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EXHIBIT 4.3
WASTE CONNECTIONS, INC.
5 1/2% Convertible Subordinated Notes due 2006
PURCHASE AGREEMENT
March 30, 2001
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇
& ▇▇▇▇▇ INCORPORATED
World Financial Center
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Waste Connections, Inc. (the "Company"), a Delaware corporation,
confirms its agreement with ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
("▇▇▇▇▇▇▇ ▇▇▇▇▇" or the "Initial Purchaser") with respect to the issue and sale
by the Company and the purchase by the Initial Purchaser of the principal amount
set forth in Schedule I of $115,000,000 aggregate principal amount of the
Company's 5 1/2% Convertible Subordinated Notes due 2006 (the "Firm Notes") and
the grant by the Company to the Initial Purchaser of the option described below
to purchase all or any part of an additional $35,000,000 aggregate principal
amount of the Company's 5 1/2% Convertible Subordinated Notes due 2006 to cover
over-allotments, if any (the "Option Notes"). The Firm Notes, together with the
Option Notes, are collectively referred to herein as the "Notes." The Notes are
to be issued pursuant to an indenture to be entered into as of April 4, 2001
(the "Indenture") between the Company and State Street Bank and Trust Company of
California, N.A., as trustee (the "Trustee"). The Notes will be registered in
the name of Cede & Co. as nominee of The Depository Trust Company ("DTC")
pursuant to a letter of representations, to be entered into as of the Closing
Date (as defined below) (the "DTC Agreement") among the Company, the Trustee and
DTC.
The Notes will be convertible into shares of the Company's Common Stock,
$0.01 par value (the "Common Stock") in accordance with the terms of the Notes
and the Indenture, at the initial conversion rate specified in Schedule II
hereto.
The holders of Notes will be entitled to the benefits of a Registration
Rights Agreement, substantially in the form of Exhibit A with such changes as
shall be agreed to by the parties hereto (the "Registration Rights Agreement"),
pursuant to which the Company will file a registration statement with the
Securities and Exchange Commission (the "Commission") registering resales of the
Notes and the shares of Common Stock issuable upon conversion
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thereof (the "Conversion Shares"), as referred to in the Registration Rights
Agreement under the Securities Act of 1933, as amended (the "Securities Act").
The Company understands that the Initial Purchaser proposes to make an
offering of the Notes on the terms and in the manner set forth herein and agrees
that the Initial Purchaser may resell, subject to the conditions set forth
herein, all or a portion of the Notes to purchasers ("Subsequent Purchasers") at
any time after the date of this Agreement. The Notes are to be offered and sold
through the Initial Purchaser without being registered under the Securities Act,
in reliance upon exemptions therefrom. Pursuant to the terms of the Notes and
the Indenture, investors that acquire Notes may only resell or otherwise
transfer such Notes if such Notes are hereinafter registered under the
Securities Act or if an exemption from the registration requirements of the
Securities Act is available (including the exemption afforded by Rule 144A
("Rule 144A") of the rules and regulations promulgated under the Securities Act
(the "Securities Act Regulations") by the Commission.
The Company has prepared and will deliver to the Initial Purchaser on
the date hereof or the next succeeding day, copies of a final offering
memorandum (the "Final Offering Memorandum") for use by the Initial Purchaser in
connection with its solicitation of purchases of, or offering of, the Notes.
"Offering Memorandum" means, with respect to any date or time referred to in
this Agreement, the most recent offering memorandum (whether the Final Offering
Memorandum, or any amendment or supplement to such document), including exhibits
thereto and the documents incorporated therein by reference, which has been
prepared and delivered by the Company to the Initial Purchaser in connection
with its solicitation of purchases of, or offering of, the Notes.
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Offering Memorandum (or other references of like import) shall be deemed to mean
and include any document filed under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") which is incorporated by reference in the Offering
Memorandum.
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
1. Representations and Warranties of the Company. The Company represents and
warrants to the Initial Purchaser as of the date hereof and as of the Closing
Date and as of the Option Closing Date (if any) (as defined below) as follows:
(a) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own or lease its properties and conduct its
business as described in the Offering Memorandum. Each of the subsidiaries of
the Company hereto (collectively, the "Subsidiaries") has been duly organized
and is validly existing as a corporation, limited partnership or limited
liability company in good standing under the laws of the jurisdiction of its
incorporation, with corporate power and authority to own or lease its properties
and conduct its business as described in the Offering Memorandum. The
Subsidiaries are the only subsidiaries, direct or indirect, of the Company. The
Company and each of the Subsidiaries are duly qualified to transact business in
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all jurisdictions in which the conduct of their business requires such
qualification and in which the failure to qualify would have a material adverse
effect upon the financial condition, results of operations, business or
prospects of the Company and the Subsidiaries taken as a whole ( a "Material
Adverse Effect"). The outstanding shares of capital stock and limited
partnership or limited liability company interests (collectively, "Equity
Securities") of each of the Subsidiaries have been duly authorized and validly
issued, are fully paid and non-assessable and, except to the extent shown in
Exhibit B hereto, are owned by the Company or another Subsidiary free and clear
of all liens, encumbrances and claims, at law or in equity; and no options,
warrants or other rights to purchase, agreements or other obligations to issue
or other rights to convert any obligations into Equity Securities in the
Subsidiaries are outstanding.
(b) The shares of issued and outstanding capital stock of the Company
have been duly authorized and validly issued and are fully paid and
non-assessable; none of the outstanding shares of capital stock of the Company
was issued in violation of the preemptive or other similar rights of any
securityholder in the Company. Upon issuance and delivery of the Notes in
accordance with this Agreement and the Indenture, the Notes will be convertible
at the option of the holder thereof into shares of Common Stock; the Conversion
Shares have been duly authorized and reserved for issuance upon such conversion
by all necessary corporate action and such Conversion Shares when issued upon
such conversion will be validly issued, full paid and non-assessable; no holder
of Common Stock will be subject to personal liability by reason of being such a
holder and the issuance of such Conversion Shares upon such conversion or
purchases will not be subject to the preemptive or similar rights of any
securityholder of the Company. No preemptive rights of stockholders exist with
respect to the issue and sale of any of the Notes or Conversion Shares. Neither
the offering nor sale of the Notes as contemplated by this Agreement gives rise
to any rights, other than those which have been waived or satisfied, for or
relating to the registration under the Securities Act of any shares of Common
Stock.
(c) The information set forth under the caption "Capitalization" in the
Offering Memorandum is true and correct. The Notes, the Indenture, the
Registration Rights Agreement and the Conversion Shares conform to the
descriptions thereof contained in the Offering Memorandum. The forms of
certificates for the Notes and Conversion Shares conform to the corporate law of
the jurisdiction of the Company's incorporation.
(d) The Offering Memorandum does not contain, and will not contain as of
the date of such Offering Memorandum, any untrue statement of material fact, and
does not omit, and will not omit as of the date of such Offering Memorandum, to
state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the Company makes no
representations or warranties as to information contained in or omitted from the
Offering Memorandum, or any such amendment or supplement, in reliance upon, and
in conformity with, written information furnished to the Company by or on behalf
of the Initial Purchaser, specifically for use in the preparation thereof. The
Offering Memorandum as delivered from time to time shall incorporate by
reference the Company's most recent Annual Report on Form 10-K filed with the
Commission and each Quarterly Report on Form 10-Q and each Current Report on
Form 8-K filed by the Company with the Commission since the end of the fiscal
year to which such Annual Report relates. The documents incorporated or deemed
to be incorporated by reference in the Offering Memorandum at the time they were
or hereafter are filed with the
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Commission complied and will comply in all material respects with the
requirements of the Exchange Act and the rules and regulations of the Commission
thereunder (the "Exchange Act Regulations"), and when read together with the
other information in the Offering Memorandum, at the time the Offering
Memorandum was issued and at the Closing Date (and, if any Option Notes are
purchased, at the Option Closing Date), do not and will not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(e) The consolidated financial statements of the Company and the
Subsidiaries, together with related notes and schedules as set forth or
incorporated by reference in the Offering Memorandum, present fairly the
financial position and the results of operations and cash flows of the Company
and the consolidated Subsidiaries, at the indicated dates and for the indicated
periods. Such financial statements and related schedules have been prepared in
accordance with generally accepted principles of accounting, consistently
applied throughout the periods involved, except as disclosed therein, and all
adjustments necessary for a fair presentation of results for such periods have
been made. The summary financial and statistical data included or incorporated
by reference in the Offering Memorandum presents fairly the information shown
therein and such data has been compiled on a basis consistent with the financial
statements presented therein and the books and records of the Company.
