial institutions may resell pursuant to this prospectus (as supplemented
or amended to reflect the transaction).
The Selling Securityholders and any broker-dealer who acts in connection
with the sale of securities hereunder may be deemed to be "underwriters," within
the meaning of Section 2(11) of the Securities Act, and any compensation
received by them and any profit on any resale of securities sold by them while
acting as principals may be deemed to be underwriting discounts or commissions
under the Securities Act.
Because the Selling Securityholders may be deemed to be "underwriters"
within the meaning of Section 2(11) of the Securities Act, the Selling
Securityholders will be subject to the prospectus delivery requirements of the
Securities Act.
In certain jurisdictions the securities offered hereby may not be
offered or sold unless they have been registered or qualified for sale in such
jurisdictions or an exemption from registration or qualification is available
and is complied with.
TRISM has agreed to pay all expenses, including the reasonable fees and
expenses of not more than one counsel in connection with the registration of the
securities being offered hereby. The Selling Securityholders are responsible for
paying broker's commissions, discounts and any other selling expenses.
The Selling Securityholders have severally agreed to indemnify TRISM,
its directors and officers and any person who controls TRISM against certain
liabilities and expenses arising out of or based upon the information set forth
in this prospectus and the Registration Statement of which this prospectus is a
part, if such liability arises out of information furnished in writing to TRISM
specifically for use in connection with the preparation of this Registration
Statement, prospectus, amendment or supplement.
If requested by a Selling Securityholder, TRISM has agreed to file a
supplement or a post-effective amendment to this prospectus disclosing such
information as the Selling Securityholder may reasonably request, including,
without limitation, (1) the name of the Selling Securityholder and of the
participating broker-dealer(s), (2) the number of securities involved and (3)
the price at which such securities were sold.
33
<PAGE>
EXPERTS
The consolidated financial statements and financial statement schedule
incorporated in this Registration Statement by reference to the Annual Report on
Form 10-K of TRISM, Inc. for the year ended December 31, 1999, have been so
incorporated in reliance on the report (which contains explanatory paragraphs
relating to the Company's emergence from bankruptcy and the Company's change in
accounting for the measurement of tires-in-service as described in Note 12 and
Note 1, respectively) of PricewaterhouseCoopers LLP, independent accountants,
given on the authority of such firm as experts in accounting and auditing.
LEGAL MATTERS
The validity of the securities offered by this prospectus have been
passed upon for us by Proskauer Rose LLP, New York, New York.
WHERE TO FIND ADDITIONAL INFORMATION
TRISM files annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission under the
Securities Exchange Act of 1934. Stockholders may read and copy this information
at the following locations of the Securities and Exchange Commission:
<TABLE>
<S> <C> <C>
Securities and Exchange Securities and Exchange Securities and Exchange
Commission Commission Commission
Judiciary Plaza, Room 1024 Seven World Trade Center, Citicorp Center
450 Fifth Street, N.W. Suite 1300 500 West Madison Street,
Washington, D.C. 20549 New York, New York 10048 Suite 1400
Chicago, Illinois 60661
</TABLE>
Stockholders can also obtain copies of this information by mail from the
Public Reference Section of the Securities and Exchange Commission, 450 Fifth
Street, N.W., Room 10024, Washington D.C. 20549, at prescribed rates.
The Securities and Exchange Commission also maintains an Internet world
wide web site that contains reports, proxy statements and other information
about issuers, like TRISM, who file electronically with the Securities and
Exchange Commission. The address of that site is http://www.sec.gov.
TRISM has filed with the Securities and Exchange Commission a
Registration Statement on Form S-3 of which this prospectus is a part. That
Registration Statement, including the attached exhibits and schedules, contains
additional relevant information about TRISM, the TRISM common stock and Notes.
The rules and regulations of the Securities and Exchange
34
<PAGE>
Commission allow TRISM to omit from this prospectus certain information included
in the Registration Statement.
Stockholders can obtain any of the documents incorporated by reference
in this document from TRISM without charge, excluding any exhibits to those
documents unless the exhibit is specifically incorporated by reference as an
exhibit to this prospectus. Documents incorporated by reference in this
prospectus can be obtained by requesting them in writing or by telephone from
TRISM at the following address:
TRISM, Inc.
4174 Jiles Road
Kennesaw, Georgia 30144
(770) 795-4600
Attention: Investor Relations
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Securities and Exchange Commission allows TRISM to "incorporate by
reference" information into this prospectus. This means that TRISM can disclose
important information by referring to another document filed separately with the
Securities and Exchange Commission. The information incorporated by reference is
considered to be part of this prospectus, except for any information that is
superseded by information that is included directly in this document.
