AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 28, 1997
DELAWARE ONE SERVICEMASTER WAY 36-3497008
(STATE OR OTHER DOWNERS GROVE, ILLINOIS 60515 (I.R.S. EMPLOYER
JURISDICTION (630) 271-1300 IDENTIFICATION NO.)
OF INCORPORATION OR
ORGANIZATION)
|
THE SERVICEMASTER COMPANY LIMITED PARTNERSHIP
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE ONE SERVICEMASTER WAY 36-3482710
(STATE OR OTHER DOWNERS GROVE, ILLINOIS 60515 (I.R.S. EMPLOYER
JURISDICTION (630) 271-1300 IDENTIFICATION NO.)
OF INCORPORATION OR
ORGANIZATION)
|
SERVICEMASTER INCORPORATED OF DELAWARE
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE ONE SERVICEMASTER WAY 36-3858106
(STATE OR OTHER DOWNERS GROVE, ILLINOIS 60515 (I.R.S. EMPLOYER
JURISDICTION (630) 271-1300 IDENTIFICATION NO.)
OF INCORPORATION OR
ORGANIZATION)
|
COPIES TO:
ROBERT H. KINDERMAN JAMES A. FLORACK
KIRKLAND & ELLIS DAVIS POLK & WARDWELL
200 E. RANDOLPH DRIVE 450 LEXINGTON AVENUE
CHICAGO, ILLINOIS 60601 NEW YORK, NEW YORK 10017
(312) 861-2096 (212) 450-4000
---------------
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PROPOSED PROPOSED
TITLE OF EACH CLASS OF AMOUNT MAXIMUM MAXIMUM AMOUNT OF
SECURITIES TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PER UNIT OFFERING PRICE FEE
------------------------------------------------------------------------------------------------------
Debt Securities (3) (5) (6)............. (1) (1) (1) (1)
------------------------------------------------------------------------------------------------------
Guarantee of ServiceMaster Limited Part-
nership................................ (4) (4) (4) (4)
------------------------------------------------------------------------------------------------------
Shares of Limited Partnership Interest
Issuable by ServiceMaster Limited Part-
nership (5) (7)........................ (1) (1) (1) (1)
------------------------------------------------------------------------------------------------------
Total................................... $950,000,000(2) 100%(2) $950,000,000(2) $287,879
------------------------------------------------------------------------------------------------------
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TWO CORE PROSPECTUSES
This Registration Statement contains two proposed forms of core prospectus. One core prospectus is intended for use with offerings of Debt Securities registered on this Registration Statement. The other core prospectus is intended for use with offerings of equity securities registered on this Registration Statement.
DEBT PROSPECTUS SUPPLEMENT
This Registration Statement also contains a preliminary Prospectus Supplement which the registrants intend to use together with the prospectus included herein for use with the offerings of Debt Securities in connection with a proposed underwritten offering of $150 million in Notes with a 10-year maturity and $150 million of Notes with a 30-year maturity. The registrants presently intend to consummate the offering described in the Prospectus Supplement as soon as practicable after the Registration Statement becomes effective.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+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 SUPPLEMENT AND THE ACCOMPANYING 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 STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PROSPECTUS SUPPLEMENT SUBJECT TO COMPLETION,
DATED JULY 28, 1997
(TO PROSPECTUS DATED , 1997)
THE SERVICEMASTER COMPANY LIMITED PARTNERSHIP [LOGO]
$150,000,000
% Notes due , 2007
Interest payable and
ISSUE PRICE: %
$150,000,000
% Notes due , 2027
Interest payable and
ISSUE PRICE: %
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FULLY AND UNCONDITIONALLY GUARANTEED BY
SERVICEMASTER LIMITED PARTNERSHIP
Interest on the % Notes due , 2007 (the "2007 Notes") and on the % Notes due , 2027 (the "2027 Notes") (collectively, the "Notes") is pay- able semi-annually on and of each year, commencing , 1998. The 2007 Notes and 2027 Notes may be redeemed at any time at the option of The ServiceMaster Company Limited Partnership ("The ServiceMaster Company" or the "Company"), in whole or in part, at a redemption price equal to the greater of (i) 100% of their principal amount or (ii) the sum of the pres- ent values of the Remaining Scheduled Payments (as defined herein) thereon dis- counted to the redemption date, on a semi-annual basis, at the Treasury Yield (as defined herein) plus basis points (for the redemption of the 2007 Notes) or basis points (for the redemption of the 2027 Notes), together with all accrued but unpaid interest, if any, to the date of redemption in ei- ther case. See "Description of Notes--Optional Redemption of 2007 and 2027 Notes" herein.
Each series of Notes will be represented by a Registered Global Security (as defined in the Indenture) registered in the name of The Depository Trust Com- pany (the "Depositary") or its nominee. Interest in the Registered Global Secu- rities will be shown on, and transfers thereof will be effected only through, records maintained by the Depositary (with respect to beneficial interests of participants) or by participants or persons that hold interests through partic- ipants (with respect to beneficial interests of beneficial owners). Except as described in the accompanying Prospectus, Notes in certificated form will not be issued. See "Description of Debt Securities--Global Securities" in the ac- companying Prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE AC- CURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC (1) DISCOUNT (2) COMPANY (1)(3)
--------------------------------------------------------------------------------------------
Per 2007 Note % % %
--------------------------------------------------------------------------------------------
Total $ $ $
--------------------------------------------------------------------------------------------
Per 2027 Note % % %
--------------------------------------------------------------------------------------------
Total $ $ $
--------------------------------------------------------------------------------------------
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(1) Plus accrued interest, if any, from , 1997.
(2) The Company has agreed to indemnify the Underwriters against certain lia-
bilities under the Securities Act of 1933, as amended. See "Underwriting" here-
in.
(3) Before deducting expenses of the Company estimated at $860,000.
The Notes are offered, subject to prior sale, when, as and if accepted by the Underwriters and subject to approval of certain legal matters by Davis Polk & Wardwell, counsel for the Underwriters. It is expected that delivery of the Notes will be made in book-entry form only on or about , 1997 through the facilities of the Depositary, against payment therefor in immedi- ately available funds.
J.P. MORGAN & CO. GOLDMAN, SACHS & CO. BA SECURITIES, INC.___ FIRST CHICAGO CAPITAL MARKETS, INC____NATIONSBANC.CAPITAL MARKETS, INC.
, 1997
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE NOTES. SPECIFICALLY, THE UNDERWRITERS MAY OVERALLOT IN CONNECTION WITH THE OFFERING, AND MAY BID
FOR, AND PURCHASE, THE NOTES IN THE OPEN MARKET. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
No dealer, salesman or any other person has been authorized to give any information or to make any representations other than those contained or incorporated by reference in this Prospectus Supplement and the accompanying Prospectus, and, if given or made, such information or representations must not be relied upon as having been authorized by the Company or by any Underwriter. This Prospectus Supplement and the accompanying Prospectus do not constitute an offer to sell or the solicitation of an offer to buy the Notes by anyone in any jurisdiction in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation. Neither the delivery of this Prospectus nor any sale made hereunder and thereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since the date hereof or thereof or that the information contained or incorporated by reference herein or therein is correct as of any time subsequent to the date of such information.
TABLE OF CONTENTS
PAGE
PAGE
PROSPECTUS SUPPLEMENT PROSPECTUS
ServiceMaster.................. S-3
Recent Developments............ S-5
Capitalization................. S-5
Use of Proceeds................ S-6
Selected Historical Financial
Information................... S-6
Description of the Notes and
Guarantee..................... S-8
Underwriting................... S-10
Legal Opinions................. S-11
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Available Information............... 2 Incorporation of Certain Documents by Reference....................... 2 ServiceMaster....................... 4 Ratio of Earnings to Fixed Charges.. 5 Summarized Financial Information for The ServiceMaster Company.......... 5 Use of Proceeds..................... 6 Description of Debt Securities and Guarantee.......................... 6 The Reincorporating Merger and Partnership Liquidations........... 19 Plan of Distribution................ 20 Validity of Debt Securities......... 22 Experts............................. 22 |
Unless otherwise indicated or the context otherwise requires, all references herein to: (i) the "Parent Partnership" refers to ServiceMaster Limited Partnership; (ii) "The ServiceMaster Company" or the "Company" refer to The ServiceMaster Company Limited Partnership; and (iii) "ServiceMaster" refers to the Parent Partnership and The ServiceMaster Company, together with all entities affiliated with these two limited partnerships and their respective predecessors. As described in this Prospectus Supplement and the attached Prospectus, the shareholders of the Parent Partnership have approved a Reincorporating Merger, which is scheduled to occur on or before December 31, 1997. The Reincorporating Merger will install ServiceMaster Incorporated of Delaware as the ultimate parent in the ServiceMaster enterprise, and the term "ServiceMaster" as used in this Prospectus Supplement with respect to periods at and after the Reincorporating Merger refers to ServiceMaster Incorporated of Delaware and its subsidiaries.
SERVICEMASTER
ServiceMaster provides a range of services to individual consumers, businesses
and institutions in the United States and over 30 other countries throughout
the world. ServiceMaster is functionally divided into three operating units:
Consumer Services, Management Services and International. Consumer Services
and Management Services are the principal operating units.
CONSUMER SERVICES
ServiceMaster Consumer Services provides specialty services to homeowners and commercial facilities through seven market-leading companies. The services provided by these companies include: lawn care, tree and shrub services and indoor plant maintenance services under the "TruGreen--ChemLawn" and "Barefoot" service marks; termite and pest control services under the "Terminix" service mark; home systems and appliance warranty contracts under the "American Home Shield" service mark; residential and commercial cleaning and disaster restoration services under the "ServiceMaster" service mark; domestic housekeeping services under the "Merry Maids" service mark; home inspection services under the "AmeriSpec" service mark; and on-site furniture repair and restoration under the "Furniture Medic" service mark.
ServiceMaster focuses on providing easy access to its various services and establishing relationships to provide one or more of these services on a repetitive basis to customers. Since 1986, the number of domestic customers served by ServiceMaster Consumer Services has increased from fewer than one million customers to more than 6,500,000 customers. The International group is primarily responsible for overseeing the Consumer Services businesses that are conducted in foreign markets. The services provided by the seven Consumer Services companies are part of the ServiceMaster "Quality Service Network" and can be accessed by calling a single toll-free telephone number: 1-800-WE SERVE or by contacting the individual companies directly.
TruGreen-ChemLawn. As of March 21, 1997, TruGreen-ChemLawn (following the acquisition of Barefoot) was operating in 47 states through 198 company-owned branches and 126 franchised branches. With over 3 million residential and commercial customers, TruGreen-ChemLawn is the leading provider of lawn care services in the United States and also provides interior plantscape services to commercial customers. TruGreen-ChemLawn also provides lawn, tree and shrub care services in Saudi Arabia through a licensing arrangement and in Canada through an affiliate. The TruGreen-ChemLawn businesses are seasonal in nature.
In February 1997, ServiceMaster, for the benefit of TruGreen-ChemLawn, completed the acquisition of Barefoot Inc. ("Barefoot") for aggregate consideration having a value of approximately $237,000,000. At the time of the transaction, Barefoot was the second largest provider of professional lawn care services in the United States.
Terminix. With over 3 million residential and commercial customers, Terminix is the leading provider of termite and pest control services in the United States. As of December 1996, Terminix was providing these services in 45 states and in Mexico through 316 company-owned branches and 250 franchised branches. Terminix also provides termite and pest control services through subsidiaries in Belgium, the Netherlands, Norway, Sweden, Ireland, the United Kingdom, Germany and Mexico and through local licensees in 11 other countries. The Terminix business is seasonal in nature.
American Home Shield. American Home Shield ("AHS") is a leading provider of home service warranty contracts in the United States. AHS warranty contracts cover the repair or replacement of built-in appliances, hot water heaters
and electrical, plumbing, central heating, and central air conditioning systems that malfunction by reason of normal wear and tear. Service contracts are sold through participating real estate brokerage offices in conjunction with resales of single-family residences to homeowners. AHS also sells service warranty contracts directly to non-moving homeowners by renewing existing contracts and through various other distribution channels which are currently being expanded. As of December 31, 1996, AHS was providing services to approximately 503,000 homes through approximately 13,000 independent repair maintenance contractors in 49 states and the District of Columbia. AHS also provides home service warranty contracts through licensing arrangements with local service providers in three other countries.
ServiceMaster Residential/Commercial Services ("Res/Com"). ServiceMaster, through Res/Com, is the leading franchiser in the United States in the residential and commercial cleaning field. Res/Com provides carpet and upholstery cleaning and janitorial services, disaster restoration services and window cleaning services to over 1.6 million residential and commercial customers worldwide through a network of over 4,500 independent franchisees. Res/Com provides its services through subsidiaries in Germany, Ireland and the United Kingdom, through an affiliate in Canada, and through licensees in 13 other countries.
Merry Maids. Merry Maids provides domestic house cleaning services. With approximately 225,000 customers, Merry Maids is the leading provider of domestic house cleaning services in the United States. As of December 31, 1996, these services were provided through 27 company-owned branches in 18 states and 836 licensees operating in 49 states. Merry Maids also provides domestic housecleaning services in the United Kingdom through a subsidiary, in Canada through an affiliate and in five other countries through licensing arrangements with local service providers.
AmeriSpec. AHS acquired AmeriSpec in February 1996. AmeriSpec is a leading provider of home inspection services in the United States. During 1996, AmeriSpec conducted 85,000 home inspections in 41 states and Canada. AmeriSpec provides home inspection services in Canada through licensing arrangements with local service providers.
Furniture Medic. ServiceMaster acquired Furniture Medic in July 1996. Furniture Medic provides on-site furniture repair and restoration services in all 50 states. As of December 31, 1996, these services were provided through 549 licensees. Furniture Medic also provides its services in Canada through an affiliate and in two other countries through licensing arrangements with local service providers.
MANAGEMENT SERVICES
Management Services is organized into three discrete operating units, each
providing a separate functional service on a nationwide basis. These units are:
Healthcare Management Services (including Diversified Health Services);
Education Management Services; and Business and Industry Management Services.
The services provided by the Healthcare Management Services unit and the
services provided by ServiceMaster Diversified Health Services have been
integrated to provide a coordinated range of services to the health care
market.
ServiceMaster pioneered the providing of management of support services to health care facilities by instituting housekeeping management services in 1962. Since then, ServiceMaster has expanded its management services business such that it now provides management of a variety of support services including the management of housekeeping, plant operations and maintenance, laundry and linen, grounds and landscaping, clinical equipment maintenance, food service, energy management and total facility management. The Diversified Health Services' portion of Healthcare Management Services provides management and other services to nursing homes, skilled nursing facilities, assisted living facilities and home health care agencies. ServiceMaster's general programs and systems free the customer to focus on its core business activity with confidence that the support services are being managed and performed in an efficient manner.
As of December 31, 1996, ServiceMaster was providing management of support services to approximately 1,800 health care facilities and to approximately 700 educational and commercial facilities. These services were being provided in all 50 states and the District of Columbia. Outside of the United States, ServiceMaster provides management services through a subsidiary in Japan, through affiliated companies in Canada, Japan, Germany, Mexico, and the United Kingdom, and through licensees in 15 other countries. The International unit is responsible for overseeing the management services which are provided in foreign markets.
INTERNATIONAL
The International unit oversees the management of support services and consumer services in international markets through licensing arrangements, ownership of foreign operating companies acquired by ServiceMaster and joint ventures.
The International unit currently owns controlling interests in Terminix Peter Cox Ltd., a leading pest control and wood preservation company in the United Kingdom; Terminix Protekta B.V. and Riwa B.V., each a leading pest control company in the Netherlands; Anticimex Development AB, a holding company for the leading pest control company in Sweden; and the Stenglein group of pest control companies in Germany.
BACKGROUND
The Parent Partnership and its immediate subsidiary, The ServiceMaster Company, were formed in December 1986 as limited partnerships to succeed to the business and assets of ServiceMaster Industries, Inc., which began operations in 1947. The principal executive offices of the Parent Partnership and The ServiceMaster Company are located at One ServiceMaster Way, Downers Grove, Illinois 60515- 9969. Their telephone number is (630) 271-1300.
RECENT DEVELOPMENTS
Second Quarter Operating Results. On July 24, 1997, ServiceMaster reported record revenues for the second quarter of 1997 of $1 billion, up 10.2% over the comparable 1996 period, reflecting solid growth from base operations and acquisitions. This marked the first time in ServiceMaster's 50-year history in which quarterly revenues exceeded $1 billion. Net income of $75.7 million was up 6.2%, with earnings per share increasing 21% to $0.40.
Revenues for the six months ended June 30, 1997 rose 10.3% to $1.8 billion. Net income for the six months was $122.6 million, a 9.7% increase over 1996, with earnings per share increasing 18% to $0.60.
Share and Option Repurchase. On December 31, 1995, ServiceMaster completed a transaction with WMI Urban Services, Inc. ("WMUS"), a wholly owned subsidiary of WMX Technologies, Inc. ("WMX") in which WMUS contributed its 27.76% interest in ServiceMaster Consumer Services L.P. to ServiceMaster and, in exchange therefor, the Parent Partnership issued to WMUS approximately 40.7 million unregistered limited partner shares of ServiceMaster and an option to purchase approximately 2.8 million additional shares of ServiceMaster's limited partner shares (the "Option"). On April 1, 1997, the Parent Partnership completed the repurchase from WMUS of all the restricted shares of the Parent Partnership owned by WMUS and the Option (the "WMUS Repurchase") for the sum of approximately $626 million. ServiceMaster financed the WMUS Repurchase with short-term bank financing.
Share Dividend. On May 9, 1997, ServiceMaster's Board of Directors declared a three-for-two share split effective June 25, 1997. All share and per share data included herein have been restated for all periods presented to reflect this three-for-two split.
CAPITALIZATION
The following table sets forth as of June 30, 1997: (a) the actual consolidated
capitalization of the Parent Partnership and (b) the consolidated
capitalization of the Parent Partnership as adjusted to reflect the sale of the
Notes offered hereby and application of net proceeds therefrom as described
under "Use of Proceeds." No separate financial information for The
ServiceMaster Company has been provided in this Prospectus Supplement because:
(i) the Parent Partnership does not itself conduct any operations but rather
all operations of the ServiceMaster enterprise are conducted by The
ServiceMaster Company and the direct and indirect subsidiaries of The
ServiceMaster Company; (ii) the Parent Partnership has no material assets other
than substantially all of the ownership interest in The ServiceMaster Company;
and (iii) all of the assets and liabilities shown in the consolidated financial
statements for the Parent Partnership are located at The ServiceMaster Company
and at the direct and indirect subsidiaries of The ServiceMaster Company.
JUNE 30, 1997
---------------------
AS
ACTUAL ADJUSTED
---------- ----------
(IN THOUSANDS)
Cash and cash equivalents................................ $ 91,047 $ 91,047
========== ==========
Current maturities of long-term debt..................... $ 16,324 $ 16,324
Long-term debt:
Notes payable.......................................... 386,001 386,001
Revolving credit facilities............................ 686,915 390,063
Other.................................................. 93,590 93,590
2007 Notes............................................. -- 150,000
2027 Notes............................................. -- 150,000
---------- ----------
Total long-term debt................................. 1,166,506 1,169,654
Total Debt............................................... $1,182,830 $1,185,978
========== ==========
Total Net Debt........................................... $1,091,783 $1,094,931
========== ==========
Minority interest........................................ 2,939 2,939
Shareholders' equity..................................... 402,559 402,559
Total capitalization (including short-term debt)......... $1,497,281 $1,500,429
========== ==========
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USE OF PROCEEDS
The net proceeds from the sale of the Notes are estimated to be approximately $297 million. The Company expects to use the net proceeds from the sale of the Notes to repay a portion of its borrowings incurred to finance the WMUS Repurchase. The indebtedness to be repaid with the proceeds of the Notes was incurred under a five-year revolving bank credit facility, which matures April 1, 2002 and bears interest at floating rates (equal to approximately 6% at June 30, 1997).
Affiliates of J.P. Morgan Securities Inc., BA Securities, Inc., First Chicago Capital Markets, Inc. and NationsBanc Capital Markets, Inc. are lenders under the revolving bank credit facility. See "Underwriting."
SELECTED HISTORICAL FINANCIAL INFORMATION
The summary of selected historical financial information set forth below as of
and for each of the years in the five-year period ended December 31, 1996 has
been derived from the consolidated financial statements of ServiceMaster,
which statements have been audited by Arthur Andersen LLP, independent public
accountants for ServiceMaster. Such information is contained in and should be
read in conjunction with the consolidated financial statements and
accompanying notes included in ServiceMaster's Annual Reports on Form 10-K for
such years, incorporated herein by reference. The historical data as of and
for the six months ended June 30, 1996 and 1997 are derived from unaudited
financial statements which, in the opinion of ServiceMaster management,
reflect all adjustments (consisting only of normal recurring adjustments)
necessary for a fair presentation of the financial position and results of
operations for such dates and for such periods. Historical results for the
interim periods ended June 30 are not necessarily indicative of the results
for the full year. No separate financial information for The ServiceMaster
Company has been provided in this Prospectus Supplement because: (i) the
Parent Partnership does not itself conduct any operations but rather all
operations of the ServiceMaster enterprise are conducted by The ServiceMaster
Company and the direct and indirect subsidiaries of The ServiceMaster Company;
(ii) the Parent Partnership has no material assets other than substantially
all of the ownership interest in The ServiceMaster Company; and (iii) all of
the assets and liabilities shown in the consolidated financial statements for
the Parent Partnership are located at The ServiceMaster Company and at the
direct and indirect subsidiaries of The ServiceMaster Company. For certain
summarized unaudited financial information for The ServiceMaster Company, see
"Summarized Financial Information for The ServiceMaster Company" in the
attached Prospectus.
SIX MONTHS
ENDED JUNE 30, YEAR ENDED DECEMBER 31,
-------------- ----------------------------------------------
1997 1996 1996 1995 1994 1993 1992
------- ------- ------ ------ ------ ------ ------
(IN MILLIONS, EXCEPT FOR PER SHARE
(UNAUDITED) DATA)(1)
OPERATING RESULTS
Operating revenue....... $ 1,828 $ 1,657 $3,458 $3,203 $2,985 $2,759 $2,489
Cost of services
rendered and products
sold................... 1,411 1,294 2,681 2,500 2,356 2,193 2,030
Selling and
administrative
expenses............... 260 230 482 451 415 393 326
Restructuring charges... -- -- -- -- -- -- 70
------- ------- ------ ------ ------ ------ ------
Operating income(2)..... 157 133 295 252 214 173 63
Non-operating expense... 30 18 43 74 71 55 37
Realized gain on
issuance of subsidiary
shares................. -- -- -- -- -- (30) (105)
Provision for income
taxes.................. 4 3 7 6 3 2 1
Cumulative effect of
change in accounting
for postretirement
medical benefits....... -- -- -- -- -- -- 8
------- ------- ------ ------ ------ ------ ------
Net income(2)........... $ 123 $ 112 $ 245 $ 172 $ 140 $ 146 $ 122
======= ======= ====== ====== ====== ====== ======
Net income per share(2). $ 0.60 $ 0.51 $ 1.13(3) $ 0.96(3) $ 0.80(3) $ 0.84(3) $ 0.72(3)
Cash distributions per
share to shareholders.. $ 0.23 $ 0.21 $ 0.44 $ 0.42 $ 0.41 $ 0.40 $ 0.39
FINANCIAL POSITION AT
PERIOD END
Current assets.......... $ 579 $ 494 $ 499 $ 393 $ 331 $ 291 $ 258
Current liabilities..... 499 403 426 373 304 244 207
Working capital......... 80 91 74 20 27 47 51
Total assets............ 2,200 1,809 1,847 1,650 1,231 1,122 1,006
Non-current liabilities. 1,295 606 608 518 484 471 511
Minority interest....... 3 14 17 13 135 118 78
Shareholders' equity.... 403 787 797 747 307 289 210
Book value per share.... $ 1.97 $ 3.61 $ 3.68 $ 4.18 $ 1.76 $ 1.67 $ 1.23
OTHER DATA
Ratio of earnings to
fixed charges(4)....... 3.85x 4.76x 5.16x 4.83x 4.72x 4.55x 3.85x
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SIX MONTHS
ENDED JUNE 30, YEAR ENDED DECEMBER 31,
-------------- -----------------------------
1997 1996 1996 1995 1994 1993 1992
------- ------- ----- ----- ----- ----- -----
(UNAUDITED)
Operating income.............. $ 157 $ 133 $ 295 $ 252 $ 214 $ 173 $ 141
Net income.................... 123 112 245 172 140 116 94
Net income per share.......... $ 0.60 $ 0.51 $1.13 $0.96 $0.80 $0.67 $0.55
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(3) Most operations conducted by The ServiceMaster Company and its subsidiary
partnerships have been conducted since 1986 free of federal corporate
income tax. The Internal Revenue Code as presently constituted will impose
federal corporate income tax on ServiceMaster's operations beginning in
1998. In anticipation of this change, in January 1992, ServiceMaster's
shareholders approved a Reincorporating Merger the purpose of which is to
reorganize the ServiceMaster enterprise so that ServiceMaster Incorporated
of Delaware (the "Successor Parent Corporation") will be substituted for
the Parent Partnership as the ultimate parent in the ServiceMaster
enterprise. See "The Reincorporating Merger and the Partnership
Liquidations" in the Prospectus.
As a result of the Reincorporating Merger and related transactions (which are
collectively referred to herein as the "Reincorporation") and the WMUS
Repurchase, ServiceMaster will be entitled to recognize a step-up in the tax
basis of its assets, which will be amortized against ServiceMaster's taxable
income in future years, resulting in an annual cash benefit currently
estimated at between $20 and $25 million. Reincorporation will have no impact
on the "book basis" of ServiceMaster's assets reflected in the Selected
Historical Financial Information above and in the financial statements from
which such information was derived. The taxis basis step-up will result in
the recognition of a deferred tax asset on ServiceMaster's balance sheet and
a corresponding unusual gain in ServiceMaster's income statement in the
period of Reincorporation. The exact amount of the tax basis step-up (and the
deferred tax asset and unusual gain that will result therefrom) will depend
in part on the price and trading volume of the Parent Partnership's shares
prior to the Reincorporating Merger. It is currently estimated that the
effective book tax rate upon Reincorporation will be approximately 40% of
pretax earnings. This estimate is necessarily subject to change based on
changes in circumstances, statutory tax rates, etc. Pro forma earnings per
share would be $0.69 in 1996, $0.59 in 1995, $0.49 in 1994, $0.51 in 1993,
and $0.43 in 1992, assuming Reincorporation had occurred at the beginning of
each respective period.
(4) In the calculation of the Parent Partnership's ratio of earnings to fixed
charges, "earnings" consist of income from continuing operations before
income taxes, fixed charges (excluding capitalized interest) and minority
interest expense of subsidiaries with fixed changes and "fixed charges"
consist of interest and amortization of debt expense, including the
interest portion of rental obligations deemed representative of the
interest factor.
DESCRIPTION OF THE NOTES AND GUARANTEE
The following description of the particular terms of the Notes and Guarantee offered hereby supplements, and to the extent inconsistent therewith replaces, the description of the general terms and provisions of the Debt Securities and Guarantee set forth in the Prospectus, to which description reference is hereby made.
GENERAL
The Notes will be issued under the Indenture (the "Indenture") dated as of July , 1997 among The ServiceMaster Company, as issuer, the Parent Partnership, as guarantor, and Harris Trust and Savings Bank, as trustee (the "Trustee"). The Notes will be guaranteed by the Parent Partnership and will rank pari passu with all other unsubordinated indebtedness of The ServiceMaster Company. Capitalized terms not defined herein have meanings as set forth in the Indenture.
The 2007 Notes will be limited to $150,000,000 aggregate principal amount and will mature on July , 2007 (the "2007 Notes Maturity Date") at 100% of their principal amount, unless earlier redeemed pursuant to the terms thereof. See "Optional Redemption of 2007 Notes and 2027 Notes" below. The 2027 Notes will be limited to $150,000,000 aggregate principal amount and will mature on , 2027 (the "2027 Notes Maturity Date") at 100% of their principal amount, unless earlier redeemed pursuant to the terms thereof. See "Optional Redemption of 2007 Notes and 2027 Notes" below.
The Notes will bear interest at the rate per annum set forth on the cover page of this Prospectus Supplement from , 1997 or from the most recent interest payment date to which interest has been paid or provided for, payable semi-annually on and of each year (an "Interest Payment Date"), beginning , 199 until the 2007 Notes Maturity Date or the 2027 Notes Maturity Date, as the case may be. Interest will be payable to the persons in whose names the Notes are registered at the close of business on the or , as the case may be, next preceding such Interest Payment Date.
The Notes will be issued as Registered Global Securities. See "Book-Entry System" below. Principal of and interest on the Notes will be payable, and the transfer of Notes will be registrable, through the Depository Trust Company, as Depositary (the "Depositary"), as described under "Description of Debt Securities--Global Debt Securities" in the Prospectus.
The Notes are not subject to any sinking fund.
GUARANTEE
The Notes are unconditionally guaranteed as to the payment of principal, premium, if any, and interest in respect thereof by the Parent Partnership, pursuant to the Indenture, as described under "Guarantee" in the accompanying
Prospectus. The Guarantee will constitute an unsecured obligation of the Parent Partnership and will rank equally in right of payment with all existing and future unsubordinated and unsecured indebtedness of the Parent Partnership.
OPTIONAL REDEMPTION OF 2007 AND 2027 NOTES
The 2007 Notes and the 2027 Notes will be redeemable in whole or in part, at the option of the Company, upon not less than 30 or more than 60 days prior written notice, at any time, at a redemption price equal to the greater of (i) 100% of their principal amount or (ii) the sum of the present values of the Remaining Scheduled Payments (as hereinafter defined) thereon discounted to the redemption date, on a semi-annual basis, at the Treasury Yield plus basis points (for the redemption of the 2007 Notes) or basis points (for the redemption of the 2027 Notes), together with all accrued but unpaid interest, if any, to the date of redemption in either case; provided, however, that interest installments due on an Interest Payment Date which is on or prior to the date of redemption will be payable to holders who are holders of record of such 2007 Notes or 2027 Notes, as the case may be, as of the close of business on the fifteenth day next preceding such Interest Payment Date.
"Treasury Yield" means, with respect to any redemption date, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price of the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date.
"Comparable Treasury Issue" means the United States Treasury security selected by the Independent Investment Banker as having a maturity most comparable to the remaining term of the 2007 Notes or the 2027 Notes, as the case may be, that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the 2007 Notes or the 2027 Notes, as the case may be.
"Independent Investment Banker" means J.P. Morgan Securities Inc. or, if such firm is unwilling or unable to select the Comparable Treasury Issue, an independent investment banking institution of national standing in the United States appointed by the Board of Directors of ServiceMaster in good faith.
"Comparable Treasury Price" means, with respect to any redemption date, (i) the average of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) on the third business day preceding such redemption date, as set forth in the daily statistical release (or any successor release) published by the Federal Reserve Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S. Government Securities" or (ii) if such release (or any successor release) is not published or does not contain such prices on such business day, the average of the Reference Treasury Dealer Quotations for such redemption price.
"Reference Treasury Dealer" means each of J.P. Morgan Securities Inc. and its respective successors; provided, however, that if such firm ceases to be a primary U.S. Government securities dealer in New York, New York (a "Primary Treasury Dealer") or otherwise fails to provide a Reference Treasury Dealer Quotation, the Company will substitute therefor any other Primary Treasury Dealer.
"Reference Treasury Dealer Quotation" means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issues (express in each case as a percentage of its principal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York, New York time, on the third business day preceding such redemption date.
"Remaining Scheduled Payments" means, with respect to any Notes, the remaining scheduled payments of the principal thereof to be redeemed and interest thereon that would be due after the related redemption date but for such redemption; provided, however, that, if such redemption date is not an Interest Payment Date with respect to such Note, the amount of the next succeeding scheduled interest payment thereon will be reduced by the amount of interest accrued thereon to such redemption date.
BOOK-ENTRY SYSTEM
Upon issuance, all 2007 Notes and all 2027 Notes will be represented respectively by one or more Registered Global Securities. Each Registered Global Security representing any of the Notes will be deposited with, or on behalf of, the Depositary and registered in the name of a nominee of the Depositary. The provisions set forth under "Description of
Debt Securities--Global Debt Securities" in the accompanying Prospectus will be applicable to the Notes. Accordingly, beneficial interests in the Notes will be shown on, and transfers thereof will be effected only through, records maintained by the Depositary and its participants. Except as described under "Description of Debt Securities--Global Debt Securities" in the accompanying Prospectus, owners of beneficial interests in the Registered Global Security will not be entitled to receive Notes in certificated form and will not be considered holders of Notes.
Ownership of beneficial interests in the Registered Global Security will be limited to institutions that have accounts with the Depositary or its nominee ("participants") or persons that may hold interests through participants. Payments of principal, premium, if any, and interest will be made in immediately available funds to the Depositary's nominee as the registered owner of the Registered Global Security. Under the terms of the Indenture, the Company and the Trustee will treat the person in whose name the Registered Global Security is registered as the owner of the Notes for the purpose of receiving payments of principal, premium, if any, and interest and for all other purposes. Therefore, neither the Company, the Trustee nor any other agent will have any direct responsibility or liability for the payment of principal, premium, if any, or interest to owners of beneficial interests in the Registered Global Security.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement, dated the date hereof (the "Underwriting Agreement") among the Company, the Parent Partnership, as guarantor, and J.P. Morgan Securities Inc. and Goldman, Sachs & Co. (the "Representatives"), the Company has agreed to sell to each of the underwriters named below (the "Underwriters"), and each of the Underwriters has severally agreed to purchase, the principal amount of Notes set forth opposite its name below:
PRINCIPAL AMOUNT OF NOTES
-------------------------
NAME 2007 NOTES 2027 NOTES
---- ------------ ------------
J.P. Morgan Securities Inc.................... $ $
Goldman, Sachs & Co...........................
BA Securities, Inc............................
First Chicago Capital Markets, Inc............
NationsBanc Capital Markets, Inc..............
------------ ------------
Total..................................... $150,000,000 $150,000,000
============ ============
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Under the terms and conditions of the Underwriting Agreement, the Underwriters are obligated to take and pay for all of the Notes if any are taken.
The Underwriters propose to offer the Notes directly to the public initially at the initial public offering price set forth on the cover page of this Prospectus Supplement and to certain dealers at such price less a concession not in excess of % of the principal amount of the 2007 Notes and % of the principal amount of the 2027 Notes. The Underwriters may allow, and such dealers may re-allow, a concession not in excess of % of the principal amount of the 2007 Notes or % of the principal amount of the 2027 Notes to certain other dealers. After the initial public offering, the public offering price and such concessions may be changed by the Underwriters.
The Notes are new issues of securities with no established trading market and will not be listed on any national securities exchange. The Company has been advised by the Underwriters that the Underwriters intend to make a market for the Notes, but are not obligated to do so and may discontinue market making at any time without notice. No assurance can be given as to the liquidity of the trading market for the Notes.
In connection with this offering, the Underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of the Notes. Specifically, the Underwriters may overallot the offering, creating a syndicate short position. In addition, the Underwriters may bid for, and purchase, Notes in the open market to cover the syndicate short position or to stabilize the price of the Notes. Finally, the underwriting syndicate may reclaim selling concessions allowed for distributing the Notes in the offering if the syndicate repurchases previously distributed Notes in transactions to cover syndicate short positions, in stabilization transactions or otherwise. Any of these activities may stabilize or maintain the market price of the Notes above independent market levels. The Underwriters are not required to engage in these activities, and may end these activities at any time.
The Company and the Parent Partnership have agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended, or contribute to payments which the Underwriters may be required to make in respect thereof.
When more than 10% of the proceeds of a public offering of certain securities are to be paid to members of the National Association of Securities Dealers, Inc. ("NASD") participating in such public offering or to affiliates of such members, Rule 2710(c)(8) of the NASD's Rules of Fair Practice requires disclosure of such fact.
Each of J.P. Morgan Securities Inc., BA Securities, Inc., First Chicago Capital Markets, Inc. and NationsBanc Capital Markets, Inc. and/or certain affiliates thereof is a member of the NASD. The Underwriters and/or their affiliates may indirectly receive more than 10% of the net proceeds from the offering of the Notes as a result of the use of such proceeds to repay borrowings by the Company under a five-year revolving bank credit facility. See "Use of Proceeds."
In the ordinary course of their respective businesses, the Underwriters and their affiliates have engaged and may in the future engage in commercial banking and investment banking transactions with ServiceMaster and its affiliates.
LEGAL OPINIONS
Certain legal matters in connection with the Notes will be passed upon for the Company by Vernon T. Squires, Esq., Senior Vice President and General Counsel of the Company, and for the Underwriters by Davis Polk & Wardwell, New York, New York. As of the date of this Prospectus Supplement, Mr. Squires holds 255,887 shares and options to acquire 54,000 shares of limited partnership interests of the Parent Partnership.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+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 JULY 28, 1997
PROSPECTUS
THE SERVICEMASTER COMPANY LIMITED PARTNERSHIP
DEBT SECURITIES
The ServiceMaster Company Limited Partnership ("The ServiceMaster Company") may offer from time to time in one or more series its debt securities consisting of debentures, notes or other evidence of indebtedness (the "Debt Securities," which term shall include any guarantees thereof), in amounts as may be sold for an aggregate public offering price of up to $950,000,000 on terms to be determined at the time of each offering. The Debt Securities may be issued as unsecured Debt Securities that will not be subordinated to other obligations of The ServiceMaster Company. The payment of principal and interest with respect to such Debt Securities will be unconditionally guaranteed by ServiceMaster Limited Partnership (the "Parent Partnership"). The Parent Partnership holds the entire limited partnership interest in The ServiceMaster Company, which interest represents 99% of the entire equity interest in The ServiceMaster Company. See "Description of Debt Securities--Guarantee." The Debt Securities may be offered separately or together, in separate series, in amounts, at prices and on terms determined by market conditions at the time of sale and to be set forth in one or more supplements to this Prospectus (each, a "Prospectus Supplement").
The specific terms of the Debt Securities for which this Prospectus is being delivered will be set forth in the applicable Prospectus Supplement, which will include, where applicable: the specific title, aggregate principal amount, authorized denominations, maturity (which may be fixed or extendible), interest rate or rates (which may be fixed or variable) (or manner of calculation thereof), if any, the time of payment of interest, if any, any terms of redemption at the option of The ServiceMaster Company or repayment at the option of the holder, any terms for sinking fund payments, additional covenants, initial public offering price, purchase price and other terms with respect to the Debt Securities. The Debt Securities may be issued as Original Issue Discount Securities to be sold at a substantial discount below their principal amount and, if issued, certain terms thereof will be set forth in the Prospectus Supplement related thereto. The Debt Securities will be represented by global notes registered in the name of a nominee of The Depository Trust Company, as Depositary. Beneficial interests in the Debt Securities will be shown on, and transfers thereof will be effected only through, records maintained by the Depositary (with respect to participants' interests) and its participants. Except as described in this Prospectus, Debt Securities in certificated form will not be issued in exchange for the global notes. See "Description of Debt Securities--Global Debt Securities."
The applicable Prospectus Supplement will also contain information, where applicable, about certain United States federal income tax considerations relating to, and any listing on a securities exchange of, the Debt Securities covered by such Prospectus Supplement.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The Debt Securities may be offered directly to one or more purchasers, through agents designated from time to time by The ServiceMaster Company or to or through underwriters or dealers. If any agents or underwriters are involved in the sale of the Debt Securities, their names, and any applicable purchase price, fee, commission or discount arrangement between or among them, will be set forth, or will be calculable from the information set forth, in the applicable Prospectus Supplement. See "Plan of Distribution." No Debt Securities may be sold without delivery of a Prospectus Supplement describing the method and terms of the offering of such Debt Securities.
The date of this Prospectus is
AVAILABLE INFORMATION
The Parent Partnership, The ServiceMaster Company and ServiceMaster Incorporated of Delaware have filed with the Securities and Exchange Commission (the "Commission") a Registration Statement on Form S-3 under the Securities Act of 1933, as amended (the "Securities Act"), for the registration of, among other things, the Debt Securities offered hereby. This Prospectus, which constitutes a part of the Registration Statement, does not contain all of the information set forth in the Registration Statement, certain items of which are contained in exhibits and schedules to, or incorporated by reference in, the Registration Statement as permitted by the rules and regulations of the Commission. For further information with respect to the Parent Partnership, The ServiceMaster Company, ServiceMaster Incorporated of Delaware, and the Debt Securities offered hereby, reference is made to the Registration Statement, including the exhibits thereto, and financial statements and notes filed as a part thereof or incorporated by reference therein. Statements made in this Prospectus concerning the contents of any document referred to herein are not necessarily complete. With respect to each such document filed with the Commission as an exhibit to, or incorporated by reference in, the Registration Statement, reference is made to the exhibit for a more complete description of the matter involved, and each such statement shall be deemed qualified in its entirety by such reference.