(f) Ernst & Young LLP, who has certified certain of the financial
statements included as part of, or incorporated by reference in, the Offering
Memorandum, are independent public accountants as required by the Securities
Act.
(g) Except as set forth in the Offering Memorandum, there is no action,
suit, claim or proceeding pending or, to the knowledge of the Company,
threatened against the Company or any of the Subsidiaries before any court or
administrative agency or otherwise which, if determined adversely to the Company
or any of its Subsidiaries, might result in any material adverse change in the
earnings, business, management, properties, assets, operations, condition
(financial or otherwise) or prospects of the Company and of the Subsidiaries
taken as a whole or to prevent the consummation of the transactions contemplated
hereby.
(h) The Company and the Subsidiaries have good and marketable title to
all of the material properties and assets reflected in the financial statements
(or as described in the Offering Memorandum) hereinabove described, subject to
no lien, mortgage, pledge, charge or encumbrance of any kind except those
reflected in such financial statements (or as described in the Offering
Memorandum) or which are not material in amount to the Company and the
Subsidiaries taken as a whole. The Company and the Subsidiaries occupy their
leased properties under valid and binding leases conforming in all material
respects to the description thereof set forth in the Offering Memorandum.
(i) The Company and the Subsidiaries have filed all Federal, State,
local and foreign income tax returns which have been required to be filed and
have paid all taxes indicated by said returns and all assessments received by
them or any of them to the extent that such taxes have become due and are not
being contested in good faith. All tax liabilities have been adequately provided
for in the financial statements of the Company.
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(j) Since the respective dates as of which information is given in the
Offering Memorandum, as it may be amended or supplemented, there has not been
any material adverse change or any development known to the Company involving a
prospective material adverse change in or affecting the earnings, business,
management, properties, assets, operations, condition (financial or otherwise),
or prospects of the Company and its Subsidiaries taken as a whole, whether or
not occurring in the ordinary course of business (a "Material Adverse Change"),
and there has not been any material transaction entered into or any material
transaction that is probable of being entered into by the Company or the
Subsidiaries, other than transactions in the ordinary course of business and
changes and transactions described in the Offering Memorandum, as it may be
amended or supplemented. The Company and the Subsidiaries have no material
contingent obligations which are not disclosed in the Company's financial
statements which are set forth or incorporated by reference in the Offering
Memorandum.
(k) Neither the Company nor any of the Subsidiaries is or with the
giving of notice or lapse of time or both, will be, in violation of or in
default under its Certificate of Incorporation, as currently in effect (the
"Charter"), or its Bylaws, as currently in effect (the "By-Laws") (or in the
case of an entity that is not a corporation, such entity's governing documents)
or under any agreement, lease, contract, indenture or other instrument or
obligation to which it is a party or by which it, or any of its properties, is
bound and which default is of material significance in respect of the business,
management, properties, assets, operations, condition (financial or otherwise)
or prospects of the Company and the Subsidiaries taken as a whole.
(l) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body necessary to be made by or on behalf of the Company in
connection with the execution and delivery by the Company of this Agreement and
the consummation of the transactions herein contemplated (except such additional
steps as may be necessary to qualify the Notes under state securities or Blue
Sky laws) has been obtained or made and is in full force and effect.
(m) The Company and each of the Subsidiaries holds all material
licenses, certificates and permits from governmental authorities which are
necessary to the conduct of their businesses. Except as disclosed in the
Offering Memorandum, the Company and each of the Subsidiaries own or possess
adequate rights to use all material patents, patent applications, trademarks,
service marks, trade names, trademark registrations, service ▇▇▇▇ registrations,
copyrights, licenses and know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures) necessary for the conduct of their respective business, except where
the failure to own or possess such rights would not have a Material Adverse
Effect, and the Company has no reasonable basis to believe that the conduct of
their businesses will conflict with any such rights of others which would
reasonably be expected to have a Material Adverse Effect, and other than as
described in the Offering Memorandum, neither the Company nor any subsidiary has
received any notice of any claim of conflict with any such rights of others
which, if such assertion of conflict were sustained, would have a Material
Adverse Effect.
(n) Neither the Company, nor to the Company's best knowledge, any of its
affiliates (as defined in Rule 144 under the Act), has taken or will take,
directly or indirectly, any action
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designed to cause or result in, or which has constituted or which might
reasonably be expected to constitute, the manipulation or unlawful stabilization
of the price of the shares of Common Stock to facilitate the sale or resale of
the Notes or Conversion Shares. The Company acknowledges that the Initial
Purchaser may engage in passive market making transactions in shares of the
Common Stock on the NASDAQ National Market in accordance with Rule 103 of
Regulation M under the Exchange Act.
(o) Neither the Company nor any Subsidiary is an "investment company"
within the meaning of such term under the Investment Company Act of 1940, as
amended and the rules and regulations thereunder (the "1940 Act").
(p) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(q) The Company and each of its Subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as is adequate for the conduct
of their respective businesses and the value of their respective properties and
as is customary for companies engaged in similar industries.
(r) The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security Act
of 1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has occurred
with respect to any "pension plan" (as defined in ERISA) for which the Company
would have any liability; the Company has not incurred and does not expect to
incur liability under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the Internal
Revenue Code of 1986, as amended, including the regulations and published
interpretations thereunder (the "Code"); and each "pension plan" for which the
Company would have any liability that is intended to be qualified under Section
401(a) of the Code is so qualified in all material respects and nothing has
occurred, whether by action or by failure to act, which would cause the loss of
such qualification.
(s) No labor disturbance by the employees of the Company or any of the
Subsidiaries exists or, to the best knowledge of the Company, is contemplated or
threatened.
(t) There has been no storage, generation, transportation, handling,
treatment, disposal, discharge, emission or other release of any kind of toxic
or other wastes or other hazardous substances by, due to or caused by the
Company or any of the Subsidiaries (or, to the best knowledge of the Company,
and other entity (including any predecessor) for whose acts or omissions the
Company or any of the Subsidiaries is or may reasonably be expected to be
liable) upon any of the property now or previously owned or leased by the
Company or any of the
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Subsidiaries, or upon any other property, in violation of any statute or any
ordinance, rule, regulation, order, judgment, decree or permit or which would,
under any statute or any ordinance, rule (including rule of common law),
regulation, order, judgment decree or permit, give rise to any liability, except
for any violation or liability which would not have, singularly or in the
aggregate with all such violations and liabilities, a Material Adverse Effect;
and there has been no disposal, discharge, emission or other release of any kind
onto such property or into the environment surrounding such property of any
toxic or other wastes or other hazardous substances with respect to which the
Company has knowledge, except for any such disposal, discharge, emission or
other release of any kind which would not have, singularly or in the aggregate
with all such discharges and other releases, a Material Adverse Effect.
(u) Neither the Company nor, to the best knowledge of the Company, any
director, officer, agent, employee or other person associated with or acting on
behalf of the Company has (i) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to
political activity; (ii) made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds; or
(iii) made any bribe, rebate, payoff, influence, payment, kickback or other
unlawful payment.
(v) Other than options and warrants granted to employees and consultants
in the ordinary course of business since the date as of which information is
given in the Offering Memorandum, and except as otherwise described in the
Offering Memorandum, there are no outstanding subscriptions, rights, warrants,
calls or options to acquire, or instruments convertible into or exchangeable
for, or agreements or understandings with respect to the sale or issuance of,
any shares of capital stock of or other equity or other ownership interest in
the Company.
