Exhibit 1.1
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THE SERVICEMASTER COMPANY
Underwriting Agreement
[Insert Date]
To the Representatives named
in Schedule I hereto of the
Underwriters named in
Schedule II hereto
Ladies and Gentlemen:
The ServiceMaster Company, a Delaware corporation (the "Company"), proposes
to issue and sell to the underwriters named in Schedule II hereto (the
"Underwriters"), for whom you are acting as representatives (the
"Representatives"), the principal amount of its debt securities identified in
Schedule I hereto (the "Securities"), to be issued under the indenture specified
in Schedule I hereto between the Company and the trustee identified in such
Schedule (the "Trustee") (as heretofore amended or supplemented as specified in
Schedule I hereto, the "Indenture"). If the firm or firms listed in Schedule II
hereto include only the firm or firms listed in Schedule I hereto, then the
terms "Underwriters" and "Representatives" as used herein, shall each be deemed
to refer to such firm or firms.
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"), a registration
statement (the file number of which is set forth in Schedule I hereto) on Form
S-3, relating to certain debt securities (the "Shelf Securities") that may be
issued from time to time by the Company. The Company has also filed with, or
proposes to file with, the Commission pursuant to Rule 424 under the Securities
Act a prospectus supplement specifically relating to the Securities so issued by
the Company. The registration statement referenced above as amended to the date
of this Agreement is hereinafter referred to as the "Registration Statement" and
the related prospectus covering the Shelf Securities in the form first used to
confirm sales of the Securities is hereinafter referred to as the "Basic
Prospectus."
The Basic Prospectus as supplemented by the prospectus supplement
specifically relating to the Securities in the form first used to confirm sales
of the Securities is hereinafter referred to as the "Prospectus." If the Company
has filed an abbreviated registration statement pursuant to Rule 462(b) under
the Securities Act (the "Rule 462 Registration Statement"), then any reference
herein to the term "Registration Statement" shall be deemed to include such Rule
462 Registration Statement. Any reference in this Agreement to the Registration
Statement, the Basic Prospectus, any preliminary form of Prospectus (a
"preliminary prospectus") previously filed with the Commission pursuant to Rule
424 or the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the
Securities Act which were filed under the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder
(collectively, the "Exchange Act") on or before the date of this Agreement or
the date of the Basic Prospectus, any preliminary prospectus or the Prospectus,
as the case may be; and any reference to "amend," "amendment" or "supplement"
with respect to the Registration Statement, the Basic Prospectus, any
preliminary prospectus or the Prospectus shall be deemed to refer to and include
any documents filed under the Exchange Act after the date of this Agreement, or
the date of the Basic Prospectus, any preliminary prospectus or the Prospectus,
as the case may be, which are deemed to be incorporated by reference therein.
The Company hereby agrees with the Underwriters as follows:
1. The Company agrees to issue and sell the Securities to the several
Underwriters, as hereinafter provided, and each Underwriter, on the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated agrees to purchase, severally and not jointly, from the
Company the respective principal amount of Securities set forth opposite such
Underwriter's name in Schedule II hereto at the purchase price set forth in
Schedule I hereto plus accrued interest, if any, from the date specified in
Schedule I hereto to the date of payment and delivery.
2. The Company understands that the several Underwriters intend (i) to
make a public offering of their respective portions of the Securities and (ii)
initially to offer the Securities upon the terms set forth in the Prospectus.
3. Payment for the Securities shall be made by wire transfer in
immediately available funds to the account specified by the Company to the
Representatives, no later than noon on the date and at the time and place set
forth in Schedule I hereto (or at such other time and place on the same or such
other date, not later than the fifth Business Day (as defined below) thereafter,
as you and the Company may agree in writing). As used herein, the term "Business
Day" means any day other than a day on which banks are permitted or required to
be closed in New York City. The time and date of such payment and delivery with
respect to the Securities are referred to herein as the "Closing Date."
Payment for the Securities shall be made against delivery to the nominee of
The Depository Trust Company for the respective accounts of the several
Underwriters of the Securities of one or more global notes (the "Global Note")
representing the Securities, with any transfer taxes payable in connection with
the transfer to the Underwriters of the Securities duly paid by the Company. The
Global Note will be made available for inspection by the Representatives at the
office of X.X. Xxxxxx Securities Inc., 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
on the Business Day prior to the Closing Date.
4. The Company represents and warrants to each Underwriter that:
(a) the Registration Statement has been declared effective by the
Commission under the Securities Act; no stop order suspending the effectiveness
of the Registration Statement
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has been issued and no proceeding for that purpose has been instituted or, to
the knowledge of the Company, threatened by the Commission; and the Registration
Statement and Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) comply, or will comply, as the
case may be, in all material respects with the Securities Act and the Trust
Indenture Act of 1939, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Trust Indenture Act"), and do not and
will not, as of the applicable effective date as to the Registration Statement
and any amendment or supplement thereto and as of the date of the Prospectus and
any amendment or supplement thereto, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, and the Prospectus, as amended or
supplemented at the Closing Date, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading; provided, however, that the foregoing representations and
warranties shall not apply to (i) that part of the Registration Statement which
constitutes the Statement of Eligibility and Qualification (Form T-1) under the
Trust Indenture Act of the Trustee and (ii) statements or omissions in the
Registration Statement or the Prospectus made in reliance upon and in conformity
with information relating to any Underwriter furnished to the Company in writing
by such Underwriter through the Representatives expressly for use therein;
(b) the documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Securities Act or
the Exchange Act, as applicable, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and any further
documents so filed and incorporated by reference in the Prospectus or any
further amendment or supplement thereto, when such documents become effective or
are filed with the Commission, as the case may be, will conform in all material
respects to the requirements of the Securities Act or the Exchange Act, as
applicable, and will not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading;
(c) the financial statements, and the related notes thereto, of the
Company included or incorporated by reference in the Registration Statement and
the Prospectus present fairly in all material respects the consolidated
financial position of the Company and its consolidated subsidiaries as of the
dates indicated and the results of their operations and the changes in their
consolidated cash flows for the periods specified; said financial statements
have been prepared in conformity with generally accepted accounting principles
applied on a consistent basis, and the supporting schedules included or
incorporated by reference in the Registration Statement present fairly in all
material respects the information required to be stated therein; and the pro
forma financial information, and the related notes thereto, if any, included or
incorporated by reference in the Registration Statement and the Prospectus has
been prepared in accordance with the applicable requirements of the Securities
Act and the Exchange Act, as applicable and is based upon good faith estimates
and assumptions believed by the Company to be reasonable;
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(d) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any material
change in the capital stock or long-term debt of the Company or any of its
significant subsidiaries (as defined in the Commission's Regulation S-X), or any
material adverse change, or any development involving a prospective material
adverse change, in or affecting the general affairs, business, prospects,
management, financial position, stockholders' equity or results of operations of
the Company and its subsidiaries, taken as a whole, otherwise than as set forth
or contemplated in the Prospectus; and except as set forth or contemplated in
the Prospectus neither the Company nor any of its subsidiaries has entered into
any transaction or agreement (whether or not in the ordinary course of business)
material to the Company and its subsidiaries taken as a whole;
(e) the Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of its jurisdiction of
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and has been
duly qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business, so as to require such
qualification, other than where the failure to be so qualified or in good
standing would not have a material adverse effect on the Company and its
subsidiaries taken as a whole.