The Parent Partnership is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). In accordance therewith, the Parent Partnership files consolidated reports, proxy statements and other information with the Commission. Upon consummation of the Reincorporating Merger described in this Prospectus (which is scheduled to occur on or before December 31, 1997), ServiceMaster Incorporated of Delaware will become the successor to the Parent Partnership and The ServiceMaster Company and will become subject to the informational requirements identified in the preceding sentence. Reports, proxy statements and other information filed by the Parent Partnership may be inspected and copied at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices located at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511, and 7 World Trade Center, 13th Floor, New York, New York 10048. Copies of such material may be obtained by mail from the Public Reference Branch of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission maintains a Web site (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding the Parent Partnership, The ServiceMaster Company and ServiceMaster Incorporated of Delaware. In addition, such material may also be inspected and copied at the offices of the New York Stock Exchange. Partnership shares issued by the Parent Partnership are listed on the New York Stock Exchange.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents have been filed with the Commission and are incorporated by reference in this Prospectus: (i) the Annual Report on Form 10- K of the Parent Partnership (File No. 1-9378) for the year ended December 31, 1996 (the "1996 Form 10-K") and (ii) the Parent Partnership's Quarterly Report on Form 10-Q for the period ended March 31, 1997. All documents filed by the Parent Partnership pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to the termination of the offering of the Debt Securities and the other securities registered on the Registration Statement shall be deemed to be incorporated herein by reference and to be a part hereof from the respective dates of filing of such documents. As indicated in this Prospectus, the Parent Partnership, The ServiceMaster Company and ServiceMaster Incorporated of Delaware are parties to a Merger and Reorganization Agreement, which provides for a Reincorporating Merger that is scheduled to occur on or before December 31, 1997. Upon consummation of the Reincorporating Merger, ServiceMaster Incorporated of Delaware will (i) assume the obligations of The ServiceMaster Company on all Debt Securities issued prior to the Reincorporating Merger and the obligations of the Parent Partnership under its Guarantees of those Debt Securities and (ii) become the successor to the Parent Partnership as the ultimate parent in the ServiceMaster enterprise. All documents filed by ServiceMaster
Incorporated of Delaware after the Reincorporating Merger pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus
and prior to the termination of the offering of the Debt Securities and other
securities registered on the Registration Statement shall be deemed to be
incorporated herein by reference and to be a part hereof from the respective
dates of filing of such documents.
Any statement contained in a document incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein, or in any other subsequently filed document that also is or is deemed to be incorporated by reference herein, modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus.
Copies of all documents which are incorporated herein by reference (not
including the exhibits to such information, unless such exhibits are
specifically incorporated by reference in such information) will be provided
without charge to each person, including any beneficial owner, to whom this
Prospectus is delivered, upon written or oral request. Copies of this
Prospectus, as amended or supplemented from time to time, and any other
documents (or parts of documents) that constitute part of the Prospectus under
Section 10(a) of the Securities Act will also be provided without charge to
each such person, upon written or oral request. Requests should be directed to
ServiceMaster at One ServiceMaster Way, Downers Grove, Illinois 60515-9969,
Attention: Investor Relations (telephone number: (630) 271-1300).
NO PERSON IS AUTHORIZED IN CONNECTION WITH THE OFFERING MADE HEREBY TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE SERVICEMASTER COMPANY, THE PARENT PARTNERSHIP OR SERVICEMASTER INCORPORATED OF DELAWARE. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITY OTHER THAN THE DEBT SECURITIES OFFERED HEREBY TO ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE ANY SUCH OFFER OR SOLICITATION TO SUCH PERSON. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREBY SHALL UNDER ANY CIRCUMSTANCES IMPLY THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.
Unless otherwise indicated or the context otherwise requires, all references herein to: (i) the "Parent Partnership" refers to ServiceMaster Limited Partnership; (ii) "The ServiceMaster Company" or the "Company" refer to The ServiceMaster Company Limited Partnership; and (iii) "ServiceMaster" refers to the Parent Partnership and The ServiceMaster Company, together with all entities affiliated with these two limited partnerships and their respective predecessors. As described under"The Reincorporating Merger and the Partnership Liquidations" below, the shareholders of the Parent Partnership have approved a Reincorporating Merger, which is scheduled to occur on or before December 31, 1997. The Reincorporating Merger will install a corporation as the ultimate parent in the ServiceMaster enterprise and that corporation is called the "Successor Parent Corporation" in this Prospectus. The term "ServiceMaster" as used in this Prospectus with respect to periods at and after the Reincorporating Merger refers to ServiceMaster Incorporated of Delaware and its subsidiaries.
SERVICEMASTER
The Parent Partnership and The ServiceMaster Company were formed in December 1986 as limited partnerships to succeed to the business and assets of ServiceMaster Industries Inc., which began its operation in 1947. The Parent Partnership is a holding company whose limited partnership shares are listed on the New York Stock Exchange and whose principal asset consists of all of the common limited partner interest of The ServiceMaster Company. The actual operations of the ServiceMaster enterprise are conducted by The ServiceMaster Company and its subsidiaries. Accordingly, The ServiceMaster Company has essentially the same degree of ownership of the businesses which make up the ServiceMaster enterprise as does the Parent Partnership and the descriptions of those businesses incorporated into this Prospectus are essentially the same with respect to The ServiceMaster Company as they are for the Parent Partnership.
The Debt Securities will be issued by The ServiceMaster Company. The Debt Securities will be guaranteed by the Parent Partnership.
ServiceMaster, through its subsidiaries, provides a range of services to individual consumers, businesses and institutions in the United States and 30 other countries throughout the world. ServiceMaster is divided into three operating units: Consumer Services, Management Services and International. Consumer Services and Management Services are the principal operating units.
ServiceMaster Consumer Services L.P. is a wholly owned first-tier subsidiary
of The ServiceMaster Company and provides services to over 6,500,000
residential and commercial customers through seven market leading companies:
TruGreen L.P., which provides lawn care, tree and shrub services and indoor
plant maintenance under the "TruGreen," "ChemLawn," "TruGreen-ChemLawn" and
"Barefoot" service marks; The Terminix International Company, L.P., which
provides termite and pest control services under the "Terminix" service mark;
American Home Shield Corporation, which provides home system and appliance
warranty contracts and home inspection services under the "American Home
Shield" and "AmeriSpec" service marks; ServiceMaster Residential/Commercial
Services L.P., which provides residential and commercial cleaning and disaster
restoration services under the "ServiceMaster" service mark; Merry Maids L.P.,
which provides domestic housekeeping services under the "Merry Maids" service
mark; and Furniture Medic L.P., which provides in-home furniture repair and
restoration services under the "Furniture Medic" service mark. These services
are part of the "ServiceMaster Quality Network" and may be accessed by calling
a single toll-free telephone number: 1-800-WE SERVE.
ServiceMaster Management Services L.P. is a wholly owned first-tier subsidiary of The ServiceMaster Company and is organized into three discrete operating units: ServiceMaster Healthcare Management Services, Education Management Services and Business and Industry Management Services. Each of these three units provides to its respective customers a variety of supportive management services, including the management of housekeeping, plant operations and maintenance, clinical equipment maintenance, laundry and linen, grounds and landscaping, energy management services and food service. In addition, Healthcare Management Services provides management and other services to the long-term care, assisted living and home health care markets.
On January 13, 1992, the Parent Partnership's limited partners approved a Reincorporating Merger. The purpose of the Reincorporating Merger is to install ServiceMaster Incorporated of Delaware as the ultimate parent in the ServiceMaster enterprise. The Reincorporating Merger is scheduled to be consummated on or before December 31, 1997. When and if the Reincorporating Merger consummates: a subsidiary of the Successor Parent Corporation will be merged into the Parent Partnership; as a result of the merger, each outstanding limited partnership share issued by the Parent Partnership will be converted into one share of common stock issued by the Successor Parent Corporation; and the Parent Partnership will become wholly owned by the Successor Parent Corporation. ServiceMaster expects that after the Reincorporating Merger, the Parent Partnership and The ServiceMaster Company will be merged or liquidated into the Successor Parent Corporation. Upon consummation of these actions, the Successor Parent Corporation will become the successor to both the Parent Partnership and The ServiceMaster Company Limited Partnership. ServiceMaster intends to change the name of the Successor Parent Corporation to "The ServiceMaster Company" not later than the time the Partnership Liquidations (as defined) are completed.
Upon consummation of the Partnership Liquidations, the Successor Parent Corporation will assume all obligations of The ServiceMaster Company on the Debt Securities and will become the primary obligor on the Debt Securities. See "The Reincorporating Merger and the Partnership Liquidations."
RATIO OF EARNINGS TO FIXED CHARGES
The following are the consolidated ratios of earnings to fixed charges for the Parent Partnership for the six months ended June 30, 1996 and 1997 and each of the fiscal years 1992 through 1996:
SIX MONTHS
ENDED JUNE 30, YEAR ENDED DECEMBER 31,
--------------- -----------------------------
1997 1996 1996 1995 1994 1993 1992
------- ------- ----- ----- ----- ----- -----
Consolidated ratios of
earnings to fixed charges... 3.85x 4.76x 5.16x 4.83x 4.72x 4.55x 3.85x
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The Parent Partnership's consolidated ratios of earnings to fixed charges were computed by dividing earnings by fixed charges. For this purpose, "earnings" consist of income from continuing operations before income taxes, fixed charges (excluding capitalized interest) and minority interest expenses of subsidiaries with fixed charges and "fixed charges" consist of interest and amortization of debt expense, including the interest portion of rental obligations deemed representative of the interest factor.
SUMMARIZED FINANCIAL INFORMATION
FOR THE SERVICEMASTER COMPANY
The Debt Securities being offered hereby will be issued by The ServiceMaster
Company. The ServiceMaster Company is the only direct subsidiary of the Parent
Partnership. Set forth below is summarized unaudited financial information for
The ServiceMaster Company as of and for each of the years in the three-year
period December 31, 1996. Such information should be read in conjunction with
the consolidated financial statements and accompanying notes included in the
Parent Partnership's Annual Reports on Form 10-K for such years, incorporated
herein by reference. This information is substantially the same as the
corresponding information reported for the Parent Partnership because: (i) the
Parent Partnership does not itself conduct any operations but rather
operations of the ServiceMaster enterprise are conducted by The ServiceMaster
Company and the direct and indirect subsidiaries of The ServiceMaster Company;
(ii) the Parent Partnership has no material assets other than substantially
all of the ownership interest in The ServiceMaster Company; and (iii)
substantially all of the assets and liabilities shown in the consolidated
financial statements for the Parent Partnership are located at The
ServiceMaster Company and at the direct and indirect subsidiaries of The
ServiceMaster Company.
YEAR ENDED DECEMBER
31,
--------------------
1996 1995 1994
------ ------ ------
(IN MILLIONS)
BALANCE SHEET DATA:
Current assets......................................... $ 499 $ 393 $ 331
Noncurrent assets...................................... 1,348 1,257 900
Current liabilities.................................... 426 373 304
Noncurrent liabilities................................. 651 561 527
Minority interests..................................... 16 12 134
INCOME STATEMENT DATA:
Operating revenue...................................... $3,458 $3,203 $2,985
Cost of sales.......................................... 2,681 2,500 2,356
Selling and administrative............................. 482 451 415
------ ------ ------
Total operating costs.................................. 3,163 2,951 2,771
------ ------ ------
Operating income....................................... 295 252 214
Income from continuing operations...................... 247 174 141
Net income............................................. 247 174 141
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USE OF PROCEEDS
The ServiceMaster Company (and the Successor Parent Corporation after the Reincorporating Merger) intend to use the net proceeds from the sale of the Debt Securities for general business purposes, which may include, but are not limited to, repayment, redemption or repurchase of outstanding indebtedness; repurchase of outstanding shares issued by the Parent Partnership (or the Successor Parent Corporation after the Reincorporating Merger); acquisitions, capital expenditures and working capital requirements; and such other purposes as may be specified in the relevant Prospectus Supplement. A description of any indebtedness to be refinanced with the proceeds from the sale of the Debt Securities will be set forth in the applicable Prospectus Supplement.
DESCRIPTION OF DEBT SECURITIES AND GUARANTEE
The Debt Securities will be issued under an Indenture (the "Indenture") dated as of July , 1997 among The ServiceMaster Company, as issuer, the Parent Partnership, as guarantor, and Harris Trust and Savings Bank, as trustee (the "Trustee"). The following description of certain provisions of the Indenture and the Debt Securities summarizes the material terms thereof but does not purport to be complete, and such summary is subject to the detailed provisions of the Indenture to which reference is hereby made, including the definition of certain terms used herein, and for other information regarding the Debt Securities. The Indenture has been filed as an exhibit to the Registration Statement of which this Prospectus is a part. Numerical references in parentheses below are to sections in the Indenture. Wherever particular sections or defined terms of the Indenture are referred to, such sections or defined terms are incorporated herein by reference as part of the statement made, and the statement is qualified in its entirety by such reference. Any Debt Securities offered by this Prospectus and the accompanying Prospectus Supplement are referred to herein as the "Offered Debt Securities."
GENERAL
The Indenture provides for issuance of Debt Securities by The ServiceMaster Company in an unlimited amount from time to time in one or more series. Debt Securities may be denominated and payable in foreign currencies or units based on or relating to foreign currencies. Special United States federal income tax considerations applicable to any Debt Securities so denominated will be described in the relevant Prospectus Supplement.
The Debt Securities will be unsecured obligations of The ServiceMaster Company and will be guaranteed by the Parent Partnership. The Indenture does not limit the amount of additional indebtedness that The ServiceMaster Company or the Parent Partnership may incur and does not contain provisions which would afford the holders (the "Holders") of the Debt Securities protection in the event of a decline in The ServiceMaster Company's or the Parent Partnership's credit quality resulting from highly leveraged or other transactions involving The ServiceMaster Company or the Parent Partnership, as the case may be.
Reference is made to the Prospectus Supplement for the following terms of and
information relating to the Offered Debt Securities (to the extent such terms
are applicable to such Offered Debt Securities): (i) the specific designation,
aggregate principal amount, purchase price and denomination; (ii) currency or
units based on or relating to currencies in which such Offered Debt Securities
are denominated and in which principal of, premium, if any, and any interest on
such Offered Debt Securities will or may be payable; (iii) any date of
maturity; (iv) interest rate or rates, which may be fixed or variable, and the
method by which such rate or rates will be determined, if any; (v) the dates on
which any such interest will be payable; (vi) the place or places where the
principal of, premium, if any, and any interest on the Offered Debt Securities
will be payable; (vii) any redemption, repayment or sinking fund provisions;
(viii) whether the Offered Debt Securities will be issuable in registered form
or bearer form ("Bearer Securities") or both and, if Bearer Securities are
issuable, any restrictions applicable to the exchange of one form for another
and to the offer, sale and delivery of Bearer Securities; (ix) any applicable
United States federal income tax consequences, including whether and under what
circumstances The ServiceMaster Company will pay additional amounts on Offered
Debt Securities held by a person who is not a U.S. person (as defined in the
Prospectus Supplement) in respect of any tax, assessment or governmental charge
withheld or deducted and, if so, whether The ServiceMaster Company will have
the option to redeem such Offered Debt Securities rather than pay such
additional amounts; and (x) any other specific terms of the Offered Debt
Securities, including any additions to or modifications or deletions of any
events of default or covenants provided for with respect to such Offered Debt
Securities, and any terms which may be required by or be advisable under
applicable laws or regulations (Section 2.03).
Debt Securities may be presented for exchange and registered Debt Securities may be presented for transfer in the manner, at the places and subject to the restrictions set forth in the Debt Securities and the Prospectus Supplement. Subject to the limitations provided in the Indenture, such services will be provided without charge, other than any tax or other governmental charge payable in connection therewith. Debt Securities in bearer form and the coupons, if any, appertaining thereto will be transferable by delivery.
Debt Securities will bear interest at a fixed rate (a "Fixed Rate Security") or a floating rate (a "Floating Rate Security"). Debt Securities bearing no interest or interest at a rate that at the time of issuance is below the prevailing market rate will be sold at a discount below their stated principal amount. Special United States federal income tax considerations applicable to any such discounted Debt Securities or to certain Debt Securities issued at par which are treated as having been issued at a discount for United States federal income tax purposes will be described in the relevant Prospectus Supplement.
Debt Securities may be issued, from time to time, with the principal amount payable on any principal payment date, or the amount of interest payable on any interest payment date, to be determined by reference to one or more currency exchange rates, commodity prices, equity indices or other factors. Holders of such Debt Securities may receive a principal amount on any principal payment date, or a payment of interest on any interest payment date, that is greater than or less than the amount of principal or interest otherwise payable on such dates, depending upon the value on such dates of the applicable currency, commodity, equity index or other factors. Information as to the methods for determining the amount of principal or interest payable on any date, the currencies, commodities, equity index, or other factors to which the amount payable on such date is linked and certain additional tax considerations will be set forth in the applicable Prospectus Supplement.
RANKING
The Debt Securities, when issued, will rank pari passu in right of payment with all other unsecured and unsubordinated indebtedness of The ServiceMaster Company (Section 2.03).
The Debt Securities may, under certain circumstances, be equally and ratably secured with other senior indebtedness of The ServiceMaster Company. See "-- Certain Covenants of the Company--Restrictions on Liens."
GLOBAL DEBT SECURITIES
The registered Debt Securities of a series may be issued in the form of one or more fully registered global Debt Securities (a "Registered Global Security") that will be deposited with a depository (a "Depositary") or with a nominee for a Depositary identified in the Prospectus Supplement relating to such series and registered in the name of the Depositary or a nominee thereof. In such case, one or more Registered Global Securities will be issued in a denomination or aggregate denominations equal to the portion of the aggregate principal amount of outstanding registered Debt Securities of the series to be represented by such Registered Global Security or Registered Global Securities. Unless and until it is exchanged in whole or in part for Debt Securities in debenture registered form, a Registered Global Security may not be transferred except as a whole by the Depositary for such Registered Global Security to a nominee of such Depositary or by a nominee of such Depositary to such Depositary or another nominee of such Depositary or such Depositary or any such nominee to a successor of such Depositary or a nominee of such successor.
The specific terms of the depositary arrangement with respect to any portion of a series of Debt Securities to be represented by a Registered Global Security will be described in the Prospectus Supplement relating to such series. The ServiceMaster Company anticipates that the following provisions will apply to all depositary arrangements.
Ownership of beneficial interests in a Registered Global Security will be limited to persons that have accounts with the Depositary for such Registered Global Security ("participants") or persons that may hold interests through participants. Upon the issuance of a Registered Global Security, the Depositary for such Registered Global Security will credit, on its book-entry registration and transfer systems the participants' accounts with the respective principal amounts of the Debt Securities represented by such Registered Global Security beneficially owned by such participants. The accounts to be credited will be designated by any dealers, underwriters or agents participating in the distribution of such Debt Securities. Ownership of beneficial interests in such Registered Global Security will be shown on, and the transfer of such ownership interests will be effected only through, records maintained by the Depositary for such Registered Global Security (with respect to interests of participants) and on the records of participants (with respect to interests of persons holding through participants). The laws of some states may require that certain purchasers of securities take physical delivery of such securities in definitive form. Such limits and such laws may impair the ability to own, transfer or pledge beneficial interests in registered Global Securities.
So long as the Depositary for a Registered Global Security, or its nominee, is the owner of record of such Registered Global Security, such Depositary or such nominee, as the case may be, will be considered the sole owner or holder of the Debt Securities represented by such Registered Global Security for all purposes under the Indenture. Except as set forth below, owners of beneficial interests in a Registered Global Security will not be entitled to have the Debt Securities represented by such Registered Global Security registered in their names, and will not receive or be entitled to receive physical delivery of such Debt Securities in definitive form and will not be considered the owners or holders thereof under the Indenture. Accordingly, each person owning a beneficial interest in a Registered Global Security must rely on the procedures of the Depositary for such Registered Global Security and, if such person is not a participant, on the procedures of the participant through which such person owns its interest to exercise any rights of a holder of record under the Indenture. The ServiceMaster Company understands that under existing industry practices, if The ServiceMaster Company requests any action of holders or if any owner of a beneficial interest in a Registered Global Security desires to give or take any action which a holder is entitled to give or take under the Indenture, the Depositary for such Registered Global Security would authorize the participants holding the relevant beneficial interests to give or take such action, and such participants would authorize beneficial owners owning through such participants to give or take such action or would otherwise act upon the instruction of beneficial owners holding through them.
Payments of principal of, premium, if any, and any interest on Debt Securities represented by a Registered Global Security registered in the name of a Depositary or its nominee will be made to such Depositary or its nominee, as the case may be, as the registered owner of such Registered Global Security. None of The ServiceMaster Company, the Trustee or any other agent of The ServiceMaster Company or agent of the Trustee will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in such Registered Global Security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.
The ServiceMaster Company expects that the Depositary for any Debt Securities represented by a Registered Global Security, upon receipt of any payment of principal, premium, if any, or interest in respect of such Registered Global Security, will immediately credit participants' accounts with payments in amounts proportionate to their respective beneficial interests in such Registered Global Security as shown on the records of such Depositary. The ServiceMaster Company also expects that payments by participants to owners of beneficial interests in such Registered Global Security held through such participants will be governed by standing customer instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such participants.
If the Depositary for any Debt Securities represented by a Registered Global Security notifies The ServiceMaster Company that it is at any time unwilling or unable to continue as Depositary or ceases to be eligible under applicable law, and a successor Depositary eligible under applicable law is not appointed by The ServiceMaster Company within 90 days, The ServiceMaster Company will issue such Debt Securities in definitive form in exchange for such Registered Global Security. In addition, The ServiceMaster Company may at any time and in its sole discretion determine not to have any of the Debt Securities of a series represented by one or more Registered Global Securities and, in such event, will issue Debt Securities of such series in definitive form in exchange for all of the Registered Global Security or Registered Global Securities representing such Debt Securities. Any Debt Securities issued in definitive form in exchange for a Registered Global Security will be registered in such name or names as the Depositary shall instruct the Trustee (Section 2.07). It is expected that such instructions will be based upon directions received by the Depositary from participants with respect to ownership of beneficial interests in such Registered Global Security. The Debt Securities of a series may also be issued in the form of one or more bearer global Debt Securities (a "Bearer Global Security") that will be deposited with a common depositary for Euroclear and CEDEL, or with a nominee for such depositary identified in the Prospectus Supplement relating to such series. The specific terms and procedures, including the specific terms of the depositary arrangement, with respect to any portion of a series of Debt Securities to be represented by a Bearer Global Security will be described in the Prospectus Supplement relating to such series.
CERTAIN COVENANTS OF THE COMPANY
The following restrictions apply to each series of Debt Securities unless the terms of such series of Debt Securities provide otherwise.
Restrictions on Liens. The Indenture provides that the ServiceMaster Company and the Parent Partnership will not, and will not permit any Significant Subsidiary to, create, incur or suffer to exist any lien on any Equity Interests (as defined in the Indenture), indebtedness or other obligations of a Significant Subsidiary held by the Parent Partnership, the Company or any Subsidiary or any Principal Property of The ServiceMaster Company or a Significant Subsidiary, whether such Equity Interests, indebtedness or other obligations of a Significant Subsidiary or Principal Property are owned at the date of this Indenture or hereafter acquired, unless The ServiceMaster Company secures or causes such Significant Subsidiary to secure the outstanding Debt Securities equally and ratably with all indebtedness secured by such Lien, so long as such indebtedness shall be so secured; provided, however, that this covenant shall not apply in the case of: (i) the creation of any Lien on any Equity Interests, indebtedness or other obligations of a Significant Subsidiary or any Principal Property hereafter acquired (including acquisitions by way of merger or consolidation) by The ServiceMaster Company or a Significant Subsidiary contemporaneously with such acquisition, or within 180 days thereafter, to secure or provide for the payment or financing of any part of the purchase price thereof, or the assumption of any Lien
upon any Equity Interests, indebtedness or other obligations of a Significant
Subsidiary or any Principal Property hereafter acquired (including acquisition
by way of merger or consolidation) existing at the time of such acquisition,
provided that every such Lien referred to in this clause (i) shall not attach
to the Equity Interests, indebtedness or other obligations of a Significant
Subsidiary or any Principal Property other than the Equity Interests,
indebtedness or other obligations of the Significant Subsidiary or any
Principal Property other than the Equity Interests, indebtedness or other
obligations of the Significant Subsidiary or any Principal Property so
acquired and fixed improvements thereon; (ii) any Lien on any Equity
Interests, indebtedness or other obligations of a Significant Subsidiary or
any Principal Property existing at the date of this Indenture; (iii) any Lien
on any Equity Interests, indebtedness or other obligations of a Significant
Subsidiary or any Principal Property in favor of The ServiceMaster Company or
any Significant Subsidiary; (iv) any Lien on any Principal Property being
constructed or improved securing loans to finance such construction or
improvements; (v) any Lien on Equity Interests, indebtedness or other
obligations of a Significant Subsidiary or any Principal Property incurred in
connection with the issuance of tax-exempt governmental obligations; (vi)
Liens on any Principal Property for taxes not yet due or which are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves, to the extent required by GAAP, have been made; (vii)
carriers', warehousemen's, mechanics', materialmen's, repairmen's or other
like Liens on any Principal Property arising in the ordinary course of
business and securing obligations that are not due and payable or which are
being contested in good faith by appropriate proceedings and with respect to
which adequate reserves, to the extent required by GAAP, have been made;
(viii) zoning restrictions, easements, rights-of-way, restrictions on use of
real property and other similar encumbrances incurred in the ordinary course
of business which, in the aggregate, are not substantial in amount and do not
materially detract from the value of the property subject thereto or interfere
with the ordinary conduct of business of any of the Company, the Parent
Partnership or any Significant Subsidiary; (ix) any Lien on Equity Interests,
indebtedness or other obligations of a Non-U.S. Subsidiary held by a Non-U.S.
Subsidiary or any Principal Property of a Non-U.S. Subsidiary; provided that
at the time of the creation or incurrence of any such Lien the aggregate book
value of the total assets of the Non-U.S. Subsidiaries then subject to Liens
securing indebtedness for borrowed money (and after giving effect to the
proposed Lien), shall not exceed 25% of the Total Assets of the Parent
Partnership and its Subsidiaries; (x) any Lien on Equity Interests,
indebtedness or other obligations of a Securitization Subsidiary created,
incurred, assumed or suffered to exit in connection with Permitted Receivables
Financing; (xi) Liens arising by reason of any attachment, judgment, decree or
order of any court or other governmental authority, so long as any appropriate
legal proceedings which may have been initiated for review of such attachment,
judgment, decree or order shall not have been finally terminated or so long as
the period within which such proceedings may be initiated shall not have
expired; (xii) any Lien on Equity Interests, indebtedness or other obligations
of a Significant Subsidiary that was not a Significant Subsidiary at the time
such Lien was created or incurred; and (xiii) any renewal of or substitution
for any Lien permitted by any of the preceding clauses (i), (ii), (iv), (v),
(vi), (vii), (viii), (ix), (x), (xi) or (xii), provided, that the indebtedness
secured is not increased (except for increases in the amount of premiums or
fees payable in connection with such renewal or substitution) nor the Lien
extended to any additional assets (other than assets as to which the creation,
incurrence or existence of Liens is not governed by this clause). (Section
5.03(a))
Notwithstanding the foregoing, The ServiceMaster Company or any Significant Subsidiary may create, incur, assume or suffer to exist Liens in addition to those permitted above and renew, extend or replace such Liens, provided that at the time of such creation, incurrence, assumption, renewal, extension or replacement, and after giving effect thereto, the aggregate outstanding principal or face amount of all indebtedness secured by Liens not permitted by clauses (i) through (xiii) above does not exceed 10% of Consolidated Net Worth. (Section 5.03(b))
Restrictions on Sale and Lease-Back Transactions. The Indenture provides that The ServiceMaster Company will not, and will not permit any Significant Subsidiary to, sell or transfer, directly or indirectly, except to The ServiceMaster Company or a Significant Subsidiary, any Principal Property as an entirety, or any substantial portion thereof, with the intention of taking back a lease of such property, except a lease for a period of three years or less at the end of which it is intended that the use of such property by the lessee will be discontinued and any transaction for the sale and lease-back of any property if such lease is entered into within
180 days after the later of the acquisition, completion of construction or commencement of operation of such property; provided that, notwithstanding the foregoing, The ServiceMaster Company or any Significant Subsidiary may sell any such Principal Property and lease it back for a period longer than three years if The ServiceMaster Company or such Significant Subsidiary would be entitled to create a Lien on the property to be leased securing indebtedness in an amount equal to the Attributable Debt with respect to such sale and lease-back transaction without equally and ratably securing the outstanding Debt Securities or The ServiceMaster Company promptly informs the Trustee of such transaction, the net proceeds of such transaction are at least equal to the fair value (as determined by Board Resolution of The ServiceMaster Company) of such property and The ServiceMaster Company causes an amount equal to the net cash proceeds of the sale to be applied to the retirement, within 120 days after receipt of such proceeds, of Funded Debt incurred or assumed by The ServiceMaster Company or a Significant Subsidiary (including the Debt Securities); provided further that, in lieu of applying all of or any part of such net cash proceeds to such retirement, The ServiceMaster Company may, within 75 days after such sale, deliver or cause to be delivered to the applicable trustee for cancellation either debentures or notes evidencing Funded Debt of The ServiceMaster Company (which may include the Debt Securities) or of a Significant Subsidiary previously authenticated and delivered by the applicable trustee, and not theretofore tendered for sinking fund purposes or called for a sinking fund or otherwise applied as a credit against an obligation to redeem or retire such notes or debentures, and an Officers' Certificate (which shall be delivered to the Trustee and which need not contain the statements prescribed by Section 11.04) stating that The ServiceMaster Company elects to deliver or cause to be delivered such debentures or notes in lieu of retiring Funded Debt as hereinabove provided. If The ServiceMaster Company shall so deliver debentures or notes to the applicable trustee and the ServiceMaster Company shall duly deliver such Officers' Certificate, the amount of cash which The ServiceMaster Company shall be required to apply to the retirement of Funded Debt shall be reduced by an amount equal to the aggregate of the then applicable optional redemption prices (not including any optional sinking fund redemption prices) of such debentures or notes, or, if there are no such redemption prices, the principal amount of such debentures or notes; provided, that in the case of debentures or notes which provide for an amount less than the principal amount thereof to be due and payable upon a declaration of the maturity thereof, such amount of cash shall be reduced by the amount of principal of such debentures or notes that would be due and payable as of the date of such application upon a declaration of acceleration of the maturity thereof pursuant to the terms of the indenture pursuant to which such debentures or notes were issued. (Section 5.04)
CERTAIN DEFINITIONS
The term "Attributable Debt" as defined in the Indenture means when used in connection with a sale and lease-back transaction referred to above under "-- Restrictions on Sale and Lease-Back Transactions," on any date as of which the amount thereof is to be determined, the product of (a) the net proceeds from such sale and lease-back transaction multiplied by (b) a fraction, the numerator of which is the number of full years of the term of the lease relating to the property involved in such sale and lease-back transaction (without regard to any options to renew or extend such term) remaining on the date of the making of such computation and the denominator of which is the number of full years of the term of such lease measured from the first day of such term.
The term "Consolidated Net Worth" as defined in the Indenture means, at any date of determination, the consolidated stockholders' equity of the Parent Partnership, as set forth on the then most recently available consolidated balance sheet of the Parent Partnership and its consolidated Subsidiaries.
The term "Funded Debt" as defined in the Indenture involves all indebtedness for money borrowed, including purchase money indebtedness, and indebtedness pursuant to a mandatory sinking fund or prepayment provision or otherwise, having a maturity of more than one year from the date of its creation or having a maturity of less than one year but by its terms being renewable or extendible, at the option of the obligor in respect thereof, beyond one year from the date of its creation.
The term "Holder" or "Securityholder" as defined in the Indenture means the registered holder of any Security with respect to registered Debt Securities and the bearer of any Unregistered Security or any coupon appertaining thereto, as the case may be.
"Non-U.S. Subsidiary" as defined in the Indenture means any Subsidiary that is not a corporation, partnership or other entity created or organized in or under the laws of the United States of America or any state thereof.
"Original Issue Discount Security" as defined in the Indenture means any Security that provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the maturity thereof.
"Permitted Receivables Financing" as defined in the Indenture means a transaction or series of transactions (including amendments, supplements, extensions, renewals, replacements, refinancings or modifications thereof) pursuant to which a Securitization Subsidiary purchases Receivables and Related Assets from the Company or any Subsidiary and finances such Receivables and Related Assets through the issuance of Equity Interests or indebtedness (either directly or through a trust) or through the sale of the Receivables and Related Assets or a fractional undivided interest in the Receivables and Related Assets; provided that (i) the Board of Directors of the Company or the Parent Partnership, as the case may be, shall have determined in good faith that such Permitted Receivables Financing is economically fair and reasonable to the Company, (ii) all sales of Receivables and Related Assets to the Securitization Subsidiary are made at fair market value (as determined in good faith by the Board of Directors of the Company or the Parent Partnership), (iii) the financing terms, covenants, termination events and other provisions thereof shall be market terms (as determined in good faith by the Board of Directors of the Company or the Parent Partnership), (iv) no portion of the indebtedness of a Securitization Subsidiary will be guaranteed by or will be recourse to the Company, the Parent Partnership or any Significant Subsidiary (other than recourse for customary representations, warranties, covenants and indemnities, none of which shall relate to the collectibility (as opposed to the status) of the Receivables and Related Assets) and (v) neither the Company, the Parent Partnership nor any Subsidiary shall have any obligation to maintain or preserve the Securitization Subsidiary's financial condition.
The term "Principal Property" as defined in the Indenture means The ServiceMaster Company's principal office building and any manufacturing plant or principal research facility of any of The ServiceMaster Company, the Parent Partnership or any Significant Subsidiary which is located within the United States of America, except any such principal office building, plant or facility which the Board of Directors by resolution declares is not of material importance to the total business conducted by The ServiceMaster Company, the Parent Partnership and their respective Subsidiaries as an entirety.
"Receivables and Related Assets" means accounts receivable and instruments, chattel paper, obligations, general intangibles and other similar assets, in each case, relating to such receivables, including interest in merchandise or goods, the sale or lease of which gave rise to such receivables, related contractual rights, guarantees, insurance proceeds, collections, other related assets, and proceeds of all of the foregoing.
"Securitization Subsidiary" as defined in the Indenture means a Wholly Owned Subsidiary which is established for the limited purpose of acquiring and financing Receivables and Related Assets and engaging in activities ancillary thereto.
The term "Significant Subsidiary", as defined in the Indenture means at any time, any Subsidiary that would be a Significant Subsidiary at such time, as such term is defined in Regulation S-X promulgated by the Commission, as in effect on the date of the Indenture.
The term "Subsidiary" as defined in the Indenture means with respect to any Person, any corporation, association or other business entity of which more than 50% of the outstanding Voting Stock (as defined in the Indenture) or other ownership interest is owned directly or indirectly, by such Person and one or more other Subsidiaries of such Persons.
The term "Total Assets" as defined in the Indenture means, at any date of determination, the total assets of the Parent Partnership and its Subsidiaries on a consolidated basis as set forth on the then most recently available consolidated balance sheet of the Parent Partnership and its consolidated Subsidiaries.
"Wholly Owned Subsidiary" as defined in the Indenture means a Subsidiary all of the Equity Interests of which (except directors' qualifying shares) is at the time owned directly or indirectly by the Company.
RESTRICTIONS ON MERGERS AND SALES OF ASSETS
Under the Indenture, The ServiceMaster Company shall not consolidate with,
merge with or into, or sell, convey, transfer, lease or otherwise dispose of
all or substantially all of its property and assets (as an entirety or
substantially as an entirety in one transaction or a series of related
transactions) to, any Person or permit any Person to merge with or into The
ServiceMaster Company unless: (i) either (x) The ServiceMaster Company shall be
the continuing Person or (y) the Person (if other than The ServiceMaster
Company) formed by such consolidation or into which The ServiceMaster Company
is merged or that acquired or leased such property and assets of The
ServiceMaster Company shall be a corporation, partnership or limited liability
company organized and validly existing under the laws of the United States of
America or any jurisdiction thereof and shall expressly assume, by a
supplemental indenture, executed and delivered to the Trustee, all of the
obligations of The ServiceMaster Company on all of the Debt Securities and
under this Indenture and, if the successor corporation or partnership is not
the Parent Partnership (unless such successor is also the successor to the
Parent Partnership under Section 6.04 of the Indenture), the Parent Partnership
shall unconditionally guarantee the successor corporation's or partnership's
obligations on all of the Debt Securities and under this Indenture and The
ServiceMaster Company shall have delivered to the Trustee an Opinion of Counsel
stating that such consolidation, merger or transfer and such supplemental
Indenture complies with this provision and that all conditions precedent
provided for herein relating to such transaction have been complied with and
that such supplemental indenture constitutes the legal, valid and binding
obligation of The ServiceMaster Company or such successor enforceable against
such entity in accordance with its terms, subject to customary exceptions; and
(ii) immediately after giving effect to such transaction, no Default shall have
occurred and be continuing.