(w) Neither the Company nor any of the Subsidiaries owns any "margin
securities" as that term is defined in Regulations G and U of the Board of
Governors of the Federal Reserve System ( the "Federal Reserve Board"), and none
of the proceeds of the sale of the Notes will be used, directly or indirectly,
for the purpose of purchasing or carrying any margin security, for the purpose
of reducing or retiring any indebtedness which was originally incurred to
purchase or carry any margin security or for any other purpose which might cause
any of the Notes to be considered a "purpose credit" within the meanings of
Regulation G, T, U or X of the Federal Reserve Board.
(x) The Company has full right, power and authority to execute and
deliver this Agreement, the Indenture, the Registration Rights Agreement, and
the Notes (collectively, the "Transaction Documents") and to perform its
obligations hereunder and thereunder.
(y) This Agreement has been duly authorized, executed and delivered by
the Company and when duly executed and delivered by each of the other parties
hereto will constitute a valid and legally binding agreement of the Company,
except as the enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting enforcement of creditors'
rights generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
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(z) The Indenture has been duly authorized by the Company and, when
executed and delivered by the Company and the Trustee, will constitute a valid
and binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement thereof is
subject to general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law). On the Closing Date, the
Indenture will conform in all material respects to the requirements of the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act") and the rules and
regulations of the Commission applicable to an indenture which is qualified
thereunder.
(aa) The Registration Rights Agreement has been duly authorized by the
Company and, when executed and delivered by the Company and the Initial
Purchaser, will constitute a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors' rights generally
and except as enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law).
(bb) The Notes have been duly authorized and at the Closing Date, will
have been duly executed by the Company and, when authenticated, issued and
delivered in the manner provided for in the Indenture and delivered against
payment of the purchase price therefor as provided in this Agreement, will
constitute valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms except as the enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or similar laws
affecting enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law) and will be in
the form contemplated by, and entitled to the benefits of, the Indenture and the
Registration Rights Agreement.
(cc) The execution, delivery and performance by the Company of each of
the Transaction Documents, the issuance, authentication, sale and delivery of
the Notes and the consummation of the transactions contemplated by the
Transaction Documents (i) (A) will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
or result in the creation or imposition of any lien charge or encumbrance upon
any property or assets of the Company or any of the Subsidiaries pursuant to,
any material indenture, mortgage, deed of trust, loan agreement or other
material agreement or instrument to which the Company or any of the Subsidiaries
is a party or by which the Company or any of the Subsidiaries is bound or to
which any of the property or assets of the Company or any of the Subsidiaries is
subject, (B) will not result in any violation of the provisions of the Charter
By-laws, or equivalent constituent documents, of the Company or any of the
Subsidiaries and (C) will not result in the violation of the provisions of any
statute or any judgment, order, decree, rule or regulation of any court or
arbitrator or governmental agency or body having jurisdiction over the Company
or any of the Subsidiaries or any of their respective properties or assets
except, in the case of clauses (i)(A) and (i)(C), for any such conflict, breach,
violation, default,
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lien, charge or encumbrance that would not have a Material Adverse Effect; and
(ii) no consent, approval, authorization or order of, or filing or registration
with, any such court or arbitrator or governmental agency or body under any such
statute, judgment, order, decree, rule or regulation is required for the
execution, delivery and performance by the Company of each of the Transaction
Documents, the issuance, authentication, sale and delivery of the Notes and the
consummation of the transactions contemplated by the Transaction Documents,
except for such consents, approvals, authorizations, filings, registrations or
qualifications (i) which shall have been obtained or made prior to the Closing
Date and (ii) as may be required to be obtained or made under the Securities Act
and applicable state securities laws as provided in the Registration Rights
Agreement.
(dd) Neither the Company nor any of its affiliates, as such term is
defined in Rule 501(b) under the Securities Act (each an "Affiliate"), has
directly or indirectly, solicited any offer to buy, sold or offered to sell or
otherwise negotiated in respect of, or will solicit any offer to buy or offer to
sell or otherwise negotiate in respect of, or will solicit any offer to buy or
offer to sell or otherwise negotiate in respect of any security which is or
would be integrated with the sale of the Notes in a manner that would require
the Notes or the Conversion Shares to be registered under the Securities Act.
None of the Company, its Affiliates or any person acting on its or any of their
behalf (other than the Initial Purchaser, as to whom the Company makes no
representation) has engaged or will engage in any form of general solicitation
or general advertising within the meaning of Rule 502(c) under the Securities
Act. Assuming the accuracy of Initial Purchaser's representations and warranties
set forth in Section 2 and compliance with the procedures set forth in Section 6
hereof, it is not necessary in connection with the offer, sale issuance and
delivery of the Notes to the Initial Purchaser and the offer, resale and
delivery of the Notes by the Initial Purchaser in the manner contemplated by
this Agreement and the Offering Memorandum to register the Notes under the
Securities Act or to qualify the Indenture under the Trust Indenture Act.
(ee) The Notes are eligible for resale pursuant to Rule 144A and will
not be, at the Closing Date, of the same class as securities listed on a
national securities exchange registered under Section 6 of the Exchange Act, or
quoted in a U.S. automated interdealer quotation system.
2. Purchase, Sale and Delivery of the Notes.
(a) On the basis of the representations, warranties and covenants herein
contained, and subject to the conditions herein set forth, the Company agrees to
sell to the Initial Purchaser and the Initial Purchaser agrees to purchase from
the Company at the price set forth on Schedule II the aggregate principal amount
of Firm Notes set forth opposite the name of such Initial Purchaser in Schedule
I hereof plus accrued interest if any, subject to adjustments in accordance with
Section 8 hereof.
(b) Payment for the Firm Notes to be sold hereunder is to be made in
same day funds via wire transfer to the order of the Company for the Notes to be
sold by it against delivery of certificates therefor to the Initial Purchaser.
Such delivery is to be made at the offices of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP,
at 9:00 a.m., EST time, on the third business day after the date of this
Agreement or at such other time and date not later than five business days
thereafter
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as you and the Company shall agree upon, such time and date being herein
referred to as the "Closing Date." (As used herein, "business day" means a day
on which the New York Stock Exchange is open for trading and on which banks in
New York are open for business and not permitted by law or executive order to be
closed.) Upon delivery, the Notes shall be credited in such names and in such
denominations as the Initial Purchaser shall have requested in writing at least
two full business days prior to the Closing Date. The Company agrees to make one
or more global certificates evidencing the Notes available for inspection by the
Initial Purchaser at least 24 hours prior to the Closing Date.
(c) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company hereby grants an option to the Initial Purchaser to purchase any or all
of the Option Notes at the price set forth on Schedule II hereto. The option
granted hereby may be exercised in whole or in part by giving written notice (i)
at any time before the Closing Date and (ii) only once thereafter within 30 days
after the date of this Agreement, by you, as the Initial Purchaser, to the
Company setting forth the aggregate principal amount of Option Notes as to which
the Initial Purchaser is exercising the option, the names and date at which such
Option Notes are to be delivered. The time and date at which certificates for
Option Notes are to be delivered shall be determined by the Initial Purchaser
but shall not be earlier than three nor later than 10 full business days after
the exercise of such option, nor in any event prior to the Closing Date (such
time and date being herein referred to as the "Option Closing Date"). If the
date of exercise of the option is three or more days before the Closing Date,
the notice of exercise shall set the Closing Date as the Option Closing Date.
The aggregate principal amount of Option Notes to be purchased by the Initial
Purchaser shall be in the same proportion to the total aggregate principal
amount of Option Notes being purchased as the aggregate principal amount of Firm
Notes being purchased by such Initial Purchaser bears to the total aggregate
principal amount of Firm Notes. The option with respect to the Option Notes
granted hereunder may be exercised only to cover over-allotments in the sale of
the Firm Notes by the Initial Purchaser. You, as the Initial Purchaser, may
cancel such option at any time prior to its expiration by giving written notice
of such cancellation to the Company. To the extent, if any, that the option is
exercised, payment for the Option Notes shall be made on the Option Closing Date
in same day funds via wire transfer to the order of the Company for the Option
Notes against delivery of Notes therefor.