(f) each of the Company's significant subsidiaries (as defined in the
Commission's Regulation S-X) has been duly incorporated or organized and is
validly existing as a corporation, limited liability company or limited
partnership under the laws of its jurisdiction of incorporation or organization,
with power and authority (corporate or partnership or other) to own its
properties and conduct its business, as described in the Prospectus, and has
been duly qualified as a foreign corporation, limited liability company or
limited partnership for the transaction of business and is in good standing
under the laws of each jurisdiction in which it owns or leases properties, or
conducts any business so as to require such qualification, other than where the
failure to be so qualified or in good standing would not have a material adverse
effect on the Company and its subsidiaries taken as a whole; and all the
outstanding shares of capital stock, limited liability company interests or
partnership interests, as the case may be, of each significant subsidiary of the
Company have been duly authorized and validly issued, are fully-paid and non-
assessable, and (except as described in the Prospectus) are owned by the
Company, directly or indirectly, free and clear of all liens, encumbrances,
security interests and claims;
(g) this Agreement has been duly authorized, executed and delivered by
the Company;
(h) the Securities have been duly authorized, and, when executed,
authenticated and issued under the Indenture and delivered to and paid for in
accordance with this Agreement, will have been duly executed, issued and
delivered by the Company and will constitute valid and binding obligations of
the Company entitled to the benefits provided by the Indenture; the Indenture
has been duly authorized, executed and delivered by the Company and qualified
under the Trust Indenture Act and constitutes a valid and binding instrument;
and the Indenture conforms to the descriptions thereof in the Prospectus;
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(i) neither the Company nor any of its subsidiaries is, or with the
giving of notice or lapse of time or both would be, in violation of or in
default under, its certificate of incorporation or by-laws or agreement of
limited partnership or other organization document, as the case may be, or any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which it or any of them or any of their respective properties is bound, except
for violations and defaults which individually and in the aggregate would not
reasonably be expected to have a material adverse effect on the Company and its
subsidiaries taken as a whole; the issue and sale of the Securities and the
performance by the Company of all of its obligations under the Securities, the
Indenture and this Agreement, and the consummation of the transactions herein
and therein contemplated will not conflict with or result in a breach of any of
the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject, that is material for the
Company and its subsidiaries taken as a whole, nor will such action result in
any violation of the provisions of the certificate of incorporation or the by-
laws of the Company or any applicable law or statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Company, its subsidiaries or any of their respective properties, except
where such would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole (a "Material Adverse Effect"); and no consent,
approval, authorization, order, license, registration or qualification of or
with any such court or governmental agency or body is required for the issue and
sale of the Securities or the consummation by the Company of the transactions
contemplated by this Agreement or the Indenture, except such consents,
approvals, authorizations, orders, licenses, registrations or qualifications as
have been obtained under the Securities Act or the Trust Indenture Act and as
may be required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Securities;
(j) other than as set forth or contemplated in the Prospectus, there
are no legal or governmental investigations, actions, suits or proceedings
pending or, to the knowledge of the Company, threatened against or affecting the
Company or any of its subsidiaries or any of their respective properties or to
which the Company or any of its subsidiaries is or may be a party or to which
any property of the Company or any of its subsidiaries is or may be the subject
which, if determined adversely to the Company or any of its subsidiaries, could
individually or in the aggregate reasonably be expected to have, a material
adverse effect on the general affairs, business, prospects, management,
financial position, stockholders' equity or results of operations of the Company
and its subsidiaries taken as a whole and, to the best of the Company's
knowledge, no such proceedings are threatened or contemplated by governmental
authorities or threatened by others; and there are no statutes, regulations,
contracts or other documents that are required to be filed as an exhibit to the
Registration Statement or required to be described in the Registration Statement
or the Prospectus which are not filed or described as required;
(k) immediately after any sale of Securities by the Company hereunder,
the aggregate amount of Securities which have been issued and sold by the
Company hereunder and of any securities of the Company (other than the
Securities) that shall have been issued and sold pursuant to the Registration
Statement will not exceed the amount of securities registered under the
Registration Statement;
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(l) Xxxxxx Xxxxxxxx LLP, who have certified certain financial
statements of the Company and its subsidiaries are independent public
accountants as required by the Securities Act;
(m) the Company and its subsidiaries have good and marketable title in
fee simple to all items of real property and good and marketable title to all
personal property owned by them, in each case free and clear of all liens,
encumbrances and defects except such as are described or referred to in the
Prospectus or such as do not materially affect the value of such property or do
not interfere with the use made or proposed to be made of such property by the
Company and its subsidiaries; and any real property and buildings held under
lease by the Company and its subsidiaries are held by them under valid, existing
and enforceable leases with such exceptions as are not material to the Company
and its subsidiaries taken as a whole or do not interfere with the use made or
proposed to be made of such property and buildings by the Company or its
subsidiaries;
(n) the Company is not and, after giving effect to the offering and
sale of the Securities, will not be an "investment company" or, to the Company's
knowledge, an entity "controlled" by an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended (the "Investment
Company Act");
(o) the Company has complied with all provisions of Section 517.075,
Florida Statutes (Chapter 92-198, Laws of Florida) relating to doing business
with the Government of Cuba or with any person or affiliate located in Cuba;
(p) the Company (including its predecessors) and its subsidiaries have
filed all federal, state or material local and foreign tax returns which have
been required to be filed and have paid all taxes shown thereon and all
assessments received by them or any of them to the extent that such taxes have
become due and are not being contested in good faith; and, except as disclosed
in the Registration Statement and the Prospectus, to the knowledge of the
Company there is no tax deficiency which has been or might reasonably be
expected to be asserted or threatened against the Company or any of its
subsidiaries;
(q) each of the Company and its subsidiaries owns, possesses or has
obtained all licenses, permits, certificates, consents, orders, approvals and
other authorizations from, and has made all declarations and filings with, all
federal, state, local and other governmental authorities (including foreign
regulatory agencies), all self-regulatory organizations and all courts and other
tribunals, domestic or foreign, necessary to own or lease, as the case may be,
and to operate its properties and to carry on its business as conducted as of
the date hereof, except where such would not cause a Material Adverse Effect,
and neither the Company nor any such subsidiary has received any actual notice
of any proceeding relating to revocation or modification of any such license,
permit, certificate, consent, order, approval or other authorization, except as
described in the Registration Statement and the Prospectus; and each of the
Company and its subsidiaries is in compliance in all material respects with all
laws and regulations relating to the conduct of its business as conducted as of
the date hereof;
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(r) there are no existing or, to the best knowledge of the Company,
threatened labor disputes with the employees of the Company or any of its
subsidiaries which would reasonably be expected to have a material adverse
effect on the Company and its subsidiaries taken as a whole;
(s) the Company and its subsidiaries (i) are in compliance with any
and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their
respective businesses and (iii) are in compliance with all terms and conditions
of any such permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, reasonably be
expected to have a material adverse effect on the Company and its subsidiaries,
taken as a whole;
(t) in the ordinary course of its business, the Company conducts a
periodic review of the effect of Environmental Laws on the business, operations
and properties of the Company and its subsidiaries, in the course of which it
identifies and evaluates associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for clean-up, closure
of properties or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties). On the basis of such review and except as
disclosed in the Form 10-K of the Company for the year ended December 31,
[____], the Company has reasonably concluded that such associated costs and
liabilities would not, singly or in the aggregate, reasonably be expected to
have a material adverse effect on the Company and its subsidiaries, taken as a
whole;
(u) each employee benefit plan, within the meaning of Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), that
is maintained, administered or contributed to by the Company or any of its
affiliates for employees or former employees of the Company and its affiliates
has been maintained in compliance in all material respects with its terms and
the requirements of any applicable statutes, orders, rules and regulations,
including but not limited to ERISA and the Internal Revenue Code of 1986, as
amended (the "Code"). No prohibited transaction, within the meaning of Section
406 of ERISA or Section 4975 of the Code has occurred with respect to any such
plan excluding transactions effected pursuant to a statutory or administrative
exemption. For each such plan which is subject to the funding rules of Section
412 of the Code or Section 302 of ERISA no "accumulated funding deficiency" as
defined in Section 412 of the Code has been incurred, whether or not waived, and
the fair market value of the assets of each such plan (excluding for these
purposes accrued but unpaid contributions) exceeded the present value of all
benefits accrued under such plan determined using reasonable actuarial
assumptions.
(v) Each of the Company and its subsidiaries owns or possesses, or can
acquire, or reasonably believes it can acquire, on reasonable terms, rights
adequate to the present operations of the businesses now operated by it under
the patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks and
trade names (collectively, the "Intellectual Property") presently employed by
it in connection with the businesses
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now operated by it, except to the extent that the failure to own, possess or
acquire such rights would not, singly or in the aggregate, reasonably be
expected to have a material adverse effect on the Company and its subsidiaries
taken as a whole, and to the knowledge of the Company neither the Company nor
any of its subsidiaries has received any notice of infringement of or conflict
with asserted rights of others with respect to any of the foregoing.