The Indenture also provides that the Parent Partnership shall not consolidate
with, merge with or into, or sell, convey, transfer, lease or otherwise dispose
of all or substantially all of its property and assets (as an entirety or
substantially as an entirety in one transaction or a series of related
transactions) to, any Person or permit any Person to merge with or into the
Parent Partnership unless: (i) either (x) the Parent Partnership shall be the
continuing Person or (y) the Person (if other than the Parent Partnership)
formed by such consolidation or into which the Parent Partnership is merged or
that acquired or leased such property and assets of the Parent Partnership
shall be a corporation, partnership or limited liability company organized and
validly existing under the laws of the United States of America or any
jurisdiction thereof and shall expressly assume, by a supplemental Indenture,
executed and delivered to the Trustee, the due and punctual performance of the
Guarantees, and the due and punctual performance and observance of all of the
covenants and conditions of this Indenture and the Debt Securities and the
Guarantee to be performed by the Parent Partnership; and (ii) immediately after
giving effect to such transaction, no Default shall have occurred and be
continuing. (Sections 6.01 and 6.03)
EVENTS OF DEFAULT
Events of Default defined in the Indenture with respect to the Debt Securities of any series are: (a) The ServiceMaster Company defaults in the payment of the principal of any Debt Securities of such series when the same becomes due and payable at maturity, upon acceleration, redemption or mandatory repurchase, including as a sinking fund installment, or otherwise; (b) The ServiceMaster Company defaults in the payment of interest on any Debt Securities of such series when the same becomes due and payable, and such default continues for a period of 30 days; (c) The ServiceMaster Company or the Parent Partnership defaults in the performance of or breaches any other covenant or agreement of The ServiceMaster Company or the Parent Partnership in the Indenture with respect to any Security of such series or in the Debt Securities of such series and such default or breach continues for a period of 60 consecutive days after written notice to The ServiceMaster Company by the Trustee or to The ServiceMaster Company and the Trustee by the Holders of 25% or more in aggregate principal amount of the Debt Securities of all series then outstanding affected thereby; (d) an involuntary case or other proceeding shall be commenced against The ServiceMaster Company, the Parent Partnership or any Significant Subsidiary with respect to it or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of 60 days; or an order for relief shall be entered against The ServiceMaster Company, the Parent Partnership or any Significant Subsidiary under the federal bankruptcy laws as now or hereafter in effect;
(e) The ServiceMaster Company, the Parent Partnership or any Significant Subsidiary (i) commences a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consents to the entry of an order for relief in an involuntary case under any such law, (ii) consents to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, Trustee, sequestrator or similar official of The ServiceMaster Company, the Parent Partnership or any Significant Subsidiary or for all or substantially all of the property and assets of The ServiceMaster Company, the Parent Partnership or any Significant Subsidiary or (iii) effects any general assignment for the benefit of creditors; or (f) any other Event of Default established with respect to any series of Debt Securities issued pursuant to the Indenture occurs. (Section 7.01)
The Indenture provides that if an Event of Default described in clauses (a)
or (b) of the immediately preceding paragraph with respect to the Debt
Securities of any series then outstanding occurs and is continuing, then, and
in each and every such case, except for any series of Debt Securities the
principal of which shall have already become due and payable, either the
Trustee or the Holders of not less than 25% in aggregate principal amount of
the Debt Securities of any such affected series then outstanding under the
Indenture (each such series treated as a separate class) by notice in writing
to The ServiceMaster Company or the Parent Partnership (and to the Trustee if
given by Securityholders), may declare the entire principal (or, if the Debt
Securities of any such series are Original Issue Discount Securities, such
portion of the principal amount as may be specified in the terms of such series
established pursuant to the Indenture) of all Debt Securities of such affected
series, and the interest accrued thereon, if any, to be due and payable
immediately, and upon any such declaration the same shall become immediately
due and payable. If an Event of Default described in clauses (c) or (f) of the
immediately preceding paragraph with respect to the Debt Securities of one or
more but not all series then outstanding or with respect to the Debt Securities
of all series then outstanding occurs and is continuing, then, and in each and
every such case, except for any series of Debt Securities the principal of
which shall have already become due and payable, either the Trustee or the
Holders of not less than 25% in aggregate principal amount of the Debt
Securities of all such affected series then outstanding under the Indenture
(treated as a single class) by notice in writing to The ServiceMaster Company
(and to the Trustee if given by Securityholders), may declare the entire
principal (or, if the Debt Securities of any such series are Original Issue
Discount Securities, such portion of the principal amount as may be specified
in the terms of such series established pursuant to the Indenture) of all Debt
Securities of all such affected series, and the interest accrued thereon, if
any, to be due and payable immediately, and upon any such declaration the same
shall become immediately due and payable. If an Event of Default described in
clause (d) or (e) of the immediately preceding paragraph occurs and is
continuing, then the principal amount (or, if any Debt Securities are Original
Issue Discount Securities, such portion of the principal as may be specified in
the terms thereof established pursuant to the Indenture) of all the Debt
Securities then outstanding and interest accrued thereon, if any, shall be and
become immediately due and payable, without any notice or other action by any
Holder or the Trustee to the full extent permitted by applicable law. Upon
certain conditions such declarations may be rescinded and annulled and past
defaults may be waived by the Holders of a majority in principal of the then
outstanding Debt Securities of all such series that have been accelerated
(voting as a single class). (Section 7.02)
The Indenture contains a provision under which, subject to the duty of the trustee during a default to act with the required standard of care, (i) the Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, officers' certificate, opinion of counsel (or both), statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper person or persons and the Trustee need not investigate any fact or matter stated in the document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit; (ii) before the Trustee acts or refrains from acting, it may require an officers' certificate and/or an opinion of counsel, which shall conform to the requirements of the Indenture and the Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such certificate or opinion; subject to the terms of the Indenture, whenever in the administration of the trusts of the Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering or omitting any action under the Indenture, such matter (unless other evidence in respect thereof be specifically prescribed in the Indenture) may, in the absence
of wilful misconduct on the part of the Trustee, be deemed to be conclusively
proved and established by an officers' certificate delivered to the Trustee,
and such certificate, in the absence of wilful misconduct on the part of the
Trustee, shall be full warrant to the Trustee for any action taken, suffered or
omitted by it under the provisions of the Indenture upon the faith thereof;
(iii) the Trustee may act through its attorneys and agents not regularly in its
employ and shall not be responsible for the misconduct or negligence of any
agent or attorney appointed with due care; (iv) any request, direction, order
or demand of The ServiceMaster Company mentioned in the Indenture shall be
sufficiently evidenced by an officers' certificate (unless other evidence in
respect thereof be specifically prescribed in the Indenture); and any Board
Resolution may be evidenced to the Trustee by a copy thereof certified by the
Secretary or an Assistant Secretary of The ServiceMaster Company; (v) the
Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by the Indenture at the request, order or direction of any of the
Holders, unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities that might be
incurred by it in compliance with such request or direction; (vi) the Trustee
shall not be liable for any action it takes, or omits to take in good faith
that it believes to be authorized or within its rights or powers or for any
action it takes or omits to take in accordance with the direction of the
Holders in accordance with the Indenture relating to the time, method and place
of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under the Indenture;
(vii) the Trustee may consult with counsel and the written advice of such
counsel or any opinion of counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it under the
Indenture in good faith and in reliance thereon; (viii) prior to the occurrence
of an Event of Default under the Indenture and after the curing or waiving of
all Events of Default, the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, officers'
certificate, opinion of counsel, Board Resolution, statement, instrument,
opinion, report, notice, request, consent order, approval, appraisal, bond,
debenture, note, coupon, security, or other paper or document unless requested
in writing so to do by the Holders of not less than a majority in aggregate
principal amount of the Debt Securities of all series affected then
outstanding; provided that, if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by it in
the making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the terms
of the Indenture, the Trustee may require reasonable indemnity against such
expenses or liabilities as a condition to proceeding; (ix) the Trustee shall
not be required to give any bond or surety in respect of the performance of its
powers and duties hereunder; (x) the Trustee shall not be bound to ascertain or
inquire as to the performance or observance of any covenants, conditions or
agreements on the part of the Company, except as otherwise set forth herein,
but the Trustee may require of the Company reasonable information and advice as
to the performance of the covenants, conditions and agreements contained herein
and shall be entitled in connection herewith to examine the books, records and
premises of the Company; (xi) the permissive rights of the Trustee to do things
enumerated in this Indenture shall not be construed as a duty and the Trustee
shall not be answerable for other than its negligence or willful misconduct;
(xii) except for any event of which the Trustee has "actual knowledge" and
which event, with the giving of notice or the passage of time or both, would
constitute an Event of Default under this Indenture, the Trustee shall not be
deemed to have notice of any default or event unless specifically notified in
writing of such event by the Company or the Holders of not less than 25% of the
Outstanding Securities; as used herein, the term "actual knowledge" means the
actual fact or statement of knowing, without any duty to make any investigation
with regard thereto. (Section 8.02)
Subject to such provisions in the Indenture for the indemnification of the Trustee and certain other limitations, the Holders of at least a majority in aggregate principal amount (or, if any Debt Securities are Original Issue Discount Securities, such portion of the principal as may be specified in the terms thereof established pursuant to the Indenture) of the outstanding Debt Securities of all series affected (voting as a single class) may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on this Trustee with respect to the Debt Securities of such series by the Indenture; provided, that the Trustee may refuse to follow any direction that conflicts with law or the Indenture, that may involve the Trustee in personal liability, or that the Trustee determines in good faith may be unduly prejudicial to the rights of Holders not joining in the giving of such direction, it being understood that the Trustee shall have no duty to ascertain whether or not such actions or forbearance are unduly prejudicial to
such Holders and provided further, that the Trustee may take any other action it deems proper that is not inconsistent with any directions received from Holders of Debt Securities pursuant to this paragraph. (Section 7.05)
Subject to various provisions in the Indenture, the Holders of at least a
majority in principal amount (or, if the Debt Securities are Original Issue
Discount Securities, such portion of the principal as may be specified in the
terms thereof established pursuant to the Indenture) of the outstanding Debt
Securities of all series affected (voting as a single class), by notice to the
Trustee, may waive an existing Default or Event of Default with respect to the
Debt Securities of such series and its consequences, except a Default in the
payment of principal of or interest on any Security as specified in clauses
(a) or (b) of Section 6.1 of the Indenture or in respect of a covenant or
provision of the Indenture which cannot be modified or amended without the
consent of the Holder of each outstanding Security affected. Upon any such
waiver, such Default shall cease to exist, and any Event of Default with
respect to the Debt Securities of such series arising therefrom shall be
deemed to have been cured, for every purpose of the Indenture; but no such
waiver shall extend to any subsequent or other Default or Event of Default or
impair any right consequent thereto. (Section 7.04)
The Indenture provides that no Holder of any Debt Securities of any series
may institute any proceeding, juridical or otherwise, with respect to the
Indenture or the Debt Securities of such series, or for the appointment of a
receiver or trustee, or for any other remedy under the Indenture, unless: (i)
such Holder has previously given to the Trustee written notice of a continuing
Event of Default with respect to the Debt Securities of such series; (ii) the
Holders of at least 25% in aggregate principal amount of outstanding Debt
Securities of all such series affected shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its
own name as Trustee under the Indenture; (iii) such Holder or Holders have
offered to The Trustee indemnity reasonably satisfactory to the Trustee
against any costs, liabilities or expenses to be incurred in compliance with
such request; (iv) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding;
and (v) during such 60-day period, the Holders of a majority in aggregate
principal amount of the outstanding Debt Securities of all such affected
series have not given the Trustee a direction that is inconsistent with such
written request. A Holder may not use the Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over such other Holder.
(Section 7.06)
The Indenture provides that each of The ServiceMaster Company and the Parent Partnership will file with the Trustee, within 15 days after The ServiceMaster Company is required to file the same with the Commission, copies of the annual reports and of the information, documents and other reports which The ServiceMaster Company and the Parent Partnership, as the case may be, may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act. (Sections 5.06 and 5.09)
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
The Indenture provides with respect to each series of Debt Securities that The ServiceMaster Company may terminate its obligations under the Debt Securities of a series and the Indenture with respect to Debt Securities of such series if: (i) all Debt Securities of such series previously authenticated and delivered, with certain exceptions, have been delivered to the Trustee for cancellation and The ServiceMaster Company has paid all sums payable by it under the Indenture; or (ii) (A) the Debt Securities of such series mature within one year or all of them are to be called for redemption within one year under arrangements satisfactory to the Trustee for giving the notice of redemption, (B) The ServiceMaster Company irrevocably deposits in trust with the Trustee, as trust funds solely for the benefit of the Holders of such Debt Securities, for that purpose, money or U.S. Government Obligations or a combination thereof sufficient (unless such funds consist solely of money, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee), without consideration of any reinvestment, to pay principal of and interest on the Debt Securities of such series to maturity or redemption, as the case may be, and to pay all other sums payable by it under the Indenture, and (C) The ServiceMaster Company delivers to the Trustee an officers' certificate and an opinion of counsel in each case stating that all conditions precedent provided for in The
ServiceMaster Company's Indenture relating to the satisfaction and discharge of the Indenture with respect to the Debt Securities of such series have been complied with. With respect to the foregoing clause (i), only The ServiceMaster Company 's obligations to compensate and indemnify the Trustee under the Indenture shall survive. With respect to the foregoing clause (ii), only The ServiceMaster Company's obligations to execute and deliver Debt Securities of such series for authentication, to set the terms of the Debt Securities of such series, to maintain an office or agency in respect of the Debt Securities of such series, to have moneys held for payment in trust, to register the transfer or exchange of Debt Securities of such series, to deliver Debt Securities of such series for replacement or to be canceled, to compensate and indemnify the Trustee and to appoint a successor trustee, and its right to recover excess money held by the Trustee shall survive until such Debt Securities are no longer outstanding. Thereafter, only The ServiceMaster Company's obligations to compensate and indemnify the Trustee, and its right to recover excess money held by the Trustee shall survive. (Section 9.01)
The Indenture provides that The ServiceMaster Company (i) will be deemed to have paid and will be discharged from any and all obligations in respect of the Debt Securities of any series, and the provisions of the Indenture will, except as noted below, no longer be in effect with respect to the Debt Securities of such series ("legal defeasance") and (ii) may omit to comply with any term, provision or condition of the Indenture described above under "--Certain Covenants" (or any other specific covenant relating to such series provided for in a Board Resolution or supplemental indenture which may by its terms be defeased pursuant to the Indenture), and such omission shall be deemed not to be an Event of Default under clauses (c) or (f) of the first paragraph of "--Events of Default" with respect to the outstanding Debt Securities of a series ("covenant defeasance"); provided that the following conditions shall have been satisfied: (A) The ServiceMaster Company has irrevocably deposited in trust with the Trustee as trust funds solely for the benefit of the Holders of the Debt Securities of such series, for payment of the principal of and interest on the Debt Securities of such series, money or U.S. Government Obligations or a combination thereof sufficient (unless such funds consist solely of money, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee) without consideration of any reinvestment and after payment of all federal, state and local taxes or other charges and assessments in respect thereof payable by the Trustee, to pay and discharge the principal of and accrued interest on the outstanding Debt Securities of such series to maturity or earlier redemption (irrevocably provided for under arrangements satisfactory to the Trustee), as the case may be; (B) such deposit will not result in a breach or violation of, or constitute a default under, the Indenture or any other material agreement or instrument to which The ServiceMaster Company is a party or by which it is bound; (C) no Default with respect to such Debt Securities of such series shall have occurred and be continuing on the date of such deposit; (D) The ServiceMaster Company shall have delivered to the Trustee an opinion of counsel that (1) the Holders of the Debt Securities of such series will not recognize income, gain or loss for federal income tax purposes as a result of The ServiceMaster Company's exercise of its option under this provision of the Indenture and will be subject to federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred and (2) the Holders of the Debt Securities of such series have a valid security interest in the trust funds subject to no prior liens under the Uniform Commercial Code; and (E) The ServiceMaster Company has delivered to the Trustee an officers' certificate and an opinion of counsel, in each case stating that all conditions precedent provided for in the Indenture relating to the defeasance contemplated have been complied with. In the case of legal defeasance under clause (i) above, the opinion of counsel referred to in clause (D)(1) above may be replaced by a ruling directed to the Trustee received from the Internal Revenue Service to the same effect. Subsequent to legal defeasance under clause (i) above, The ServiceMaster Company's obligations to execute and deliver Debt Securities of such series for authentication, to set the terms of the Debt Securities of such series, to maintain an office or agency in respect of the Debt Securities of such series, to have moneys held for payment in trust, to register the transfer or exchange of Debt Securities of such series, to deliver Debt Securities of such series for replacement or to be canceled, to compensate and indemnify the Trustee and to appoint a successor trustee, and its right to recover excess money held by the Trustee shall survive until such Debt Securities are no longer outstanding. After such Debt Securities are no longer outstanding, in the case of legal defeasance under clause (i) above, only The ServiceMaster Company's obligations to compensate and indemnify the Trustee and its right to recover excess money held by the Trustee shall survive. (Sections 9.02 and 9.03)
MODIFICATION OF THE INDENTURE
The Indenture provides that The ServiceMaster Company, the Parent Partnership
and the Trustee may amend or supplement the Indenture or the Debt Securities of
any series without notice to or the consent of any Holder: (1) to cure any
ambiguity, defect or inconsistency in the Indenture; provided that such
amendments or supplements shall not materially and adversely affect the
interests of the Holders; (2) to comply with Article 6 of the Indenture; (3) to
comply with any requirements of the Commission in connection with the
qualification of the Indenture under the Trust Indenture Act; (4) to evidence
and provide for the acceptance of appointments under the Indenture with respect
to the Debt Securities of any or all series by a successor Trustee; (5) to
establish the form or forms or terms of Debt Securities of any series or of the
coupons appertaining to such Debt Securities as permitted under the Indenture
or the Guarantees; (6) to provide for uncertificated or Unregistered Securities
and to make all appropriate changes for such purpose; and (7) to make any
change that does not materially and adversely affect the rights of any Holder.
(Section 10.01)
The Indenture also contains provisions whereby The ServiceMaster Company, the
Parent Partnership and the Trustee, subject to certain conditions, without
prior notice to any Holders, may amend the Indenture, the outstanding Debt
Securities of any series and the Guarantees with the written consent of the
Holders of a majority in principal amount of the Debt Securities then
outstanding of all series affected by such supplemental indenture (all such
series voting as one class), and the Holders of a majority in principal amount
of the outstanding Debt Securities of all series affected thereby (all such
series voting as one class) by written notice to the Trustee may waive future
compliance by The ServiceMaster Company with any provision of the Indenture or
the Debt Securities of such series. Notwithstanding the foregoing provisions,
without the consent of each Holder affected thereby, an amendment or waiver,
including a waiver pursuant to Section 7.04 of the Indenture, may not: (i)
extend the stated maturity of the principal of, or any sinking fund obligation
or any installment of interest on, such Holder's Security, or reduce the
principal amount thereof or the rate of interest thereon (including any amount
in respect of original issue discount), or any premium payable with respect
thereto, or adversely affect the rights of such Holder under any mandatory
redemption or repurchase provision or any right of redemption or repurchase at
the option of such Holder, or reduce the amount of the principal of an Original
Issue Discount Security that would be due and payable upon an acceleration of
the maturity thereof or the amount thereof provable in bankruptcy, or change
any place of payment where, or the currency in which, any Security or any
premium or the interest thereon is payable, or impair the right to institute
suit for the enforcement of any such payment on or after the due date therefor;
(ii) reduce the percentage in principal amount of outstanding Debt Securities
of the relevant series the consent of whose Holders is required for any such
supplemental Indenture, for any waiver of compliance with certain provisions of
the Indenture of certain Defaults and their consequences provided for in the
Indenture; (iii) waive a Default in the payment of principal of or interest on
any Security of such Holder; or (iv) modify any of the provisions of this
section of the Indenture, except to increase any such percentage or to provide
that certain other provisions of the Indenture cannot be modified or waived
without the consent of the Holder of each outstanding Security affected
thereby. A supplemental Indenture which changes or eliminates any covenant or
other provision of the Indenture which has expressly been included solely for
the benefit of one or more particular series of Debt Securities, or which
modifies the rights of Holders of Debt Securities of such series with respect
to such covenant or provision, shall be deemed not to affect the rights under
the Indenture of the Holders of Debt Securities of any other series or of the
coupons appertaining to such Debt Securities. It shall not be necessary for the
consent of any Holder under this section of the Indenture to approve the
particular form of any proposed amendment, supplement or waiver, but it shall
be sufficient if such consent approves the substance thereof. After an
amendment, supplement or waiver under this section of the Indenture becomes
effective, The ServiceMaster Company shall give to the Holders affected thereby
a notice briefly describing the amendment, supplement or waiver. The Company
will mail supplemental Indentures to Holders upon request. Any failure of The
ServiceMaster Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such supplemental
Indenture or waiver. (Section 10.02)
GUARANTEE
The Parent Partnership will irrevocably and unconditionally guarantee the payment of all obligations of The ServiceMaster Company under the Debt Securities. If The ServiceMaster Company defaults in the payment of
the principal of, premium if any, or interest on such Debt Securities when and as the same shall become due, whether upon maturity, acceleration, call for redemption or otherwise, without the necessity of action by the Trustee or any Holder of such Debt Securities, the Parent Partnership shall be required promptly to make such payment. As explained in more detail under "The Reincorporating Merger and The Partnership Liquidations" below, upon consummation of the Partnership Liquidations, the Successor Parent Corporation will assume the obligations of both The ServiceMaster Company and the Parent Partnership on the Debt Securities and both The ServiceMaster Company and the Parent Partnership will be merged or liquidated into the Successor Parent Corporation.
The Parent Partnership conducts all of its business through The ServiceMaster Company and Subsidiaries of The ServiceMaster Company and does not own any material assets other than all of the limited partnership interest of The ServiceMaster Company. The Parent Partnership's obligations under the Guarantee are as a secondary obligor. The Parent Partnership is presently dependent on the receipt of dividends or other payments from The ServiceMaster Company to make payments on the Guarantee of the Debt Securities.
CONCERNING THE TRUSTEE
Harris Trust and Savings Bank is the Trustee under the Indenture. The Trustee performs services for ServiceMaster in the ordinary course of business.
THE REINCORPORATING MERGER AND THE PARTNERSHIP LIQUIDATIONS
The Parent Partnership was organized as a Limited Partnership at the end of 1986 to enable the parent entity in the ServiceMaster enterprise to function free of the federal corporate income tax. In 1987, the Internal Revenue Code was amended to reimpose federal corporate income tax on publicly traded partnerships like ServiceMaster beginning January 1, 1998.
On December 11, 1991, the Parent Partnership issued a proxy statement/prospectus (the "Reincorporation Proxy Statement") in which the board of directors of ServiceMaster's Managing General Partner recommended that the holders of the outstanding partnership shares approve, among other things, a merger (the "Reincorporating Merger") having the characteristics described in the Reincorporation Proxy Statement. The limited partners approved and authorized the Reincorporating Merger at a special meeting held on January 13, 1992.
The purpose of the Reincorporating Merger is to substitute a corporation for the Parent Partnership as the ultimate parent in the ServiceMaster enterprise before the Parent Partnership becomes subject to federal corporate income tax. The Reincorporating Merger is scheduled to be consummated on or before December 31, 1997. ServiceMaster Incorporated of Delaware has been organized to serve as the ultimate parent in the ServiceMaster enterprise after the Reincorporating Merger and is herein called the "Successor Parent Corporation." The Successor Parent Corporation is at present a wholly owned subsidiary of the Parent Partnership.
The Reincorporating Merger will be accomplished by merging a subsidiary of the Successor Parent Corporation (which subsidiary was organized to serve as the vehicle for the merger) into the Parent Partnership. Upon consummation of the Reincorporating Merger: (i) each share of limited partnership interest issued prior to that time by the Parent Partnership will be converted into one share of common stock issued by the Successor Parent Corporation and (ii) each share of common stock issued by the disappearing subsidiary corporation will be converted into a limited partnership interest in the Parent Partnership. Upon consummation of the Reincorporating Merger, the Parent Partnership will be a wholly owned subsidiary of the Successor Parent Corporation.
ServiceMaster expects that after the Reincorporating Merger, the Parent Partnership and The ServiceMaster Company will be merged or liquidated into the Successor Parent Corporation (such transactions are called the
"Partnership Liquidations" in this Prospectus). Upon consummation of the Partnership Liquidations, the Successor Parent Corporation will become the successor to both the Parent Partnership and The ServiceMaster Company and will own all businesses previously owned (directly or indirectly) by the Parent Partnership and The ServiceMaster Company. ServiceMaster intends to change the name of the Successor Parent Corporation to "The ServiceMaster Company" not later than the time the Partnership Liquidations are completed. Upon consummation of the Partnership Liquidations, the Successor Parent Corporation will assume all obligations of The ServiceMaster Company Limited Partnership and the Parent Partnership on the Debt Securities and will become the primary obligor on the Debt Securities. The term "Reincorporation" is used in this Prospectus to refer to the Reincorporating Merger and the Partnership Liquidations and related actions.
The Board of Directors of the Successor Parent Corporation immediately after the Reincorporation will be comprised of the same individuals who served as members of the Board of Directors of the Managing General Partner of the Parent Partnership immediately prior to the Reincorporation. Each of the terms "Board" and "Board of Directors" is used in this Prospectus to mean (i) the Board of Directors of ServiceMaster Management Corporation (i.e., ServiceMaster's Managing General Partner) when it refers to any time prior to the consummation of the Reincorporating Merger and (ii) the Board of Directors of the Successor Parent Corporation when it refers to any time after consummation of the Reincorporation.
Each individual who held a management or other employment position with the Parent Partnership or The ServiceMaster Company immediately prior to the Reincorporation will hold the same position with the Successor Parent Corporation immediately after the Reincorporation. No payment or equity issuance will be made to the ServiceMaster Management Corporation in its capacity as Managing General Partner of either the Parent Partnership or The ServiceMaster Company in connection with Reincorporation except for the pay out of any income allocated its capital account prior to Reincorporation.
The Board of Directors has the right to elect not to consummate the Reincorporating Merger.
After Reincorporation, ServiceMaster's operations will become subject to federal income tax. ServiceMaster's management currently estimates that the effective tax rate reflected in ServiceMaster's income statement after Reincorporation will be approximately 40 percent. Pro forma earnings per share would have been $0.69 in 1996 (contrasted with $1.13 reported by ServiceMaster), $0.59 in 1995 (contrasted with $0.96 reported by ServiceMaster), and $0.49 in 1994 (contrasted with $0.80 reported by ServiceMaster) if the Reincorporation had occurred at the beginning of each of those periods. These estimates are necessarily subject to change based on changes in circumstances, statutory tax rates, and other relevant factors.
PLAN OF DISTRIBUTION
ServiceMaster may sell the Debt Securities in or outside the United States through underwriters or dealers, directly to one or more purchasers, or through agents. The Prospectus Supplement with respect to the Debt Securities will set forth the terms of the offering of the Debt Securities, including the name or names of any underwriters, dealers or agents, the purchase price of the Debt Securities and the proceeds to ServiceMaster from such sale, any delayed delivery arrangements, any underwriting discounts and other items constituting underwriters' compensation, the initial public offering price, any discounts or concessions allowed or re-allowed or paid to dealers, and any securities exchanges on which the Debt Securities may be listed.
If underwriters are used in the sale, the Debt Securities will be acquired by the underwriters for their own account and may be resold from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. The Debt Securities may be offered to the public either through underwriting syndicates represented by one or more managing underwriters or directly by one or more firms acting as underwriters. The underwriter or underwriters with respect to a particular underwritten offering of Debt Securities will be named in the Prospectus Supplement relating to such offering,
and, if an underwriting syndicate is used, the managing underwriter or underwriters will be set forth on the cover of such Prospectus Supplement. Unless otherwise set forth in the Prospectus Supplement relating thereto, the obligations of the underwriters or agents to purchase the Debt Securities will be subject to conditions precedent, and the underwriters will be obligated to purchase all the Debt Securities if any are purchased. The initial public offering price and any discounts or concessions allowed or re-allowed or paid to dealers may be changed from time to time.
If dealers are used in the sale of Debt Securities with respect to which this Prospectus is delivered, ServiceMaster will sell such Debt Securities to the dealers as principals. The dealers may then resell such Debt Securities to the public at varying prices to be determined by such dealers at the time of resale. The names of the dealers and the terms of the transaction will be set forth in the Prospectus Supplement relating thereto.
Debt Securities may be sold directly by ServiceMaster or through agents designated by ServiceMaster from time to time at fixed prices, which may be changed, or at varying prices determined at the time of sale. Any agent involved in the offer or sale of the Debt Securities with respect to which this Prospectus is delivered will be named, and any commissions payable by the Company to such agent will be set forth, in the Prospectus Supplement relating thereto. Unless otherwise indicated in the Prospectus Supplement, any such agent will be acting on a best efforts basis for the period of its appointment.
Debt Securities may be sold directly by ServiceMaster to institutional investors or others, who may be deemed to be underwriters within the meaning of the Securities Act with respect to any resale thereof. The terms of any such sales will be described in the Applicable Prospectus Supplement.
In connection with the sale of the Debt Securities, underwriters or agents may receive compensation from ServiceMaster or from purchasers of Offered Securities for whom they may act as agents in the form of discounts, concessions or commissions. Underwriters, agents and dealers participating in the distribution of the Debt Securities may be deemed to be underwriters, and any discounts or commissions received by them from The ServiceMaster Company and any profit on the resale of the Debt Securities by them may be deemed to be underwriting discounts or commissions under the Securities Act.
If so indicated in the Prospectus Supplement, ServiceMaster will authorize agents, underwriters or dealers to solicit offers from certain types of institutions to purchase Debt Securities from ServiceMaster at the public offering price set forth in the Prospectus Supplement pursuant to delayed delivery contracts providing for payment and delivery on a specified date in the future. Such contracts will be subject only to those conditions set forth in the Prospectus Supplement, and the Prospectus Supplement will set forth the commission payable for solicitation of such contracts.
Agents, dealers and underwriters may be entitled under agreements entered into with ServiceMaster to indemnification by ServiceMaster against certain civil liabilities, including liabilities under the Securities Act, or to contribution with respect to payments that such agents, dealers, or underwriters may be required to make with respect thereto. Agents, dealers, and underwriters may be customers of, engage in transactions with or perform services for ServiceMaster and its subsidiaries in the ordinary course of business.
Some or all of the Debt Securities may be new issues of securities with no established trading market. Any underwriters to whom Debt Securities are sold by ServiceMaster for public offering and sale may make a market in such Debt Securities, but such underwriters will not be obligated to do so and may discontinue any market making at any time without notice. No assurance can be given as to the liquidity of or the trading markets for any Debt Securities.
Certain of the underwriters, dealers or agents and their affiliates may be customers of, engage in transactions with and perform services for ServiceMaster and its subsidiaries in the ordinary course of business.
VALIDITY OF DEBT SECURITIES
The validity of the Debt Securities will be passed upon for the ServiceMaster Companies by Vernon T. Squires, Esq., Senior Vice President and General Counsel of ServiceMaster. As of July 22, 1997, Vernon T. Squires owned 255,887 shares and options to acquire 54,000 shares of limited partnership interests of the Parent Partnership.
EXPERTS
The financial statements and schedule of the Parent Partnership incorporated by reference in this Prospectus and elsewhere in the registration statement have been audited by Arthur Andersen LLP, independent public accountants, as indicated in their reports with respect thereto, and are incorporated by reference in reliance upon the authority of said firm as experts in giving said reports.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+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 JULY 28, 1997
PROSPECTUS
SERVICEMASTER LIMITED PARTNERSHIP
PARTNERSHIP SHARES
ServiceMaster Limited Partnership ("ServiceMaster") may offer from time to time shares of limited partnership interest issued by ServiceMaster ("Partnership Shares"). ServiceMaster is a publicly traded limited partnership and its Partnership Shares are listed on the New York Stock Exchange.
The Partnership Shares may be sold in one or more offerings. The terms for each offering will be determined at the time the offering occurs. The alternative means potentially available to ServiceMaster for sale of the Partnership Shares in offerings effected with this Prospectus include: sales to underwriters under firm commitment underwriting arrangements; sales through agents, underwriters or dealers; and sales directly by ServiceMaster.
The terms of each offering of the Partnership Shares will be described in a supplement to this Prospectus (a "Prospectus Supplement") including the initial offering price and the net proceeds to ServiceMaster from the sale of the Shares to be sold in that offering. If any agents for ServiceMaster, underwriters or dealers are involved in the sale of any Partnership Shares in respect of which this Prospectus is being delivered, the names of such agents, underwriters or deals and any applicable commissions or discounts and the net proceeds to ServiceMaster will be set forth in the applicable Prospectus Supplement.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The Date of this Prospectus is
AVAILABLE INFORMATION
ServiceMaster, The ServiceMaster Company Limited Partnership (in which ServiceMaster owns directly the entire limited partnership interest ("The ServiceMaster Company")), and ServiceMaster Incorporated of Delaware have filed with the Securities and Exchange Commission (the "Commission") a Registration Statement on Form S-3 (the "Registration Statement") under the Securities Act of 1933, as amended (the "Securities Act"), for the registration of, among other things, the Partnership Shares offered hereby and Common Stock issuable by ServiceMaster Incorporated of Delaware. This Prospectus, which constitutes a part of the Registration Statement, does not contain all of the information set forth in the Registration Statement, certain items of which are contained in exhibits and schedules to, or incorporated by reference in, the Registration Statement as permitted by the rules and regulations of the Commission. For further information with respect to ServiceMaster, The ServiceMaster Company, ServiceMaster Incorporated of Delaware and the Partnership Shares and other securities offered hereby, reference is made to the Registration Statement, including the exhibits thereto, and financial statements and notes filed as a part thereof or incorporated by reference therein. Statements made in this Prospectus concerning the contents of any document referred to herein are not necessarily complete. With respect to each such document filed with the Commission as an exhibit to, or incorporated by reference in, the Registration Statement, reference is made to the exhibit for a more complete description of the matter involved, and each such statement shall be deemed qualified in its entirety by such reference.
ServiceMaster is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). In accordance therewith, ServiceMaster files consolidated reports, proxy statements and other information with the Commission. Upon consummation of the Reincorporating Merger described in this Prospectus (which is scheduled to occur on or before December 31, 1997), ServiceMaster Incorporated of Delaware will become the successor to ServiceMaster and The ServiceMaster Company and will become subject to the informational requirements identified in the preceding sentence. Reports, proxy statements and other information filed by ServiceMaster may be inspected and copied at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices located at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511, and 7 World Trade Center, 13th Floor, New York, New York 10048. Copies of such material may be obtained by mail from the Public Reference Branch of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission maintains a Web site (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding ServiceMaster, The ServiceMaster Company and ServiceMaster Incorporated of Delaware. In addition, such material may also be inspected and copied at the offices of the New York Stock Exchange. Partnership Shares issued by ServiceMaster are listed on the New York Stock Exchange.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents have been filed with the Commission and are incorporated by reference in this Prospectus: (i) the Annual Report on Form 10-K of ServiceMaster (File No. 1-9378) for the year ended December 31, 1996 (the "1996 Form 10-K") and (ii) ServiceMaster's Quarterly Report on Form 10-Q for the period ended March 31, 1997. All documents filed by ServiceMaster pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to the termination of the offering of the Partnership Shares and other securities registered on the Registration Statement shall be deemed to be incorporated herein by reference and to be a part hereof from the respective dates of filing of such documents. As indicated in this Prospectus, ServiceMaster, The ServiceMaster Company and ServiceMaster Incorporated of Delaware are parties to a Merger and Reorganization Agreement, which provides for a Reincorporating Merger and other related transactions that are scheduled to occur on or before December 31, 1997. Upon consummation of the Reincorporating Merger, ServiceMaster Incorporated of Delaware will become the successor to ServiceMaster as the ultimate parent in the ServiceMaster enterprise. All documents filed by ServiceMaster Incorporated of Delaware after the Reincorporating Merger pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to the termination of the offering of the securities
registered on the Registration Statement shall be deemed to be incorporated herein by reference and to be a part hereof from the respective dates of filing of such documents.
Any statement contained in a document incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein, or in any other subsequently filed document that also is or is deemed to be incorporated by reference herein, modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus.
Copies of all documents which are incorporated herein by reference (not
including the exhibits to such information, unless such exhibits are
specifically incorporated by reference in such information) will be provided
without charge to each person, including any beneficial owner, to whom this
Prospectus is delivered, upon written or oral request. Copies of this
Prospectus, as amended or supplemented from time to time, and any other
documents (or parts of documents) that constitute part of the Prospectus under
Section 10(a) of the Securities Act will also be provided without charge to
each such person, upon written or oral request. Requests should be directed to
ServiceMaster at One ServiceMaster Way, Downers Grove, Illinois 60515-9969,
Attention: Investor Relations (telephone number: (630) 271-1300).
NO PERSON IS AUTHORIZED IN CONNECTION WITH THE OFFERING MADE HEREBY TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY SERVICEMASTER, THE SERVICEMASTER COMPANY OR SERVICEMASTER INCORPORATED OF DELAWARE. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITY OTHER THAN THE PARTNERSHIP SHARES OFFERED HEREBY TO ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE ANY SUCH OFFER OR SOLICITATION TO SUCH PERSON. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREBY SHALL UNDER ANY CIRCUMSTANCES IMPLY THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.
Unless otherwise indicated or the context otherwise requires, all references herein to: (i) "ServiceMaster" refers to ServiceMaster Limited Partnership and its subsidiaries and predecessors; and (ii) "The ServiceMaster Company" refers to The ServiceMaster Company Limited Partnership. As described under "The Reincorporating Merger and the Partnership Liquidations" below, the shareholders of ServiceMaster have approved a Reincorporating Merger, which is scheduled to occur on or before December 31, 1997. The Reincorporating Merger will install a corporation as the ultimate parent in the ServiceMaster enterprise and that corporation is called the "Successor Parent Corporation" in this Prospectus. The term "ServiceMaster" as used in this Prospectus with respect to periods at and after the Reincorporating Merger refers to ServiceMaster Incorporated of Delaware and its subsidiaries.
SERVICEMASTER
ServiceMaster was formed in December 1986 as a limited partnership to succeed to the business and assets of ServiceMaster Industries Inc., which began its operation in 1947. ServiceMaster is a holding company whose Partnership Shares are listed on the New York Stock Exchange and whose principal asset consists of all of the common limited partner interest of The ServiceMaster Company. The actual operations of the ServiceMaster enterprise are conducted by The ServiceMaster Company and its subsidiaries.
ServiceMaster, through its subsidiaries, provides a range of services to individual consumers, businesses and institutions in the United States and 30 other countries throughout the world. ServiceMaster is divided into three operating units: Consumer Services, Management Services and International. Consumer Services and Management Services are the principal operating units
ServiceMaster Consumer Services L.P. provides services to over 6,500,000
residential and commercial customers through seven market leading companies:
TruGreen L.P., which provides lawn care, tree and shrub services and indoor
plant maintenance under the "TruGreen," "ChemLawn," "TruGreen-ChemLawn" and
"Barefoot" service marks; The Terminix International Company, L.P., which
provides termite and pest control services under the "Terminix" service mark;
American Home Shield Corporation, which provides home system and appliance
warranty contracts and home inspection services under the "American Home
Shield" and "AmeriSpec" service marks; ServiceMaster Residential/Commercial
Services L.P., which provides residential and commercial cleaning and disaster
restoration services under the "ServiceMaster" service mark; Merry Maids L.P.,
which provides domestic housekeeping services under the "Merry Maids" service
mark; and Furniture Medic L.P., which provides in-home furniture repair and
restoration services under the "Furniture Medic" service mark. These services
are part of the "ServiceMaster Quality Network" and may be accessed by calling
a single toll-free telephone number: 1-800-WE SERVE.
ServiceMaster Management Services L.P. is organized into three discrete operating units: ServiceMaster Healthcare Management Services, Education Management Services and Business and Industry Management Services. Each of these three units provides to their respective customers a variety of supportive management services, including the management of housekeeping, plant operations and maintenance, clinical equipment maintenance, laundry and linen, grounds and landscaping, energy management services and food service. In addition, Healthcare Management Services provides management and other services to the long-term care, assisted living and home health care markets.
USE OF PROCEEDS
ServiceMaster intends to use the net proceeds from the sale of the Partnership Shares for general business purposes, which may include, but are not limited to, repayment, redemption or repurchase of outstanding indebtedness; acquisitions, capital expenditures and working capital requirements; and such other purposes as may be specified in the relevant Prospectus Supplement. A description of any indebtedness to be refinanced with the proceeds from the sale of the Partnership Shares will be set forth in the applicable Prospectus Supplement.
DESCRIPTION OF PARTNERSHIP SHARES
ServiceMaster is a publicly traded limited partnership formed under the Delaware Revised Uniform Limited Partnership Act.
ServiceMaster Management Corporation serves as ServiceMaster's Managing General Partner. The Board of Directors of ServiceMaster Management Corporation serves as the Board of Directors for the ServiceMaster enterprise. ServiceMaster Management Corporation holds a 1% carried interest in both ServiceMaster and its principal subsidiary partnership, and these two interests together provide ServiceMaster Management Corporation with approximately 2% of the income earned and distributions made by the ServiceMaster enterprise. All other income and distributions attributable to ServiceMaster are allocated to the holders of the outstanding Partnership Shares. Each Partnership Share represents an ownership interest in ServiceMaster equal to the interest represented by every other Partnership Share. Distributions are made pro rata with the same amount distributed with respect to each outstanding Partnership Share. Taxable income is allocated to the owners of Partnership Shares based on the time at which the shares were acquired and the price paid for the shares and other factors; various tax consequences of investment in Partnership Shares are described in the 1996 Form 10-K, which is incorporated into this Prospectus by reference.
As of June 30, 1997, an aggregate of 182,784,000 Partnership Shares were outstanding (before giving effect to any issuances of Partnership Shares which may be sold in offerings made by means of this Prospectus).
Partnership Shares are listed on the New York Stock Exchange and are freely transferable.
THE REINCORPORATING MERGER AND PARTNERSHIP LIQUIDATIONS
ServiceMaster was organized as a Limited Partnership at the end of 1986 to enable the parent entity in the ServiceMaster enterprise to function free of the federal corporate income tax. In 1987, the Internal Revenue Code was amended to reimpose federal corporate income tax on publicly traded partnerships like ServiceMaster beginning January 1, 1998.
On December 11, 1991, ServiceMaster issued a proxy statement/prospectus (the "Reincorporation Proxy Statement") in which the board of directors of ServiceMaster's Managing General Partner recommended that the holders of the outstanding partnership shares approve, among other things, a merger (the "Reincorporating Merger") having the characteristics described in the Reincorporation Proxy Statement. The limited partners approved and authorized the Reincorporating Merger at a special meeting held on January 13, 1992.
The purpose of the Reincorporating Merger is to substitute a corporation for ServiceMaster as the ultimate parent in the ServiceMaster enterprise before ServiceMaster becomes subject to federal corporate income tax. The Reincorporating Merger is scheduled to be consummated on or before December 31, 1997. ServiceMaster Incorporated of Delaware has been organized to serve as the ultimate parent in the ServiceMaster enterprise after the Reincorporating Merger and is hereinafter called the "Successor Parent Corporation." The Successor Parent Corporation is at present a wholly owned subsidiary of ServiceMaster.