(d) The Initial Purchaser represents and warrants to, and agrees with,
the Company that it is a "qualified institutional buyer" within the meaning of
Rule 144A (a "QIB") and an "accredited investor" within the meaning of Rule
501(a) under the Securities Act.
3. Covenants of the Company. The Company covenants and agrees with the Initial
Purchaser that:
(a) The Company will cooperate with the Initial Purchaser in endeavoring
to qualify the Notes for sale under the securities laws of such jurisdictions as
the Initial Purchaser may reasonably have designated in writing and will make
such applications, file such documents, and furnish such information as may be
reasonably required for that purpose, provided the Company shall not be required
to qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction where it is not now so qualified or required to file
such a consent. The Company will, from time to time, prepare and file such
statements, reports, and other documents,
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as are or may be required to continue such qualifications in effect for so long
a period as the Initial Purchaser may reasonably request for distribution of the
Notes.
(b) The Company will deliver to, or upon the order of, the Initial
Purchaser, from time to time, as many copies of the Offering Memorandum as the
Initial Purchaser may reasonably request, including documents incorporated by
reference therein, and of all amendments thereto, as the Initial Purchaser may
reasonably request.
(c) The Company will immediately notify the Initial Purchaser, and
confirm such notice in writing, of (i) any filing made by the Company of
information with any securities exchange or any other regulatory body in the
United States or any other jurisdiction, and (ii) prior to the completion of the
placement of the Notes by the Initial Purchaser as evidenced by a notice in
writing from the Initial Purchaser to the Company, any material changes in or
affecting the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company and its subsidiaries, considered as
one enterprise, which (x) make any statement in the Offering Memorandum false or
misleading or (y) are not disclosed in the Offering Memorandum. In such event or
if during such time any event shall occur as a result of which it is necessary
in the reasonable opinion of any of the Company, its counsel, the Initial
Purchaser or counsel for the Initial Purchaser, to amend or supplement the Final
Offering Memorandum in order that the Final Offering Memorandum not include any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein not misleading in the light of the
circumstances then existing, the Company will forthwith amend or supplement the
Final Offering Memorandum by preparing and furnishing to the Initial Purchaser
an amendment or amendments of, or a supplement or supplements to, the Final
Offering Memorandum (in form and substance satisfactory in the reasonable
opinion of counsel to the Initial Purchaser) so that, as so amended or
supplemented, the Final Offering Memorandum will not include an untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances existing at the time
it is delivered to a Subsequent Purchaser, not misleading.
(d) The Company will advise the Initial Purchaser promptly of any
proposal to amend or supplement the Offering Memorandum and will not effect such
amendment or supplement without the consent of the Initial Purchaser. Neither
the consent of the Initial Purchaser nor the Initial Purchaser's delivery of any
such amendment or supplement, shall constitute a waiver of any of the conditions
set forth in Section 5 hereof.
(e) The Company will cooperate with the Initial Purchaser and use its
best efforts to permit the Notes to be eligible for clearance and settlement
through the facilities of DTC, the Euroclear System and Clearstream Banking.
(f) The Company will use the net proceeds received by it from the sale
of the Notes in the manner specified in the Offering Memorandum under "Use of
Proceeds."
(g) For as long as the Notes are outstanding or a period of three years
from the Closing Date, whichever is shorter, the Company will deliver to the
Initial Purchaser copies of annual reports and copies of all other documents,
reports and information furnished by the Company to its stockholders generally
or filed with any securities exchange pursuant to the
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requirements of such exchange or with the Commission pursuant to the Securities
Act or the Exchange Act. The Company will deliver to the Initial Purchaser
similar reports with respect to significant subsidiaries, as that term is
defined in the Securities Act, if any, which are not consolidated in the
Company's financial statements.
(h) No offering, sale, short sale, issuance or other disposition of any
shares of Common Stock of the Company or other securities convertible into or
exchangeable or exercisable for shares of Common Stock or derivative of Common
Stock (or agreement for such) will be made for a period of 90 days after the
date of this Agreement, directly or indirectly, by the Company otherwise than
hereunder or with the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ except for (i)
options granted under the Company's stock option plans, (ii) shares of Common
Stock issued upon exercise of currently outstanding warrants or options or
pursuant to the Company's stock option plan or employee stock purchase plan, and
(iii) issuance of the Conversion Shares. In addition, during the 90-day period,
the Company may offer to issue and issue shares of Common Stock in connection
with mergers and acquisitions.
(i) The Company will use its best efforts to permit the Notes to be
designated PORTAL securities in accordance with the rules and regulations
adopted by the NASD relating to the PORTAL Market.
(j) The Company will reserve and keep available at all times, free of
preemptive rights, a sufficient number of shares of Common Stock for the purpose
of enabling the Company to satisfy any obligations to issue Common Stock upon
conversion of the Notes.
(k) The Company will cause all shares of Common Stock issuable upon
conversion of the Notes to be listed on NASDAQ Stock Market's National Market.
(l) The Company will file all documents required to be filed with the
Commission pursuant to the Exchange Act within the time periods required by the
Exchange Act and the Exchange Act Regulations.
(m) The Company has caused each executive officer and director of the
Company to furnish to you, on or prior to the date of this agreement, a letter
or letters, in form and substance satisfactory to the Initial Purchaser,
pursuant to which each such person shall agree not to make or cause any
offering, sale or other disposition, directly or indirectly, of any shares of
Common Stock or other securities of the Company owned of record or beneficially
by such person (or as to which such person has the right to direct the
disposition of) for a period of 90 days after the date of the Offering
Memorandum, except with the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Lockup
Agreements").
(n) The Company shall not invest, or otherwise use the proceeds received
by the Company from its sale of the Notes in such a manner as would require the
Company or any of the Subsidiaries to register as an investment company under
the ▇▇▇▇ ▇▇▇.
(o) The Company will continue to maintain a transfer agent and, if
necessary under the jurisdiction of incorporation of the Company, a registrar
for the Common Stock.
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(p) The Company will not take, directly or indirectly, any action
designed to cause or result in, or that has constituted or might reasonably be
expected to constitute, the manipulation or unlawful stabilization of the price
of any securities of the Company.
4. Costs and Expenses. The Company will pay all costs, expenses and fees
incident to the performance of the obligations of the Company under this
Agreement, including, without limiting the generality of the foregoing, the
following: (a) accounting fees of the Company; (b) the fees and disbursements of
counsel for the Company; (c) the cost of preparing, printing and delivering to,
or as requested by, the Initial Purchaser copies of the Final Offering
Memorandum, this Agreement, the Indenture, the Registration Rights Agreement and
any other documents that may be required in connection with the offering,
purchase, sale, issuance or delivery of the Notes; (d) the qualification of the
Notes under securities laws in accordance with the provisions of Section 3(a)
hereof, including filing fees and the reasonable fees and disbursements of
counsel for the Initial Purchaser in connection therewith and in connection with
the preparation of the Blue Sky Survey, any supplement thereto and any Legal
Investment Survey; (e) the fees and expense of the Trustee, including the
reasonable fees and disbursements of counsel for the Trustee in connection with
the Indenture and the Notes; (f) any fees payable in connection with the rating
of the Notes; (g) any fees payable in connection with the initial and continued
designation of the Notes as PORTAL securities under the PORTAL Market pursuant
to NASD Rule 5322; and (h) the listing fee of The NASDAQ National Market
relating to the Conversion Shares. Any transfer taxes imposed on the sale of the
Notes to the Initial Purchaser will be paid by the Company. The Company,
however, shall not be required to pay for any of the Initial Purchaser's
expenses (other than those related to clause (d) above) except that, if this
Agreement shall not be consummated because the conditions in Section 5 hereof
are not satisfied, or because this Agreement is terminated by the Initial
Purchaser pursuant to Section 10 hereof, or by reason of any failure, refusal or
inability on the part of the Company to perform any undertaking or satisfy any
condition of this Agreement or to comply with any of the terms hereof on their
part to be performed, unless such failure to satisfy said condition or to comply
with said terms be due to the default or omission of the Initial Purchaser, then
the Company shall reimburse the Initial Purchaser for reasonable out-of-pocket
expenses, including fees and disbursements of counsel, reasonably incurred in
connection with investigating, marketing and proposing to market the Notes or in
contemplation of performing their obligations hereunder; but the Company shall
not in any event be liable to the Initial Purchaser for damages on account of
loss of anticipated profits from the sale by them of the Notes.
