EXECUTION COUNTERPART
WASTE INDUSTRIES, INC.
NOTE PURCHASE AND
PRIVATE SHELF AGREEMENT
$25,000,000
7.28% SERIES A SENIOR NOTES DUE APRIL 3, 2006
$25,000,000
PRIVATE SHELF FACILITY
as of April 3, 1996
TABLE OF CONTENTS
Paragraph Page
1. AUTHORIZATION OF ISSUE OF NOTES......................................... 1
1.1A. Authorization of Issue of Series A Notes....................... 1
1.1B. Authorization of Issue of Shelf Notes.......................... 2
2. PURCHASE AND SALE OF NOTES.............................................. 2
2.1A. Purchase and Sale of Series A Notes............................ 2
2.1B. Purchase and Sale of Shelf Notes............................... 3
2.1B.(1) Facility.......................................... 3
2.1B.(2) Issuance Period................................... 3
2.1B.(3) Request for Purchase.............................. 4
2.1B.(4) Rate Quotes....................................... 5
2.1B.(5) Acceptance........................................ 5
2.1B.(6) Market Disruption................................. 6
2.1B.(7) Facility Closings................................. 6
2.1B.(8) Fees.............................................. 7
3. CONDITIONS OF CLOSING................................................... 9
3.1A. Certain Documents.............................................. 9
3.1B. Opinion of Purchaser's Special Counsel......................... 10
3.1C. Representations and Warranties; No Default..................... 10
3.1D. Purchase Permitted by Applicable Laws.......................... 10
3.1E. Payment of Fees................................................ 11
3.1F. No Material Adverse Change..................................... 11
3.1G. Environmental Compliance....................................... 11
4. PREPAYMENTS............................................................. 11
4.1A. Required Prepayments of Series A Notes......................... 11
4.1B. Required Prepayments of Shelf Notes............................ 11
4.1C. Optional Prepayment With Yield-Maintenance Amount.............. 12
4.1D. Notice of Optional Prepayment.................................. 12
4.1E. Application of Prepayments..................................... 12
4.1F. Retirement of Notes............................................ 12
5. AFFIRMATIVE COVENANTS................................................... 13
5.1A. Reporting Requirements......................................... 13
5.1A.(1) General Information............................... 13
5.1A.(2) Officer's Certificates............................ 15
5.1A.(3) Annual Accountant's Letter........................ 15
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Paragraph Page
5.1A.(4) Special Information............................... 15
5.1B. Inspection of Property......................................... 17
5.1C. Covenant to Secure Notes Equally............................... 17
5.1D. Guaranteed Obligations......................................... 17
5.1E. Maintenance of Insurance....................................... 17
5.1F. Maintenance of Corporate Existence/Compliance with
Law/Preservation of Property................................... 18
5.1G. Compliance with Environmental Laws............................. 18
5.1H. No Integration................................................. 19
5.1I. Financial Records.............................................. 19
6. NEGATIVE COVENANTS...................................................... 19
6.1A. Financial Limitation........................................... 20
6.1B. Liens, Debt and Other Restrictions............................. 20
6.1B.(1) Liens............................................. 20
6.1B.(2) Merger or Consolidation........................... 22
6.1B.(3) Investments....................................... 22
6.1B.(4) Operating Leases.................................. 23
6.1B.(5) Transactions with Related Party................... 23
6.1C. Sale of Property............................................... 24
6.1D. Subsidiary Stock and Debt...................................... 24
6.1E. Restricted Payments............................................ 25
6.1F. ERISA.......................................................... 26
6.1G. Environmental Matters.......................................... 26
6.1H. Specified Laws................................................. 27
6.1I. Subordinated Debt.............................................. 27
7. EVENTS OF DEFAULT....................................................... 28
7.1A. Acceleration................................................... 28
7.1B. Rescission of Acceleration............................ 31
7.1C. Notice of Acceleration or Rescission.................. 32
7.1D. Other Remedies........................................ 32
8. REPRESENTATIONS, COVENANTS AND WARRANTIES............................... 33
8.1A. Organization................................................... 33
8.1B. Financial Statements........................................... 33
8.1C. Actions Pending................................................ 34
8.1D. Outstanding Debt............................................... 34
8.1E. Title to Properties............................................ 34
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Paragraph Page
8.1F. Taxes.......................................................... 35
8.1G. Conflicting Agreements and Other Matters....................... 35
8.1H. Offering of Notes.............................................. 35
8.1I. Use of Proceeds................................................ 36
8.1J. ERISA.......................................................... 36
8.1K. Governmental Consent........................................... 37
8.1L. Environmental Compliance....................................... 37
8.1M. Disclosure..................................................... 38
8.1N. Hostile Tender Offers.......................................... 39
9. REPRESENTATIONS OF THE PURCHASERS....................................... 39
9.1A. Nature of Purchase............................................. 39
9.1B. Source of Funds................................................ 39
9.1C. Business of Purchaser; Prohibited Transferees.................. 40
10. DEFINITIONS; ACCOUNTING MATTERS......................................... 41
10.1A. Yield-Maintenance Terms........................................ 41
10.1B. Other Terms.................................................... 42
10.1C. Accounting Principles, Terms and Determinations................ 55
11. MISCELLANEOUS........................................................... 55
11.1A. Payments....................................................... 55
11.1B. Expenses....................................................... 55
11.1C. Consent to Amendments.......................................... 57
11.1D. Form and Registration; Transfer and Exchange;
Transfer Restrictions; Lost Notes.............................. 58
11.1D.(1) Form and Registration............................. 58
11.1D.(2) Transfer and Exchange of Notes.................... 58
11.1D.(3) Transfer Restrictions............................. 58
11.1D.(4) Lost Notes........................................ 58
11.1E. Persons Deemed Owners; Participations.......................... 59
11.1F. Survival of Representations and Warranties; Entire Agreement... 59
11.1G. Successors and Assigns......................................... 59
11.1H. Independence of Covenants...................................... 59
11.1I. Notices........................................................ 60
11.1J. Payments Due on Non-Business Days.............................. 60
11.1K. Severability................................................... 61
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Paragraph Page
11.1L. Descriptive Headings........................................... 61
11.1M. Satisfaction Requirement....................................... 61
11.1N. Governing Law; Submission to Jurisdiction...................... 61
11.1O. Severalty of Obligations....................................... 61
11.1P. Counterparts................................................... 62
11.1Q. Binding Agreement.............................................. 62
Purchaser Schedule
Information Schedule
Exhibit A-1 -- Form of Series A Note
Exhibit A-2 -- Form of Shelf Note
Exhibit B -- Form of Request for Purchase
Exhibit C -- Form of Confirmation of Acceptance
Exhibit D-1 -- Form of Opinion of Company Counsel, Series A Note
Closing
Exhibit D-2 -- Form of Opinion of Company Counsel, Shelf Note
Closing
Schedule 6B(1) -- Outstanding Liens
Schedule 6I -- Form of Subordination Provisions
Schedule 8A -- Subsidiaries
Schedule 8D -- Outstanding Debt
Schedule 8G -- Conflicting Agreements
Schedule 8I -- Use of Proceeds
Schedule 8L -- Environmental Disclosures
Schedule 11D(3) -- Prohibited Transferees
Waste Industries, inc.
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As of April 3, 1996
The Prudential Insurance Company
of America ("Prudential")
Each Prudential Affiliate (as hereinafter
defined) which becomes bound by certain
provisions of this Agreement as hereinafter
provided (together with Prudential, the
"Purchasers")
c/o Prudential Capital Group
Gateway Center One, 11th Floor
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▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
The undersigned, Waste Industries, Inc. (herein called the "Company"),
hereby agrees with you as follows:
1. AUTHORIZATION OF ISSUE OF NOTES.
1.1A. Authorization of Issue of Series A Notes. The Company will
authorize the issue of its senior unsecured promissory notes (the "Series A
Notes") in the aggregate principal amount of $25,000,000, to be dated the date
of issue thereof, to mature April 3, 2006, to bear interest on the unpaid
balance thereof from the date thereof until the principal thereof shall have
become due and payable at the rate of 7.28% per annum and on overdue principal,
Yield- Maintenance Amount and interest at the rate specified therein, and to be
substantially in the form of Exhibit A-1 attached hereto. The terms "Series A
Note" and "Series A Notes" as used herein shall include each Series A Note
delivered pursuant to any provision of this Agreement and each Series A Note
delivered in substitution or exchange for any such Series A Note pursuant to any
such provision.
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1.1B. Authorization of Issue of Shelf Notes. The Company will authorize
the issue of its additional senior unsecured promissory notes (the "Shelf
Notes") in the aggregate principal amount of $25,000,000, to be dated the date
of issue thereof, to mature, in the case of each Shelf Note so issued, no more
than ten years after the date of original issuance thereof, to have an average
life, in the case of each Shelf Note so issued, of no more than seven years
after the date of original issuance thereof, to bear interest on the unpaid
balance thereof from the date thereof at the rate per annum, and to have such
other particular terms, as shall be set forth, in the case of each Shelf Note so
issued, in the Confirmation of Acceptance with respect to such Shelf Note
delivered pursuant to paragraph 2B(5), and to be substantially in the form of
Exhibit A-2 attached hereto. The terms "Shelf Note" and "Shelf Notes" as used
herein shall include each Shelf Note delivered pursuant to any provision of this
Agreement and each Shelf Note delivered in substitution or exchange for any such
Shelf Note pursuant to any such provision. The terms "Note" and "Notes" as used
herein shall include each Series A Note and each Shelf Note delivered pursuant
to any provision of this Agreement and each Note delivered in substitution or
exchange for any such Note pursuant to any such provision. Notes which have
(i) the same final maturity, (ii) the same principal prepayment dates, (iii) the
same principal prepayment amounts (as a percentage of the original principal
amount of each Note), (iv) the same interest rate, (v) the same interest payment
periods and (vi) the same date of issuance (which, in the case of a Note issued
in exchange for another Note, shall be deemed for these purposes the date on
which such Note's ultimate predecessor Note was issued), are herein called a
"Series" of Notes.
2. PURCHASE AND SALE OF NOTES.
2.1A. Purchase and Sale of Series A Notes. The Company hereby agrees to
sell to Prudential and, subject to the terms and conditions herein set forth,
Prudential agrees to purchase from the Company $25,000,000 aggregate principal
amount of Series A Notes at 100% of such aggregate principal amount. On April 3,
1996 (herein called the "Series A Closing Day"), the Company will deliver to
Prudential at the offices of King & Spalding, 120 West 45th Street, New York,
New York, one or more Series A Notes registered in its name, evidencing the
aggregate principal amount of Series A Notes to be purchased by Prudential and
in the denomination or denominations specified in the Purchaser Schedule
attached hereto, against payment of the purchase price thereof by transfer of
immediately available funds for credit to the Company's account #5114191657 at
Branch Banking and Trust Company, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ABA Routing Number ▇▇▇▇▇▇▇▇▇.
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2.1B. Purchase and Sale of Shelf Notes.
2.1B.(1) Facility. Prudential is willing to consider, in its sole
discretion and within limits which may be authorized for purchase by Prudential
and Prudential Affiliates from time to time, the purchase of Shelf Notes
pursuant to this Agreement. The willingness of Prudential to consider such
purchase of Shelf Notes is herein called the "Facility". At any time, the
aggregate principal amount of Shelf Notes stated in paragraph 1B, minus the
aggregate principal amount of Shelf Notes purchased and sold pursuant to this
Agreement prior to such time, minus the aggregate principal amount of Accepted
Notes (as hereinafter defined) which have not yet been purchased and sold
hereunder prior to such time, plus the aggregate principal amount of Shelf Notes
purchased and sold pursuant to this Agreement and thereafter retired prior to
such time is herein called the "Available Facility Amount" at such time.
NOTWITHSTANDING THE WILLINGNESS OF PRUDENTIAL TO CONSIDER PURCHASES OF SHELF
NOTES, THIS AGREEMENT IS ENTERED INTO ON THE EXPRESS UNDERSTANDING THAT NEITHER
PRUDENTIAL NOR ANY PRUDENTIAL AFFILIATE SHALL BE OBLIGATED TO MAKE OR ACCEPT
OFFERS TO PURCHASE SHELF NOTES, OR TO QUOTE RATES, SPREADS OR OTHER TERMS WITH
RESPECT TO SPECIFIC PURCHASES OF SHELF NOTES, AND THE FACILITY SHALL IN NO WAY
BE CONSTRUED AS A COMMITMENT BY PRUDENTIAL OR ANY PRUDENTIAL AFFILIATE.
2.1B.(2) Issuance Period. Shelf Notes may be issued and sold
pursuant to this Agreement until the earlier of:
(i) the second anniversary of the date of this Agreement (or
if such anniversary is not a Business Day, the Business Day next
preceding such anniversary),
(ii) the thirtieth day after Prudential shall have given to
the Company, or the Company shall have given to Prudential, a notice
stating that it elects to terminate the issuance and sale of Shelf
Notes pursuant to this Agreement (or if such thirtieth day is not a
Business Day, the Business Day next preceding such thirtieth day),
(iii) the last Closing Day after which there is no Available
Facility Amount,
(iv) the termination of the Facility under paragraph 7A, and
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(v) the acceleration of any Note under paragraph 7A of this
Agreement.
The period during which Shelf Notes may be issued and sold pursuant to this
Agreement is herein called the "Issuance Period".
2.1B.(3) Request for Purchase. The Company may from time to time during
the Issuance Period make requests for purchases of Shelf Notes (each such
request being herein called a "Request for Purchase"). Each Request for Purchase
shall be made to Prudential by telecopier or overnight delivery service, and
shall:
(i) specify the aggregate principal amount of Shelf Notes
covered thereby, which shall not be less than $5,000,000 and not be
greater than the Available Facility Amount at the time such Request for
Purchase is made,
(ii) specify the principal amounts, final maturities (which
shall be no more than ten years from the date of issuance), principal
prepayment dates, if any, and amounts and interest payment periods
(which shall be quarterly in arrears) of the Shelf Notes covered
thereby,
(iii) specify the use of proceeds of such Shelf Notes (which
shall not be used to finance a Hostile Tender Offer),
(iv) specify the proposed day for the closing of the
purchase and sale of such Shelf Notes, which shall be a Business Day
during the Issuance Period not less than 10 days and not more than 30
days after the making of such Request for Purchase,
(v) specify the number of the account and the name and
address of the depository institution to which the purchase prices of
such Shelf Notes are to be transferred on the Closing Day for such
purchase and sale,
(vi) certify that the representations and warranties
contained in paragraph 8 are true on and as of the date of such Request
for Purchase and that there exists on the date of such Request for
Purchase no Event of Default or Default,
(vii) specify the Designated Spread for such Shelf Notes,
and
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(viii) be substantially in the form of Exhibit B attached
hereto.
Each Request for Purchase shall be in writing and shall be deemed made when
received by Prudential.