The Reincorporating Merger will be accomplished by merging a subsidiary of the Successor Parent Corporation (which subsidiary was organized to serve as the vehicle for the merger) into ServiceMaster. Upon consummation of the Reincorporating Merger (i) each Partnership Share issued prior to that time by ServiceMaster will be converted into one share of common stock issued by the Successor Parent Corporation (a "Corporate Share") and (ii) ServiceMaster will become a wholly owned subsidiary of the Successor Parent Corporation. Each of the terms "ServiceMaster Shares" and "Shares" is used in this Prospectus to mean (i) shares of limited partnership interest in ServiceMaster when it refers to any time prior to the consummation of the Reincorporating Merger and (ii) shares of common stock issued or issuable by the Successor Parent Corporation when it refers to any time after consummation or the Reincorporating Merger.
No federal income tax will be imposed on ServiceMaster shareholders as a result of the Reincorporating Merger.
ServiceMaster expects that after the Reincorporating Merger, ServiceMaster and The ServiceMaster Company (which is the sole subsidiary of the ServiceMaster) will be merged or liquidated into the Successor Parent Corporation (such transactions are called the "Partnership Liquidations" in this Prospectus). Upon consummation of the Partnership Liquidations, the Successor Parent Corporation will become the successor to both ServiceMaster and The ServiceMaster Company and will own all businesses previously owned (directly or indirectly) by ServiceMaster or The ServiceMaster Company. ServiceMaster intends to change the name of the Successor Parent Corporation to "The ServiceMaster Company" not later than the time the Partnership Liquidations are completed. The term "Reincorporation" is used in this Prospectus to refer to the Reincorporating Merger and the Partnership Liquidations and related actions.
The Board of Directors of the Successor Parent Corporation immediately after the Reincorporation will be comprised of the same individuals who served as members of the Board of Directors of the Managing General Partner of ServiceMaster immediately prior to the Reincorporation. Each of the terms "Board" and "Board of Directors" is used in this Prospectus to mean (i) the Board of Directors of ServiceMaster Management Corporation (i.e., ServiceMaster's Managing General Partner) when it refers to any time prior to the consummation of the Reincorporating Merger and (ii) the Board of Directors of the Successor Parent Corporation when it refers to any time after consummation of the Reincorporation.
Each individual who held a management or other employment position with ServiceMaster or The ServiceMaster Company immediately prior to the Reincorporation will hold the same position with the Successor Parent Corporation immediately after the Reincorporation. No payment or equity issuance will be made to the ServiceMaster Management Corporation in its capacity as Managing General Partner of either ServiceMaster or The ServiceMaster Company in connection with Reincorporation except for the pay out of any income allocated its capital account prior to Reincorporation.
The Board of Directors has the right to elect not to consummate the Reincorporating Merger.
After Reincorporation, ServiceMaster's operations will become subject to federal income tax. ServiceMaster's management currently estimates that the effective tax rate reflected in ServiceMaster's income statement after Reincorporation will be approximately 40 percent. Pro forma earnings per share would have been $0.69 in 1996 (contrasted with $1.13 reported by ServiceMaster), $0.59 in 1995 (contrasted with $0.96 reported by ServiceMaster), and $0.49 in 1994 (contrasted with $0.80 reported by ServiceMaster) if the Reincorporation had occurred at the beginning of each of those periods. These estimates are necessarily subject to change based on changes in circumstances, statutory tax rates, and other relevant factors.
SUMMARY COMPARISON OF PARTNERSHIP SHARES AND CORPORATE SHARES
As described in greater detail above, the holders of ServiceMaster's Partnership Shares have approved a Reincorporating Merger which is scheduled to occur on or before December 31, 1997. Upon consummation of the Reincorporating Merger, (i) the Successor Parent Corporation will replace ServiceMaster as the ultimate parent entity in the ServiceMaster enterprise and (ii) each Partnership Share outstanding immediately prior to the Reincorporating Merger will be converted into one share of common stock issuable by the Successor Parent Corporation. The following summary compares various characteristics of the Partnership Shares and the Corporate Shares. This summary is qualified in its entirety by the more complete description of the tax and other characteristics of investment in ServiceMaster contained in the 1996 Form 10-K, by other information filed by ServiceMaster or the Successor Parent Corporation with the Commission and incorporated into this Prospectus by reference and by other information in and exhibits to the Registration Statement of which this Prospectus is a part, including the Agreement of Limited Partnership for ServiceMaster as Amended and Restated on January 31, 1992.
TAXATION
Under the Internal Revenue Code of The Successor Parent Corporation
1986 as amended (the "Code"), will be obligated to pay federal
ServiceMaster is not currently ob- income tax on the taxable income
ligated to pay federal income tax. realized from its operations.
The Code was amended in 1987 to im-
pose federal corporate income tax
on operations of publicly traded
partnerships like ServiceMaster be-
ginning January 1, 1998. It does
not appear likely that any change
in the law will become effective
which would cause ServiceMaster not
to proceed with the
Reincorporation, which is scheduled
to occur on or before December 31,
1997.
Holders of Corporate Shares gener-
ally will not be required to in-
clude their share of the Successor
Parent Corporation's taxable income
in computing their own taxable in-
come.
Holders of Corporate Shares gener-
ally will be required to include
any dividends received from the
Successor Parent Corporation in
computing their own taxable income
except that stockholders which are
corporations generally will be al-
lowed a dividend-received deduction
equal to 70% of the amount of divi-
dends received from the Successor
Parent Corporation.
Under the federal income law appli-
cable for the balance of 1997, each
holder of Partnership Shares is al-
located a share of the taxable in-
come attributable to
ServiceMaster's operations; the
amount of the taxable income allo-
cable to each shareholder is vari-
able and is dependent upon when the
shareholder acquired the shares in-
volved, the price paid for those
shares and other factors. Partner-
ship income allocable to Partner-
ship shareholders who are otherwise
tax exempt organizations is gener-
ally treated as unrelated business
taxable income and accordingly may
be subject to federal income tax
despite the fact that such share-
holders are generally tax exempt.
However, ServiceMaster anticipates
that the depreciation and other de-
ductions attributable to persons
who purchase Partnership Shares be-
tween the date of this Prospectus
and the end of 1997 (whether or not
tax exempt) will exceed the income
allocable to those shares with the
result that no taxable income
should be realized in 1997 by rea-
son of such purchases.
The earnings of, or any dividends
received from, the Successor Parent
Corporation generally will not con-
stitute unrelated business taxable
income to tax-exempt shareholders,
except in cases where shareholder's
investment in the Corporate Shares
is debt-financed (within the mean-
ing of section 514 of the Code).
In the event of a sale of a Corpo-
rate Share, the selling stockholder
generally will recognize capital
gain or loss equal to the amount of
the difference between the amount
realized and the stockholder's ba-
sis in the Corporate Share.
7
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Cash distributions received from ServiceMaster by a holder of its shares are not taxable to that holder except to the extent such distributions exceed the holder's adjusted tax basis in the holder's shares. For purposes of computing gain or loss on the sale of a Part- nership Share, a shareholder's ini- tial tax basis is increased by in- come allocated to the holder and decreased by losses and distribu- tions allocated to the holder. Gen- erally, any gain or loss realized on the sale of a Partnership Share is treated as a capital gain or loss, but some ordinary income may be realized (even if there is no overall gain). No gain or loss will be recognized by reason of the con- version of Partnership Shares into Corporate Shares in the Reincorpo- rating Merger, and each holder's basis in the holder's Partnership Shares will carry over to the Cor- porate Shares such holder receives in exchange. |
CASH DISTRIBUTIONS AND DIVIDENDS
ServiceMaster and its predecessors It is the present intention of the
have paid a cash distribution to ServiceMaster Board to continue to
shareholders every year since 1962. manage the quarterly distribution
ServiceMaster has increased the process after Reincorporation with
amount of the distribution paid per essentially the same approach and
share every year since 1970. philosophy used to determine the
ServiceMaster's Board of Directors amount of quarterly distributions
intends to continue to pay quar- prior to Reincorporation. The Board
terly dividends to the extent expects that the Reincorporation by
ServiceMaster's operations in the itself will not cause a diminution
future continue to generate avail- in the amount of quarterly distri-
able cash in a manner consistent butions paid. The Board reserves
with past performance. There can of the right to change the approach to
course be no guarantee as to what dividend distributions based on
the future results will actually be relevant criteria, including the
or that the pattern of past distri- results of ServiceMaster's opera-
butions will be continued in the tions and the relative merits of
future. competing opportunities for employ-
ment of available cash which may
present themselves in the future.
ServiceMaster paid cash distribu-
tions for 1996 equal to $0.44 per
share and paid distributions at-
tributable to the first and second
quarters of 1997 in the amount of
$0.1133 per share per quarter which
were paid on January 31 and April
30 1997, respectively.
ServiceMaster's Board of Directors
expects to authorize cash distribu-
tions of $0.12 per share for each
of the two remaining calendar quar-
ters in 1997.
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LIQUIDITY AND MARKETABILITY
The Partnership Shares are freely After the Reincorporation, the Cor-
transferrable and are listed on the porate Shares will be freely
New York Stock Exchange. After the transferrable. The Corporate Shares
Reincorporation, the Partnership have been approved for listing on
Shares will cease to be outstand- the New York Stock Exchange and
ing. will be listed on that Exchange
from the time of Reincorporation.
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MANAGEMENT; VOTING RIGHTS
ServiceMaster Management Corpora- The Board of Directors of the Suc-
tion serves as the Managing General cessor Parent Corporation is di-
Partner for the ServiceMaster Part- vided into three classes exactly
nership and is authorized by the like the Board of ServiceMaster
governing Management Corporation; one class
Agreement of Limited Partnership to of directors comes up for election
exercise all management powers over each year, and members of each
the business and affairs of class serve a three year term on
ServiceMaster and the businesses it the Board.
owns.
Immediately after the
ServiceMaster Management Corpora- Reincorporation, the individuals
tion is in turn governed by a Board who served as directors of
of Directors. The Board appoints ServiceMaster Management Corpora-
officers of ServiceMaster and its tion immediately prior to the
principal subsidiaries and invests Reincorporation will become members
those officers with the same au- of the Board of the Successor Par-
thority and responsibility gener- ent Corporation and will serve in
ally exercised by corporate offi- the same class on that Board as the
cers. class in which they last served on
the Partnership's Board. Each indi-
vidual who served as an officer of
ServiceMaster Partnership immedi-
ately prior to the Reincorporation
will be appointed by the Board to
the same officership position with
the Successor Parent Corporation
immediately after the
Reincorporation.
The Board's membership is divided
into three classes; one class of
directors comes up for election
each year, and members of each
class serve a three-year term on
the Board. The Board itself is re-
sponsible for determining the indi-
viduals to be elected to the Board
in each class every year subject to
a requirement in the Certificate of
Incorporation that a majority of
the positions on the Board are re-
served for independent directors as
defined in the Certificate.
After the Reincorporation, one of
the three classes of directors of
the Successor Parent Corporation
will come up for election each
year. The holders of Corporate
Shares will have the right to vote
on the Board candidates each year.
The candidates for whom the highest
number of shares are voted will be
elected. Each Corporate Share will
carry one vote, and each share-
holder will have the right to cast
a number of votes for each Board
position equal to the number of
Corporate Shares such shareholder
has the power to vote.
Holders of Partnership Shares do
not vote for members of the Board.
Those holders do however have the
right to replace ServiceMaster Man-
agement Corporation and thereby re-
place the entire Board if they de-
termine such action to be in their
best interests. Such replacement
would require the vote of two-
thirds of the outstanding Partner-
ship Shares and the satisfaction of
certain other requirements. If more
than 20% of the outstanding Part-
nership Shares were owned by a sin-
gle shareholder or group working in
concert, then removal would also
require the approval of two-thirds
of the outstanding Partnership
Shares that are not so held.
Corporate shareholders have the
right to remove directors of the
Successor Parent Corporation pro-
vided that such removal may only be
for cause and provided that a
supermajority vote is required for
such removal.
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SPECIAL MEETINGS
Meetings of the holders of Partner- Special meetings of the holders of ship Shares may be called by the the Corporate Shares may be called Managing General Partner or by only by the Successor Parent Corpo- Shareholders holding at least 20% ration's Chairman or chief execu- of the outstanding shares, provid- tive officer or by a majority of ed, however, that the right of the Corporation's Board of Direc- Shareholders to call a meeting does tors. not include the right to propose amendments to the Partnership Agreement governing ServiceMaster. |
REDEMPTION
The Partnership Shares are gener- The Corporate Shares are not sub- ally not subject to mandatory re- ject to mandatory redemption. demption. |
LIQUIDATION RIGHTS
The holders of the Partnership The ServiceMaster Board has no in- Shares are entitled to share rata- tention of liquidating the Succes- bly in any assets distributable sor Parent Corporation. If such a (after satisfaction of creditors liquidation were to occur, the and the holders of any senior eq- holders of the Corporate Shares uity securities that might hereaf- would be entitled to share ratably ter be issued by the Partnership) in any assets remaining after sat- in liquidation. Because the Part- isfaction of amounts owed creditors nership Shares will be converted and on any preferred stock that the into Corporate Shares prior to the Board of the Successor Parent Cor- liquidation to be accomplished in poration might hereafter elect to connection with the issue. Reincorporation, the holders of the Partnership Shares will not be en- titled to any distribution by rea- son of the liquidation of ServiceMaster into the Successor Parent Corporation as part of the Reincorporation. |
LIMITED LIABILITY
Holders of Partnership Shares gen- The Corporate Shares will be fully
erally do not have personal liabil- paid and nonassessable. Ownership
ity for obligations of of Corporate Shares will not cause
ServiceMaster. the owner to have personal liabil-
ity for any obligations of the Suc-
cessor Parent Corporation.
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CONTINUITY OF EXISTENCE
Section 1.5 of the Partnership The Successor Parent Corporation's Agreement provides that the Part- Certificate of Incorporation pro- nership shall continue in existence vides that the Corporation will until December 31, 2036 provided have perpetual existence. that such date can be changed if the change is approved by the Man- aging General Partner and the hold- ers of a majority of the outstand- ing Partnership Shares. |
FEDERAL SECURITIES REPORTING
ServiceMaster is subject to the re- After the Reincorporation, the Suc-
porting requirements of the Ex- cessor Parent Corporation will be
change Act and files annual, quar- subject to the reporting require-
terly and other reports thereunder. ments of the Exchange Act and will
ServiceMaster also provides annual file annual and quarterly reports
reports to Partnership sharehold- thereunder and will also file other
ers. reports when required or when it
otherwise decides additional re-
ports should be filed. The Succes-
sor Parent Corporation will also
issue to its shareholders an annual
proxy statement and an annual re-
port to shareholders.
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PLAN OF DISTRIBUTION
ServiceMaster may sell the ServiceMaster Shares in or outside the United States through underwriters or dealers, directly to one or more purchasers, or through agents. The Prospectus Supplement with respect to the ServiceMaster Shares will set forth the terms of the offering of the ServiceMaster Shares, including the name or names of any underwriters, dealers or agents, the purchase price of the ServiceMaster Shares and the proceeds to ServiceMaster from such sale, any delayed delivery arrangements, any underwriting discounts and other items constituting underwriters' compensation, the initial public offering price, and any discounts or concessions allowed or re-allowed or paid to dealers.
If firm commitments arrangements with underwriters are used in the sale, the ServiceMaster Shares will be acquired by the underwriters for their own account and may be resold from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. The ServiceMaster Shares may be offered to the public either through underwriting syndicates represented by one or more managing underwriters or directly by one or more firms acting as underwriters. The underwriter or underwriters with respect to a particular underwritten offering of ServiceMaster Shares will be named in the Prospectus Supplement relating to such offering, and, if an underwriting syndicate is used, the managing underwriter or underwriters will be set forth on the cover of such Prospectus Supplement. Unless otherwise set forth in the Prospectus Supplement relating thereto, the obligations of the underwriters or agents to purchase the ServiceMaster Shares will be subject to conditions precedent, and the underwriters will be obligated to purchase all the ServiceMaster Shares if any are purchased. The initial public offering price and any discounts or concessions allowed or re-allowed or paid to dealers may be changed from time to time.
If dealers are used in the sale of ServiceMaster Shares with respect to which this Prospectus is delivered, ServiceMaster will sell such ServiceMaster Shares to the dealers as principals. The dealers may then resell such ServiceMaster Shares to the public at varying prices to be determined by such dealers at the time of resale. The names of the dealers and the terms of the transaction will be set forth in the Prospectus Supplement relating thereto.
ServiceMaster Shares may be sold directly by ServiceMaster or through agents designated by ServiceMaster from time to time at fixed prices, which may be changed, or at varying prices determined at the time of sale. Any agent involved in the offer or sale of the ServiceMaster Shares with respect to which this Prospectus is delivered will be named, and any commissions payable by the Company to such agent will be set forth, in the Prospectus Supplement relating thereto. Unless otherwise indicated in the Prospectus Supplement, any such agent will be acting on a best efforts basis for the period of its appointment.
ServiceMaster Shares may be sold directly by ServiceMaster to institutional investors or others, who may be deemed to be underwriters within the meaning of the Securities Act with respect to any resale thereof. The terms of any such sales will be described in the applicable Prospectus Supplement.
In connection with the sale of the ServiceMaster Shares, underwriters or agents may receive compensation from ServiceMaster or from purchasers of ServiceMaster Shares for whom they may act as agents in the form of discounts, concessions or commissions. Underwriters, agents and dealers participating in the distribution of the ServiceMaster Shares may be deemed to be underwriters, and any discounts or commissions received by them from The ServiceMaster Company and any profit on the resale of the ServiceMaster Shares by them may be deemed to be underwriting discounts or commissions under the Securities Act.
If so indicated in the Prospectus Supplement, ServiceMaster will authorize agents, underwriters or dealers to solicit offers from certain types of institutions to purchase ServiceMaster Shares from ServiceMaster at the public offering price set forth in the Prospectus Supplement pursuant to delayed delivery contracts providing for payment and delivery on a specified date in the future. Such contracts will be subject only to those conditions set forth in the Prospectus Supplement, and the Prospectus Supplement will set forth the commission payable for solicitation of such contracts.
Agents, dealers and underwriters may be entitled under agreements entered into with ServiceMaster to indemnification by ServiceMaster against certain civil liabilities, including liabilities under the Securities Act, or to contribution with respect to payments that such agents, dealers, or underwriters may be required to make with respect thereto. Agents, dealers, and underwriters may be customers of, engage in transactions with or perform services for the ServiceMaster and its subsidiaries in the ordinary course of business.
Certain of the underwriters, dealers or agents and their affiliates may be customers of, engage in transactions with and perform services for the ServiceMaster and/or its subsidiaries in the ordinary course of business.
VALIDITY OF SERVICEMASTER SHARES
The validity of the Partnership Shares and Corporate Shares issuable in the offerings registered on the Registration Statement of which this Prospectus is a part will be passed upon for ServiceMaster by Vernon T. Squires, Esq., Senior Vice President and General Counsel of ServiceMaster. As of July 22, 1997, Vernon T. Squires owned 255,887 shares and options to acquire 54,000 shares of limited partnership interests of ServiceMaster.
EXPERTS
The financial statements and schedule of the Parent Partnership incorporated by reference in this Prospectus and elsewhere in the registration statement have been audited by Arthur Andersen LLP, independent public accountants, as indicated in their reports with respect thereto, and incorporated by reference in reliance upon the authority of said firm as experts in giving said reports.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses in connection with the issuance and distribution of the securities being registered, other than underwriting compensation, are:
S.E.C. Registration Fee........................................ $287,879*
Legal Fees and Expenses........................................ 100,000
Accounting Fees and Expenses................................... 30,000
Trustee's Fees and Expenses.................................... 10,000
Rating Agency Fees............................................. 300,000
Blue Sky Fees and Expenses..................................... 15,000
Printing and Engraving Fees.................................... 100,000
Miscellaneous.................................................. 17,121
--------
Total...................................................... $860,000
========
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ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
ServiceMaster Management Corporation (the "Managing General Partner") and ServiceMaster Incorporated of Delaware (the "Successor Parent Corporation") are incorporated under the laws of the State of Delaware. Section 145 of the DGCL, inter alia ("Section 145") provides that a Delaware corporation may indemnify any persons who were, are or are threatened to be made, parties to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of such corporation), by reason of the fact that such person is or was an officer, director, employee or agent of such corporation, or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, provided such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the corporation's best interests and, with respect to any criminal action or proceeding, had no reasonable cause to believe that his conduct was illegal. A Delaware corporation may indemnify any persons who are, were or are threatened to be made, a party to any threatened, pending or completed action or suit by or in the right of the corporation by reason of the fact that such person was a director, officer, employee or agent of such corporation, or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorneys' fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit, provided such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the corporation's best interests, provided that no indemnification is permitted without judicial approval if the officer, director, employee or agent is adjudged to be liable to the corporation. Where an officer, director, employee or agent is successful on the merits or otherwise in the defense of any action referred to above, the corporation must indemnify him against the expenses that such officer or director has actually and reasonably incurred.
The Certificate of Incorporation for the Managing General Partner and the Certificate of Incorporation for the Successor Parent Corporation each provides that, to the fullest extent permitted by the DGCL as the same exists or may hereafter be amended, a director of the Managing General Partner or the Successor Parent Corporation shall not be liable to the Managing General Partner or the Successor Parent Corporation or its stockholders for monetary damages for a breach of fiduciary duty as a director.
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ServiceMaster Limited Partnership (the "Parent Partnership") and The ServiceMaster Company Limited Partnership ("The ServiceMaster Company") are limited partnerships formed under the laws of the State of Delaware. Section 108 of the Delaware Revised Uniform Limited Partnership Act provides that a Delaware partnership may, subject to such standards and restrictions, if any, as are set forth in its partnership agreement, may and shall have the power to, indemnify and hold harmless any partner or other person from and against any and all claims and demands whatsoever.
Article 7.9 of the ServiceMaster Limited Partnership Agreement of Limited Partnership ("Article 7.9") obligates the Parent Partnership to indemnify to the fullest extent allowable by law any person who at any time serves as a director or executive officer of the Parent Partnership, The ServiceMaster Company, ServiceMaster Management Services, Inc. or ServiceMaster Consumer Services, Inc., against any claim which arises in connection with his or her service with the Parent Partnership, including any subsidiary, any ServiceMaster employee benefit plan, or in any other capacity in which he or she is asked to serve by the Managing General Partner's Board of Directors or Chief Executive Officer. The Board of Directors of the Managing General Partner or its Chief Executive Officer may extend the indemnification protections to any other person to the extent they deem appropriate. Article 7.9 is intended to allow indemnification in accordance with and subject to Article 7.9 and to the fullest extent permitted by applicable law, including but not limited to the Delaware Revised Uniform Limited Partnership Act.
Article 7.9(c) provides that, except to the extent that ServiceMaster otherwise expressly agrees in writing, the Parent Partnership will not be obligated to reimburse any person for or otherwise indemnify any person against: (a) any obligation such person may have under any written contract except to the extent such obligation arises by reason of any action taken by such person to satisfy, settle or otherwise deal with any claim against which such person is entitled to indemnification; (b) except as otherwise expressly provided by a separate written agreement, any income taxes payable by reason of salary, bonus or other income or gain actually realized by such person; (c) any liability imposed by contract or applicable law resulting from such person's competition against the ServiceMaster enterprise; and (d) any obligation to pay an amount up to the value personally realized by such person by stealing or by any other action which constitutes a criminal felony. With certain exceptions, the Parent Partnership will not be obligated to indemnify any person in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized by the Managing General Partner's Board of Directors.
Section 145 further authorizes a corporation to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or enterprise, against any liability asserted against him and incurred by him in any such capacity, arising out of his status as such, whether or not the corporation would otherwise have the power to indemnify him under Section 145.
Article 7.9(o) of the Parent Partnership's Partnership Agreement further provides that ServiceMaster may purchase and maintain insurance on behalf of any person who is or was a director or executive officer of the Parent Partnership, The ServiceMaster Company, ServiceMaster Management Service, Inc. or ServiceMaster Consumer Services, Inc. or is or was serving in any other capacity with the Parent Partnership or any other corporation at the request of the Managing General Partner's Board of Directors or Chief Executive Officer against any expense, liability or loss, whether or not ServiceMaster would have the power to indemnify such person against such liability under Article 7.9.
All of the Managing General Partner's directors and the officers of the Parent Partnership, The ServiceMaster Company, and the Successor Parent Partnership are covered by insurance policies maintained and held in effect by the Parent Partnership against certain liabilities for actions taken in such capacities, including liabilities under the Securities Act of 1933.
The Certificate of Incorporation for the Successor Parent Corporation contains indemnification provisions substantially identical to those in Article 7.9 of the Parent Partnership's Partnership Agreement.
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ITEM 16. EXHIBITS.
*1.1 Form of Underwriting Agreement for the Debt Securities.
4.1 Indenture, dated as of July , 1997, among The
ServiceMaster Company, as issuer, ServiceMaster, as guar-
antor, and Harris Trust and Savings Bank, as Trustee.
4.2 Form of Debt Securities relating to Senior Debt Securities
(included in Exhibit 4.1).
5.1 Opinion of Vernon T. Squires, Senior Vice President and
General Counsel of ServiceMaster.
12.1 Statement and Computation of ratio of earnings to fixed
charges.
23.1 Consent of Vernon T. Squires (included in Exhibit 5.1).
23.2 Consent of Arthur Andersen LLP.
24.1 Power of Attorney.
25.1 Form T-1 Statement of Eligibility of the Trustee.
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ITEM 17. UNDERTAKINGS.
(A) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in the volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high and of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;
provided, however, that paragraphs (A)(1)(i) and (A)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act, 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.
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(B) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant's annual report pursuant to section 13(a) or section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Exchange Act 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 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 Securities 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 Securities Act and will be governed by the final adjudication of such issue.
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SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE SERVICEMASTER COMPANY LIMITED PARTNERSHIP 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 DOWNERS GROVE, ILLINOIS, ON THE DAY OF JULY 25, 1997.
The ServiceMaster Company Limited Partnership, As Registrant
By: ServiceMaster Management Corporation Its Managing General Partner
/s/ Vernon T. Squires
By: _________________________________
Vernon T. Squires
Senior Vice President and General
Counsel
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PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, SERVICEMASTER LIMITED PARTNERSHIP 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 DOWNERS GROVE, ILLINOIS, ON THE DAY OF JULY 25, 1997.
ServiceMaster Limited Partnership, As Registrant
By: ServiceMaster Management Corporation Its Managing General Partner
/s/ Vernon T. Squires
By: _________________________________
Vernon T. Squires
Senior Vice President and General
Counsel
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PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION STATEMENT HAS BEEN SIGNED ON JULY 25, 1997 BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED:
SIGNATURE TITLE
--------- -----
* Chairman of ServiceMaster Limited
___________________________________________ Partnership, The ServiceMaster Company
C. William Pollard Limited Partnership, and ServiceMaster
Management Corporation and Director of
ServiceMaster Management Corporation
* President and Chief Executive Officer of
___________________________________________ ServiceMaster Limited Partnership, The
Carlos H. Cantu ServiceMaster Company Limited
Partnership, and ServiceMaster Management
Corporation and Director of ServiceMaster
Management Corporation
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SIGNATURE TITLE
--------- -----
* Vice Chairman of ServiceMaster Limited
___________________________________________ Partnership, The ServiceMaster Company
Charles W. Stair Limited Partnership, and ServiceMaster
Management Corporation and Director of
ServiceMaster Management Corporation
* Vice Chairman of ServiceMaster Limited
___________________________________________ Partnership, The ServiceMaster Company
Philip B. Rooney Limited Partnership, and ServiceMaster
Management Corporation and Director of
ServiceMaster Management Corporation
* Director of ServiceMaster Management
___________________________________________ Corporation
Paul W. Berezny, Jr.
* Director of ServiceMaster Management
___________________________________________ Corporation
Henry O. Boswell
* Director of ServiceMaster Management
___________________________________________ Corporation
Brian Griffiths
* Director of ServiceMaster Management
___________________________________________ Corporation
Sidney E. Harris
* Director of ServiceMaster Management
___________________________________________ Corporation
Herbert P. Hess
* Director of ServiceMaster Management
___________________________________________ Corporation
Michele M. Hunt
* Director of ServiceMaster Management
___________________________________________ Corporation
Gunther H. Knoedler
* Director of ServiceMaster Management
___________________________________________ Corporation
James D. McLennan
* Director of ServiceMaster Management
___________________________________________ Corporation
Vincent C. Nelson
* Director of ServiceMaster Management
___________________________________________ Corporation
Kay A. Orr
* Director of ServiceMaster Management
___________________________________________ Corporation
Dallen W. Peterson
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SIGNATURE TITLE
--------- -----
* Director of ServiceMaster Management
___________________________________________ Corporation
Burton E. Sorensen
* Director of ServiceMaster Management
___________________________________________ Corporation
David K. Wessner
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*The undersigned, by signing his name hereto, does sign and execute this Registration Statement pursuant to the Powers of Attorney executed by the above-named officers and directors of ServiceMaster Incorporated of Delaware and filed with the Securities and Exchange Commission on behalf of such officers and directors.
/s/ Vernon T. Squires
_____________________________________
Vernon T. Squires
Attorney in fact
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PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, SERVICEMASTER INCORPORATED OF DELAWARE 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 DOWNERS GROVE, ILLINOIS, ON THE DAY OF JULY 25, 1997.
ServiceMaster Incorporated of Delaware, As Registrant
/s/ Vernon T. Squires
By: _________________________________
Vernon T. Squires
Senior Vice President and
Secretary
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PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION STATEMENT HAS BEEN SIGNED ON JULY 25, 1997 BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED:
* Vice President, Treasurer and Director of
___________________________________________ ServiceMaster Incorporated of Delaware
Ernest J. Mrozek (Principal Executive Officer)
/s/ Vernon T. Squires Vice President and Director of
___________________________________________ ServiceMaster Incorporated of Delaware
Vernon T. Squires
* Vice President, Assistant Treasurer and
___________________________________________ Director of ServiceMaster Incorporated of
Bruce T. Duncan Delaware (Principal Financial and
Accounting Officer)
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*The undersigned, by signing his name hereto, does sign and execute this Registration Statement pursuant to the Powers of Attorney executed by the above-named officers and directors of ServiceMaster Incorporated of Delaware and filed with the Securities and Exchange Commission on behalf of such officers and directors.
/s/ Vernon T. Squires
_____________________________________
Vernon T. Squires
Attorney in fact
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EXHIBIT INDEX
SEQUENTIAL
EXHIBIT PAGE
NUMBER DOCUMENT DESCRIPTION NUMBER
------- -------------------- ----------
*1.1 Form of Underwriting Agreement for the Debt Securities.
4.1 Indenture, dated as of July , 1997, among The
ServiceMaster Company, as issuer, ServiceMaster, as
guarantor, and Harris Trust and Savings Bank, as Trust-
ee.
4.2 Form of Debt Securities relating to Senior Debt Securi-
ties (included in Exhibit 4.1).
5.1 Opinion of Vernon T. Squires, Senior Vice President and
General Counsel of ServiceMaster.
12.1 Statement and Computation of ratio of earnings to fixed
charges.
23.1 Consent of Vernon T. Squires (included in Exhibit 5.1).
23.2 Consent of Arthur Andersen LLP.
24.1 Power of Attorney.
25.1 Form T-1 Statement of Eligibility of the Trustee.
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and incorporated herein by reference.
THE SERVICEMASTER COMPANY
LIMITED PARTNERSHIP
as the Company,
and
SERVICEMASTER LIMITED PARTNERSHIP
as the Guarantor,
and
HARRIS TRUST AND SAVINGS BANK
as Trustee
Indenture
Dated as of July __, 1997
TABLE OF CONTENTS*
Page
----
RECITALS OF THE COMPANY
ARTICLE 1
Definitions and Incorporation By Reference
Section 1.01. Definitions................................................ 1
Section 1.02. Other Definitions.......................................... 9
Section 1.03. Incorporation by Reference of Trust
Indenture Act.............................................. 9
Section 1.04. Rules of Construction...................................... 10
ARTICLE 2
The Securities
Section 2.01. Form and Dating............................................ 11
Section 2.02. Execution and Authentication............................... 11
Section 2.03. Amount Unlimited; Issuable in Series....................... 13
Section 2.04. Denomination and Date of Securities; Payments of Interest.. 16
Section 2.05. Registrar and Paying Agent; Agents Generally............... 17
Section 2.06. Paying Agent to Hold Money in Trust........................ 18
Section 2.07. Transfer and Exchange...................................... 18
Section 2.08. Replacement Securities..................................... 22
Section 2.09. Outstanding Securities..................................... 22
Section 2.10. Temporary Securities....................................... 23
Section 2.11. Cancellation............................................... 23
Section 2.12. CUSIP Numbers.............................................. 24
Section 2.13. Defaulted Interest......................................... 24
Section 2.14. Series May Include Tranches................................ 24
ARTICLE 3
Redemption
Section 3.01. Applicability of Article................................... 25
Section 3.02. Notice of Redemption; Partial Redemptions.................. 25
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Page
----
Section 3.03. Payment of Securities Called for Redemption................ 27
Section 3.04. Exclusion of Certain Securities from Eligibility for
Selection for Redemption.................................. 28
Section 3.05. Mandatory and Optional Sinking Funds....................... 28
ARTICLE 4
Guarantee of Debt Securities
Section 4.01. Unconditional Guarantee.................................... 31
Section 4.02. Execution of Guarantees.................................... 32
ARTICLE 5
Covenants
Section 5.01. Payment of Securities...................................... 33
Section 5.02. Maintenance of Office or Agency............................ 34
Section 5.03. Negative Pledge............................................ 35
Section 5.04. Certain Sale and Lease-back Transactions................... 37
Section 5.05. Certificate to Trustee..................................... 38
Section 5.06. Reports by the Company..................................... 39
Section 5.07. Guarantor to Maintain Office or Agency..................... 39
Section 5.08. Guarantor's Certificate to Trustee......................... 39
Section 5.09. Reports by the Guarantor................................... 39
ARTICLE 6
Successor Corporation
Section 6.01. When Company May Merge, Etc................................ 40
Section 6.02. Successor Substituted...................................... 40
Section 6.03. When Guarantor May Merge, Etc.............................. 41
Section 6.04. Successor to the Guarantor................................. 41
ARTICLE 7
Default and Remedies
Section 7.01. Events of Default.......................................... 41
Section 7.02. Acceleration............................................... 43
Section 7.03. Other Remedies............................................. 44
Section 7.04. Waiver of Past Defaults.................................... 45
Section 7.05. Control by Majority........................................ 45
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Page
----
Section 7.06. Limitations on Suits....................................... 45
Section 7.07. Rights of Holders to Receive Payment....................... 46
Section 7.08. Collection Suit by Trustee................................. 46
Section 7.09. Trustee May File Proofs of Claim........................... 47
Section 7.10. Application of Proceeds.................................... 47
Section 7.11. Restoration of Rights and Remedies......................... 48
Section 7.12. Undertaking for Costs...................................... 48
Section 7.13. Rights and Remedies Cumulative............................. 49
Section 7.14. Delay or Omission Not Waiver............................... 49
ARTICLE 8
Trustee
Section 8.01. General.................................................... 49
Section 8.02. Certain Rights of Trustee.................................. 50
Section 8.03. Individual Rights of Trustee............................... 52
Section 8.04. Trustee's Disclaimer....................................... 53
Section 8.05. Notice of Default.......................................... 53
Section 8.06. Reports by Trustee to Holders.............................. 53
Section 8.07. Compensation and Indemnity................................. 53
Section 8.08. Replacement of Trustee..................................... 54
Section 8.09. Successor Trustee by Merger, Etc........................... 56
Section 8.10. Eligibility................................................ 56
Section 8.11. Money Held in Trust........................................ 56
ARTICLE 9
Discharge of Indenture
Section 9.01. Defeasance Within One Year of Payment...................... 56
Section 9.02. Defeasance................................................. 57
Section 9.03. Covenant Defeasance........................................ 59
Section 9.04. Application of Trust Money................................. 60
Section 9.05. Repayment to Company....................................... 60
ARTICLE 10
Amendments, Supplements and Waivers
Section 10.01. Without Consent of Holders................................. 61
Section 10.02. With Consent of Holders.................................... 61
Section 10.03. Revocation and Effect of Consent........................... 63
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Page
----
Section 10.04. Notation on or Exchange of Securities...................... 64
Section 10.05. Trustee to Sign Amendments, Etc............................ 64
Section 10.06. Conformity with Trust Indenture............................ 64
ARTICLE 11
Miscellaneous
Section 11.01. Trust Indenture Act of 1939................................ 64
Section 11.02. Notices.................................................... 64
Section 11.03. Certificate and Opinion as to Conditions Precedent......... 66
Section 11.04. Statements Required in Certificate or Opinion.............. 66
Section 11.05. Evidence of Ownership...................................... 67
Section 11.06. Rules by Trustee, Paying Agent or Registrar................ 68
Section 11.07. Payment Date Other than a Business Day..................... 68
Section 11.08. Governing Law.............................................. 68
Section 11.09. No Adverse Interpretation of Other Agreements.............. 68
Section 11.10. Successors................................................. 68
Section 11.11. Duplicate Originals........................................ 68
Section 11.12. Severability............................................... 68
Section 11.13. Table of Contents, Headings, Etc........................... 68
Section 11.14. Incorporators, Stockholders, Officers and Directors of
Company Exempt from Individual Liability
Section 11.15. Judgment Currency.......................................... 69
SIGNATURES
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INDENTURE, dated as of July __, 1997, among The ServiceMaster Company Limited Partnership, a Delaware limited partnership, as the Company, ServiceMaster Limited Partnership, a Delaware limited partnership, as the Guarantor, and Harris Trust and Savings Bank, an Illinois banking corporation, as Trustee.
RECITALS
WHEREAS, the Company has duly authorized the issuance from time to time of its debentures, notes or other evidences of indebtedness to be issued in one or more series (the "Securities") up to such principal amount or amounts as may from time to time be authorized in accordance with the terms of this Indenture and to provide, among other things, for the authentication, delivery and administration thereof, the Company has duly authorized the execution and delivery of this Indenture;
WHEREAS, the Guarantor desires to make the Guarantees (as defined herein) as provided herein and has duly authorized the execution and delivery of this Indenture;
WHEREAS, all things necessary to make this Indenture a valid indenture and agreement according to its terms have been done;
NOW, THEREFORE:
In consideration of the premises and the purchases of the Securities by the holders thereof, the Company, the Guarantor and the Trustee mutually covenant and agree for the equal and proportionate benefit of the respective holders from time to time of the Securities or of any and all series thereof and of the coupons, if any, appertaining thereto as follows:
ARTICLE 1
Definitions and Incorporation by Reference
Section 1.01. Definitions.
"Agent" means any Registrar, Paying Agent, transfer agent or Authenticating Agent.
"Attributable Debt" means, when used in connection with a sale and lease- back transaction referred to in Section 5.04, on any date as of which the amount thereof is to be determined, the product of (a) the net cash proceeds from such sale and lease-back transaction multiplied by (b) a fraction, the numerator of which is the number of full years of the term of the lease relating to the property involved in such sale and lease-back transaction (without regard to any options to renew or extend such term) remaining on the date of the making of such computation and the denominator of which is the number of full years of the term of such lease measured from the first day of such term.
"Authorized Newspaper" means a newspaper (which, in the case of The City of New York, will, if practicable, be The Wall Street Journal (Eastern Edition) and in the case of London, will, if practicable, be the Financial Times (London Edition) and published in an official language of the country of publication customarily published at least once a day for at least five days in each calendar week and of general circulation in The City of New York or London, as applicable. If it shall be impractical in the opinion of the Trustee to make any publication of any notice required hereby in an Authorized Newspaper, any publication or other notice in lieu thereof which is made or given with the approval of the Trustee shall constitute a sufficient publication of such notice.
"Board of Directors" means either the Board of Directors of the Company or the Guarantor, as the case may be (or if the Company or the Guarantor, as the case may be, is organized as a partnership, the Board of Directors of the corporate general partner), or any committee of either such Board duly authorized to act hereunder.
