EXECUTION COPY
WASTE INDUSTRIES, INC.
NOTE PURCHASE AND PRIVATE SHELF AGREEMENT
$25,000,000
6.96% SERIES A SENIOR NOTES DUE JUNE 30, 2008
$50,000,000
PRIVATE SHELF FACILITY
as of June 30, 1998
TABLE OF CONTENTS
Paragraph Page
1. AUTHORIZATION OF ISSUE OF NOTES..........................................................................1
1A. Authorization of Issue of 1998 Series A Notes.......................................................1
1B. Authorization of Issue of Shelf Notes...............................................................1
2. PURCHASE AND SALE OF NOTES...............................................................................2
2A. Purchase and Sale of 1998 Series A Notes............................................................2
2B. Purchase and Sale of Shelf Notes....................................................................2
2B(1) Facility.............................................................................2
2B(2) Issuance Period......................................................................3
2B(3) Request for Purchase.................................................................3
2B(4) Rate Quotes..........................................................................4
2B(5) Acceptance...........................................................................4
2B(6) Market Disruption....................................................................5
2B(7) Facility Closings....................................................................5
2B(8) Fees.................................................................................6
3. CONDITIONS OF CLOSING....................................................................................7
3A. Certain Documents...................................................................................7
3B. Representations and Warranties; No Default..........................................................8
3C. Purchase Permitted by Applicable Laws...............................................................8
3D. Payment of Fees.....................................................................................8
3E. No Material Adverse Change..........................................................................8
3F. Environmental Compliance............................................................................8
4. PREPAYMENTS..............................................................................................9
4A. Required Prepayments of 1998 Series A Notes.........................................................9
4B. Required Prepayments of Shelf Notes.................................................................9
4C. Optional Prepayment With Yield-Maintenance Amount...................................................9
4D. Notice of Optional Prepayment.......................................................................9
4E. Application of Prepayments.........................................................................10
4F. Retirement of Notes................................................................................10
5. AFFIRMATIVE COVENANTS...................................................................................10
5A. Reporting Requirements.............................................................................10
5A(1) General Information.................................................................10
5A(2) Officer's Certificates..............................................................12
5A(3) Annual Accountant's Letter..........................................................12
5A(4) Special Information.................................................................12
5B. Inspection of Property.............................................................................13
5C. Covenant to Secure Notes Equally...................................................................13
5D. Guaranteed Obligations.............................................................................13
5E. Maintenance of Insurance...........................................................................14
5F. Maintenance of Corporate Existence/Compliance with Law/Preservation of Property....................14
5G. Compliance with Environmental Laws.................................................................14
5H. No ▇▇▇▇▇▇▇▇▇▇▇.....................................................................................▇▇
▇▇. Financial Records..................................................................................15
6. NEGATIVE COVENANTS......................................................................................15
6A. Financial Limitation...............................................................................15
6B. Liens, Debt and Other Restrictions.................................................................16
6B(1) Liens...............................................................................16
6B(2) Merger or Consolidation.............................................................17
6B(3) Investments.........................................................................17
6B(4) Operating Leases....................................................................18
6B(5) Transactions with Related Party.....................................................18
6C. Sale of Property...................................................................................18
6D. Subsidiary Stock and Debt..........................................................................19
6E. Restricted Payments................................................................................20
6F. ERISA..............................................................................................20
6G. Environmental Matters..............................................................................20
6H. Specified Laws.....................................................................................21
6I. Subordinated Debt..................................................................................21
7. EVENTS OF DEFAULT.......................................................................................22
7A. Acceleration.......................................................................................22
7B. Rescission of Acceleration.........................................................................24
7C. Notice of Acceleration or Rescission...............................................................25
7D. Other Remedies.....................................................................................25
8. REPRESENTATIONS, COVENANTS AND WARRANTIES...............................................................25
8A. Organization.......................................................................................25
8B. Financial Statements...............................................................................26
8C. Actions Pending....................................................................................26
8D. Outstanding Debt...................................................................................26
8E. Title to Properties................................................................................27
8F. Taxes..............................................................................................27
8G. Conflicting Agreements and Other Matters...........................................................27
8H. Offering of Notes..................................................................................27
8I. Use of Proceeds....................................................................................28
8J. ERISA..............................................................................................28
8K. Governmental Consent...............................................................................28
8L. Environmental Compliance...........................................................................29
8M. Disclosure.........................................................................................29
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8N. Hostile Tender Offers..............................................................................30
9. REPRESENTATIONS OF THE PURCHASERS.......................................................................30
9A. Nature of Purchase.................................................................................30
9B. Source of Funds....................................................................................30
9C. Business of Purchaser; Prohibited Transferees......................................................31
10. DEFINITIONS; ACCOUNTING MATTERS.........................................................................31
10A. Yield-Maintenance Terms............................................................................31
10B. Other Terms........................................................................................33
10C. Accounting Principles, Terms and Determinations....................................................42
11. MISCELLANEOUS...........................................................................................42
11A. Payments...........................................................................................42
11B. Expenses...........................................................................................43
11C. Consent to Amendments..............................................................................44
11D. Form and Registration; Transfer and Exchange; Transfer Restrictions; Lost Notes....................44
11D(1) Form and Registration...............................................................44
11D(2) Transfer and Exchange of Notes......................................................45
11D(3) Transfer Restrictions...............................................................45
11D(4) Lost Notes..........................................................................45
11E. Persons Deemed Owners; Participations..............................................................45
11F. Survival of Representations and Warranties; Entire Agreement.......................................45
11G. Successors and Assigns.............................................................................46
11H. Independence of Covenants..........................................................................46
11I. Notices............................................................................................46
11J. Payments Due on Non-Business Days..................................................................46
11K. Severability.......................................................................................47
11L. Descriptive Headings...............................................................................47
11M. Satisfaction Requirement...........................................................................47
11N. Governing Law; Submission to Jurisdiction..........................................................47
11O. Severalty of Obligations...........................................................................47
11P. Counterparts.......................................................................................47
11Q. Binding Agreement..................................................................................47
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Purchaser Schedule
Information Schedule
Exhibit A-1 - Form of 1998 Series A Note
Exhibit A-2 - Form of Shelf Note
Exhibit B - Form of Request for Purchase
Exhibit C - Form of Confirmation of Acceptance
Exhibit D-1 - Form of Opinion of Company Counsel, 1998 Series A
Note Closing
Exhibit D-2 - Form of Opinion of Company Counsel, Shelf Note Closing
Schedule 6B(1) - Outstanding Liens
Schedule 6I - Form of Subordination Provisions
Schedule 8A - Subsidiaries
Schedule 8D - Outstanding Debt
Schedule 8G - Conflicting Agreements
Schedule 8I - Use of Proceeds
Schedule 8L - Environmental Disclosures
Schedule 11D(3) - Prohibited Transferees
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WASTE INDUSTRIES, INC.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
As of June 30, 1998
The Prudential Insurance Company of
America ("Prudential")
Pruco Life Insurance Company
Each Prudential Affiliate (as hereinafter
defined) which becomes bound by
certain provisions of this Agreement as
hereinafter provided (together with
Prudential, the "Purchasers")
c/o Prudential Capital Group
Gateway Center One, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
The undersigned, Waste Industries, Inc. (herein called the "Company"),
hereby agrees with you as follows:
1. AUTHORIZATION OF ISSUE OF NOTES.
1A. Authorization of Issue of 1998 Series A Notes. The Company will
authorize the issue of its senior unsecured promissory notes (the "1998 Series A
Notes") in the aggregate principal amount of $25,000,000, to be dated the date
of issue thereof, to mature June 30, 2008, to bear interest on the unpaid
balance thereof from the date thereof until the principal thereof shall have
become due and payable at the rate of 6.96% per annum and on overdue principal,
Yield-Maintenance Amount and interest at the rate specified therein, and to be
substantially in the form of Exhibit A-1 attached hereto. The terms "1998 Series
A Note" and "1998 Series A Notes" as used herein shall include each 1998 Series
A Note delivered pursuant to any provision of this Agreement and each 1998
Series A Note delivered in substitution or exchange for any such 1998 Series A
Note pursuant to any such provision.
1B. Authorization of Issue of Shelf Notes. The Company will authorize the
issue of its additional senior unsecured promissory notes (the "Shelf Notes") in
the aggregate principal amount of $50,000,000, to be dated the date of issue
thereof, to mature, in the case of each Shelf Note so issued, no more than ten
years after the date of original issuance thereof, to have an average life, in
the case of each Shelf Note so issued, of no more than seven years after the
date of original issuance thereof, to bear interest on the unpaid balance
thereof from the date thereof at
the rate per annum, and to have such other particular terms, as shall be set
forth, in the case of each Shelf Note so issued, in the Confirmation of
Acceptance with respect to such Shelf Note delivered pursuant to paragraph
2B(5), and to be substantially in the form of Exhibit A-2 attached hereto. The
terms "Shelf Note" and "Shelf Notes" as used herein shall include each Shelf
Note delivered pursuant to any provision of this Agreement and each Shelf Note
delivered in substitution or exchange for any such Shelf Note pursuant to any
such provision. The terms "Note" and "Notes" as used herein shall include each
1998 Series A Note and each Shelf Note delivered pursuant to any provision of
this Agreement and each Note delivered in substitution or exchange for any such
Note pursuant to any such provision. Notes which have the same final maturity,
the same principal prepayment dates, the same principal prepayment amounts (as a
percentage of the original principal amount of each Note), the same interest
rate, the same interest payment periods and the same date of issuance (which, in
the case of a Note issued in exchange for another Note, shall be deemed for
these purposes the date on which such Note's ultimate predecessor Note was
issued), are herein called a "Series" of Notes.
2. PURCHASE AND SALE OF NOTES.
2A. Purchase and Sale of 1998 Series A Notes. The Company hereby agrees to
sell to the Purchasers and, subject to the terms and conditions herein set
forth, the Purchasers agree to purchase from the Company $25,000,000 aggregate
principal amount of 1998 Series A Notes at 100% of such aggregate principal
amount. On June 30, 1998 (herein called the "Series A Closing Day"), the Company
will deliver to the Purchasers at the offices of Prudential Capital Group, ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, one or more 1998 Series A Notes
registered in its name, evidencing the aggregate principal amount of 1998 Series
A Notes to be purchased by the Purchasers and in the denomination or
denominations specified in the Purchaser Schedule attached hereto, against
payment of the purchase price thereof by transfer of immediately available funds
for credit to the Company's account #5114191657 at Branch Banking and Trust
Company, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ABA
Routing Number ▇▇▇▇▇▇▇▇▇.
2B. Purchase and Sale of Shelf Notes.
2B(1) Facility. Prudential is willing to consider, in its sole discretion
and within limits which may be authorized for purchase by Prudential and
Prudential Affiliates from time to time, the purchase of Shelf Notes pursuant to
this Agreement. The willingness of Prudential to consider such purchase of Shelf
Notes is herein called the "Facility". At any time, the aggregate principal
amount of Shelf Notes stated in paragraph 1B, minus the aggregate principal
amount of Shelf Notes purchased and sold pursuant to this Agreement prior to
such time, minus the aggregate principal amount of Accepted Notes (as
hereinafter defined) which have not yet been purchased and sold hereunder prior
to such time, plus the aggregate principal amount of Shelf Notes purchased and
sold pursuant to this Agreement and thereafter retired prior to such time is
herein called the "Available Facility Amount" at such time. NOTWITHSTANDING THE
WILLINGNESS OF PRUDENTIAL TO CONSIDER PURCHASES OF SHELF NOTES, THIS AGREEMENT
IS ENTERED INTO ON THE EXPRESS UNDERSTANDING THAT NEITHER PRUDENTIAL NOR ANY
PRUDENTIAL AFFILIATE SHALL BE OBLIGATED
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TO MAKE OR ACCEPT OFFERS TO PURCHASE SHELF NOTES, OR TO QUOTE RATES, SPREADS OR
OTHER TERMS WITH RESPECT TO SPECIFIC PURCHASES OF SHELF NOTES, AND THE FACILITY
SHALL IN NO WAY BE CONSTRUED AS A COMMITMENT BY PRUDENTIAL OR ANY PRUDENTIAL
AFFILIATE.
2B(2) Issuance Period. Shelf Notes may be issued and sold pursuant to this
Agreement until the earlier of:
(i) the third anniversary of the date of this Agreement (or if such
anniversary is not a Business Day, the Business Day next preceding such
anniversary),
(ii) the thirtieth day after Prudential shall have given to the
Company, or the Company shall have given to Prudential, a notice stating
that it elects to terminate the issuance and sale of Shelf Notes pursuant
to this Agreement (or if such thirtieth day is not a Business Day, the
Business Day next preceding such thirtieth day),
(iii) the last Closing Day after which there is no Available Facility
Amount,
(iv) the termination of the Facility under paragraph 7A, and
(v) the acceleration of any Note under paragraph 7A of this Agreement.
The period during which Shelf Notes may be issued and sold pursuant to this
Agreement is herein called the "Issuance Period".
2B(3) Request for Purchase. The Company may from time to time during the
Issuance Period make requests for purchases of Shelf Notes (each such request
being herein called a "Request for Purchase"). Each Request for Purchase shall
be made to Prudential by telecopier or overnight delivery service, and shall:
(i) specify the aggregate principal amount of Shelf Notes covered
thereby, which shall not be less than $5,000,000 and not be greater than
the Available Facility Amount at the time such Request for Purchase is
made,
(ii) specify the principal amounts, final maturities (which shall be
no more than ten years from the date of issuance), principal prepayment
dates, if any, and amounts and interest payment periods (which shall be
quarterly in arrears) of the Shelf Notes covered thereby,
(iii) specify the use of proceeds of such Shelf Notes (which shall not
be used to finance a Hostile Tender Offer),
(iv) specify the proposed day for the closing of the purchase and sale
of such Shelf Notes, which shall be a Business Day during the Issuance
Period not less than 10 days and not more than 30 days after the making of
such Request for Purchase,
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(v) specify the number of the account and the name and address of the
depository institution to which the purchase prices of such Shelf Notes are
to be transferred on the Closing Day for such purchase and sale,
(vi) certify that the representations and warranties contained in
paragraph 8 are true on and as of the date of such Request for Purchase and
that there exists on the date of such Request for Purchase no Event of
Default or Default,
(vii) specify the Designated Spread for such Shelf Notes, and
(viii) be substantially in the form of Exhibit B attached hereto.
Each Request for Purchase shall be in writing and shall be deemed made when
received by Prudential.
2B(4) Rate Quotes. Not later than five Business Days after the Company
shall have given Prudential a Request for Purchase pursuant to paragraph 2B(3),
Prudential may, but shall be under no obligation to, provide to the Company by
telephone or telecopier, in each case between 9:30 A.M. and 2:00 P.M. New York
City local time (or such later time as Prudential may elect), interest rate
quotes for the several principal amounts, maturities, principal prepayment
schedules, and interest payment periods of Shelf Notes specified in such Request
for Purchase. Each quote shall represent the interest rate per annum payable on
the outstanding principal balance of such Shelf Notes at which Prudential or a
Prudential Affiliate would be willing to purchase such Shelf Notes at 100% of
the principal amount thereof.
2B(5) Acceptance. Within 30 minutes after Prudential shall have provided
any interest rate quotes pursuant to paragraph 2B(4) or such shorter period as
Prudential may specify to the Company (such period herein called the "Acceptance
Window"), the Company may, subject to paragraph 2B(6), elect to accept such
interest rate quotes as to not less than $5,000,000 aggregate principal amount
of the Shelf Notes specified in the related Request for Purchase. Such election
shall be made by an Authorized Officer of the Company notifying Prudential by
telephone or telecopier within the Acceptance Window (but not earlier than 9:30
A.M. or later than 2:00 P.M., New York City local time) that the Company elects
to accept such interest rate quotes, specifying the Shelf Notes (each such Shelf
Note being herein called an "Accepted Note") as to which such acceptance (herein
called a "Acceptance") relates. The day the Company notifies Prudential of an
Acceptance with respect to any Accepted Notes is herein called the "Acceptance
Day" for such Accepted Notes. Any interest rate quotes as to which Prudential
does not receive an Acceptance within the Acceptance Window shall expire, and no
purchase or sale of Shelf Notes hereunder shall be made based on such expired
interest rate quotes. Subject to paragraph 2B(6) and the other terms and
conditions hereof, the Company agrees to sell to Prudential or a Prudential
Affiliate, and Prudential agrees to purchase, or to cause the purchase by a
Prudential Affiliate of, the Accepted Notes at 100% of the principal amount of
such Notes. As soon as practicable following the Acceptance Day, the Company,
Prudential and each Prudential Affiliate which is to purchase any such Accepted
Notes will execute a confirmation of such Acceptance substantially in the form
of Exhibit C attached hereto (herein called a "Confirmation of Acceptance"). If
the Company should fail to execute and return to Prudential within three
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Business Days following receipt thereof a Confirmation of Acceptance with
respect to any Accepted Notes, Prudential may at its election at any time prior
to its receipt thereof cancel the closing with respect to such Accepted Notes by
so notifying the Company in writing.
2B(6) Market Disruption. Notwithstanding the provisions of paragraph 2B(5),
if Prudential shall have provided interest rate quotes pursuant to paragraph
2B(4) and thereafter prior to the time an Acceptance with respect to such quotes
shall have been notified to Prudential in accordance with paragraph 2B(5) the
domestic market for U.S. Treasury securities or other financial instruments
shall have closed or there shall have occurred a general suspension, material
limitation, or significant disruption of trading in securities generally on the
New York Stock Exchange or in the domestic market for U.S. Treasury securities
or other financial instruments, then such interest rate quotes shall expire, and
no purchase or sale of Shelf Notes hereunder shall be made based on such expired
interest rate quotes. If the Company thereafter notifies Prudential of the
Acceptance of any such interest rate quotes, such Acceptance shall be
ineffective for all purposes of this Agreement, and Prudential shall promptly
notify the Company that the provisions of this paragraph 2B(6) are applicable
with respect to such Acceptance.
2B(7) Facility Closings. Not later than 11:30 A.M. (New York City local
time) on the Closing Day for any Accepted Notes, the Company will deliver to
each Purchaser listed in the Confirmation of Acceptance relating thereto at the
offices of the Prudential Capital Group, Gateway Center One, 11th Floor, Newark,
New Jersey the Accepted Notes to be purchased by such Purchaser in the form of
one or more Notes in authorized denominations as such Purchaser may request for
each Series of Accepted Notes to be purchased on the Closing Day, dated the
Closing Day and registered in such Purchaser's name (or in the name of its
nominee), against payment of the purchase price thereof by transfer of
immediately available funds for credit to the Company's account specified in the
Request for Purchase of such Notes. If the Company fails to tender to any
Purchaser the Accepted Notes to be purchased by such Purchaser on the scheduled
Closing Day for such Accepted Notes as provided above in this paragraph 2B(7),
or any of the conditions specified in paragraph 3 shall not have been fulfilled
by the time required on such scheduled Closing Day, the Company shall, prior to
1:00 P.M., New York City local time, on such scheduled Closing Day notify
Prudential (which notification shall be deemed received by each Purchaser) in
writing whether such closing is to be rescheduled (such rescheduled date to be a
Business Day during the Issuance Period not less than one Business Day and not
more than 10 Business Days after such scheduled Closing Day (the "Rescheduled
Closing Day") and certify to Prudential (which certification shall be for the
benefit of each Purchaser) that the Company reasonably believes that it will be
able to comply with the conditions set forth in paragraph 3 on such Rescheduled
Closing Day and that the Company will pay the Delayed Delivery Fee, if
applicable, in accordance with paragraph 2B(8)(iii) or such closing is to be
canceled. In the event that the Company shall fail to give such notice referred
to in the preceding sentence, Prudential (on behalf of each Purchaser) may at
its election, at any time after 1:00 P.M., New York City local time, on such
scheduled Closing Day, notify the Company in writing that such closing is to be
canceled. Notwithstanding anything to the contrary appearing in this Agreement,
the Company may elect to reschedule a closing with respect to any given Accepted
Notes on not more than one occasion, unless Prudential shall have otherwise
consented in writing.