2.1B.(4) Rate Quotes. Not later than five Business Days after the
Company shall have given Prudential a Request for Purchase pursuant to paragraph
2B(3), Prudential may, but shall be under no obligation to, provide to the
Company by telephone or telecopier, in each case between 9:30 A.M. and 2:00 P.M.
New York City local time (or such later time as Prudential may elect), interest
rate quotes for the several principal amounts, maturities, principal prepayment
schedules, and interest payment periods of Shelf Notes specified in such Request
for Purchase. Each quote shall represent the interest rate per annum payable on
the outstanding principal balance of such Shelf Notes at which Prudential or a
Prudential Affiliate would be willing to purchase such Shelf Notes at 100% of
the principal amount thereof.
2.1B.(5) Acceptance. Within 30 minutes after Prudential shall have
provided any interest rate quotes pursuant to paragraph 2B(4) or such shorter
period as Prudential may specify to the Company (such period herein called the
"Acceptance Window"), the Company may, subject to paragraph 2B(6), elect to
accept such interest rate quotes as to not less than $5,000,000 aggregate
principal amount of the Shelf Notes specified in the related Request for
Purchase. Such election shall be made by an Authorized Officer of the Company
notifying Prudential by telephone or telecopier within the Acceptance Window
(but not earlier than 9:30 A.M. or later than 2:00 P.M., New York City local
time) that the Company elects to accept such interest rate quotes, specifying
the Shelf Notes (each such Shelf Note being herein called an "Accepted Note") as
to which such acceptance (herein called a "Acceptance") relates. The day the
Company notifies Prudential of an Acceptance with respect to any Accepted Notes
is herein called the "Acceptance Day" for such Accepted Notes. Any interest rate
quotes as to which Prudential does not receive an Acceptance within the
Acceptance Window shall expire, and no purchase or sale of Shelf Notes hereunder
shall be made based on such expired interest rate quotes. Subject to paragraph
2B(6) and the other terms and conditions hereof, the Company agrees to sell to
Prudential or a Prudential Affiliate, and Prudential agrees to purchase, or to
cause the purchase by a Prudential Affiliate of, the Accepted Notes at 100% of
the principal amount of such Notes. As soon as practicable following the
Acceptance Day, the Company, Prudential and each Prudential Affiliate which is
to purchase any such Accepted Notes will execute a confirmation of such
Acceptance substantially in the form of Exhibit C attached hereto (herein called
a "Confirmation of
6
Acceptance"). If the Company should fail to execute and return to Prudential
within three Business Days following receipt thereof a Confirmation of
Acceptance with respect to any Accepted Notes, Prudential may at its election at
any time prior to its receipt thereof cancel the closing with respect to such
Accepted Notes by so notifying the Company in writing.
2.1B.(6) Market Disruption. Notwithstanding the provisions of paragraph
2B(5), if Prudential shall have provided interest rate quotes pursuant to
paragraph 2B(4) and thereafter prior to the time an Acceptance with respect to
such quotes shall have been notified to Prudential in accordance with paragraph
2B(5) the domestic market for U.S. Treasury securities or other financial
instruments shall have closed or there shall have occurred a general suspension,
material limitation, or significant disruption of trading in securities
generally on the New York Stock Exchange or in the domestic market for U.S.
Treasury securities or other financial instruments, then such interest rate
quotes shall expire, and no purchase or sale of Shelf Notes hereunder shall be
made based on such expired interest rate quotes. If the Company thereafter
notifies Prudential of the Acceptance of any such interest rate quotes, such
Acceptance shall be ineffective for all purposes of this Agreement, and
Prudential shall promptly notify the Company that the provisions of this
paragraph 2B(6) are applicable with respect to such Acceptance.
2.1B.(7) Facility Closings. Not later than 11:30 A.M. (New York City
local time) on the Closing Day for any Accepted Notes, the Company will deliver
to each Purchaser listed in the Confirmation of Acceptance relating thereto at
the offices of the Prudential Capital Group, Gateway Center One, 11th Floor,
▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ the Accepted Notes to be
purchased by such Purchaser in the form of one or more Notes in authorized
denominations as such Purchaser may request for each Series of Accepted Notes to
be purchased on the Closing Day, dated the Closing Day and registered in such
Purchaser's name (or in the name of its nominee), against payment of the
purchase price thereof by transfer of immediately available funds for credit to
the Company's account specified in the Request for Purchase of such Notes. If
the Company fails to tender to any Purchaser the Accepted Notes to be purchased
by such Purchaser on the scheduled Closing Day for such Accepted Notes as
provided above in this paragraph 2B(7), or any of the conditions specified in
paragraph 3 shall not have been fulfilled by the time required on such scheduled
Closing Day, the Company shall, prior to 1:00 P.M., New York City local time, on
such scheduled Closing Day notify Prudential (which notification shall be deemed
received by each Purchaser) in writing whether (i) such closing is to be
rescheduled (such rescheduled date to be a Business Day during the Issuance
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Period not less than one Business Day and not more than 10 Business Days after
such scheduled Closing Day (the "Rescheduled Closing Day") and certify to
Prudential (which certification shall be for the benefit of each Purchaser) that
the Company reasonably believes that it will be able to comply with the
conditions set forth in paragraph 3 on such Rescheduled Closing Day and that the
Company will pay the Delayed Delivery Fee, if applicable, in accordance with
paragraph 2B(8)(iii) or (ii) such closing is to be canceled. In the event that
the Company shall fail to give such notice referred to in the preceding
sentence, Prudential (on behalf of each Purchaser) may at its election, at any
time after 1:00 P.M., New York City local time, on such scheduled Closing Day,
notify the Company in writing that such closing is to be canceled.
Notwithstanding anything to the contrary appearing in this Agreement, the
Company may elect to reschedule a closing with respect to any given Accepted
Notes on not more than one occasion, unless Prudential shall have otherwise
consented in writing.
2.1B.(8) Fees.
2.1B.(8)(i) Facility Fee. In consideration for the time, effort and
expense involved in the preparation, negotiation and execution of this
Agreement, at the time of the execution and delivery of this Agreement by the
Company and Prudential, the Company will pay to Prudential in immediately
available funds a nonrefundable fee (herein called the "Facility Fee") in the
amount of $75,000.00.
2.1B.(8)(ii) Issuance Fee. The Company will pay to Prudential in
immediately available funds a fee (herein called the "Issuance Fee") on each
Closing Day (other than the Series A Closing Day) in an amount equal to 0.15% of
the aggregate principal amount of Notes sold on such Closing Day.
2.1B.(8)(iii) Delayed Delivery Fee. If the closing of the purchase and
sale of any Accepted Note is delayed for any reason beyond the original Closing
Day for such Accepted Note, the Company will pay to Prudential (a) on the
Cancellation Date or actual closing date of such purchase and sale and (b) if
earlier, the next Business Day following 90 days after the Acceptance Day for
such Accepted Note and on each Business Day following 90 days after the prior
payment hereunder, a fee (herein called the "Delayed Delivery Fee") calculated
as follows:
(BEY - MMY) X DTS/360 X PA
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where "BEY" means Bond Equivalent Yield, i.e., the bond equivalent yield per
annum of such Accepted Note, "MMY" means Money Market Yield, i.e., the yield per
annum on a commercial paper investment of the highest quality selected by
Prudential on the date Prudential receives notice of the delay in the closing
for such Accepted Note having a maturity date or dates the same as, or closest
to, the Rescheduled Closing Day or Rescheduled Closing Days (a new alternative
investment being selected by Prudential each time such closing is delayed);
"DTS" means Days to Settlement, i.e., the number of actual days elapsed from and
including the original Closing Day with respect to such Accepted Note (in the
case of the first such payment with respect to such Accepted Note) or from and
including the date of the next preceding payment (in the case of any subsequent
delayed delivery fee payment with respect to such Accepted Note) to but
excluding the date of such payment; and "PA" means Principal Amount, i.e., the
principal amount of the Accepted Note for which such calculation is being made.
In no case shall the Delayed Delivery Fee be less than zero. If the foregoing
calculation yields a negative number or zero, no Delayed Delivery Fee shall be
due. Nothing contained herein shall obligate any Purchaser to purchase any
Accepted Note on any day other than the Closing Day for such Accepted Note, as
the same may be rescheduled from time to time in compliance with paragraph
2B(7).
2.1B.(8)(iv) Cancellation Fee. If the Company at any time notifies
Prudential in writing that the Company is canceling the closing of the purchase
and sale of any Accepted Note, or if Prudential notifies the Company in writing
under the circumstances set forth in the last sentence of paragraph 2B(5) or the
penultimate sentence of paragraph 2B(7) that the closing of the purchase and
sale of such Accepted Note is to be canceled, or if the closing of the purchase
and sale of such Accepted Note is not consummated on or prior to the last day of
the Issuance Period (the date of any such notification, or the last day of the
Issuance Period, as the case may be, being herein called the "Cancellation
Date"), the Company will pay the Purchasers in immediately available funds an
amount (the "Cancellation Fee") calculated as follows:
PI X PA
where "PI" means Price Increase, i.e., the quotient (expressed in decimals)
obtained by dividing (a) the excess of the ask price (as determined by
Prudential) of the Hedge Treasury Note(s) on the Cancellation Date over the bid
price (as determined by Prudential) of the Hedge Treasury Notes(s) having a
maturity date the same as, or closest to, such Accepted Note, on the Acceptance
Day (if the difference is a negative number or zero, no Cancellation Fee shall
be due) by (b)
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such bid price; and "PA" has the meaning ascribed to it in paragraph 2B(8)(iii).
The foregoing bid and ask prices shall be as reported by Telerate Systems, Inc.
(or, if such data for any reason ceases to be available through Telerate
Systems, Inc., any publicly available source of similar market data). Each price
shall be based on a U.S. Treasury security having a par value of $100.00 and
shall be rounded to the second decimal place. In no case shall the Cancellation
Fee be less than zero.
3. CONDITIONS OF CLOSING. The obligation of any Purchaser to purchase
and pay for any Notes is subject to the satisfaction, on or before the Closing
Day for such Notes, of the following conditions:
3.1A. Certain Documents. Such Purchaser shall have received the
following, each dated the date of the applicable Closing Day:
(i) The Note(s) to be purchased by such Purchaser.
(ii) Certified copies of the resolutions of the Board of
Directors of the Company authorizing the execution and delivery of this
Agreement and the issuance of the Notes, and of all documents
evidencing other necessary corporate action and governmental approvals,
if any, with respect to this Agreement and the Notes.
(iii) A certificate of the Secretary or an Assistant Secretary
and one other officer of the Company certifying the names and true
signatures of the officers of the Company authorized to sign this
Agreement and the Notes and the other documents to be delivered
hereunder.
(iv) Certified copies of the Articles of Incorporation and By-
laws of the Company.
(v) A favorable opinion of Wyrick, Robbins, ▇▇▇▇▇ & ▇▇▇▇▇▇, LLP,
special counsel to the Company (or such other counsel designated by the
Company and acceptable to the Purchaser(s)) satisfactory to such
Purchaser and substantially in the form of Exhibit D-1 (in the case of
the Series A Notes) or D-2 (in the case of any Shelf Notes) attached
hereto and as to such other matters as such Purchaser may reasonably
request. The Company hereby directs each such counsel to deliver such
opinion, agrees that the issuance and sale of any Notes will constitute
a reconfirmation of such direction, and understands and agrees that
each
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Purchaser receiving such an opinion will and is hereby authorized to
rely on such opinion.
(vi) A good standing certificate for the Company from the
Secretary of State of North Carolina dated of a recent date and good
standing or other certificates of qualification to do business as a
foreign corporation for the Company in the States of South Carolina and
Virginia and such other evidence of the status of the Company as such
Purchaser may reasonably request.
(vii) Additional documents or certificates with respect to legal
matters or corporate or other proceedings related to the transactions
contemplated hereby as may be reasonably requested by such Purchaser.
3.1B. Opinion of Purchaser's Special Counsel. Such Purchaser shall have
received from King & Spalding or such other counsel who is acting as special
counsel for it in connection with this transaction, a favorable opinion
satisfactory to such Purchaser as to such matters incident to the matters herein
contemplated as it may reasonably request.
3.1C. Representations and Warranties; No Default. The representations
and warranties contained in paragraph 8 shall be true on and as of such Closing
Day, except to the extent of changes caused by the transactions herein
contemplated and for any Closing Day after the Series A Closing Day changes
since the date of this Agreement which are disclosed in writing to Prudential
and to which Prudential shall have consented in writing; there shall exist on
such Closing Day no Event of Default or Default; and the Company shall have
delivered to such Purchaser an Officer's Certificate, dated such Closing Day, to
both such effects.
3.1D. Purchase Permitted by Applicable Laws. The purchase of and
payment for the Notes to be purchased by such Purchaser on the terms and
conditions herein provided (including the use of the proceeds of such Notes by
the Company) shall not violate any applicable law or governmental regulation
(including, without limitation, Section 5 of the Securities Act or Regulation G,
T or X of the Board of Governors of the Federal Reserve System) and shall not
subject such Purchaser to any tax (other than any income taxes arising from such
Purchaser's ownership of the Notes), penalty, liability or other onerous
condition under or pursuant to any applicable law or governmental regulation,
and such Purchaser shall have received such certificates or other evidence as it
may request to establish compliance with this condition.
11
3.1E. Payment of Fees. The Company shall have paid to Prudential any
fees due it pursuant to or in connection with this Agreement, including any
Facility Fee due pursuant to paragraph 2B(8)(i), any Issuance Fee due pursuant
to paragraph 2B(8)(ii) and any Delayed Delivery Fee due pursuant to paragraph
2B(8)(iii).
3.1F. No Material Adverse Change. Prudential shall have received a
certificate from the chief financial officer of the Company, dated the
applicable Closing Day, saying that no material adverse change in the financial
condition, business, operations or prospects of the Company or its subsidiaries,
taken as a whole, has occurred since December 31, 1994.
3.1G. Environmental Compliance. With respect to any Closing Day other
than the Series A Closing Day, Prudential shall have received such evidence
(including without limitation certificates and environmental audits or reports
by an independent environmental consultant) satisfactory to Prudential
demonstrating (i) the accuracy of the representations under paragraph 8L
(without giving effect to any qualification with respect to the Company's
knowledge) and (ii) compliance with paragraph 5G.
4. PREPAYMENTS. The Series A Notes and any Shelf Notes shall be subject
to required prepayment as and to the extent provided in paragraphs 4A and 4B,
respectively. The Series A Notes and any Shelf Notes shall also be subject to
prepayment under the circumstances set forth in paragraph 4C. Any prepayment
made by the Company pursuant to any other provision of this paragraph 4 shall
not reduce or otherwise affect its obligation to make any required prepayment as
specified in paragraph 4A or 4B.