5. The Company covenants and agrees with each of the several Underwriters
as follows:
(a) to file the Prospectus in a form approved by you pursuant to Rule
424 under the Securities Act not later than the Commission's close of business
on the second Business Day following the date of determination of the offering
price of the Securities or, if applicable, such earlier time as may be required
by Rule 424(b);
(b) to furnish to each Representative and counsel for the Underwriters
a signed copy of the Registration Statement (as originally filed) and each
amendment thereto, in each case including exhibits and documents incorporated by
reference therein and, during the period mentioned in paragraph (e) below, to
furnish each of the Underwriters as many copies of the Prospectus (including all
amendments and supplements thereto) and documents incorporated by reference
therein as you may reasonably request;
(c) from the date hereof and prior to the Closing Date, to furnish to
you a copy of any proposed amendment or supplement to the Registration Statement
or the Prospectus, for your review, and not to file any such proposed amendment
or supplement to which you reasonably object;
(d) to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as
the delivery of a prospectus is required in connection with the offering or sale
of the Securities, and during such same period, to advise you promptly, and to
confirm such advice in writing, (i) when any amendment to the Registration
Statement shall have become effective, (ii) of any request by the Commission for
any amendment to the Registration Statement or any amendment or supplement to
the Prospectus or for any additional information, (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the initiation or threatening of any proceeding for that purpose
and (iv) of the receipt by the Company of any notification with respect to any
suspension of the qualification of the Securities for offer and sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; and to use its reasonable best efforts to prevent the issuance of any
such stop order or notification and, if issued, to obtain as soon as possible
the withdrawal thereof;
(e) if, during such period after the first date of the public offering
of the Securities as in the opinion of counsel for the Underwriters a prospectus
relating to the Securities is required by law to be delivered in connection with
sales by an Underwriter or dealer, any event shall occur as a result of which it
is necessary to amend or supplement the Prospectus in order to make the
statements therein, in light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading, or if it is necessary to amend or
supplement the Prospectus to comply with law, forthwith to prepare and furnish
to the Underwriters and to the dealers (whose names and addresses you will
furnish to the Company) to which Securities may have been sold by you on behalf
of the Underwriters
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and to any other dealers upon request, such amendments or supplements to the
Prospectus as may be necessary so that the statements in the Prospectus as so
amended or supplemented will not, in light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the Prospectus
will comply with law;
(f) to endeavor to qualify the Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request and to continue such qualification in effect so long as reasonably
required for distribution of the Securities; provided that the Company shall not
be required to file a general consent to service of process in any jurisdiction;
(g) to make generally available to its security holders and to you as
soon as practicable an earnings statement which shall satisfy the provisions of
Section 11 (a) of the Securities Act and Rule 158 of the Commission promulgated
thereunder covering a period of at least twelve months beginning with the first
fiscal quarter of the Company and its subsidiaries occurring after the
"effective date" (as defined in Rule 158) of the Registration Statement;
(h) so long as the Securities are outstanding, to furnish to you upon
request copies of all reports or other communications (financial or other)
furnished to holders of Securities and copies of any reports and financial
statements furnished to or filed with the Commission or any national securities
exchange;
(i) during the period beginning on the date hereof and continuing to
and including the Business Day following the Closing Date, not to offer, sell,
contract to sell or otherwise dispose of any debt securities of or guaranteed by
the Company which are substantially similar to the Securities;
(j) to use the net proceeds received by the Company from the sale of
the Securities pursuant to this Agreement in the manner specified in the
Prospectus under the caption "Use of Proceeds";
(k) whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
costs and expenses incident to the performance of its obligations hereunder,
including without limiting the generality of the foregoing, all costs and
expenses (i) incident to the preparation, issuance, execution, authentication
and delivery of the Securities, including any expenses of the Trustee, (ii)
incident to the preparation, printing and filing under the Securities Act of the
Registration Statement, the Prospectus and any preliminary prospectus (including
in each case all exhibits, amendments and supplements thereto), (iii) incurred
in connection with the registration or qualification and determination of
eligibility for investment of the Securities under the laws of such
jurisdictions as the Underwriters may designate (including reasonable fees of
counsel for the Underwriters and their disbursements), (iv) related to any
filing with National Association of Securities Dealers, Inc., (v) in connection
with the printing (including word processing and duplication costs) and delivery
of this Agreement, the Indenture, the preliminary and supplemental blue sky
memoranda and any legal investment survey and the furnishing to Underwriters and
dealers of a reasonable number of copies of the Registration Statement and the
Prospectus, (vi) payable to rating agencies in connection with the rating of the
Securities and (vii) the cost and charges of any transfer agent.
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6. The several obligations of the Underwriters hereunder shall be subject
to the following conditions:
(a) the representations and warranties of the Company contained herein
are true and correct on and as of the Closing Date as if made on and as of the
Closing Date and the Company shall have complied in all material respects with
all agreements and all conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date;
(b) the Prospectus shall have been filed with the Commission pursuant
to Rule 424 within the applicable time period prescribed for such filing by the
rules and regulations under the Securities Act; no stop order suspending the
effectiveness of the Registration Statement shall be in effect, and no
proceedings for such purpose shall be pending before or threatened by the
Commission, and all requests for additional information on the part of the
Commission shall have been complied with to your reasonable satisfaction;
(c) subsequent to the execution and delivery of this Agreement, there
shall not have occurred any downgrading, nor shall any notice have been given of
(i) any downgrading, (ii) any intended or potential downgrading or (iii) any
review or possible change that does not indicate an improvement in the rating
accorded any securities of or guaranteed by the Company by any "nationally
recognized statistical rating organization," as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act;
(d) since the respective dates as of which information is given in the
Prospectus there shall not have been any material change in capital stock or
other equity interests or long-term debt of the Company or any of its
significant subsidiaries (as defined in the Commission's Regulation S-X) or any
material adverse change or any development involving a material adverse change,
in or affecting the general affairs, business, prospects, management, financial
position, stockholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole, otherwise than as set forth or contemplated in
the Prospectus, the effect of which in the judgment of the Representatives makes
it impracticable or inadvisable to proceed with the public offering or the
delivery of the Securities on the terms and in the manner contemplated in the
Prospectus; and neither the Company nor any of its subsidiaries, has sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or interference
with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the Prospectus;
(e) the Representatives shall have received from the Company, on and
as of the Closing Date, a certificate of an authorized officer of the Company,
holding the office or title equal or more senior in rank to that of vice
president, with specific knowledge about the financial matters of the Company
satisfactory to you to the effect set forth in subsections (a) through (c) of
this Section and to the further effect that there has not occurred any material
adverse change, or any development involving a prospective material adverse
change, in or affecting the general affairs, business, prospects, management,
financial position, stockholders' equity or results of operations of the Company
and its subsidiaries, taken as a whole from that set forth or contemplated in
the Registration Statement or the Prospectus;
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(f) the General Counsel of the Company shall have furnished to you his
written opinion, dated the Closing Date, in form and substance satisfactory to
you, to the effect as set forth in Exhibit A hereto;
(g) Xxxxxxxx & Xxxxx, counsel for the Company, shall have furnished to
you their written opinion, dated the Closing Date, in form and substance
satisfactory to you, to the effect as set forth in Exhibit B hereto;
(h) on the Closing Date, Xxxxxx Xxxxxxxx LLP shall have furnished to
you a letter, dated such date, in form and substance satisfactory to you,
containing statements and information of the type customarily included in
accountants' "comfort letters" to underwriters with respect to the financial
statements and certain financial information contained in the Registration
Statement and the Prospectus;
(i) you shall have received on and as of the Closing Date an opinion
of Xxxxx Xxxx & Xxxxxxxx, counsel to the Underwriters, with respect to the
validity of the Indenture, the Securities, the Registration Statement, the
Prospectus and other related matters as the Representatives may reasonably
request, and such counsel shall have received such papers and information as
they may reasonably request to enable them to pass upon such matters; and
(j) on or prior to the Closing Date, the Company shall have furnished
to the Representatives such further certificates and documents as the
Representatives shall reasonably request.