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2B(8) Fees.
2B(8)(i) Closing Fee. At the time of the execution and delivery of this
Agreement by the Company and Prudential, the Company will pay to Prudential in
immediately available funds a nonrefundable fee (herein called the "Closing
Fee") in the amount of $37,500.00.
2B(8)(ii) Issuance Fee. The Company will pay to Prudential in immediately
available funds a fee (herein called the "Issuance Fee") on each Closing Day
(other than the Series A Closing Day) in an amount equal to 0.15% of the
aggregate principal amount of Notes sold on such Closing Day.
2B(8)(iii) Delayed Delivery Fee. If the closing of the purchase and sale of
any Accepted Note is delayed for any reason beyond the original Closing Day for
such Accepted Note, the Company will pay to Prudential (a) on the Cancellation
Date or actual closing date of such purchase and sale and (b) if earlier, the
next Business Day following 90 days after the Acceptance Day for such Accepted
Note and on each Business Day following 90 days after the prior payment
hereunder, a fee (herein called the "Delayed Delivery Fee") calculated as
follows:
(BEY - MMY) x DTS/360 x PA
where "BEY" means Bond Equivalent Yield, i.e., the bond equivalent yield per
annum of such Accepted Note, "MM" means Money Market Yield, i.e., the yield per
annum on a commercial paper investment of the highest quality selected by
Prudential on the date Prudential receives notice of the delay in the closing
for such Accepted Note having a maturity date or dates the same as, or closest
to, the Rescheduled Closing Day or Rescheduled Closing Days (a new alternative
investment being selected by Prudential each time such closing is delayed);
"DTS" means Days to Settlement, i.e., the number of actual days elapsed from and
including the original Closing Day with respect to such Accepted Note (in the
case of the first such payment with respect to such Accepted Note) or from and
including the date of the next preceding payment (in the case of any subsequent
delayed delivery fee payment with respect to such Accepted Note) to but
excluding the date of such payment; and "PA" means Principal Amount, i.e., the
principal amount of the Accepted Note for which such calculation is being made.
In no case shall the Delayed Delivery Fee be less than zero. If the foregoing
calculation yields a negative number or zero, no Delayed Delivery Fee shall be
due. Nothing contained herein shall obligate any Purchaser to purchase any
Accepted Note on any day other than the Closing Day for such Accepted Note, as
the same may be rescheduled from time to time in compliance with paragraph
2B(7).
2B(8)(iv) Cancellation Fee. If the Company at any time notifies Prudential
in writing that the Company is canceling the closing of the purchase and sale of
any Accepted Note, or if Prudential notifies the Company in writing under the
circumstances set forth in the last sentence of paragraph 2B(5) or the
penultimate sentence of paragraph 2B(7) that the closing of the purchase and
sale of such Accepted Note is to be canceled, or if the closing of the purchase
and sale of such Accepted Note is not consummated on or prior to the last day of
the Issuance Period (the date of any such notification, or the last day of the
Issuance Period, as the case may
6
be, being herein called the "Cancellation Date"), the Company will pay the
Purchasers in immediately available funds an amount (the "Cancellation Fee")
calculated as follows:
PI x PA
where "PI" means Price Increase, i.e., the quotient (expressed in decimals)
obtained by dividing (a) the excess of the ask price (as determined by
Prudential) of the Hedge Treasury Note(s) on the Cancellation Date over the bid
price (as determined by Prudential) of the Hedge Treasury Notes(s) having a
maturity date the same as, or closest to, such Accepted Note, on the Acceptance
Day (if the difference is a negative number or zero, no Cancellation Fee shall
be due) by (b) such bid price; and "PA" has the meaning ascribed to it in
paragraph 2B(8)(iii). The foregoing bid and ask prices shall be as reported by
Bridge Telerate (or, if such data for any reason ceases to be available through
Bridge Telerate, any publicly available source of similar market data). Each
price shall be based on a U.S. Treasury security having a par value of $100.00
and shall be rounded to the second decimal place. In no case shall the
Cancellation Fee be less than zero.
3. CONDITIONS OF CLOSING. The obligation of any Purchaser to purchase and
pay for any Notes is subject to the satisfaction, on or before the Closing Day
for such Notes, of the following conditions:
3A. Certain Documents. Such Purchaser shall have received the following,
each dated the date of the applicable Closing Day:
(i) The Note(s) to be purchased by such Purchaser.
(ii) Certified copies of the resolutions of the Board of Directors of
the Company authorizing the execution and delivery of this Agreement and
the issuance of the Notes, and of all documents evidencing other necessary
corporate action and governmental approvals, if any, with respect to this
Agreement and the Notes.
(iii) A certificate of the Secretary or an Assistant Secretary and one
other officer of the Company certifying the names and true signatures of
the officers of the Company authorized to sign this Agreement and the Notes
and the other documents to be delivered hereunder.
(iv) Certified copies of the Articles of Incorporation and By-laws of
the Company.
(v) A favorable opinion of Wyrick, Robbins, ▇▇▇▇▇ & ▇▇▇▇▇▇, LLP,
special counsel to the Company (or such other counsel designated by the
Company and acceptable to the Purchaser(s)) satisfactory to such Purchaser
and substantially in the form of Exhibit D-1 (in the case of the 1998
Series A Notes) or D-2 (in the case of any Shelf Notes) attached hereto and
as to such other matters as such Purchaser may reasonably request. The
Company hereby directs such counsel to deliver such opinion, agrees that
the issuance and sale of any Notes will constitute a reconfirmation of such
7
direction, and understands and agrees that each Purchaser receiving
such an opinion will and is hereby authorized to rely on such opinion.
(vi) A good standing certificate for the Company from the Secretary of
State of North Carolina dated of a recent date and good standing or other
certificates of qualification to do business as a foreign corporation for
the Company in the States of South Carolina, Georgia, Tennessee and
Virginia and such other evidence of the status of the Company as such
Purchaser may reasonably request.
(vii) Additional documents or certificates with respect to legal
matters or corporate or other proceedings related to the transactions
contemplated hereby as may be reasonably requested by such Purchaser.
3B. Representations and Warranties; No Default. The representations and
warranties contained in paragraph 8 shall be true on and as of such Closing Day,
except to the extent of changes caused by the transactions herein contemplated
and for any Closing Day after the Series A Closing Day changes since the date of
this Agreement which are disclosed in writing to Prudential and to which
Prudential shall have consented in writing; there shall exist on such Closing
Day no Event of Default or Default; and the Company shall have delivered to such
Purchaser an Officer's Certificate, dated such Closing Day, to both such
effects.
3C. Purchase Permitted by Applicable Laws. The purchase of and payment for
the Notes to be purchased by such Purchaser on the terms and conditions herein
provided (including the use of the proceeds of such Notes by the Company) shall
not violate any applicable law or governmental regulation (including, without
limitation, Section 5 of the Securities Act or Regulation T, U or X of the Board
of Governors of the Federal Reserve System) and shall not subject such Purchaser
to any tax (other than any income taxes arising from such Purchaser's ownership
of the Notes), penalty, liability or other onerous condition under or pursuant
to any applicable law or governmental regulation, and such Purchaser shall have
received such certificates or other evidence as it may request to establish
compliance with this condition.
3D. Payment of Fees. The Company shall have paid to Prudential any fees due
it pursuant to or in connection with this Agreement, including any Facility Fee
due pursuant to paragraph 2B(8)(i), any Issuance Fee due pursuant to paragraph
2B(8)(ii) and any Delayed Delivery Fee due pursuant to paragraph 2B(8)(iii).
3E. No Material Adverse Change. Prudential shall have received a
certificate from the chief financial officer of the Company, dated the
applicable Closing Day, saying that no material adverse change in the financial
condition, business, operations or prospects of the Company or its subsidiaries,
taken as a whole, has occurred since December 31, 1997.
3F. Environmental Compliance. With respect to any Closing Day other than
the Series A Closing Day, Prudential shall have received such evidence
(including without limitation certificates and environmental audits or reports
by an independent environmental consultant) satisfactory to Prudential
demonstrating the accuracy of the representations under paragraph 8L
8
(without giving effect to any qualification with respect to the Company's
knowledge) and compliance with paragraph 5G.
4. PREPAYMENTS. The 1998 Series A Notes and any Shelf Notes shall be
subject to required prepayment as and to the extent provided in paragraphs 4A
and 4B, respectively. The 1998 Series A Notes and any Shelf Notes shall also be
subject to prepayment under the circumstances set forth in paragraph 4C. Any
prepayment made by the Company pursuant to any other provision of this paragraph
4 shall not reduce or otherwise affect its obligation to make any required
prepayment as specified in paragraph 4A or 4B.
4A. Required Prepayments of 1998 Series A Notes. Until the 1998 Series A
Notes shall be paid in full, the Company shall apply to the prepayment of the
1998 Series A Notes, without Yield-Maintenance Amount, the sum of $3,571,428.57
commencing on June 30, 2002 and each June 30, thereafter to and including June
30, 2007, and such principal amounts of the 1998 Series A Notes, together with
interest thereon to the payment dates, shall become due on such payment dates.
The remaining unpaid principal amount of the 1998 Series A Notes, together with
interest accrued thereon, shall become due on June 30, 2008, the maturity date
of the 1998 Series A Notes.
4B. Required Prepayments of Shelf Notes. Each Series of Shelf Notes shall
be subject to required prepayments, if any, set forth in the Notes of such
Series.
4C. Optional Prepayment With Yield-Maintenance Amount. The Notes of each
Series shall be subject to prepayment, in whole at any time or from time to time
in part (in integral multiples of $100,000 and in a minimum amount of
$1,000,000), at the option of the Company, at 100% of the principal amount so
prepaid plus interest thereon to the prepayment date and the Yield-Maintenance
Amount, if any, with respect to each such Note. Any partial prepayment of a
Series of the Notes pursuant to this paragraph 4C shall be applied in
satisfaction of required payments of principal in inverse order of their
scheduled due dates.
4D. Notice of Optional Prepayment. The Company shall give the holder of
each Note of a Series to be prepaid pursuant to paragraph 4C irrevocable written
notice of such prepayment not less than 10 Business Days prior to the prepayment
date, specifying such prepayment date, the aggregate principal amount of the
Notes of such Series to be prepaid on such date, the principal amount of the
Notes of such Series held by such holder to be prepaid on that date and that
such prepayment is to be made pursuant to paragraph 4C. Notice of prepayment
having been given as aforesaid, the principal amount of the Notes specified in
such notice, together with interest thereon to the prepayment date and together
with the Yield-Maintenance Amount, if any, herein provided, shall become due and
payable on such prepayment date. The Company shall, on or before the day on
which it gives written notice of any prepayment pursuant to paragraph 4C, give
telephonic notice of the principal amount of the Notes to be prepaid and the
prepayment date to each Significant Holder which shall have designated a
recipient for such notices in the Purchaser Schedule attached hereto or the
applicable Confirmation of Acceptance or by notice in writing to the Company.
9
4E. Application of Prepayments. In the case of each prepayment of less than
the entire unpaid principal amount of all outstanding Notes of any Series
pursuant to paragraphs 4A, 4B or 4C, the amount to be prepaid shall be applied
pro rata to all outstanding Notes of such Series (including, for the purpose of
this paragraph 4E only, all Notes prepaid or otherwise retired or purchased or
otherwise acquired by the Company or any of its Subsidiaries or Affiliates other
than by prepayment pursuant to paragraph 4A, 4B or 4C) according to the
respective unpaid principal amounts thereof.
4F. Retirement of Notes. The Company shall not, and shall not permit any of
its Subsidiaries or Affiliates to, prepay or otherwise retire in whole or in
part prior to their stated final maturity (other than by prepayment pursuant to
paragraphs 4A, 4B or 4C or upon acceleration of such final maturity pursuant to
paragraph 7A), or purchase or otherwise acquire, directly or indirectly, Notes
of any Series held by any holder unless the Company or such Subsidiary or
Affiliate shall have offered to prepay or otherwise retire or purchase or
otherwise acquire, as the case may be, the same proportion of the aggregate
principal amount of Notes of such Series held by each other holder of Notes of
such Series at the time outstanding upon the same terms and conditions. Any
Notes so prepaid or otherwise retired or purchased or otherwise acquired by the
Company or any of its Subsidiaries or Affiliates shall not be deemed to be
outstanding for any purpose under this Agreement, except as provided in
paragraph 4E.
5. AFFIRMATIVE COVENANTS.
5A. Reporting Requirements.
5A(1) General Information. The Company covenants that it will deliver to
each Significant Holder in triplicate:
(i) as soon as practicable and in any event within 45 days after the
end of each quarterly period (other than the fourth quarterly period) in
each fiscal year,
(1) Consolidated statements of income, stockholders' equity and
cash flows for the period from the beginning of the current fiscal
year to the end of such quarterly period, and
(2) a Consolidated balance sheet as at the end of such quarterly
period,
setting forth in each case in comparative form figures for the
corresponding period in the preceding fiscal year, all in reasonable detail
and reasonably satisfactory in form to the Required Holder(s) and certified
by an authorized financial officer of the Company as fairly presenting, in
all material respects, the financial condition of the Company and its
Consolidated Subsidiaries as of the end of such period and the results of
their operations for the period then ended in accordance with generally
accepted accounting principles, subject to changes resulting from normal
year-end adjustments and the inclusion of abbreviated footnotes; provided,
however, that delivery pursuant to clause (iii) below of copies of the
Quarterly Report on Form 10-Q of the Company for such quarterly period
10
filed with the Securities and Exchange Commission shall be deemed to
satisfy the requirements of this clause (i);
(ii) as soon as practicable and in any event within 90 days after the
end of each fiscal year,
(1) Consolidated statements of income, stockholders' equity and
cash flows for such year, and
(2) a Consolidated balance sheet as at the end of such year,
setting forth in each case in comparative form corresponding Consolidated
figures from the preceding annual audit, all in reasonable detail and
reasonably satisfactory in scope to the Required Holder(s) and reported on
by independent public accountants of recognized standing selected by the
Company whose report shall be without limitation as to the scope of the
audit and reasonably satisfactory in substance to the Required Holder(s);
provided, however, that delivery pursuant to clause (iii) below of copies
of the Annual Report on Form 10-K of the Company for such year filed with
the Securities and Exchange Commission shall be deemed to satisfy the
requirements of this clause (ii);
(iii) if the Company shall be publicly held, promptly upon
transmission thereof, copies of all such financial statements, proxy
statements, notices and reports as it shall send to its public stockholders
and copies of all registration statements (without exhibits) and all
reports (other than any registration statement filed on Form S-8) which it
files with the Securities and Exchange Commission (or any governmental body
or agency succeeding to the functions of the Securities and Exchange
Commission);
(iv) promptly upon receipt thereof, a copy of each other report
(including, without limitation, management letters) submitted to the
Company or any Subsidiary by independent accountants in connection with any
annual, interim or special audit made by them of the books of the Company
or any Subsidiary;
(v) promptly upon receipt thereof, a copy of each report, survey,
study, evaluation, assessment or other document prepared by any consultant,
engineer, Environmental Authority or other Person relating to compliance by
the Company or any Subsidiary with any Environmental Requirements, if the
cost of remediation, repair or compliance may be reasonably expected to
exceed $250,000 in any one case or in the aggregate;
(vi) with reasonable promptness, upon the request of the holder of any
Note, provide such holder, and any qualified institutional buyer designated
by such holder, such financial and other information as such holder may
reasonably determine to be necessary in order to permit compliance with the
information requirements of Rule 144A under the Securities Act in
connection with the resale of Notes, except at such times as the Company is
subject to the reporting requirements of section 13 or 15(d) of the
Exchange
11
Act. For the purpose of this clause (vi), the term "qualified institutional
buyer" shall have the meaning specified in Rule 144A under the Securities
Act; and
(vii) with reasonable promptness, such other data relating to the
business, operations, properties or financial condition of the Company or
any of its Subsidiaries as a Significant Holder may reasonably request;
5A(2) Officer's Certificates. Together with each delivery of financial
statements required by clauses 5A(i) and (ii) above, the Company will deliver to
each Significant Holder an Officer's Certificate demonstrating (with
computations in reasonable detail) compliance with the provisions of paragraphs
6A, 6B(1), 6B(2) and 6C and stating that there exists no Event of Default or
Default, or, if any Event of Default or Default exists, specifying the nature
and period of existence thereof and what action the Company has taken, is taking
or proposes to take with respect thereto;
5A(3) Annual Accountant's Letter. Together with each delivery of financial
statements required by clause 5A(ii) above, the Company will deliver to each
Significant Holder a certificate of the independent public accountants giving
the report on such financial statements stating that, in making the audit
necessary for their report, they have obtained no knowledge of any Event of
Default or Default, or, if they have obtained knowledge of any Event of Default
or Default, specifying the nature and period of existence thereof. The
accountants, however, shall not be liable to anyone as a result of this
provision by reason of their failure to obtain knowledge of any Event of Default
or Default which would not be disclosed in the course of an audit conducted in
accordance with generally accepted auditing standards;
5A(4) Special Information. The Company also covenants that immediately
after any Responsible Officer obtains actual knowledge of:
(a) an Event of Default or Default;
(b) a material adverse change in the financial condition, business or
operations of the Company and its Subsidiaries, taken as a whole;
(c) legal proceedings filed against the Company ` and/or any
Subsidiary, which reasonably could be expected to have a material adverse
effect on the financial condition, business or operations of the Company
and its Subsidiaries, taken as a whole, or which in any manner draws into
question the validity of or reasonably could be expected to impair the
ability of the Company to perform its obligations under this Agreement or
the Notes;
(d) a default under any agreement or note evidencing Debt for which
the Company or any Subsidiary is liable, which individually or in the
aggregate with all other agreements and notes in default for which the
Company or any Subsidiary is liable, exceed $250,000;
12
(e) the occurrence of any other event that reasonably could be
expected to impair the ability of the Company to meet its obligations
hereunder;
(f) any (i) Environmental Liabilities, (ii) pending, threatened or
anticipated Environmental Proceedings, (iii) Environmental Notices, (iv)
Environmental Judgments and Orders, or (v) Environmental Releases at, on,
in, under or in any way affecting the Properties which reasonably could be
expected to have a material adverse effect on the business, operations or
financial condition of the Company and its Subsidiaries, taken as a whole;
or
(g) with respect to any Plan that is subject to the funding
requirements of Section 302 of ERISA or Section 412 of the Code, the
Company (i) has given or is required to give notice to the Pension Benefit
Guaranty Corporation that a material reportable event has occurred with
respect to such Plan, (ii) has delivered notice to the Pension Benefit
Guaranty Corporation of any intent to withdraw from or terminate any such
Plan, or (iii) has failed to make timely a contribution to any such Plan;
the Company will deliver to each Significant Holder an Officer's Certificate
specifying the nature and period of existence thereof and what action the
Company or the Subsidiary has taken, is taking or proposes to take with respect
thereto.