4.1A. Required Prepayments of Series A Notes. Until the Series A Notes
shall be paid in full, the Company shall apply to the prepayment of the Series A
Notes, without Yield-Maintenance Amount, the sum of $3,571,429.00 commencing on
April 3, 2000 and each April 3, thereafter to and including April 3, 2005, and
such principal amounts of the Series A Notes, together with interest thereon to
the payment dates, shall become due on such payment dates. The remaining unpaid
principal amount of the Series A Notes, together with interest accrued thereon,
shall become due on April 3, 2006, the maturity date of the Series A Notes.
4.1B. Required Prepayments of Shelf Notes. Each Series of Shelf Notes
shall be subject to required prepayments, if any, set forth in the Notes of such
Series.
12
4.1C. Optional Prepayment With Yield-Maintenance Amount. The Notes of
each Series shall be subject to prepayment, in whole at any time or from time to
time in part (in integral multiples of $100,000 and in a minimum amount of
$1,000,000), at the option of the Company, at 100% of the principal amount so
prepaid plus interest thereon to the prepayment date and the Yield-Maintenance
Amount, if any, with respect to each such Note. Any partial prepayment of a
Series of the Notes pursuant to this paragraph 4C shall be applied in
satisfaction of required payments of principal in inverse order of their
scheduled due dates.
4.1D. Notice of Optional Prepayment. The Company shall give the holder
of each Note of a Series to be prepaid pursuant to paragraph 4C irrevocable
written notice of such prepayment not less than 10 Business Days prior to the
prepayment date, specifying such prepayment date, the aggregate principal amount
of the Notes of such Series to be prepaid on such date, the principal amount of
the Notes of such Series held by such holder to be prepaid on that date and that
such prepayment is to be made pursuant to paragraph 4C. Notice of prepayment
having been given as aforesaid, the principal amount of the Notes specified in
such notice, together with interest thereon to the prepayment date and together
with the Yield-Maintenance Amount, if any, herein provided, shall become due and
payable on such prepayment date. The Company shall, on or before the day on
which it gives written notice of any prepayment pursuant to paragraph 4C, give
telephonic notice of the principal amount of the Notes to be prepaid and the
prepayment date to each Significant Holder which shall have designated a
recipient for such notices in the Purchaser Schedule attached hereto or the
applicable Confirmation of Acceptance or by notice in writing to the Company.
4.1E. Application of Prepayments. In the case of each prepayment of
less than the entire unpaid principal amount of all outstanding Notes of any
Series pursuant to paragraphs 4A, 4B or 4C, the amount to be prepaid shall be
applied pro rata to all outstanding Notes of such Series (including, for the
purpose of this paragraph 4E only, all Notes prepaid or otherwise retired or
purchased or otherwise acquired by the Company or any of its Subsidiaries or
Affiliates other than by prepayment pursuant to paragraph 4A, 4B or 4C)
according to the respective unpaid principal amounts thereof.
4.1F. Retirement of Notes. The Company shall not, and shall not permit
any of its Subsidiaries or Affiliates to, prepay or otherwise retire in whole or
in part prior to their stated final maturity (other than by prepayment pursuant
to paragraphs 4A, 4B or 4C or upon acceleration of such final maturity pursuant
to paragraph 7A), or purchase or otherwise acquire, directly or indirectly,
Notes
13
of any Series held by any holder unless the Company or such Subsidiary or
Affiliate shall have offered to prepay or otherwise retire or purchase or
otherwise acquire, as the case may be, the same proportion of the aggregate
principal amount of Notes of such Series held by each other holder of Notes of
such Series at the time outstanding upon the same terms and conditions. Any
Notes so prepaid or otherwise retired or purchased or otherwise acquired by the
Company or any of its Subsidiaries or Affiliates shall not be deemed to be
outstanding for any purpose under this Agreement, except as provided in
paragraph 4E.
5. AFFIRMATIVE COVENANTS.
5.1A. Reporting Requirements.
5.1A.(1) General Information. The Company covenants that it will
deliver to each Significant Holder in triplicate:
(i) as soon as practicable and in any event within 45 days after
the end of each quarterly period (other than the fourth quarterly
period) in each fiscal year,
(1) Consolidated statements of income, stockholders'
equity and cash flows for the period from the beginning of the
current fiscal year to the end of such quarterly period, and
(2) a Consolidated balance sheet as at the end of such
quarterly period,
setting forth in each case in comparative form figures for the
corresponding period in the preceding fiscal year, all in reasonable
detail and reasonably satisfactory in form to the Required Holder(s)
and certified by an authorized financial officer of the Company as
fairly presenting, in all material respects, the financial condition of
the Company and its Consolidated Subsidiaries as of the end of such
period and the results of their operations for the period then ended in
accordance with generally accepted accounting principles, subject to
changes resulting from normal year-end adjustments and the inclusion of
abbreviated footnotes; provided, however, that delivery pursuant to
clause (iii) below of copies of the Quarterly Report on Form 10-Q of
the Company for such quarterly period filed with the Securities and
Exchange Commission shall be deemed to satisfy the requirements of this
clause (i);
14
(ii) as soon as practicable and in any event within 90 days after
the end of each fiscal year,
(1) Consolidated statements of income, stockholders'
equity and cash flows for such year, and
(2) a Consolidated balance sheet as at the end of such
year,
setting forth in each case in comparative form corresponding
Consolidated figures from the preceding annual audit, all in reasonable
detail and reasonably satisfactory in scope to the Required Holder(s)
and reported on by independent public accountants of recognized
standing selected by the Company whose report shall be without
limitation as to the scope of the audit and reasonably satisfactory in
substance to the Required Holder(s); provided, however, that delivery
pursuant to clause (iii) below of copies of the Annual Report on Form
10-K of the Company for such year filed with the Securities and
Exchange Commission shall be deemed to satisfy the requirements of this
clause (ii);
(iii) if the Company shall be publicly held, promptly upon
transmission thereof, copies of all such financial statements, proxy
statements, notices and reports as it shall send to its public
stockholders and copies of all registration statements (without
exhibits) and all reports (other than any registration statement filed
on Form S-8) which it files with the Securities and Exchange Commission
(or any governmental body or agency succeeding to the functions of the
Securities and Exchange Commission);
(iv) promptly upon receipt thereof, a copy of each other report
(including, without limitation, management letters) submitted to the
Company or any Subsidiary by independent accountants in connection with
any annual, interim or special audit made by them of the books of the
Company or any Subsidiary;
(v) promptly upon receipt thereof, a copy of each report, survey,
study, evaluation, assessment or other document prepared by any
consultant, engineer, Environmental Authority or other Person relating
to compliance by the Company or any Subsidiary with any Environmental
Requirements, if the cost of remediation, repair or compliance may be
15
reasonably expected to exceed $250,000 in any one case or in the
aggregate;
(vi) with reasonable promptness, upon the request of the holder
of any Note, provide such holder, and any qualified institutional buyer
designated by such holder, such financial and other information as such
holder may reasonably determine to be necessary in order to permit
compliance with the information requirements of Rule 144A under the
Securities Act in connection with the resale of Notes, except at such
times as the Company is subject to the reporting requirements of
section 13 or 15(d) of the Exchange Act. For the purpose of this
clause (vi), the term "qualified institutional buyer" shall have the
meaning specified in Rule 144A under the Securities Act; and
(vii) with reasonable promptness, such other data relating to the
business, operations, properties or financial condition of the Company
or any of its Subsidiaries as a Significant Holder may reasonably
request;
5.1A.(2) Officer's Certificates. Together with each delivery of
financial statements required by clauses 5A(i) and (ii) above, the Company will
deliver to each Significant Holder an Officer's Certificate demonstrating (with
computations in reasonable detail) compliance with the provisions of paragraphs
6A, 6B(1), 6B(2) and 6C and stating that there exists no Event of Default or
Default, or, if any Event of Default or Default exists, specifying the nature
and period of existence thereof and what action the Company has taken, is taking
or proposes to take with respect thereto;
5.1A.(3) Annual Accountant's Letter. Together with each delivery of
financial statements required by clause 5A(ii) above, the Company will deliver
to each Significant Holder a certificate of the independent public accountants
giving the report on such financial statements stating that, in making the audit
necessary for their report, they have obtained no knowledge of any Event of
Default or Default, or, if they have obtained knowledge of any Event of Default
or Default, specifying the nature and period of existence thereof. The
accountants, however, shall not be liable to anyone as a result of this
provision by reason of their failure to obtain knowledge of any Event of Default
or Default which would not be disclosed in the course of an audit conducted in
accordance with generally accepted auditing standards;
5.1A.(4) Special Information. The Company also covenants that
immediately after any Responsible Officer obtains actual knowledge of:
16
(a) an Event of Default or Default;
(b) a material adverse change in the financial condition,
business or operations of the Company and its Subsidiaries, taken as a
whole;
(c) legal proceedings filed against the Company and/or any
Subsidiary, which reasonably could be expected to have a material
adverse effect on the financial condition, business or operations of
the Company and its Subsidiaries, taken as a whole, or which in any
manner draws into question the validity of or reasonably could be
expected to impair the ability of the Company to perform its
obligations under this Agreement or the Notes;
(d) a default under any agreement or note evidencing Debt
for which the Company or any Subsidiary is liable, which individually
or in the aggregate with all other agreements and notes in default for
which the Company or any Subsidiary is liable, exceed $250,000;
(e) the occurrence of any other event that reasonably could
be expected to impair the ability of the Company to meet its
obligations hereunder;
(f) any (i) Environmental Liabilities, (ii) pending,
threatened or anticipated Environmental Proceedings, (iii)
Environmental Notices, (iv) Environmental Judgments and Orders, or (v)
Environmental Releases at, on, in, under or in any way affecting the
Properties which reasonably could be expected to have a material
adverse effect on the business, operations or financial condition of
the Company and its Subsidiaries, taken as a whole; or
(g) with respect to any Plan that is subject to the funding
requirements of Section 302 of ERISA or Section 412 of the Code, the
Company (i) has given or is required to give notice to the Pension
Benefit Guaranty Corporation that a material reportable event has
occurred with respect to such Plan, (ii) has delivered notice to the
Pension Benefit Guaranty Corporation of any intent to withdraw from or
terminate any such Plan, or (iii) has failed to make timely a
contribution to any such Plan;
17
the Company will deliver to each Significant Holder an Officer's Certificate
specifying the nature and period of existence thereof and what action the
Company or the Subsidiary has taken, is taking or proposes to take with respect
thereto.
5.1B. Inspection of Property. The Company covenants that, at such
reasonable times and as often as a Significant Holder may reasonably request, it
will permit any Person designated by a Significant Holder in writing, at such
Significant Holder's expense unless a Default has occurred and is continuing in
which case at the Company's expense, to:
(i) visit and inspect any of the properties of the Company
and any Subsidiary;
(ii) examine the corporate books and financial records of
the Company and its Subsidiaries and make copies thereof or extracts
therefrom; and
(iii) discuss the affairs, finances and accounts of any of
such corporations with the principal officers of the Company or any
Subsidiary and their independent public accountants.
5.1C. Covenant to Secure Notes Equally. The Company covenants that if
it or any Subsidiary shall create or assume any Lien upon any of its property or
assets, whether now owned or hereafter acquired, other than Liens permitted by
paragraph 6B(1) (unless prior written consent shall have been obtained under
paragraph 11C), it will make or cause to be made effective provision whereby the
Notes will be secured by such Lien equally and ratably with any and all other
Debt thereby secured so long as any such other Debt shall be so secured.
5.1D. Guaranteed Obligations. The Company covenants that if any
Person (other than the Company) Guarantees or provides collateral in any manner
for any Debt of the Company or any Subsidiary, it will simultaneously cause such
Person to Guarantee or provide collateral for the Notes equally and ratably with
all Debt Guaranteed or secured by such Person for so long as such Debt is
Guaranteed and pursuant to documentation in form and substance reasonably
satisfactory to such holder.
5.1E. Maintenance of Insurance. The Company covenants that it and each
Subsidiary will maintain, with responsible insurers, insurance with respect to
its properties and business against such casualties and contingencies
(including,
18
but not limited to, public liability, larceny, embezzlement or other criminal
misappropriation) and in such amounts as is customary in the case of similarly
situated corporations engaged in the same or similar businesses; provided,
however, that the Company and each Subsidiary may elect to continue to self-
insure (i) their waste containers; (i) certain immaterial assets such as radio
towers consistent with their business practices in effect on the date hereof;
and (i) certain risks under their medical and short-term disability plans..
5.1F. Maintenance of Corporate Existence/Compliance with
Law/Preservation of Property. The Company covenants that, except as permitted
under paragraphs 6B(2) and 6C, it and each Subsidiary will do or cause to be
done all things necessary to, at all times:
(i) preserve, renew and keep in full force and effect the
corporate existence of the Company and its Subsidiaries (other than
those Subsidiaries not material to the financial condition, business or
operations of the Company and its Subsidiaries taken as a whole);
(ii) comply with all laws and regulations (including,
without limitation, laws and regulations relating to equal employment
opportunity and employee safety) applicable to it and any Subsidiary
except where the failure to comply could not reasonably be expected to
have a material adverse effect on the business, operations or financial
condition of the Company and its Subsidiaries, taken as a whole;
(iii) maintain, preserve and protect all material licenses,
certificates, permits, franchises and intellectual property of the
Company and its Subsidiaries; and
(iv) preserve all the remainder of its property used or
useful in the conduct of its business and keep the same in good repair,
working order and condition excluding normal wear and tear, except
where the failure to preserve such property could not be reasonably
expected to have a material adverse effect on the business, operations
or financial condition of the Company and its Subsidiaries, taken as a
whole.
5.1G. Compliance with Environmental Laws. The Company covenants that it
and each Subsidiary will, comply in a timely fashion with, or operate pursuant
to valid waivers of the provisions of, all applicable Environmental
Requirements, including, without limitation, the emission of wastewater
effluent, solid and hazardous waste and air emissions together with any other
applicable
19
Environmental Requirements for conducting, on a timely basis, periodic tests and
monitoring for contamination of ground water, surface water, air and land and
for biological toxicity of the aforesaid, and all applicable regulations of the
Environmental Protection Agency or other relevant federal, state or local
governmental authority, except where the failure to comply could not reasonably
be expected to have a material adverse effect on the business, operations or
financial condition of the Company and its Subsidiaries, taken as a whole. The
Company agrees to indemnify and hold you, your officers, agents and employees
(each an "Indemnified Person") harmless from any loss, liability, claim or
expense that you may incur or suffer as a result of a breach by the Company or
any Subsidiary, as the case may be, of this covenant other than as a result of
the gross negligence or wilful misconduct of such Indemnified Person. The
Company shall not be deemed to have breached or violated this paragraph 5G if
the Company or any Subsidiary is challenging in good faith by appropriate
proceedings diligently pursued the application or enforcement of such
Environmental Requirements for which adequate reserves have been established in
accordance with generally accepted accounting principles.