7. The Company will indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages and liabilities (including without
limitation the reasonable legal fees and other expenses incurred in connection
with any suit, action or proceeding or any claim asserted) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through the Representatives expressly for use therein; provided
that the foregoing indemnity with respect to any preliminary prospectus shall
not inure to the benefit of any Underwriter (or to the benefit of any person
controlling such Underwriter) from whom the person asserting any such losses,
claims, damages or liabilities purchased Securities if such untrue statement or
omission or alleged untrue statement or omission made in such preliminary
prospectus is eliminated or remedied in the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) and if a copy of the Prospectus (as so amended or supplemented, but
excluding the documents incorporated by reference therein), if required by law
to have been furnished to such person at or prior to the written confirmation of
the sale of such Securities to such person, shall not have been so furnished.
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Each Underwriter agrees, severally and not jointly, to indemnify and hold
harmless the Company and the directors and officers of the Company who sign the
Registration Statement and each person who controls the Company within the
meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act,
to the same extent as the foregoing indemnity from the Company to each
Underwriter, but only with reference to information relating to such Underwriter
furnished to the Company in writing by such Underwriter through the
Representatives expressly for use in the Registration Statement, the Prospectus,
any amendment or supplement thereto, or any preliminary prospectus.
If any suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any person
in respect of which indemnity may be sought pursuant to either of the two
preceding paragraphs, such person (the "Indemnified Person") shall promptly
notify the person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary, (ii) the Indemnifying Person has failed within
a reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person or (iii) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It is
understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one separate firm (in addition to any
local counsel) for all Indemnified Persons, and that all such reasonable fees
and expenses shall be reimbursed as they are incurred. Any such separate firm
for the Underwriters and such control persons of Underwriters shall be
designated in writing by the first of the named Representatives on Schedule I
hereto and any such separate firm for the Company and the directors and officers
of the Company who sign the Registration Statement and such control persons of
the Company or authorized representatives shall be designated in writing by the
Company. The Indemnifying Person shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there shall be a final judgment for the plaintiff, the
Indemnifying Person agrees to indemnify any Indemnified Person from and against
any loss or liability by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an Indemnified Person shall have
requested an Indemnifying Person to reimburse the Indemnified Person for fees
and expenses of counsel as contemplated by the third sentence of this paragraph,
the Indemnifying Person agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 60 days after receipt by such Indemnifying Person of the
aforesaid request and (ii) such Indemnifying Person shall not have reimbursed
the Indemnified Person in accordance with such request prior to the date of such
settlement (or delivered a notice to such Indemnified Person setting forth its
good faith objection to such request's conformity to the provisions of this
Section). No Indemnifying Person shall, without the prior written consent of
the Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party and indemnity could have been sought
12
hereunder by such Indemnified Person, unless such settlement includes an
unconditional release of such Indemnified Person from all liability on claims
that are the subject matter of such proceeding.
If the indemnification provided for in the first and second paragraphs of
this Section 7 is unavailable to an Indemnified Person or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other hand from the offering of the Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and the Underwriters on the other in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Underwriters on the other shall be deemed
to be in the same respective proportions as the net proceeds from the offering
of such Securities (before deducting expenses) received by the Company and the
total underwriting discounts and the commissions received by the Underwriters
bear to the aggregate public offering price of the Securities. The relative
fault of the Company on the one hand and the Underwriters on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Person as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any reasonable legal or other expenses incurred by such Indemnified
Person in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall an
Underwriter be required to contribute any amount in excess of the amount by
which the total price at which the Securities underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages that
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 7 are several in proportion to the
respective principal amount of the Securities set forth opposite their names in
Schedule I hereto, and not joint.
The remedies provided for in this Section 7 are not exclusive and shall not
limit any rights or remedies which may otherwise be available to any indemnified
party at law or in equity.
13
The indemnity and contribution agreements contained in this Section 7 and
the representations and warranties of the Company set forth in this Agreement
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Underwriter or any person controlling any Underwriter or by or on behalf of
the Company, its officers or directors or any other person controlling the
Company and (iii) acceptance of and payment for any of the Securities.
8. Notwithstanding anything herein contained, this Agreement may be
terminated in the absolute discretion of the Representatives, by notice given to
the Company, if after the execution and delivery of this Agreement (i) trading
generally shall have been suspended or materially limited on or by, as the case
may be, any of the New York Stock Exchange, the American Stock Exchange, the
National Association of Securities Dealers, Inc., the Chicago Board Options
Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii)
trading of any securities of or guaranteed by the Company shall have been
suspended on any exchange or in any over-the-counter market, (iii) a general
moratorium on commercial banking activities in New York shall have been declared
by either Federal or New York State authorities or (iv) there shall have
occurred any outbreak or escalation of hostilities or any change in financial
markets or any calamity or crisis that, in the judgment of the Representatives,
is material and adverse and which, in the judgment of the Representatives, makes
it impracticable to market the Securities on the terms and in the manner
contemplated in the Prospectus.
9. If, on the Closing Date, any one or more of the Underwriters shall
fail or refuse to purchase Securities which it or they have agreed to purchase
under this Agreement, and the aggregate principal amount of Securities which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase is not more than one-tenth of the aggregate principal amount of the
Securities, the other Underwriters shall be obligated severally in the
proportions that the principal amount of Securities set forth opposite their
respective names in Schedule I hereto bears to the aggregate principal amount of
Securities set forth opposite the names of all such non-defaulting Underwriters,
or in such other proportions as the Representatives may specify, to purchase the
Securities which such defaulting Underwriter or Underwriters agreed but failed
or refused to purchase on such date; provided that in no event shall the
principal amount of Securities that any Underwriter has agreed to purchase
pursuant to Section 1 be increased pursuant to this Section 9 by an amount in
excess of one-tenth of such principal amount of Securities without the written
consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Securities and the aggregate
principal amount of Securities with respect to which such default occurs is more
than one-tenth of the aggregate principal amount of Securities to be purchased,
and arrangements satisfactory to the Representatives and the Company for the
purchase of such Securities are not made within 36 hours after such default,
this Agreement shall terminate without liability on the part of any non-
defaulting Underwriter or the Company. In any such case either the
Representatives or the Company shall have the right to postpone the Closing
Date, but in no event for longer than seven days, in order that the required
changes, if any, in the Registration Statement and in the Prospectus or in any
other documents or arrangements may be effected. Any action taken under this
paragraph shall not relieve any defaulting Underwriter from liability in respect
of any default of such Underwriter under this Agreement.
14
10. If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement or any condition of the Underwriters' obligations cannot be fulfilled,
the Company agrees to reimburse the Underwriters or such Underwriters as have so
terminated this Agreement with respect to themselves, severally, for all out-of-
pocket expenses (including the fees and expenses of their counsel) reasonably
incurred by such Underwriters in connection with this Agreement or the offering
of Securities. Notwithstanding the foregoing, the Company shall not be liable
for the expenses of the Underwriters if the Underwriters terminate this
Agreement pursuant to Section 8(i), 8(iii) or 8(iv).
11. This Agreement shall inure to the benefit of and be binding upon the
Company, the Underwriters, any controlling persons referred to herein and their
respective successors and assigns. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person, firm or
corporation any legal or equitable right, remedy or claim under or in respect of
this Agreement or any provision herein contained. No purchaser of Securities
from any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
12. Any action by the Underwriters hereunder may be taken by you jointly
or by the first of the named Representatives set forth in Schedule I hereto
alone on behalf of the Underwriters, and any such action taken by you jointly or
by the first of the named Representatives set forth in Schedule I hereto alone
shall be binding upon the Underwriters. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be given at the address set forth in Schedule II hereto.
Notices to the Company shall be given to it at Xxx XxxxxxxXxxxxx Xxx, Xxxxxxx
Xxxxx, Xxxxxxxx 00000; Attention: General Counsel and Attention: Treasurer.
13. This Agreement may be signed in counterparts, each of which shall be
an original and all of which together shall constitute one and the same
instrument.
14. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without giving effect to the conflicts of
laws provisions thereof.
* * * *
15
Very truly yours,
THE SERVICEMASTER COMPANY
By: ______________________________
Name:
Title:
Accepted:[___________, ____]
Acting severally on behalf of
[itself/themselves] and the
several Underwriters listed in
Schedule II hereto.