5B. Inspection of Property. The Company covenants that, at such reasonable
times and as often as a Significant Holder may reasonably request, it will
permit any Person designated by a Significant Holder in writing, at such
Significant Holder's expense unless a Default has occurred and is continuing in
which case at the Company's expense, to:
(i) visit and inspect any of the properties of the Company and any
Subsidiary;
(ii) examine the corporate books and financial records of the Company
and its Subsidiaries and make copies thereof or extracts therefrom; and
(iii) discuss the affairs, finances and accounts of any of such
corporations with the principal officers of the Company or any Subsidiary
and their independent public accountants.
5C. Covenant to Secure Notes Equally. The Company covenants that if it or
any Subsidiary shall create or assume any Lien upon any of its property or
assets, whether now owned or hereafter acquired, other than Liens permitted by
paragraph 6B(1) (unless prior written consent shall have been obtained under
paragraph 11C), it will make or cause to be made effective provision whereby the
Notes will be secured by such Lien equally and ratably with any and all other
Debt thereby secured so long as any such other Debt shall be so secured.
5D. Guaranteed Obligations. The Company covenants that if any Person (other
than the Company) Guarantees or provides collateral in any manner for any Debt
of the Company or any Subsidiary, it will simultaneously cause such Person to
Guarantee or provide collateral for the Notes equally and ratably with all Debt
Guaranteed or secured by such Person for so long as
13
such Debt is Guaranteed and pursuant to documentation in form and substance
reasonably satisfactory to such holder.
5E. Maintenance of Insurance. The Company covenants that it and each
Subsidiary will maintain, with responsible insurers, insurance with respect to
its properties and business against such casualties and contingencies
(including, but not limited to, public liability, larceny, embezzlement or other
criminal misappropriation) and in such amounts as is customary in the case of
similarly situated corporations engaged in the same or similar businesses;
provided, however, that the Company and each Subsidiary may elect to continue to
self-insure (i) their waste containers; (ii) certain immaterial assets such as
radio towers consistent with their business practices in effect on the date
hereof; and (iii) certain risks under their medical and short-term disability
plans..
5F. Maintenance of Corporate Existence/Compliance with Law/Preservation of
Property. The Company covenants that, except as permitted under paragraphs 6B(2)
and 6C, it and each Subsidiary will do or cause to be done all things necessary
to, at all times:
(i) preserve, renew and keep in full force and effect the corporate
existence of the Company and its Subsidiaries (other than those
Subsidiaries not material to the financial condition, business or
operations of the Company and its Subsidiaries taken as a whole);
(ii) comply with all laws and regulations (including, without
limitation, laws and regulations relating to equal employment opportunity
and employee safety) applicable to it and any Subsidiary except where the
failure to comply could not reasonably be expected to have a material
adverse effect on the business, operations or financial condition of the
Company and its Subsidiaries, taken as a whole;
(iii) maintain, preserve and protect all material licenses,
certificates, permits, franchises and intellectual property of the Company
and its Subsidiaries; and
(iv) preserve all the remainder of its property used or useful in the
conduct of its business and keep the same in good repair, working order and
condition excluding normal wear and tear, except where the failure to
preserve such property could not be reasonably expected to have a material
adverse effect on the business, operations or financial condition of the
Company and its Subsidiaries, taken as a whole.
5G. Compliance with Environmental Laws. The Company covenants that it and
each Subsidiary will, comply in a timely fashion with, or operate pursuant to
valid waivers of the provisions of, all applicable Environmental Requirements,
including, without limitation, the emission of wastewater effluent, solid and
hazardous waste and air emissions together with any other applicable
Environmental Requirements for conducting, on a timely basis, periodic tests and
monitoring for contamination of ground water, surface water, air and land and
for biological toxicity of the aforesaid, and all applicable regulations of the
Environmental Protection Agency or other relevant federal, state or local
governmental authority, except where the failure to comply could not reasonably
be expected to have a material adverse effect on the business,
14
operations or financial condition of the Company and its Subsidiaries, taken as
a whole. The Company agrees to indemnify and hold you, your officers, agents and
employees (each an "Indemnified Person") harmless from any loss, liability,
claim or expense that you may incur or suffer as a result of a breach by the
Company or any Subsidiary, as the case may be, of this covenant other than as a
result of the gross negligence or willful misconduct of such Indemnified Person.
The Company shall not be deemed to have breached or violated this paragraph 5G
if the Company or any Subsidiary is challenging in good faith by appropriate
proceedings diligently pursued the application or enforcement of such
Environmental Requirements for which adequate reserves have been established in
accordance with generally accepted accounting principles.
5H. No Integration. The Company covenants that it has taken and will take
all necessary action so that the issuance of the Notes does not and will not
require registration under the Securities Act. The Company covenants that no
future offer and sale of debt securities of the Company of any class will be
made if there is a reasonable possibility that such offer and sale would, under
the doctrine of "integration", subject the issuance of the Notes to you to the
registration requirements of the Securities Act.
5I. Financial Records. The Company covenants that it and each Subsidiary
will keep proper books of record and account in which full and correct entries
(in all material respects and subject to normal year end adjustments and, as to
interim statements, the absence of footnotes) will be made of the business and
affairs of the Company or such Subsidiary under generally accepted accounting
principles consistently applied (except for changes disclosed in the financial
statements furnished to you pursuant to paragraph SA and concurred in by the
independent public accountants referred to in paragraph 5A).
6. NEGATIVE COVENANTS. Unless the Required Holders otherwise agree in
writing, the Company shall not, and shall not permit any Subsidiary, to take any
of the following actions or permit the occurrence or existence of any of the
following events or conditions:
6A. Financial Limitation. The Company covenants that it will not permit at
any time:
(i) Consolidated Debt to exceed 400% of EBITDA for the most recently
ended four fiscal quarter period; or
(ii) Consolidated Senior Debt to exceed 350% of EBITDA for the most
recently ended four fiscal quarter period; or
(iii) Priority Debt to exceed 5 % of Consolidated Total
Capitalization; or
(iv) Consolidated Current Debt to exceed 20 % of Consolidated Total
Capitalization; or
(v) Consolidated Fixed Charges to exceed 250% of EBITDA plus
Consolidated Fixed Charges for the most recently ended four fiscal quarter
period; or
15
(vi) Consolidated Net Worth to be less than $12,500,000 plus on a
cumulative basis 40% of Consolidated Net Income (if positive) for each
fiscal year ending after the date hereof.
6B. Liens, Debt and Other Restrictions. The Company covenants that it will
not and will not permit any Subsidiary to:
6B(1) Liens. Create, assume or suffer to exist any Lien upon any of its
property or assets, whether now owned or hereafter acquired (whether or not
provision is made for the equal and ratable securing of the Notes pursuant to
paragraph 5C), except:
(i) Liens existing on the Series A Closing Day and specified on
Schedule 6B(1);
(ii) Liens for taxes (including ad valorem and property taxes) and
assessments or governmental charges or levies not yet due or which are
being actively contested in good faith by appropriate proceedings;
(iii) other Liens incidental to the conduct of its business or the
maintenance, operation, construction or ownership of its property and
assets (including pledges or deposits in connection with workers'
compensation and social security taxes, assessments and charges, and
landlords, mechanics and materialmen Liens and survey exceptions or
encumbrances, easements or reservations, rights-of-way, or zoning
restrictions) provided that such Liens were not incurred in connection with
the borrowing of money, or the obtaining of advances or credit or the
payment of the deferred purchase price of property and the existence of
such Lien does not materially detract from the value of such property or
assets to the Company or any Subsidiary or unreasonably interfere with the
ordinary conduct of business;
(iv) Liens (other than any Lien imposed by ERISA) incurred or deposits
made in the ordinary course of business to secure (or to obtain letters of
credit that secure) the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, performance bonds, purchase,
construction or sales contracts and other similar obligations, in each case
not incurred or made in connection with any Debt;
(v) any Lien created to secure all or any part of the purchase price
incurred or assumed to pay all or any part of the purchase price of
property acquired by the Company or a Subsidiary after the date of this
Agreement, provided that:
(A) any such Lien shall be confined solely to the item or items
of property so acquired and, if required by the terms of the
instrument originally creating such Lien, other property which is an
improvement to or for specific use with such acquired property; and
(B) the principal amount of the Debt secured by any such Lien
shall at no time exceed 100% of the lesser of (1) the cost to the
Company or such
16
Subsidiary of the property acquired and (2) the Fair Market Value of
such property (as determined in good faith by the Company's Board) at
the time of such acquisition;
(vi) Liens securing Capitalized Lease Obligations, provided such Liens
are limited to the property subject to such leases;
(vii) any right of set off or banker's lien (whether by common law,
statute, contract or otherwise) in connection with ordinary course of
business deposit arrangements maintained by the Company or its Subsidiaries
with its banks or other financial institutions so long as any such bank or
other financial institution (A) shall not at any time make loans or
otherwise extend credit to the Company or any Subsidiary, (B) does not
maintain accounts (for the deposit of cash or otherwise) for the benefit of
the Company or any Subsidiary, (C) shall have waived in writing for the
benefit of each holder of a Note such right of setoff or banker's lien, or
(D) shall be subject to a pro rata sharing agreement in form and substance
satisfactory to each Significant Holder; or
(viii) any Lien renewing, extending, or refunding any outstanding
obligations secured by a Lien described in clause (i), provided the
principal amount secured is not increased and such Lien is not extended to
any other property of the Company or its Subsidiaries;
(ix) Liens securing judgments rendered against the Company or any of
its Subsidiaries or arising in connection with any court proceedings,
provided (iv) such Liens are being contested in good faith by appropriate
proceedings and (v) no action has been taken by any Person to execute or
otherwise collect on such Lien;
(x) Liens securing Debt held by the Company in any Subsidiary or Debt
held by any Subsidiary in any other Subsidiary; and
(xi) additional Liens securing Priority Debt permitted by paragraph
6A(iii).
6B(2) Merger or Consolidation. Merge, consolidate or exchange shares with
any other Person, except that:
(i) any Subsidiary may merge or consolidate with the Company or any
other Subsidiary;
(ii) the Company may merge or consolidate with any other corporation
(including a Subsidiary) provided (A) the Company is the surviving
corporation, and (B) immediately after giving effect to such transaction,
no Default or Event of Default shall occur or exist; or
6B(3) Investments. Make or permit to remain outstanding any Investments,
except that the Company or any Subsidiary may:
17
(i) make or own Investments in any Subsidiary or any Person which
immediately after giving effect to such Investment will be a Subsidiary;
(ii) own, purchase or otherwise acquire (A) notes or accounts
receivable arising from transactions with customers, suppliers and
employees in the ordinary course of business or (B) stock or securities
received as settlements of debts created in the ordinary course of
business;
(iii) endorse negotiable instruments for collection in the ordinary
course of business;
(iv) advances or loans to officers and employees in the ordinary
course of business in an aggregate amount not in excess of $500,000 during
any fiscal year; or
(v) own, purchase or acquire prime commercial paper or certificates of
deposit or repurchase agreements of U.S. commercial banks having capital
and surplus in excess of $500,000,000 and a long term debt rating of A or
better by ▇▇▇▇▇'▇ or S&P, in each case, due within one year from the date
of purchase and payable in U.S. dollars, or obligations of the United
States Government or any agency thereof for which the full faith and credit
of the United States Government is pledged due within one year from the
date of purchase, or obligations guaranteed by the United States Government
due within one year from the date of purchase.
6B(4) Operating Leases. Enter into, or permit to remain in effect, or
become or remain liable, directly or indirectly, as lessee or guarantor (or
other surety) under an Operating Lease, which when combined with all Operating
Leases would require aggregate payments by the Company during any fiscal year to
exceed an aggregate amount equal to 3.5% of Consolidated revenues for such
period.
6B(5) Transactions with Related Party. Effect any transaction with any
Affiliate or Subsidiary by which any asset or services of the Company or a
Subsidiary of the Company is transferred to such Affiliate or Subsidiary, or
from such Affiliate or Subsidiary or enter into any other transaction with an
Affiliate or Subsidiary, on terms more favorable than would be reasonably
expected to be given in a similar transaction with an unrelated entity.
6C. Sale of Property. The Company will not, and will not permit any
Subsidiary to, Dispose of any property or assets, except:
(i) any Subsidiary may Dispose of its assets to the Company or a
Subsidiary; or
(ii) the Company or any Subsidiary may Dispose of its assets (whether
or not leased back) so long as, immediately after giving effect to such
proposed Disposition:
18
(A) the consideration for such assets represents the Fair Market
Value of such assets (as determined in good faith by the Company's
Board) at the time of such Disposition; and
(B) the net book value of all assets so Disposed of by the
Company and its Subsidiaries during the prior 12 months, does not
constitute a Substantial Part of the Consolidated assets; and
(C) no Default or Event of Default shall exist.
For purposes of this paragraph 6C:
(i) "Dispose" means the sale, lease, transfer or other disposition of
property of the Company or any of its Subsidiaries, and "Disposition" and
"Disposed of" has a corresponding meaning to Dispose;
(ii) Calculation of net book value. The net book value of any assets
shall be determined as of the respective date of Disposition of those
assets; and
(iii) Sales of less than all the stock of a Subsidiary. In the case of
the sale or issuance of the stock of a Subsidiary, the amount of
Consolidated Assets contributed by the stock Disposed of shall be assumed
to be the percentage of outstanding stock sold or to be sold.
6D. Subsidiary Stock and Debt. The Company will not:
(i) directly or indirectly sell, assign, pledge or otherwise dispose
of any Debt of or any shares of stock of (or warrants, rights or options to
acquire stock of) any Subsidiary except to a Subsidiary and except as
permitted pursuant to paragraph 6C;
(ii) permit any Subsidiary directly or indirectly to sell, assign,
pledge or otherwise dispose of any Debt of the Company or any other
Subsidiary, or any shares of stock of (or warrants, rights or options to
acquire stock of) any other Subsidiary, except to the Company or a
Subsidiary and except pursuant to paragraph 6C;
(iii) permit any Subsidiary directly or indirectly to issue or sell
any shares of its stock (or warrants, rights or options to acquire its
stock) except to the Company or a Subsidiary and except as permitted
pursuant to paragraph 6B(2) and 6C; or
(iv) permit any Subsidiary to enter into or otherwise be bound by or
subject to any contract or agreement (including, without limitation, any
provision of its certificate or articles of incorporation or bylaws) that
restricts its ability to pay dividends or other distributions on account of
its stock; or
(v) permit any Subsidiary to create, incur, assume or maintain any
Debt except as permitted by paragraph 6A.
19
6E. Restricted Payments. The Company will not, and will not permit any
Subsidiary to:
(a) pay or declare any dividend on any class of its Capital Stock or
make any other distribution on account of any class of its Capital Stock;
or
(b) except as otherwise required pursuant to the Cross Purchase
Agreement and each Stock Purchase Agreement between the Company, as an
original party or as successor by merger for certain of its Affiliates, and
certain stockholders of the Company, redeem, purchase or otherwise acquire,
directly or indirectly (through a Subsidiary or otherwise), any shares of
its Capital Stock (all of the foregoing events set forth in subsections (a)
and (b), whether made in cash or property, being herein called "Restricted
Payments");
unless the aggregate amount of all Restricted Payments made since the date
hereof would not exceed the sum of (A) $500,000, plus (B) since the date hereof,
60% of cumulative Consolidated Net Income so long as the Company shall be
organized as a Subchapter S corporation under the Code and 35 % of Cumulative
Consolidated Net Income if the Company shall be organized as a "C" corporation
under the Code (or, in either case, minus 100% of cumulative Consolidated Net
Income if such Cumulative Net Income for such period is a loss) and no Default
or Event of Default shall have occurred and be continuing, and no Default or
Event of Default would occur as a result of such Restricted Payment.
6F. ERISA. The Company covenants that it will not, nor permit any
Subsidiary to:
(i) terminate or withdraw from any Plan (other than a Multiemployer
Plan) resulting in the incurrence of any material liability to the Pension
Benefit Guaranty Corporation;
(ii) engage in or permit any Person to engage in any prohibited
transaction (as defined in Section 4975 of the Code) involving any Plan
(other than a Multiemployer Plan) which would subject the Company or any
Subsidiary to any material tax, penalty or other liability;
(iii) incur or suffer to exist any material accumulated funding
deficiency (as defined in section 302 of ERISA and section 412 of the
Code), whether or not waived, involving any Plan (other than a
Multiemployer Plan); or
(iv) allow or suffer to exist any risk or condition which presents a
risk of incurring a material liability to the Pension Benefit Guaranty
Corporation.
6G. Environmental Matters. The Company covenants that it will not, and will
not permit any Third Party to, use, produce, manufacture, process, generate,
store, dispose of, manage at, or ship or transport to or from the Properties any
Hazardous Materials except for Hazardous Materials used, produced, released or
managed in the ordinary course of business in compliance with all applicable
Environmental Requirements except where the failure to do so
20
could not reasonably be expected to have a material adverse effect on the
business, operations or financial condition of the Company and its Subsidiaries
taken as a whole and except for Hazardous Materials released in amounts which do
not require remediation pursuant to applicable Environmental Requirements or if
remediation is required, such remediation could not reasonably be expected to
have a material adverse effect on the business, operations or financial
condition of the Company and its Subsidiaries taken as a whole.
6H. Specified Laws. Neither the Company nor any agent acting on its behalf
will take any action which could reasonably be expected to cause this Agreement
or the Notes to violate Regulation T, Regulation U or any other regulation of
the Board of Governors of the Federal Reserve System or to violate the Exchange
Act, in any case as in effect now or as the same may hereafter be in effect.
6I. Subordinated Debt. The Company covenants that, until the Notes have
been paid in full, it will not and will not permit any Subsidiary to:
(a) pay principal (including prepayments), interest or premium, if
any, on any Subordinated Debt or retire, redeem, purchase, defease or
otherwise acquire any Subordinated Debt if a Default or Event of Default
shall have occurred and be continuing; or
(b) issue any Subordinated Debt unless the Company has provided
evidence to you, all in form and substance reasonably satisfactory to you,
that it has satisfied each of the following:
(i) no Default or Event of Default exists or would occur upon
such issuance;
(ii) the Subordinated Debt is effectively subordinated to the
Notes upon terms and conditions no less favorable to the holders of
the Notes and in form and substance as set forth in Schedule 6I
attached hereto;
(iii) the interest rate shall be set on an arm's-length basis and
shall not exceed the market rate and shall be reasonably acceptable to
you;
(iv) the events of default of the Subordinated Debt shall be
limited to (1) acceleration of the Senior Debt (as defined in Schedule
6I), (2) the occurrence of a Bankruptcy Proceeding (as defined in
Schedule 6I) with respect to the Company and (3) a failure of the
Company to pay interest on or principal of the Subordinated Debt for a
period of 180 days after the date such payment was due; and
(v) the affirmative covenants are customary for subordinated
indebtedness and such Subordinated Debt does not contain or receive
the benefit of any negative covenants; or
21
(c) waive, supplement, modify, amend, terminate or change the terms of
any Subordinated Debt without the consent of the Required Holders; or
(d) so long as a Default or Event of Default shall exist, retain any
payment or distribution received pursuant to the terms of clause (0 of
Schedule 6I hereto (or any similar provision) and the Company hereby agrees
that it shall immediately pay over or deliver and transfer to the Senior
Creditors (as defined in Schedule 6I) any such payment or distribution in
accordance with the priorities then existing among such Senior Creditors.