"Board Resolution" means one or more resolutions of the board of directors of the Company or the Guarantor, or any authorized committee thereof, certified by the secretary or an assistant secretary to have been duly adopted and to be in full force and effect on the date of certification, and delivered to the Trustee.
"Business Day" means any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions are authorized or required by law or regulation to close in The City of New York or Chicago, with respect to any Security the interest on which is based on the offered quotations in the interbank Eurodollar market for dollar deposits in London, or with respect to Securities denominated in a specified currency other than United States dollars, in the principal financial center of the country of the specified currency.
"Capital Stock" means, with respect to any Person, any and all shares, interests, participations or other equivalents (however designated, whether voting or non-voting) of such Person's capital stock or equity, including, without limitation, all Common Stock and Preferred Stock.
"Commission" means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time.
"Common Stock" means, with respect to any Person, any and all shares, interests, participations or other equivalents (however designated, whether voting or non-voting) of such Person's common stock, whether now outstanding or issued after the date of this Indenture, including, without limitation, all series and classes of such common stock.
"Company" means the party named as such in the first paragraph of this Indenture until a successor replaces it pursuant to Article 6 of this Indenture and thereafter means the successor.
"Consolidated Net Worth" means, at any date of determination, the consolidated stockholders' equity of the Guarantor, as set forth on the then most recently available consolidated balance sheet of the Guarantor and its consolidated Subsidiaries.
"Corporate Trust Office" means the office of the Trustee at which the corporate trust business of the Trustee shall, at any particular time, be principally administered, which office is, at the date of this Indenture, located at Harris Trust & Savings Bank, Attention Indenture Trust, 311 West Monroe, 12th Floor, Chicago, Illinois 60606.
"Default" means any Event of Default as defined in Section 7.01 and any event that is, or after notice or passage of time or both would be, an Event of Default.
"Depositary" means, with respect to the Securities of any series issuable or issued in the form of one or more Registered Global Securities, the Person designated as Depositary by the Company pursuant to Section 2.03 until a successor Depositary shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Depositary" shall mean or include each Person who is then a Depositary hereunder, and if at any time there is more
than one such Person, "Depositary" as used with respect to the Securities of any such series shall mean the Depositary with respect to the Registered Global Securities of that series.
"Equity Interests" means (i) in the case of a corporation, capital stock,
(ii) in the case of a partnership, partnership interests (whether general or
limited) and (iii) in the case of an association or business entity other than a
corporation or a partnership, any and all shares, interests, participations,
rights or other equivalents (however designated) of corporate stock or
partnership interests or other interest or participation that confers on the
holder thereof the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Funded Debt" means all indebtedness for money borrowed, including purchase money indebtedness and indebtedness pursuant to a mandatory sinking fund or prepayment provision or otherwise, having a maturity of more than one year from the date of its creation or having a maturity of less than one year but by its terms being renewable or extendible, at the option of the obligor in respect thereof, beyond one year from the date of its creation.
"GAAP" means generally accepted accounting principles in the United States of America at the date of any computation required or permitted hereunder.
"Guarantees" means the guarantees of the Guarantor endorsed or to be endorsed on the Securities authenticated and delivered hereunder; and "related Guarantee" means, with respect to any Security, the Guarantee endorsed or to be endorsed on such Security.
"Guarantor" means the party named as such in the first paragraph of this Indenture until a successor replaces it pursuant to Article 6 of this Indenture and thereafter means the successor.
"Holder" or "Securityholder" means the registered holder of any Security with respect to Registered Securities and the bearer of any Unregistered Security or any coupon appertaining thereto, as the case may be.
"Indenture" means this Indenture as originally executed or as it may be amended or supplemented from time to time by one or more indentures supplemental to this Indenture entered into pursuant to the applicable provisions of this Indenture and shall include the forms and terms of the Securities of each series established as contemplated pursuant to Sections 2.01 and 2.03.
"Lien" means, with respect to any property or asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind. For the purposes of this Indenture, the Company, the Guarantor or any Subsidiary shall be deemed to own subject to a Lien any property or asset which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such asset.
"Non-U.S. Subsidiary" means any Subsidiary that is not a corporation, partnership or other entity created or organized in or under the laws of the United States of America or any state thereof.
"Officer" means, with respect to the Company or the Guarantor, the chairman of the board of directors, the president or chief executive officer, any vice president, the chief financial officer, the treasurer or any assistant treasurer, or the secretary or any assistant secretary.
"Officers' Certificate" means a certificate signed in the name of the Company or the Guarantor (i) by the chairman of the board of directors, the president or chief executive officer or a vice president and (ii) by the chief financial officer, the treasurer or any assistant treasurer, or the secretary or any assistant secretary, complying with Section 11.04 and delivered to the Trustee. Each such certificate shall comply with Section 314 of the Trust Indenture Act and include (except as otherwise expressly provided in this Indenture) the statements provided in Section 11.04.
"Opinion of Counsel" means a written opinion signed by legal counsel, who may be an employee of or counsel to the Company or the Guarantor, satisfactory to the Trustee and complying with Section 11.04. Each such opinion shall comply with Section 314 of the Trust Indenture Act and include the statements provided in Section 11.04, if and to the extent required thereby.
"original issue date" of any Security (or portion thereof) means the earlier of (a) the date of authentication of such Security or (b) the date of any Security (or portion thereof) for which such Security was issued (directly or indirectly) on registration of transfer, exchange or substitution.
"Original Issue Discount Security" means any Security that provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the maturity thereof pursuant to Section 7.02.
"Periodic Offering" means an offering of Securities of a series from time to time, the specific terms of which Securities, including, without limitation, the
rate or rates of interest, if any, thereon, the stated maturity or maturities thereof and the redemption provisions, if any, with respect thereto, are to be determined by the Company or its agents upon the issuance of such Securities.
"Permitted Receivables Financing" means a transaction or series of transactions (including amendments, supplements, extensions, renewals, replacements, refinancings or modifications thereof) pursuant to which a Securitization Subsidiary purchases Receivables and Related Assets from the Company or any Subsidiary and finances such Receivables and Related Assets through the issuance of Equity Interests or indebtedness (either directly or through a trust) or through the sale of the Receivables and Related Assets or a fractional undivided interest in the Receivables and Related Assets; provided that (i) the Board of Directors of the Company or the Guarantor, as the case may be, shall have determined in good faith that such Permitted Receivables Financing is economically fair and reasonable to the Company, (ii) all sales of Receivables and Related Assets to the Securitization Subsidiary shall be made at fair market value (as determined in good faith by the Board of Directors of the Company or the Guarantor), (iii) the financing terms, covenants, termination events and other provisions thereof shall be market terms (as determined in good faith by the Board of Directors of the Company or the Guarantor), (iv) no portion of the indebtedness of a Securitization Subsidiary will be guaranteed by or will be recourse to the Company, the Guarantor or any Significant Subsidiary (other than recourse for customary representations, warranties, covenants and indemnities, none of which shall relate to the collectibility (as opposed to the status) of the Receivables and Related Assets) and (v) neither the Company, the Guarantor nor any Subsidiary shall have any obligation to maintain or preserve the Securitization Subsidiary's financial condition.
"Person" means an individual, a corporation, a partnership, a limited liability company, an association, a trust or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.
"Preferred Stock" means, with respect to any Person, any and all shares, interests, participations or other equivalents (however designated, whether voting or non-voting) of such Person's preferred or preference stock, whether now outstanding or issued after the date of the Indenture, including, without limitation, all series and classes of such preferred or preference stock.
"Principal" of a Security means the principal amount of, and, unless the context indicates otherwise, includes any premium payable on, the Security.
"Principal Property" means the Company's principal office building and any manufacturing plant or principal research facility of any of the Company, the Guarantor or any Significant Subsidiary which is located within the United States of America, except any such principal office building, plant or facility which the Board of Directors by resolution declares is not of material importance to the total business conducted by the Company, the Guarantor and their respective Subsidiaries as an entirety.
"Prospectus" means the Prospectus dated July __, 1997 issued by the Company in connection with its issuance, from time to time, of Securities under this Indenture.
"Receivables and Related Assets" means accounts receivable and instruments, chattel paper, obligations, general intangibles and other similar assets, in each case, relating to such receivables, including interest in merchandise or goods, the sale or lease of which gave rise to such receivables, related contractual rights, guarantees, insurance proceeds, collections, other related assets, and proceeds of all of the foregoing.
"Registered Global Security" means a Security evidencing all or a part of a series of Registered Securities, issued to the Depositary for such series in accordance with Section 2.02, and bearing the legend prescribed in Section 2.02.
"Registered Security" means any Security registered on the Security Register (as defined in Section 2.05).
"Responsible Officer" means, when used with respect to the Trustee, any senior trust officer, any vice president, any trust officer, any assistant trust officer, or any other officer or assistant officer of the Trustee customarily performing functions similar to those performed by the persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of his knowledge of and familiarity with the particular subject.
"Securities" means any of the securities, as defined in the first paragraph of the recitals hereof, that are authenticated and delivered under this Indenture and, unless the context indicates otherwise, shall include any coupon appertaining thereto.
"Securities Act" means the Securities Act of 1933, as amended.
"Securitization Subsidiary" means a Wholly Owned Subsidiary which is established for the limited purpose of acquiring and financing Receivables and Related Assets and engaging in activities ancillary thereto.
"Significant Subsidiary" means, at any time, any Subsidiary that would be a Significant Subsidiary at such time, as such term is defined in Regulation S-X promulgated by the Commission, as in effect on the date of the Indenture.
"Subsidiary" means, with respect to any Person, any corporation, association or other business entity of which more than 50% of the outstanding Voting Stock (in the case of a corporation) or other ownership interest is owned, directly or indirectly, by such Person and one or more other Subsidiaries of such Person.
"Total Assets" means, at any date of determination, the total assets of the Guarantor and its Subsidiaries on a consolidated basis as set forth on the then most recently available consolidated balance sheet of the Guarantor and its consolidated Subsidiaries prepared in accordance with GAAP.
"Trustee" means the party named as such in the first paragraph of this Indenture until a successor replaces it in accordance with the provisions of Article 8 and thereafter means such successor.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended (15 U.S. Code (S)(S) 77aaa-77bbbb), as it may be amended from time to time. "UCC" means the Uniform Commercial Code, as in effect in each applicable jurisdiction.
"United States Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as amended and as codified in Title 11 of the United States Code, as amended from time to time hereafter, or any successor federal bankruptcy law.
"Unregistered Security" means any Security other than a Registered Security.
"U.S. Government Obligations" means securities that are (i) direct obligations of the United States of America for the payment of which its full faith and credit is pledged or (ii) obligations of an agency or instrumentality of the United States of America the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, and shall also
include a depository receipt issued by a bank or trust company as custodian with respect to any such U.S. Government Obligation or a specific payment of interest on or principal of any such U.S. Government Obligation held by such custodian for the account of the holder of a depository receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of interest on or principal of the U.S. Government Obligation evidenced by such depository receipt.
"Voting Stock" means with respect to any Person, Capital Stock of any class or kind ordinarily having the power to vote for the election of directors, managers or other voting members of the governing body of such Person.
"Wholly Owned Subsidiary" means a Subsidiary all of the Equity Interests of which (except directors' qualifying shares) is at the time owned directly or indirectly by the Company.
"Yield to Maturity" means, as the context may require, the yield to maturity (i) on a series of Securities or (ii) if the Securities of a series are issuable from time to time, on a Security of such series, calculated at the time of issuance of such series in the case of clause (i) or at the time of issuance of such Security of such series in the case of clause (ii), or, if applicable, at the most recent redetermination of interest on such series or on such Security, and calculated in accordance with the constant interest method or such other accepted financial practice as is specified in the terms of such Security.
Section 1.02. Other Definitions. Each of the following terms is defined in the section set forth opposite such term:
Term Section
Authenticating Agent 2.02
cash transaction 8.03
Dollars 5.02
Event of Default 7.01
Judgment Currency 11.15
mandatory sinking fund payment 3.05
optional sinking fund payment 3.05
Paying Agent 2.05
record date 2.04
Registrar 2.05
|
Term Section
Required Currency 11.15
Security Register 2.05
self-liquidating paper 8.03
sinking fund payment date 3.05
tranche 2.14
|
Section 1.03. Incorporation by Reference of Trust Indenture Act. Whenever this Indenture refers to a provision of the Trust Indenture Act, the provision is incorporated by reference in and made a part of this Indenture. The following terms used in this Indenture that are defined by the Trust Indenture Act have the following meanings:
"indenture securities" means the Securities;
"indenture security holder" means a Holder or a Securityholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the indenture securities means the Company or any other obligor on the Securities.
All other terms used in this Indenture that are defined by the Trust Indenture Act, defined by reference in the Trust Indenture Act to another statute or defined by a rule of the Commission and not otherwise defined herein have the meanings assigned to them therein.
Section 1.04. Rules of Construction. Unless the context otherwise requires:
(i) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;
(ii) words in the singular include the plural, and words in the plural include the singular;
(iii) "herein," "hereof" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision;
(iv) all references to Sections or Articles refer to Sections or Articles of this Indenture unless otherwise indicated; and
(v) use of masculine, feminine or neuter pronouns should not be deemed a limitation, and the use of any such pronouns should be construed to include, where appropriate, the other pronouns.
ARTICLE 2
The Securities
Section 2.01. Form and Dating. The Securities of each series shall be substantially in such form or forms (not inconsistent with this Indenture) as shall be established by or pursuant to one or more Board Resolutions or in one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture and may have imprinted or otherwise reproduced thereon such legend or legends or endorsements, not inconsistent with the provisions of this Indenture, as may be required to comply with any law, or with any rules of any securities exchange or usage, all as may be determined by the officers executing such Securities as evidenced by their execution of the Securities. Unless otherwise so established, Unregistered Securities shall have coupons attached.
The Guarantees to be endorsed on the Securities of each series shall be in substantially the form set forth in Section 4.01, or as shall be established by or pursuant to one or more Board Resolutions of the Guarantor or in one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with any law or with any rules made pursuant thereto or with any rules of any securities exchange or to conform to general usage or as may, consistently herewith, be determined by the officers executing such Guarantees, as evidenced by their execution of such Guarantees.
Section 2.02. Execution and Authentication. Two Officers shall execute the Securities (other than coupons) for the Company by facsimile or manual signature in the name and on behalf of the Company. The seal of the Company, if any, shall be reproduced on the Securities. If an Officer whose signature is on a Security no longer holds that office at the time the Security is authenticated, the Security shall nevertheless be valid.
The Trustee, at the expense of the Company, may appoint an authenticating agent (the "Authenticating Agent") to authenticate Securities (other than coupons). The Authenticating Agent may authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such Authenticating Agent.
A Security (other than coupons) shall not be valid until the Trustee or Authenticating Agent manually signs the certificate of authentication on the Security. The signature shall be conclusive evidence that the Security has been authenticated under this Indenture.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series having attached
thereto appropriate coupons, if any, executed by the Company and having endorsed
thereon the Guarantees executed by the Guarantor to the Trustee for
authentication together with the applicable documents referred to below in this
Section, and the Trustee shall thereupon authenticate and deliver such
Securities to or upon the written order of the Company. In authenticating any
Securities of a series, the Trustee shall be entitled to receive prior to the
first authentication of any Securities of such series, and (subject to Article
8) shall be fully protected in relying upon, unless and until such documents
have been superseded or revoked:
(1) any Board Resolution and/or executed supplemental indenture referred to in Sections 2.01 and 2.03 by or pursuant to which the forms and terms of the Securities of that series and the related Guarantees were established;
(2) an Officers' Certificate setting forth the form or forms and terms of the Securities and the related Guarantees, stating that the form or forms and terms of the Securities of such series and the related Guarantees have been, or will be when established in accordance with such procedures as shall be referred to therein, established in compliance with this Indenture; and
(3) an Opinion of Counsel substantially to the effect that (i) the form or forms and terms of the Securities of such series have been, or will be when established in accordance with such procedures as shall be referred to therein, established in compliance with this Indenture, (ii) that the supplemental indenture, to the extent applicable, and Securities have been duly authorized and, if executed and authenticated in accordance with the provisions of the Indenture and delivered to and duly paid for by the purchasers thereof on the date of such opinion, would be entitled to the benefits of the Indenture and would be valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, receivership, moratorium and other similar laws affecting creditors' rights generally, general principles of equity, and such other matters as shall be specified therein and (iii) the Guarantees endorsed on the Securities have been duly authorized and, when executed by the Guarantor in accordance with the provisions of the Indenture and delivered to the purchasers of the Securities on the date of such opinion, would be entitled to the benefits of the Indenture and would be valid and binding obligations of the Guarantor, enforceable against the Guarantor in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, receivership, moratorium and other similar laws affecting creditors' rights generally, general principles of equity, and such other matters as shall be specified therein.
If the Company shall establish pursuant to Section 2.03 that the Securities
of a series or a portion thereof are to be issued in the form of one or more
Registered Global Securities, then the Company shall execute and the Trustee
shall authenticate and deliver one or more Registered Global Securities that (i)
shall represent and shall be denominated in an amount equal to the aggregate
principal amount of all of the Securities of such series issued in such form and
not yet canceled, (ii) shall be registered in the name of the Depositary for
such Registered Global Security or Securities or the nominee of such Depositary,
(iii) shall be delivered by the Trustee to such Depositary or its custodian or
pursuant to such Depositary's instructions and (iv) shall bear a legend
substantially to the following effect: "Unless and until it is exchanged in
whole or in part for Securities in definitive registered form, this Security may
not be transferred except as a whole by the Depositary to the nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary."
Section 2.03. Amount Unlimited; Issuable in Series. The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series and each such series shall rank equally and pari passu with all other unsecured and unsubordinated debt of the Company. There shall be established in or pursuant to Board Resolution (or pursuant to the action of Persons to whom such authority is delegated in such Board Resolution) or one or more indentures supplemental hereto, prior to the initial issuance of Securities of any series, subject to the last sentence of this Section 2.03,
(1) the designation of the Securities of the series, which shall distinguish the Securities of the series from the Securities of all other series;
(2) any limit upon the aggregate principal amount of the Securities of the series that may be authenticated and delivered under this Indenture and any limitation on the ability of the Company to increase such aggregate principal amount after the initial issuance of the Securities of that series (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, or upon redemption of, other Securities of the series pursuant hereto);
(3) the date or dates on which the principal of the Securities of the series is payable (which date or dates may be fixed or extendible);
(4) the rate or rates (which may be fixed or variable) per annum at which the Securities of the series shall bear interest, if any, the date or dates from which such interest shall accrue, on which such interest shall be payable and (in the case of Registered Securities) on which a record shall be taken for the determination of Holders to whom interest is payable and/or the method by which such rate or rates or date or dates shall be determined;
(5) if other than as provided in Section 5.02, the place or places where the principal of and any interest on Securities of the series shall be payable, any Registered Securities of the series may be surrendered for exchange, notices, demands to or upon the Company in respect of the Securities of the series and this Indenture may be served and notice to Holders may be published;
(6) the right, if any, of the Company to redeem Securities of the series, in whole or in part, at its option and the period or periods within which, the price or prices at which and any terms and conditions upon which Securities of the series may be so redeemed, pursuant to any sinking fund or otherwise;
(7) the obligation, if any, of the Company to redeem, purchase or repay Securities of the series pursuant to any mandatory redemption, sinking fund or analogous provisions or at the option of a Holder thereof and the price or prices at which and the period or periods within which and any of the terms and conditions upon which Securities of the series shall be redeemed, purchased or repaid, in whole or in part, pursuant to such obligation;
(8) if other than denominations of $1,000 and any integral multiple thereof, the denominations in which Securities of the series shall be issuable;
(9) if other than the Principal thereof, the portion of the Principal of Securities of the series which shall be payable upon declaration of acceleration of the maturity thereof;
(10) if other than the coin or currency in which the Securities of the series are denominated, the coin or currency in which payment of the Principal of or interest on the Securities of the series shall be payable or if the amount of payments of Principal of and/or interest on the Securities of the series may be determined with reference to an index based on a coin or currency other than that in which the Securities of the series are denominated, the manner in which such amounts shall be determined;
(11) if other than the currency of the United States of America, the currency or currencies, including composite currencies, in which payment of the Principal of and interest on the Securities of the series shall be payable, and the manner in which any such currencies shall be valued against other currencies in which any other Securities shall be payable;
(12) whether the Securities of the series or any portion thereof will be issuable as Registered Securities (and if so, whether such Securities will be issuable as Registered Global Securities) or Unregistered Securities (with or without coupons), or any combination of the foregoing, any restrictions applicable to the offer, sale or delivery of Unregistered Securities or the payment of interest thereon and, if other than as provided
herein, the terms upon which Unregistered Securities of any series may be exchanged for Registered Securities of such series and vice versa;
(13) whether and under what circumstances the Company will pay additional amounts on the Securities of the series held by a person who is not a U.S. person in respect of any tax, assessment or governmental charge withheld or deducted and, if so, whether the Company will have the option to redeem such Securities rather than pay such additional amounts;
(14) if the Securities of the series are to be issuable in definitive form (whether upon original issue or upon exchange of a temporary Security of such series) only upon receipt of certain certificates or other documents or satisfaction of other conditions, the form and terms of such certificates, documents or conditions;
(15) any trustees, depositaries, authenticating or paying agents, transfer agents or the registrar or any other agents with respect to the Securities of the series;
(16) provisions, if any, for the defeasance of the Securities of the series (including provisions permitting defeasance of less than all Securities of the series), which provisions may be in addition to, in substitution for, or in modification of (or any combination of the foregoing) the provisions of Article 9;
(17) if the Securities of the series are issuable in whole or in part as one or more Registered Global Securities, the identity of the Depositary for such Registered Global Security or Securities;
(18) any addition to or modification or deletion of any Events of Default set forth in Article 7 or covenant set forth in Article 5 pertaining to the Securities of the series;
(19) the Guarantees of the Securities of such series pursuant to Article 4 hereof; and
(20) any other terms of the Securities of the series (which terms shall not be inconsistent with the provisions of this Indenture).
All Securities of any one series and coupons, if any, appertaining thereto shall be substantially identical, except in the case of Registered Securities as to date and denomination, except in the case of any Periodic Offering and except as
may otherwise be provided by or pursuant to the Board Resolution referred to above or as set forth in any such indenture supplemental hereto. All Securities of any one series need not be issued at the same time and may be issued from time to time, consistent with the terms of this Indenture, if so provided by or pursuant to such Board Resolution or in any such indenture supplemental hereto and any forms and terms of Securities to be issued from time to time may be completed and established from time to time prior to the issuance thereof by procedures described in such Board Resolution or supplemental indenture.
Section 2.04. Denomination and Date of Securities; Payments of Interest. The Securities of each series shall be issuable as Registered Securities or Unregistered Securities in denominations established as contemplated by Section 2.03 or, if not so established with respect to Securities of any series, in denominations of $1,000 and any integral multiple thereof. The Securities of each series shall be numbered, lettered or otherwise distinguished in such manner or in accordance with such plan as the Officers of the Company executing the same may determine, as evidenced by their execution thereof.
Each Security shall be dated the date of its authentication. The Securities of each series shall bear interest, if any, from the date, and such interest and shall be payable on the dates, established as contemplated by Section 2.03.
The person in whose name any Registered Security of any series is registered at the close of business on any record date applicable to a particular series with respect to any interest payment date for such series shall be entitled to receive the interest, if any, payable on such interest payment date notwithstanding any transfer or exchange of such Registered Security subsequent to the record date and prior to such interest payment date, except if and to the extent the Company shall default in the payment of the interest due on such interest payment date for such series, in which case the provisions of Section 2.13 shall apply. The term "record date" as used with respect to any interest payment date (except a date for payment of defaulted interest) for the Securities of any series shall mean the date specified as such in the terms of the Registered Securities of such series established as contemplated by Section 2.03, or, if no such date is so established, the fifteenth day next preceding such interest payment date, whether or not such record date is a Business Day.
Section 2.05. Registrar and Paying Agent; Agents Generally. The Company shall maintain an office or agency where Securities may be presented for registration, registration of transfer or for exchange (the "Registrar") and an office or agency where Securities may be presented for payment (the "Paying Agent"), which shall be in the Borough of Manhattan, The City of New York.
The Company shall cause the Registrar to keep a register of the Registered Securi ties and of their registration, transfer and exchange (the "Security Register"). The Company may have one or more additional Paying Agents or transfer agents with respect to any series.
The Company shall enter into an appropriate agency agreement with any Agent not a party to this Indenture. The agreement shall implement the provisions of this Indenture and the Trust Indenture Act that relate to such Agent. The Company shall give prompt written notice to the Trustee of the name and address of any Agent and any change in the name or address of an Agent. If the Company fails to maintain a Registrar or Paying Agent, the Trustee shall act as such. The Company may remove any Agent upon written notice to such Agent and the Trustee; provided that no such removal shall become effective until (i) the acceptance of an appointment by a successor Agent to such Agent as evidenced by an appropriate agency agreement entered into by the Company and such successor Agent and delivered to the Trustee or (ii) notification to the Trustee that the Trustee shall serve as such Agent until the appointment of a successor Agent in accordance with clause (i) of this proviso. The Company or any affiliate of the Company may act as Paying Agent or Registrar; provided that neither the Company nor an affiliate of the Company shall act as Paying Agent in connection with the defeasance of the Securities or the discharge of this Indenture under Article 9.
The Company initially appoints the Trustee as Registrar, Paying Agent and Authenticating Agent. If, at any time, the Trustee is not the Registrar, the Registrar shall make available to the Trustee ten days prior to each interest payment date and at such other times as the Trustee may reasonably request the names and addresses of the Holders as they appear in the Security Register.
Section 2.06. Paying Agent to Hold Money in Trust. Not later than 10:00
a.m. New York City time on each due date of any Principal or interest on any
Securities, the Company shall deposit with the Paying Agent money in immediately
available funds sufficient to pay such Principal or interest. The Company shall
require each Paying Agent other than the Trustee to agree in writing that such
Paying Agent shall hold in trust for the benefit of the Holders of such
Securities or the Trustee all money held by the Paying Agent for the payment of
Principal of and interest on such Securities and shall promptly notify the
Trustee of any default by the Company in making any such payment. The Company at
any time may require a Paying Agent to pay all money held by it to the Trustee
and account for any funds disbursed, and the Trustee may at any time during the
continuance of any payment default, upon written request to a Paying Agent,
require such Paying Agent to pay all money held by it to the Trustee and to
account for any funds disbursed. Upon doing so, the Paying Agent shall have no further liability for the money so paid over to the Trustee. If the Company or any affiliate of the Company acts as Paying Agent, it will, on or before each due date of any Principal of or interest on any Securities, segregate and hold in a separate trust fund for the benefit of the Holders thereof a sum of money sufficient to pay such Principal or interest so becoming due until such sum of money shall be paid to such Holders or otherwise disposed of as provided in this Indenture, and will promptly notify the Trustee in writing of its action or failure to act as required by this Section.
Section 2.07. Transfer and Exchange. Unregistered Securities (except for any temporary global Unregistered Securities) and coupons (except for coupons attached to any temporary global Unregistered Securities) shall be transferable by delivery.
At the option of the Holder thereof, Registered Securities of any series
(other than a Registered Global Security, except as set forth below) may be
exchanged for a Registered Security or Registered Securities of such series and
tenor having authorized denominations and an equal aggregate principal amount,
upon surrender of such Registered Securities to be exchanged at the agency of
the Company that shall be maintained for such purpose in accordance with Section
2.05 and upon payment, if the Company shall so require, of the charges
hereinafter provided. If the Securities of any series are issued in both
registered and unregistered form, except as otherwise established pursuant to
Section 2.03, at the option of the Holder thereof, Unregistered Securities of
any series may be exchanged for Registered Securities of such series and tenor
having authorized denominations and an equal aggregate principal amount, upon
surrender of such Unregistered Securities to be exchanged at the agency of the
Company that shall be maintained for such purpose in accordance with Section
5.02, with, in the case of Unregistered Securities that have coupons attached,
all unmatured coupons and all matured coupons in default thereto appertaining,
and upon payment, if the Company shall so require, of the charges hereinafter
provided. At the option of the Holder thereof, if Unregistered Securities of any
series, maturity date, interest rate and original issue date are issued in more
than one authorized denomination, except as otherwise established pursuant to
Section 2.03, such Unregistered Securities may be exchanged for Unregistered
Securities of such series and tenor having authorized denominations and an equal
aggregate principal amount, upon surrender of such Unregistered Securities to be
exchanged at the agency of the Company that shall be maintained for such purpose
in accordance with Section 5.02, with, in the case of Unregistered Securities
that have coupons attached, all unmatured coupons and all matured coupons in
default thereto appertaining, and upon payment, if the Company shall so require,
of the charges hereinafter
provided. Registered Securities of any series may not be exchanged for Unregistered Securities of such series. Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Securities which the Holder making the exchange is entitled to receive.
All Registered Securities presented for registration of transfer, exchange, redemption or payment shall be duly endorsed by, or be accompanied by a written instrument or instruments of transfer in form satisfactory to the Company and the Trustee duly executed by, the holder or his attorney duly authorized in writing.
The Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any exchange or registration of transfer of Securities. No service charge shall be made for any such transaction.
Notwithstanding any other provision of this Section 2.07, unless and until it is exchanged in whole or in part for Securities in definitive registered form, a Registered Global Security representing all or a portion of the Securities of a series may not be transferred except as a whole by the Depositary for such series to a nominee of such Depositary or by a nominee of such Depositary to such Depositary or another nominee of such Depositary or by such Depositary or any such nominee to a successor Depositary for such series or a nominee of such successor Depositary.
If at any time the Depositary for any Registered Global Securities of any series notifies the Company that it is unwilling or unable to continue as Depositary for such Registered Global Securities or if at any time the Depositary for such Registered Global Securities shall no longer be eligible under applicable law, the Company shall appoint a successor Depositary eligible under applicable law with respect to such Registered Global Securities. If a successor Depositary eligible under applicable law for such Registered Global Securities is not appointed by the Company within 90 days after the Company receives such notice or becomes aware of such ineligibility, the Company will execute, and the Trustee, upon receipt of the Company's order for the authentication and delivery of definitive Registered Securities of such series and tenor, will authenticate and deliver Registered Securities of such series and tenor, in any authorized denominations, in an aggregate principal amount equal to the principal amount of such Registered Global Securities, in exchange for such Registered Global Securities.
The Company may at any time and in its sole discretion determine that any Registered Global Securities of any series shall no longer be maintained in global form. In such event, the Company will execute, and the Trustee, upon receipt of the Company's order for the authentication and delivery of definitive Registered Securities of such series and tenor, will authenticate and deliver, Registered Securities of such series and tenor in any authorized denominations, in an aggregate principal amount equal to the principal amount of such Registered Global Securities, in exchange for such Registered Global Securities.
Any time the Registered Securities of any series are not in the form of Registered Global Securities pursuant to the preceding two paragraphs, the Company agrees to supply the Trustee with a reasonable supply of certificated Registered Securities without the legend required by Section 2.02 and the Trustee agrees to hold such Registered Securities in safekeeping until authenticated and delivered pursuant to the terms of this Indenture.
If established by the Company pursuant to Section 2.03 with respect to any Registered Global Security, the Depositary for such Registered Global Security may surrender such Registered Global Security in exchange in whole or in part for Registered Securities of the same series and tenor in definitive registered form on such terms as are acceptable to the Company and such Depositary. Thereupon, the Company shall execute, and the Trustee shall authenticate and deliver, without service charge,
(i) to the Person specified by such Depositary new Registered Securities of the same series and tenor, of any authorized denominations as requested by such Person, in an aggregate principal amount equal to and in exchange for such Person's beneficial interest in the Registered Global Security; and
(ii) to such Depositary a new Registered Global Security in a denomination equal to the difference, if any, between the principal amount of the surrendered Registered Global Security and the aggregate principal amount of Registered Securities authenticated and delivered pursuant to clause (i) above.
Registered Securities issued in exchange for a Registered Global Security pursuant to this Section 2.07 shall be registered in such names and in such authorized denominations as the Depositary for such Registered Global Security, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee or an agent of the Company or the Trustee. The Trustee or
such agent shall deliver such Securities to or as directed by the Persons in whose names such Securities are so registered.
All Securities issued upon any transfer or exchange of Securities shall have a Guarantee or Guarantees endorsed thereon to the same extent as the Securities surrendered upon such transfer or exchange, and shall be valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such transfer or exchange.
Notwithstanding anything herein or in the forms or terms of any Securities to the contrary, none of the Company, the Trustee or any agent of the Company or the Trustee shall be required to exchange any Unregistered Security for a Registered Security if such exchange would result in adverse Federal income tax consequences to the Company (such as, for example, the inability of the Company to deduct from its income, as computed for Federal income tax purposes, the interest payable on the Unregistered Securities) under then applicable United States Federal income tax laws. The Trustee and any such agent shall be entitled to rely on an Officers' Certificate or an Opinion of Counsel in determining such result.
The Registrar shall not be required (i) to issue, authenticate, register the transfer of or exchange Securities of any series for a period of 15 days before a selection of such Securities to be redeemed or (ii) to register the transfer of or exchange any Security selected for redemption in whole or in part.
Section 2.08. Replacement Securities. If a defaced or mutilated Security of any series is surrendered to the Trustee or if a Holder claims that its Security of any series has been lost, destroyed or wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement Security of such series and tenor and principal amount bearing a number not contemporaneously outstanding. If required by the Trustee or the Company, an indemnity bond must be furnished that is sufficient in the judgment of both the Trustee and the Company to protect the Company, the Trustee and any Agent from any loss that any of them may suffer if a Security is replaced. The Company may charge such Holder for its expenses and the expenses of the Trustee (including without limitation attorneys' fees and expenses) in replacing a Security. In case any such mutilated, defaced, lost, destroyed or wrongfully taken Security has become or is about to become due and payable, the Company in its discretion may pay such Security instead of issuing a new Security in replacement thereof.
Every replacement Security is an additional obligation of the Company and shall be entitled to the benefits of this Indenture.
To the extent permitted by law, the foregoing provisions of this Section are exclusive with respect to the replacement or payment of mutilated, destroyed, lost or wrongfully taken Securities.
Section 2.09. Outstanding Securities. Securities outstanding at any time are all Securities that have been authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation and those described in this Section as not outstanding.
If a Security is replaced pursuant to Section 2.08, it ceases to be outstanding unless and until the Trustee and the Company receive proof satisfactory to them that the replaced Security is held by a holder in due course.
If the Paying Agent (other than the Company or an affiliate of the Company) holds on the maturity date or any redemption date or date for repurchase of the Securities money sufficient to pay Securities payable or to be redeemed or repurchased on that date, then on and after that date such Securities cease to be outstanding and interest on them shall cease to accrue.
A Security does not cease to be outstanding because the Company or one of its affiliates holds such Security, provided, however, that, in determining whether the Holders of the requisite principal amount of the outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Securities owned by the Company or any affiliate of the Company shall be disregarded and deemed not to be outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities as to which a Responsible Officer of the Trustee has received written notice to be so owned shall be so disregarded. Any Securities so owned which are pledged by the Company, or by any affiliate of the Company, as security for loans or other obligations, otherwise than to another such affiliate of the Company, shall be deemed to be outstanding, if the pledgee is entitled pursuant to the terms of its pledge agreement and is free to exercise in its or his discretion the right to vote such securities, uncontrolled by the Company or by any such affiliate.
Section 2.10. Temporary Securities. Until definitive Securities of any series are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Securities of such series. Temporary Securities of any series shall be substantially in the form of definitive Securities of such series but
may have insertions, substitutions, omissions and other variations determined to be appropriate by the Officers executing the temporary Securities, as evidenced by their execution of such temporary Securities. If temporary Securities of any series are issued, the Company will cause definitive Securities of such series to be prepared without unreasonable delay. After the preparation of definitive Securities of any series, the temporary Securities of such series shall be exchangeable for definitive Securities of such series and tenor upon surrender of such temporary Securities at the office or agency of the Company designated for such purpose pursuant to Section 5.02, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities of any series the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a like principal amount of definitive Securities of such series and tenor and authorized denominations. Until so exchanged, the temporary Securities of any series shall be entitled to the same benefits under this Indenture as definitive Securities of such series.
Section 2.11. Cancellation. The Company at any time may deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and may deliver to the Trustee for cancellation any Securities previously authenticated hereunder which the Company has not issued and sold. The Registrar, any transfer agent and the Paying Agent shall forward to the Trustee any Securities surrendered to them for transfer, exchange or payment. The Trustee shall cancel and destroy all Securities surrendered for transfer, exchange, payment or cancellation and shall deliver a certificate of destruction to the Company. The Company may not issue new Securities to replace Securities it has paid in full or delivered to the Trustee for cancellation.
Section 2.12. CUSIP Numbers. The Company in issuing the Securities may use "CUSIP" and "CINS" numbers (if then generally in use), and the Trustee shall use CUSIP numbers or CINS numbers, as the case may be, in notices of redemption or exchange as a convenience to Holders and no representation shall be made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of redemption or exchange.
Section 2.13. Defaulted Interest. If the Company defaults in a payment of interest on the Securities, it shall pay, or shall deposit with the Paying Agent money in immediately available funds sufficient to pay, the defaulted interest plus (to the extent lawful) any interest payable on the defaulted interest (as may be specified in the terms thereof, established pursuant to Section 2.03) to the Persons who are Holders on a subsequent special record date, which shall mean the 15th day next preceding the date fixed by the Company for the payment of defaulted
interest, whether or not such day is a Business Day. At least 15 days before such special record date, the Company shall mail to each Holder and to the Trustee a notice that states the special record date, the payment date and the amount of defaulted interest to be paid.
Section 2.14. Series May Include Tranches. A series of Securities may
include one or more tranches (each a "tranche") of Securities, including
Securities issued in a Periodic Offering. The Securities of different tranches
may have one or more different terms, including authentication dates and public
offering prices, but all the Securities within each such tranche shall have
identical terms, including authentication date and public offering price.
Notwithstanding any other provision of this Indenture, with respect to Sections
2.02 (other than the fourth paragraph thereof) through 2.04, 2.07, 2.08, 2.10,
3.01 through 3.05, 5.02, 7.01 through 7.14, 9.01 through 9.05 and 10.02, if any
series of Securities includes more than one tranche, all provisions of such
sections applicable to any series of Securities shall be deemed equally
applicable to each tranche of any series of Securities in the same manner as
though originally designated a series unless otherwise provided with respect to
such series or tranche pursuant to Section 2.03. In particular, and without
limiting the scope of the next preceding sentence, any of the provisions of such
sections which provide for or permit action to be taken with respect to a series
of Securities shall also be deemed to provide for and permit such action to be
taken instead only with respect to Securities of one or more tranches within
that series (and such provisions shall be deemed satisfied thereby), even if no
comparable action is taken with respect to Securities in the remaining tranches
of that series.
ARTICLE 3
Redemption
Section 3.01. Applicability of Article. The provisions of this Article shall be applicable to the Securities of any series which are redeemable before their maturity or to any sinking fund for the retirement of Securities of a series except as otherwise specified as contemplated by Section 2.03 for Securities of such series.
Section 3.02. Notice of Redemption; Partial Redemptions. Notice of
redemption to the Holders of Registered Securities of any series to be redeemed
as a whole or in part at the option of the Company shall be given by mailing
notice of such redemption by first class mail, postage prepaid, at least 30 days
and not
more than 60 days prior to the date fixed for redemption to such Holders of Registered Securities of such series at their last addresses as they shall appear upon the registry books. Notice of redemption to the Holders of Unregistered Securities of any series to be redeemed as a whole or in part who have filed their names and addresses with the Trustee pursuant to Section 313(c)(2) of the Trust Indenture Act, shall be given by mailing notice of such redemption, by first class mail, postage prepaid, at least 30 days and not more than 60 days prior to the date fixed for redemption, to such Holders at such addresses as were so furnished to the Trustee (and, in the case of any such notice given by the Company, the Trustee shall make such information available to the Company for such purpose). Notice of redemption to all other Holders of Unregistered Securities of any series to be redeemed as a whole or in part shall be published in an Authorized Newspaper in The City of New York or with respect to any Security the interest on which is based on the offered quotations in the interbank Eurodollar market for dollar deposits in an Authorized Newspaper in London, in each case, once in each of three successive calendar weeks, the first publication to be not less than 30 days nor more than 60 days prior to the date fixed for redemption. Any notice which is mailed or published in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the Holder receives the notice. Failure to give notice by mail, or any defect in the notice to the Holder of any Security of a series designated for redemption as a whole or in part shall not affect the validity of the proceedings for the redemption of any other Security of such series.