By: [LEAD MANAGER]
By:
Name:
Title:
By: [CO-MANAGER]
By:
Name:
Title:
16
SCHEDULE I
Representatives: [______________]
Underwriting Agreement dated: [_________, ____]
Registration Statement No: [333-____]
Title of Securities: [__]% [Floating Rate] [Zero Coupon] [Notes]
[Debentures] due [_____].
Aggregate principal amount: $[__________________________]
Price to Public: [__% of the principal amount of the
Securities, plus accrued interest, if any,
from ______, ____, to the Closing Date].
Indenture: Indenture dated as of September [__], 1999
by and between the Company and Xxxxxx as
Trustee.
Maturity: [_______________]
Interest Rate: [__]% [Zero Coupon] [See Floating Rate
Provisions]
Interest Payment Dates: [Months and dates]
Optional Redemption Provisions: [No provisions for redemption]
[The Securities may be redeemed, otherwise
than through the sinking fund, in whole or
in part at the option of the Company, [in
the amount of [$] or an integral multiple
thereof,] [on or after , at the
following redemption prices (expressed in
percentages of principal amount). If
[redeemed on or before , %, and if]
redeemed during the 12-month period
beginning ,
17
Redemption
Year Price
---- ----------
and thereafter] at 100% of their principal
amount, together in each case with accrued
interest to the redemption date] [on any
interest payment date falling in or after
, , at the election of
the Company, at a redemption price equal to
the principal amount thereof, plus accrued
interest to the date of redemption.] [Other
possible redemption provisions, such as
mandatory redemption upon occurrence of
certain events or redemption for changes in
tax law] [Restriction on refunding]
Sinking Fund Provisions: [No sinking fund provisions]
[The Securities are entitled to the benefit
of a sinking fund to retire [$] principal
amount of Securities on in each of
the years through at 100% of their principal
amount plus accrued interest] [,together
with [cumulative] [noncumulative]
redemptions at the option of the Company to
retire an additional [$] principal amount of
Securities in the years through at 100% of
their principal amount plus accrued
interest.]
Other Provisions: [For floating rate securities, initial
annual interest rate will be % through [and
thereafter will be adjusted [monthly] [on
each , , and ] [to
an annual rate of % above the average rate
for year [month] [securities] [certificates
of deposit] issued by and [insert names of
banks].] [and the annual interest rate
[thereafter] [from through ]
will be the interest yield equivalent of the
weekly average per annum market discount
rate for -month Treasury bills plus % of
Interest Differential (the excess, if any,
of (i) then current weekly average per annum
secondary market yield for-month
certificates of deposit over (ii) then
current interest yield equivalent of the
weekly average per annum market discount
rate for month Treasury bills); [from and
thereafter the rate will be the then
18
current interest yield equivalent plus % of
Interest Differential].]
Closing Date and Time of Delivery: [_________________________]
Closing Location: [_________________________]
Address for Notices to Underwriters: [_________________________]
19
SCHEDULE II
Principal Amount of Securities
To Be Purchased
Underwriter $___________
Total $___________
20
EXHIBIT A
Form of ServiceMaster General Counsel Opinion
[Lead Manager]
[Co-Manager]
As Representatives of the
Underwriters named in Schedule II
c/o [Lead Manager]
[Address]
Ladies and Gentlemen:
I am rendering this opinion in my capacity as Senior Vice President and
General Counsel of The ServiceMaster Company (the "Company") in response to the
requirement in Section 6(f) of the Underwriting Agreement dated [___________]
(the "Underwriting Agreement") by and among the Company and the underwriters
named in Schedule II thereto (the "Underwriters"). Every term which is defined
or given a special meaning in the Underwriting Agreement and which is not given
a different meaning in this letter has the same meaning whenever it is used in
this letter as the meaning it is given in the Underwriting Agreement.
In connection with the preparation of this letter, I have, among other
things, read:
(a) the registration statement on Form S-3 (Registration No. 333-
[_______]) filed by the Company with the Securities and Exchange Commission
(the "Commission") on November 19, 1999 for the purpose of registering
the offering of the shelf securities under the Securities Act of 1933, as
amended (the "Securities Act") (which registration statement, including the
information incorporated therein by reference, and as constituted at the
time it became effective is herein called the "Registration Statement");
(b) the Prospectus Supplement of the Company dated [_____________]
(including the information incorporated therein by reference, the
"Prospectus Supplement") to the Basic Prospectus covering the offering of
the Securities through the Underwriters, in the form which includes the
initial offering price and related terms (which Basic Prospectus, as
supplemented by the Prospectus Supplement, including the information
incorporated therein by reference, is herein called the "Prospectus");
(c) an executed copy of the Underwriting Agreement;
(d) an executed copy of the Indenture dated as of November 18, 1999
in the form executed and delivered by the Company and Xxxxxx Trust and
Savings Bank as Trustee (the "Trustee") (the "Indenture");
(e) a certified copy of resolutions adopted on [_______________] by
the Board of Directors of the Company, a certified copy of resolutions
adopted on [_______________]
A-1
by the [_________] Committee of the Board of Directors of the Company and a
certified copy of resolutions adopted on [_____________] by the [_________]
Committee of the Board of Directors of the Company (together, the "Board
Resolutions"); and
(f) copies of all certificates and other documents delivered today at
the closing of the purchase and sale of the Securities under the
Underwriting Agreement.
Subject to the assumptions, qualifications and limitations which are
identified in this letter, I advise you that:
1. The Company is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation. The Company is qualified to
do business and is in good standing in the State of Illinois. The Company is not
required to qualify to do business under the laws of any other jurisdiction
other than where the failure to be so qualified would not have a material
adverse effect on the Company.
2. Each of the significant subsidiaries of the Company (the
"Subsidiaries") is a limited partnership, limited liability company or
corporation existing and in good standing under the laws of its respective
jurisdiction of organization. The Company and each Subsidiary is qualified to do
business and is in good standing under the laws of each other jurisdiction in
which it owns or leases properties or conducts any business, so as to require
such qualification, other than where the failure to be so qualified would not
have a material adverse effect on the Company and its subsidiaries taken as a
whole. The equity of each of the Subsidiaries is wholly-owned by the Company,
except as may be indicated in Schedule A attached hereto. The term "significant
subsidiaries" means the subsidiaries listed as significant subsidiaries in
Schedule B attached hereto. The Company's Treasurer has advised me that he has
determined that the subsidiaries listed on Schedule B are the only subsidiaries
of the Company which constitute "significant subsidiaries" of the Company within
the meaning of that term under the Commission's Regulation S-X.
3. The Company and each of the Subsidiaries has the power to own and
lease its properties and to conduct its business as described in the Prospectus.
4. The execution of the Transaction Documents by the Company has been
duly authorized by all necessary actions by the Board of Directors of the
Company, the Finance Committee of the Board of Directors of the Company and by
authorized officers qualified to act under the resolutions relevant to the
issuance and sale of the Securities pursuant to the Underwriting Agreement. No
other approval is required under the certificate of incorporation of the
Company.
5. Neither the Company nor any of its Subsidiaries is, or with the giving
of notice or lapse of time or both would be, in violation of or in default
under, its charter or certificate of incorporation or by-laws or agreement of
limited partnership or other organizational documents, as the case may be. The
execution and delivery of the Underwriting Agreement by the Company, the
performance of its obligations under the Underwriting Agreement, the Indenture,
the Securities and the Company's sale of the Securities to you in accordance
with the Underwriting Agreement do not (i) violate the certificate of
incorporation of the Company or (ii) constitute a violation by the Company of
any applicable provision of any law, statute, rule, regulation or court order
(except that
A-2
I express no opinion in this paragraph as to (A) any prohibition against fraud
or misrepresentation or (B) whether performance of the indemnification or
contribution provisions in the Underwriting Agreement would be permitted or (C)
compliance with any disclosure requirement, but I refer you to the third
paragraph following clause (D) of numbered paragraph 9 hereof) or (iii)
materially breach, or result in a material default under, any existing
obligation of the Company or any of its subsidiaries under any of the agreements
with which I am familiar.