5.1H. No Integration. The Company covenants that it has taken and will
take all necessary action so that the issuance of the Notes does not and will
not require registration under the Securities Act. The Company covenants that no
future offer and sale of debt securities of the Company of any class will be
made if there is a reasonable possibility that such offer and sale would, under
the doctrine of "integration", subject the issuance of the Notes to you to the
registration requirements of the Securities Act.
5.1I. Financial Records. The Company covenants that it and each
Subsidiary will keep proper books of record and account in which full and
correct entries (in all material respects and subject to normal year end
adjustments and, as to interim statements, the absence of footnotes) will be
made of the business and affairs of the Company or such Subsidiary under
generally accepted accounting principles consistently applied (except for
changes disclosed in the financial statements furnished to you pursuant to
paragraph 5A and concurred in by the independent public accountants referred to
in paragraph 5A).
6. NEGATIVE COVENANTS. Unless the Required Holders otherwise agree in
writing, the Company shall not, and shall not permit any Subsidiary, to take any
of the following actions or permit the occurrence or existence of any of the
following events or conditions:
20
6.1A. Financial Limitation. The Company covenants that it will not
permit at any time:
(i) Consolidated Debt to exceed 400% of EBITDA for the most
recently ended four fiscal quarter period; or
(ii) Consolidated Senior Debt to exceed 350% of EBITDA for
the most recently ended four fiscal quarter period; or
(iii) Priority Debt to exceed 5% of Consolidated Total
Capitalization; or
(iv) Consolidated Current Debt to exceed 20% of Consolidated
Total Capitalization; or
(v) Consolidated Fixed Charges to exceed 250% of EBITDA
plus Consolidated Fixed Charges for the most recently ended four fiscal
quarter period; or
(vi) Consolidated Net Worth to be less than $12,500,000 plus
on a cumulative basis 40% of Consolidated Net Income (if positive) for
each fiscal year ending after the date hereof.
6.1B. Liens, Debt and Other Restrictions. The Company covenants that it
will not and will not permit any Subsidiary to:
6.1B.(1) Liens. Create, assume or suffer to exist any Lien upon any of
its property or assets, whether now owned or hereafter acquired (whether or not
provision is made for the equal and ratable securing of the Notes pursuant to
paragraph 5C), except:
(i) Liens existing on the Series A Closing Day and specified
on Schedule 6B(1);
(ii) Liens for taxes (including ad valorem and property
taxes) and assessments or governmental charges or levies not yet due or
which are being actively contested in good faith by appropriate
proceedings;
(iii) other Liens incidental to the conduct of its business
or the maintenance, operation, construction or ownership of its
property and assets (including pledges or deposits in connection with
workers'
21
compensation and social security taxes, assessments and charges, and
landlords, mechanics and materialmen Liens and survey exceptions or
encumbrances, easements or reservations, rights-of-way, or zoning
restrictions) provided that (A) such Liens were not incurred in
connection with the borrowing of money, or the obtaining of advances or
credit or the payment of the deferred purchase price of property and
(B) the existence of such Lien does not materially detract from the
value of such property or assets to the Company or any Subsidiary or
unreasonably interfere with the ordinary conduct of business;
(iv) Liens (other than any Lien imposed by ERISA) incurred
or deposits made in the ordinary course of business to secure (or to
obtain letters of credit that secure) the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases,
performance bonds, purchase, construction or sales contracts and other
similar obligations, in each case not incurred or made in connection
with any Debt;
(v) any Lien created to secure all or any part of the
purchase price incurred or assumed to pay all or any part of the
purchase price of property acquired by the Company or a Subsidiary
after the date of this Agreement, provided that:
(A) any such Lien shall be confined solely to the
item or items of property so acquired and, if required by
the terms of the instrument originally creating such Lien,
other property which is an improvement to or for specific
use with such acquired property; and
(B) the principal amount of the Debt secured by any
such Lien shall at no time exceed 100% of the lesser of
(1) the cost to the Company or such Subsidiary of the
property acquired and (2) the Fair Market Value of such
property (as determined in good faith by the Company's
Board) at the time of such acquisition;
(vi) Liens securing Capitalized Lease Obligations, provided
such Liens are limited to the property subject to such leases;
(vii) any right of set off or banker's lien (whether by
common law, statute, contract or otherwise) in connection with ordinary
course of business deposit arrangements maintained by the Company or
its
22
Subsidiaries with its banks or other financial institutions so long as
any such bank or other financial institution (A) shall not at any time
make loans or otherwise extend credit to the Company or any Subsidiary,
(B) does not maintain accounts (for the deposit of cash or otherwise)
for the benefit of the Company or any Subsidiary, (C) shall have waived
in writing for the benefit of each holder of a Note such right of
setoff or banker's lien, or (D) shall be subject to a pro rata sharing
agreement in form and substance satisfactory to each Significant
Holder; or
(viii) any Lien renewing, extending, or refunding any
outstanding obligations secured by a Lien described in clause (i),
provided the principal amount secured is not increased and such Lien is
not extended to any other property of the Company or its Subsidiaries;
(ix) Liens securing judgments rendered against the Company
or any of its Subsidiaries or arising in connection with any court
proceedings, provided (i) such Liens are being contested in good faith
by appropriate proceedings and (i) no action has been taken by any
Person to execute or otherwise collect on such Lien;
(x) Liens securing Debt held by the Company in any
Subsidiary or Debt held by any Subsidiary in any other Subsidiary; and
(xi) additional Liens securing Priority Debt permitted by
paragraph 6A(iii).
6.1B.(2) Merger or Consolidation. Merge, consolidate or exchange shares
with any other Person, except that:
(i) any Subsidiary may merge or consolidate with the Company
or any other Subsidiary;
(ii) the Company may merge or consolidate with any other
corporation (including a Subsidiary) provided (A) the Company is the
surviving corporation, and (A) immediately after giving effect to such
transaction, no Default or Event of Default shall occur or exist; or
6.1B.(3) Investments. Make or permit to remain outstanding any
Investments, except that the Company or any Subsidiary may:
23
(i) make or own Investments in any Subsidiary or any Person
which immediately after giving effect to such Investment will be a
Subsidiary;
(ii) own, purchase or otherwise acquire (A) notes or
accounts receivable arising from transactions with customers, suppliers
and employees in the ordinary course of business or (B) stock or
securities received as settlements of debts created in the ordinary
course of business;
(iii) endorse negotiable instruments for collection in the
ordinary course of business;
(iv) advances or loans to officers and employees in the
ordinary course of business in an aggregate amount not in excess of
$500,000 during any fiscal year; or
(v) own, purchase or acquire (i) prime commercial paper or
certificates of deposit or repurchase agreements of U.S. commercial
banks having capital and surplus in excess of $500,000,000 and a long
term debt rating of A or better by ▇▇▇▇▇'▇ or S&P, in each case, due
within one year from the date of purchase and payable in U.S. dollars,
or (ii) obligations of the United States Government or any agency
thereof for which the full faith and credit of the United States
Government is pledged due within one year from the date of purchase, or
(iii) obligations guaranteed by the United States Government due within
one year from the date of purchase.
6.1B.(4) Operating Leases. Enter into, or permit to remain in effect,
or become or remain liable, directly or indirectly, as lessee or guarantor (or
other surety) under an Operating Lease, which when combined with all Operating
Leases would require aggregate payments by the Company during any fiscal year to
exceed an aggregate amount equal to 3.5% of Consolidated revenues for such
period.
6.1B.(5) Transactions with Related Party. Effect any transaction with
any Affiliate or Subsidiary by which any asset or services of the Company or a
Subsidiary of the Company is transferred to such Affiliate or Subsidiary, or
from such Affiliate or Subsidiary or enter into any other transaction with an
Affiliate or Subsidiary, on terms more favorable than would be reasonably
expected to be given in a similar transaction with an unrelated entity.
24
6.1C. Sale of Property. The Company will not, and will not permit any
Subsidiary to, Dispose of any property or assets, except:
(i) any Subsidiary may Dispose of its assets to the Company
or a Subsidiary; or
(ii) the Company or any Subsidiary may Dispose of its assets
(whether or not leased back) so long as, immediately after giving
effect to such proposed Disposition:
(A) the consideration for such assets represents
the Fair Market Value of such assets (as determined in good
faith by the Company's Board) at the time of such
Disposition; and
(B) the net book value of all assets so Disposed of
by the Company and its Subsidiaries during the prior 12
months, does not constitute a Substantial Part of the
Consolidated assets; and
(C) no Default or Event of Default shall exist.
For purposes of this paragraph 6C:
(i) "Dispose" means the sale, lease, transfer or other
disposition of property of the Company or any of its Subsidiaries, and
"Disposition" and "Disposed of" has a corresponding meaning to Dispose;
(ii) Calculation of net book value. The net book value of
any assets shall be determined as of the respective date of Disposition
of those assets; and
(iii) Sales of less than all the stock of a Subsidiary. In
the case of the sale or issuance of the stock of a Subsidiary, the
amount of Consolidated Assets contributed by the stock Disposed of
shall be assumed to be the percentage of outstanding stock sold or to
be sold.
6.1D. Subsidiary Stock and Debt. The Company will not:
(i) directly or indirectly sell, assign, pledge or otherwise
dispose of any Debt of or any shares of stock of (or warrants, rights
or
25
options to acquire stock of) any Subsidiary except to a Subsidiary and
except as permitted pursuant to paragraph 6C;
(ii) permit any Subsidiary directly or indirectly to sell,
assign, pledge or otherwise dispose of any Debt of the Company or any
other Subsidiary, or any shares of stock of (or warrants, rights or
options to acquire stock of) any other Subsidiary, except to the
Company or a Subsidiary and except pursuant to paragraph 6C;
(iii) permit any Subsidiary directly or indirectly to issue
or sell any shares of its stock (or warrants, rights or options to
acquire its stock) except to the Company or a Subsidiary and except as
permitted pursuant to paragraph 6B(2) and 6C; or
(iv) permit any Subsidiary to enter into or otherwise be
bound by or subject to any contract or agreement (including, without
limitation, any provision of its certificate or articles of
incorporation or bylaws) that restricts its ability to pay dividends or
other distributions on account of its stock; or
(v) permit any Subsidiary to create, incur, assume or
maintain any Debt except as permitted by paragraph 6A.
6.1E. Restricted Payments. The Company will not, and will not permit
any Subsidiary to:
(a) pay or declare any dividend on any class of its Capital
Stock or make any other distribution on account of any class of its
Capital Stock; or
(b) except as otherwise required pursuant to the Cross
Purchase Agreement and each Stock Purchase Agreement between the
Company, as an original party or as successor by merger for certain of
its Affiliates, and certain stockholders of the Company, redeem,
purchase or otherwise acquire, directly or indirectly (through a
Subsidiary or otherwise), any shares of its Capital Stock (all of the
foregoing events set forth in subsections (a) and (b), whether made in
cash or property, being herein called "Restricted Payments");
unless (i) the aggregate amount of all Restricted Payments made since the date
hereof would not exceed the sum of (A) $500,000, plus (B) since the date hereof,
26
60% of cumulative Consolidated Net Income so long as the Company shall be
organized as a Subchapter S corporation under the Code and 35% of Cumulative
Consolidated Net Income if the Company shall be organized as a "C" corporation
under the Code (or, in either case, minus 100% of cumulative Consolidated Net
Income if such Cumulative Net Income for such period is a loss) and (ii) no
Default or Event of Default shall have occurred and be continuing, and no
Default or Event of Default would occur as a result of such Restricted Payment.
6.1F. ERISA. The Company covenants that it will not, nor permit any
Subsidiary to:
(i) terminate or withdraw from any Plan (other than a
Multiemployer Plan) resulting in the incurrence of any material
liability to the Pension Benefit Guaranty Corporation;
(ii) engage in or permit any Person to engage in any
prohibited transaction (as defined in Section 4975 of the Code)
involving any Plan (other than a Multiemployer Plan) which would
subject the Company or any Subsidiary to any material tax, penalty or
other liability;
(iii) incur or suffer to exist any material accumulated
funding deficiency (as defined in section 302 of ERISA and section 412
of the Code), whether or not waived, involving any Plan (other than a
Multiemployer Plan); or
(iv) allow or suffer to exist any risk or condition which
presents a risk of incurring a material liability to the Pension
Benefit Guaranty Corporation.
6.1G. Environmental Matters. The Company covenants that it will not,
and will not permit any Third Party to, use, produce, manufacture, process,
generate, store, dispose of, manage at, or ship or transport to or from the
Properties any Hazardous Materials except for Hazardous Materials used,
produced, released or managed in the ordinary course of business in compliance
with all applicable Environmental Requirements except where the failure to do so
could not reasonably be expected to have a material adverse effect on the
business, operations or financial condition of the Company and its Subsidiaries
taken as a whole and except for Hazardous Materials released in amounts which do
not require remediation pursuant to applicable Environmental Requirements or if
remediation is required, such remediation could not reasonably be expected
27
to have a material adverse effect on the business, operations or financial
condition of the Company and its Subsidiaries taken as a whole.
6.1H. Specified Laws. Neither the Company nor any agent acting on
its behalf will take any action which could reasonably be expected to cause this
Agreement or the Notes to violate Regulation G, Regulation T or any other
regulation of the Board of Governors of the Federal Reserve System or to violate
the Exchange Act, in any case as in effect now or as the same may hereafter be
in effect.
6.1I. Subordinated Debt. The Company covenants that, until the Notes
have been paid in full, it will not and will not permit any Subsidiary to:
(a) pay principal (including prepayments), interest or
premium, if any, on any Subordinated Debt or retire, redeem, purchase,
defease or otherwise acquire any Subordinated Debt if a Default or
Event of Default shall have occurred and be continuing; or
(b) issue any Subordinated Debt unless the Company has
provided evidence to you, all in form and substance reasonably
satisfactory to you, that it has satisfied each of the following:
(i) no Default or Event of Default exists or would
occur upon such issuance;
(i) the Subordinated Debt is effectively
subordinated to the Notes upon terms and conditions no less
favorable to the holders of the Notes and in form and
substance as set forth in Schedule 6I attached hereto;
(i) the interest rate shall be set on an
arm's-length basis and shall not exceed the market rate and
shall be reasonably acceptable to you;
(iv) the events of default of the Subordinated Debt
shall be limited to (1) acceleration of the Senior Debt (as
defined in Schedule 6I), (2) the occurrence of a Bankruptcy
Proceeding (as defined in Schedule 6I) with respect to the
Company and (3) a failure of the Company to pay interest on
or principal of the Subordinated Debt for a period of
180 days after the date such payment was due; and
28
(v) the affirmative covenants are customary for
subordinated indebtedness and such Subordinated Debt does
not contain or receive the benefit of any negative
covenants; or
(c) waive, supplement, modify, amend, terminate or change
the terms of any Subordinated Debt without the consent of the Required
Holders; or
(d) so long as a Default or Event of Default shall exist,
retain any payment or distribution received pursuant to the terms of
clause (f) of Schedule 6I hereto (or any similar provision) and the
Company hereby agrees that it shall immediately pay over or deliver and
transfer to the Senior Creditors (as defined in Schedule 6I) any such
payment or distribution in accordance with the priorities then existing
among such Senior Creditors.