The notice of redemption to each such Holder shall specify the principal amount of each Security of such series held by such Holder to be redeemed, the CUSIP numbers of the Securities to be redeemed, the date fixed for redemption, the redemption price, the place or places of payment, that payment will be made upon presentation and surrender of such Securities and, in the case of Securities with coupons attached thereto, of all coupons appertaining thereto maturing after the date fixed for redemption, that such redemption is pursuant to the mandatory or optional sinking fund, or both, if such be the case, that interest accrued to the date fixed for redemption will be paid as specified in such notice and that on and after said date interest thereon or on the portions thereof to be redeemed will cease to accrue. In case any Security of a series is to be redeemed in part only, the notice of redemption shall state the portion of the principal amount thereof to be redeemed and shall state that on and after the date fixed for redemption, upon surrender of such Security, a new Security or Securities of such series and tenor in principal amount equal to the unredeemed portion thereof will be issued.
The notice of redemption of Securities of any series to be redeemed at the option of the Company shall be given by the Company or, at the Company's request, by the Trustee in the name and at the expense of the Company.
On or before 10:00 a.m. New York City time on the redemption date specified in the notice of redemption given as provided in this Section, the Company will deposit with the Trustee or with one or more Paying Agents (or, if the Company is acting as its own Paying Agent, set aside, segregate and hold in trust as provided in Section 2.06) an amount of money sufficient to redeem on the redemption date all the Securities of such series so called for redemption at the appropriate redemption price, together with accrued interest to the date fixed for redemption. If all of the outstanding Securities of a series are to be redeemed, the Company will deliver to the Trustee at least 10 days prior to the last date on which notice of redemption may be given to Holders pursuant to the first paragraph of this Section 3.02 (or such shorter period as shall be acceptable to the Trustee) an Officers' Certificate stating that all such Securities are to be redeemed. If less than all the outstanding Securities of a series are to be redeemed, the Company will deliver to the Trustee at least 15 days prior to the last date on which notice of redemption may be given to Holders pursuant to the first paragraph of this Section 3.02 (or such shorter period as shall be acceptable to the Trustee) an Officers' Certificate stating the aggregate principal amount of such Securities to be redeemed. In case of a redemption at the election of the Company prior to the expiration of any restriction on such redemption, the Company shall deliver to the Trustee, prior to the giving of any notice of redemption to Holders pursuant to this Section, an Officers' Certificate stating that such redemption is not prohibited by such restriction.
If less than all the Securities of a series are to be redeemed, the Trustee shall select, pro rata, by lot or in such manner as it shall deem appropriate and fair, Securities of such series to be redeemed in whole or in part. Securities may be redeemed in part in multiples equal to the minimum authorized denomination for Securities of such series or any multiple thereof. The Trustee shall promptly notify the Company in writing of the Securities of such series selected for redemption and, in the case of any Securities of such series selected for partial redemption, the principal amount thereof to be redeemed. For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Security redeemed or to be redeemed only in part, to the portion of the principal amount of such Security which has been or is to be redeemed.
Section 3.03. Payment of Securities Called for Redemption. If notice of redemption has been given as above provided, the Securities or portions of
Securities specified in such notice shall become due and payable on the date and at the place stated in such notice at the applicable redemption price, together with interest accrued to the date fixed for redemption, and on and after such date (unless the Company shall default in the payment of such Securities at the redemption price, together with interest accrued to such date) interest on the Securities or portions of Securities so called for redemption shall cease to accrue, and the unmatured coupons, if any, appertaining thereto shall be void and, except as provided in Sections 8.11 and 9.04, such Securities shall cease from and after the date fixed for redemption to be entitled to any benefit under this Indenture, and the Holders thereof shall have no right in respect of such Securities except the right to receive the redemption price thereof and unpaid interest to the date fixed for redemption. On presentation and surrender of such Securities at a place of payment specified in said notice, together with all coupons, if any, appertaining thereto maturing after the date fixed for redemption, said Securities or the specified portions thereof shall be paid and redeemed by the Company at the applicable redemption price, together with interest accrued thereon to the date fixed for redemption; provided that payment of interest becoming due on or prior to the date fixed for redemption shall be payable in the case of Securities with coupons attached thereto, to the Holders of the coupons for such interest upon surrender thereof, and in the case of Registered Securities, to the Holders of such Registered Securities registered as such on the relevant record date subject to the terms and provisions of Sections 2.04 and 2.13 hereof.
If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal shall, until paid or duly provided for, bear interest from the date fixed for redemption at the rate of interest or Yield to Maturity (in the case of an Original Issue Discount Security) borne by such Security.
If any Security with coupons attached thereto is surrendered for redemption and is not accompanied by all appurtenant coupons maturing after the date fixed for redemption, the surrender of such missing coupon or coupons may be waived by the Company and the Trustee, if there be furnished to each of them such security or indemnity as they may require to save each of them harmless.
Upon presentation of any Security of any series redeemed in part only, the Company shall execute and the Trustee shall authenticate and deliver to or on the order of the Holder thereof, at the expense of the Company, a new Security or Securities of such series and tenor (with any unmatured coupons attached), of authorized denominations, in principal amount equal to the unredeemed portion of the Security so presented.
Section 3.04. Exclusion of Certain Securities from Eligibility for Selection for Redemption. Securities shall be excluded from eligibility for selection for redemption if they are identified by registration and certificate number in a written statement signed by an authorized officer of the Company and delivered to the Trustee at least 40 days prior to the last date on which notice of redemption may be given as being owned of record and beneficially by, and not pledged or hypothecated by either (a) the Company or (b) an entity specifically identified in such written statement as directly or indirectly controlling or controlled by or under direct or indirect common control with the Company.
Section 3.05. Mandatory and Optional Sinking Funds. The minimum amount of any sinking fund payment provided for by the terms of Securities of any series is herein referred to as a "mandatory sinking fund payment", and any payment in excess of such minimum amount provided for by the terms of the Securities of any series is herein referred to as an "optional sinking fund payment". The date on which a sinking fund payment is to be made is herein referred to as the "sinking fund payment date".
In lieu of making all or any part of any mandatory sinking fund payment
with respect to any series of Securities in cash, the Company may at its option
(a) deliver to the Trustee Securities of such series theretofore purchased or
otherwise acquired (except through a mandatory sinking fund payment) by the
Company or receive credit for Securities of such series (not previously so
credited) theretofore purchased or otherwise acquired (except as aforesaid) by
the Company and delivered to the Trustee for cancellation pursuant to Section
2.11, (b) receive credit for optional sinking fund payments (not previously so
credited) made pursuant to this Section, or (c) receive credit for Securities of
such series (not previously so credited) redeemed by the Company through any
optional sinking fund payment. Securities so delivered or credited shall be
received or credited by the Trustee at the sinking fund redemption price
specified in such Securities.
On or before the sixtieth day next preceding each sinking fund payment date for any series, or such shorter period as shall be acceptable to the Trustee, the Company will deliver to the Trustee an Officers' Certificate (a) specifying the portion of the mandatory sinking fund payment to be satisfied by payment of cash and the portion to be satisfied by credit of specified Securities of such series and the basis for such credit, (b) stating that none of the specified Securities of such series has theretofore been so credited, (c) stating that no defaults in the payment of interest or Events of Default with respect to such series have occurred (which have not been waived or cured) and are continuing and (d) stating whether or not the Company intends to exercise its right to make an optional sinking fund payment with respect to such series and, if so, specifying the amount of such
optional sinking fund payment which the Company intends to pay on or before the next succeeding sinking fund payment date. The Trustee shall have no duty to verify the facts set forth in such Officer's Certificate and may conclusively rely on such Officer's Certificate. Any Securities of such series to be credited and required to be delivered to the Trustee in order for the Company to be entitled to credit therefor as aforesaid which have not theretofore been delivered to the Trustee shall be delivered for cancellation pursuant to Section 2.11 to the Trustee with such Officers' Certificate (or reasonably promptly thereafter if acceptable to the Trustee). Such Officers' Certificate shall be irrevocable and upon its receipt by the Trustee the Company shall become unconditionally obligated to make all the cash payments or delivery of securities therein referred to, if any, on or before the next succeeding sinking fund payment date. Failure of the Company, on or before any such sixtieth day, to deliver such Officer's Certificate and Securities specified in this paragraph, if any, shall not constitute a default but shall constitute, on and as of such date, the irrevocable election of the Company (i) that the mandatory sinking fund payment for such series due on the next succeeding sinking fund payment date shall be paid entirely in cash without the option to deliver or credit Securities of such series in respect thereof and (ii) that the Company will make no optional sinking fund payment with respect to such series as provided in this Section.
If the sinking fund payment or payments (mandatory or optional or both) to be made in cash on the next succeeding sinking fund payment date plus any unused balance of any preceding sinking fund payments made in cash shall exceed $50,000 (or a lesser sum if the Company shall so request with respect to the Securities of any series), such cash shall be applied on the next succeeding sinking fund payment date to the redemption of Securities of such series at the sinking fund redemption price thereof together with accrued interest thereon to the date fixed for redemption. If such amount shall be $50,000 (or such lesser sum) or less and the Company makes no such request then it shall be carried over until a sum in excess of $50,000 (or such lesser sum) is available. The Trustee shall select, in the manner provided in Section 3.02, for redemption on such sinking fund payment date a sufficient principal amount of Securities of such series to absorb said cash, as nearly as may be, and shall (if requested in writing by the Company) inform the Company of the serial numbers of the Securities of such series (or portions thereof) so selected. Securities shall be excluded from eligibility for redemption under this Section if they are identified by registration and certificate number in an Officers' Certificate delivered to the Trustee at least 60 days prior to the sinking fund payment date as being owned of record and beneficially by, and not pledged or hypothecated by either (a) the Company or the Guarantor or (b) an entity specifically identified in such Officers' Certificate as directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company or the Guarantor. The Trustee, in the name and at the expense of the Company (or the Company, if it shall so request the Trustee in writing) shall cause notice of redemption of the Securities of such series to be given in substantially the manner provided in Section 3.02 (and with the effect provided in Section 3.03) for the redemption of Securities of such series in part at the option of the Company. The amount of any sinking fund payments not so applied or allocated to the redemption of Securities of such series shall be added to the next cash sinking fund payment for such series and, together with such payment, shall be applied in accordance with the provisions of this Section. Any and all sinking fund moneys held on the stated maturity date of the Securities of any particular series (or earlier, if such maturity is accelerated), which are not held for the payment or redemption of particular Securities of such series shall be applied, together with other moneys, if necessary, sufficient for the purpose, to the payment of the Principal of, and interest on, the Securities of such series at maturity.
On or before 10:00 a.m. New York City time on each sinking fund payment date, the Company shall pay to the Trustee in cash or shall otherwise provide for the payment of all interest accrued to the date fixed for redemption on Securities to be redeemed on the next following sinking fund payment date.
The Trustee shall not redeem or cause to be redeemed any Securities of a series with sinking fund moneys or mail any notice of redemption of Securities of such series by operation of the sinking fund during the continuance of a Default in payment of interest on such Securities or of any Event of Default except that, where the mailing of notice of redemption of any Securities shall theretofore have been made, the Trustee shall redeem or cause to be redeemed such Securities, provided that it shall have received from the Company a sum sufficient for such redemption. Except as aforesaid, any moneys in the sinking fund for such series at the time when any such Default or Event of Default shall occur, and any moneys thereafter paid into the sinking fund, shall, during the continuance of such default or Event of Default, be deemed to have been collected under Article 7 and held for the payment of all such Securities. In case such Event of Default shall have been waived as provided in Section 7.04 or the Default cured on or before the sixtieth day preceding the sinking fund payment date in any year, such moneys shall thereafter be applied on the next succeeding sinking fund payment date in accordance with this Section to the redemption of such Securities.
ARTICLE 4
Guarantee of Debt Securities
Section 4.01. Unconditional Guarantee. The Guarantor hereby unconditionally
guarantees to each holder of a Security of each series authenticated and
delivered by the Trustee, the due and punctual payment of the Principal of
(including any amount in respect of original issue discount), and interest
(including, in the event the Company defaults on a payment of interest on the
Securities, defaulted interest plus (to the extent lawful) any interest payable
on the defaulted interest), if any (together with any additional amounts payable
pursuant to the terms of such Security), on such Security and the due and
punctual payment of the sinking fund payments, if any, and analogous
obligations, if any, provided for pursuant to the terms of such Security, when
and as the same shall become due and payable, whether at maturity or upon
redemption or upon declaration of acceleration or otherwise according to the
terms of such Security and of this Indenture. In case of default by the Company
in the payment of any such principal (including any amount in respect of
original issue discount), interest (including, in the event the Company defaults
on a payment of interest on the Securities, defaulted interest plus (to the
extent lawful) any interest payable on the defaulted interest, together with any
additional amounts payable pursuant to the terms of such Security), sinking fund
payment, or analogous obligation, the Guarantor agrees duly and punctually to
pay the same. The Guarantor hereby agrees that its obligations hereunder shall
be absolute and unconditional irrespective of any extension of the time for
payment of any such Security, any modification of any such Security, any
invalidity, irregularity or unenforceability of any such Security or this
Indenture, any failure to enforce the same or any waiver, modification or
indulgence granted to the Company with respect thereto by the holder of such
Security or the Trustee, or any other circumstances which may otherwise
constitute a legal or equitable discharge of a surety or guarantor. The
Guarantor hereby waives diligence, presentment, demand of payment, filing of
claims with a court in the event of merger or bankruptcy of the Company, any
right to require a demand or proceeding first against the Company, protest or
notice with respect to any such Security or the indebtedness evidenced thereby
and all demands whatsoever, and covenants that this guarantee will not be
discharged as to any such Security except by payment in full of the Principal of
(including any amount payable in respect of original issue discount), and
interest (including, in the event the Company defaults on a payment of interest
on the Securities, defaulted interest plus (to the extent lawful) any interest
payable on the defaulted interest), if any (together with any additional amounts
payable pursuant to the terms of such Security), thereon, either pursuant to
Section 9.01 or Section 9.02 or otherwise.
Upon making any payment hereunder, the Guarantor shall be subrogated to the rights of a Holder against the Company with respect to such payment; provided that the Guarantor shall not enforce any payment by way of subrogation until all amounts of Principal of and interest on the Securities and all other amounts payable by the Company under this Indenture have been paid in full.
The guarantee set forth in this Section shall not be valid or become obligatory for any purpose with respect to a Security of any series until the Security shall have been authenticated by the Trustee.
Section 4.02. Execution of Guarantees. To evidence its guarantee specified in Section 4.01 to the holders of Securities of any series, the Guarantor hereby agrees to execute the Guarantees in substantially the form above recited to be endorsed on each Security of such series authenticated and delivered by the Trustee. Two Officers of the Guarantor shall execute the Guarantees for the Guarantor by facsimile or manual signature in the name and on behalf of the Guarantor under the corporate seal of the Guarantor, if any, prior to the authentication of the Security on which it is endorsed, and the delivery of such Security by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of such Guarantees on behalf of the Guarantor. The seal of the Guarantor may be in the form of a facsimile thereof and may be impressed, affixed, imprinted or otherwise reproduced on the Guarantees. Typographical and other minor errors or defects in any such reproduction of the seal or any such signature shall not affect the validity or enforceability of any Guarantee that has been duly authenticated and delivered by the Trustee.
The signatures of the two Officers may be imprinted or otherwise reproduced on the Guarantees. If an Officer whose signature is on a Guarantee no longer holds that office at the time the Security on which such Guarantee is endorsed is authenticated, the Guarantee shall nevertheless be valid.
ARTICLE 5
Covenants
Section 5.01. Payment of Securities. The Company shall pay the Principal of and interest on the Securities on the dates and in the manner provided in the Securities and this Indenture. The interest on Securities with coupons attached (together with any additional amounts payable pursuant to the terms of such Securities) shall be payable only upon presentation and surrender of the
several coupons for such interest installments as are evidenced thereby as they severally mature. The interest on any temporary Unregistered Securities (together with any additional amounts payable pursuant to the terms of such Securities) shall be paid, as to the installments of interest evidenced by coupons attached thereto, if any, only upon presentation and surrender thereof, and, as to the other installments of interest, if any, only upon presentation of such Unregistered Securities for notation thereon of the payment of such interest. The interest on Registered Securities (together with any additional amounts payable pursuant to the terms of such Securities) shall be payable only to the Holders thereof and at the option of the Company may be paid by mailing checks for such interest payable to or upon the written order of such Holders at their last addresses as they appear on the Security Register of the Company.
Notwithstanding any provisions of this Indenture and the Securities of any series to the contrary, if the Company and a Holder of any Registered Security so agree, payments of interest on, and any portion of the Principal of, such Holder's Registered Security (other than interest payable at maturity or on any redemption or repayment date or the final payment of Principal on such Security) shall be made by the Paying Agent, upon receipt from the Company of immediately available funds by 11:00 a.m., New York City time (or such other time as may be agreed to between the Company and the Paying Agent), directly to the Holder of such Security (by Federal funds wire transfer or otherwise) if the Holder has delivered written instructions to the Trustee 15 days prior to such payment date requesting that such payment will be so made and designating the bank account to which such payments shall be so made and in the case of payments of Principal surrenders the same to the Trustee in exchange for a Security or Securities aggregating the same principal amount as the unredeemed principal amount of the Securities surrendered. The Trustee shall be entitled to rely on the last instruction delivered by the Holder pursuant to this Section 5.01 unless a new instruction is delivered 15 days prior to a payment date. The Company will indemnify and hold each of the Trustee and any Paying Agent harmless against any loss, liability or expense (including attorneys' fees) resulting from any act or omission to act on the part of the Company or any such Holder in connection with any such agreement or from making any payment in accordance with any such agreement.
The Company shall pay interest on overdue Principal, and interest on overdue installments of interest, to the extent lawful, at the rate per annum specified in the Securities.
Section 5.02. Maintenance of Office or Agency. The Company will maintain in the Borough of Manhattan, The City of New York, an office or agency where Securities may be surrendered for registration of transfer or
exchange or for presentation for payment and where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served. The Company hereby initially designates the Corporate Trust Office of the Trustee, located in the Borough of Manhattan, The City of New York, as such office or agency of the Company. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the address of the Trustee set forth in Section 11.02.
The Company will maintain one or more agencies in a city or cities located outside the United States (including any city in which such an agency is required to be maintained under the rules of any stock exchange on which the Securities of any series are listed) where the Unregistered Securities, if any, of each series and coupons, if any, appertaining thereto may be presented for payment. No payment on any Unregistered Security or coupon will be made upon presentation of such Unregistered Security or coupon at an agency of the Company within the United States nor will any payment be made by transfer to an account in, or by mail to an address in, the United States unless, pursuant to applicable United States laws and regulations then in effect, such payment can be made without adverse tax consequences to the Company. Notwithstanding the foregoing, if full payment in United States Dollars ("Dollars") at each agency maintained by the Company outside the United States for payment on such Unregistered Securities or coupons appertaining thereto is illegal or effectively precluded by exchange controls or other similar restrictions, payments in Dollars of Unregistered Securities of any series and coupons appertaining thereto which are payable in Dollars may be made at an agency of the Company maintained in the Borough of Manhattan, The City of New York.
The Company may also from time to time designate one or more other offices or agencies where the Securities of any series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the Borough of Manhattan, The City of New York for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.
Section 5.03. Negative Pledge. The Company and the Guarantor will not, and will not permit any Significant Subsidiary to, create, incur or suffer to exist any Lien on any Equity Interests, indebtedness or other obligations of a
Significant Subsidiary held by the Guarantor, the Company or any Subsidiary or any Principal Property of the Company or a Significant Subsidiary, whether such Equity Interests, indebtedness or other obligations of a Significant Subsidiary or Principal Property are owned at the date of this Indenture or hereafter acquired, unless the Company secures or causes such Significant Subsidiary to secure the outstanding Securities equally and ratably with all indebtedness secured by such Lien, so long as such indebtedness shall be so secured; provided, however, that this covenant shall not apply in the case of:
(i) (a) the creation of any Lien on any Equity Interests, indebtedness or other obligations of a Significant Subsidiary or any Principal Property hereafter acquired (including acquisitions by way of merger or consolidation) by the Company or a Significant Subsidiary contemporaneously with such acquisition, or within 180 days thereafter, to secure or provide for the payment or financing of any part of the purchase price thereof, or (b) the assumption of any Lien upon any Equity Interests, indebtedness or other obligations of a Significant Subsidiary or any Principal Property hereafter acquired (including acquisitions by way of merger or consolidation) existing at the time of such acquisition, provided that every such Lien referred to in subclause (a) or (b) of this clause (i) shall not attach to Equity Interests, indebtedness or other obligations of a Significant Subsidiary or any Principal Property other than the Equity Interests, indebtedness or other obligations of the Significant Subsidiary or any Principal Property so acquired and fixed improvements thereon;
(ii) any Lien on any Equity Interests, indebtedness or other obligations of a Significant Subsidiary or any Principal Property existing at the date of this Indenture;
(iii) any Lien on any Equity Interests, indebtedness or other obligations of a Significant Subsidiary or any Principal Property in favor of the Company or any Significant Subsidiary;
(iv) any Lien on any Principal Property being constructed or improved securing loans to finance such construction or improvements;
(v) any Lien on Equity Interests, indebtedness or other obligations of a Significant Subsidiary or any Principal Property incurred in connection with the issuance of tax-exempt governmental obligations;
(vi) Liens on any Principal Property for taxes not yet due or which are being contested in good faith by appropriate proceedings and
with respect to which adequate reserves, to the extent required by GAAP, have been made;
(vii) carriers', warehousemen's, mechanics', materialmen's, repairmen's or other like Liens on any Principal Property arising in the ordinary course of business and securing obligations that are not due and payable or which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves, to the extent required by GAAP, have been made;
(viii) zoning restrictions, easements, rights-of-way, restrictions on use of real property and other similar encumbrances incurred in the ordinary course of business which, in the aggregate, are not substantial in amount and do not materially detract from the value of the property subject thereto or interfere with the ordinary conduct of the business of any of the Company, the Guarantor or any Significant Subsidiary;
(ix) any Lien on Equity Interests, indebtedness or other obligations of a Non-U.S. Subsidiary held by a Non-U.S. Subsidiary or any Principal Property of a Non-U.S. Subsidiary; provided that, at the time of the creation or incurrence of any such Lien, the aggregate book value of the total assets of the Non-U.S. Subsidiaries then subject to Liens securing indebtedness for borrowed money (and after giving effect to the proposed Lien) shall not exceed 25% of the Total Assets of the Guarantor and its Subsidiaries;
(x) any Lien on Equity Interests, indebtedness or other obligations of a Securitization Subsidiary created, incurred, assumed or suffered to exist in connection with a Permitted Receivables Financing;
(xi) Liens arising by reason of any attachment, judgment, decree or order of any court or other governmental authority, so long as any appropriate legal proceedings which may have been initiated for review of such attachment, judgment, decree or order shall not have been finally terminated or so long as the period within which such proceedings may be initiated shall not have expired;
(xii) any Lien on Equity Interests, indebtedness or other obligations of a Significant Subsidiary that was not a Significant Subsidiary at the time such Lien was created or incurred; and
(xiii) any renewal of or substitution for any Lien permitted by any
of the preceding clauses (i), (ii), (iv), (v), (vi), (vii), (viii), (ix),
(x), (xi) or
(xii), provided, that the indebtedness secured is not increased (except for increases in the amount of premiums or fees payable in connection with such renewal or substitution) nor the Lien extended to any additional assets (other than assets as to which the creation, incurrence or existence of Liens is not governed by this Section).
(b) Notwithstanding the provisions of paragraph (a) of this Section, the
Company or any Significant Subsidiary may create, incur, assume or suffer to
exist Liens in addition to those permitted by clauses (i) through (xiii) of
paragraph (a) of this Section, and renew, extend or replace such Liens, provided
that at the time of such creation, incurrence, assumption, renewal, extension or
replacement, and after giving effect thereto, the aggregate outstanding
principal or face amount of all indebtedness secured by Liens governed by clause
(a) and not permitted by clauses (i) through (xiii) thereof does not exceed 10%
of Consolidated Net Worth.
Section 5.04. Certain Sale and Lease-back Transactions. The Company will
not, and will not permit any Significant Subsidiary to, sell or transfer,
directly or indirectly, except to the Company or a Significant Subsidiary, any
Principal Property as an entirety, or any substantial portion thereof, with the
intention of taking back a lease of such property, except a lease for a period
of three years or less at the end of which it is intended that the use of such
property by the lessee will be discontinued and any transaction for the sale and
lease-back of any property if such lease is entered into within 180 days after
the later of the acquisition, completion of construction or commencement of
operation of such property; provided that, notwithstanding the foregoing, the
Company or any Significant Subsidiary may sell any such Principal Property and
lease it back for a period longer than three years (i) if the Company or such
Significant Subsidiary would be entitled, pursuant to the provisions of Section
5.03, to create a Lien on the property to be leased securing indebtedness in an
amount equal to the Attributable Debt with respect to such sale and lease-back
transaction without equally and ratably securing the outstanding Securities or
(ii)(A) the Company promptly informs the Trustee of such transaction, (B) the
net proceeds of such transaction are at least equal to the fair value (as
determined by Board Resolution of the Company) of such property and (C) the
Company causes an amount equal to the net cash proceeds of the sale to be
applied to the retirement, within 120 days after receipt of such proceeds, of
Funded Debt incurred or assumed by the Company or a Significant Subsidiary
(including the Securities); provided further that, in lieu of applying all of or
any part of such net cash proceeds to such retirement, the Company may, within
75 days after such sale, deliver or cause to be delivered to the applicable
trustee for cancellation either debentures or notes evidencing Funded Debt of
the Company (which may include the Securities) or of a Significant Subsidiary
previously authenticated and delivered by the applicable
trustee, and not theretofore tendered for sinking fund purposes or called for a
sinking fund or otherwise applied as a credit against an obligation to redeem or
retire such notes or debentures, and an Officers' Certificate (which shall be
delivered to the Trustee and which need not contain the statements prescribed by
Section 11.04) stating that the Company elects to deliver or cause to be
delivered such debentures or notes in lieu of retiring Funded Debt as
hereinabove provided. If the Company shall so deliver debentures or notes to the
applicable trustee and the Company shall duly deliver such Officers'
Certificate, the amount of cash which the Company shall be required to apply to
the retirement of Funded Debt under this Section 5.04 shall be reduced by an
amount equal to the aggregate of the then applicable optional redemption prices
(not including any optional sinking fund redemption prices) of such debentures
or notes, or, if there are no such redemption prices, the principal amount of
such debentures or notes; provided, that in the case of debentures or notes
which provide for an amount less than the principal amount thereof to be due and
payable upon a declaration of the maturity thereof, such amount of cash shall be
reduced by the amount of principal of such debentures or notes that would be due
and payable as of the date of such application upon a declaration of
acceleration of the maturity thereof pursuant to the terms of the indenture
pursuant to which such debentures or notes were issued.
Section 5.05. Certificate to Trustee. The Company will furnish to the Trustee annually, on or before a date not more than four months after the end of its fiscal year (which, on the date hereof, is a calendar year), a brief certificate (which need not contain the statements required by Section 11.04) from its principal executive, financial or accounting officer or its treasurer as to his or her knowledge of the compliance of the Company with all conditions and covenants under this Indenture (such compliance to be determined without regard to any period of grace or requirement of notice provided under this Indenture) which certificate shall comply with the requirements of the Trust Indenture Act.
Section 5.06. Reports by the Company. The Company covenants to file with the Trustee, within 15 days after the Company is required to file the same with the Commission, copies of the annual reports and of the information, documents, and other reports that the Company may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act.
Section 5.07 Guarantor to Maintain Office or Agency. The Guarantor will maintain in the Borough of Manhattan, The City of New York, an office or agency where notices and demands to or upon the Guarantor in respect of the Guarantees on the Securities of any series of this Indenture may be served, and an office or agency where the Securities may be presented for payment under the Guarantees. The Guarantor hereby initially designates the Corporate Trust Office
of the Trustee, located in the Borough of Manhattan, The City of New York, as such office or agency of the Guarantor. The Guarantor will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Guarantor shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, notices and demands may be made or served at the address of the Trustee set forth in Section 11.02.
Section 5.08. Guarantor's Certificate to Trustee. The Guarantor will
furnish to the Trustee annually, on or before a date not more than four months
after the end of its fiscal year (which, on the date hereof, is a calendar
year), a brief certificate (which need not contain the statements required by
Section 11.04) from its principal executive, financial or accounting officer or
its treasurer as to his or her knowledge of the compliance of the Guarantor with
all conditions and covenants under this Indenture (such compliance to be
determined without regard to any period of grace or requirement of notice
provided under this Indenture) which certificate shall comply with the
requirements of the Trust Indenture Act.
Section 5.09. Reports by the Guarantor. The Guarantor covenants to file with the Trustee, within 15 days after the Guarantor is required to file the same with the Commission, copies of the annual reports and of the information, documents, and other reports that the Guarantor may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act.
ARTICLE 6
Successor Corporation
Section 6.01. When Company May Merge, Etc. The Company shall not consolidate with, merge with or into, or sell, convey, transfer, lease or otherwise dispose of all or substantially all of its property and assets (as an entirety or substantially as an entirety in one transaction or a series of related transactions) to, any Person or permit any Person to merge with or into the Company unless:
(i) either (x) the Company shall be the continuing Person or (y) the Person (if other than the Company) formed by such consolidation or into which the Company is merged or that acquired or leased such property and assets of the Company shall be a corporation, partnership or limited liability company organized and validly existing under the laws of the United States of America or any jurisdiction thereof and shall
expressly assume, by a supplemental indenture, executed and delivered to the Trustee, all of the obligations of the Company on all of the Securities and under this Indenture and, if the successor corporation or partnership is not the Guarantor, the Guarantor (unless such successor is also the successor to the Guarantor under Section 6.04 of this Indenture) shall unconditionally guarantee the successor corporation's or partnership's obligations on all of the Securities and under this Indenture and the Company shall have delivered to the Trustee an Opinion of Counsel stating that such consolidation, merger or transfer and such supplemental indenture complies with this provision and that all conditions precedent provided for herein relating to such transaction have been complied with and that such supplemental indenture constitutes the legal, valid and binding obligation of the Company or such successor enforceable against such entity in accordance with its terms, subject to customary exceptions; and
(ii) immediately after giving effect to such transaction, no Default shall have occurred and be continuing.
Section 6.02. Successor Substituted. Upon any consolidation or merger,
or any sale, conveyance, transfer, lease or other disposition of all or
substantially all of the property and assets of the Company in accordance with
Section 6.01 of this Indenture, the successor Person formed by such
consolidation or into which the Company is merged or to which such sale,
conveyance, transfer, lease or other disposition is made shall succeed to, and
be substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor Person had been named
as the Company herein.
Section 6.03. When Guarantor May Merge, Etc. The Guarantor shall not consolidate with, merge with or into, or sell, convey, transfer, lease or otherwise dispose of all or substantially all of its property and assets (as an entirety or substantially as an entirety in one transaction or a series of related transactions) to, any Person or permit any Person to merge with or into the Guarantor unless:
(i) either (x) the Guarantor shall be the continuing Person or (y) the Person (if other than the Guarantor) formed by such consolidation or into which the Guarantor is merged or that acquired or leased such property and assets of the Guarantor shall be a corporation, partnership or limited liability company organized and validly existing under the laws of the United States of America or any jurisdiction thereof and shall expressly assume, by a supplemental indenture, executed and delivered to the Trustee, the due and punctual performance of the Guarantees, and the
due and punctual performance and observance of all of the covenants and conditions of this Indenture and the Securities and the Guarantee to be performed by the Guarantor; and
(ii) immediately after giving effect to such transaction, no Default shall have occurred and be continuing.
Section 6.04. Successor to the Guarantor. Upon any consolidation or
merger, or any sale, conveyance, transfer, lease or other disposition of all or
substantially all of the property and assets of the Guarantor in accordance with
Section 6.03 of this Indenture, the successor person (which may be the Company)
formed by such consolidation or into which the Guarantor is merged or to which
such sale, conveyance, transfer, lease or other disposition is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Guarantor under this Indenture with the same effect as if such successor
Person had been named as the Guarantor herein.
ARTICLE 7
Default and Remedies
Section 7.01. Events of Default. An "Event of Default" shall occur with respect to the Securities of any series if:
(a) the Company defaults in the payment of the Principal of any Security of such series when the same becomes due and payable at maturity, upon acceleration, redemption or mandatory repurchase, including as a sinking fund installment, or otherwise;
(b) the Company defaults in the payment of interest on any Security of such series when the same becomes due and payable, and such default continues for a period of 30 days;
(c) the Company or the Guarantor defaults in the performance of or breaches any other covenant or agreement of the Company or the Guarantor in this Indenture with respect to any Security of such series or in the Securities of such series and such default or breach continues for a period of 60 consecutive days after written notice to the Company or the Guarantor by the Trustee or to the Company or the Guarantor and the
Trustee by the Holders of 25% or more in aggregate principal amount of the Securities of all series then outstanding affected thereby;
(d) an involuntary case or other proceeding shall be commenced against the Company, the Guarantor or any Significant Subsidiary with respect to it or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of 60 days; or an order for relief shall be entered against the Company, the Guarantor or any Significant Subsidiary under the federal bankruptcy laws as now or hereafter in effect;
(e) the Company, the Guarantor or any Significant Subsidiary (A) commences a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consents to the entry of an order for relief in an involuntary case under any such law, (B) consents to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Company, the Guarantor or any Significant Subsidiary or for all or substantially all of the property and assets of the Company, the Guarantor or any Significant Subsidiary or (C) effects any general assignment for the benefit of creditors; or
(f) any other Event of Default established pursuant to Section 2.03 with respect to the Securities of such series occurs.
Section 7.02. Acceleration. (a) If an Event of Default described in clauses
(a) or (b) of Section 7.01 with respect to the Securities of any series then
outstanding occurs and is continuing, then, and in each and every such case,
except for any series of Securities the Principal of which shall have already
become due and payable, either the Trustee or the Holders of not less than 25%
in aggregate principal amount of the Securities of any such affected series then
outstanding hereunder (each such series treated as a separate class) by notice
in writing to the Company or the Guarantor (and to the Trustee if given by
Securityholders), may declare the entire Principal (or, if the Securities of any
such series are Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms of such series established
pursuant to Section 2.03) of all Securities of such affected series, and the
interest accrued thereon, if any, to be due and payable immediately, and upon
any such declaration the same shall become immediately due and payable.
(b) If an Event of Default described in clauses (c) or (f) of Section 7.01 with respect to the Securities of one or more but not all series then outstanding, or with respect to the Securities of all series then outstanding, occurs and is continuing, then, and in each and every such case, except for any series of Securities the Principal of which shall have already become due and payable, either the Trustee or the Holders of not less than 25% in aggregate principal amount (or, if the Securities of any such series are Original Issue Discount Securities, the amount thereof accelerable under this Section) of the Securities of all such affected series then outstanding hereunder (treated as a single class) by notice in writing to the Company (and to the Trustee if given by Securityholders), may declare the entire Principal (or, if the Securities of any such series are Original Issue Discount Securities, such portion of the Principal as may be specified in the terms of such series established pursuant to Section 2.03) of all Securities of all such affected series, and the interest accrued thereon, if any, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable.
(c) If an Event of Default described in clause (d) or (e) of Section 7.01 occurs and is continuing, then the Principal (or, if any Securities are Original Issue Discount Securities, such portion of the Principal as may be specified in the terms thereof established pursuant to Section 2.03) of all the Securities then outstanding and interest accrued thereon, if any, shall be and become immediately due and payable, without any notice or other action by any Holder or the Trustee, to the full extent permitted by applicable law.
The foregoing provisions, however, are subject to the condition that if, at any time after the Principal (or, if the Securities are Original Issue Discount Securities, such portion of the Principal as may be specified in the terms thereof established pursuant to Section 2.03) of the Securities of any series (or of all the Securities, as the case may be) shall have been so declared due and payable, and before any judgment or decree for the payment of the moneys due shall have been obtained or entered as hereinafter provided, the Company or the Guarantor shall pay or shall deposit with the Trustee a sum sufficient to pay all matured installments of interest upon all the Securities of each such series (or of all the Securities, as the case may be) and the Principal of any and all Securities of each such series (or of all the Securities, as the case may be) which shall have become due otherwise than by acceleration (with interest upon such Principal and, to the extent that payment of such interest is enforceable under applicable law, on overdue installments of interest, at the same rate as the rate of interest or Yield to Maturity (in the case of Original Issue Discount Securities) specified in the Securities of each such series to the date of such payment or deposit) and such amount as shall be sufficient to cover all amounts owing the Trustee under
Section 8.07, and if any and all Events of Default under the Indenture, other than the non-payment of the Principal of Securities which shall have become due by acceleration, shall have been cured, waived or otherwise remedied as provided herein, then and in every such case the Holders of a majority in aggregate principal amount of all the then outstanding Securities of all such series that have been accelerated (voting as a single class), by written notice to the Company and to the Trustee, may waive all defaults with respect to all such series (or with respect to all the Securities, as the case may be) and rescind and annul such declaration and its consequences, but no such waiver or rescission and annulment shall extend to or shall affect any subsequent default or shall impair any right consequent thereon.
For all purposes under this Indenture, if a portion of the Principal of any Original Issue Discount Securities shall have been accelerated and declared due and payable pursuant to the provisions hereof, then, from and after such declaration, unless such declaration has been rescinded and annulled, the Principal of such Original Issue Discount Securities shall be deemed, for all purposes hereunder, to be such portion of the Principal thereof as shall be due and payable as a result of such acceleration, and payment of such portion of the Principal thereof as shall be due and payable as a result of such acceleration, together with interest, if any, thereon and all other amounts owing thereunder, shall constitute payment in full of such Original Issue Discount Securities.
Section 7.03. Other Remedies. If a payment default or an Event of Default with respect to the Securities of any series occurs and is continuing, the Trustee may pursue, in its own name or as trustee of an express trust, any available remedy by proceeding at law or in equity to collect the payment of principal of and interest on the Securities of such series or to enforce the performance of any provision of the Securities of such series or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of the Securities or does not produce any of them in the proceeding.
Section 7.04. Waiver of Past Defaults. Subject to Sections 7.02, 7.07 and 10.02, the Holders of at least a majority in Principal amount (or, if the Securities are Original Issue Discount Securities, such portion of the Principal as is then accelerable under Section 7.02) of the outstanding Securities of all series affected (voting as a single class), by notice to the Trustee, may waive an existing Default or Event of Default with respect to the Securities of such series and its consequences, except a Default in the payment of Principal of or interest on any Security as specified in clauses (a) or (b) of Section 7.01 or in respect of a covenant or provision of this Indenture which cannot be modified or amended
without the consent of the Holder of each outstanding Security affected. Upon any such waiver, such Default shall cease to exist, and any Event of Default with respect to the Securities of such series arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereto.
Section 7.05. Control by Majority. Subject to Sections 8.01 and 8.02(a)(v), the Holders of at least a majority in aggregate Principal amount (or, if any Securities are Original Issue Discount Securities, such portion of the Principal as is then accelerable under Section 7.02) of the outstanding Securities of all series affected (voting as a single class) may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee with respect to the Securities of such series by this Indenture; provided, that the Trustee may refuse to follow any direction that conflicts with law or this Indenture, that may involve the Trustee in personal liability or that the Trustee determines in good faith may be unduly prejudicial to the rights of Holders not joining in the giving of such direction, it being understood that the Trustee shall have no duty to ascertain whether or not such actions or forebearance are unduly prejudicial to such Holders; and provided further, that the Trustee may take any other action it deems proper that is not inconsistent with any directions received from Holders of Securities pursuant to this Section 7.05.
Section 7.06. Limitations on Suits. No Holder of any Security of any series may institute any proceeding, judicial or otherwise, with respect to this Indenture or the Securities of such series, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless:
(i) such Holder has previously given to the Trustee written notice of a continuing Event of Default with respect to the Securities of such series;
(ii) the Holders of at least 25% in aggregate principal amount of outstanding Securities of all such series affected shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;
(iii) such Holder or Holders have offered to the Trustee indemnity reasonably satisfactory to the Trustee against any costs, liabilities or expenses to be incurred in compliance with such request;
(iv) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and
(v) during such 60-day period, the Holders of a majority in aggregate principal amount of the outstanding Securities of all such affected series have not given the Trustee a direction that is inconsistent with such written request.