6. After due inquiry, I have no knowledge about any legal or governmental
proceeding that is pending or threatened against the Company or any of its
subsidiaries that has caused me to conclude that such proceeding is required by
Item 103 of Regulation S-K to be described in the Prospectus but that is not so
described. I have no knowledge of any contract, document, or court order to
which the Company is a party or to which any of its properties is subject that
has caused me to conclude that such contract, document or court order is
required to be described in the Prospectus or Registration Statement but is not
so described or is required to be filed as an exhibit to the Registration
Statement but has not been so filed.
7. The Company was not required to obtain any consent, approval,
authorization or order of governmental agency for the issuance, delivery and
sale of the Securities under the Underwriting Agreement except for the order by
the Commission declaring the Registration Statement effective.
8. The Company has received a copy of an order entered for the
Commission by the Division of Corporate Finance that the Commission pursuant to
delegated authority declaring the Registration Statement effective under the
Securities Act on [______________], 1999 (the "effective date") and I have no
knowledge that any stop order suspending its effectiveness has been issued or
that any proceedings for that purpose are pending before, or overtly threatened
by, the Commission. Section 309(a) of the Trust Indenture Act provides that the
Indenture shall be deemed to have been qualified under that Act when the
Registration Statement became effective under the Securities Act.
9. The statements under Item 1 in the Company's Form 10-Q Quarterly
Report for the fiscal quarter ended [_______________] were correct in all
material respects on the date that such Report was filed with the Commission.
Insofar as the statements constitute a summary of the legal matters, documents
or proceedings referred to therein, such statements adequately present the
information called for with respect to such legal matters, documents or
proceedings.
10. Nothing has come to my attention that has caused me to conclude that
any of the Company or any of its subsidiaries:
(a) does not own or have the rights under any material license,
permit, certificate, consent, order, approval or other authorization from
or has not made any declaration or filing with, any federal, state, local
or other governmental authority (including foreign regulatory agencies) or
any court or tribunal, domestic or foreign, necessary to own or lease, as
the case may be, and to operate its properties and to carry on its business
as conducted as of the date hereof;
A-3
(b) has received any actual notice of any proceeding relating to
revocation or modification of any license, permit, certificate, consent,
order, approval or other authorization cited in immediately preceding
clause (a);
(c) does not have any material right required to use the Intellectual
Property employed by it in connection with the business conducted by it as
of the date hereof; or
(d) is, or with the giving of notice or lapse of time or both would
be, in violation of or in default under any material indenture, mortgage,
deed of trust, loan agreement or other material agreement or instrument
known to me to which the Company or any of its subsidiaries, is a party or
by which it or any of them or any of them or any of their respective
subsidiaries is bound.
I make no representation that I have independently verified the accuracy,
completeness or fairness of the Prospectus or Registration Statement or that the
actions taken in connection with the preparation of the Registration Statement
or Prospectus (including the actions described in the next paragraph) were
sufficient to cause the Prospectus or Registration Statement to be accurate,
complete or fair. I am not passing upon and do not assume any responsibility for
the accuracy, completeness or fairness of the Prospectus or the Registration
Statement except to the extent otherwise explicitly indicated in numbered
paragraph 9 above.
I can however confirm that I have participated in conferences with
representatives of the Company, representatives of the Underwriters, counsel for
the Underwriters and representatives of the independent accountants for the
Company during which disclosures in the Registration Statement and Prospectus
and related matters were discussed. In addition, I have reviewed certain records
maintained by the Company.
Based upon my participation in the conferences and my document review
identified in the preceding paragraph, my understanding of applicable law and
the experience I have gained in my practice thereunder, I can, however, advise
you that nothing has come to my attention that has caused me to conclude that
(i) the Registration Statement at its effective date contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or
(ii) the Basic Prospectus on the date it bears or on the date of this letter or
the Prospectus Supplement on the date it bears or on the date of this letter
contained an untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading or (iii) the
Registration Statement or the Basic Prospectus, each as of the effective date of
the Registration Statement, or the Prospectus Supplement on the date it bears,
did not comply in all material respects with the form and the requirements of
Form S-3 or (iv) any of the periodic reports incorporated by reference into the
Registration Statement as of the date of the filing of such report with the
Commission appeared on its face not to comply as to form in all material
respects with the Exchange Act, and the rules and regulations of the Commission
thereunder.
Except for the activities described in the immediately preceding section of
this letter, I have not undertaken any investigation to determine the facts upon
which the advice in this letter is based. I have not undertaken any
investigation or search of court records for purposes of this letter.
A-4
I have assumed for purposes of this letter: each document I have reviewed
for purposes of this letter is accurate and complete, each such document that is
an original is authentic, each such document that is a copy conforms to an
authentic original, and all signatures on each such document are genuine; that
the Underwriting Agreement and every other agreement I have examined for
purposes of this letter constitutes a valid and binding obligation of each party
to that document and that each such party has satisfied all legal requirements
that are applicable to such party to the extent necessary to entitle such party
to enforce such agreement (except that I make no such assumption with respect to
the Company); and that you have acted in good faith and without notice of any
fact which has caused you to reach any conclusion contrary to any of the
conclusions provided in this letter. I have also made other assumptions which I
believe to be appropriate for purposes of this letter.
In preparing this letter I have relied without independent verification
upon: (i) information contained in certificates obtained from governmental
authorities; (ii) factual information represented to be true in the Underwriting
Agreement and other documents specifically identified at the beginning of this
letter as having been read by me; (iii) factual information provided to me by
the other representatives of the Company; and (iv) factual information I have
obtained from such other sources as I have deemed reasonable. I have assumed
that the information upon which I have relied is accurate and does not omit
disclosures necessary to prevent such information from being misleading. For
purposes of numbered paragraphs 1 and 2 (other than the last sentence of
paragraph 2), I have relied exclusively upon certificates issued by governmental
authorities in the relevant jurisdictions and such opinion is not intended to
provide any conclusion or assurance beyond that conveyed by those certificates.
I confirm that I do not have knowledge that has caused me to conclude that
my reliance and assumptions cited in the two immediately preceding paragraphs
are unwarranted. Whenever this letter provides advice about (or based upon) my
knowledge of any particular information or about any information which has or
has not come to my attention such advice is based entirely on my conscious
awareness at the time this letter is delivered on the date it bears.
My advice on every legal issue addressed in this letter is based
exclusively on the internal law of Illinois, the General Corporation Law of the
State of Delaware, or the federal law of the United States, and represents my
opinion as to how that issue would be resolved were it to be considered by the
highest court in the jurisdiction that enacted such law. I express no opinion
with respect to any state securities (or "blue sky") laws or regulations or any
laws, statutes governmental rules or regulations which in my experience are not
applicable generally to transactions of the kind covered by the Underwriting
Agreement. None of the opinions or other advice contained in this letter
considers or covers (i) any financial statements or supporting schedules (or any
notes to any such statements or schedules) or other financial or statistical
information set forth or incorporated by reference in (or omitted from) the
Registration Statement or the Prospectus or (ii) any rules and regulations of
the National Association of Securities Dealers, Inc. relating to the
compensation of underwriters.
My advice on each legal issue addressed in this letter represents my
opinion as to how that issue would be resolved were it to be considered by the
highest court of the jurisdiction upon whose law my opinion on that issue is
based. The manner in which any particular issue would be treated in
A-5
any actual court case would depend in part on facts and circumstances particular
to the case, and this letter is not intended to guarantee the outcome of any
legal dispute which may arise in the future.
This letter speaks as of the time of its delivery on the date it bears. I
do not assume any obligation to provide you with any subsequent opinion or
advice by reason of any fact about which I did not have knowledge at that time,
by reason of any change subsequent to that time in any law other governmental
requirement or interpretation thereof covered by any of my opinions or advice,
or for any other reason.
This letter may be relied upon by the Underwriters only for the purpose
served by the provision in the Underwriting Agreement cited in the initial
paragraph of this letter in response to which it has been delivered. Without my
written consent: (i) no person other than the Underwriters may rely on this
letter for any purpose; (ii) this letter may not be cited or quoted in any
financial statement, prospectus, private placement memorandum or other similar
document; (iii) this letter may not be cited or quoted in any other document or
communication which might encourage reliance upon this letter by any person or
for any purpose excluded by the restrictions in this paragraph; and (iv) copies
of this letter may not be furnished to anyone for purposes of encouraging such
reliance.