7. EVENTS OF DEFAULT.
7.1A. Acceleration. If any of the following events shall occur and be
continuing for any reason whatsoever (and whether such occurrence shall be
voluntary or involuntary or come about or be effected by operation of law or
otherwise):
(i) the Company defaults in the payment of any principal of,
or Yield- Maintenance Amount payable with respect to, any Note when the
same shall become due, either by the terms thereof or otherwise as
herein provided; or
(ii) the Company defaults in the payment of any interest on
any Note for more than 10 days after the date due; or
(iii) the Company or any Subsidiary defaults (whether as
primary obligor or as guarantor or other surety) in any payment of
principal of or interest on any other obligation for money borrowed (or
any Capitalized Lease Obligation, any obligation under a conditional
sale or other title retention agreement, any obligation issued or
assumed as full or partial payment for property whether or not secured
by a purchase money mortgage or any obligation under notes payable or
drafts accepted representing extensions of credit) beyond any period of
grace provided with respect thereto, or the Company or any Subsidiary
fails to perform or observe any other agreement, term or condition
contained in any
29
agreement under which any such obligation is created (or if any other
event thereunder or under any such agreement shall occur and be
continuing) and the effect of such failure or other event is to cause,
or to permit the holder or holders of such obligation (or a trustee on
behalf of such holder or holders) to cause, such obligation to become
due (or to be repurchased by the Company or any Subsidiary) prior to
any stated maturity, provided that the aggregate amount of all
obligations as to which such a payment default shall occur and be
continuing or such a failure or other event causing or permitting
acceleration (or resale to the Company or any Subsidiary) shall occur
and be continuing exceeds $500,000; or
(iv) any representation or warranty made by the Company
herein or by the Company or any of its officers in any writing
furnished in connection with or pursuant to this Agreement shall be
false in any material respect on the date as of which made; or
(v) the Company fails to perform or observe any agreement
contained in paragraph 6; or
(vi) the Company fails to perform or observe any other
agreement, term or condition contained herein and such failure shall
not be remedied within 30 days after any Responsible Officer obtains
knowledge or notice thereof; or
(vii) the Company or any Subsidiary makes an assignment for
the benefit of creditors or is generally not paying its debts as such
debts become due; or
(viii) any decree or order for relief in respect of the
Company or any Subsidiary is entered under any bankruptcy,
reorganization, compromise, arrangement, insolvency, readjustment of
debt, dissolution or liquidation or similar law, whether now or
hereafter in effect (herein called the "Bankruptcy Law"), of any
jurisdiction; or
(ix) the Company or any Subsidiary petitions or applies to
any tribunal for, or consents to, the appointment of, or taking
possession by, a trustee, receiver, custodian, liquidator or similar
official of the Company or any Subsidiary, or of any substantial part
of the assets of the Company or any Subsidiary, or commences a
voluntary case under the Bankruptcy Law of the United States or any
proceedings (other than
30
proceedings for the voluntary liquidation and dissolution of a
Subsidiary) relating to the Company or any Subsidiary under the
Bankruptcy Law of any other jurisdiction; or
(x) any such petition or application is filed, or any such
proceedings are commenced, against the Company or any Subsidiary and
the Company or such Subsidiary by any act indicates its approval
thereof, consent thereto or acquiescence therein, or an order, judgment
or decree is entered appointing any such trustee, receiver, custodian,
liquidator or similar official, or approving the petition in any such
proceedings, and such order, judgment or decree remains unstayed and in
effect for more than 45 days; or
(xi) any order, judgment or decree is entered in any
proceedings against the Company decreeing the dissolution of the
Company and such order, judgment or decree remains unstayed and in
effect for more than 60 days; or
(xii) any order, judgment or decree is entered in any
proceedings against the Company or any Subsidiary decreeing a split-up
of the Company or such Subsidiary which requires the divestiture of
assets representing a substantial part, or the divestiture of the stock
of a Subsidiary whose assets represent a substantial part, of the
consolidated assets of the Company and its Subsidiaries (determined in
accordance with generally accepted accounting principles) or which
requires the divestiture of assets, or stock of a Subsidiary, which
shall have contributed a substantial part of the consolidated net
income of the Company and its Subsidiaries (determined in accordance
with generally accepted accounting principles) for any of the three
fiscal years then most recently ended, and such order, judgment or
decree remains unstayed and in effect for more than 60 days; or
(xiii) one or more final judgments in an aggregate amount in
excess of $500,000 is rendered against the Company or any Subsidiary
and, within 60 days after entry thereof, any such judgment is not
discharged or execution thereof stayed pending appeal, or within 60
days after the expiration of any such stay, such judgment is not
discharged; or
(xiv) the Company or any ERISA Affiliate, in its capacity as
an employer under a Multiemployer Plan, makes a complete or partial
31
withdrawal from such Multiemployer Plan resulting in the incurrence by
such withdrawing employer of a withdrawal liability in an amount
exceeding $500,000;
then:
(a) if such event is an Event of Default specified in clause
(i) or (ii) of this paragraph 7A, any holder (other than the Company or
any of its Subsidiaries) of any Note may at its option during the
continuance of such Event of Default, by notice in writing to the
Company, terminate the Facility and/or declare all of the Notes held by
such holder to be, and all of the Notes held by such holder shall
thereupon be and become, immediately due and payable at par together
with interest accrued thereon, without presentment, demand, protest or
notice of any kind, all of which are hereby waived by the Company,
(b) if such event is an Event of Default specified in clause
(viii), (ix) or (x) of this paragraph 7A with respect to the Company,
the Facility shall automatically terminate and all of the Notes at the
time outstanding shall automatically become immediately due and payable
together with interest accrued thereon and together with the Yield-
Maintenance Amount, if any, with respect to each Note, without
presentment, demand, protest or notice of any kind, all of which are
hereby waived by the Company, and
(c) with respect to any event constituting an Event of
Default, the Required Holder(s) of the Notes of any Series may at its
or their option during the continuance of such Event of Default, by
notice in writing to the Company, terminate the Facility and/or declare
all of the Notes of such Series to be, and all of the Notes of such
Series shall thereupon be and become, immediately due and payable
together with interest accrued thereon and together with the
Yield-Maintenance Amount, if any, with respect to each Note of such
Series, without presentment, demand, protest or notice of any kind, all
of which are hereby waived by the Company.
7.1B. Rescission of Acceleration. At any time after any or all of the
Notes of any Series shall have been declared immediately due and payable
pursuant to paragraph 7A, the Required Holder(s) of the Notes of such Series
may, by notice in writing to the Company, rescind and annul such declaration and
its consequences if:
32
(i) the Company shall have paid all overdue interest on the
Notes of such Series, the principal of and Yield-Maintenance Amount, if
any, payable with respect to any Notes of such Series which have become
due otherwise than by reason of such declaration, and interest on such
overdue interest and overdue principal and Yield-Maintenance Amount at
the rate specified in the Notes of such Series,
(ii) the Company shall not have paid any amounts which
have become due solely by reason of such declaration,
(iii) all Events of Default and Defaults, other than non-
payment of amounts which have become due solely by reason of such
declaration, shall have been cured or waived pursuant to paragraph 11C,
and
(iv) no judgment or decree shall have been entered for the
payment of any amounts due pursuant to the Notes of such Series or this
Agreement.
No such rescission or annulment shall extend to or affect any subsequent Event
of Default or Default or impair any right arising therefrom.
7.1C. Notice of Acceleration or Rescission. Whenever any Note shall be
declared immediately due and payable pursuant to paragraph 7A or any such
declaration shall be rescinded and annulled pursuant to paragraph 7B, the
Company shall forthwith give written notice thereof to the holder of each Note
of each Series at the time outstanding.
7.1D. Other Remedies. If any Event of Default or Default shall occur
and be continuing, the holder of any Note may proceed to protect and enforce its
rights under this Agreement and such Note by exercising such remedies as are
available to such holder in respect thereof under applicable law, either by suit
in equity or by action at law, or both, whether for specific performance of any
covenant or other agreement contained in this Agreement or in aid of the
exercise of any power granted in this Agreement. No remedy conferred in this
Agreement upon the holder of any Note is intended to be exclusive of any other
remedy, and each and every such remedy shall be cumulative and shall be in
addition to every other remedy conferred herein or now or hereafter existing at
law or in equity or by statute or otherwise.
33
8. REPRESENTATIONS, COVENANTS AND WARRANTIES. The Company represents,
covenants and warrants as follows (all references to "Subsidiary" and
"Subsidiaries" in this paragraph 8 shall be deemed omitted if the Company has no
Subsidiaries at the time the representations herein are made or repeated):
8.1A. Organization.
(i) The Company is a corporation duly organized and existing in good
standing under the laws of the State of North Carolina, and each Subsidiary is
duly organized and existing in good standing under the laws of the jurisdiction
in which it is incorporated. Schedule 8A hereto is an accurate and complete list
of all Subsidiaries as of the Series A Closing Day, including the jurisdiction
of incorporation and ownership of all such Subsidiaries. The Company and each
Subsidiary has the corporate power to own its respective properties and to carry
on its respective businesses as now being conducted and is duly qualified and
authorized to do business in each other jurisdiction in which the character of
its respective properties or the nature of its respective businesses require
such qualification or authorization except where the failure to be so qualified
or authorized could not reasonably be expected to have a material adverse effect
on the business, operations or financial condition of the Company and its
Subsidiaries, taken as a whole.
(ii) No Subsidiary is a party to, or otherwise subject to, any legal
restriction or any agreement restricting the ability of such Subsidiary to pay
dividends out of profits or make other similar distributions of profits to the
Company or any of its Subsidiaries that owns outstanding shares of Capital Stock
or similar equity interests of such Subsidiary.
8.1B. Financial Statements. The Company has furnished you with the
following financial statements, identified by a principal financial officer of
the Company:
(i) a Consolidated balance sheet as at the last day of the
fiscal year in each of the years 1989 to 1994, inclusive, a
Consolidated statement of income, stockholders' equity and cash flows
for each such year, all reported on by Deloitte & Touche; and
(ii) a Consolidated balance sheet as at September 30, 1995
and Consolidated statements of income, stockholders' equity and cash
34
flows for the nine-month period ended on each such date, prepared by
the Company.
Those financial statements (including any related schedules and/or notes) fairly
present in all material respects (subject, as to interim statements, to the
absence of footnotes or to changes resulting from normal year-end adjustments)
the financial condition of the Company and have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved and show all liabilities, direct and contingent, of the Company
and its Subsidiaries required to be shown in accordance with such principles.
The balance sheets fairly present, in all material respects, the Consolidated
financial condition of the Company and its Subsidiaries as at the dates thereof,
and the statements of income, stockholders' equity and cash flows fairly
present, in all material respects, the Consolidated results of the operations of
the Company and its Subsidiaries, the changes in the Company's stockholders'
equity and their Consolidated cash flows for the periods indicated. There has
been no material adverse change in the business, condition (financial or
otherwise) or operations of the Company and its Subsidiaries taken as a whole
since December 31, 1994.
8.1C. Actions Pending. Except as set forth on Schedule 8L hereto, there
is no action, suit, investigation or proceeding pending or, to the knowledge of
the Company, threatened against the Company or any of its Subsidiaries, or any
properties or rights of the Company or any of its Subsidiaries, by or before any
court, arbitrator or administrative or governmental body which could reasonably
be expected to result in any material adverse change in the business, property
or assets, condition (financial or otherwise) or operations of the Company and
its Subsidiaries taken as a whole.
8.1D. Outstanding Debt. Neither the Company nor any of its Subsidiaries
has outstanding any Debt except as permitted by paragraph 6A. There exists no
default under the provisions of any instrument evidencing such Debt or of any
agreement relating thereto. Schedule 8D hereto (as such Schedule 8D may have
been modified from time to time by written supplements thereto delivered by the
Company to Prudential) is an accurate and complete list of Debt of the Company
and its Subsidiaries on the applicable Closing Day.
8.1E. Title to Properties. The Company has and each of its Subsidiaries
has good and indefeasible title to its respective real properties (other than
properties which it leases) and good title to all of its other respective
properties and assets, including the properties and assets reflected in the most
35
recent audited balance sheet referred to in paragraph 8B (other than properties
and assets disposed of in the ordinary course of business), subject to no Lien
of any kind except Liens permitted by paragraph 6B(1). All leases necessary in
any material respect for the conduct of the respective businesses of the Company
and its Subsidiaries are valid and subsisting and are in full force and effect.
8.1F. Taxes. The Company has filed and each of its Subsidiaries has
filed all federal, state and other income tax returns which, to the best
knowledge of the Chief Financial Officer of the Company and its Subsidiaries,
are required to be filed, and each has paid all taxes as shown on such returns
and on all assessments received by it to the extent that such taxes have become
due, except such taxes as are being contested in good faith by appropriate
proceedings for which adequate reserves have been established in accordance with
generally accepted accounting principles.
8.1G. Conflicting Agreements and Other Matters. Neither the Company nor
any of its Subsidiaries is a party to any contract or agreement or subject to
any charter or other corporate restriction which materially and adversely
affects its business, property or assets, condition (financial or otherwise) or
operations. Neither the execution nor delivery of this Agreement or the Notes,
nor the offering, issuance and sale of the Notes, nor fulfillment of nor
compliance with the terms and provisions hereof and of the Notes will conflict
with, or result in a breach of the terms, conditions or provisions of, or
constitute a default under, or result in any violation of, or result in the
creation of any Lien upon any of the properties or assets of the Company or any
of its Subsidiaries pursuant to, the charter or by-laws of the Company or any of
its Subsidiaries, any award of any arbitrator or any agreement (including any
agreement with stockholders), instrument, order, judgment, decree, statute, law,
rule or regulation to which the Company or any of its Subsidiaries is subject.
Neither the Company nor any of its Subsidiaries is a party to, or otherwise
subject to any provision contained in, any instrument evidencing Debt of the
Company or such Subsidiary, any agreement relating thereto or any other contract
or agreement (including its charter) which limits the amount of, or otherwise
imposes restrictions on the incurring of, Debt of the Company of the type to be
evidenced by the Notes except as set forth in the agreements listed in Schedule
8G hereto.
8.1H. Offering of Notes. Neither the Company nor any agent acting on
its behalf has, directly or indirectly, offered the Notes or any similar
security of the Company for sale to, or solicited any offers to buy the Notes or
any similar security of the Company from, or otherwise approached or negotiated
36
with respect thereto with, any Person other than institutional investors, and
neither the Company nor any agent acting on its behalf has taken or will take
any action which would subject the issuance or sale of the Notes to the
provisions of Section 5 of the Securities Act or to the provisions of any
securities or Blue Sky law of any applicable jurisdiction. The Company hereby
represents and warrants to you that, within the preceding twelve months, neither
the Company nor any other Person acting on behalf of the Company has offered or
sold to any Person (other than accredited investors) any Notes, or any
securities of the same or a similar class as the Notes, or any other
substantially similar securities of the Company.