5. Conditions of Obligations of the Initial Purchaser. The several obligations
of the Initial Purchaser to purchase the Firm Notes on the Closing Date and the
Option Notes, if any, on the Option Closing Date are subject to the accuracy as
of the date hereof and as of the Closing Date or the Option Closing Date, as the
case may be, of the representations and warranties of the Company contained
herein, and to the performance by the Company of its respective covenants and
obligations hereunder and to the following additional conditions:
(a) The Initial Purchaser shall have received on the Closing Date or the
Option Closing Date, as the case may be, the opinion of Shartsis, ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ LLP, counsel for the Company dated the Closing Date or the Option
Closing Date, as the case may be, addressed to the Initial Purchaser (and
stating that it may be relied upon by counsel to the Initial Purchaser) to the
effect that:
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(i) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own or lease its properties and conduct its
business as described in the Offering Memorandum; each of the Subsidiaries has
been duly organized and is validly existing as a corporation, limited
partnership or limited liability company in good standing under the laws of the
jurisdiction of its incorporation or organization, with corporate, limited
partnership or limited liability power and authority to own or lease its
properties and conduct its business as described in the Offering Memorandum; the
Company and each of the Subsidiaries are duly qualified to transact business in
all jurisdictions in which the conduct of their business requires such
qualification and in which the failure to qualify would have a materially
adverse effect upon the business of the Company and the Subsidiaries taken as a
whole; and the outstanding Equity Securities of each of the Subsidiaries have
been duly authorized and validly issued and are fully paid and non-assessable
and are owned by the Company or a Subsidiary, and, to the best of such counsel's
knowledge, the outstanding Equity Securities of each of the Subsidiaries is
owned free and clear of all liens, encumbrances and claims, at law or in equity,
other than the pledge of such shares to Fleet National Bank., as Administrative
Agent, in connection with that certain Third Amended and Restated Credit
Facility, as amended, among the Company, Fleet National Bank and the other
financial institutions names therein, and no options, warrants or other rights
to purchase, agreements or other obligations to issue or other rights to convert
any obligations into any shares of capital stock or of ownership interests in
the Subsidiaries are outstanding.
(ii) The Company has authorized and outstanding capital stock as set
forth under the caption "Capitalization" in the Offering Memorandum; the
authorized shares of the Company's Common Stock have been duly authorized; the
outstanding shares of the Company's capital stock have been duly authorized and
validly issued and are fully paid and non-assessable; the Notes have been duly
authorized and issued by the Company; the capital stock of the Company, the
Notes and the Indenture conform to the description thereof contained in the
Offering Memorandum in all material respects; the certificates for the Notes and
Conversion Shares are in due and proper form; the Conversion Shares have been
duly authorized and will be validly issued, fully paid and non-assessable when
issued and paid for as contemplated by this Agreement; and are not subject to
any preemptive or other similar rights arising by operation of law, under the
Charter or By-Laws, under any resolution adopted by the board of directors of
the Company or any committee thereof or, to the best of such counsel's
knowledge, otherwise.
(iii) Other than options and warrants granted to employees and
consultants in the ordinary course of business since the date as of which
information is given in the Offering Memorandum, and except as described in or
contemplated by the Offering Memorandum, to the knowledge of such counsel, there
are no outstanding securities of the Company convertible or exchangeable into or
evidencing the right to purchase or subscribe for any shares of capital stock of
the Company and there are no outstanding or authorized options, warrants or
rights of any character obligating the Company to issue any shares of its
capital stock or any securities convertible or exchangeable into or evidencing
the right to purchase or subscribe for any shares of such stock. Except as
described in the Offering Memorandum, to the knowledge of such counsel, no
holder of any securities of the Company or any other person has the right,
contractual or otherwise, which has not been satisfied or effectively waived, to
cause the Company to sell or otherwise issue to them, or to permit them to
underwrite the sale of, any of the Notes or Conversion Shares or the right to
have any Common Stock or other securities of the Company
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included in the shelf registration statement (the "Registration Statement")
contemplated by the Registration Rights Agreement or the right, as a result of
the filing of the Registration Statement, to require registration under the
Securities Act of any shares of Common Stock or other securities of the Company.
(iv) The statements under the captions "Business -- Legal
Proceedings," "Description of Capital Stock" and "Description of Notes" in the
Offering Memorandum, insofar as such statements constitute a summary of
documents referred to therein or matters of law, accurately summarize in all
material respects the information required to be set forth thereunder under the
Securities Act with respect to such documents and matters.
(v) The statements in the Offering Memorandum under the heading
"Certain United States Federal Income Tax Considerations" insofar as they
purport to summarize matters of U.S. federal law, fairly summarize such matters
in all material respects.
(vi) The Indenture conforms in all material respects with the
requirements of the Trust Indenture Act and the rules and regulations of the
Commission applicable to an indenture which is qualified thereunder.
(vii) Such counsel knows of no material legal or governmental
proceedings pending or threatened against the Company or any of the Subsidiaries
except as set forth in the Offering Memorandum.
(viii) The execution and delivery of each of the Transaction
Documents and the consummation of the transactions therein contemplated by the
Company do not and will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, the Charter or By-Laws of
the Company, or any agreement or instrument known to such counsel to which the
Company or any of the Subsidiaries is a party or by which the Company or any of
the Subsidiaries may be bound.
(ix) The execution, delivery and performance by the Company of the
Indenture and the consummation of the transactions contemplated by the Indenture
will not conflict with or result in a breach or violation of any U.S. federal or
New York.
(x) The execution, delivery and performance by the Company of this
Agreement, the Registration Rights Agreement, and the Notes, and the
consummation of the transactions contemplated by this Agreement, the
Registration Rights Agreement, and the Notes will not conflict with or result in
a breach or violation of U.S. federal or New York.
(xi) Each of this Agreement, the Indenture and the Registration
Rights Agreement has been duly authorized, executed and delivered by the
Company.
(xii) No approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body is necessary to have been made in connection with the
execution and delivery of the Transaction Documents and the consummation of the
transactions herein contemplated by the Company (other than as may be required
by State securities and Blue Sky laws as to which such counsel need express no
opinion) except such as have been obtained or made, specifying the same.
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(xiii) Assuming due authorization, execution and delivery thereof by
the Trustee, the Indenture constitutes a valid and legally binding agreement of
the Company enforceable against the Company in accordance with its terms, except
to the extent that such enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws affecting creditors' rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law).
(xiv) Assuming due authentication thereof by the Trustee and upon
payment and delivery in accordance with this Agreement, the Notes will
constitute valid and legally binding obligations of the Company entitled to the
benefits of the Indenture and enforceable against the Company in accordance with
their terms, except to the extent that such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors' rights generally and by
general equitable principles (whether considered in a proceeding in equity or at
law).
(xv) Assuming due authorization, execution and delivery thereof by
the Initial Purchaser, the Registration Rights Agreement constitutes a valid and
legally binding agreement of the Company enforceable against the Company in
accordance with its terms, except to the extent that such enforceability may be
limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors' rights
generally and by general equitable principles (whether considered in a
proceeding in equity or at law).
(xvi) The Company is not, and will not become, as a result of the
consummation of the transactions contemplated by this Agreement, and application
of the net proceeds therefrom as described in the Offering Memorandum, required
to register as an investment company under the ▇▇▇▇ ▇▇▇.