7. EVENTS OF DEFAULT.
7A. Acceleration. If any of the following events shall occur and be
continuing for any reason whatsoever (and whether such occurrence shall be
voluntary or involuntary or come about or be effected by operation of law or
otherwise):
(i) the Company defaults in the payment of any principal of, or
Yield-Maintenance Amount payable with respect to, any Note when the same
shall become due, either by the terms thereof or otherwise as herein
provided; or
(ii) the Company defaults in the payment of any interest on any Note
for more than 10 days after the date due; or
(iii) the Company or any Subsidiary defaults (whether as primary
obligor or as guarantor or other surety) in any payment of principal of or
interest on any other obligation for money borrowed (or any Capitalized
Lease Obligation, any obligation under a conditional sale or other title
retention agreement, any obligation issued or assumed as full or partial
payment for property whether or not secured by a purchase money mortgage or
any obligation under notes payable or drafts accepted representing
extensions of credit) beyond any period of grace provided with respect
thereto, or the Company or any Subsidiary fails to perform or observe any
other agreement, term or condition contained in any agreement under which
any such obligation is created (or if any other event thereunder or under
any such agreement shall occur and be continuing) and the effect of such
failure or other event is to cause, or to permit the holder or holders of
such obligation (or a trustee on behalf of such holder or holders) to
cause, such obligation to become due (or to be repurchased by the Company
or any Subsidiary) prior to any stated maturity, provided that the
aggregate amount of all obligations as to which such a payment default
shall occur and be continuing or such a failure or other event causing or
permitting acceleration (or resale to the Company or any Subsidiary) shall
occur and be continuing exceeds $500,000; or
(iv) any representation or warranty made by the Company herein or by
the Company or any of its officers in any writing furnished in connection
with or pursuant to this Agreement shall be false in any material respect
on the date as of which made; or
22
(v) the Company fails to perform or observe any agreement contained in
paragraph 6; or
(vi) the Company fails to perform or observe any other agreement, term
or condition contained herein and such failure shall not be remedied within
30 days after any Responsible Officer obtains knowledge or notice thereof;
or
(vii) the Company or any Subsidiary makes an assignment for the
benefit of creditors or is generally not paying its debts as such debts
become due; or
(viii) any decree or order for relief in respect of the Company or any
Subsidiary is entered under any bankruptcy, reorganization, compromise,
arrangement, insolvency, readjustment of debt, dissolution or liquidation
or similar law, whether now or hereafter in effect (herein called the
"Bankruptcy Law"), of any jurisdiction; or
(ix) the Company or any Subsidiary petitions or applies to any
tribunal for, or consents to, the appointment of, or taking possession by,
a trustee, receiver, custodian, liquidator or similar official of the
Company or any Subsidiary, or of any substantial part of the assets of the
Company or any Subsidiary, or commences a voluntary case under the
Bankruptcy Law of the United States or any proceedings (other than
proceedings for the voluntary liquidation and dissolution of a Subsidiary)
relating to the Company or any Subsidiary under the Bankruptcy Law of any
other jurisdiction; or
(x) any such petition or application is filed, or any such proceedings
are commenced, against the Company or any Subsidiary and the Company or
such Subsidiary by any act indicates its approval thereof, consent thereto
or acquiescence therein, or an order, judgment or decree is entered
appointing any such trustee, receiver, custodian, liquidator or similar
official, or approving the petition in any such proceedings, and such
order, judgment or decree remains unstayed and in effect for more than 45
days; or
(xi) any order, judgment or decree is entered in any proceedings
against the Company decreeing the dissolution of the Company and such
order, judgment or decree remains unstayed and in effect for more than 60
days; or
(xii) any order, judgment or decree is entered in any proceedings
against the Company or any Subsidiary decreeing a split-up of the Company
or such Subsidiary which requires the divestiture of assets representing a
substantial part, or the divestiture of the stock of a Subsidiary whose
assets represent a substantial part, of the consolidated assets of the
Company and its Subsidiaries (determined in accordance with generally
accepted accounting principles) or which requires the divestiture of
assets, or stock of a Subsidiary, which shall have contributed a
substantial part of the consolidated net income of the Company and its
Subsidiaries (determined in accordance with generally accepted accounting
principles) for any of the three fiscal years then most recently ended, and
such order, judgment or decree remains unstayed and in effect for more than
60 days; or
23
(xiii) one or more final judgments in an aggregate amount in excess of
$500,000 is rendered against the Company or any Subsidiary and, within 60
days after entry thereof, any such judgment is not discharged or execution
thereof stayed pending appeal, or within 60 days after the expiration of
any such stay, such judgment is not discharged; or
(xiv) the Company or any ERISA Affiliate, in its capacity as an
employer under a Multiemployer Plan, makes a complete or partial withdrawal
from such Multiemployer Plan resulting in the incurrence by such
withdrawing employer of a withdrawal liability in an amount exceeding
$500,000;
then:
(a) if such event is an Event of Default specified in clause (i) or
(ii) of this paragraph 7A, any holder (other than the Company or any of its
Subsidiaries) of any Note may at its option during the continuance of such
Event of Default, by notice in writing to the Company, terminate the
Facility and/or declare all of the Notes held by such holder to be, and all
of the Notes held by such holder shall thereupon be and become, immediately
due and payable at par together with interest accrued thereon, without
presentment, demand, protest or notice of any kind, all of which are hereby
waived by the Company,
(b) if such event is an Event of Default specified in clause (viii),
(ix) or (x) of this paragraph 7A with respect to the Company, the Facility
shall automatically terminate and all of the Notes at the time outstanding
shall automatically become immediately due and payable together with
interest accrued thereon and together with the Yield-Maintenance Amount, if
any, with respect to each Note, without presentment, demand, protest or
notice of any kind, all of which are hereby waived by the Company, and
(c) with respect to any event constituting an Event of Default, the
Required Holder(s) of the Notes of any Series may at its or their option
during the continuance of such Event of Default, by notice in writing to
the Company, terminate the Facility and/or declare all of the Notes of such
Series to be, and all of the Notes of such Series shall thereupon be and
become, immediately due and payable together with interest accrued thereon
and together with the Yield-Maintenance Amount, if any, with respect to
each Note of such Series, without presentment, demand, protest or notice of
any kind, all of which are hereby waived by the Company.
7B. Rescission of Acceleration. At any time after any or all of the Notes
of any Series shall have been declared immediately due and payable pursuant to
paragraph 7A, the Required Holder(s) of the Notes of such Series may, by notice
in writing to the Company, rescind and annul such declaration and its
consequences if:
(i) the Company shall have paid all overdue interest on the Notes of
such Series, the principal of and Yield-Maintenance Amount, if any, payable
with respect to any Notes of such Series which have become due otherwise
than by reason of such
24
declaration, and interest on such overdue interest and overdue principal
and Yield-Maintenance Amount at the rate specified in the Notes of such
Series,
(ii) the Company shall not have paid any amounts which have become due
solely by reason of such declaration,
(iii) all Events of Default and Defaults, other than non-payment of
amounts which have become due solely by reason of such declaration, shall
have been cured or waived pursuant to paragraph 11C, and
(iv) no judgment or decree shall have been entered for the payment of
any amounts due pursuant to the Notes of such Series or this Agreement.
No such rescission or annulment shall extend to or affect any subsequent Event
of Default or Default or impair any right arising therefrom.
7C. Notice of Acceleration or Rescission. Whenever any Note shall be
declared immediately due and payable pursuant to paragraph 7A or any such
declaration shall be rescinded and annulled pursuant to paragraph 7B, the
Company shall forthwith give written notice thereof to the holder of each Note
of each Series at the time outstanding.
7D. Other Remedies. If any Event of Default or Default shall occur and be
continuing, the holder of any Note may proceed to protect and enforce its rights
under this Agreement and such Note by exercising such remedies as are available
to such holder in respect thereof under applicable law, either by suit in equity
or by action at law, or both, whether for specific performance of any covenant
or other agreement contained in this Agreement or in aid of the exercise of any
power granted in this Agreement. No remedy conferred in this Agreement upon the
holder of any Note is intended to be exclusive of any other remedy, and each and
every such remedy shall be cumulative and shall be in addition to every other
remedy conferred herein or now or hereafter existing at law or in equity or by
statute or otherwise.
8. REPRESENTATIONS, COVENANTS AND WARRANTIES. The Company represents,
covenants and warrants as follows (all references to "Subsidiary" and
"Subsidiaries" in this paragraph 8 shall be deemed omitted if the Company has no
Subsidiaries at the time the representations herein are made or repeated):
8A. Organization.
(i) The Company is a corporation duly organized and existing in good
standing under the laws of the State of North Carolina, and each Subsidiary
is duly organized and existing in good standing under the laws of the
jurisdiction in which it is incorporated. Schedule 8A hereto is an accurate
and complete list of all Subsidiaries as of the Series A Closing Day,
including the jurisdiction of incorporation and ownership of all such
Subsidiaries. The Company and each Subsidiary has the corporate power to
own its respective properties and to carry on its respective businesses as
now being conducted and is duly qualified and authorized to do business in
each other jurisdiction in which the
25
character of its respective properties or the nature of its respective
businesses require such qualification or authorization except where the
failure to be so qualified or authorized could not reasonably be expected
to have a material adverse effect on the business, operations or financial
condition of the Company and its Subsidiaries, taken as a whole.
(ii) No Subsidiary is a party to, or otherwise subject to, any legal
restriction or any agreement restricting the ability of such Subsidiary to
pay dividends out of profits or make other similar distributions of profits
to the Company or any of its Subsidiaries that owns outstanding shares of
Capital Stock or similar equity interests of such Subsidiary.
8B. Financial Statements. The Company has furnished you with the following
financial statements, identified by a principal financial officer of the
Company:
(i) a Consolidated balance sheet as at the last day of the fiscal year
in each of the years 1989 to 1997, inclusive, a Consolidated statement of
income, stockholders' equity and cash flows for each such year, all
reported on by Deloitte & Touche.
Those financial statements (including any related schedules and/or notes) fairly
present in all material respects (subject, as to interim statements, to the
absence of footnotes or to changes resulting from normal year-end adjustments)
the financial condition of the Company and have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved and show all liabilities, direct and contingent, of the Company
and its Subsidiaries required to be shown in accordance with such principles.
The balance sheets fairly present, in all material respects, the Consolidated
financial condition of the Company and its Subsidiaries as at the dates thereof,
and the statements of income, stockholders' equity and cash flows fairly
present, in all material respects, the Consolidated results of the operations of
the Company and its Subsidiaries, the changes in the Company's stockholders'
equity and their Consolidated cash flows for the periods indicated. There has
been no material adverse change in the business, condition (financial or
otherwise) or operations of the Company and its Subsidiaries taken as a whole
since December 31, 1997.
8C. Actions Pending. Except as set forth on Schedule 8L hereto, there is no
action, suit, investigation or proceeding pending or, to the knowledge of the
Company, threatened against the Company or any of its Subsidiaries, or any
properties or rights of the Company or any of its Subsidiaries, by or before any
court, arbitrator or administrative or governmental body which could reasonably
be expected to result in any material adverse change in the business, property
or assets, condition (financial or otherwise) or operations of the Company and
its Subsidiaries taken as a whole.
8D. Outstanding Debt. Neither the Company nor any of its Subsidiaries has
outstanding any Debt except as permitted by paragraph 6A. There exists no
default under the provisions of any instrument evidencing such Debt or of any
agreement relating thereto. Schedule 8D hereto (as such Schedule 8D may have
been modified from time to time by written supplements thereto delivered by the
Company to Prudential) is an accurate and complete list of Debt of the Company
and its Subsidiaries on the applicable Closing Day.
26
8E. Title to Properties. The Company has and each of its Subsidiaries has
good and indefeasible title to its respective real properties (other than
properties which it leases) and good title to all of its other respective
properties and assets, including the properties and assets reflected in the most
recent audited balance sheet referred to in paragraph 8B (other than properties
and assets disposed of in the ordinary course of business), subject to no Lien
of any kind except Liens permitted by paragraph 6B(1). All leases necessary in
any material respect for the conduct of the respective businesses of the Company
and its Subsidiaries are valid and subsisting and are in full force and effect.
8F. Taxes. The Company has filed and each of its Subsidiaries has filed all
federal, state and other income tax returns which, to the best knowledge of the
Chief Financial Officer of the Company and its Subsidiaries, are required to be
filed, and each has paid all taxes as shown on such returns and on all
assessments received by it to the extent that such taxes have become due, except
such taxes as are being contested in good faith by appropriate proceedings for
which adequate reserves have been established in accordance with generally
accepted accounting principles.
8G. Conflicting Agreements and Other Matters. Neither the Company nor any
of its Subsidiaries is a party to any contract or agreement or subject to any
charter or other corporate restriction which materially and adversely affects
its business, property or assets, condition (financial or otherwise) or
operations. Neither the execution nor delivery of this Agreement or the Notes,
nor the offering, issuance and sale of the Notes, nor fulfillment of nor
compliance with the terms and provisions hereof and of the Notes will conflict
with, or result in a breach of the terms, conditions or provisions of, or
constitute a default under, or result in any violation of, or result in the
creation of any Lien upon any of the properties or assets of the Company or any
of its Subsidiaries pursuant to, the charter or by-laws of the Company or any of
its Subsidiaries, any award of any arbitrator or any agreement (including any
agreement with stockholders), instrument, order, judgment, decree, statute, law,
rule or regulation to which the Company or any of its Subsidiaries is subject.
Neither the Company nor any of its Subsidiaries is a party to, or otherwise
subject to any provision contained in, any instrument evidencing Debt of the
Company or such Subsidiary, any agreement relating thereto or any other contract
or agreement (including its charter) which limits the amount of, or otherwise
imposes restrictions on the incurring of, Debt of the Company of the type to be
evidenced by the Notes except as set forth in the agreements listed in Schedule
8G hereto.
8H. Offering of Notes. Neither the Company nor any agent acting on its
behalf has, directly or indirectly, offered the Notes or any similar security of
the Company for sale to, or solicited any offers to buy the Notes or any similar
security of the Company from, or otherwise approached or negotiated with respect
thereto with, any Person other than institutional investors, and neither the
Company nor any agent acting on its behalf has taken or will take any action
which would subject the issuance or sale of the Notes to the provisions of
Section 5 of the Securities Act or to the provisions of any securities or Blue
Sky law of any applicable jurisdiction. The Company hereby represents and
warrants to you that, within the preceding twelve months, neither the Company
nor any other Person acting on behalf of the Company has
27
offered or sold to any Person (other than accredited investors) any Notes, or
any securities of the same or a similar class as the Notes, or any other
substantially similar securities of the Company.
8I. Use of Proceeds. The proceeds of the 1998 Series A Notes will be used
to repay the Debt specified in Schedule 8I. None of the proceeds of the sale of
any Notes will be used, directly or indirectly, for the purpose, whether
immediate, incidental or ultimate, of purchasing or carrying any "margin stock"
as defined in Regulation U (12 C.F.R. Part 221) of the Board of Governors of the
Federal Reserve System (herein called "margin stock") or for the purpose of
maintaining, reducing or retiring any Debt which was originally incurred to
purchase or carry any stock that is then currently a margin stock or for any
other purpose which might constitute the purchase of such Notes a "purpose
credit" within the meaning of such Regulation U, unless the Company shall have
delivered to the Purchaser which is purchasing such Notes, on the Closing Day
for such Notes, an opinion of counsel satisfactory to such Purchaser stating
that the purchase of such Notes does not constitute a violation of such
Regulation U. Neither the Company nor any agent acting on its behalf has taken
or will take any action which might cause this Agreement or the Notes to violate
Regulation T, Regulation U or any other regulation of the Board of Governors of
the Federal Reserve System or to violate the Exchange Act, in each case as in
effect now or as the same may hereafter be in effect.
8J. ERISA. No accumulated funding deficiency (as defined in section 302 of
ERISA and section 412 of the Code), whether or not waived, exists with respect
to any Plan (other than a Multiemployer Plan). No liability to the Pension
Benefit Guaranty Corporation has been or is expected by the Company or any ERISA
Affiliate to be incurred with respect to any Plan (other than a Multiemployer
Plan) by the Company, any Subsidiary or any ERISA Affiliate which is or would be
materially adverse to the business, property or assets, condition (financial or
otherwise) or operations of the Company and its Subsidiaries taken as a whole.
Neither the Company, any Subsidiary nor any ERISA Affiliate has incurred or
presently expects to incur any withdrawal liability under Title IV of ERISA with
respect to any Multiemployer Plan which is or would be materially adverse to the
business, property or assets, condition (financial or otherwise) or operations
of the Company and its Subsidiaries taken as a whole. The execution and delivery
of this Agreement and the issuance and sale of the Notes will be exempt from or
will not involve any transaction which is subject to the prohibitions of section
406 of ERISA and will not involve any transaction in connection with which a
penalty could be imposed under section 502(i) of ERISA or a tax could be imposed
pursuant to section 4975 of the Code. The representation by the Company in the
next preceding sentence is made in reliance upon and subject to the accuracy of
the representation of each Purchaser in paragraph 9B as to the source of funds
to be used by it to purchase any Notes.
8K. Governmental Consent. Neither the nature of the Company or of any
Subsidiary, nor any of their respective businesses or properties, nor any
relationship between the Company or any Subsidiary and any other Person, nor any
circumstance in connection with the offering, issuance, sale or delivery of the
Notes is such as to require any authorization, consent, approval, exemption or
any action by or notice to or filing with any court or administrative or
governmental body (other than routine filings after the Closing Day for any
Notes with the Securities and Exchange Commission and/or state Blue Sky
authorities) in connection with the
28
execution and delivery of this Agreement, the offering, issuance, sale or
delivery of the Notes or fulfillment of or compliance with the terms and
provisions hereof or of the Notes.
8L. Environmental Compliance.
(i) The Company and its Subsidiaries and all of their respective Properties
have complied at all times (during such period of time the Company or its
Subsidiaries have owned or operated each such Property) and in all respects with
all Environmental Requirements where failure to comply could reasonably be
expected to have a material adverse effect on the business, condition (financial
or otherwise) or operations of the Company and its Subsidiaries taken as a
whole.
(ii) Except as set forth in Schedule 8L, neither the Company nor any
Subsidiary is subject to any Environmental Liability or Environmental
Requirement which could reasonably be expected to have a material adverse effect
on the business, condition (financial or otherwise) or operations of the Company
and its Subsidiaries, taken as a whole.
(iii) Except as set forth in Schedule 8L, neither the Company nor any
Subsidiary has been designated as a potentially responsible party under CERCLA
or under any state statute similar to CERCLA. None of the Properties has been
identified on any current or proposed National Priorities List under 40 C.F.R.
ss. 300 or any list arising from a state statute similar to CERCLA. None of the
Properties has been identified on any CERCLIS list.