This prospectus incorporates by reference the documents listed below
that TRISM has previously filed with the Securities and Exchange Commission and
that are not included in or delivered with this document. They contain important
information about TRISM and its financial condition.
FILINGS
Annual Report on Form 10-K for the year ended December 31, 1999
Current Report on Form 8-K dated February 18, 2000
The description of TRISM's common stock set forth in TRISM's Form 8-A
filed with the Securities and Exchange Commission dated January 12,
1994
TRISM incorporates by reference additional documents that it may file
with the Securities and Exchange Commission between the date of this prospectus
and the date of the TRISM stockholders meeting. These documents include periodic
reports, such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K, as well as proxy statements.
TRISM HAS NOT AUTHORIZED ANYONE TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ABOUT TRISM THAT IS DIFFERENT FROM, OR IN ADDITION TO, THAT
CONTAINED IN THIS
35
<PAGE>
PROSPECTUS OR IN ANY OF THE MATERIALS THAT TRISM HAS INCORPORATED BY REFERENCE
INTO THIS DOCUMENT. THEREFORE, IF ANYONE DOES PROVIDE INFORMATION OF THIS SORT,
IT SHOULD NOT RELIED ON. IF A PERSON IS IN A JURISDICTION WHERE OFFERS TO
EXCHANGE OR SELL, OR SOLICITATIONS OF OFFERS TO EXCHANGE OR PURCHASE, THE
SECURITIES OFFERED BY THIS DOCUMENT OR THE SOLICITATION OF PROXIES IS UNLAWFUL,
OR IF IT IS UNLAWFUL TO DIRECT THESE TYPES OF ACTIVITIES, THEN THE OFFER
PRESENTED IN THIS DOCUMENT DOES NOT EXTEND TO THAT PERSON. THE INFORMATION
CONTAINED IN THIS DOCUMENT SPEAKS ONLY AS OF THE DATE OF THIS DOCUMENT, UNLESS
THE INFORMATION SPECIFICALLY INDICATES THAT ANOTHER DATE APPLIES.
FORWARD-LOOKING STATEMENTS
TRISM believes this prospectus contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. These
statements involve substantial risks and uncertainties. You can identify such
statements by forward-looking words such as "may," "will," "expect,"
"anticipate," "believe," "estimate," and "continue" or similar words. You should
read statements that contain these words carefully because they: (1) discuss our
future expectations, (2) contain projections of our future results of operations
or of our financial condition or (3) state other "forward-looking" information.
We believe it is important to communicate our expectations to our investors.
However, there may be events in the future which we are not able to accurately
predict or over which we have no control. The risk factors identified under
"Risk Factors" section, as well as any cautionary language in this prospectus,
provide examples of risks, uncertainties and events that may cause our actual
results to differ materially from the expectations we describe in our
forward-looking statements. Before you invest in our common stock or notes, you
should be aware that the occurrence of the events described in these risk
factors and documents incorporated by reference could have a material adverse
effect on our business, operating results and financial condition.
36
<PAGE>
II-1
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following are the estimated expenses in connection with the
distribution of the securities being registered:
SEC registration fee ........................... $2,903
Printing expenses .............................. 5,000
Accounting fees and expenses ................... 5,000
Attorneys' fees and expenses ................... 15,000
Miscellaneous .................................. 5,000
------
Total ...................................... $32,903
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
With certain limitations, Article Eighth of the Registrant's Amended and
Restated Certificate of Incorporation provides for indemnification of any of the
Registrant's past, present and future officers and directors against liabilities
and reasonable expenses incurred in any criminal or civil action by reason of
such person's being or having been an officer or director of the Registrant or
of any other corporation which such person serves as such at the request of the
Registrant. Indemnification rights under Article Eighth are non-exclusive. In
the event of an officer's or director's death, such person's indemnification
rights shall extend to his or her heirs and legal representatives.
Article Ninth of the Registrant's Amended and Restated Certificate of
Incorporation is consistent with Section 102(b)(7) of the Delaware General
Corporation Law, which generally permits a corporation to include a provision
limiting the personal liability of a director in the corporation's certificate
of incorporation. Article Ninth of the Registrant's Amended and Restated
Certificate of Incorporation eliminates the personal liability of the
Registrant's directors to the Registrant or any of its stockholders for monetary
damages for breach of fiduciary duty as a director. However, Article Ninth does
not eliminate director liability: (1) for breaches of the duty of loyalty to the
Registrant or its stockholders; (2) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law; (3) for
transactions from which a director derives improper personal benefit; or (4)
under Section 174 of the Delaware General Corporation Law ("Section 174").