A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over such other Holder.
Section 7.07. Rights of Holders to Receive Payment. Notwithstanding any other provision of this Indenture, the right of any Holder of a Security to receive payment of Principal of or interest, if any, on such Holder's Security on or after the respective due dates expressed on such Security, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.
Section 7.08. Collection Suit by Trustee. If an Event of Default with respect to the Securities of any series in payment of Principal or interest specified in clause (a) or (b) of Section 7.01 occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company or the Guarantor for the whole amount (or such portion thereof as specified in the terms established pursuant to Section 2.03 of Original Issue Discount Securities) of Principal of, and accrued interest remaining unpaid on, together with interest on overdue Principal of, and, to the extent that payment of such interest is lawful, interest on overdue installments of interest on, the Securities of such series, in each case at the rate or Yield to Maturity (in the case of Original Issue Discount Securities) specified in such Securities, and such further amount as shall be sufficient to cover all amounts owing the Trustee under Section 8.07.
Section 7.09. Trustee May File Proofs of Claim. The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for amounts due the Trustee under Section 8.07) and the Holders allowed in any judicial proceedings relative to the Company or the Guarantor (or any other obligor on the Securities), its creditors or its property and shall be entitled and empowered to collect and receive any moneys, securities or other property payable or deliverable upon conversion or exchange of the Securities or upon any such claims and to distribute the same, and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it under Section 8.07. Nothing herein contained shall be deemed to empower the Trustee to authorize or consent to, or accept or adopt on behalf of any Holder, any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding; provided, however, that the Trustee may, on behalf of the Holders, vote for the election of a trustee in bankruptcy or similar official and may be a member of the creditor's committee.
Section 7.10. Application of Proceeds. Any moneys collected by the Trustee pursuant to this Article in respect of the Securities of any series shall be applied in the following order at the date or dates fixed by the Trustee and, in case of the distribution of such moneys on account of Principal or interest, upon presentation of the several Securities and coupons appertaining to such Securities in respect of which moneys have been collected and noting thereon the payment, or issuing Securities of such series and tenor in reduced principal amounts in exchange for the presented Securities of such series and tenor if only partially paid, or upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 8.07 applicable to the Securities of such series in respect of which moneys have been collected;
SECOND: In case the Principal of the Securities of such series in respect of which moneys have been collected shall not have become and be then due and payable, to the payment of interest on the Securities of such series in default in the order of the maturity of the installments of such interest, with interest (to the extent that such interest has been collected by the Trustee) upon the overdue installments of interest at the same rate as the rate of interest or Yield to Maturity (in the case of Original Issue Discount Securities) specified in such Securities, such payments to be made ratably to the persons entitled thereto, without discrimination or preference;
THIRD: In case the Principal of the Securities of such series in respect of which moneys have been collected shall have become and shall be then due and payable, to the payment of the whole amount then owing and unpaid upon all the Securities of such series for Principal and interest, with interest upon the overdue Principal, and (to the extent that such interest has been collected by the Trustee) upon overdue installments of interest at the same rate as the rate of interest or Yield to Maturity (in the case of
Original Issue Discount Securities) specified in the Securities of such series; and in case such moneys shall be insufficient to pay in full the whole amount so due and unpaid upon the Securities of such series, then to the payment of such Principal and interest or Yield to Maturity, without preference or priority of Principal over interest or Yield to Maturity, or of interest or Yield to Maturity over Principal, or of any installment of interest over any other installment of interest, or of any Security of such series over any other Security of such series, ratably to the aggregate of such Principal and accrued and unpaid interest or Yield to Maturity; and
FOURTH: To the payment of the remainder, if any, to the Company, the Guarantor or any other person lawfully entitled thereto.
Section 7.11. Restoration of Rights and Remedies. If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then, and in every such case, subject to any determination in such proceeding, the Company, the Guarantor, the Trustee and the Holders shall be restored to their former positions hereunder and thereafter all rights and remedies of the Company, the Guarantor, the Trustee and the Holders shall continue as though no such proceeding had been instituted.
Section 7.12. Undertaking for Costs. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, in either case in respect to the
Securities of any series, a court may require any party litigant in such suit
(other than the Trustee) to file an undertaking to pay the costs of the suit,
and the court may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant (other than the Trustee) in the suit having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 7.12 does not apply to a suit by a Holder pursuant to
Section 7.07 or a suit by Holders of more than 10% in principal amount of the
outstanding Securities of such series.
Section 7.13. Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or wrongfully taken Securities in Section 2.08, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.
Section 7.14. Delay or Omission Not Waiver. No delay or omission of the Trustee or of any Holder to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article 7 or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.
ARTICLE 8
Trustee
Section 8.01. General. The Trustee undertakes to perform such and only such duties and responsibilities as are specifically set forth in Sections 3.15 and 3.16 of the Trust Indenture Act and as set forth herein and no implied covenants or obligations shall be read into this Indenture. Notwithstanding the foregoing, no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, unless it receives indemnity satisfactory to it against any loss, liability or expense. Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Article 8.
Section 8.02. Certain Rights of Trustee. Subject to Trust Indenture Act Sections 315(a) through (d):
(i) the Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, Officers' Certificate, Opinion of Counsel (or both), statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper person or persons. The Trustee need not investigate any fact or matter stated in the document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit;
(ii) before the Trustee acts or refrains from acting, it may require an Officers' Certificate and/or an Opinion of Counsel, which shall conform to Section 11.04. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such certificate or opinion. Subject to Sections 8.01 and 8.02, whenever in the administration of the trusts of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering or omitting any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of willful misconduct on the part of the Trustee, be deemed to be conclusively proved and established by an Officers' Certificate delivered to the Trustee, and such certificate, in the absence of willful misconduct on the part of the Trustee, shall be full warrant to the Trustee for any action taken, suffered or omitted by it under the provisions of this Indenture upon the faith thereof;
(iii) the Trustee may act through its attorneys and agents not regularly in its employ and shall not be responsible for the misconduct or negligence of any agent or attorney appointed with due care;
(iv) any request, direction, order or demand of the Company mentioned herein shall be sufficiently evidenced by an Officers' Certificate (unless other evidence in respect thereof be herein specifically prescribed); and any Board Resolution may be evidenced to the Trustee by a copy thereof certified by the Secretary or an Assistant Secretary of the Company;
(v) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Holders, unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities that might be incurred by it in compliance with such request or direction;
(vi) the Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within its rights or powers or for any action it takes or omits to take in accordance with the direction of the Holders in accordance with Section 7.05 relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture;
(vii) the Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;
(viii) prior to the occurrence of an Event of Default hereunder and after the curing or waiving of all Events of Default, the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, Officers' Certificate, Opinion of Counsel, Board Resolution, statement, instrument, opinion, report, notice, request, consent, order, approval, appraisal, bond, debenture, note, coupon, security, or other paper or document unless requested in writing so to do by the Holders of not less than a majority in aggregate principal amount of the Securities of all series affected then outstanding; provided that, if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee, not reasonably assured to the Trustee by the security afforded to it by the terms of this Indenture, the Trustee may require reasonable indemnity against such expenses or liabilities as a condition to proceeding;
(ix) the Trustee shall not be required to give any bond or surety in respect of the performance of its powers and duties hereunder;
(x) the Trustee shall not be bound to ascertain or inquire as to the performance or observance of any covenants, conditions or agreements on the part of the Company, except as otherwise set forth herein, but the Trustee may require of the Company reasonable information and advice as to the performance of the covenants, conditions and agreements contained herein and shall be entitled in connection herewith to examine the books, records and premises of the Company;
(xi) the permissive rights of the Trustee to do things enumerated in this Indenture shall not be construed as a duty and the Trustee shall not be answerable for other than its negligence or willful misconduct; and
(xii) except for any event of which the Trustee has "actual knowledge" and which event, with the giving of notice or the passage of time or both, would constitute an Event of Default under this Indenture, the Trustee shall not be deemed to have notice of any default or event unless specifically notified in writing of such event by the Company or the Holders of not less than 25% of the Outstanding Securities; as used herein,
the term "actual knowledge" means the actual fact or statement of knowing, without any duty to make any investigation with regard thereto.
Section 8.03. Individual Rights of Trustee. The Trustee, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with the Company or its affiliates with the same rights it would have if it were not the Trustee. Any Agent may do the same with like rights. However, the Trustee is subject to Trust Indenture Act Sections 310(b) and 311. For purposes of Trust Indenture Act Section 311(b)(4) and (6), the following terms are defined as follows:
(a) "cash transaction" means any transaction in which full payment for goods or securities sold is made within seven days after delivery of the goods or securities in currency or in checks or other orders drawn upon banks or bankers and payable upon demand; and
(b) "self-liquidating paper" means any draft, bill of exchange, acceptance or obligation which is made, drawn, negotiated or incurred by the Company for the purpose of financing the purchase, processing, manufacturing, shipment, storage or sale of goods, wares or merchandise and which is secured by documents evidencing title to, possession of, or a lien upon, the goods, wares or merchandise or the receivables or proceeds arising from the sale of the goods, wares or merchandise previously constituting the security, provided the security is received by the Trustee simultaneously with the creation of the creditor relationship with the Company arising from the making, drawing, negotiating or incurring of the draft, bill of exchange, acceptance or obligation.
Section 8.04. Trustee's Disclaimer. The recitals contained herein and in the Securities (except the Trustee's certificate of authentication) and the Guarantees shall be taken as statements of the Company or the Guarantor, as the case may be, and not of the Trustee and the Trustee assumes no responsibility for the correctness of the same. Neither the Trustee nor any of its agents makes any representation as to the validity or adequacy of this Indenture or the Securities and shall be accountable for the Company's use or application of the proceeds from the Securities.
Section 8.05. Notice of Default. If any Default with respect to the Securities of any series occurs and is continuing and if such Default is known to the actual knowledge of a Responsible Officer with the Corporate Trust Department of the Trustee, the Trustee shall give to each Holder of Securities of such series notice of such Default within 90 days after it occurs (i) if any Unregistered Securities of such series are then outstanding, to the Holders thereof,
by publication at least once in an Authorized Newspaper in the Borough of Manhattan, The City of New York and at least once in an Authorized Newspaper in London and (ii) to all Holders of Securities of such series in the manner and to the extent provided in Section 313(c) of the Trust Indenture Act, unless such Default shall have been cured or waived before the mailing or publication of such notice; provided, however, that, except in the case of a Default in the payment of the Principal of or interest on any Security, the Trustee shall be protected in withholding such notice if the Trustee in good faith determines that the withholding of such notice is in the interests of the Holders.
Section 8.06. Reports by Trustee to Holders. Within 60 days after each July __, beginning with July __, 199_, the Trustee shall mail to each Holder as and to the extent provided in Trust Indenture Act Section 313(c) a brief report dated as of such July __, if required by Trust Indenture Act Section 313(a).
Section 8.07. Compensation and Indemnity. The Company shall pay to the Trustee such compensation as shall be agreed upon in writing from time to time for its services. The compensation of the Trustee shall not be limited by any law on compensation of a Trustee of an express trust. The Company shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses, disbursements and advances incurred or made by the Trustee. Such expenses shall include the reasonable compensation and expenses of the Trustee's agents, counsel and other persons not regularly in its employ.
The Company and Guarantor shall indemnify the Trustee for, and hold it harmless against, any loss or liability or expense incurred by it without negligence or willful misconduct on its part arising out of or in connection with the acceptance or administration of this Indenture and the Securities or the issuance of the Securities or of series thereof or the trusts hereunder and the performance of duties under this Indenture and the Securities, including the costs and expenses of defending itself against or investigating any claim or liability and of complying with any process served upon it or any of its officers in connection with the exercise or performance of any of its powers or duties under this Indenture and the Securities.
The obligations of the Company and the Guarantor under this Section to compensate and indemnify the Trustee and each predecessor Trustee and to pay or reimburse the Trustee and each predecessor Trustee for expenses, disbursements and advances shall constitute additional indebtedness hereunder and shall survive the satisfaction and discharge of this Indenture or the rejection or termination of this Indenture under bankruptcy law. Such additional indebtedness shall be a senior claim to that of the Securities upon all property and funds held or collected
by the Trustee as such, except funds held in trust for the benefit of the Holders of particular Securities or coupons, and the Securities are hereby subordinated to such senior claim. If the Trustee renders services and incurs expenses following an Event of Default under Section 7.01(d) or Section 7.01(e) hereof, the parties hereto and the holders by their acceptance of the Securities hereby agree that such expenses are intended to constitute expenses of administration under any bankruptcy law.
The provisions of this Section shall survive the termination of this Indenture, and the resignation or removal of the Trustee, and any defeasance pursuant to Article 9.
Section 8.08. Replacement of Trustee. A resignation or removal of the Trustee as Trustee with respect to the Securities of any series and appointment of a successor Trustee as Trustee with respect to the Securities of any series shall become effective only upon the successor Trustee's acceptance of appointment as provided in this Section 8.08.
The Trustee may resign as Trustee with respect to the Securities of any
series at any time by so notifying the Company and the Guarantor in writing. The
Holders of a majority in principal amount of the outstanding Securities of any
series may remove the Trustee as Trustee with respect to the Securities of such
series by so notifying the Trustee in writing and may appoint a successor
Trustee with respect thereto with the consent of the Company and the Guarantor.
The Company may remove the Trustee as Trustee with respect to the Securities of
any series if: (i) the Trustee is no longer eligible under Section 8.10 of this
Indenture; (ii) the Trustee is adjudged a bankrupt or insolvent; (iii) a
receiver or other public officer takes charge of the Trustee or its property; or
(iv) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed as Trustee with respect to the Securities of any series, or if a vacancy exists in the office of Trustee with respect to the Securities of any series for any reason, the Company shall promptly appoint a successor Trustee with respect thereto. Within one year after the successor Trustee takes office, the Holders of a majority in principal amount of the outstanding Securities of such series may appoint a successor Trustee in respect of such Securities to replace the successor Trustee appointed by the Company. If the successor Trustee with respect to the Securities of any series does not deliver its written acceptance required by the next succeeding paragraph of this Section 8.08 within 30 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of a majority in principal amount of the
outstanding Securities of such series may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect thereto.
A successor Trustee with respect to the Securities of any series shall
deliver a written acceptance of its appointment to the retiring Trustee and to
the Company. Immediately after the delivery of such written acceptance, subject
to the lien provided for in Section 8.07, (i) the retiring Trustee shall
transfer all property held by it as Trustee in respect of the Securities of such
series to the successor Trustee, (ii) the resignation or removal of the retiring
Trustee in respect of the Securities of such series shall become effective and
(iii) the successor Trustee shall have all the rights, powers and duties of the
Trustee in respect of the Securities of such series under this Indenture. A
successor Trustee shall mail notice of its succession to each Holder of
Securities of such series.
Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in the preceding paragraph.
The Company shall give notice of any resignation and any removal of the Trustee with respect to the Securities of any series and each appointment of a successor Trustee in respect of the Securities of such series to all Holders of Securities of such series. Each notice shall include the name of the successor Trustee and the address of its Corporate Trust Office.
Notwithstanding replacement of the Trustee with respect to the Securities
of any series pursuant to this Section 8.08, the Company's obligations under
Section 8.07 shall continue for the benefit of the retiring Trustee.
Section 8.09. Successor Trustee by Merger, Etc. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation or national banking association, the resulting, surviving or transferee corporation or national banking association without any further act shall be the successor Trustee with the same effect as if the successor Trustee had been named as the Trustee herein.
Section 8.10. Eligibility. This Indenture shall always have a Trustee who satisfies the requirements of Trust Indenture Act Section 310(a). The Trustee shall have a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition.
Section 8.11. Money Held in Trust. The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law and except for money held in trust under Article 9 of this Indenture.
ARTICLE 9
Discharge of Indenture
Section 9.01. Defeasance Within One Year of Payment. Except as otherwise provided in this Section 9.01, the Company may terminate its obligations under the Securities of any series and this Indenture with respect to Securities of such series and the Guarantor may terminate its obligations under its Guarantee of Securities of any series and this Indenture with respect to Securities of such series if:
(i) all Securities of such series previously authenticated and delivered (other than destroyed, lost or wrongfully taken Securities of such series that have been replaced or Securities of such series that are paid pursuant to Section 5.01 or Securities of such series for whose payment money or securities have theretofore been held in trust and thereafter repaid to the Company, as provided in Section 9.05) have been delivered to the Trustee for cancellation and the Company or the Guarantor has paid all sums payable hereunder; or
(ii) the Securities of such series mature within one year or all of them are to be called for redemption within one year under arrangements satisfactory to the Trustee for giving the notice of redemption, the Company or the Guarantor irrevocably deposits in trust with the Trustee, as trust funds solely for the benefit of the Holders of such Securities for that purpose, money or U.S. Government Obligations or a combination thereof sufficient (unless such funds consist solely of money, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee), without consideration of any reinvestment, to pay Principal of and interest on the Securities of such series to maturity or redemption, as the case may be, and to pay all other sums payable hereunder, and the Company or the Guarantor delivers to the Trustee an Officers' Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the satisfaction and discharge of this Indenture with respect to the Securities of such series have been complied with.
With respect to the foregoing clause (i), only the Company's obligations under Section 8.07 in respect of the Securities of such series shall survive. With respect to the foregoing clause (ii), only the Company's obligations in Sections 2.02 through 2.12, 5.02, 8.07, 8.08 and 9.05 in respect of the Securities of such series shall survive until such Securities of such series are no longer outstanding. Thereafter, only the Company's obligations in Sections 8.07 and 9.05 in respect of the Securities of such series shall survive. After any such irrevocable deposit, the Trustee upon request shall acknowledge in writing (i) the discharge of the Company's obligations under the Securities of such series and this Indenture with respect to the Securities of such series except for those surviving obligations specified above and (ii) the discharge of the Guarantor's obligations under its Guarantee of Securities of any series and this Indenture with respect to Securities of such series.
Section 9.02. Defeasance. Except as provided below, (i) the Company will be deemed to have paid and will be discharged from any and all obligations in respect of the Securities of any series, (ii) the Guarantor will be discharged from any and all obligations in respect of the Guarantees and (iii) the provisions of this Indenture will no longer be in effect with respect to the Securities of such series and the Guarantees (and the Trustee, at the expense of the Company and the Guarantor, shall execute proper instruments acknowledging the same); provided that the following conditions shall have been satisfied:
(A) the Company or the Guarantor has irrevocably deposited in trust with the Trustee as trust funds solely for the benefit of the Holders of the Securities of such series, for payment of the Principal of and interest on the Securities of such series, money or U.S. Government Obligations or a combination thereof sufficient (unless such funds consist solely of money, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee) without consideration of any reinvestment and after payment of all federal, state and local taxes or other charges and assessments in respect thereof payable by the Trustee, to pay and discharge the Principal of and accrued interest on the outstanding Securities of such series to maturity or earlier redemption (irrevocably provided for under arrangements satisfactory to the Trustee), as the case may be;
(B) such deposit will not result in a breach or violation of, or constitute a default under, this Indenture or any other material agreement or instrument to which the Company or the Guarantor is a party or by which either or both are bound;
(C) no Default with respect to the Securities of such series shall have occurred and be continuing on the date of such deposit;
(D) the Company or the Guarantor shall have delivered to the Trustee
(1) either (x) a ruling directed to the Trustee received from the Internal
Revenue Service to the effect that the Holders of the Securities of such
series will not recognize income, gain or loss for federal income tax
purposes as a result of the exercise of the option under this Section 9.02
and will be subject to federal income tax on the same amount and in the
same manner and at the same times as would have been the case if such
deposit and defeasance had not occurred or (y) an Opinion of Counsel to the
same effect as the ruling described in clause (x) above and (2) an Opinion
of Counsel to the effect that the Holders of the Securities of such series
have a valid security interest in the trust funds subject to no prior liens
under the UCC; and
(E) the Company or the Guarantor has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, in each case stating that all conditions precedent provided for herein relating to the defeasance contemplated by this Section 9.02 of the Securities of such series have been complied with.
The Company's obligations in Sections 2.02 through 2.12, 5.02, 8.07, 8.08 and 9.05 with respect to the Securities of such series shall survive until such Securities are no longer outstanding. Thereafter, only the Company's obligations in Sections 8.07 and 9.05 shall survive.
Section 9.03. Covenant Defeasance. The Company may omit to comply with any term, provision or condition set forth in Sections 5.03, 5.04 or 5.05 (or any other specific covenant relating to such series provided for in a Board Resolution or supplemental indenture pursuant to Section 2.03 which may by its terms be defeased pursuant to this Section 9.03), and such omission shall be deemed not to be an Event of Default under clauses (c) or (f) of Section 7.01, with respect to the outstanding Securities of a series if:
(i) the Company or the Guarantor has irrevocably deposited in trust with the Trustee as trust funds solely for the benefit of the Holders of
the Securities of such series, for payment of the Principal of and interest, if any, on the Securities of such series, money or U.S. Government Obligations or a combination thereof in an amount sufficient (unless such funds consist solely of money, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee) without consideration of any reinvestment and after payment of all federal, state and local taxes or other charges and assessments in respect thereof payable by the Trustee, to pay and discharge the Principal of and interest on the outstanding Securities of such series to maturity or earlier redemption (irrevocably provided for under arrangements satisfactory to the Trustee), as the case may be;
(ii) such deposit will not result in a breach or violation of, or constitute a default under, this Indenture or any other material agreement or instrument to which the Company or the Guarantor is a party or by which either or both are bound;
(iii) no Default with respect to the Securities of such series shall have occurred and be continuing on the date of such deposit;
(iv) the Company or the Guarantor has delivered to the Trustee an Opinion of Counsel to the effect that the Holders of the Securities of such series have a valid security interest in the trust funds subject to no prior liens under the UCC and such Holders will not recognize income, gain or loss for federal income tax purposes as a result of such deposit and covenant defeasance and will be subject to federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred; and
(v) the Company or the Guarantor has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, in each case stating that all conditions precedent provided for herein relating to the covenant defeasance contemplated by this Section 9.03 of the Securities of such series have been complied with.
Section 9.04. Application of Trust Money. Subject to Section 9.05, the Trustee or Paying Agent shall hold in trust money or U.S. Government Obligations deposited with it pursuant to Section 9.01, 9.02 or 9.03, as the case may be, in respect of the Securities of any series and shall apply the deposited money and the proceeds from deposited U.S. Government Obligations in accordance with the Securities of such series and this Indenture to the payment of
Principal of and interest on the Securities of such series; but such money need not be segregated from other funds except to the extent required by law.
Section 9.05. Repayment to Company. Subject to Sections 8.07, 9.01, 9.02 and 9.03, the Trustee and the Paying Agent shall promptly pay to the Company upon request set forth in an Officers' Certificate any money held by them at any time and not required to make payments hereunder and thereupon shall be relieved from all liability with respect to such money. The Trustee and the Paying Agent shall pay to the Company upon written request any money held by them and required to make payments hereunder under this Indenture that remains unclaimed for two years; provided that the Trustee or such Paying Agent before being required to make any payment may cause to be published at the expense of the Company once in an Authorized Newspaper in The City of New York or with respect to any Security the interest on which is based on the offered quotations in the interbank Eurodollar market for dollar deposits in an Authorized Newspaper in London or mail to each Holder entitled to such money at such Holder's address (as set forth in the Security Register) notice that such money remains unclaimed and that after a date specified therein (which shall be at least 30 days from the date of such publication or mailing) any unclaimed balance of such money then remaining will be repaid to the Company. After payment to the Company, Holders entitled to such money must look to the Company or the Guarantor for payment as general creditors unless an applicable law designates another Person, and all liability of the Trustee and such Paying Agent with respect to such money shall cease.
ARTICLE 10
Amendments, Supplements and Waivers
Section 10.01. Without Consent of Holders. The Company, the Guarantor and the Trustee may amend or supplement this Indenture, the Securities of any series or the Guarantees without notice to or the consent of any Holder:
(1) to cure any ambiguity, defect or inconsistency in this Indenture; provided that such amendments or supplements shall not materially and adversely affect the interests of the Holders;
(2) to comply with Article 6;
(3) to comply with any requirements of the Commission in connection with the qualification of this Indenture under the Trust Indenture Act;
(4) to evidence and provide for the acceptance of appointment hereunder with respect to the Securities of any or all series by a successor Trustee;
(5) to establish the form or forms or terms of Securities of any series, the coupons appertaining to such Securities as permitted by Section 2.03 or the Guarantees;
(6) to provide for uncertificated or Unregistered Securities and to make all appropriate changes for such purpose; and
(7) to make any change that does not materially and adversely affect the rights of any Holder.
Section 10.02. With Consent of Holders. Subject to Sections 7.04 and 7.07, without prior notice to any Holders, the Company, the Guarantor and the Trustee may amend this Indenture, the Securities of any series and the Guarantees with the written consent of the Holders of a majority in principal amount of the outstanding Securities of all series affected by such supplemental indenture (all such series voting as one class), and the Holders of a majority in principal amount of the outstanding Securities of all series affected thereby (all such series voting as one class) by written notice to the Trustee may waive future compliance by the Company with any provision of this Indenture or the Securities of such series.
Notwithstanding the provisions of this Section 10.02, without the consent of each Holder affected thereby, an amendment or waiver, including a waiver pursuant to Section 7.04, may not:
(i) extend the stated maturity of the Principal of, or any sinking fund obligation or any installment of interest on, such Holder's Security, or reduce the Principal amount thereof or the rate of interest thereon (including any amount in respect of original issue discount), or any premium payable with respect thereto, or adversely affect the rights of such Holder under any mandatory redemption or repurchase provision or any right of redemption or repurchase at the option of such Holder, or reduce the amount of the Principal of an Original Issue Discount Security that would be due and payable upon an acceleration of the maturity thereof pursuant to Section 7.02 or the amount thereof provable in bankruptcy, or
change any place of payment where, or the currency in which, any Security or any premium or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the due date therefor;
(ii) reduce the percentage in principal amount of outstanding Securities of the relevant series the consent of whose Holders is required for any such supplemental indenture, for any waiver of compliance with certain provisions of this Indenture or certain Defaults and their consequences provided for in this Indenture;
(iii) waive a Default in the payment of Principal of or interest on any Security of such Holder; or
(iv) modify any of the provisions of this Section 10.02, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each outstanding Security affected thereby.
A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of Holders of Securities of such series with respect to such covenant or provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series or of the coupons appertaining to such Securities.
It shall not be necessary for the consent of any Holder under this Section 10.02 to approve the particular form of any proposed amendment, supplement or waiver, but it shall be sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section 10.02 becomes effective, the Company shall give to the Holders affected thereby a notice briefly describing the amendment, supplement or waiver. The Company will mail supplemental indentures to Holders upon request. Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture or waiver.
Section 10.03 Revocation and Effect of Consent. Until an amendment or waiver becomes effective, a consent to it by a Holder is a continuing consent by the Holder and every subsequent Holder of a Security or portion of a Security that evidences the same debt as the Security of the consenting Holder, even if notation of the consent is not made on any Security. However, any such Holder or
subsequent Holder may revoke the consent as to its Security or portion of its Security. Such revocation shall be effective only if the Trustee receives the notice of revocation before the date the amendment, supplement or waiver becomes effective. An amendment, supplement or waiver shall become effective with respect to any Securities affected thereby on receipt by the Trustee of written consents from the requisite Holders of outstanding Securities affected thereby.
The Company may, but shall not be obligated to, fix a record date (which may be not less than 10 nor more than 60 days prior to the solicitation of consents) for the purpose of determining the Holders of the Securities of any series affected entitled to consent to any amendment, supplement or waiver. If a record date is fixed, then, notwithstanding the immediately preceding paragraph, those Persons who were such Holders at such record date (or their duly designated proxies) and only those Persons shall be entitled to consent to such amendment, supplement or waiver or to revoke any consent previously given, whether or not such Persons continue to be such Holders after such record date. No such consent shall be valid or effective for more than 90 days after such record date.
After an amendment, supplement or waiver becomes effective with respect to
the Securities of any series affected thereby, it shall bind every Holder of
such Securities unless it is of the type described in any of clauses (i) through
(iv) of Section 10.02. In case of an amendment or waiver of the type described
in clauses (i) through (iv) of Section 10.02, the amendment or waiver shall bind
each such Holder who has consented to it and every subsequent Holder of a
Security that evidences the same indebtedness as the Security of the consenting
Holder.
Section 10.04. Notation on or Exchange of Securities. If an amendment, supplement or waiver changes the terms of any Security, the Trustee may require the Holder thereof to deliver it to the Trustee. The Trustee may place an appropriate notation on the Security about the changed terms and return it to the Holder and the Trustee may place an appropriate notation on any Security of such series thereafter authenticated. Alternatively, if the Company or the Trustee so determines, the Company in exchange for the Security shall issue and the Trustee shall authenticate a new Security of the same series and tenor that reflects the changed terms.
Section 10.05. Trustee to Sign Amendments, Etc. The Trustee shall be entitled to receive, and shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of any amendment, supplement or waiver authorized pursuant to this Article 10 is authorized or permitted by this Indenture, stating that all requisite consents have been obtained or that no consents are required and stating that such supplemental indenture constitutes the legal, valid
and binding obligation of the Company and the Guarantor, enforceable against the Company and the Guarantor in accordance with its terms, subject to customary exceptions. Subject to the preceding sentence, the Trustee shall sign such amendment, supplement or waiver if the same does not adversely affect the rights of the Trustee. The Trustee may, but shall not be obligated to, execute any such amendment, supplement or waiver that affects the Trustee's own rights, duties or immunities under this Indenture or otherwise.
Section 10.06. Conformity with Trust Indenture. Every supplemental indenture executed pursuant to this Article 10 shall conform to the requirements of the Trust Indenture Act as then in effect.
ARTICLE 11
Miscellaneous
Section 11.01. Trust Indenture Act of 1939. This Indenture shall incorporate and be governed by the provisions of the Trust Indenture Act that are required to be part of and to govern indentures qualified under the Trust Indenture Act.
Section 11.02. Notices. Any notice or communication shall be sufficiently given if written and if delivered in person when received or if mailed by certified first class mail, return receipt requested, 5 days after mailing, or as between the Company and the Trustee if sent by facsimile transmission, when transmission is confirmed, in each case addressed as follows:
if to the Company: One ServiceMaster Way
Downers Grove, Illinois 60515
Attention: Treasurer
if to the Guarantor: One ServiceMaster Way
Downers Grove, Illinois 60515
Attention: Treasurer
if to the Trustee: 311 West Monroe
12th Floor
Chicago, Illinois 60606
Attention: Indenture Trust
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The Company or the Trustee by written notice to the other may designate additional or different addresses for subsequent notices or communications.
Any notice or communication shall be sufficiently given to Holders of any Unregistered Securities, by publication at least once in an Authorized Newspaper in The City of New York, or with respect to any Security the interest on which is based on the offered quotations in the interbank Eurodollar market for dollar deposits at least once in an Authorized Newspaper in London, and by mailing to the Holders thereof who have filed their names and addresses with the Trustee pursuant to Section 313(c)(2) of the Trust Indenture Act at such addresses as were so furnished to the Trustee and to Holders of Registered Securities by mailing to such Holders at their addresses as they shall appear on the Security Register. Notice mailed shall be sufficiently given if so mailed within the time prescribed. Copies of any such communication or notice to a Holder shall also be mailed to the Trustee and each Agent at the same time.
Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. Except as otherwise provided in this Indenture, if a notice or communication is mailed in the manner provided in this Section 11.02, it is duly given, whether or not the addressee receives it.
Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.
In case it shall be impracticable to give notice as herein contemplated, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.
Section 11.03. Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Company or the Guarantor to the Trustee to take any action under this Indenture, the Company or the Guarantor shall furnish to the Trustee:
(i) an Officers' Certificate stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and
(ii) an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent have been complied with.
Section 11.04. Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include:
(i) a statement that each person signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the examination or investigation upon which the statement or opinion contained in such certificate or opinion is based;
(iii) a statement that, in the opinion of each such person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and
(iv) a statement as to whether or not, in the opinion of each such person, such condition or covenant has been complied with; provided, however, that, with respect to matters of fact, an Opinion of Counsel may rely on an Officers' Certificate or certificates of public officials.
Section 11.05. Evidence of Ownership. The Company, the Guarantor, the
Trustee and any agent of the Company, the Guarantor or the Trustee may deem and
treat the Holder of any Unregistered Security and the Holder of any coupon as
the absolute owner of such Unregistered Security or coupon (whether or not such
Unregistered Security or coupon shall be overdue) for the purpose of receiving
payment thereof or on account thereof and for all other purposes, and neither
the Company, the Guarantor, the Trustee, nor any agent of the Company, the
Guarantor or the Trustee shall be affected by any notice to the contrary. The
fact of the holding by any Holder of an Unregistered Security, and the
identifying number of such Security and the date of his holding the same, may be
proved by the production of such Security or by a certificate executed by any
trust company, bank, banker or recognized securities dealer wherever situated
satisfactory to the Trustee, if such certificate shall be deemed by the Trustee
to be satisfactory. Each such certificate shall be dated and shall state that on
the date thereof a Security bearing a specified identifying number was deposited
with or exhibited to such trust company, bank, banker or recognized securities
dealer by the person named in such certificate. Any such certificate may be
issued in respect of one or more
Unregistered Securities specified therein. The holding by the person named in any such certificate of any Unregistered Securities specified therein shall be presumed to continue for a period of one year from the date of such certificate unless at the time of any determination of such holding (1) another certificate bearing a later date issued in respect of the same Securities shall be produced or (2) the Security specified in such certificate shall be produced by some other Person, or (3) the Security specified in such certificate shall have ceased to be outstanding. Subject to Article 8, the fact and date of the execution of any such instrument and the amount and numbers of Securities held by the Person so executing such instrument may also be proven in accordance with such reasonable rules and regulations as may be prescribed by the Trustee or in any other manner which the Trustee may deem sufficient.
The Company, the Guarantor, the Trustee and any agent of the Company, the Guarantor or the Trustee may deem and treat the person in whose name any Registered Security shall be registered upon the Security Register for such series as the absolute owner of such Registered Security (whether or not such Registered Security shall be overdue and notwithstanding any notation of ownership or other writing thereon) for the purpose of receiving payment of or on account of the Principal of and, subject to the provisions of this Indenture, interest on such Registered Security and for all other purposes; and neither the Company, the Guarantor nor the Trustee nor any agent of the Company, the Guarantor or the Trustee shall be affected by any notice to the contrary.
Section 11.06. Rules by Trustee, Paying Agent or Registrar. The Trustee may make reasonable rules for action by or at a meeting of Holders. The Paying Agent or Registrar may make reasonable rules for its functions.
Section 11.07. Payment Date Other than a Business Day. If any date for payment of Principal or interest on any Security shall not be a Business Day at any place of payment, then payment of Principal of or interest on such Security, as the case may be, need not be made on such date, but may be made on the next succeeding Business Day at any place of payment with the same force and effect as if made on such date and no interest shall accrue in respect of such payment for the period from and after such date.
Section 11.08. Governing Law. The laws of the State of New York shall govern this Indenture, the Securities and the Guarantees.
Section 11.09. No Adverse Interpretation of Other Agreements. This Indenture may not be used to interpret another indenture or loan or debt
agreement of the Company or any Subsidiary of the Company. Any such indenture or agreement may not be used to interpret this Indenture.
Section 11.10. Successors. All agreements of the Company and the Guarantor in this Indenture and under or with respect to the Securities and the Guarantees, as the case may be, shall bind the respective successors of each of the Company and the Guarantor. All agreements of the Trustee in this Indenture shall bind its successors.
Section 11.11. Duplicate Originals. The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.
Section 11.12. Severability. In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
Section 11.13. Table of Contents, Headings, Etc. The Table of Contents and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof and shall in no way modify or restrict any of the terms and provisions hereof.
Section 11.14. Incorporators, Stockholders, Officers and Directors of Company Exempt from Individual Liability. No recourse under or upon any obligation, covenant or agreement contained in this Indenture or any indenture supplemental hereto, in any Security or any coupons appertaining thereto or Guarantee, or because of any indebtedness evidenced thereby, shall be had against any incorporator, as such or against any past, present or future stockholder, officer, director or employee, as such, of the Company, the Guarantor or of any successor thereto, either directly or through the Company, the Guarantor or any successor thereto, under any rule of law, statute or constitutional provision or by the enforcement of any assessment or by any legal or equitable proceeding or otherwise, all such liability being expressly waived and released by the acceptance of the Securities and the coupons appertaining thereto and the related Guarantee by the holders thereof and as part of the consideration for the issue of the Securities and the coupons appertaining thereto and the related Guarantee.
Section 11.15. Judgment Currency. The Company and the Guarantor agree, to
the fullest extent that each may effectively do so under applicable law, that
(a) if for the purpose of obtaining judgment in any court it is necessary to
convert the sum due in respect of the Principal of or interest on the Securities
of
any series (the "Required Currency") into a currency in which a judgment will be rendered (the "Judgment Currency"), the rate of exchange used shall be the rate at which in accordance with normal banking procedures the Trustee could purchase in The City of New York the Required Currency with the Judgment Currency on the day on which final unappealable judgment is entered, unless such day is not a Business Day, then, to the extent permitted by applicable law, the rate of exchange used shall be the rate at which in accordance with normal banking procedures the Trustee could purchase in The City of New York the Required Currency with the Judgment Currency on the Business Day preceding the day on which final unappealable judgment is entered and (b) the obligations of each under this Indenture to make payments in the Required Currency (i) shall not be discharged or satisfied by any tender, or any recovery pursuant to any judgment (whether or not entered in accordance with subsection (a)), in any currency other than the Required Currency, except to the extent that such tender or recovery shall result in the actual receipt, by the payee, of the full amount of the Required Currency expressed to be payable in respect of such payments, (ii) shall be enforceable as an alternative or additional cause of action for the purpose of recovering in the Required Currency the amount, if any, by which such actual receipt shall fall short of the full amount of the Required Currency so expressed to be payable and (iii) shall not be affected by judgment being obtained for any other sum due under this Indenture.
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, all as of the date first written above.
The ServiceMaster Company Limited Partnership, as the Company
By ServiceMaster Management Corporation, its General Partner
Title:
ServiceMaster Limited Partnership,
as the Guarantor
By ServiceMaster Management
Corporation,
its General Partner
Title:
Harris Trust and Savings Bank,
as Trustee
Title:
STATE OF ILLINOIS )
)
COUNTY OF ___________ )
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BEFORE ME, the undersigned authority, on this __ day of July, 1997, personally appeared ____________, ____________ of ServiceMaster Management Corporation, the general partner of The ServiceMaster Company Limited Partnership, a Delaware limited partnership (the "Company"), known to me (or proved to me by introduction upon the oath of a person known to me) to be the person and officer whose name is subscribed to the foregoing instrument, and acknowledged to me that he/she executed the same as the act of such general partner on behalf of the Company for the purposes and consideration herein expressed and in the capacity therein stated.
Print Name:_________________________
Commission Expires:_________________
STATE OF ILLINOIS )
)
COUNTY OF ___________ )
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BEFORE ME, the undersigned authority, on this _______ day of July, 1997, personally appeared _________________, _______________ of ServiceMaster Management Corporation, the general partner of ServiceMaster Limited Partnership, a Delaware limited partnership (the "Guarantor"), known to me (or proved to me by introduction upon the oath of a person known to me) to be the person and officer whose name is subscribed to the foregoing instrument, and acknowledged to me that he/she executed the same as the act of such general partner on behalf of the Guarantor for the purposes and consideration herein expressed and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL THIS _____ DAY OF JULY, 1997.
STATE OF ILLINOIS )
)
COUNTY OF ___________ )
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BEFORE ME, the undersigned authority, on this _______ day of July, 1997, personally appeared _________________, _______________ of Harris Trust and Savings Bank, a ________, known to me (or proved to me by introduction upon the oath of a person known to me) to be the person and officer whose name is subscribed to the foregoing instrument, and acknowledged to me that he/she executed the same as the act of such trust for the purposes and consideration herein expressed and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL THIS _____ DAY OF JULY, 1997.