(iv) No Hazardous Materials have been or are being used, produced,
manufactured, processed, generated, stored, disposed of, released, managed at or
shipped or transported to or from the Properties (during such period of time the
Company or its Subsidiaries have owned or operated each such Property) or, to
the actual knowledge of the Company, are otherwise present at, on, in or under
the Properties or, to the actual knowledge of the Company, at or from any
adjacent site or facility, except for Hazardous Materials used, produced,
manufactured, processed, generated, stored, disposed of, released and managed in
the ordinary course of the Company's and any Subsidiary's business in compliance
with all applicable Environmental Requirements and except for Hazardous
Materials present in amounts which have not required and do not require
remediation, pursuant to applicable law or regulation, or if remediation is
required, such remediation could not reasonably be expected to have a material
adverse effect on the business, condition (financial or otherwise) or operations
of the Company and its Subsidiaries, taken as a whole.
(v) The Company and each Subsidiary have procured all permits necessary
under Environmental Requirements for the conduct of their respective businesses
or is otherwise in compliance with all applicable Environmental Requirements,
except to the extent the failure to do so would not reasonably expected to have
a material adverse effect on the business, condition (financial or otherwise) or
operations of the Company and its Subsidiaries, taken as a whole.
8M. Disclosure. Neither this Agreement nor any other document, certificate
or statement furnished to any Purchaser by or on behalf of the Company in
connection herewith contains any untrue statement of a material fact or omits to
state a material fact necessary in
29
order to make the statements contained herein and therein not misleading. There
is no fact peculiar to the Company or any of its Subsidiaries which materially
adversely affects or in the future may (so far as the Company can now reasonably
foresee) materially adversely affect the business, property or assets, condition
(financial or otherwise) or operations of the Company or any of its Subsidiaries
and which has not been set forth in this Agreement.
8N. Hostile Tender Offers. None of the proceeds of the sale of any Notes
have been or will be used to finance a Hostile Tender Offer.
9. REPRESENTATIONS OF THE PURCHASERS.
Each Purchaser represents as follows:
9A. Nature of Purchase. Such Purchaser will acquire the 1998 Series A Notes
and any other Shelf Notes purchased from the Company pursuant to this Agreement
for investment for its own account, not as a nominee or agent, and not with a
view to, or for resale in connection with, any distribution thereof within the
meaning of the Securities Act, provided that the disposition of such Purchaser's
property shall at all times be and remain within its control.
9B. Source of Funds. You represent that at least one of the following
statements is an accurate representation as to each source of funds (a "Source")
to be used by you to pay the purchase price of the Notes to be purchased by you
hereunder:
(a) the Source constitutes assets allocated to your "insurance company
general account" (as such term is defined under Section V of the United
States Department of Labor's Prohibited Transaction Exemption ("PTE")
95-60), and as of the date of the purchase of the Notes, you satisfy all of
the applicable requirements for relief under Sections I and IV of PTE
95-60; or
(b) if you are an insurance company, the Source does not include
assets allocated to any separate account maintained by you in which any
employee benefit plan (or its related trust) has any interest, other than a
separate account that is maintained solely in connection with your fixed
contractual obligations under which the amounts payable, or credited, to
such plan and to any participant or beneficiary of such plan (including any
annuitant) are not affected in any manner by the investment performance of
the separate account; or
(c) the Source is either (i) an insurance company pooled separate
account, within the meaning PTE 90-1 (issued January 29, 1990), or (ii) a
bank collective investment fund, within the meaning of the PTE 91-38
(issued July 12, 1991) and, except as you have disclosed to the Company in
writing pursuant to this paragraph (c), no employee benefit plan or group
of plans maintained by the same employer or employee organization
beneficially owns more than 10% of all assets allocated to such pooled
separate account or collective investment fund; or
30
(d) the Source constitutes asset of an "investment fund" (within the
meaning of Part V of the QPAM Exemption) managed by a "qualified
professional asset manager" or "QPAM" (within the meaning of Part V of the
QPAM Exemption), no employee benefit plan's assets that are included in
such investment fund, when combined with the assets of all other employee
benefit plans established or maintained by the same employer or by an
affiliate (within the meaning of Section V(c)(1) of the QPAM Exemption) of
such employer or by the same employee organization and managed by such
QPAM, exceed 20% of the total client assets managed by such QPAM, the
conditions of Part I(c) and (g) of the QPAM Exemption are satisfied,
neither the QPAM nor a person controlling or controlled by the QPAM
(applying the definition of "control" in Section V(e) of the QPAM
Exemption) owns a 5% or more interest in the company and (i) the identity
of such QPAM and (ii) the names of all employee benefit plans whose assets
are included in such investment fund have been disclosed to the Company in
writing pursuant to clause (c); or
(e) the Source is a governmental plan; or
(f) the Source is one or more employee benefit plans, or a separate
account or trust fund comprised of one or more employee benefit plans, each
of which has been identified to the Company in writing pursuant to this
clause (f); or
(g) the Source does not include assets of any employee benefit plan,
other than a plan exempt from the coverage of ERISA.
As used in this paragraph 9B, the terms "employee benefit plan", "governmental
plan", "party in interest" and "separate account" shall have the respective
meanings assigned to such terms in Section 3 of ERISA.
9C. Business of Purchaser; Prohibited Transferees. Neither Purchaser, nor
any Affiliate of such Purchaser, is engaged in, or owns a 5 % or more interest
in a Person engaged in, the hauling of waste or commercial recycling, nor shall
such Purchaser transfer any Note to any Person engaged in, or who owns a 5% or
more interest in a Person engaged in, the hauling of waste or commercial
recycling.
10. DEFINITIONS; ACCOUNTING MATTERS. For the purpose of this Agreement, the
terms defined in paragraphs 10A and 10B (or within the text of any other
paragraph) shall have the respective meanings specified therein and all
accounting matters shall be subject to determination as provided in paragraph
10C.
10A. Yield-Maintenance Terms.
"Called Principal" shall mean, with respect to any Note, the principal of
such Note that is to be prepaid pursuant to paragraph 4C or is declared to be
immediately due and payable pursuant to paragraph 7A, as the context requires.
31
"Designated Spread" shall mean .50 of 1% in the case of each 1998 Series A
Note and 0% in the case of each Note of any other Series unless the Confirmation
of Acceptance with respect to the Notes of such other Series specifies a
different Designated Spread in which case it shall mean, with respect to each
Note of such other Series, the Designated Spread so specified.
"Discounted Value" shall mean, with respect to the Called Principal of any
Note, the amount obtained by discounting all Remaining Scheduled Payments with
respect to such Called Principal from their respective scheduled due dates to
the Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (as converted to reflect
the periodic basis on which interest on such Note is payable, if payable other
than on a semi-annual basis) equal to the Reinvestment Yield with respect to
such Called Principal.
"Reinvestment Yield" shall mean, with respect to the Called Principal of
any Note, the Designated Spread over the yield to maturity implied by (i) the
yields reported, as of 10:00 A.M. (New York City local time) on the Business Day
next preceding the Settlement Date with respect to such Called Principal, on the
display designated as "Page 678" on the Telerate Service (or such other display
as may replace page 678 on the Telerate Service) for actively traded U.S.
Treasury securities having a maturity equal to the Remaining Average Life of
such Called Principal as of such Settlement Date, or (ii) if such yields shall
not be reported as of such time or the yields reported as of such time shall not
be ascertainable, the Treasury Constant Maturity Series yields reported, for the
latest day for which such yields shall have been so reported as of the Business
Day next preceding the Settlement Date with respect to such Called Principal, in
Federal Reserve Statistical Release H.15 (519) (or any comparable successor
publication) for actively traded U.S. Treasury securities having a constant
maturity equal to the Remaining Average Life of such Called Principal as of such
Settlement Date. Such implied yield shall be determined, if necessary, by (a)
converting U.S. Treasury ▇▇▇▇ quotations to bond-equivalent yields in accordance
with accepted financial practice and (b) interpolating linearly between yields
reported for various maturities.
"Remaining Average Life" shall mean, with respect to the Called Principal
of any Note, the number of years (calculated to the nearest one-twelfth year)
obtained by dividing (i) such Called Principal into (ii) the sum of the products
obtained by multiplying (a) each Remaining Scheduled Payment of such Called
Principal (but not of interest thereon) by (b) the number of years (calculated
to the nearest one-twelfth year) which will elapse between the Settlement Date
with respect to such Called Principal and the scheduled due date of such
Remaining Scheduled Payment.
"Remaining Scheduled Payments" shall mean, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due on or after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to its
scheduled due date.
32
"Settlement Date" shall mean, with respect to the Called Principal of any
Note, the date on which such Called Principal is to be prepaid pursuant to
paragraph 4A or is declared to be immediately due and payable pursuant to
paragraph 7A, as the context requires.
"Yield-Maintenance Amount" shall mean, with respect to any Note, an amount
equal to the excess, if any, of the Discounted Value of the Called Principal of
such Note over the sum of (i) such Called Principal plus (ii) interest accrued
thereon as of (including interest due on) the Settlement Date with respect to
such Called Principal. The Yield-Maintenance Amount shall in no event be less
than zero.
10B. Other Terms.
"Acceptance" shall have the meaning specified in paragraph 2B(5).
"Acceptance Day" shall have the meaning specified in paragraph 2B(5).
"Acceptance Window" shall have the meaning specified in paragraph 2B(5).
"Accepted Note" shall have the meaning specified in paragraph 2B(5).
"Affiliate" shall mean any Person directly or indirectly controlling,
controlled by, or under direct or indirect common control with, the Company,
except a Subsidiary. A Person shall be deemed to control a corporation if such
Person possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such corporation, whether through
the ownership of voting securities, by contract or otherwise.
"Authorized Officer" shall mean (i) in the case of the Company, its chief
executive officer, its president and chief operating officer, its chief
financial officer, any vice president of the Company designated as an
"Authorized Officer" of the Company in the Information Schedule attached hereto
or any vice president of the Company designated as an "Authorized Officer" of
the Company for the purpose of this Agreement in an Officer's Certificate
executed by the Company's chief executive officer or chief financial officer and
delivered to Prudential, and (ii) in the case of Prudential, any officer of
Prudential designated as its "Authorized Officer" in the Information Schedule or
any officer of Prudential designated as its "Authorized Officer" for the purpose
of this Agreement in a certificate executed by one of its Authorized Officers.
Any action taken under this Agreement on behalf of the Company by any individual
who on or after the date of this Agreement shall have been an Authorized Officer
of the Company and whom Prudential in good faith believes to be an Authorized
Officer of the Company at the time of such action shall be binding on the
Company even though such individual shall have ceased to be an Authorized
Officer of the Company, and any action taken under this Agreement on behalf of
Prudential by any individual who on or after the date of this Agreement shall
have been an Authorized Officer of Prudential and whom the Company in good faith
believes to be an Authorized Officer of Prudential at the time of such action
shall be binding on Prudential even though such individual shall have ceased to
be an Authorized Officer of Prudential.
"Available Facility Amount" shall have the meaning specified in paragraph
2B(1).
33
"Bankruptcy Law" shall have the meaning specified in clause (viii) of
paragraph 7A.
"Business Day" shall mean any day other than (i) a Saturday or a Sunday,
(ii) a day on which commercial banks in New York City are required or authorized
to be closed and (iii) for purposes of paragraph 2B(3) hereof only, a day on
which The Prudential Insurance Company of America is not open for business.
"Cancellation Date" shall have the meaning specified in paragraph
2B(8)(iv).
"Cancellation Fee" shall have the meaning specified in paragraph 2B(8)(iv).
"Capital Stock" means, with respect to any Person, the outstanding capital
stock (or any options or warrants to purchase capital stock or other securities
exchangeable for or convertible into capital stock) of such Person.
"Capitalized Lease Obligation " shall mean any rental obligation which,
under generally accepted accounting principles, is or will be required to be
capitalized on the books of the Company or any Subsidiary, taken at the amount
thereof accounted for as indebtedness (net of interest expenses) in accordance
with such principles.
"CERCLA" shall mean the Comprehensive Environmental Response, Compensation
and Liability Act.
"CERCLIS" shall mean the Comprehensive Environmental Response, Compensation
and Liability Inventory System established pursuant to CERCLA.
"Closing Day" shall mean, with respect to the 1998 Series A Notes, the
Series A Closing Day and, with respect to any Accepted Note, the Business Day
specified for the closing of the purchase and sale of such Accepted Note in the
Request for Purchase of such Accepted Note, provided that (i) if the Company and
the Purchaser which is obligated to purchase such Accepted Note agree on an
earlier Business Day for such closing, the "Closing Day" for such Accepted Note
shall be such earlier Business Day, and (ii) if the closing of the purchase and
sale of such Accepted Note is rescheduled pursuant to paragraph 2B(7), the
Closing Day for such Accepted Note, for all purposes of this Agreement except
references to "original Closing Day" in paragraph 2B(8)(iii), shall mean the
Rescheduled Closing Day with respect to such Accepted Note.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and the rules and regulations promulgated thereunder from time to time.
"Confirmation of Acceptance" shall have the meaning specified in paragraph
2B(5).
"Consolidated" shall mean, with respect to any item of financial
information, the item of financial information for the Company and its
Subsidiaries consolidated in accordance with generally accepted accounting
principles.
34
"Consolidated Current Debt" shall mean with respect to any Person, all Debt
of such Person which by its terms matures on demand or within one year from the
date of the creation thereof and is not directly or indirectly renewable or
extendible at the option of the obligor in respect thereto to a date one year or
more from such date.
"Consolidated Fixed Charges" shall mean, for the Company and its
Subsidiaries on a Consolidated basis, the sum (without duplication) of:
(i) all Rentals (excluding all principal components of Rentals under
Capitalized Lease Obligations) paid during the most recently completed four
fiscal quarters (the "Prior Period"); and
(ii) all Consolidated Interest Charges for the Prior Period.
"Consolidated Interest Charges" shall mean, for the Company and its
Subsidiaries on a Consolidated basis for the four fiscal quarters most recently
ended, all interest expense (as determined in accordance with generally accepted
accounting principles) on all Debt (including imputed interest in respect of
Capitalized Lease Obligations) net of interest income.
"Consolidated Net Income" shall mean, for any period, net income determined
on a consolidated basis for the Company and its Subsidiaries; provided, however,
that there shall not be included in such Consolidated Net Income:
(i) any net income of any Person if such Person is not a Subsidiary, except
that equity in the net income of any such Subsidiary for such period shall be
included in such Consolidated Net Income up to the aggregate amount of cash
actually distributed by such Subsidiary as a dividend or other distribution
(subject, in the case of a dividend of other distribution to a Subsidiary, to
the limitation contained in clause (iii) below);
(ii) any net income of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition except to the
extent that there exists for any such Person audited financial statements for
the most recently ended fiscal year of such Person;
(iii) any net income of Subsidiary if such Subsidiary is subject to
restrictions, directly or indirectly, on the payment of dividends or the making
of distributions by such Subsidiary, directly or indirectly, to the Company,
except that equity in the net income of any such Subsidiary for such period
shall be included in such Consolidated Net Income up to the aggregate amount of
cash actually distributed by such Subsidiary during such period as a dividend or
other distribution (subject, in the case of a dividend or other distribution to
another Subsidiary, to the limitation contained in this clause);
(iv) any gain realized upon the sale or other disposition of any property,
plant or equipment (including pursuant to any sale-leaseback arrangement) which
is not sold or otherwise disposed of in the ordinary course of business and any
gain realized upon the sale or other disposition of any capital stock of any
Person; or
35
(v) any other extraordinary items.
"Consolidated Net Worth" shall mean, at any time, for the Company and its
Subsidiaries on a Consolidated basis shareholders' equity at such time
determined in accordance with generally accepted accounting principles.
"Consolidated Total Capitalization" shall mean, at any time, the sum of (i)
Consolidated Debt at such time plus (ii) Consolidated Net Worth at such time.
"Cross Purchase Agreement" shall mean the Cross Purchase Agreement dated
July 10, 1990, by and among ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., ▇▇▇▇▇ ▇. ▇▇▇▇▇, J. ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇ ▇. ▇▇▇▇, the Company, Waste Enterprises, Inc., Waste
Industries South, Inc., Waste Industries West, Inc., Waste Industries East, Inc.
and Kabco, Inc., as amended.
"Debt" with respect to any Person means, at any time, without duplication,
(a) its liabilities for borrowed money;
(b) its liabilities for the deferred purchase price of property
acquired by such Person (excluding accounts payable, accrued expenses,
withholding taxes and deferred taxes, in each case arising in the ordinary
course of business, but including, without limitation, all liabilities
created or arising under any conditional sale or other title retention
agreement with respect to any such property);
(c) its Capitalized Lease Obligations;
(d) all liabilities for borrowed money secured by any Lien with
respect to any property owned by such Person (whether or not it has assumed
or otherwise become liable for such liabilities); and
(e) any Guaranty of such Person with respect to liabilities of a type
described in any of clauses (a) through (d) hereof.
Debt of any Person shall include all obligations of such Person of the character
described in clauses (a) through (e) to the extent such Person remains legally
liable in respect thereof notwithstanding that any such obligation is deemed to
be extinguished under GAAP and exclude any accounts payable, accrued expenses,
withholding taxes and deferred taxes, in each case arising in the ordinary
course of business.
"Delayed Delivery Fee" shall have the meaning specified in paragraph
2B(8)(iii).
"EBITDA" means, for any period, Consolidated Net Income adjusted by adding
thereto the amount of all amortization of intangibles, interest, taxes and
depreciation that was deducted in arriving at Consolidated Net Income for such
period.
36
"Environmental Authority" shall mean any foreign, federal, state, local or
regional government that exercises any duly authorized form of jurisdiction or
authority under any Environmental Requirement.
"Environmental Judgments and Orders" shall mean all judgments, decrees or
orders arising from or in any way associated with any Environmental
Requirements, whether or not entered upon consent or written agreements with an
Environmental Authority or other duly authorized entity arising from or in any
way associated with any Environmental Requirement, whether or not incorporated
in a judgment, degree or order.
"Environmental Liabilities" shall mean any liabilities, whether accrued or
contingent, arising from or relating in any way to any Environmental
Requirements.
"Environmental Notices" shall mean any written communication from any
Environmental Authority stating possible or alleged noncompliance with or
possible or alleged liability under any Environmental Requirement, including
without limitation any complaints, citations, demands or requests from any
Environmental Authority for correction of any purported violation of any
Environmental Requirements or any investigation concerning any purported
violation of any Environmental Requirements. Environmental Notices also shall
mean (i) any written communication from any other Person threatening litigation
or administrative proceedings against or involving the Company relating to
alleged violation of any Environmental Requirements and (ii) any complaint,
petition or similar documents filed by any other Person commencing litigation or
administrative proceedings against or involving the Company relating to alleged
violation of any Environmental Requirements.
"Environmental Proceedings" shall mean any judicial or administrative
proceedings arising from or in any way associated with any Environmental
Requirement.
"Environmental Releases" shall mean releases (as defined in CERCLA or under
any applicable state or local environmental law or regulation) of Hazardous
Materials. Environmental Releases does not include releases for which no
remediation or reporting is required by applicable Environmental Requirements
and which do not present a danger to health, safety or the environment.
"Environmental Requirements" shall mean any applicable local, state or
federal law, rule, regulation, permit, order, decision, determination or
requirement relating in any way to Hazardous Materials or to health, safety or
the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" shall mean any corporation which is a member of the same
controlled group of corporations as the Company within the meaning of section
414(b) of the Code, or any trade or business which is under common control with
the Company within the meaning of section 414(c) of the Code.