Sincerely,
A-6
EXHIBIT B
Form of Xxxxxxxx & Xxxxx Opinion
[Lead Manager]
[Co-Manager]
As Representatives of the
Underwriters named in Schedule II
c/o [Lead Manager]
[address]
Ladies and Gentlemen:
We are issuing this letter in our capacity as special counsel for The
ServiceMaster Company (the "Company") in response to the requirement in Section
6(g) of the Underwriting Agreement dated [_______________], 1999 (the
"Underwriting Agreement") by and between the Company and the underwriters named
in Schedule II thereto (the "Underwriters"). Every term which is defined or
given a special meaning in the Underwriting Agreement and which is not given a
different meaning in this letter has the same meaning whenever it is used in
this letter as the meaning it is given in the Underwriting Agreement.
In connection with the preparation of this letter, we have, among other
things, read:
(a) the registration statement on Form S-3 (Registration No. 333-
[______]), filed by the Company with the Securities and Exchange Commission
(the "Commission") on September [__], 1999 for the purpose of registering
the offering of the shelf securities under the Securities Act of 1933, as
amended (the "Securities Act") (which registration statement, including the
information incorporated therein by reference, and as constituted at the
time it became effective is herein called the "Registration Statement");
(b) the Company's prospectus supplement dated [_______________]
(including the information incorporated therein by reference, the
"Prospectus Supplement") to the Basic Prospectus covering the offering of
the Securities through the Underwriters, in the form which includes the
initial offering price and related terms (which Basic Prospectus, as
supplemented by the Prospectus Supplement, is herein called the
"Prospectus");
(c) an executed copy of the Underwriting Agreement;
(d) an executed copy of the Indenture dated as of September [__], 1999
in the form executed and delivered by the Company and Xxxxxx Trust and
Savings Bank as Trustee (the "Trustee") (the "Indenture");
B-1
(e) a certified copy of resolutions adopted on [_______________] by
the Board of Directors of the Company, a certified copy of resolutions
adopted on [_______________] by the [_________] Committee of the Board of
Directors of the Company and a certified copy of resolutions adopted on
[_____________] by the [_________] Committee of the Board of Directors of
the Company (together, the "Board Resolutions"); and
(f) copies of all certificates and other documents delivered today at
the closing of the purchase and sale of the Securities under the
Underwriting Agreement.
Subject to the assumptions, qualifications and limitations which are
identified in this letter, we advise you that:
1. The Company is validly existing as a corporation in good standing
under Delaware General Corporation Law.
2. Under its certificate of incorporation and by-laws, the Company has
the corporate power necessary to own and lease its properties and to conduct its
business as described in the Prospectus.
3. The Underwriting Agreement has been duly authorized, executed and
delivered on behalf of the Company.
4. The Indenture has been duly executed and delivered on behalf of the
Company. The Indenture is a valid and binding obligation of the Company, and
(assuming the due authorization, execution and delivery thereof by the Trustee)
is enforceable against the Company in accordance with its terms.
5. The Securities have been duly executed and delivered by the Company
and, when paid for by the Underwriters in accordance with the terms of the
Underwriting Agreement (assuming the due authorization, execution and delivery
of the Indenture by the Trustee and due authentication and delivery of the
Securities by the Trustee in accordance with the Indenture), will constitute
Securities under the terms of the Indenture, will constitute the valid and
binding obligations of the Company, and will be enforceable against the Company
in accordance with their terms.
6. The execution and delivery of the Underwriting Agreement on behalf of
the Company, the performance of the respective obligations of the Company under
the Underwriting Agreement, the Indenture, and the Securities, and the Company's
sale of the Securities to you in accordance with the Underwriting Agreement do
not (i) violate the certificate of incorporation and by-laws of the Company or
(ii) constitute a violation by the Company of any applicable provision of any
law, statute, rule or regulation (except that we express no opinion in this
paragraph as to compliance with any disclosure requirement or any prohibition
against fraud or misrepresentation or as to whether performance of the
indemnification or contribution provisions in the Underwriting Agreement would
be permitted) or (iii) breach, or result in a default under, any existing
obligation of the Company or any of its subsidiaries under any of the agreements
set forth on Schedule A attached hereto which representatives of the Company
have advised us include all material debt agreements and instruments of or
binding on the Company or any of the Company's subsidiaries. The agreements in
Schedule A
B-2
contain debt incurrence tests and/or other financial covenants and tests; we
have not attempted to independently apply any of those covenants or tests.
Representatives of the Company have however advised us that they have applied
all of those tests and covenants and have determined that none of those tests or
covenants will be breached by the Company's sale of the Securities to you or by
any of the other actions cited at the beginning of this paragraph, and we have
assumed without investigation that such advice and determinations are correct.
7. We have no knowledge about any legal action or any governmental
action, investigation or proceeding that is pending or threatened against the
Company or any of the Company's subsidiaries that has caused us to conclude that
such proceeding is required by Item 103 of Regulation S-K to be described in the
Prospectus but that is not so described. We have no knowledge about any
contract, document or court order to which the Company is a party or to which
any of its properties is subject that has caused us to conclude that such
contract, document or court order is required to be described in the Prospectus
or the Registration Statement but is not so described or is required to be filed
as an exhibit to the Registration Statement but has not been so filed.
8. The Company is not and, immediately after the sale of the Securities
to the Underwriters and application of the net proceeds therefrom as described
in the Prospectus Supplement under the caption "Use of Proceeds" will not be, an
"investment company" as such term is defined in the Investment Company Act of
1940, as amended.
9. The Company was not required to obtain any consent, approval,
authorization or order of governmental agency for the issuance, delivery and
sale of the Securities under the Underwriting Agreement except for the order by
the Commission declaring the Registration Statement effective.
10. The Company has informed us that it has received a copy of an order
entered for the Commission by the Division of Corporate Finance that the
Commission pursuant to delegated authority declaring the Registration Statement
effective under the Securities Act on [____________], 1999 (the "effective
date") and we have no knowledge that any stop order suspending its effectiveness
has been issued or that any proceedings for that purpose are pending before, or
overtly threatened by, the Commission. Section 309(a) of the Trust Indenture
Act provides that the Indenture shall be deemed to have been qualified under
that Act when the Registration Statement became effective under the Securities
Act.
11. The statements in the Basic Prospectus under the heading "Description
of Debt Securities" to the extent that those statements summarize laws,
governmental rules or regulations or documents, are correct in all material
respects.
* * *
The purpose of our professional engagement was not to establish factual
matters, and preparation of the Registration Statement and the Prospectus
involved many determinations of a wholly or partially nonlegal character. We
make no representation that we have independently verified the accuracy,
completeness or fairness of the Prospectus or Registration Statement or that the
actions taken in connection with the preparation of the Registration Statement
or Prospectus (including the
B-3
actions described in the next paragraph) were sufficient to cause the Prospectus
or Registration Statement to be accurate, complete or fair. We are not passing
upon and do not assume any responsibility for the accuracy, completeness or
fairness of the Prospectus or the Registration Statement except to the extent
otherwise explicitly indicated in numbered paragraph 10 above.
We can however confirm that we have participated in brief conferences with
representatives of the Company, representatives of the Underwriters, counsel for
the Underwriters and representatives of the independent accountants for the
Company which involved discussions relevant to the Registration Statement and
the Prospectus. In addition, we have reviewed certain corporate records
furnished to us by the Company. We were not retained by the Company to prepare
the periodic reports, or other materials incorporated in the Prospectus or the
Registration Statement, and our knowledge about these materials is limited. We
were not present at any meeting of the ServiceMaster Board or its Finance or
Executive Committee at which any resolution relevant to this letter was
discussed or adopted.