8.1I. Use of Proceeds. The proceeds of the Series A Notes will be used
to repay the Debt specified in Schedule 8I. None of the proceeds of the sale of
any Notes will be used, directly or indirectly, for the purpose, whether
immediate, incidental or ultimate, of purchasing or carrying any "margin stock"
as defined in Regulation G (12 C.F.R. Part 207) of the Board of Governors of the
Federal Reserve System (herein called "margin stock") or for the purpose of
maintaining, reducing or retiring any Debt which was originally incurred to
purchase or carry any stock that is then currently a margin stock or for any
other purpose which might constitute the purchase of such Notes a "purpose
credit" within the meaning of such Regulation G, unless the Company shall have
delivered to the Purchaser which is purchasing such Notes, on the Closing Day
for such Notes, an opinion of counsel satisfactory to such Purchaser stating
that the purchase of such Notes does not constitute a violation of such
Regulation G. Neither the Company nor any agent acting on its behalf has taken
or will take any action which might cause this Agreement or the Notes to violate
Regulation G, Regulation T or any other regulation of the Board of Governors of
the Federal Reserve System or to violate the Exchange Act, in each case as in
effect now or as the same may hereafter be in effect.
8.1J. ERISA. No accumulated funding deficiency (as defined in
section 302 of ERISA and section 412 of the Code), whether or not waived,
exists with respect to any Plan (other than a Multiemployer Plan). No liability
to the Pension Benefit Guaranty Corporation has been or is expected by the
Company or any ERISA Affiliate to be incurred with respect to any Plan (other
than a Multiemployer Plan) by the Company, any Subsidiary or any ERISA
Affiliate which is or would be materially adverse to the business, property or
assets, condition (financial or otherwise) or operations of the Company and its
Subsidiaries taken as a whole. Neither the Company, any Subsidiary nor any
ERISA Affiliate has incurred or presently expects to incur any withdrawal
liability under Title IV of ERISA with respect to any Multiemployer Plan which
37
is or would be materially adverse to the business, property or assets, condition
(financial or otherwise) or operations of the Company and its Subsidiaries taken
as a whole. The execution and delivery of this Agreement and the issuance and
sale of the Notes will be exempt from or will not involve any transaction which
is subject to the prohibitions of section 406 of ERISA and will not involve any
transaction in connection with which a penalty could be imposed under section
502(i) of ERISA or a tax could be imposed pursuant to section 4975 of the
Code. The representation by the Company in the next preceding sentence is
made in reliance upon and subject to the accuracy of the representation of each
Purchaser in paragraph 9B as to the source of funds to be used by it to
purchase any Notes.
8.1K. Governmental Consent. Neither the nature of the Company or of any
Subsidiary, nor any of their respective businesses or properties, nor any
relationship between the Company or any Subsidiary and any other Person, nor any
circumstance in connection with the offering, issuance, sale or delivery of the
Notes is such as to require any authorization, consent, approval, exemption or
any action by or notice to or filing with any court or administrative or
governmental body (other than routine filings after the Closing Day for any
Notes with the Securities and Exchange Commission and/or state Blue Sky
authorities) in connection with the execution and delivery of this Agreement,
the offering, issuance, sale or delivery of the Notes or fulfillment of or
compliance with the terms and provisions hereof or of the Notes.
8.1L. Environmental Compliance.
(i) The Company and its Subsidiaries and all of their respective
Properties have complied at all times (during such period of time the Company or
its Subsidiaries have owned or operated each such Property) and in all respects
with all Environmental Requirements where failure to comply could reasonably be
expected to have a material adverse effect on the business, condition (financial
or otherwise) or operations of the Company and its Subsidiaries taken as a
whole.
(ii) Except as set forth in Schedule 8L, neither the Company nor any
Subsidiary is subject to any Environmental Liability or Environmental
Requirement which could reasonably be expected to have a material adverse effect
on the business, condition (financial or otherwise) or operations of the Company
and its Subsidiaries, taken as a whole.
38
(iii) Except as set forth in Schedule 8L, neither the Company nor any
Subsidiary has been designated as a potentially responsible party under CERCLA
or under any state statute similar to CERCLA. None of the Properties has been
identified on any current or proposed National Priorities List under 40 C.F.R.
& 300 or any list arising from a state statute similar to CERCLA. None of the
Properties has been identified on any CERCLIS list.
(iv) No Hazardous Materials have been or are being used, produced,
manufactured, processed, generated, stored, disposed of, released, managed at or
shipped or transported to or from the Properties (during such period of time the
Company or its Subsidiaries have owned or operated each such Property) or, to
the actual knowledge of the Company, are otherwise present at, on, in or under
the Properties or, to the actual knowledge of the Company, at or from any
adjacent site or facility, except for Hazardous Materials used, produced,
manufactured, processed, generated, stored, disposed of, released and managed in
the ordinary course of the Company's and any Subsidiary's business in compliance
with all applicable Environmental Requirements and except for Hazardous
Materials present in amounts which have not required and do not require
remediation, pursuant to applicable law or regulation, or if remediation is
required, such remediation could not reasonably be expected to have a material
adverse effect on the business, condition (financial or otherwise) or operations
of the Company and its Subsidiaries, taken as a whole.
(v) The Company and each Subsidiary have procured all permits necessary
under Environmental Requirements for the conduct of their respective businesses
or is otherwise in compliance with all applicable Environmental Requirements,
except to the extent the failure to do so would not reasonably expected to have
a material adverse effect on the business, condition (financial or otherwise) or
operations of the Company and its Subsidiaries, taken as a whole.
8.1M. Disclosure. Neither this Agreement nor any other document,
certificate or statement furnished to any Purchaser by or on behalf of the
Company in connection herewith contains any untrue statement of a material fact
or omits to state a material fact necessary in order to make the statements
contained herein and therein not misleading. There is no fact peculiar to the
Company or any of its Subsidiaries which materially adversely affects or in the
future may (so far as the Company can now reasonably foresee) materially
adversely affect the business, property or assets, condition (financial or
otherwise) or operations of the Company or any of its Subsidiaries and which has
not been set forth in this Agreement.
39
8.1N. Hostile Tender Offers. None of the proceeds of the sale of any
Notes have been or will be used to finance a Hostile Tender Offer.
9. REPRESENTATIONS OF THE PURCHASERS.
Each Purchaser represents as follows:
9.1A. Nature of Purchase. Such Purchaser will acquire the Series A
Notes and any other Shelf Notes purchased from the Company pursuant to this
Agreement for investment for its own account, not as a nominee or agent, and not
with a view to, or for resale in connection with, any distribution thereof
within the meaning of the Securities Act, provided that the disposition of such
Purchaser's property shall at all times be and remain within its control.
9.1B. Source of Funds. You represent that at least one of the
following statements is an accurate representation as to each source of funds (a
"Source") to be used by you to pay the purchase price of the Notes to be
purchased by you hereunder:
(a) the Source constitutes assets allocated to your
"insurance company general account" (as such term is defined under
Section V of the United States Department of Labor's Prohibited
Transaction Exemption ("PTE") 95-60), and as of the date of the
purchase of the Notes, you satisfy all of the applicable requirements
for relief under Sections I and IV of PTE 95-60; or
(b) if you are an insurance company, the Source does not
include assets allocated to any separate account maintained by you in
which any employee benefit plan (or its related trust) has any
interest, other than a separate account that is maintained solely in
connection with your fixed contractual obligations under which the
amounts payable, or credited, to such plan and to any participant or
beneficiary of such plan (including any annuitant) are not affected in
any manner by the investment performance of the separate account; or
(c) the Source is either (i) an insurance company pooled
separate account, within the meaning PTE 90-1 (issued January 29,
1990), or (i) a bank collective investment fund, within the meaning of
the PTE 91-38 (issued July 12, 1991) and, except as you have disclosed
to the Company in writing pursuant to this paragraph (c), no employee
benefit plan or group of plans maintained by the same employer or
40
employee organization beneficially owns more than 10% of all assets
allocated to such pooled separate account or collective investment
fund; or
(d) the Source constitutes asset of an "investment fund"
(within the meaning of Part V of the QPAM Exemption) managed by a
"qualified professional asset manager" or "QPAM" (within the meaning of
Part V of the QPAM Exemption), no employee benefit plan's assets that
are included in such investment fund, when combined with the assets of
all other employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of Section V(c)(1) of
the QPAM Exemption) of such employer or by the same employee
organization and managed by such QPAM, exceed 20% of the total client
assets managed by such QPAM, the conditions of Part I(c) and (g) of the
QPAM Exemption are satisfied, neither the QPAM nor a person controlling
or controlled by the QPAM (applying the definition of "control" in
Section V(e) of the QPAM Exemption) owns a 5% or more interest in the
company and (i) the identity of such QPAM and (i) the names of all
employee benefit plans whose assets are included in such investment
fund have been disclosed to the Company in writing pursuant to
clause (c); or
(e) the Source is a governmental plan; or
(f) the Source is one or more employee benefit plans, or a
separate account or trust fund comprised of one or more employee
benefit plans, each of which has been identified to the Company in
writing pursuant to this clause (f); or
(g) the Source does not include assets of any employee
benefit plan, other than a plan exempt from the coverage of ERISA.
As used in this paragraph 9B, the terms "employee benefit plan",
"governmental plan", "party in interest" and "separate account" shall have the
respective meanings assigned to such terms in Section 3 of ERISA.
9.1C. Business of Purchaser; Prohibited Transferees. Neither
Purchaser, nor any Affiliate of such Purchaser, is engaged in, or owns a 5%
or more interest in a Person engaged in, the hauling of waste or commercial
recycling, nor shall such Purchaser transfer any Note to any Person engaged
41
in, or who owns a 5% or more interest in a Person engaged in, the hauling of
waste or commercial recycling.
10. DEFINITIONS; ACCOUNTING MATTERS. For the purpose of this Agreement,
the terms defined in paragraphs 10A and 10B (or within the text of any other
paragraph) shall have the respective meanings specified therein and all
accounting matters shall be subject to determination as provided in paragraph
10C.
10.1A. Yield-Maintenance Terms.
"Called Principal" shall mean, with respect to any Note, the principal
of such Note that is to be prepaid pursuant to paragraph 4C or is declared to be
immediately due and payable pursuant to paragraph 7A, as the context requires.
"Designated Spread" shall mean .50 of 1% in the case of each Series A
Note and 0% in the case of each Note of any other Series unless the Confirmation
of Acceptance with respect to the Notes of such other Series specifies a
different Designated Spread in which case it shall mean, with respect to each
Note of such other Series, the Designated Spread so specified.
"Discounted Value" shall mean, with respect to the Called Principal of
any Note, the amount obtained by discounting all Remaining Scheduled Payments
with respect to such Called Principal from their respective scheduled due dates
to the Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (as converted to reflect
the periodic basis on which interest on such Note is payable, if payable other
than on a semi-annual basis) equal to the Reinvestment Yield with respect to
such Called Principal.
"Reinvestment Yield" shall mean, with respect to the Called Principal
of any Note, the Designated Spread over the yield to maturity implied by (i) the
yields reported, as of 10:00 A.M. (New York City local time) on the Business Day
next preceding the Settlement Date with respect to such Called Principal, on the
display designated as Page 678 on the Telerate Service (or such other display as
may replace page 678 on the Telerate Service) for actively traded U.S. Treasury
securities having a maturity equal to the Remaining Average Life of such Called
Principal as of such Settlement Date, or (ii) if such yields shall not be
reported as of such time or the yields reported as of such time shall not be
ascertainable, the Treasury Constant Maturity Series yields reported, for the
latest day for which such yields shall have been so reported as of the Business
42
Day next preceding the Settlement Date with respect to such Called Principal, in
Federal Reserve Statistical Release H.15 (519) (or any comparable successor
publication) for actively traded U.S. Treasury securities having a constant
maturity equal to the Remaining Average Life of such Called Principal as of such
Settlement Date. Such implied yield shall be determined, if necessary, by (a)
converting U.S. Treasury ▇▇▇▇ quotations to bond-equivalent yields in accordance
with accepted financial practice and (b) interpolating linearly between yields
reported for various maturities.
"Remaining Average Life" shall mean, with respect to the Called
Principal of any Note, the number of years (calculated to the nearest
one-twelfth year) obtained by dividing (i) such Called Principal into (i) the
sum of the products obtained by multiplying (a) each Remaining Scheduled Payment
of such Called Principal (but not of interest thereon) by (a) the number of
years (calculated to the nearest one-twelfth year) which will elapse between the
Settlement Date with respect to such Called Principal and the scheduled due date
of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" shall mean, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due on or after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to its
scheduled due date.
"Settlement Date" shall mean, with respect to the Called Principal of
any Note, the date on which such Called Principal is to be prepaid pursuant to
paragraph 4A or is declared to be immediately due and payable pursuant to
paragraph 7A, as the context requires.
"Yield-Maintenance Amount" shall mean, with respect to any Note, an
amount equal to the excess, if any, of the Discounted Value of the Called
Principal of such Note over the sum of (i) such Called Principal plus (i)
interest accrued thereon as of (including interest due on) the Settlement Date
with respect to such Called Principal. The Yield-Maintenance Amount shall in no
event be less than zero.
10.1B. Other Terms.
"Acceptance" shall have the meaning specified in paragraph 2B(5).
"Acceptance Day" shall have the meaning specified in paragraph 2B(5).
43
"Acceptance Window" shall have the meaning specified in paragraph
2B(5).
"Accepted Note" shall have the meaning specified in paragraph 2B(5).
"Affiliate" shall mean any Person directly or indirectly controlling,
controlled by, or under direct or indirect common control with, the Company,
except a Subsidiary. A Person shall be deemed to control a corporation if such
Person possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such corporation, whether through
the ownership of voting securities, by contract or otherwise.
"Authorized Officer" shall mean (i) in the case of the Company, its
chief executive officer, its president and chief operating officer, its chief
financial officer, any vice president of the Company designated as an
"Authorized Officer" of the Company in the Information Schedule attached hereto
or any vice president of the Company designated as an "Authorized Officer" of
the Company for the purpose of this Agreement in an Officer's Certificate
executed by the Company's chief executive officer or chief financial officer and
delivered to Prudential, and (i) in the case of Prudential, any officer of
Prudential designated as its "Authorized Officer" in the Information Schedule or
any officer of Prudential designated as its "Authorized Officer" for the purpose
of this Agreement in a certificate executed by one of its Authorized Officers.