37
"Event of Default" shall mean any of the events specified in paragraph 7A,
provided that there has been satisfied any requirement in connection with such
event for the giving of notice, or the lapse of time, or the happening of any
further condition, event or act, and "Default" shall mean any of such events,
whether or not any such requirement has been satisfied.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Facility" shall have the meaning specified in paragraph 2B(1).
"Facility Fee" shall have the meaning specified in paragraph 2B(8)(i).
"Fair Market Value" means, at any time, the sale value of property that
would be realized in an arm's-length sale at such time between an informed and
willing buyer, and an informed and willing seller, under no compulsion to buy or
sell, respectively.
"Guaranty" or "Guarantee" shall mean, with respect to any Person, any
obligation (except the endorsement in the ordinary course of business of
negotiable instruments for deposit or collection) of such Person guaranteeing or
in effect guaranteeing any indebtedness, dividend or other obligation of any
other Person in any manner, whether directly or indirectly, including (without
limitation) obligations incurred through an agreement, contingent or otherwise,
by such Person:
(i) to purchase such indebtedness or obligation or any property
constituting security therefor;
(ii) to advance or supply funds for the purchase or payment of such
indebtedness or obligation, or to maintain any working capital or other
balance sheet condition or any income statement condition of any Person or
otherwise to advance or make available funds for the purchase or payment of
such indebtedness or obligation;
(iii) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such indebtedness or
obligation of the ability of any other Person to make payment of the
indebtedness or obligation; or
(iv) otherwise to assure the owner of such indebtedness or obligation
against loss in respect thereof.
In any computation of the indebtedness or other liabilities of the obligor under
any Guaranty, the indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.
"Hazardous Materials" shall mean (a) hazardous waste as defined in the
Resource Conservation and Recovery Act of 1976, or in any applicable federal,
state or local law or regulation, (b) hazardous substances, as defined in
CERCLA, or in any applicable state or local law or regulation, (c) gasoline, or
any other petroleum product or by-product, (d) toxic substances, as defined in
the Toxic Substances Control Act of 1976, or in any applicable federal,
38
state or local law or regulation or (e) insecticides, fungicides, or
rodenticides, as defined in the Federal Insecticide, Fungicide, and Rodenticide
Act of 1975, or in any applicable federal, state or local law or regulation, as
each such Act, statute or regulation may be amended from time to time.
"Hedge Treasury Note(s)" shall mean, with respect to any Accepted Note, the
United States Treasury Note or Notes whose duration (as determined by
Prudential) most closely matches the duration of such Accepted Note.
"Hostile Tender Offer" shall mean, with respect to the use of proceeds of
any Note, any offer to purchase, or any purchase of, shares of capital stock of
any corporation or equity interests in any other entity, or securities
convertible into or representing the beneficial ownership of, or rights to
acquire, any such shares or equity interests, if such shares, equity interests,
securities or rights are of a class which is publicly traded on any securities
exchange or in any over-the-counter market, other than purchases of such shares,
equity interests, securities or rights representing less than 5 % of the equity
interests or beneficial ownership of such corporation or other entity for
portfolio investment purposes, and such offer or purchase has not been duly
approved by the board of directors of such corporation or the equivalent
governing body of such other entity prior to the date on which the Company makes
the Request for Purchase of such Note.
"including" shall mean, unless the context clearly requires otherwise,
"including without limitation".
"Institutional Investors" shall mean (i) any bank, savings bank, savings
and loan association or insurance company, (ii) any pension plan or portfolio or
investment fund managed or administered by any bank, savings bank, savings and
loan association or insurance company, (iii) any investment company owned by any
bank, savings bank, savings and loan association or insurance company, the
majority of the shares of the capital stock of which are traded on a national
securities exchange or in the National Association of Securities Dealers
automated quotation system, or (iv) any investment banking company.
"Intangibles" shall mean goodwill, patents, trademarks, trade names,
organization expense, licenses, franchises, exploration permits and import and
export permits and other like intangibles, determined in accordance with
generally accepted accounting principles.
"investment" shall mean, when used with respect to any Person, any direct
or indirect advance, loan or other extension of credit or capital contribution
by such Person (by means of transfers of property to others or payments for
property or services for the account or use of others, or otherwise) to any
other Person, or any direct or indirect purchase or other acquisition or
beneficial ownership by such Person of, or of a beneficial interest in, Capital
Stock, partnership interests, bonds, notes, debentures or other securities
issued by any other Person.
"Issuance Period" shall have the meaning specified in paragraph 2B(2).
39
"Lien" shall mean any mortgage, pledge, security interest, encumbrance,
lien (statutory or otherwise) or charge of any kind (including any agreement to
give any of the foregoing, any conditional sale or other title retention
agreement, any lease in the nature thereof, and the filing of or agreement to
give any financing statement under the Uniform Commercial Code of any
jurisdiction except in connection with an Operating Lease permitted under
Paragraph 6B(4)) or any other type of preferential arrangement for the purpose,
or having the effect, of protecting a creditor against loss or securing the
payment or performance of an obligation.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. or any successor thereto.
"Multi-employer Plan" shall mean any Plan which is a "multiemployer plan"
(as such term is defined in section 4001(a)(3) of ERISA.
"Notes" shall have the meaning specified in paragraph 1B.
"Officer's Certificate" shall mean a certificate signed in the name of the
Company by an Authorized Officer of the Company.
"Operating Leases" shall mean any lease of real or personal property,
plant, equipment or buildings for a term (including any renewals or extension
permitted) greater than one year, which is not a Capitalized Lease Obligation.
"Person" shall mean and include an individual, a partnership, a joint
venture, limited liability company, a corporation, a trust, an unincorporated
organization and a government or any department or agency thereof.
"Plan" shall mean any employee pension benefit plan (as such term is
defined in section 3 of ERISA) which is or has been established or maintained,
or to which contributions are or have been made, by the Company or any ERISA
Affiliate.
"Priority Debt" means with respect any Person, at any time, without
duplication, the sum of
(i) Debt of each Subsidiary (other than Debt held by the Company or
another wholly-owned Subsidiary); and
(ii) Debt secured by any Lien other than a Lien described in clauses
(ii), (iii), (ix) and (x) of paragraph 6B(1).
"Properties" shall mean all real property owned, leased or otherwise used
or occupied by the Company or any Subsidiary, wherever located.
"Prudential" shall mean The Prudential Insurance Company of America.
"Prudential Affiliate" shall mean any corporation or other entity all of
the Voting Stock (or equivalent voting securities or interests) of which is
owned by Prudential either directly or through Prudential Affiliates.
40
"Purchasers" shall mean Prudential with respect to the 1998 Series A Notes
and, with respect to any Accepted Notes, Prudential and/or the Prudential
Affiliate(s), which are purchasing such Accepted Notes.
"QPAM Exemption" means Prohibited Transaction Class Exemption 84-14 issued
by the United States Department of Labor.
"Reasonable Attorneys' Fees" shall mean attorneys' fees based upon actual
hours worked by an attorney at such attorney's normal hourly billing rate and
shall not be based upon any percentage of any amount in dispute, premium,
results achieved or any non-hourly charge.
"Rentals" shall mean for any period of determination all fixed rents or
charges (including as such all payments during any such period of determination
which the lessee is obligated to make on termination of the lease or surrender
of the property) payable by the Company or a Subsidiary (as lessee, sublessee,
licensee, franchisee or the like) for such period under a lease, license, or
other agreement for the use or possession of real or personal property, tangible
or intangible, as determined in accordance with generally accepted accounting
principles.
"Request for Purchase" shall have the meaning specified in paragraph 2B(3).
"Required Holder(s)" shall mean the holder or holders of at least 66-2/3%
of the aggregate principal amount of the Notes or of a Series of Notes, as the
context may require, from time to time outstanding.
"Rescheduled Closing Day" shall have the meaning specified in paragraph
2B(7).
"Responsible Officer" shall mean the chief executive officer, chief
operating officer, chief financial officer or chief accounting officer of the
Company, general counsel of the Company or any other officer of the Company
involved principally in its financial administration or its controllership
function.
"S&P" means Standard & Poor's Rating Group or any successor thereto.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Senior Debt" means all Debt other than Subordinated Debt.
"Series" shall have the meaning specified in paragraph 1B.
"Series A Closing Day" shall have the meaning specified in paragraph 2A.
"1998 Series A Note(s)" shall have the meaning specified in paragraph 1A.
"Significant Holder" shall mean (i) Prudential, so long as Prudential or
any Prudential Affiliate shall hold (or be committed under this Agreement to
purchase) any Note, or (ii) any other holder of at least 10% of the aggregate
principal amount of the Notes of any Series from time to time outstanding.
41
"Subordinated Debt" shall mean Debt which is subordinated in right of
payment to Senior Debt on the terms set forth in Schedule 6I.
"Subsidiary" shall mean, as to any Person, any Person, in which such
Person, or one or more of its Subsidiaries, or such Person and one or more of
its Subsidiaries, owns sufficient equity or voting interests to enable it or
them (as a group) ordinarily, in the absence of contingencies, to elect a
majority of the directors (or Persons performing similar functions) of such
entity, and any partnership or joint venture if more than a 50% interest in the
profits or capital thereof is owned by such Person or one or more of its
Subsidiaries or such Person and one or more of its Subsidiaries (unless such
partnership can and does ordinarily take major business actions without the
prior approval of such Person or one or more of its Subsidiaries).
"Substantial Part" shall mean, with respect to any transfer, assets which
(i) together with all other assets disposed of in the same fiscal year
constitute 10% or more of Consolidated assets determined as of the beginning of
such fiscal year or (ii) have contributed 10% or more of Consolidated Net Income
for the most recently ended period of four fiscal quarters.
"Third Party" shall mean all lessees, sublessees, licensees and other users
of the Properties, excluding those users of the Properties in the ordinary
course of the Company's business (consistent with its practices on the Series A
Closing Day) and on a temporary basis.
"Transferee" shall mean any direct or indirect transferee of all or any
part of any Note purchased by any Purchaser under this Agreement.
"Voting Stock" shall mean, with respect to any corporation, any shares of
stock of such corporation whose holders are entitled under ordinary
circumstances to vote for the election of directors of such corporation
(irrespective of whether at the time stock of any other class or classes shall
have or might have voting power by reason of the happening of any contingency).
10C. Accounting Principles, Terms and Determinations. All references in
this Agreement to "generally accepted accounting principles" shall be deemed to
refer to generally accepted accounting principles in effect in the United States
at the time of application thereof. Unless otherwise specified herein, all
accounting terms used herein shall be interpreted, all determinations with
respect to accounting matters hereunder shall be made, and all unaudited
financial statements and certificates and reports as to financial matters
required to be furnished hereunder shall be prepared, in accordance with
generally accepted accounting principles applied on a basis consistent with the
most recent audited financial statements delivered pursuant to clause (ii) of
paragraph 5A or, if no such statements have been so delivered, the most recent
audited financial statements referred to in clause (i) of paragraph 8B.
11. MISCELLANEOUS.
11A. Payments. The Company agrees that, so long as any Purchaser shall hold
any Note, it will make payments of principal of, interest on, and any
Yield-Maintenance Amount payable with respect to, such Note, which comply with
the terms of this Agreement, by wire transfer of immediately available funds for
credit (not later than 12:00 noon, New York City
42
local time, on the date due) to (i) the account or accounts of such Purchaser
specified in the Purchaser Schedule attached hereto in the case of any 1998
Series A Note, (ii) the account or accounts of such Purchaser specified in the
Confirmation of Acceptance with respect to such Note in the case of any Shelf
Note or (iii) such other account or accounts in the United States as such
Purchaser may from time to time designate in writing, notwithstanding any
contrary provision herein or in any Note with respect to the place of payment.
Each Purchaser agrees that, before disposing of any Note, it will make a
notation thereon (or on a schedule attached thereto) of all principal payments
previously made thereon and of the date to which interest thereon has been paid.
The Company agrees to afford the benefits of this paragraph 11A to any
Transferee which shall have made the same agreement as the Purchasers have made
in this paragraph 11A.
11B. Expenses. The Company agrees, whether or not the transactions
contemplated hereby shall be consummated, to pay, and save Prudential, each
Purchaser and any Transferee harmless against liability for the payment of, all
out-of-pocket expenses arising in connection with such transactions, including:
(i) all taxes (together in each case with interest and penalties, if
any), other than state, federal, local or foreign income taxes, intangible
taxes, or franchise taxes, including without limitation, all stamp,
recording and other similar taxes, which may be payable with respect to the
execution and delivery of this Agreement or the execution, delivery or
acquisition of any Note;
(ii) all document production and duplication charges and the
Reasonable Attorneys' Fees and expenses of any special counsel engaged by
the Purchasers in connection with this Agreement, the transactions
contemplated hereby and any subsequent proposed modification of, or
proposed consent under, this Agreement, whether or not such proposed
modification shall be effected or proposed consent granted; provided,
however, where there are multiple Purchasers for any single Series of Notes
issued under this Agreement, the Company shall pay and be liable for the
Reasonable Attorneys' Fees and expenses of a single special counsel engaged
by such Purchasers to represent all such Purchasers in such transaction
(except as set forth below); and
(iii) the reasonable costs and expenses, including Reasonable
Attorneys' Fees, actually incurred by you, any other Purchaser or any
Transferee in connection with the restructuring, refinancing or "work out"
of this Agreement or the Notes or the transactions contemplated hereby or
thereby or in enforcing (or determining whether or how to enforce) any
rights under this Agreement or the Notes or in responding to any subpoena
or other legal process or informal investigative demand issued in
connection with this Agreement or the Notes or the transactions
contemplated hereby or by reason of your or any Transferee's having
acquired any Note, including without limitation costs and expenses incurred
in any bankruptcy case.
Notwithstanding the foregoing, the Company shall not be liable for any counsel
fees incurred by any Purchaser or Transferee arising in connection with a
transfer in the ordinary course of any Note or portion thereof or interest
therein by Prudential or any other Purchaser to any Transferee.
43
The obligations of the Company under this paragraph 11B shall survive the
transfer of any Note or portion thereof or interest therein by any Purchaser or
any Transferee and the payment of any Note.
11C. Consent to Amendments. This Agreement may be amended, and the Company
may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, if the Company shall obtain the written consent
to such amendment, action or omission to act, of the Required Holder(s) of the
Notes of each Series except that, with the written consent of the holders of all
Notes of a particular Series, and if an Event of Default shall have occurred and
be continuing, of the holders of all Notes of all Series, at the time
outstanding (and not without such written consents), the Notes of such Series
may be amended or the provisions thereof waived to change the maturity thereof,
to change or affect the principal thereof, or to change or affect the rate or
time of payment of interest on or any Yield-Maintenance Amount payable with
respect to the Notes of such Series, without the written consent of the holder
or holders of all Notes at the time outstanding, no amendment to or waiver of
the provisions of this Agreement shall change or affect the provisions of
paragraph 7A or this paragraph 11C insofar as such provisions relate to
proportions of the principal amount of the Notes of any Series, or the rights of
any individual holder of Notes, required with respect to any declaration of
Notes to be due and payable or with respect to any consent, amendment, waiver or
declaration, with the written consent of Prudential (and not without the written
consent of Prudential) the provisions of paragraph 2B may be amended or waived
(except insofar as any such amendment or waiver would affect any rights or
obligations with respect to the purchase and sale of Notes which shall have
become Accepted Notes prior to such amendment or waiver), and with the written
consent of all of the Purchasers which shall have become obligated to purchase
Accepted Notes of any Series (and not without the written consent of all such
Purchasers), any of the provisions of paragraphs 2B and 3 may be amended or
waived insofar as such amendment or waiver would affect only rights or
obligations with respect to the purchase and sale of the Accepted Notes of such
Series or the terms and provisions of such Accepted Notes. Each holder of any
Note at the time or thereafter outstanding shall be bound by any consent
authorized by this paragraph 11C, whether or not such Note shall have been
marked to indicate such consent, but any Notes issued thereafter may bear a
notation referring to any such consent. No course of dealing between the Company
and the holder of any Note nor any delay in exercising any rights hereunder or
under any Note shall operate as a waiver of any rights of any holder of such
Note. As used herein and in the Notes, the term "this Agreement" and references
thereto shall mean this Agreement as it may from time to time be amended or
supplemented.
11D. Form and Registration; Transfer and Exchange; Transfer Restrictions;
Lost Notes.
11D(1) Form and Registration. The Notes are issuable as registered notes
without coupons in denominations of at least $1,000,000, except as may be
necessary to reflect any principal amount not evenly divisible by $1,000,000.
The Company shall keep at its principal office a register in which the Company
shall provide for the registration of Notes and of transfers of Notes. Upon
surrender for registration of transfer of any Note at the principal office of
the Company, the Company shall, at its expense, execute and deliver one or more
new Notes of like
44
tenor and of a like aggregate principal amount, registered in the name of such
transferee or transferees.
11D(2) Transfer and Exchange of Notes. At the option of the holder of any
Note, such Note may be exchanged for other Notes of like tenor and of any
authorized denominations, of a like aggregate principal amount, upon surrender
of the Note to be exchanged at the principal office of the Company. Whenever any
Notes are so surrendered for exchange, the Company shall, at its expense,
execute and deliver the Notes which the holder making the exchange is entitled
to receive. Each installment of principal payable on each installment date upon
each new Note issued upon any such transfer or exchange shall be in the same
proportion to the unpaid principal amount of such new Note as the installment of
principal payable on such date on the Note surrendered for registration of
transfer or exchange bore to the unpaid principal amount of such Note. No
reference need be made in any such new Note to any installment or installments
of principal previously due and paid upon the Note surrendered for registration
of transfer or exchange. Every Note surrendered for registration of transfer or
exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer duly executed, by the holder of such Note or such holder's attorney
duly authorized in writing. Any Note or Notes issued in exchange for any Note or
upon transfer thereof shall carry the rights to unpaid interest and interest to
accrue which were carried by the Note so exchanged or transferred, so that
neither gain nor loss of interest shall result from any such transfer or
exchange.
11D(3) Transfer Restrictions. You hereby agree that you shall not transfer
any Note, or portion thereof, to any Person unless such Person is an
Institutional Investor or not specified on Schedule 11D(3).
11D(4) Lost Notes. Upon receipt of written notice from the holder of any
Note of the loss, theft, destruction or mutilation of such Note and, in the case
of any such loss, theft or destruction, upon receipt of such holder's unsecured
indemnity agreement, in form and substance reasonably satisfactory to the
Company, or in the case of any such mutilation upon surrender and cancellation
of such Note, the Company will make and deliver a new Note, of like tenor, in
lieu of the lost, stolen, destroyed or mutilated Note.
11E. Persons Deemed Owners; Participations. Prior to due presentment for
registration of transfer, the Company may treat the Person in whose name any
Note is registered as the owner and holder of such Note for the purpose of
receiving payment of principal of and interest on, and any Yield-Maintenance
Amount payable with respect to, such Note and for all other purposes whatsoever,
whether or not such Note shall be overdue, and the Company shall not be affected
by notice to the contrary. Subject to the preceding sentence, the holder of any
Note may from time to time grant participations in all or any part of such Note
to any Person on such terms and conditions as may be determined by such holder
in its sole and absolute discretion.