(xvii) Assuming the accuracy of the representations, warranties and
agreements of the Company and the Initial Purchaser contained in this Agreement,
no registration of the Notes under the Securities Act or qualification of the
Indenture under the Trust Indenture Act is required in connection with the
issuance and sale of the Notes by the Company and the offer, initial resale and
delivery of the securities by the Initial Purchaser in the manner contemplated
by this Agreement and the Offering Memorandum.
In rendering such opinion, Shartsis, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP may rely as
to matters governed by the laws of states or jurisdictions other than Delaware
or Federal laws on local counsel in such jurisdictions provided that in each
case Shartsis, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP shall state that they believe that they and
the Initial Purchaser are justified in relying on such other counsel. In
addition to the matters set forth above, such opinion shall also include a
statement to the effect that nothing has come to the attention of such counsel
which leads them to believe that the Offering Memorandum as of the date of the
Final Offering Memorandum, Closing Date or the Option Closing Date, as the case
may be, contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading (except that such counsel need express no view as to
financial statements, including the notes thereto, schedules or other financial
or statistical information derived from financial statements). With respect to
such statement, Shartsis, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP may state
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that their belief is based upon the procedures set forth therein, but is without
independent check and verification.
(b) The Initial Purchaser shall have received from ▇▇▇▇▇▇▇, Phleger &
▇▇▇▇▇▇▇▇ LLP, counsel for the Initial Purchaser, an opinion dated the Closing
Date or the Option Closing Date, as the case may be, substantially to the effect
specified in subparagraphs (ii), (iii), (vi), (viii), (xiii), (xiv), (xv) and
(xvii) of Paragraph (a) of this Section 5. In rendering such opinion, ▇▇▇▇▇▇▇,
Phleger & ▇▇▇▇▇▇▇▇ LLP may rely as to all matters governed other than by the
laws of the State of New York and the State of Delaware or Federal laws on the
opinion of counsel referred to in Paragraph (a) of this Section 5. In addition
to the matters set forth above, such opinion shall also include a statement to
the effect that nothing has come to the attention of such counsel which leads
them to believe that the Offering Memorandum or any amendment thereto, as of the
time it became effective, as of the Closing Date or the Option Closing Date, as
the case may be, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading (except that such counsel need express no view
as to financial statements, including the notes thereto, schedules or other
financial or statistical information therein). With respect to such statement,
▇▇▇▇▇▇▇, Phleger & ▇▇▇▇▇▇▇▇ LLP may state that their belief is based upon the
procedures set forth therein, but is without independent check and verification.
(c) You shall have received, on each of the date hereof, the Closing
Date and the Option Closing Date, as the case may be, a letter dated the date
hereof, the Closing Date or the Option Closing Date, as the case may be, in form
and substance satisfactory to you, of Ernst & Young LLP, confirming that they
are independent public accountants within the meaning of the Securities Act and
stating that in their opinion the financial statements and schedules examined by
them and included in the Offering Memorandum comply in form in all material
respects with the applicable accounting requirements of the Securities Act; and
containing such other statements and information as is ordinarily included in
accountants' "comfort letters" to the Initial Purchaser with respect to the
financial statements and certain financial and statistical information contained
in the Offering Memorandum.
(d) The Initial Purchaser shall have received on the Closing Date or the
Option Closing Date, as the case may be, a certificate or certificates of the
Chief Executive Officer and the Chief Financial Officer of the Company to the
effect that, as of the Closing Date or the Option Closing Date, as the case may
be, each of them severally represents as follows:
(i) The representations and warranties of the Company contained in
Section 1 hereof are true and correct as of the Closing Date or the Option
Closing Date, as the case may be;
(ii) Since the respective dates as of which information is given in
the Offering Memorandum, there has not been any material adverse change or any
development known to him involving a prospective material adverse change in or
affecting the condition, financial or otherwise, of the Company and its
Subsidiaries taken as a whole or the earnings, business, management, properties,
assets, operations, condition (financial or otherwise) or prospects of the
Company and the Subsidiaries taken as a whole, whether or not arising in the
ordinary course of business; and
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(iii) He has carefully examined the Offering Memorandum and, to such
officer's knowledge, as of the effective date, the statements contained in the
Offering Memorandum were true and correct in all material respects and such
Offering Memorandum did not omit to state a material fact required to be stated
therein or necessary in order to make the statements therein not misleading, and
since the date of the Offering Memorandum, no event has occurred which should
have been set forth in a supplement to or an amendment of the Offering
Memorandum which has not been so set forth in such supplement or amendment.
(e) The Company shall have furnished to the Initial Purchaser such
further certificates and documents confirming the representations and
warranties, covenants and conditions contained herein and related matters as the
Initial Purchaser may reasonably have requested in writing.
(f) The Conversion Shares have been approved as additional shares of
Common Stock for listing upon notice of issuance on NASDAQ National Market.
(g) The Lockup Agreements described in Section 3(n) are in full force
and effect.
(h) At the Closing Date, the Registration Rights Agreement in form and
substance reasonably satisfactory to the Initial Purchaser shall have been duly
executed and delivered by the Company and (assuming due execution, delivery and
performance by the Initial Purchaser) be in full force and effect.
(i) At the Closing Date, the Notes shall have been designated for
trading on PORTAL.
(j) There shall not have occurred any invalidation of Rule 144A under
the Securities Act by any court or any withdrawal or proposed withdrawal of any
rule or regulation under the Securities Act or the Exchange Act by the
Commission or any amendment or proposed amendment thereof by the Commission
which in the reasonable judgment of the Initial Purchaser would materially
impair the ability of the Initial Purchaser to purchase, hold or effect resales
of the Notes as contemplated.
(k) Subsequent to the execution and delivery of this Agreement or, if
earlier, the dates as of which information is given in the Offering Memorandum
(exclusive of any amendment or supplement thereto), there shall not have been
any change in the capital stock or long-term debt or any change, or any
development involving a prospective change, in or affecting the financial
condition, results of operations, business or prospects of the Company and its
subsidiaries taken as a whole, the effect of which, in any such case described
above, is, in the reasonable judgment of the Initial Purchaser, after oral
notice to and consultation with (but not subject to the agreement of) the
Company, so material and adverse as to make it impracticable or inadvisable to
proceed with the sale or delivery of the Notes on the terms and in the manner
contemplated by this Agreement and the Offering Memorandum (exclusive of any
amendment or supplement thereto).
(l) No action shall have been taken and no statute, rule, regulation or
order shall have been enacted, adopted or issued by any governmental agency or
body, foreign or domestic, which would, as of the Closing Date, prevent the
issuance or sale of the Notes; and no injunction,
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restraining order or order of any other nature by any federal, state or foreign
court of competent jurisdiction shall have been issued as of the Closing Date
which would prevent the issuance or sale of the Notes.
(m) Subsequent to the execution and delivery of this Agreement (i) no
downgrading shall have occurred in the rating accorded the Notes or any of the
Company's other debt securities by any "nationally recognized statistical rating
organization", as such term is defined by the Commission for purposes of Rule
436(g)(2) of the rules and regulations of the Commission under the Securities
Act and (ii) no such organization shall have publicly announced that it has
under surveillance or review (other than an announcement with positive
implications of a possible upgrading), its rating of the Notes or any of the
Company's other debt securities.
(n) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange, The Nasdaq Stock Market, the
over-the-counter market, shall have been suspended or limited, or minimum prices
shall have been established on any such exchange or market by the Commission, by
any such exchange or by any other regulatory body or governmental authority
having jurisdiction, or trading in any securities of the Company on any exchange
or in the over-the-counter market shall have been suspended or (ii) any
moratorium on commercial banking activities shall have been declared by federal
or New York State authorities or (iii) trading in the Company's Common Stock on
the NASDAQ National Market shall have been suspended or (iv) an outbreak or
escalation of hostilities or a declaration by the United States of a national
emergency or war or (v) a material adverse change in general economic, political
or financial conditions (or the effect of international conditions on the
financial markets in the United States shall be such) the effect of which, in
the case of this clause (v), is, in the judgment of the Initial Purchaser, so
material and adverse as to make it impracticable or inadvisable to proceed with
the sale or the delivery of the Notes on the terms and in the manner
contemplated by this Agreement and in the Offering Memorandum (exclusive of any
amendment or supplement thereto).