Section 174 makes directors personally liable for unlawful dividends and
stock repurchases or redemptions and expressly sets forth a negligence standard
with respect to such liability. While Article Ninth protects the directors from
awards for monetary damages for
II-1
<PAGE>
breaches of their duty of care, it does not eliminate their duty of care. The
limitations in Article Ninth have no effect on claims arising under the federal
securities laws.
Under Section 145 of the Delaware General Corporation Law, directors and
officers, as well as other employees and individuals, may be indemnified against
expenses (including attorneys' fees), judgments, fines, amounts paid in
settlement in connection with specified actions, suits or proceedings, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the corporation - a "derivative action") if they acted in good
faith and in a manner they reasonably believed to be in, or not opposed to, the
best interests of the corporation, and, with respect to criminal actions or
proceedings, had no reasonable cause to believe their conduct was unlawful.
A similar standard of care is applicable in the case of derivative
actions, except that indemnification only extends to expenses (including
attorneys' fees) incurred in connection with the defense or settlement of such
an action, and the Delaware General Corporation Law requires court approval
before there can be any indemnification where the person seeking indemnification
has been found liable to the corporation.
ITEM 16. EXHIBITS
A list of the exhibits included as part of this Registration Statement
is set forth in the Exhibit Index which immediately precedes such exhibits and
which is incorporated herein by reference.
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement to include
any material information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to such
information in the Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new Registration Statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) 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
II-2
<PAGE>
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant 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 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Kennesaw and State of Georgia on the 31st day of
March 2000.
TRISM, INC.
By: /S/ EDWARD L. MCCORMICK
-----------------------
Edward L. McCormick
Chairman, President and Chief
Executive Officer
The undersigned officers and directors of TRISM, Inc. hereby severally
constitute Edward L. McCormick our true and lawful attorney and agent, with full
power to him to sign for us and our names in the capacities indicated below, the
Registration Statement on Form S-3 filed herewith and any and all pre-effective
and post-effective amendments to said Registration Statement, and generally to
do all such things in our names and on our behalf in our capacities as officers
and directors to enable TRISM, Inc. to comply with the provisions of the
Securities Act of 1933, as amended, and all requirements of the Securities and
Exchange Commission, hereby ratifying and confirming our signatures as they may
be signed by our said attorney to said Registration Statement and any and all
amendment hereto.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Chairman, President, Chief
/s/ EDWARD L. MCCORMICK Executive Officer and
- ----------------------- Director
Edward L. McCormick (principal executive officer) March 31, 2000
Senior Vice President and
/s/ JAMES G. OVERLEY Chief Financial Officer
- --------------------- (principal financial and
James G. Overley accounting officer)
March 31, 2000
/s/ THOMAS P. KRASNER
- ---------------------
Thomas P. Krasner Director March 31, 2000
<PAGE>
/s/ DANA L. MANNER
- ------------------
Dana L. Manner Director March 31, 2000
/s/ JOHN S. ALBANESE, ESQ.
- --------------------------
John S. Albanese, Esq. Director March 31, 2000
/s/ RANDALL B. KOMINSKY
- -----------------------
Randall B. Kominsky Director March 31, 2000
<PAGE>
EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
- -------------- ----------------------
4.1 Indenture dated February 15, 2000, among TRISM, Inc., the
Guarantors named therein and U.S. Bank Trust National
Association, as trustee (incorporated by reference to Exhibit 4.1
to the Company's Annual Report on Form 10-K for the year ended
December 31, 1999)
5 Opinion of Proskauer Rose LLP
12 Computation of Fixed Ratio of Earnings to Fixed Charges
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of Proskauer Rose LLP (included in Exhibit 5)
24.1 Power of Attorney (contained on signature page)
<PAGE>
Exhibit 5
[PROSKAUER LETTERHEAD]
March 31, 2000
TRISM, Inc.
4174 Jiles Road
Kennesaw, Georgia 30144
Ladies and Gentlemen:
We have acted as counsel to TRISM, Inc., a Delaware corporation (the "Company"),
in connection with the Registration Statement on Form S-3, as amended (the
"Registration Statement"), filed by the Company under the Securities Act of
1933, as amended, with the Securities and Exchange Commission (the
"Commission"), relating to the registration for resale of: (i) up to 564,492
shares (the "Shares") of the Company's common stock, par value $.01 per share
and (ii) up to $8,913,024 principal amount of the Company's 12% Senior
Subordinated Notes due 2005 (the "Notes").