11F. Survival of Representations and Warranties; Entire Agreement. All
representations and warranties contained herein or made in writing by or on
behalf of the Company in connection herewith shall survive the execution and
delivery of this Agreement and the Notes, the transfer by any Purchaser of any
Note or portion thereof or interest therein and the
45
payment of any Note, and may be relied upon by any Transferee, regardless of any
investigation made at any time by or on behalf of any Purchaser or any
Transferee. Subject to the preceding sentence, this Agreement and the Notes
embody the entire agreement and understanding between the parties hereto with
respect to the subject matter hereof and supersede all prior agreements and
understandings relating to such subject matter.
11G. Successors and Assigns. All covenants and other agreements in this
Agreement contained by or on behalf of any of the parties hereto shall bind and
inure to the benefit of the respective successors and assigns of the parties
hereto (including, without limitation, any Transferee) whether so expressed or
not.
11H. Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is prohibited by
any one of such covenants, the fact that it would be permitted by an exception
to, or otherwise be in compliance within the limitations of, another covenant
shall not avoid the occurrence of a Default or Event of Default if such action
is taken or such condition exists.
11I. Notices. All written communications provided for hereunder (other than
communications provided for under paragraph 2) shall be sent by first class mail
or nationwide overnight delivery service (with charges prepaid) and if to any
Purchaser, addressed as specified for such communications in the Purchaser
Schedule attached hereto (in the case of the 1998 Series A Notes) or the
Purchaser Schedule attached to the applicable Confirmation of Acceptance (in the
case of any Shelf Notes) or at such other address as any such Purchaser shall
have specified to the Company in writing, if to any other holder of any Note,
addressed to it at such address as it shall have specified in writing to the
Company or, if any such holder shall not have so specified an address, then
addressed to such holder in care of the last holder of such Note which shall
have so specified an address to the Company and (iii) if to the Company,
addressed to it at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Chief Financial Officer, telephone (▇▇▇) ▇▇▇-▇▇▇▇,
telecopy (▇▇▇) ▇▇▇-▇▇▇▇, provided, however, that any such communication to the
Company may also, at the option of the Person sending such communication, be
delivered by any other means either to the Company at its address specified
above or to any Authorized Officer of the Company. Any communication pursuant to
paragraph 2 shall be made by the method specified for such communication in
paragraph 2, and shall be effective to create any rights or obligations under
this Agreement only if, in the case of a telephone communication, an Authorized
Officer of the party conveying the information and of the party receiving the
information are parties to the telephone call, and in the case of a telecopier
communication, the communication is signed by an Authorized Officer of the party
conveying the information, addressed to the attention of an Authorized Officer
of the party receiving the information, and in fact received at the telecopier
terminal the number of which is listed for the party receiving the communication
in the Information Schedule or at such other telecopier terminal as the party
receiving the information shall have specified in writing to the party sending
such information.
11J. Payments Due on Non-Business Days. Anything in this Agreement or the
Notes to the contrary notwithstanding, any payment of principal of or interest
on, or Yield-Maintenance
46
Amount payable with respect to, any Note that is due on a date other than a
Business Day shall be made on the next succeeding Business Day. If the date for
any payment is extended to the next succeeding Business Day by reason of the
preceding sentence, the period of such extension shall be included in the
computation of the interest payable on such Business Day.
11K. Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
11L. Descriptive Headings. The descriptive headings of the several
paragraphs of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
11M. Satisfaction Requirement. If any agreement, certificate or other
writing, or any action taken or to be taken, is by the terms of this Agreement
required to be satisfactory to any Purchaser, to any holder of Notes or to the
Required Holder(s), the determination of such satisfaction shall be made by such
Purchaser, such holder or the Required Holder(s), as the case may be, in the
sole and exclusive judgment (exercised in good faith) of the Person or Persons
making such determination.
11N. Governing Law; Submission to Jurisdiction. This Agreement shall be
construed and enforced in accordance with, and the rights of the Parties shall
be governed by, the Internal Law of the State of New York. THE COMPANY HEREBY
SUBMITS TO THE JURISDICTION OF THE SUPREME COURT OF THE STATE OF NEW YORK
LOCATED IN NEW YORK COUNTY, NEW YORK AND THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK AND IRREVOCABLY AGREES THAT, SUBJECT TO THE
SOLE AND ABSOLUTE ELECTION OF THE REQUIRED HOLDER(S) AND TO THE EXTENT PERMITTED
BY APPLICABLE LAW, ALL ACTIONS OR PROCEEDINGS RELATING TO THIS AGREEMENT OR THE
NOTES SHALL BE LITIGATED IN SUCH COURTS, AND THE COMPANY WAIVES ANY OBJECTION
WHICH IT MAY HAVE BASED ON IMPROPER VENUE OR FORUM NON CONVENIENS TO THE CONDUCT
OF ANY PROCEEDING IN ANY SUCH COURTS.
11O. Severalty of Obligations. The sales of Notes to the Purchasers are to
be several sales, and the obligations of Prudential and the Purchasers under
this Agreement are several obligations. No failure by Prudential or any
Purchaser to perform its obligations under this Agreement shall relieve
Prudential, any other Purchaser or the Company of any of its obligations
hereunder, and neither Prudential nor any Purchaser shall be responsible for the
obligations of, or any action taken or omitted by, any other such Person
hereunder.
11P. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
11Q. Binding Agreement. When this Agreement is executed and delivered by
the Company, Prudential and the Purchasers, it shall become a binding agreement
between the
47
Company and Prudential. This Agreement shall also inure to the benefit of each
Purchaser which shall have executed and delivered a Confirmation of Acceptance,
and each such Purchaser shall be bound by this Agreement to the extent provided
in such Confirmation of Acceptance.
Very truly yours,
WASTE INDUSTRIES, INC.
By: _______________________________________
Name:
Title:
The foregoing Agreement is hereby accepted
as of the date first above written.
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By: ____________________________________________
Name:
Title:
PRUCO LIFE INSURANCE COMPANY
By: ____________________________________________
Name:
Title:
U.S. PRIVATE PLACEMENT FUND
By Prudential Private Placement Investors,
L.P., Investment Advisor
By Prudential Private Placement Investors,
Inc., its General Partner
By: ____________________________________________
Name:
Title:
48
SCHEDULE 6I
[FORM OF SUBORDINATION PROVISIONS]
(a) Subordination. The indebtedness ("Subordinated Debt") evidenced by this
instrument is subordinate and junior in right of payment to all Senior
Indebtedness (as defined in clause (b) below) of the Company to the extent
provided herein.
(b) Definition of Senior Indebtedness. For all purposes of these
subordination provisions the term "Senior Indebtedness" shall mean all principal
of and premium, if any, and interest on (i) the Company's 7.28% Series A Senior
Notes due April 3, 2006, originally issued in the aggregate principal amount of
$25,000,000 pursuant to a Note Purchase and Private Shelf Agreement, dated April
3, 1996 (as it may be amended, modified, supplemented, extended, renewed,
refunded or refinanced from time to time, the "1996 Note Agreement"), between
the Company and The Prudential Insurance Company of America (together with its
successors and assigns, "Prudential") (and any notes issued in substitution or
exchange therefor) (the "1996 Notes"), (ii) the Company's 6.96% Series A Senior
Notes due June 30, 2008, originally issued in the aggregate principal amount of
$25,000,000 pursuant to a Note Purchase and Private Shelf Agreement, dated June
30, 1998 (as it may be amended, modified, supplemented, extended, renewed,
refunded or refinanced from time to time, the "1998 Note Agreement"; the 1996
Note Agreement and 1998 Note Agreement, collectively, the "Note Agreements")
between the Company, Prudential and Pruco Life Insurance Company (and any notes
issued in substitution or exchange therefor (the "1998 Notes")), (iii) any
Senior Note issued under the Facility (as defined in the 1998 Note Agreement)
from time to time (and any Notes issued in substitution or exchange therefor (a
"Shelf Note"; the 1996 Notes, 1998 Notes and the Shelf Notes, collectively, the
"Senior Notes")), (iv) any and all other obligations (whether direct or
contingent, joint, several, independent, now or hereafter existing, due or to
become due and however created) owed by the Company or any Subsidiary to
Prudential, Pruco Life Insurance Company, any Transferee or any additional or
replacement lender in connection with any refinancing, whether borrowed pursuant
to the Note Agreements (including any increase in the principal amount thereof)
or borrowed pursuant to any other agreement (collectively, the "Senior
Creditors"), and (v) any interest on any of the foregoing accruing at the legal
rate after the commencement of any proceedings described in clause (d) below and
any additional interest that would have accrued thereon but for the commencement
of such proceedings. The Senior Indebtedness shall continue to be Senior
Indebtedness and entitled to the benefits of these subordination provisions
irrespective of any amendment, modification or waiver of any term of the Senior
Indebtedness or extension or renewal of the Senior Indebtedness.
(c) No Payment After Default. Upon the happening of any default or event of
default with respect to any Senior Indebtedness which automatically accelerates
or permits a Senior Creditor to accelerate the maturity thereof, then, unless
and until such default or event of default shall have been remedied in a manner
reasonably satisfactory to such Senior Creditor in its sole discretion or waived
in writing or shall have ceased to exist, no direct or indirect payment (in
cash, property or securities or by setoff or otherwise) or distribution shall be
made on account of
the principal of or premium, if any, or interest on any Subordinated Debt, or as
a sinking fund for any Subordinated Debt, or in respect of any redemption,
retirement, purchase or other acquisition of any Subordinated Debt. Any default
or event of default with respect to Senior Indebtedness shall not constitute or
be deemed in and of itself to be a default under any instrument evidencing or
executed in connection within the Subordinated Debt.
(d) Priority of Senior Debt. In the event of:
(i) any insolvency, bankruptcy, receivership, liquidation,
reorganization, readjustment, composition or other similar proceeding
relating to the Company or any Subsidiary, its respective creditors as such
or its respective property,
(ii) any proceeding for the liquidation, dissolution or other
winding-up of the Company or any Subsidiary, voluntary or involuntary,
whether or not involving insolvency or bankruptcy proceedings,
(iii) any assignment by the Company or any Subsidiary for the benefit
of creditors,
(iv) any other marshalling of the assets of the Company or any
Subsidiary (clause (i) through (iv), collectively, "Bankruptcy
Proceedings"), or
(v) any acceleration of any Senior Indebtedness,
all Senior Indebtedness shall first be paid in full before any further payment
or distribution, whether in cash, securities or other property, shall be made to
any holder of any Subordinated Debt on account of any Subordinated Debt. Any
direct or indirect payment or distribution, whether in cash, securities or other
property, which would otherwise (but for these subordination provisions) be
payable or deliverable in respect of this Subordinated Debt and any pledge of
any property or assets or other grant of collateral by the Company or any
Subsidiary shall be paid, delivered or pledged directly to the Senior Creditors
in accordance with the priorities then existing among the Senior Creditors until
all Senior Indebtedness (including any interest thereon accruing at the legal
rate after the commencement of any such proceedings and any additional interest
that would have accrued thereon but for the commencement of such proceedings)
shall have been paid in full.
(e) No Action. So long as any Senior Indebtedness remains outstanding,
whether or not a default or an event of default shall have occurred, the holders
of Subordinated Debt (the "Junior Creditors") shall not commence any action or
proceeding (including without limitation any Bankruptcy Proceeding) against the
Company or with respect to the Subordinated Debt or declare the Subordinated
Debt due and payable, or enforce obligations in respect of such Subordinated
Debt, including, without limitation, a demand for payment or the exercise of any
other remedy in respect of any Subordinated Debt or otherwise recover all or any
part of the Subordinated Debt, until the acceleration of all or a portion of the
Senior Indebtedness.
2
(f) Payments In Trust. If any payment or distribution, whether direct or
indirect, of any character or any collateral, whether in cash, securities or
other property, shall be received by Junior Creditor in contravention of any of
the terms hereof, such payment or distribution or collateral shall be received
in trust for the benefit of, and shall be paid over or delivered and transferred
to, the Company.
(g) No Impairment of Rights. Nothing contained herein shall impair, as
between the Company and the Junior Creditor, the obligation of the Company to
pay to the Junior Creditor the principal hereof and interest hereon as and when
the same shall become due and payable in accordance with the terms hereof, or,
except as provided herein, prevent the Junior Creditor from exercising all
rights, powers and remedies otherwise permitted by applicable law or hereunder
upon a default or Event of Default hereunder, all subject to the rights of the
Senior Creditor to receive cash, securities or other property otherwise payable
or deliverable to the Junior Creditor until all Senior Indebtedness shall have
been paid in full.
(h) Subrogation. Upon the payment in full of all Senior Indebtedness, the
Junior Creditor shall be subrogated to all rights of the Senior Creditors to
receive any further payments or distributions applicable to the Senior
Indebtedness until the Subordinated Debt shall have been paid in full, and, for
the purposes of such subrogation, no payment or distribution received by the
holders of Senior Indebtedness of cash, securities or other property to which
the Junior Creditor would have been entitled except for these subordination
provisions shall, as between the Company and its creditors other than the Senior
Creditors, on the one hand, and the holders of Subordinated Debt, on the other,
be deemed to be a payment or distribution by the Company to or on account of
Senior Indebtedness.
(i) No Prejudice. No present or future holder of any Senior Indebtedness
shall be prejudiced in the right to enforce subordination of the Subordinated
Debt by any act or failure to act on the part of the Company or any Junior
Creditor.
(j) Power of Attorney. The Junior Creditor hereby (i) undertakes and agrees
to execute, verify, and deliver and file proofs of claim, consents, assignments
or other instruments which any Senior Creditor may at any time reasonably
request in order to provide and realize upon any rights or claims pertaining to
the Subordinated Debt held by the Junior Creditor and to effectuate the full
benefit of the subordination contained herein and (ii) authorizes each Senior
Creditor to take any action as may be reasonably necessary or appropriate to
effect the subordination provided for herein and appoints each Senior Creditor
the Junior Creditor's attorney-in-fact for such purposes.
(k) Actions Regarding Senior Debt. Any Senior Creditor may extend, renew,
modify or amend the terms of Senior Indebtedness or any collateral therefor and
release, sell or exchange such collateral and otherwise deal freely with the
Company or any Subsidiary or affiliate to the same extent as could any person,
all without notice to or consent of the Junior Creditor and without affecting
the liabilities and obligations of the Junior Creditor pursuant to the
provisions hereof.
3
(l) Consent to Senior Debt. The Junior Creditor hereby consents to the
purchase of the Senior Notes and the making of any other financial
accommodations by a Senior Creditor to the Company or any Subsidiary and hereby
acknowledges that each Senior Creditor, in entering into the Note Agreement or
any financial accommodation, has relied upon the terms of subordination set
forth herein. No Senior Creditor shall have any liability to the Junior Creditor
and the Junior Creditor hereby waives any claim which it may have now or
hereafter against any Senior Creditor arising from any and all actions which any
Senior Creditor may take or omit to take with regard to the Senior Indebtedness.
(m) Further Assurances. The Junior Creditor agrees to execute any further
documents or amendments and take such other actions as may be reasonably
necessary to affect the purposes of the subordination provisions set forth
herein, including the filing of any financing statements or other instruments in
any applicable public records, all as directed by any Senior Creditor. The
Junior Creditor agrees that it shall cause to be added to each document
evidencing the Subordinated Debt the following legend:
The rights and remedies of [insert name of Junior Creditor]
hereunder are subject to the terms and conditions of that
[insert description of document containing subordination
provisions.
(n) Term of Subordination. The terms and conditions hereof shall remain in
full force and effect unless and until the Note Agreement has been terminated
and all Senior Indebtedness has been paid in full. The terms and provisions
hereof shall be binding upon the successors and assigns of the Junior Creditor
and shall inure to the benefit of the successors and assigns of each Senior
Creditor.
(o) Governing Law. These provisions shall be governed by and construed in
accordance with the laws of the State of New York.
(p) No Amendment or Waiver. The provisions in clauses (a) through (o) above
shall not be amended or modified and no term or provision hereof shall be waived
without the express prior written consent of 66- of the Senior Creditors.
4
PURCHASER SCHEDULE
Aggregate
Principal Amount
of Notes to be Note
Purchased Denomination(s)
--------- ---------------
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA $18,000,000 $18,000,000
(1) All payments on account of Notes held by such
purchaser shall be made by wire transfer of
immediately available funds for credit to:
Account No. ▇▇▇-▇▇▇▇-▇▇▇
Bank of New York
New York, New York
ABA No.: ▇▇▇-▇▇▇-▇▇▇
Each such wire transfer shall set forth the name
of the Company, a reference to "6.96% Senior
Notes due June 30, 2008, PPN 94106#\B, ▇▇▇
▇▇▇▇", and the due date and application (as
among principal, interest and Yield-
Maintenance Amount) of the payment being made.
(2) Address for all notices relating to payments:
The Prudential Insurance Company of America
c/o Prudential Capital Group
Four ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Trade Management Group
(3) Address for all other communications and notices:
The Prudential Insurance Company of America
c/o Prudential Capital Group - Private Placements
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Managing Director
(4) Recipient of telephonic prepayment notices:
Manager, Trade Management Group
(▇▇▇) ▇▇▇-▇▇▇▇
(5) Tax Identification No.: ▇▇-▇▇▇▇▇▇▇
2
U.S. PRIVATE PLACEMENT FUND $5,000,000 $5,000,000
(1) All payments on account of Notes held by such
purchaser shall be made by wire transfer of
immediately available funds for credit to:
Account No.: U1FF ▇▇▇▇▇▇▇
Boston Safe Deposit and Trust Company
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ABA No.: ▇▇▇-▇▇▇-▇▇▇
DDA No.: 108111
Account Name: U.S. Private Placement Fund
Each such wire transfer shall set forth the
name of the Company, a reference to "6.96%
Senior Notes due June 30, 2008, PPN
94106#\B, and the due date and application
(as among principal, interest and
Yield-Maintenance Amount) of the payment
being made.
(2) Address for all notices relating to payments:
Mellon Trust
One Cabot Road
Mail Stop #028-003C
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(3) Address for copies of notices under (2) above and all other
communications and notices:
Prudential Private Placement Investors, Inc.
Four Gateway Center
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(4) Recipient of telephonic prepayment notices:
See (2) above.
3
PRUCO LIFE INSURANCE COMPANY $2,000,000 $2,000,000
(1) All payments on account of Notes held by such
purchaser shall be made by wire transfer of
immediately available funds for credit to:
Account No. ▇▇▇-▇▇▇▇-▇▇▇
Bank Of New York
New York, New York
(ABA No.: 021-000-018)
Each such wire transfer shall set forth the
name of the Company, a reference to "6.96%
Senior Notes due June 30, 1998, PPN 94106#\B,
▇▇▇ ▇▇▇▇", and the due date and application (as
among principal, interest and Yield-Maintenance
Amount) of the payment being made.
(2) Address for all notices relating to payments:
Pruco Life Insurance Company
c/o The Prudential Insurance Company of America
Three Gateway Center
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Manager, ▇▇▇▇▇▇▇▇ and Collections
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(3) Address for all other communications and notices:
Pruco Life Insurance Company
c/o Prudential Capital Group
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Managing Director
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
4
(4) Recipient of telephonic prepayment notices:
Manager, Trade Management
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(5) Tax Identification No.: ▇▇-▇▇▇▇▇▇▇
5
EXHIBIT A-l
[FORM OF SERIES A NOTE]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND MAY NOT BE OFFERED
OR SOLD IN VIOLATION OF SUCH ACT.
WASTE INDUSTRIES, INC.