The opinions and certificates mentioned in this Agreement shall be
deemed to be in compliance with the provisions hereof only if they are in all
material respects satisfactory to the Initial Purchaser and to ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇ LLP, counsel for the Initial Purchaser.
If any of the conditions hereinabove provided for in this Section 5
shall not have been fulfilled when and as required by this Agreement to be
fulfilled, the obligations of the Initial Purchaser hereunder may be terminated
by the Initial Purchaser by notifying the Company of such termination in writing
or by telegram at or prior to the Closing Date or the Option Closing Date, as
the case may be.
In such event, the Company and the Initial Purchaser shall not be under
any obligation to each other (except to the extent provided in Sections 4 and 7
hereof).
6. Subsequent Offers and Resales of the Notes.
(a) The Initial Purchaser and the Company hereby establish and agree to
observe the following procedures in connection with the offer and sale of the
Notes:
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(i) Offers and sales of the Notes shall only be made to persons whom
the offeror or seller reasonably believes to be qualified institutional buyers
(as defined in Rule 144A under the Securities Act) or persons who are not U.S.
persons (as defined in Rule 902(k) under the Securities Act) in accordance with
Regulation S.
(ii) No general solicitation or general advertising (within the
meaning of Rule 502(c) under the Securities Act) will be used in the United
States in connection with the offering or sale of the Notes.
(iii) In the case of a non-bank Subsequent Purchaser of a Note
acting as a fiduciary for one or more third parties, each third party shall, in
the judgment of the applicable Initial Purchaser, be a QIB.
(iv) The Initial Purchaser will take reasonable steps to inform, and
cause each of its U.S. affiliates to take reasonable steps to inform, persons
acquiring Notes from such Initial Purchaser or affiliate, as the case may be, in
the United States that the Notes (A) have not been registered under the
Securities Act, (B) are being sold to them without registration under the
Securities Act in reliance on Rule 144A or in accordance with another exemption
from registration under the Securities Act, as the case may be, and (C) may not
be offered, sold or otherwise transferred except (1) to the Company, (2) outside
the United States to non-U.S. persons in accordance with Regulation S or (3) to
U.S. persons in accordance with (x) Rule 144A to a person whom the seller
reasonably believes is a QIB that is purchasing such Notes for its own account
or for the account of a QIB to whom notice is given that the offer, sale or
transfer is being made in reliance on Rule 144A or (y) pursuant to another
available exemption from registration under the Securities Act.
(v) The transfer restrictions and the other provisions set forth in
the Offering Memorandum under the heading "Notice to Investors; Transfer
Restrictions," including the legend required thereby, shall apply to the Notes
except as otherwise agreed by the Company and the Initial Purchaser or as
otherwise required by law.
(b) The Company covenants with the Initial Purchaser as follows:
(i) The Company agrees that it will not and will cause its
Affiliates not to, directly or indirectly, solicit any offer to buy or make any
offer or sale of, or otherwise negotiate in respect of, securities of the
Company of any class if, as a result of the doctrine of "integration" referred
to in Rule 502 under the Securities Act, such offer or sale would render invalid
(for the purpose of (i) the sale of the Notes by the Company to the Initial
Purchaser, (ii) the resale of the Notes by the Initial Purchaser to Subsequent
Purchasers or (iii) the resale of the Notes by such Subsequent Purchasers to
others) the exemption from the registration requirements of the Securities Act
provided by Section 4(2) thereof, by Rule 144A thereunder, by Regulation S
thereunder or otherwise.
(ii) The Company agrees that, in order to render the Notes eligible
for resale pursuant to Rule 144A under the Securities Act, while any of the
Notes remains outstanding, it will make available, upon request, to any holder
of Notes or prospective purchasers of Notes the information specified in Rule
144A(d)(4), unless the Company furnishes information to the
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Commission pursuant to Section 13 or 15(d) of the Exchange Act (such
information, whether made available to holders or prospective purchasers or
furnished to the Commission, is herein referred to as "Additional Information").
(iii) During the period beginning on the last date of original
issuance of the Notes and ending on the date that is two years from such date,
the Company will not, and will use all reasonable efforts not to permit any of
its "affiliates" (as defined under Rule 144 under the Securities Act or any
successor provision thereto) to, resell (x) any Notes which constitute
"restricted securities" under Rule 144 or (y) any securities into which the
Notes have been converted which constitute "restricted securities" under Rule
144, that in either case have been reacquired by any of them, except pursuant to
an effective registration statement under the Securities Act.
7. Indemnification.
(a) The Company agrees to indemnify and hold harmless the Initial
Purchaser and each person, if any, who controls the Initial Purchaser within the
meaning of the Securities Act, against any losses, claims, damages or
liabilities to which such Initial Purchaser or any such controlling person may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in the Final Offering Memorandum or any
amendment or supplement thereto, or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading in light of the circumstances under which
they were made; and will reimburse the Initial Purchaser and each such
controlling person upon demand for any legal or other expenses reasonably
incurred by the Initial Purchaser or such controlling person in connection with
investigating or defending any such loss, claim, damage or liability, action or
proceeding or in responding to a subpoena or governmental inquiry related to the
offering of the Notes, whether or not the Initial Purchaser or controlling
person is a party to any action or proceeding; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement, or omission or alleged omission made in the Final
Offering Memorandum, or such amendment or supplement, in reliance upon and in
conformity with written information furnished to the Company by or through the
Initial Purchaser specifically for use in the preparation thereof. This
indemnity agreement will be in addition to any liability which the Company may
otherwise have.
(b) The Initial Purchaser will indemnify and hold harmless the Company,
and each person, if any, who controls the Company within the meaning of the
Securities Act, against any losses, claims, damages or liabilities to which the
Company or controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in the
Final Offering Memorandum or any amendment or supplement thereto, or (ii) the
omission or the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances under which they were made; and will reimburse any
legal or other expenses reasonably incurred by the Company or
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controlling person in connection with investigating or defending any such loss,
claim, damage, liability, action or proceeding; provided, however, that the
Initial Purchaser will be liable in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission has been made in the Final Offering Memorandum or such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by or through the Initial Purchaser
specifically for use in the preparation thereof. This indemnity agreement will
be in addition to any liability which such Initial Purchaser may otherwise have.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to this Section 7, such person (the "indemnified party") shall
promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing. No indemnification provided for in Section
7(a) or (b) shall be available to any party who shall fail to give notice as
provided in this Section 7(c) if the party to whom notice was not given was
unaware of the proceeding to which such notice would have related and was
materially prejudiced by the failure to give such notice, but the failure to
give such notice shall not relieve the indemnifying party or parties from any
liability which it or they may have to the indemnified party for contribution or
otherwise than on account of the provisions of Section 7(a) or (b). In case any
such proceeding shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party and
shall pay as incurred the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel at its own expense. Notwithstanding the foregoing, the
indemnifying party shall pay as incurred (or within 30 days of presentation) the
fees and expenses of the counsel retained by the indemnified party in the event
(i) the indemnifying party and the indemnified party shall have mutually agreed
to the retention of such counsel, (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them or
(iii) the indemnifying party shall have failed to assume the defense and employ
counsel acceptable to the indemnified party within a reasonable period of time
after notice of commencement of the action. It is understood that the
indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm for all such indemnified parties. Such
firm shall be designated in writing by you in the case of parties indemnified
pursuant to Section 7(a) and by the Company in the case of parties indemnified
pursuant to Section 7(b). The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent but if settled
with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. In addition, the
indemnifying party will not, without the prior written consent of the
indemnified party, settle or compromise or consent to the entry of any judgment
in any pending or threatened claim, action or proceeding of which
indemnification may be sought hereunder (whether or not any indemnified party is
an actual or potential party to such claim, action or
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proceeding) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising out
of such claim, action or proceeding.