As such counsel, we have participated in the preparation of the Registration
Statement and certain corporate proceedings. We have examined and relied upon
originals or copies, certified or otherwise authenticated to our satisfaction,
of certain public officials and representatives of the Company and have made
such investigations of law, and have discussed with representatives of the
Company and such other persons such questions of fact, as we have deemed proper
and necessary as a basis for rendering this opinion.
Based upon, and subject to, the foregoing, we are of the opinion that (i) the
Shares are duly authorized, legally issued, fully paid and non-assessable and
(ii) the Notes are duly authorized, legally issued, fully paid and
non-assessable, and binding obligations of the Company.
We hereby consent to the filing of this opinion as Exhibit 5 to the Registration
Statement and to the reference to this firm in the Prospectus and Registration
Statement in the section entitled "Legal Matters". In giving such consent, we do
not admit that we are in the category of persons whose consent is required under
Section 7 of the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission promulgated thereunder.
Very truly yours,
/s/ Proskauer Rose LLP
<PAGE>
Exhibit 23.1
Consent of Independent Auditors
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated March 3, 2000 relating to the
financial statements and financial statement schedule, which appear in TRISM,
Inc.'s Annual Report on Form 10-K for the year ended December 31, 1999. We also
consent to the reference to us under the heading "Experts" in such Registration
Statement.
PricewaterhouseCoopers LLP
Atlanta, Georgia
March 31, 2000
Exhibit 12
TRISM, INC.
COMPUTATION OF FIXED RATIO OF EARNINGS
TO FIXED CHARGES
For the twelve months ended December 31, 1999, 1998, 1997, 1996 and 1995
(in millions)
FISCAL YEAR ENDED DECEMBER 31,
-------------------------------
<TABLE>
<S>
<C> <C> <C> <C> <C>
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
(Loss) income from continuing $(18.2) $(8.4) $(8.1) $ (9.9) $ 5.5
operations before income taxes
Amortization of deferred debt 1.8 0.8 0.7 0.7 0.6
issuance cost
Interest expense 13.0 15.1 14.6 14.5 14.1
Appropriate portion (1/3) of rentals 3.6 4.4 5.1 5.0 2.2
------- ------- ------ ------- -----
Earnings available for fixed $ 0.2 11.9 12.3 10.3 22.4
charges -------- ------- ------ ------- -----
Amortization of deferred debt $ 1.8 0.8 0.7 0.7 0.6
issuance cost
Interest expense 13.0 15.1 14.6 14.5 14.1
Appropriate portion (1/3) of rentals 3.6 4.4 5.1 5.0 2.2
-------- ------- ------ ------- -----
Fixed charges $ 18.4 20.3 20.4 20.2 16.9
-------- ------- ------ ------- -----
Ratio of earnings available to fixed 0.0x 0.6x 0.6x 0.5x 1.3x
charges(1) ======= ======= ====== ======= =====
</TABLE>
- -----------
(1) Coverage of fixed charges is determined by dividing income from
continuing operations before income taxes and extraordinary items,
cumulative effect of accounting change, interest expense, debt issuance
cost amortization and the interest portion of rental expense deemed
representative of the interest factor by the sum of interest expense,
debt issuance cost amortization and the portion of the rental expense
deemed representative of the interest factor. For the twelve months
ended December 31, 1999, 1998, 1997 and 1996, earnings available for
fixed charges were inadequate to cover fixed charges by $18.2, $8.4,
$8.1 and $9.9 million, respectively.
<PAGE>
Pro forma ratio of earnings to fixed charges(1)
1999
----
(Loss) income from continuing $(5.6)
operations before income taxes
Amortization of deferred debt issuance cost 0.4
Interest expense 10.0
Appropriate portion (1/3) of rental 3.6
-----
Earnings available for fixed charges $ 8.4
-----
Amortization of deferred debt issuance cost 0.4
Interest expense 10.0
Appropriate portion (1/3) of rentals 3.6
-----
Pro forma fixed charges $14.0
-----
Ratio of earnings available to fixed 0.6x
charges(2) =====
- ----------
(1) The Pro forma ratio of earnings to fixed charges for the twelve months
ended December 31, 1999 reflects the Company's emergence from
bankruptcy and adoption of fresh-start reporting.
(2) Coverage of fixed charges is determined by dividing income from
continuing operations before income taxes and extraordinary items,
cumulative effect of accounting change, interest expense, debt issuance
cost amortization and the interest portion of rental expense deemed
representative of the interest factor by the sum of interest expense,
debt issuance cost amortization and the portion of the rental expense
deemed representative of the interest factor. For the Pro forma twelve
months ended December 31, 1999, earnings available for fixed charges
were inadequate to cover fixed charges by $5.6 million.