Any action taken under this Agreement on behalf of the Company by any individual
who on or after the date of this Agreement shall have been an Authorized Officer
of the Company and whom Prudential in good faith believes to be an Authorized
Officer of the Company at the time of such action shall be binding on the
Company even though such individual shall have ceased to be an Authorized
Officer of the Company, and any action taken under this Agreement on behalf of
Prudential by any individual who on or after the date of this Agreement shall
have been an Authorized Officer of Prudential and whom the Company in good faith
believes to be an Authorized Officer of Prudential at the time of such action
shall be binding on Prudential even though such individual shall have ceased to
be an Authorized Officer of Prudential.
"Available Facility Amount" shall have the meaning specified in
paragraph 2B(1).
"Bankruptcy Law" shall have the meaning specified in clause (viii) of
paragraph 7A.
44
"Business Day" shall mean any day other than (i) a Saturday or a
Sunday, (i) a day on which commercial banks in New York City are required or
authorized to be closed and (i) for purposes of paragraph 2B(3) hereof only, a
day on which The Prudential Insurance Company of America is not open for
business.
"Cancellation Date" shall have the meaning specified in paragraph
2B(8)(iv).
"Cancellation Fee" shall have the meaning specified in paragraph
2B(8)(iv).
"Capital Stock" means, with respect to any Person, the outstanding
capital stock (or any options or warrants to purchase capital stock or other
securities exchangeable for or convertible into capital stock) of such Person.
"Capitalized Lease Obligation" shall mean any rental obligation which,
under generally accepted accounting principles, is or will be required to be
capitalized on the books of the Company or any Subsidiary, taken at the amount
thereof accounted for as indebtedness (net of interest expenses) in accordance
with such principles.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act.
"CERCLIS" shall mean the Comprehensive Environmental Response,
Compensation and Liability Inventory System established pursuant to CERCLA.
"Closing Day" shall mean, with respect to the Series A Notes, the
Series A Closing Day and, with respect to any Accepted Note, the Business Day
specified for the closing of the purchase and sale of such Accepted Note in the
Request for Purchase of such Accepted Note, provided that (i) if the Company and
the Purchaser which is obligated to purchase such Accepted Note agree on an
earlier Business Day for such closing, the "Closing Day" for such Accepted Note
shall be such earlier Business Day, and (i) if the closing of the purchase and
sale of such Accepted Note is rescheduled pursuant to paragraph 2B(7), the
Closing Day for such Accepted Note, for all purposes of this Agreement except
references to "original Closing Day" in paragraph 2B(8)(iii), shall mean the
Rescheduled Closing Day with respect to such Accepted Note.
45
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the rules and regulations promulgated thereunder from time to
time.
"Confirmation of Acceptance" shall have the meaning specified in
paragraph 2B(5).
"Consolidated" shall mean, with respect to any item of financial
information, the item of financial information for the Company and its
Subsidiaries consolidated in accordance with generally accepted accounting
principles.
"Consolidated Current Debt" shall mean with respect to any Person, all
Debt of such Person which by its terms matures on demand or within one year from
the date of the creation thereof and is not directly or indirectly renewable or
extendible at the option of the obligor in respect thereto to a date one year or
more from such date.
"Consolidated Fixed Charges" shall mean, for the Company and its
Subsidiaries on a Consolidated basis, the sum (without duplication) of:
(i) all Rentals (excluding all principal components of
Rentals under Capitalized Lease Obligations) paid during the most
recently completed four fiscal quarters (the "Prior Period"); and
(ii) all Consolidated Interest Charges for the Prior Period.
"Consolidated Interest Charges" shall mean, for the Company and its
Subsidiaries on a Consolidated basis for the four fiscal quarters most recently
ended, all interest expense (as determined in accordance with generally accepted
accounting principles) on all Debt (including imputed interest in respect of
Capitalized Lease Obligations) net of interest income.
"Consolidated Net Income" shall mean, for any period, net income
determined on a consolidated basis for the Company and its Subsidiaries;
provided, however, that there shall not be included in such Consolidated Net
Income:
(i) any net income of any Person if such Person is not a
Subsidiary, except that equity in the net income of any such Subsidiary
for such period shall be included in such Consolidated Net Income up to
the aggregate amount of cash actually distributed by such Subsidiary as
a
46
dividend or other distribution (subject, in the case of a dividend of
other distribution to a Subsidiary, to the limitation contained in
clause (iii) below);
(ii) any net income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such
acquisition except to the extent that there exists for any such Person
audited financial statements for the most recently ended fiscal year of
such Person;
(iii) any net income of Subsidiary if such Subsidiary is
subject to restrictions, directly or indirectly, on the payment of
dividends or the making of distributions by such Subsidiary, directly
or indirectly, to the Company, except that equity in the net income of
any such Subsidiary for such period shall be included in such
Consolidated Net Income up to the aggregate amount of cash actually
distributed by such Subsidiary during such period as a dividend or
other distribution (subject, in the case of a dividend or other
distribution to another Subsidiary, to the limitation contained in this
clause);
(iv) any gain realized upon the sale or other disposition of
any property, plant or equipment (including pursuant to any
sale-leaseback arrangement) which is not sold or otherwise disposed of
in the ordinary course of business and any gain realized upon the sale
or other disposition of any capital stock of any Person; or
(v) any other extraordinary items.
"Consolidated Net Worth" shall mean, at any time, for the Company and
its Subsidiaries on a Consolidated basis shareholders' equity at such time
determined in accordance with generally accepted accounting principles.
"Consolidated Total Capitalization" shall mean, at any time, the sum of
(i) Consolidated Debt at such time plus (ii) Consolidated Net Worth at such
time.
"Cross Purchase Agreement" shall mean the Cross Purchase Agreement
dated July 10, 1990, by and among ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., ▇▇▇▇▇ ▇. ▇▇▇▇▇, J.
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇ ▇. ▇▇▇▇, the Company, Waste Enterprises, Inc., Waste
Industries South, Inc., Waste Industries West, Inc., Waste Industries East, Inc.
and Kabco, Inc., as amended.
47
"Debt" with respect to any Person means, at any time, without
duplication,
(a) its liabilities for borrowed money;
(a) its liabilities for the deferred purchase price of
property acquired by such Person (excluding accounts payable, accrued
expenses, withholding taxes and deferred taxes, in each case arising in
the ordinary course of business, but including, without limitation, all
liabilities created or arising under any conditional sale or other
title retention agreement with respect to any such property);
(a) its Capitalized Lease Obligations;
(a) all liabilities for borrowed money secured by any Lien
with respect to any property owned by such Person (whether or not it
has assumed or otherwise become liable for such liabilities); and
(a) any Guaranty of such Person with respect to liabilities
of a type described in any of clauses (a) through (d) hereof.
Debt of any Person shall include all obligations of such Person of the character
described in clauses (a) through (e) to the extent such Person remains legally
liable in respect thereof notwithstanding that any such obligation is deemed to
be extinguished under GAAP and exclude any accounts payable, accrued expenses,
withholding taxes and deferred taxes, in each case arising in the ordinary
course of business.
"Delayed Delivery Fee" shall have the meaning specified in paragraph
2B(8)(iii).
"EBITDA" means, for any period, Consolidated Net Income adjusted by
adding thereto the amount of all amortization of intangibles, interest, taxes
and depreciation that was deducted in arriving at Consolidated Net Income for
such period.
"Environmental Authority" shall mean any foreign, federal, state, local
or regional government that exercises any duly authorized form of jurisdiction
or authority under any Environmental Requirement.
"Environmental Judgments and Orders" shall mean all judgments,
decrees or orders arising from or in any way associated with any Environmental
Requirements, whether or not entered upon consent or written agreements with
48
an Environmental Authority or other duly authorized entity arising from or in
any way associated with any Environmental Requirement, whether or not
incorporated in a judgment, degree or order.
"Environmental Liabilities" shall mean any liabilities, whether accrued
or contingent, arising from or relating in any way to any Environmental
Requirements.
"Environmental Notices" shall mean any written communication from any
Environmental Authority stating possible or alleged noncompliance with or
possible or alleged liability under any Environmental Requirement, including
without limitation any complaints, citations, demands or requests from any
Environmental Authority for correction of any purported violation of any
Environmental Requirements or any investigation concerning any purported
violation of any Environmental Requirements. Environmental Notices also shall
mean (i) any written communication from any other Person threatening litigation
or administrative proceedings against or involving the Company relating to
alleged violation of any Environmental Requirements and (ii) any complaint,
petition or similar documents filed by any other Person commencing litigation or
administrative proceedings against or involving the Company relating to alleged
violation of any Environmental Requirements.
"Environmental Proceedings" shall mean any judicial or administrative
proceedings arising from or in any way associated with any Environmental
Requirement.
"Environmental Releases" shall mean releases (as defined in CERCLA or
under any applicable state or local environmental law or regulation) of
Hazardous Materials. Environmental Releases does not include releases for which
no remediation or reporting is required by applicable Environmental Requirements
and which do not present a danger to health, safety or the environment.
"Environmental Requirements" shall mean any applicable local, state or
federal law, rule, regulation, permit, order, decision, determination or
requirement relating in any way to Hazardous Materials or to health, safety or
the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
49
"ERISA Affiliate" shall mean any corporation which is a member of the
same controlled group of corporations as the Company within the meaning of
section 414(b) of the Code, or any trade or business which is under common
control with the Company within the meaning of section 414(c) of the Code.
"Event of Default" shall mean any of the events specified in paragraph
7A, provided that there has been satisfied any requirement in connection with
such event for the giving of notice, or the lapse of time, or the happening of
any further condition, event or act, and "Default" shall mean any of such
events, whether or not any such requirement has been satisfied.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Facility" shall have the meaning specified in paragraph 2B(1).
"Facility Fee" shall have the meaning specified in paragraph 2B(8)(i).
"Fair Market Value" means, at any time, the sale value of property that
would be realized in an arm's-length sale at such time between an informed and
willing buyer, and an informed and willing seller, under no compulsion to buy
or sell, respectively.
"Guaranty" or "Guarantee" shall mean, with respect to any Person, any
obligation (except the endorsement in the ordinary course of business of
negotiable instruments for deposit or collection) of such Person guaranteeing or
in effect guaranteeing any indebtedness, dividend or other obligation of any
other Person in any manner, whether directly or indirectly, including (without
limitation) obligations incurred through an agreement, contingent or otherwise,
by such Person:
(i) to purchase such indebtedness or obligation or any
property constituting security therefor;
(ii) to advance or supply funds for the purchase or payment
of such indebtedness or obligation, or to maintain any working capital
or other balance sheet condition or any income statement condition of
any Person or otherwise to advance or make available funds for the
purchase or payment of such indebtedness or obligation;
50
(iii) to lease properties or to purchase properties or
services primarily for the purpose of assuring the owner of such
indebtedness or obligation of the ability of any other Person to make
payment of the indebtedness or obligation; or
(iv) otherwise to assure the owner of such indebtedness or
obligation against loss in respect thereof.
In any computation of the indebtedness or other liabilities of the obligor under
any Guaranty, the indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.
"Hazardous Materials" shall mean (a) hazardous waste as defined in the
Resource Conservation and Recovery Act of 1976, or in any applicable federal,
state or local law or regulation, (b) hazardous substances, as defined in
CERCLA, or in any applicable state or local law or regulation, (c) gasoline, or
any other petroleum product or by-product, (d) toxic substances, as defined in
the Toxic Substances Control Act of 1976, or in any applicable federal, state or
local law or regulation or (e) insecticides, fungicides, or rodenticides, as
defined in the Federal Insecticide, Fungicide, and Rodenticide Act of 1975, or
in any applicable federal, state or local law or regulation, as each such Act,
statute or regulation may be amended from time to time.
"Hedge Treasury Note(s)" shall mean, with respect to any Accepted Note,
the United States Treasury Note or Notes whose duration (as determined by
Prudential) most closely matches the duration of such Accepted Note.
"Hostile Tender Offer" shall mean, with respect to the use of proceeds
of any Note, any offer to purchase, or any purchase of, shares of capital stock
of any corporation or equity interests in any other entity, or securities
convertible into or representing the beneficial ownership of, or rights to
acquire, any such shares or equity interests, if such shares, equity interests,
securities or rights are of a class which is publicly traded on any securities
exchange or in any over-the-counter market, other than purchases of such shares,
equity interests, securities or rights representing less than 5% of the equity
interests or beneficial ownership of such corporation or other entity for
portfolio investment purposes, and such offer or purchase has not been duly
approved by the board of directors of such corporation or the equivalent
governing body of such other entity prior to the date on which the Company makes
the Request for Purchase of such Note.
51
"including" shall mean, unless the context clearly requires otherwise,
"including without limitation".
"Institutional Investors" shall mean (i) any bank, savings bank,
savings and loan association or insurance company, (ii) any pension plan or
portfolio or investment fund managed or administered by any bank, savings bank,
savings and loan association or insurance company, (iii) any investment company
owned by any bank, savings bank, savings and loan association or insurance
company, the majority of the shares of the capital stock of which are traded on
a national securities exchange or in the National Association of Securities
Dealers automated quotation system, or (iv) any investment banking company.
"Intangibles" shall mean goodwill, patents, trademarks, trade names,
organization expense, licenses, franchises, exploration permits and import and
export permits and other like intangibles, determined in accordance with
generally accepted accounting principles.
"Investment" shall mean, when used with respect to any Person, any
direct or indirect advance, loan or other extension of credit or capital
contribution by such Person (by means of transfers of property to others or
payments for property or services for the account or use of others, or
otherwise) to any other Person, or any direct or indirect purchase or other
acquisition or beneficial ownership by such Person of, or of a beneficial
interest in, Capital Stock, partnership interests, bonds, notes, debentures or
other securities issued by any other Person.
"Issuance Period" shall have the meaning specified in paragraph 2B(2).
"Lien" shall mean any mortgage, pledge, security interest, encumbrance,
lien (statutory or otherwise) or charge of any kind (including any agreement to
give any of the foregoing, any conditional sale or other title retention
agreement, any lease in the nature thereof, and the filing of or agreement to
give any financing statement under the Uniform Commercial Code of any
jurisdiction except in connection with an Operating Lease permitted under
Paragraph 6B(4)) or any other type of preferential arrangement for the purpose,
or having the effect, of protecting a creditor against loss or securing the
payment or performance of an obligation.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. or any successor
thereto.
52
"Multiemployer Plan" shall mean any Plan which is a "multiemployer
plan" (as such term is defined in section 4001(a)(3) of ERISA.
"Notes" shall have the meaning specified in paragraph 1B.
"Officer's Certificate" shall mean a certificate signed in the name of
the Company by an Authorized Officer of the Company.
"Operating Leases" shall mean any lease of real or personal property,
plant, equipment or buildings for a term (including any renewals or extension
permitted) greater than one year, which is not a Capitalized Lease Obligation.
"Person" shall mean and include an individual, a partnership, a joint
venture, limited liability company, a corporation, a trust, an unincorporated
organization and a government or any department or agency thereof.