(d) If the indemnification provided for in this Section 7 is unavailable
to or insufficient to hold harmless an indemnified party under Section 7(a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) referred to therein, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the Initial
Purchaser on the other from the offering of the Shares. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law, then each indemnifying party shall contribute to such amount
paid or payable by such indemnified party in such proportion as is appropriate
to reflect not only such relative benefits but also the relative fault of the
Company on the one hand and the Initial Purchaser on the other in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities, (or actions or proceedings in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Initial Purchaser on the other shall be deemed
to be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total discounts received
by the Initial Purchaser, in each case as set forth in this Agreement and on the
cover page of the Final Offering Memorandum. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or the Initial Purchaser on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Initial Purchaser agree that it would not be just
and equitable if contributions pursuant to this Section 7(d) were determined by
pro rata allocation (even if the Initial Purchaser was treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 7(d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
referred to above in this Section 7(d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), (i) no Initial Purchaser shall be required to
contribute any amount in excess of the underwriting discounts applicable to the
Notes purchased by such Initial Purchaser, and (ii) no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
(e) In any proceeding relating to the Offering Memorandum or any
supplement or amendment thereto, each party against whom contribution may be
sought under this Section 7 hereby consents to the jurisdiction of any court
having jurisdiction over any other contributing party, agrees that process
issuing from such court may be served upon him or it by any other contributing
party and consents to the service of such process and agrees that any other
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contributing party may join him or it as an additional defendant in any such
proceeding in which such other contributing party is a party.
(f) Except as otherwise provided above in this Section 7, any losses,
claims, damages, liabilities or expenses for which an indemnified party is
entitled to indemnification or contribution under this Section 7 shall be paid
by the indemnifying party to the indemnified party as such losses, claims,
damages, liabilities or expenses are incurred (or within 30 days of
presentation). The indemnity and contribution agreements contained in this
Section 7 and the representations and warranties of the Company set forth in
this Agreement shall remain operative and in full force and effect, regardless
of (i) any investigation made by or on behalf of the Initial Purchaser or any
person controlling the Initial Purchaser, the Company, its directors or officers
or any persons controlling the Company, (ii) acceptance of any Notes and payment
therefor hereunder, and (iii) any termination of this Agreement. A successor to
the Initial Purchaser, or to the Company, its directors or officers, or any
person controlling the Company, shall be entitled to the benefits of the
indemnity, contribution and reimbursement agreements contained in this Section
7.
8. Default By Initial Purchaser. If on the Closing Date or the Option Closing
Date, as the case may be, the Initial Purchaser shall fail to purchase and pay
for the portion of the Notes which such Initial Purchaser has agreed to purchase
and pay for on such date (otherwise than by reason of any default on the part of
the Company), you, the Initial Purchaser, shall use your reasonable best efforts
to procure within 36 hours thereafter other purchasers to purchase from the
Company such amounts as may be agreed upon and upon the terms set forth herein,
the Firm Notes or Option Notes, as the case may be, which the defaulting Initial
Purchaser failed to purchase. If during such 36 hours you shall not have
procured such other purchasers to purchase the Firm Notes or Option Notes, as
the case may be, agreed to be purchased by the defaulting Initial Purchaser, and
if the aggregate principal amount of Firm Notes or Option Notes, as the case may
be, with respect to which such default shall occur exceeds 10% of the Firm Notes
or Option Notes, as the case may be, covered hereby, the Company or you will
have the right, by written notice given within the next 36-hour period to the
parties to this Agreement, to terminate this Agreement without liability on the
part of the non-defaulting Initial Purchaser or of the Company except to the
extent provided in Section 7 hereof. In the event of a default by any Initial
Purchaser, as set forth in this Section 8, the Closing Date or Option Closing
Date, as the case may be, may be postponed for such period, not exceeding seven
days, as you may determine in order that the required changes in the Offering
Memorandum or in any other documents or arrangements may be effected. The term
"Initial Purchaser" includes any person substituted for a defaulting Initial
Purchaser. Any action taken under this Section 8 shall not relieve any
defaulting Initial Purchaser from liability in respect of any default of such
Initial Purchaser under this Agreement.
9. Notices.
All communications hereunder shall be in writing and, except as
otherwise provided herein, will be mailed, delivered, telecopied or telegraphed
and confirmed as follows:
if to the Initial Purchaser, to:
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▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
World Financial Center
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ Fiddle
with a copy to:
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP ▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
if to the Company to:
Waste Connections, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
with a copy to:
Shartsis, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
10. Termination. This Agreement may be terminated by you in your absolute
discretion by notice to the Company as follows:
(a) at any time prior to the Closing Date if any of the events described
in Section 5(k), (l), (m) or (n) shall have occurred and be continuing; or
(b) as provided in Sections 4 and 7 of this Agreement.
11. Successors. This Agreement has been and is made solely for the benefit of
the Initial Purchaser and the Company and their respective successors,
executors, administrators, heirs and assigns, and the officers, directors and
controlling persons referred to herein, and no other person will have any right
or obligation hereunder. No purchaser of any of the Notes from any Initial
Purchaser shall be deemed a successor or assign merely because of such purchase.
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12. Information Provided by Initial Purchaser. The Company and the Initial
Purchaser acknowledge and agree that the only information furnished or to be
furnished by the Initial Purchaser to the Company for inclusion in any Offering
Memorandum consists of the information set forth in the last paragraph on the
front cover page (insofar as such information relates to the Initial Purchaser),
and certain information under the caption "Plan of Distribution" in the Offering
Memorandum relating to the Initial Purchaser.
13. Miscellaneous. The reimbursement, indemnification and contribution
agreements contained in this Agreement and the representations, warranties and
covenants in this Agreement shall remain in full force and effect regardless of
(a) any termination of this Agreement, (b) any investigation made by or on
behalf of the Initial Purchaser or controlling person thereof, or by or on
behalf of the Company or its directors or officers and (c) delivery of, and
payment for, the Notes under this Agreement.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York.
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If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company and the Initial
Purchaser in accordance with its terms.
Very truly yours,
WASTE CONNECTIONS, INC.
By: ____________________________________
Name:
Title:
The foregoing Note Purchase Agreement
is hereby confirmed and accepted as
of the date first above written.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated
By: ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated
By: _____________________________________
Name:
Title:
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SCHEDULE I
Principal Amount Principal Amount
Initial Purchaser of Firm Notes of Option Notes
----------------- ---------------- ----------------
$
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & $115,000,000.00 $35,000,000.00
▇▇▇▇▇ Incorporated
Total $115,000,000.00 $35,000,000.00
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SCHEDULE II
WASTE CONNECTIONS, INC.
$115,000,000
5 1/2% CONVERTIBLE SUBORDINATED NOTES DUE 2006
1. The Notes shall bear interest at a rate of 5 1/2% per annum.
2. The Notes shall be convertible into shares of common stock, par value
$0.01 per share, of the Company (the "Common Stock") at an initial rate
of 26.2985 shares of Common Stock per $1,000 principal amount of Notes.
3. The purchase price to be paid by the Initial Purchaser for the Firm
Notes and the Option Notes shall be an aggregate of $145,500,000.00,
being an amount equal to 97% of the aggregate principal amount of Firm
Notes and Option Notes purchased by the Initial Purchaser.
4. The redemption prices to be as set forth in the "Description of the
Notes" in the Offering Memorandum and correspondingly in the Indenture.
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EXHIBIT B
The Company owns only fifty-one percent (51%) of the outstanding
membership interests in ▇▇▇▇▇▇ County Recycling, Composting and Disposal, LLC.
The outstanding shares of capital stock and limited partnership and
limited liability company membership interests of each of the Subsidiaries are
subject to liens in favor of Fleet National Bank, as agent, to secure the
obligations of the Company and its Subsidiaries pursuant to the Company's Third
Amended and Restated Revolving Credit Agreement.
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