Based upon our participation in the conferences and our document review
identified in the preceding paragraph, our understanding of applicable law and
the experience we have gained in our practice thereunder and relying as to
materiality to a large extent upon the opinions and statements of officers of
the Company, we can, however, advise you that nothing has come to our attention
that has caused us to conclude that (i) the Registration Statement at its
effective date contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) the Basic Prospectus on the date it
bears or on the date of this letter contained an untrue statement of a material
fact or omitted to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading or (iii) the Registration Statement as of its effective date or
the Prospectus Supplement on the date it bears, did not comply in all material
respects with the form and the requirements of Form S-3.
* * *
Except for the activities described in the immediately preceding section of
this letter, we have not undertaken any investigation to determine the facts
upon which the advice in this letter is based. We have not undertaken any
investigation or search of court records for purposes of this letter.
We have assumed for purposes of this letter: each document we have reviewed
for purposes of this letter is accurate and complete, each such document that is
an original is authentic, each such document that is a copy conforms to an
authentic original, and all signatures on each such document are genuine; that
the Underwriting Agreement and every other agreement we have examined for
purposes of this letter constitutes a valid and binding obligation of each party
to that document and that each such party has satisfied all legal requirements
that are applicable to such party to the extent necessary to entitle such party
to enforce such agreement (except that we make no such assumption with respect
to the Company); and that you have acted in good faith and without notice of any
fact which has caused you to reach any conclusion contrary to any of the
conclusions provided in this letter. We have also made other assumptions which
we believe to be appropriate for purposes of this letter.
B-4
In preparing this letter we have relied without independent verification
upon: (i) information contained in certificates obtained from governmental
authorities; (ii) factual information represented to be true in the Underwriting
Agreement and other documents specifically identified at the beginning of this
letter as having been read by us; (iii) factual information provided to us by
the Company or its representatives as of the date of this letter; and (iv)
factual information from such other sources as we have deemed reasonable. We
have assumed that there has been no relevant change or development between the
dates as of which the information cited in the preceding sentence was given and
the date of this letter and that the information upon which we have relied is
accurate and does not omit disclosures necessary to prevent such information
from being misleading. For purposes of numbered paragraph 1, we have relied
exclusively upon the certificate issued by the Delaware Secretary of State at
the closing and such opinion is not intended to provide any conclusion or
assurance beyond that conveyed by that certificate.
We confirm that nothing has come to our attention that has caused us to
conclude that our reliance and assumptions cited in the two immediately
preceding paragraphs are unwarranted. Whenever this letter provides advice about
(or based upon) our knowledge of any particular information or about any
information which has or has not come to our attention such advice is based
entirely on the conscious awareness at the time this letter is delivered on the
date it bears by the lawyers with Xxxxxxxx & Xxxxx at that time who spent
substantial time representing the Company in connection with the offering
effected pursuant to the Prospectus.
Each opinion in this letter that any particular agreement is a valid and
binding obligation or is enforceable in accordance with its terms is subject to:
(i) the effect of bankruptcy, insolvency, fraudulent conveyance and other
similar laws and judicially developed doctrines in this area such as substantive
consolidation and equitable subordination; (ii) the effect of general principles
of equity; and (iii) other commonly recognized statutory and judicial
constraints on enforceability including statutes of limitations. "General
principles of equity" include but are not limited to: principles limiting the
availability of specific performance and injunctive relief; principles which
limit the availability of specific performance and injunctive relief; principles
which limit the availability of a remedy under certain circumstances where
another remedy has been elected; principles requiring reasonableness, good faith
and fair dealing in the performance and enforcement of an agreement by the party
seeking enforcement; principles which may permit a party to cure a material
failure to perform its obligations; and principles affording equitable defenses
such as waiver, laches and estoppel.
Our advice on every legal issue addressed in this letter is based
exclusively on the internal law of New York, the General Corporation Law of the
State of Delaware and the federal law of the United States, and represents our
opinion as to how that issue would be resolved were it to be considered by the
highest court in the jurisdiction which enacted such law. We express no opinion
with respect to any state securities (or "blue sky") laws or regulations or any
laws, statutes governmental rules or regulations which in our experience are not
applicable generally to transactions of the kind covered by the Underwriting
Agreement. None of the opinions or other advice contained in this letter
considers or covers (i) any financial statements or supporting schedules (or any
notes to any such statements or schedules) or other financial or statistical
information set forth or incorporated by reference in (or omitted from) the
Registration Statement or the Prospectus or (ii) any rules and regulations of
the National Association of Securities Dealers, Inc. relating to the
compensation of underwriters.
B-5
Our advice on each legal issue addressed in this letter represents our
opinion as to how that issue would be resolved were it to be considered by the
highest court of the jurisdiction upon whose law our opinion on that issue is
based. The manner in which any particular issue would be treated in any actual
court case would depend in part on facts and circumstances particular to the
case, and this letter is not intended to guarantee the outcome of any legal
dispute which may arise in the future. It is possible that some terms of the
Indenture or the Securities may not prove enforceable for reasons other than
those cited in this letter should an actual enforcement action be brought, but
(subject to all the exceptions, qualifications, exclusions and other limitations
contained in this letter) such unenforceability would not in our opinion prevent
the Underwriters from realizing the principal benefits purported to be provided
by the Indenture or the Securities.
This letter speaks as of the time of its delivery on the date it bears. We
do not assume any obligation to provide you with any subsequent opinion or
advice by reason of any fact about which we did not have knowledge at that time,
by reason of any change subsequent to that time in any law other governmental
requirement or interpretation thereof covered by any of our opinions or advice,
or for any other reason.
B-6
This letter may be relied upon by the Underwriters only for the purpose
served by the provision in the Underwriting Agreement cited in the initial
paragraph of this letter in response to which it has been delivered. Without our
written consent: (i) no person other than the Underwriters may rely on this
letter for any purpose; (ii) this letter may not be cited or quoted in any
financial statement, prospectus, private placement memorandum or other similar
document; (iii) this letter may not be cited or quoted in any other document or
communication which might encourage reliance upon this letter by any person or
for any purpose excluded by the restrictions in this paragraph; and (iv) copies
of this letter may not be furnished to anyone for purposes of encouraging such
reliance.
XXXXXXXX & XXXXX
B-7
Schedule A
Specified Contracts
1. Note Agreements dated as of September 15, 1988, as amended through
Third Amendments thereto dated as of July 15, 1996 (relating to the Company's
$45 million, 10.57% Senior Notes, Series A, due October 1, 2000).
2. Exchange Agreements dated as of August 1, 1990, as amended through
Third Amendments thereto dated as of July 15, 1996, and related Guaranty
Agreements dated as of August 1, 1990, as amended through Third Amendments
thereto dated as of July 15, 1996 (relating to the $55 million, 10.8125% Senior
Notes, due October 1, 2002, of American Home Shield Corporation (as successor by
merger to SVM Holding Corp.) and guaranteed by the Company).
3. Note Agreements dated as of April 1, 1992, as amended through Second
Amendments thereto dated as of July 15, 1996 (relating to the Company's $50
million, 8.38% Senior Notes, due July 15, 2001).
4. Participation, Master Lease and Construction Agreement dated as of
October 28, 1996, as amended by first amendment thereto dated as of December 5,
1997 (relating to the Company's $80 million line of credit) by second amendment
thereto dated as of March 23, 1998 and by third amendment thereto dated as of
August 31, 1998.
5. Note Agreements dated as of January 15, 1994, as amended through First
Amendments thereto dated as of July 15, 1996 (relating to the Company's $70
million, 6.65% Senior Notes, due January 31, 2004).
6. Note Agreements dated as of July 16, 1996, as amended through First
Amendments thereto dated as of March 1, 1997 (relating to the Company's $100
million, 7.40% Senior Notes, Series A, due July 16, 2006, and the Company's $25
million, 7.40% Senior Notes, Series B, due September 26, 2006).
7. $100 million 6.95% Notes due August 15, 2007.
8. $200 million 7.45% Notes due August 15, 2027.
9. $750 million Five-Year Credit Agreement dated as of April 1, 1997
among The ServiceMaster Company, the Lenders party thereto, The First National
Bank of Chicago as Administrative Agent and Xxxxxx Guaranty Trust Company of New
York as Documentation Agent.
10. $150 million 7.10% Notes due 2018.
11. $150 million 7.25% Notes due 2038.
12. $250 million 7.875% Notes due 2009.
B-8