(SEAL)
[FORM OF FACE OF NOTE]
Exhibit 1
No. $
The ServiceMaster Company Limited Partnership
% Note
Due
The ServiceMaster Company Limited Partnership, a Delaware limited partnership (the "Company", which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to _______________, or registered assigns, at the office or agency of the Company in New York, New York, the principal sum of _______________ on _______________, in the coin or currency of the United States, and to pay interest, semi-annually on _______________, and _______________ of each year, commencing _______________, on said principal sum at said office or agency, in like coin or currency, at the rate per annum specified in the title of this Note, from the _______________ or the _______________, as the case may be, next preceding the date of this Note to which interest has been paid or duly provided for, unless the date hereof is a date to which interest has been paid or duly provided for, in which case from the date of this Note, or unless no interest has been paid or duly provided for on these Notes, in which case from _______________, until payment of said principal sum has been made or duly provided for; provided, that payment of interest may be made at the option of the Company by check mailed to the address of the person entitled thereto as such address shall appear on the Security Register or by wire transfer as provided in the Indenture. Notwithstanding the foregoing, if the date hereof is after the first day of _______________ or _______________, as the case may be, and before the following _______________ or _______________, this Note shall bear interest from such _______________ or _______________; provided, that if the Company shall default in the payment of interest due on such _______________ or _______________, then this Note shall bear interest from the next preceding _______________ or _______________, to which interest has been paid or duly provided for or, if no interest has been paid or duly provided for on these Notes, from _______________. The interest so payable on any _______________ or _______________ will, subject to certain exceptions provided in the Indenture referred to on the reverse hereof, be paid to the person in whose name this Note is registered at the close of business on _______________ or
_______________, as the case may be, next preceding such _______________ or _______________, whether or not such day is a Business Day.
Reference is made to the further provisions of this Note set forth on the reverse hereof. Such further provisions shall for all purposes have the same effect as though fully set forth at this place.
This Note shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been manually signed by the Trustee under the Indenture referred to on the reverse hereof.
IN WITNESS WHEREOF, The ServiceMaster Company Limited Partnership has caused this instrument to be signed manually or by facsimile by its duly authorized officers.
Dated:
THE SERVICEMASTER COMPANY
LIMITED PARTNERSHIP
By ServiceMaster Management Corporation,
its General Partner
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.
Dated: Harris Trust and Savings Bank,
as Trustee
By
---------------------------
Authorized Signatory
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[FORM OF GUARANTEE]
ServiceMaster Limited Partnership (the "Guarantor") hereby unconditionally guarantees to the holder of this Note duly authenticated and delivered by the Trustee, the due and punctual payment of the principal, and premium, if any, of (including any amount in respect of original issue discount), and interest (including, in the event the Company defaults on a payment of interest on the Securities, defaulted interest plus (to the extent lawful) any interest payable on the defaulted interest), if any (together with any additional amounts payable pursuant to the terms of this Note), on this Note and the due and punctual payment of the sinking fund payments, if any, and analogous obligations, if any, provided for pursuant to the terms of this Note, when and as the same shall become due and payable, whether at maturity or upon redemption or upon declaration of acceleration or otherwise according to the terms of this Note and of the Indenture. In case of default by the Company in the payment of any such principal (including any amount in respect of original issue discount), interest (including, in the event the Company defaults on a payment of interest on the Securities, defaulted interest plus (to the extent lawful) any interest payable on the defaulted interest), if any (together with any additional amounts payable pursuant to the terms of this Note), sinking fund payment, or analogous obligation, the Guarantor agrees duly and punctually to pay the same. The Guarantor hereby agrees that its obligations hereunder shall be absolute and unconditional irrespective of any extension of the time for payment of this Note, any modification of this Note, any invalidity, irregularity or unenforceability of this Note or the Indenture, any failure to enforce the same or any waiver, modification or indulgence granted to the Company with respect thereto by the holder of this Note or the Trustee, or any other circumstances which may otherwise constitute a legal or equitable discharge of a surety or guarantor. The Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of merger or bankruptcy of the Company, any right to require a demand or proceeding first against the Company, protest or notice with respect to this Note or the indebtedness evidenced thereby and all demands whatsoever, and covenants that this guarantee will not be discharged as to this Note except by payment in full of the principal of (including any amount payable in respect of original issue discount), and interest (including, in the event the Company defaults on a payment of interest on the Securities, defaulted interest plus (to the extent lawful) any interest payable on the defaulted interest), if any (together with any additional amounts payable pursuant to the terms of this Note), thereon.
Upon making any payment hereunder, the Guarantor shall be subrogated to the rights of a Holder against the Company with respect to such payment; provided that the Guarantor shall not enforce any payment by way of subrogation
until all amounts of Principal of and interest on the Securities and all other amounts payable by the Company under this Indenture have been paid in full.
This guarantee shall not be valid or become obligatory for any purpose with respect to this Note until the certificate of authentication on this Note shall have been signed by the Trustee.
IN WITNESS WHEREOF, ServiceMaster Limited Partnership has caused this guarantee to be signed manually or by facsimile by its duly authorized officers.
SERVICEMASTER LIMITED PARTNERSHIP
By ServiceMaster Management Corporation,
its General Partner
By ________________________________
By ________________________________
REVERSE OF NOTE
The ServiceMaster Company
Limited Partnership
% Note
Due
This Note is one of a duly authorized issue of debentures, notes, bonds or other evidences of indebtedness of the Company (hereinafter called the "Securities") of the series hereinafter specified, all issued or to be issued under and pursuant to an indenture dated as of July _____ , 1997 (herein called the "Indenture"), duly executed and delivered by the Company to _____________ , as Trustee (herein called the "Trustee"), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the Holders of the Securities. The Securities may be issued in one or more series, which different series may be issued in various aggregate principal amounts, may mature at different times, may bear interest (if any) at different rates, may be subject to different redemption provisions (if any), may be subject to different sinking, purchase or analogous funds (if any) and may otherwise vary as in the Indenture provided. This Note is one of a series designated as the % Notes Due of the Company, limited in aggregate principal amount to $ .
Interest will be computed on the basis of a 360-day year of twelve 30-day months. The Company shall pay interest on overdue principal and, to the extent lawful, on overdue installments of interest at the rate per annum borne by this Note. If a payment date is not a Business Day as defined in the Indenture at a place of payment, payment may be made at that place on the next succeeding day that is a Business Day, and no interest shall accrue for the intervening period.
In case an Event of Default as defined in the Indenture, with respect to the % Notes Due , shall have occurred and be continuing, the principal hereof and the interest accrued hereon, if any, may be declared, and upon such declaration shall become, due and payable in the manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions which provide that, without prior notice to any Holders, the Company and the Trustee may amend the Indenture and the Securities of any series with the written consent of the Holders of a majority in
aggregate principal amount of the outstanding Securities of all series affected (all such series voting as one class), and the Holders of a majority in aggregate principal amount of the outstanding Securities of all series to be affected (all such series voting as one class) by written notice to the Trustee may waive future compliance by the Company with any provision of the Indenture or the Securities of such series; provided that, without the consent of each Holder of the Securities of each series affected thereby, an amendment or waiver, including a waiver of past defaults, may not: (i) extend the stated maturity of the principal of, or any sinking fund obligation or any installment of interest on, such Holder's Security, or reduce the principal amount thereof or the rate of interest thereon (including any amount in respect of original issue discount), or any premium payable with respect thereto, or adversely affect the rights of such Holder under any mandatory redemption or repurchase provision or any right of redemption or repurchase at the option of such Holder, or reduce the amount of the principal of an Original Issue Discount Security that would be due and payable upon an acceleration of the maturity or the amount thereof provable in bankruptcy, or change any place of payment where, or the currency in which, any Security or any premium or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the due date therefor; (ii) reduce the percentage in principal amount of outstanding Securities of the relevant series the consent of whose Holders is required for any such supplemental indenture, for any waiver of compliance with certain provisions of the Indenture or certain Defaults and their consequences provided for in the Indenture; (iii) waive a Default in the payment of principal of or interest on any Security of such Holder; or (iv) modify any of the provisions of the Indenture governing supplemental indentures with the consent of Securityholders except to increase any such percentage or to provide that certain other provisions of the Indenture cannot be modified or waived without the consent of the Holder of each outstanding Security affected thereby.
It is also provided in the Indenture that, subject to certain conditions, the Holders of at least a majority in aggregate principal amount of the outstanding Securities of all series affected (voting as a single class), by notice to the Trustee, may waive an existing Default or Event of Default with respect to the Securities of such series and its consequences, except a Default in the payment of principal of or interest on any Security or in respect of a covenant or provision of the Indenture which cannot be modified or amended without the consent of the Holder of each outstanding Security affected. Upon any such waiver, such Default shall cease to exist, and any Event of Default with respect to the Securities of such series arising therefrom shall be deemed to have been cured, for every purpose of the Indenture; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereto.
The Indenture provides that a series of Securities may include one or more tranches (each a "tranche") of Securities, including Securities issued in a periodic offering. The Securities of different tranches may have one or more different terms, including authentication dates and public offering prices, but all the Securities within each such tranche shall have identical terms, including authentication date and public offering price. Notwithstanding any other provision of the Indenture, subject to certain exceptions, with respect to sections of the Indenture concerning the execution, authentication and terms of the Securities, redemption of the Securities, Events of Default of the Securities, defeasance of the Securities and amendment of the Indenture, if any series of Securities includes more than one tranche, all provisions of such sections applicable to any series of Securities shall be deemed equally applicable to each tranche of any series of Securities in the same manner as though originally designated a series unless otherwise provided with respect to such series or tranche pursuant to a board resolution or a supplemental indenture establishing such series or tranche.
No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and any premium and interest on this Note in the manner, at the place, at the respective times, at the rate and in the coin or currency herein prescribed.
The Notes are issuable initially only in registered form without coupons in denominations of $ and any multiple of $ at the office or agency of the Company in the Borough of Manhattan, The City of New York, and in the manner and subject to the limitations provided in the Indenture, but, without the payment of any service charge, Notes may be exchanged for a like aggregate principal amount of Notes of other authorized denominations.
[The Notes may be redeemed at the option of the Company, as a whole, or from time to time in part, on any date [after [_______________] and] prior to maturity, upon mailing a notice of such redemption not less than 30 nor more than 60 days prior to the date fixed for redemption to the Holders of Notes at their last registered addresses, all as further provided in the Indenture, at the following optional redemption prices (expressed in percentages of the principal amount) together in each case with accrued interest to the date fixed for redemption:
If redeemed during the twelve-month period beginning ,
]
[As and for a sinking fund for the retirement of the Notes and so long as
any of the Notes remain outstanding and unpaid, the Company will pay to the
Trustee in cash [(subject to the right to deliver certain Notes in credit
therefor as in the Indenture provided)], on or before and on or before
in each year thereafter to and including an amount sufficient to
redeem $_______________ principal amount of the Notes (or such lesser amount
equal to the principal amount then Outstanding) at 100% of the principal amount
thereof (the "sinking fund redemption price"), together with accrued interest
to the date fixed for redemption. The Notes shall be redeemed through the
operation of the sinking fund as herein provided on and on each
thereafter to and including on notice as set forth in the Indenture.
[At its option the Company may pay into the sinking fund for the retirement of
Notes, in cash except as provided in the Indenture, on or before and on
or before in each year thereafterto and including an amount
sufficient to redeem an additional principal amount of Notes up to but not to
exceed $______________ at the sinking fund redemption price. To the extent that
the right to such optional sinking fund payment is not exercised in any year, it
shall not be cumulative or carried forward to any subsequent year.] The Trustee
shall select Notes for redemption, by prorating, as nearly as may be, the
principal amount of Notes to be redeemed among the Holders of Notes. The Trustee
shall make such adjustments, reallocations and eliminations to such proration as
it shall deem proper to the end that the principal amount of Notes so redeemed
shall be $1,000 or a multiple thereof, by increasing or decreasing or
eliminating the amount which would be allocable to any Holder on the basis of
exact proration by an amount not exceeding $1,000. The Trustee in its discretion
may determine the particular Notes (if there are more than one) registered in
the name of any Holder which are to be redeemed, in whole or in part.]
Upon due presentment for registration of transfer of this Note at the office or agency of the Company in the Borough of Manhattan, The City of New York, a new Note or Notes of authorized denominations for an equal aggregate principal amount will be issued to the transferee in exchange therefor, subject to the
limitations provided in the Indenture, without charge except for any tax or other governmental charge imposed in connection therewith.
The Company, the Guarantor, the Trustee and any agent of the Company or the Trustee may deem and treat the registered Holder hereof as the absolute owner of this Note (whether or not this Note shall be overdue and notwithstanding any notation of ownership or other writing hereon), for the purpose of receiving payment of, or on account of, the principal hereof and, subject to the provisions hereof, interest hereon, and for all other purposes, and neither the Company nor the Guarantor nor the Trustee nor any agent of the Company, the Guarantor or the Trustee shall be affected by any notice to the contrary.
No recourse under or upon any obligation, covenant or agreement of the Company or the Guarantor in the Indenture or any indenture supplemental thereto or in any Note, or because of any indebtedness evidenced thereby, shall be had against any incorporator, stockholder, officer or director, as such, past, present, or future, of the Company or the Guarantor or any successor corporation of either of them, either directly or through the Company, the Guarantor or any successor corporation of either of them, under any rule of law, statute or constitutional provision or by the enforcement of any assessment or by any legal or equitable proceeding or otherwise, all such liability being expressly waived and released by the acceptance hereof and as part of the consideration for the issue hereof.
Terms used herein which are defined in the Indenture shall have the respective meanings assigned thereto in the Indenture.
Exhibit 2
[FORM OF GUARANTEE]
ServiceMaster Limited Partnership (the "Guarantor") hereby unconditionally
guarantees to the holder of this [__________] duly authenticated and delivered
by the Trustee, the due and punctual payment of the principal, and premium, if
any, of (including any amount in respect of original issue discount), and
interest (including, in the event the Company defaults on a payment of interest
on the Securities, defaulted interest plus (to the extent lawful) any interest
payable on the defaulted interest), if any (together with any additional amounts
payable pursuant to the terms of this [__________]), on this [__________] and
the due and punctual payment of the sinking fund payments, if any, and analogous
obligations, if any, provided for pursuant to the terms of this [__________],
when and as the same shall become due and payable, whether at maturity or upon
redemption or upon declaration of acceleration or otherwise according to the
terms of this [__________] and of the Indenture. In case of default by the
Company in the payment of any such principal (including any amount in respect of
original issue discount), premium, if any, interest (including, in the event the
Company defaults on a payment of interest on the Securities, defaulted interest
plus (to the extent lawful) any interest payable on the defaulted interest), if
any (together with any additional amounts payable pursuant to the terms of this
[__________]), sinking fund payment, or analogous obligation, the Guarantor
agrees duly and punctually to pay the same. The Guarantor hereby agrees that
its obligations hereunder shall be absolute and unconditional irrespective of
any extension of the time for payment of this [__________], any modification of
this [__________], any invalidity, irregularity or unenforceability of the
Indenture, any failure to enforce the same or any waiver, modification or
indulgence granted to the Company with respect thereto by the holder of this
[__________] or the Trustee, or any other circumstances which may otherwise
constitute a legal or equitable discharge of a surety or guarantor. The
Guarantor hereby waives diligence, presentment, demand of payment, filing of
claims with a court in the event of merger or bankruptcy of the Company, any
right to require a demand or proceeding first against the Company, protest or
notice with respect to this [__________] or the indebtedness evidenced thereby
and all demands whatsoever, and covenants that this guarantee will not be
discharged as to this [__________] except by payment in full of the principal of
(including any amount payable in respect or original issue discount), and
interest (including, in the event the Company defaults on a payment of interest
on the Securities, defaulted interest plus (to the extent lawful) any interest
payable on the defaulted interest), if any (together with any additional amounts
payable pursuant to the terms of this [__________]), thereon.
Upon making any payment hereunder, the Guarantor shall be subrogated to the rights of a Holder against the Company with respect to such payment; provided that the Guarantor shall not enforce any payment by way of subrogation until all amounts of Principal of and interest on the Securities and all other amounts payable by the Company under this Indenture have been paid in full.
This guarantee shall not be valid or become obligatory for any purpose
with respect to this [________] until the certificate of authentication on this
[________] shall have been signed by the Trustee.
IN WITNESS WHEREOF, ServiceMaster Limited Partnership has caused this guarantee to be signed by facsimile by its duly authorized officers and has caused a facsimile of its corporate seal to be affixed hereunto or imprinted hereon.
SERVICEMASTER LIMITED PARTNERSHIP
By ServiceMaster Management Corporation,
its General Partner
[Letterhead of ServiceMaster]
July 28, 1997
ServiceMaster Limited Partnership
The ServiceMaster Company Limited Partnership
ServiceMaster Incorporated of Delaware
One ServiceMaster Way
Downers Grove, Illinois 60515
Gentlemen:
I am Senior Vice President and General Counsel of ServiceMaster Limited Partnership, a Delaware limited partnership (the "Parent Partnership"), and The ServiceMaster Company Limited Partnership ("The ServiceMaster Company") and Vice President and Secretary of ServiceMaster Incorporated of Delaware ("ServiceMaster Incorporated"). In those capacities, I have participated in the preparation of, and I am familiar with the contents of:
(i) the Registration Statement on Form S-3 of the Parent Partnership, The ServiceMaster Company and ServiceMaster Incorporated (the "Registration Statement"), which is being filed with the Securities and Exchange Commission on or about the date of this letter, which registers under the Securities Act of 1933 (a) certain debt securities which may be issued by The ServiceMaster Company prior to the Reincorporation (as described in the Registration Statement) and by ServiceMaster Incorporated thereafter (collectively, the "Debt Securities," which term includes any guarantee thereof by the Parent Partnership), (b) partnership shares which may be issued by the Parent Partnership (the "Partnership Shares") prior to the Reincorporating Merger (as described in the Registration Statement), (c) shares of common stock (the "Merger Shares") of ServiceMaster Incorporated into which any Partnership Shares issued under the Registration Statement will be converted in the Reincorporating Merger, and (d) shares of common stock which ServiceMaster Incorporated may issue after the Reincorporating Merger in offerings made under the Registration Statement (the "Corporate Shares"), and
(ii) a proposed Indenture (the "Indenture") between The ServiceMaster Company, the Parent Partnership and Harris Trust and Savings Bank, as trustee (the "Trustee"), under which The ServiceMaster Company may issue Debt Securities in one or more
ServiceMaster Limited Partnership
The ServiceMaster Company Limited Partnership
ServiceMaster Incorporated of Delaware
July 28, 1997
series and which provides a mechanism for ServiceMaster Incorporated to take the place of The ServiceMaster Company and the Parent Partnership in connection with the Reincorporation.
I have reviewed the resolutions adopted by the Board of Directors of ServiceMaster Management Corporation in its capacity as the managing general partner of the Parent Partnership and The ServiceMaster Company (the "Partnership Board") and resolutions adopted by the Board of Directors of ServiceMaster Incorporated (the "SMI Board"). Such resolutions, among other things, (i) authorize the Finance Committee of the Partnership Board to determine the principal amount of Debt Securities to be issued in each offering and the price for which those Debt Securities may be sold, (ii) appoint Authorized Officers who are authorized to act on behalf of the registrants with respect the matters relevant to the registration, (iii) authorize all or any one or more of the Authorized Officers to approve the terms of the Indenture relating to the Debt Securities and the terms of each series of Debt Securities which may be issued under the Indenture, (iv) authorize the Finance Committee to authorize the issuance of the Partnership Shares in such number and at such price and on such other terms as the Finance Committee shall approve, (v) authorize each Authorized Officer to cause each registrant to take such other actions as such Authorized Officer determines to be within the scope of the resolution. Any resolution which shall be approved by the Finance Committee or any authorization which may be granted by all or any one or more of the Authorized Officers pursuant to the authority delegated by the Authorizing Resolutions or authority otherwise exercisable by such Committee or Officer or Officers is called an "Implementing Authorization" in this letter. I have also reviewed such other records and documents as I have deemed necessary in order to enable me to express the opinions stated herein.
On the basis of the foregoing and subject to the limitations and assumptions identified in this letter, I am of the opinion that:
1. The Parent Partnership and The ServiceMaster Company are each a limited partnership validly existing and in good standing under the Revised Uniform Limited Partnership Act of the State of Delaware (the "Delaware RULPA"). ServiceMaster Incorporated is a corporation validly existing and in good standing under the Delaware General Corporation Law.
ServiceMaster Limited Partnership
The ServiceMaster Company Limited Partnership
ServiceMaster Incorporated of Delaware
July 28, 1997
2. The Indenture will constitute a valid and binding obligation of The ServiceMaster Company and the Parent Partnership enforceable against The ServiceMaster Company and the Parent Partnership in accordance with its terms upon the approval of an appropriate Implementing Authorization and due execution and delivery by The ServiceMaster Company, the Parent Partnership, and the Trustee.
3. The Indenture will constitute a valid and binding obligation of ServiceMaster Incorporated enforceable against ServiceMaster Incorporated in accordance with its terms upon the consummation of the Reincorporation, the execution by ServiceMaster Incorporated of a supplemental indenture expressly assuming all of the obligations of The ServiceMaster Company on all of the Debt Securities and under the Indenture, and the compliance with the related requirements in Article 6 of the Indenture, and the authorization of these actions by the SMI Board.
4. Debt Securities issued in any series will be legally issued and will
be binding obligations of The ServiceMaster Company or ServiceMaster
Incorporated enforceable in accordance with their terms assuming that:
(a) the conditions contemplated in paragraph 3 of this letter (if such
series is to be issued by ServiceMaster Incorporated) or in paragraphs
3 and 4 of this letter (if such series is to be issued by The
ServiceMaster Company) have been satisfied, (b) the terms of such Debt
Securities and their issue and sale have been duly established in
accordance with the Authorizing Resolutions, Article Two of the
Indenture and an appropriate Implementing Authorization, (c) such Debt
Securities have been duly executed, authenticated, issued and
delivered, and (d) The ServiceMaster Company or ServiceMaster
Incorporated has received the prescribed consideration for the
issuance of such Debt Securities, all in accordance with the terms and
conditions of the Indenture, the Authorizing Resolutions and the
relevant Implementing Authorizations and in the manner contemplated by
the Registration Statement.
5. Any Partnership Shares which may be issued by the Parent Partnership in offerings made under the Registration Statement will be validly issued by the Parent Partnership assuming (a) the issue and sale of the Partnership Shares is duly authorized by an appropriate resolution adopted by the Finance Committee, (b) the certificates representing the Partnership Shares comply as to form with the Parent Partnership's Governing Instruments and the Authorizing Resolutions and bear all necessary signatures and authentications, and (c) the Parent Partnership has received the prescribed consideration for the Partnership Shares. Neither the Parent Partnership's Governing Instruments nor the Delaware RULPA
ServiceMaster Limited Partnership
The ServiceMaster Company Limited Partnership
ServiceMaster Incorporated of Delaware
July 28, 1997
authorizes any assessment to be made against the owners of the Partnership Shares except to the extent authorized by Section 17-607 of Delaware RULPA.
6. In the event that any Partnership Shares are issued prior to the Reincorporating Merger in connection with offerings under the Registration Statement with respect to which the conditions specified in paragraph 5 of this letter are satisfied, then the Merger Shares into which those Partnership Shares will be converted in the Reincorporating Merger will upon their issuance by ServiceMaster Incorporated be validly issued, fully paid and nonassessable.
7. Any Corporate Shares which may be issued by ServiceMaster Incorporated after consummation of the Reincorporating Merger will be validly issued, fully paid and nonassessable assuming that: (i) the issue and sale of the Corporate Shares shall be authorized by an appropriate Implementing Authorization adopted by the SMI Board, (ii) the certificates representing the Corporate Shares comply as to form with the By-laws of ServiceMaster Incorporated, the General Corporation Law of the State of Delaware and the Authorizing Resolutions and bear all necessary signatures and authentications, and (iii) ServiceMaster Incorporated has received the prescribed consideration for the Corporate Shares.
The opinions expressed herein regarding enforceability of the Indenture and any series of Debt Securities are subject to: (i) the effect of bankruptcy, insolvency, fraudulent conveyance and other similar laws and judicially developed doctrines in this area such as substantive consolidation and equitable subordination; (ii) the effect of general principles of equity; and (iii) other commonly recognized statutory and judicial constraints on enforceability including statutes of limitations.
The Parent Partnership's Certificate of Limited Partnership filed with the Delaware Secretary of State as constituted on the date hereof and the Parent Partnership's Amended and Restated Partnership Agreement as constituted on the date hereof are herein called "the Parent Partnership's Governing Instruments." The Board of Directors and the sole stockholder of ServiceMaster Incorporated have approved the amendment and restatement of the Certification of Incorporation of ServiceMaster Incorporated and all other actions necessary to make such amendment and restatement effective have been taken except for the filing of such amendment and restatement in Delaware. I have assumed for purposes of this opinion that such amendment and restatement will be filed in Delaware and will become effective prior to consummation of the Reincorporating Merger. All of my opinions assume that the Registration Statement will become
ServiceMaster Limited Partnership
The ServiceMaster Company Limited Partnership
ServiceMaster Incorporated of Delaware
July 28, 1997
effective under the Securities Act before any Debt Securities, Partnership Shares, or Corporate Shares covered by the Registration Statement are issued. I have also made other assumptions which I believe to be appropriate for purposes of this letter.
My advice on every legal issue addressed in this letter is based
exclusively on the internal law of Illinois, the Delaware RULPA, the Delaware
General Corporation Law, or the federal law of the United States. The Indenture
provides that the Indenture and the Debt Securities issued under the Indenture
are to be governed by the law of New York, but my advice on every state law
issue with respect to the Indenture provides that the Indenture and the Debt
Securities issued under the Indenture represents my opinion of how that issue
would be resolved by the Illinois state courts if the Indenture and the Debt
Securities issued under the Indenture had instead provided that they were
governed by Illinois internal law and the Illinois state courts applied Illinois
internal law to resolve such issue. I express no opinion whether any relevant
difference exists between the laws upon which my opinions are based and the laws
of New York or any other laws which may actually be used to decide any issue
addressed by this letter. This letter does not cover any law which in my
experience would generally not be considered by lawyers in Illinois for purposes
of the opinions contained in this letter. Without limiting by implication the
generality of the preceding sentence, this opinion does not cover the securities
laws of the state of Illinois or any other jurisdiction. Each reference in this
letter to general principles of equity includes but is not limited to:
principles limiting the availability of specific performance and injunctive
relief; principles which limit the availability of a remedy under certain
circumstances where another remedy has been elected; principles requiring
reasonableness, good faith and fair dealing in the performance and enforcement
of an agreement by the party seeking enforcement; principles which may permit a
party to cure a material failure to perform its obligations; and principles
affording equitable defenses such as waiver, laches and estoppel.
I hereby consent to the inclusion of this letter as an exhibit to the Registration Statement and to the reference in each Prospectus included as part of the Registration Statement to my having issued the opinions expressed herein.
Very truly yours,
/s/ Vernon T. Squires Vernon T. Squires Senior Vice President and General Counsel |
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in Thousands)
Six Months Ended
June 30, Year Ended December 31,
--------------- --------------------------------------------
1997 1996 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ----
Earnings:
Consolidated net income................. $122,567 $111,777 $245,140 $172,019 $139,883 $145,947 $122,065
Provision for income taxes.............. 4,428 3,178 7,257 5,588 2,755 2,146 1,233
Fixed charges less interest capitalized. 45,082 31,166 62,985 57,451 49,799 48,877 45,665
Minority interest of subsidiaries with 1,674 2,327 9,729 42,210 42,405 25,571 6,740
fixed charge........................... -------- -------- -------- -------- -------- -------- --------
Total.............................. $173,751 $148,448 $325,111 $277,268 $234,842 $222,541 $175,703
======== ======== ======== ======== ======== ======== ========
Fixed Charges:
Interest on debt and liabilities -
amount expensed (includes amortization
of debt expense)...................... $ 31,192 $ 18,822 $ 38,298 $ 35,855 $ 31,543 $ 32,483 $ 32,155
Interest element of rentals 13,890 12,344 24,687 21,596 18,256 16,394 13,510
-------- -------- -------- -------- -------- -------- --------
Total.............................. 45,082 $ 31,166 $ 62,985 $ 57,451 $ 49,799 $ 48,877 $ 45,665
======== ======== ======== ======== ======== ======== ========
Ratio of earnings to fixed charges...... 3.85x 4.76x 5.16x 4.83x 4.72x 4.55x 3.85x
======== ======== ======== ======== ======== ======== ========
|
Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by reference in this registration statement of our report dated January 22, 1997 (February 24, 1997 as to the pending transaction with WMX Technologies, Inc. and the acquisition of Barefoot, Inc., which are discussed in the footnotes in the financial statements) incorporated by reference in the ServiceMaster Limited Partnership's Form 10-K for the year ended December 31, 1996 and to all references to our firm included in this registration statement.
ARTHUR ANDERSEN LLP
Exhibit 24.1
Power of Attorney
ServiceMaster Registration Statements
I hereby appoint each of Vernon T. Squires or Steven C. Preston or Eric R. Zarnikow or Susan D. Baker or any other person occupying the office of General Counsel, Chief Financial Officer, Treasurer, or Secretary with any of the Registrants at the time any action hereby authorized shall be taken to act as my attorney-in-fact and agent for all purposes specified in this Power of Attorney. I hereby authorize each person identified by name or office in the preceding sentence (each of whom is herein called my "authorized representative") acting alone to sign and file on my behalf in all capacities I may at any time have with any of the Registrants or with ServiceMaster Management Corporation (in its capacity as general partner of ServiceMaster Limited Partnership or The ServiceMaster Company Limited Partnership) (including but not limited to the position of director or any officership position) all or any one or more of the registration statements prepared under the Securities Act of 1933 identified in this Power of Attorney and any pre-effective or post effective amendment to any such registration statement. I hereby authorize each authorized representative in my name and on my behalf to execute every document and take every other action which such authorized representative deems necessary or desirable in connection with any of the registration statements identified in this Power of Attorney and any sale of securities or other transaction accomplished by means of any such registration statement.
For purposes of this Power of Attorney, ServiceMaster Limited Partnership, The ServiceMaster Company Limited Partnership and ServiceMaster Incorporated of Delaware shall each be deemed a Registrant and shall collectively be deemed to be the Registrants.
This Power of Attorney applies to the following registration statements which may be filed under the Securities Act of 1933 by all or any one or more of the Registrants: (i) a registration statement registering up to $950 million of equity securities, debt securities, and/or warrants; and (ii) any subsequent registration statement which may be filed to register additional securities in the same classes as those covered by the registration statement specified in clause (i) or additional classes of debt securities, equity securities or warrants which employs a prospectus used in common with the registration statement specified in clause (i) and which does not materially increase the dollar amount of the securities to be offered.
This instrument shall remain in effect until and unless I shall give written notice to the Chief Executive Officer, General Counsel or Chief Financial Officer of any of the Registrants of my election to revoke this instrument. No such revocation shall be effective to revoke the authority for any action taken pursuant to this Power of Attorney prior to such delivery of such revocation. This instrument shall be governed by the internal law of the state of Illinois.
Dated: July 10, 1997
Signature Title
--------- -----
/s/ C. William Pollard Chairman of ServiceMaster Limited
---------------------------- Partnership, The ServiceMaster Company
C. William Pollard Limited Partnership, and ServiceMaster
Management Corporation and
Director of ServiceMaster Management
Corporation
/s/ Carlos H. Cantu President and Chief Executive Officer of
---------------------------- ServiceMaster Limited Partnership, The
Carlos H. Cantu ServiceMaster Company Limited
Partnership, and ServiceMaster Management
Corporation and Director of ServiceMaster
Management Corporation
/s/ Charles W. Stair Vice Chairman of ServiceMaster Limited
---------------------------- Partnership, The ServiceMaster Company
Charles W. Stair Limited Partnership, and ServiceMaster
Management Corporation and Director of
ServiceMaster Management Corporation
/s/ Philip B. Rooney Vice Chairman of ServiceMaster Limited
---------------------------- Partnership, The ServiceMaster Company
Philip B. Rooney Limited Partnership, and ServiceMaster
Management Corporation and Director of
ServiceMaster Management Corporation
/s/ Paul W. Berezny, Jr. Director of ServiceMaster Management
---------------------------- Corporation
Paul W. Berezny, Jr.
/s/ Henry O. Boswell Director of ServiceMaster Management
---------------------------- Corporation
Henry O. Boswell
/s/ Brian Griffiths Director of ServiceMaster Management
---------------------------- Corporation
Brian Griffiths
/s/ Sidney E. Harris Director of ServiceMaster Management
---------------------------- Corporation
Sidney E. Harris
/s/ Herbert P. Hess Director of ServiceMaster Management
---------------------------- Corporation
Herbert P. Hess
|
Signature Title
--------- -----
/s/ Michele M. Hunt Director of ServiceMaster Management
------------------------------ Corporation
Michele M. Hunt
/s/ Gunther H. Knoedler Director of ServiceMaster Management
------------------------------ Corporation
Gunther H. Knoedler
/s/ James D. McLennan Director of ServiceMaster Management
------------------------------ Corporation
James D. McLennan
/s/ Vincent C. Nelson Director of ServiceMaster Management
------------------------------ Corporation
Vincent C. Nelson
/s/ Kay A. Orr Director of ServiceMaster Management
------------------------------ Corporation
Kay A. Orr
/s/ Dallen W. Peterson Director of ServiceMaster Management
------------------------------ Corporation
Dallen W. Peterson
/s/ Burton E. Sorensen Director of ServiceMaster Management
------------------------------ Corporation
Burton E. Sorensen
/s/ David K. Wessner Director of ServiceMaster Management
------------------------------ Corporation
David K. Wessner
|
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
Statement of Eligibility
Under the Trust Indenture Act of 1939
of a Corporation Designated to Act as Trustee
Check if an Application to Determine Eligibility of a Trustee Pursuant to Section 305(b)(2) ______
HARRIS TRUST AND SAVINGS BANK
(Name of Trustee)
Illinois 36-1194448
(State of Incorporation) (I.R.S. Employer Identification No.)
111 West Monroe Street, Chicago, Illinois 60603
(Address of principal executive offices)
Carolyn Potter, Harris Trust and Savings Bank,
311 West Monroe Street, Chicago, Illinois, 60606
312-461-2531 phone 312-461-3525 facsimile
(Name, address and telephone number for agent for service)
|
The ServiceMaster Company Limited Partnership
(Name of obligor)
Delaware 36-3482710
(State of Incorporation) (I.R.S. Employer Identification No.)
ServiceMaster Limited Partnership
(Name of Guarantor)
Delaware 36-3497008
(State of Incorporation) (I.R.S. Employer Identification No.)
One ServiceMaster Way
Downers Grove Illinois 60515
(Address of principal executive offices)
|
Debt Securities
(Title of indenture securities)
1. GENERAL INFORMATION. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which it is subject.
Commissioner of Banks and Trust Companies, State of Illinois, Springfield, Illinois; Chicago Clearing House Association, 164 West Jackson Boulevard, Chicago, Illinois; Federal Deposit Insurance Corporation, Washington, D.C.; The Board of Governors of the Federal Reserve System,Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Harris Trust and Savings Bank is authorized to exercise corporate trust powers.
2. AFFILIATIONS WITH OBLIGOR. If the Obligor is an affiliate of the Trustee, describe each such affiliation.
The Obligor is not an affiliate of the Trustee.
3. thru 15.
NO RESPONSE NECESSARY
16. LIST OF EXHIBITS.
1. A copy of the articles of association of the Trustee is now in effect which includes the authority of the trustee to commence business and to exercise corporate trust powers.
A copy of the Certificate of Merger dated April 1, 1972 between Harris Trust and Savings Bank, HTS Bank and Harris Bankcorp, Inc. which constitutes the articles of association of the Trustee as now in effect and includes the authority of the Trustee to commence business and to exercise corporate trust powers was filed in connection with the Registration Statement of Louisville Gas and Electric Company, File No. 2-44295, and is incorporated herein by reference.
2. A copy of the existing by-laws of the Trustee.
A copy of the existing by-laws of the Trustee was filed in connection with the Registration Statement of Commercial Federal Corporation, File No. 333-20711, and is incorporated herein by reference.
3. The consents of the Trustee required by Section 321(b) of the Act.
(included as Exhibit A on page 2 of this statement)
4. A copy of the latest report of condition of the Trustee published pursuant to law or the requirements of its supervising or examining authority.
(included as Exhibit B on page 3 of this statement)
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee, HARRIS TRUST AND SAVINGS BANK, a corporation organized and existing under the laws of the State of Illinois, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Chicago, and State of Illinois, on the 11th day of July, 1997.
HARRIS TRUST AND SAVINGS BANK
By: /s/ C. Potter
------------------------------
C. Potter
Assistant Vice President
|
EXHIBIT A
The consents of the trustee required by Section 321(b) of the Act.
Harris Trust and Savings Bank, as the Trustee herein named, hereby consents that reports of examinations of said trustee by Federal and State authorities may be furnished by such authorities to the Securities and Exchange Commission upon request therefor.
HARRIS TRUST AND SAVINGS BANK
By: /s/ C. Potter
------------------------------
C. Potter
Assistant Vice President
|
EXHIBIT B
Attached is a true and correct copy of the statement of condition of Harris Trust and Savings Bank as of March 31, 1997, as published in accordance with a call made by the State Banking Authority and by the Federal Reserve Bank of the Seventh Reserve District.
[LOGO HARRIS BANK]
Harris Trust and Savings Bank
111 West Monroe Street
Chicago, Illinois 60603
of Chicago, Illinois, And Foreign and Domestic Subsidiaries, at the close of business on March 31, 1997, a state banking institution organized and operating under the banking laws of this State and a member of the Federal Reserve System. Published in accordance with a call made by the Commissioner of Banks and Trust Companies of the State of Illinois and by the Federal Reserve Bank of this District.
Bank's Transit Number 71000288
THOUSANDS
ASSETS OF DOLLARS
Cash and balances due from depository
institutions:
Non-interest bearing balances
and currency and coin........... $ 1,594,951
Interest bearing balances........ $ 620,847
Securities:
a. Held-to-maturity securities $ 0
b. Available-for-sale securities $ 3,674,321
Federal funds sold and securities
purchased under agreements to resell in
domestic offices of the bank and
of its Edge and Agreement
subsidiaries, and in IBF's:
Federal funds sold............... $ 447,375
Securities purchased under
agreements to resell............ $ 0
Loans and lease financing receivables:
Loans and leases, net of
unearned income................. $8,499,011
LESS: Allowance for loan and
lease losses.................... $110,978
----------
Loans and leases, net of
unearned income, allowance, and
reserve (item 4.a minus 4.b).... $ 8,388,033
Assets held in trading accounts......... $ 126,309
Premises and fixed assets (including
capitalized leases).................... $ 188,993
Other real estate owned................. $ 446
Investments in unconsolidated
subsidiaries and associated companies.. $ 53
Customer's liability to this bank on
acceptances outstanding................ $ 66,859
Intangible assets....................... $ 292,918
Other assets............................ $ 495,997
-----------
TOTAL ASSETS $15,897,102
===========
|
LIABILITIES
Deposits:
In domestic offices.................................... $ 8,252,773
Non-interest bearing.............................. $3,414,150
Interest bearing.................................. $4,838,623
In foreign offices, Edge and Agreement subsidiaries,
and IBF's............................................. $ 1,989,792
Non-interest bearing.............................. $54,391
Interest bearing.................................. $1,935,401
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of the
bank and of its Edge and Agreement subsidiaries, and in
IBF's:
Federal funds purchased & securities sold under
agreements to repurchase.............................. $ 2,896,616
Trading Liabilities...................................... 81,381
Other borrowed money:
a. With remaining maturity of one year or less.......... $ 991,442
b. With remaining maturity of more than one year........ $ 0
Bank's liability on acceptances executed and outstanding. $ 66,859
Subordinated notes and debentures....................... $ 310,000
Other liabilities........................................ $ 138,427
-----------
TOTAL LIABILITIES........................................ $14,727,290
===========
EQUITY CAPITAL
Common stock............................................. $ 100,000
Surplus.................................................. $ 600,566
a. Undivided profits and capital reserves............... $ 519,518
b. Net unrealized holding gains (losses) on available-
for-sale securities.................................. ($50,272)
-----------
TOTAL EQUITY CAPITAL..................................... $ 1,169,812
===========
Total liabilities, limited-life preferred stock, and
equity capital.......................................... $15,897,102
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I, Steve Neudecker, Vice President of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true to the best of my knowledge and belief.
STEVE NEUDECKER
4/30/97
We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us and, to the best of our knowledge and belief, has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and the Commissioner of Banks and Trust Companies of the State of Illinois and is true and correct.
EDWARD W. LYMAN,
ALAN G. McNALLY,
MARIBETH S. RAHE
Directors.