6.96% SENIOR SERIES A NOTE DUE 2008
No.________________________ [Date]
$ _________________________
FOR VALUE RECEIVED, the undersigned, WASTE INDUSTRIES, INC. (herein called
the "Company"), a corporation organized and existing under the laws of the State
of North Carolina, hereby promises to pay to _______________, or registered
assigns, the principal sum of _______________ DOLLARS on June 30, 2008, with
interest (computed on the basis of a 360-day year-30-day month) (a) on the
unpaid balance thereof at the rate of 6.96% per annum from the date hereof,
payable quarterly on the 30th day of March, June, September and December in each
year, commencing with the March, June, September or December next succeeding the
date hereof, until the principal hereof shall have become due and payable, and
(b) on any overdue payment (including any overdue prepayment) of principal, any
overdue payment of Yield-Maintenance Amount and any overdue payment of interest,
payable quarterly as aforesaid (or, at the option of the registered holder
hereof, on demand), at a rate per annum from time to time equal to the greater
of (i) 8.96% or (ii) 2% over the rate of interest publicly announced by ▇▇▇▇▇▇
Guaranty Trust Company of New York from time to time in New York City as its
Prime Rate.
Payments of principal, Yield-Maintenance Amount, if any, and interest are
to be made at the main office of ▇▇▇▇▇▇ Guaranty Trust Company of New York in
New York City or at such other place as the holder hereof shall designate to the
Company in writing, in lawful money of the United States of America.
This Note is one of a series of Senior Notes (herein called the "Notes")
issued pursuant to a Note Purchase and Private Shelf Agreement, dated as of June
30, 1998 (herein called the "Agreement"), between the Company, on the one hand,
and The Prudential Insurance Company of America, Pruco Life Insurance Company
and each Prudential Affiliate which becomes party thereto, on the other hand,
and is entitled to the benefits thereof. As provided in the Agreement, this Note
is subject to prepayment, in whole or from time to time in part, with the
Yield-Maintenance Amount specified in the Agreement.
The Company agrees to make prepayments of principal of this Note on the
dates and in the amounts specified in the Agreement.
This Note is a registered Note and, as provided in the Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the registered
holder hereof or such holder's attorney duly authorized in writing, a new Note
for the then outstanding principal amount will be issued to, and registered in
the name of, the transferee. Prior to due presentment for registration of
transfer, the Company may treat the person in whose name this Note is registered
as the owner hereof for the purpose of receiving payment and for all other
purposes, and the Company shall not be affected by any notice to the contrary.
In case an Event of Default shall occur and be continuing, the principal of
this Note may be declared or otherwise become due and payable in the manner and
with the effect provided in the Agreement.
The Company and any and all endorsers, guarantors and sureties severally
waive demand, presentment for payment, notice of dishonor or default, notice of
intent to accelerate, notice of acceleration (to the extent set forth in the
Agreement), protest and diligence in collecting.
Should any debt represented by this Note be collected at law or in equity,
or in bankruptcy or other proceedings, or should this Note be placed in the
hands of attorneys for collection, the Company agrees to pay, in addition to the
principal, Yield-Maintenance Amount, if any, and interest due and payable
hereon, all costs of collecting or attempting to collect this Note, including
Reasonable Attorneys' Fees and expenses (including those incurred in connection
with any appeal).
Capitalized terms used and not otherwise defined herein shall have the
meanings (if any) provided in the Agreement.
This Note is intended to be performed in the State of New York and shall be
construed and enforced in accordance with the internal law of such State. As
provided in paragraph 11N of the Agreement, the Company submits to the
jurisdiction of the Supreme Court of the State of New York located in New York
County, New York and the United States District Court for the Southern District
of New York in any action or proceeding relating to this Note.
WASTE INDUSTRIES, INC
By: ______________________________________
Name:
Title:
2
EXHIBIT A-2
[FORM OF SHELF NOTE]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND MAY NOT BE OFFERED
OR SOLD IN VIOLATION OF SUCH ACT.
WASTE INDUSTRIES, INC.
SENIOR SERIES _____ NOTE
No. ________________
ORIGINAL PRINCIPAL AMOUNT:
ORIGINAL ISSUE DATE:
INTEREST RATE:
INTEREST PAYMENT DATES:
FINAL MATURITY DATE:
PRINCIPAL PREPAYMENT DATES AND AMOUNTS:
FOR VALUE RECEIVED, the undersigned, WASTE INDUSTRIES, INC. (herein called
the "Company"), a corporation organized and existing under the laws of the State
of North Carolina, hereby promises to pay to _______________, or registered
assigns, the principal sum of _______________ DOLLARS [on the Final Maturity
Date specified above] [, payable on the Principal Prepayment Dates and in the
amounts specified above, and on the Final Maturity Date specified above in an
amount equal to the unpaid balance of the principal hereof,] with interest
(computed on the basis of a 360-day year-30-day month) (a) on the unpaid balance
thereof at the Interest Rate per annum specified above, payable on each Interest
Payment Date specified above and on the Final Maturity Date specified above,
commencing with the Interest Payment Date next succeeding the date hereof, until
the principal hereof shall have become due and payable, and (b) on any overdue
payment (including any overdue prepayment) of principal, any overdue payment of
Yield-Maintenance Amount and any overdue payment of interest, payable on each
Interest Payment Date as aforesaid (or, at the option of the registered holder
hereof, on demand), at a rate per annum from time to time equal to the greater
of (i) 2% over the Interest Rate specified above or (ii) 2% over the rate of
interest publicly announced by ▇▇▇▇▇▇ Guaranty Trust Company of New York from
time to time in New York City as its Prime Rate.
Payments of principal, Yield-Maintenance Amount, if any, and interest are
to be made at the main office of ▇▇▇▇▇▇ Guaranty Trust Company of New York in
New York City or at such other place as the holder hereof shall designate to the
Company in writing, in lawful money of the United States of America.
This Note is one of a series of Senior Notes (herein called the "Notes")
issued pursuant to a Note Purchase and Private Shelf Agreement, dated as of June
30, 1998 (herein called the "Agreement"), between the Company, on the one hand,
and The Prudential Insurance Company of America, Pruco Life Insurance Company
and each Prudential Affiliate (as defined in the Agreement) which becomes party
thereto, on the other hand, and is entitled to the benefits thereof.
[This Note is subject to optional prepayment, in whole or from time to time
in part, on the terms specified in the Agreement.]
This Note is a registered Note and, as provided in the Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the registered
holder hereof or such holder's attorney duly authorized in writing, a new Note
for the then outstanding principal amount will be issued to, and registered in
the name of, the transferee. Prior to due presentment for registration of
transfer, the Company may treat the person in whose name this Note is registered
as the owner hereof for the purpose of receiving payment and for all other
purposes, and the Company shall not be affected by any notice to the contrary.
In case an Event of Default shall occur and be continuing, the principal of
this Note may be declared or otherwise become due and payable in the manner and
with the effect provided in the Agreement.
The Company and any and all endorsers, guarantors and sureties severally
waive demand, presentment for payment, notice of dishonor or default, notice of
intent to accelerate, notice of acceleration (to the extent set forth in the
Agreement), protest and diligence in collecting.
Should any debt represented by this Note be collected at law or in equity,
or in bankruptcy or other proceedings, or should this Note be placed in the
hands of attorneys for collection, the Company agrees to pay, in addition to the
principal, Yield-Maintenance Amount, if any, and interest due and payable
hereon, all costs of collecting or attempting to collect this Note, including
Reasonable Attorneys' Fees and expenses (including those incurred in connection
with any appeal).
Capitalized terms used and not otherwise defined herein shall have the
meanings (if any) provided in the Agreement.
2
This Note is intended to be performed in the State of New York and shall be
construed and enforced in accordance with the internal law of such State. As
provided in paragraph 11N of the Agreement, the Company submits to the
jurisdiction of the Supreme Court of the State of New York located in New York
County, New York and the United States District Court for the Southern District
of New York in any action or proceeding relating to this Note.
WASTE INDUSTRIES, INC
By: ___________________________________
Name:
Title:
3
EXHIBIT B
[FORM OF REQUEST FOR PURCHASE]
WASTE INDUSTRIES, INC.
Reference is made to the Note Purchase and Private Shelf Agreement (the
"Agreement"), dated as of June 30, 1998 between Waste Industries, Inc. (the
"Company"), on the one hand, and The Prudential Insurance Company of America
("Prudential"), Pruco Life Insurance Company and each Prudential Affiliate which
becomes party thereto, on the other hand. Capitalized terms used and not
otherwise defined herein shall have the respective meanings specified in the
Agreement.
Pursuant to Paragraph 2B(3) of the Agreement, the Company hereby makes the
following Request for Purchase:
1. Aggregate principal amount of the Notes covered hereby (the
"Notes") ................................................$
2. Individual specifications of the Notes:
3. Use of proceeds of the Notes(1):
4. Proposed day for the closing of the purchase and sale of the
Notes:
5. The purchase price of the Notes is to be transferred to:
Name, Address and
ABA Routing Number of Bank Number of Account
6. [Except as otherwise set forth in Exhibit A attached hereto, the
Company certifies that:
(a) the representations and warranties contained in paragraph 8
of the Agreement are true on and as of the date of this
Request for Purchase except to the extent of
----------
(1) Cannot be used to finance a Hostile Tender Offer.
changes caused by the transactions contemplated in the
Agreement;
(b) there exists on the date of this Request for Purchase no
Event of Default or Default; and
(c) without limiting the foregoing clauses (a) and (b), (i) the
representations under paragraph 8L of the Agreement are true
on and as of the date hereof without giving effect to any
qualification regarding the Company's knowledge and (ii) the
Company is in compliance with paragraph 5G of the Agreement.
7. The Issuance Fee to be paid pursuant to the Agreement will be
paid by the Company on the closing date.
[8. In connection with any rate quotes it may provide, Prudential
should assume a Designated Spread of %.]
Dated:
WASTE INDUSTRIES, INC
By: __________________________________
Authorized Officer
2
EXHIBIT C
[FORM OF CONFIRMATION OF ACCEPTANCE]
WASTE INDUSTRIES, INC.
Reference is made to the Note Purchase and Private Shelf Agreement (the
"Agreement"), dated as of June 30, 1998 between Waste Industries, Inc. (the
"Company"), on the one hand, and The Prudential Insurance Company of America
("Prudential"), Pruco Life Insurance Company and each Prudential Affiliate which
becomes party thereto, on the other hand. All terms used herein that are defined
in the Agreement have the respective meanings specified in the Agreement.
Prudential or the Prudential Affiliate which is named below as a Purchaser
of Notes hereby confirms the representations as to such Notes set forth in
paragraph 9 of the Agreement, and agrees to be bound by the provisions of
paragraphs 2B(5) and 2B(7) of the Agreement relating to the purchase and sale of
such Notes and by the provisions of the penultimate sentence of paragraph 11A of
the Agreement.
Pursuant to paragraph 2B(5) of the Agreement, an Acceptance with respect to
the following Accepted Notes is hereby confirmed:
I. Accepted Notes: Aggregate principal amount $
(A) (a) Name of Purchaser:
(b) Principal amount:
(c) Final maturity date:
(d) Principal prepayment dates and amounts:
(e) Interest rate:
(f) Interest payment period:
(g) Payment and notice instructions: As set forth on
attached Purchaser Schedule
[(h) Designated Spread: ___%]
(B) (a) Name of Purchaser:
(b) Principal amount:
(c) Final maturity date:
(d) Principal prepayment dates and amounts:
(e) Interest rate:
(f) Interest payment period:
(g) Payment and notice instructions: As set
forth on attached Purchaser Schedule
[(h) Designated Spread: ___%]
[(C), (D) same information as above.]
II. Closing Day:
[III. The following shall be required to evidence compliance with
paragraph 3G of the Agreement:]
Dated:
WASTE INDUSTRIES, INC
By: ___________________________________________
Title:____________________________________
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By: ___________________________________________
Vice President
[PRUDENTIAL AFFILIATE]
By: ___________________________________________
Vice President
2
EXHIBIT D-1
[FORM OF OPINION OF COMPANY'S COUNSEL
[Letterhead of Wyrick, Robbins, ▇▇▇▇▇ & ▇▇▇▇▇▇, LLP]
[Date of Closing]
The Prudential Insurance Company of America
c/o Prudential Capital Group
Gateway Center One, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
We have acted as counsel for Waste Industries, Inc. (the "Company") in
connection with the Note Purchase and Private Shelf Agreement, dated as of June
30, 1998 (the "Agreement") between the Company, on the one hand, and The
Prudential Insurance Company of America, Pruco Life Insurance Company, U.S.
Private Placement Fund and each Prudential Affiliate which becomes a party
thereto, on the other hand, pursuant to which the Company has issued to you
today its Senior Series A Notes in the aggregate principal amount of $25,000,000
(the "Notes"). Capitalized terms used and not otherwise defined herein shall
have the meanings provided in the Agreement. This letter is being delivered to
you in satisfaction of the condition set forth in paragraph 3A(v) of the
Agreement and with the understanding you are purchasing the Notes in reliance on
the opinions expressed herein.
In this connection, we have examined such certificates of public officials,
certificates of officers of the Company and copies certified to our satisfaction
of corporate documents and records of the Company and of other papers, and have
made such other investigations, as we have deemed relevant and necessary as a
basis for our opinion hereinafter set forth. We have relied upon such
certificates of public officials and of officers of the Company with respect to
the accuracy of material factual matters contained therein which were not
independently established. With respect to the opinion expressed in paragraph 3
below, we have also relied upon the representation made by [each of] you in
paragraph 9A of the Agreement.
Based on the foregoing, it is our opinion that:
1. The Company is a corporation duly organized and validly existing in good
standing under the laws of the State of North Carolina. [Each Subsidiary is a
corporation duly organized and validly existing in good standing under the laws
of its jurisdiction of incorporation.] The Company [and its Subsidiaries] has
[have] the corporate power to carry on its [their respective] business[es] as
now being conducted. [The Company has no Subsidiaries.]
2. The Agreement and the Notes have been duly authorized by all requisite
corporate action and duly executed and delivered by authorized officers of the
Company, and are valid obligations of the Company, legally binding upon and
enforceable against the Company in accordance with their respective terms,
except as such enforceability may be limited by (a) bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors'
rights generally and (b) general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law).
3. It is not necessary in connection with the offering, issuance, sale and
delivery of the Notes under the circumstances contemplated by the Agreement to
register the Notes under the Securities Act or to qualify an indenture in
respect of the Notes under the Trust Indenture Act of 1939, as amended.
4. The extension, arranging and obtaining of the credit represented by the
Notes do not result in any violation of regulation T, U or X of the Board of
Governors of the Federal Reserve System.
5. The execution and delivery of the Agreement and the Notes, the offering,
issuance and sale of the Notes and fulfillment of and compliance with the
respective provisions of the Agreement and the Notes do not conflict with, or
result in a breach of the terms, conditions or provisions of, or constitute a
default under, or result in any violation of, or result in the creation of any
Lien upon any of the properties or assets of the Company [or any of its
Subsidiaries] pursuant to, or require any authorization, consent, approval,
exemption, or other action by or notice to or filing with any court,
administrative or governmental body or other Person (other than routine filings
after the date hereof with the Securities and Exchange Commission and/or state
Blue Sky authorities) pursuant to, the charter or by-laws of the Company [or any
of its Subsidiaries], any applicable law (including any securities or Blue Sky
law), statute, rule or regulation or (insofar as is known to [us] [me] after
having made due inquiry with respect thereto) any agreement [(including, without
limitation, any agreement listed in Schedule 8G to the Agreement)], instrument,
order, judgment or decree to which the Company [or any of its Subsidiaries] is a
party or otherwise subject.
Any Transferee may rely on this opinion.
Very truly yours,
2
EXHIBIT D-2
[FORM OF OPINION OF COMPANY'S COUNSEL]
[Letterhead of Wyrick, Robbins, ▇▇▇▇▇ & ▇▇▇▇▇▇, LLP]
[Date of Closing]
[Name(s) and address(es) of Purchaser(s)]
Ladies and Gentlemen:
We have acted as counsel for Waste Industries, Inc. (the "Company") in
connection with the Note Purchase and Private Shelf Agreement, dated as of June
30, 1998 (the "Agreement") between the Company, on the one hand, and The
Prudential Insurance Company of America and each Prudential Affiliate which
becomes a party thereto, on the other hand, pursuant to which the Company has
issued to you today Senior Series Notes of the Company in the aggregate
principal amount of $__________ (the "Notes"). Capitalized terms used and not
otherwise defined herein shall have the meanings provided in the Agreement. This
letter is being delivered to you in satisfaction of the condition set forth in
paragraph 3A(v) of the Agreement and with the understanding that you are
purchasing the Notes in reliance on the opinions expressed herein.
In this connection, we have examined such certificates of public officials,
certificates of officers of the Company and copies certified to our satisfaction
of corporate documents and records of the Company and of other papers, and have
made such other investigations, as we have deemed relevant and necessary as a
basis for our opinion hereinafter set forth. We have relied upon such
certificates of public officials and of officers of the Company with respect to
the accuracy of material factual matters contained therein which were not
independently established. With respect to the opinion expressed in paragraph 3
below, we have also relied upon the representation made by [each of] you in
paragraph 9A of the Agreement. Based on the foregoing, it is our opinion that:
1. The Company is a corporation duly organized and validly existing in good
standing under the laws of the State of North Carolina. [Each Subsidiary is a
corporation duly organized and validly existing in good standing under the laws
of its jurisdiction of incorporation.] The Company [and its Subsidiaries] has
[have] the corporate power to carry on its [their respective] business[es] as
now being conducted. [The Company has no Subsidiaries.]
2. The Agreement and the Notes have been duly authorized by all requisite
corporate action and duly executed and delivered by authorized officers of the
Company, and are valid obligations of the Company, legally binding upon and
enforceable against the Company in accordance with their respective terms,
except as such enforceability may be limited by (a) bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of
creditors' rights generally and (b) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
3. It is not necessary in connection with the offering, issuance, sale and
delivery of the Notes under the circumstances contemplated by the Agreement to
register the Notes under the Securities Act or to qualify an indenture in
respect of the Notes under the Trust Indenture Act of 1939, as amended.
4. The extension, arranging and obtaining of the credit represented by the
Notes do not result in any violation of regulation T, U or X of the Board of
Governors of the Federal Reserve System.
5. The execution and delivery of the Agreement and the Notes, the offering,
issuance and sale of the Notes and fulfillment of and compliance with the
respective provisions of the Agreement and the Notes do not conflict with, or
result in a breach of the terms, conditions or provisions of, or constitute a
default under, or result in any violation of, or result in the creation of any
Lien upon any of the properties or assets of the Company [or any of its
Subsidiaries] pursuant to, or require any authorization, consent, approval,
exemption, or other action by or notice to or filing with any court,
administrative or governmental body or other Person (other than routine filings
after the date hereof with the Securities and Exchange Commission and/or state
Blue Sky authorities) pursuant to, the charter or by-laws of the Company [or any
of its Subsidiaries], any applicable law (including any securities or Blue Sky
law), statute, rule or regulation or (insofar as is known to us after having
made due inquiry with respect thereto) any agreement (including, without
limitation, any agreement listed in Schedule 8G to the Agreement), instrument,
order, judgment or decree to which the Company [or any of its Subsidiaries] is a
party or otherwise subject.
Any Transferee may rely on this opinion.
Very truly yours,
2