"Plan" shall mean any employee pension benefit plan (as such term is
defined in section 3 of ERISA) which is or has been established or maintained,
or to which contributions are or have been made, by the Company or any
ERISA Affiliate.
"Priority Debt" means with respect any Person, at any time, without
duplication, the sum of
(i) Debt of each Subsidiary (other than Debt held by the
Company or another wholly-owned Subsidiary); and
(i) Debt secured by any Lien other than a Lien described in
clauses (ii), (iii), (ix) and (x) of paragraph 6B(1).
"Properties" shall mean all real property owned, leased or otherwise
used or occupied by the Company or any Subsidiary, wherever located.
"Prudential" shall mean The Prudential Insurance Company of America.
"Prudential Affiliate" shall mean any corporation or other entity all
of the Voting Stock (or equivalent voting securities or interests) of which is
owned by Prudential either directly or through Prudential Affiliates.
53
"Purchasers" shall mean Prudential with respect to the Series A Notes
and, with respect to any Accepted Notes, Prudential and/or the Prudential
Affiliate(s), which are purchasing such Accepted Notes.
"QPAM Exemption" means Prohibited Transaction Class Exemption 84-14
issued by the United States Department of Labor.
"Reasonable Attorneys' Fees" shall mean attorneys' fees based upon
actual hours worked by an attorney at such attorney's normal hourly billing rate
and shall not be based upon any percentage of any amount in dispute, premium,
results achieved or any non-hourly charge.
"Rentals" shall mean for any period of determination all fixed rents or
charges (including as such all payments during any such period of determination
which the lessee is obligated to make on termination of the lease or surrender
of the property) payable by the Company or a Subsidiary (as lessee, sublessee,
licensee, franchisee or the like) for such period under a lease, license, or
other agreement for the use or possession of real or personal property, tangible
or intangible, as determined in accordance with generally accepted accounting
principles.
"Request for Purchase" shall have the meaning specified in paragraph
2B(3).
"Required Holder(s)" shall mean the holder or holders of at least
66-2/3% of the aggregate principal amount of the Notes or of a Series of Notes,
as the context may require, from time to time outstanding.
"Rescheduled Closing Day" shall have the meaning specified in
paragraph 2B(7).
"Responsible Officer" shall mean the chief executive officer, chief
operating officer, chief financial officer or chief accounting officer of the
Company, general counsel of the Company or any other officer of the Company
involved principally in its financial administration or its controllership
function.
"S&P" means Standard & Poor's Rating Group or any successor thereto.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Senior Debt" means all Debt other than Subordinated Debt.
54
"Series" shall have the meaning specified in paragraph 1B.
"Series A Closing Day" shall have the meaning specified in paragraph
2A.
"Series A Note(s)" shall have the meaning specified in paragraph 1A.
"Significant Holder" shall mean (i) Prudential, so long as Prudential
or any Prudential Affiliate shall hold (or be committed under this Agreement to
purchase) any Note, or (ii) any other holder of at least 10% of the aggregate
principal amount of the Notes of any Series from time to time outstanding.
"Subordinated Debt" shall mean Debt which is subordinated in right of
payment to Senior Debt on the terms set forth in Schedule 6I.
"Subsidiary" shall mean, as to any Person, any Person, in which such
Person, or one or more of its Subsidiaries, or such Person and one or more of
its Subsidiaries, owns sufficient equity or voting interests to enable it or
them (as a group) ordinarily, in the absence of contingencies, to elect a
majority of the directors (or Persons performing similar functions) of such
entity, and any partnership or joint venture if more than a 50% interest in the
profits or capital thereof is owned by such Person or one or more of its
Subsidiaries or such Person and one or more of its Subsidiaries (unless such
partnership can and does ordinarily take major business actions without the
prior approval of such Person or one or more of its Subsidiaries).
"Substantial Part" shall mean, with respect to any transfer, assets
which (i) together with all other assets disposed of in the same fiscal year
constitute 10% or more of Consolidated assets determined as of the beginning of
such fiscal year or (ii) have contributed 10% or more of Consolidated Net Income
for the most recently ended period of four fiscal quarters.
"Third Party" shall mean all lessees, sublessees, licensees and other
users of the Properties, excluding those users of the Properties in the ordinary
course of the Company's business (consistent with its practices on the Series A
Closing Day) and on a temporary basis.
"Transferee" shall mean any direct or indirect transferee of all or any
part of any Note purchased by any Purchaser under this Agreement.
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"Voting Stock" shall mean, with respect to any corporation, any shares
of stock of such corporation whose holders are entitled under ordinary
circumstances to vote for the election of directors of such corporation
(irrespective of whether at the time stock of any other class or classes shall
have or might have voting power by reason of the happening of any contingency).
10.1C. Accounting Principles, Terms and Determinations. All references
in this Agreement to "generally accepted accounting principles" shall be deemed
to refer to generally accepted accounting principles in effect in the United
States at the time of application thereof. Unless otherwise specified herein,
all accounting terms used herein shall be interpreted, all determinations with
respect to accounting matters hereunder shall be made, and all unaudited
financial statements and certificates and reports as to financial matters
required to be furnished hereunder shall be prepared, in accordance with
generally accepted accounting principles applied on a basis consistent with the
most recent audited financial statements delivered pursuant to clause (ii) of
paragraph 5A or, if no such statements have been so delivered, the most recent
audited financial statements referred to in clause (i) of paragraph 8B.
11. MISCELLANEOUS.
11.1A. Payments. The Company agrees that, so long as any Purchaser
shall hold any Note, it will make payments of principal of, interest on, and any
Yield-Maintenance Amount payable with respect to, such Note, which comply with
the terms of this Agreement, by wire transfer of immediately available funds for
credit (not later than 12:00 noon, New York City local time, on the date due) to
(i) the account or accounts of such Purchaser specified in the Purchaser
Schedule attached hereto in the case of any Series A Note, (ii) the account or
accounts of such Purchaser specified in the Confirmation of Acceptance with
respect to such Note in the case of any Shelf Note or (iii) such other account
or accounts in the United States as such Purchaser may from time to time
designate in writing, notwithstanding any contrary provision herein or in any
Note with respect to the place of payment. Each Purchaser agrees that, before
disposing of any Note, it will make a notation thereon (or on a schedule
attached thereto) of all principal payments previously made thereon and of the
date to which interest thereon has been paid. The Company agrees to afford the
benefits of this paragraph 11A to any Transferee which shall have made the same
agreement as the Purchasers have made in this paragraph 11A.
11.1B. Expenses. The Company agrees, whether or not the
transactions contemplated hereby shall be consummated, to pay, and save
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Prudential, each Purchaser and any Transferee harmless against liability for the
payment of, all out-of-pocket expenses arising in connection with such
transactions, including:
(i) all taxes (together in each case with interest and
penalties, if any), other than state, federal, local or foreign income
taxes, intangible taxes, or franchise taxes, including without
limitation, all stamp, recording and other similar taxes, which may be
payable with respect to the execution and delivery of this Agreement or
the execution, delivery or acquisition of any Note;
(ii) all document production and duplication charges and the
Reasonable Attorneys' Fees and expenses of any special counsel engaged
by the Purchasers in connection with this Agreement, the transactions
contemplated hereby and any subsequent proposed modification of, or
proposed consent under, this Agreement, whether or not such proposed
modification shall be effected or proposed consent granted; provided,
however, where there are multiple Purchasers for any single Series of
Notes issued under this Agreement, the Company shall pay and be liable
for the Reasonable Attorneys' Fees and expenses of a single special
counsel engaged by such Purchasers to represent all such Purchasers in
such transaction (except as set forth below); and
(iii) the reasonable costs and expenses, including
Reasonable Attorneys' Fees, actually incurred by you, any other
Purchaser or any Transferee in connection with the restructuring,
refinancing or "work out" of this Agreement or the Notes or the
transactions contemplated hereby or thereby or in enforcing (or
determining whether or how to enforce) any rights under this Agreement
or the Notes or in responding to any subpoena or other legal process or
informal investigative demand issued in connection with this Agreement
or the Notes or the transactions contemplated hereby or by reason of
your or any Transferee's having acquired any Note, including without
limitation costs and expenses incurred in any bankruptcy case.
Notwithstanding the foregoing, the Company shall not be liable for any counsel
fees incurred by any Purchaser or Transferee arising in connection with a
transfer in the ordinary course of any Note or portion thereof or interest
therein by Prudential or any other Purchaser to any Transferee. The obligations
of the Company under this paragraph 11B shall survive the transfer of any Note
or
57
portion thereof or interest therein by any Purchaser or any Transferee and the
payment of any Note.
11.1C. Consent to Amendments. This Agreement may be amended, and the
Company may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, if the Company shall obtain the written consent
to such amendment, action or omission to act, of the Required Holder(s) of the
Notes of each Series except that, (i) with the written consent of the holders of
all Notes of a particular Series, and if an Event of Default shall have occurred
and be continuing, of the holders of all Notes of all Series, at the time
outstanding (and not without such written consents), the Notes of such Series
may be amended or the provisions thereof waived to change the maturity thereof,
to change or affect the principal thereof, or to change or affect the rate or
time of payment of interest on or any Yield-Maintenance Amount payable with
respect to the Notes of such Series, (ii) without the written consent of the
holder or holders of all Notes at the time outstanding, no amendment to or
waiver of the provisions of this Agreement shall change or affect the provisions
of paragraph 7A or this paragraph 11C insofar as such provisions relate to
proportions of the principal amount of the Notes of any Series, or the rights of
any individual holder of Notes, required with respect to any declaration of
Notes to be due and payable or with respect to any consent, amendment, waiver or
declaration, (iii) with the written consent of Prudential (and not without the
written consent of Prudential) the provisions of paragraph 2B may be amended or
waived (except insofar as any such amendment or waiver would affect any rights
or obligations with respect to the purchase and sale of Notes which shall have
become Accepted Notes prior to such amendment or waiver), and (iv) with the
written consent of all of the Purchasers which shall have become obligated to
purchase Accepted Notes of any Series (and not without the written consent of
all such Purchasers), any of the provisions of paragraphs 2B and 3 may be
amended or waived insofar as such amendment or waiver would affect only rights
or obligations with respect to the purchase and sale of the Accepted Notes of
such Series or the terms and provisions of such Accepted Notes. Each holder of
any Note at the time or thereafter outstanding shall be bound by any consent
authorized by this paragraph 11C, whether or not such Note shall have been
marked to indicate such consent, but any Notes issued thereafter may bear a
notation referring to any such consent. No course of dealing between the Company
and the holder of any Note nor any delay in exercising any rights hereunder or
under any Note shall operate as a waiver of any rights of any holder of such
Note. As used herein and in the Notes, the term "this Agreement" and references
thereto shall mean this Agreement as it may from time to time be amended or
supplemented.
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11.1D. Form and Registration; Transfer and Exchange; Transfer
Restrictions; Lost Notes.
11.1D.(1) Form and Registration. The Notes are issuable as registered
notes without coupons in denominations of at least $1,000,000, except as may be
necessary to reflect any principal amount not evenly divisible by $1,000,000.
The Company shall keep at its principal office a register in which the Company
shall provide for the registration of Notes and of transfers of Notes. Upon
surrender for registration of transfer of any Note at the principal office of
the Company, the Company shall, at its expense, execute and deliver one or more
new Notes of like tenor and of a like aggregate principal amount, registered in
the name of such transferee or transferees.
11.1D.(2) Transfer and Exchange of Notes. At the option of the holder
of any Note, such Note may be exchanged for other Notes of like tenor and of any
authorized denominations, of a like aggregate principal amount, upon surrender
of the Note to be exchanged at the principal office of the Company. Whenever any
Notes are so surrendered for exchange, the Company shall, at its expense,
execute and deliver the Notes which the holder making the exchange is entitled
to receive. Each installment of principal payable on each installment date upon
each new Note issued upon any such transfer or exchange shall be in the same
proportion to the unpaid principal amount of such new Note as the installment of
principal payable on such date on the Note surrendered for registration of
transfer or exchange bore to the unpaid principal amount of such Note. No
reference need be made in any such new Note to any installment or installments
of principal previously due and paid upon the Note surrendered for registration
of transfer or exchange. Every Note surrendered for registration of transfer or
exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer duly executed, by the holder of such Note or such holder's attorney
duly authorized in writing. Any Note or Notes issued in exchange for any Note or
upon transfer thereof shall carry the rights to unpaid interest and interest to
accrue which were carried by the Note so exchanged or transferred, so that
neither gain nor loss of interest shall result from any such transfer or
exchange.
11.1D.(3) Transfer Restrictions. You hereby agree that you shall not
transfer any Note, or portion thereof, to any Person unless such Person is an
Institutional Investor or not specified on Schedule 11D(3).
11.1D.(4) Lost Notes. Upon receipt of written notice from the holder of
any Note of the loss, theft, destruction or mutilation of such Note and,
59
in the case of any such loss, theft or destruction, upon receipt of such
holder's unsecured indemnity agreement, in form and substance reasonably
satisfactory to the Company, or in the case of any such mutilation upon
surrender and cancellation of such Note, the Company will make and deliver a new
Note, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Note.
11.1E. Persons Deemed Owners; Participations. Prior to due presentment
for registration of transfer, the Company may treat the Person in whose name any
Note is registered as the owner and holder of such Note for the purpose of
receiving payment of principal of and interest on, and any Yield- Maintenance
Amount payable with respect to, such Note and for all other purposes whatsoever,
whether or not such Note shall be overdue, and the Company shall not be affected
by notice to the contrary. Subject to the preceding sentence, the holder of any
Note may from time to time grant participations in all or any part of such Note
to any Person on such terms and conditions as may be determined by such holder
in its sole and absolute discretion.
11.1F. Survival of Representations and Warranties; Entire Agreement.
All representations and warranties contained herein or made in writing by or on
behalf of the Company in connection herewith shall survive the execution and
delivery of this Agreement and the Notes, the transfer by any Purchaser of any
Note or portion thereof or interest therein and the payment of any Note, and may
be relied upon by any Transferee, regardless of any investigation made at any
time by or on behalf of any Purchaser or any Transferee. Subject to the
preceding sentence, this Agreement and the Notes embody the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersede all prior agreements and understandings relating to such
subject matter.
11.1G. Successors and Assigns. All covenants and other agreements in
this Agreement contained by or on behalf of any of the parties hereto shall bind
and inure to the benefit of the respective successors and assigns of the parties
hereto (including, without limitation, any Transferee) whether so expressed or
not.
11.1H. Independence of Covenants. All covenants hereunder shall be
given independent effect so that if a particular action or condition is
prohibited by any one of such covenants, the fact that it would be permitted by
an exception to, or otherwise be in compliance within the limitations of,
another
60
covenant shall not avoid the occurrence of a Default or Event of Default if such
action is taken or such condition exists.
11.1I. Notices. All written communications provided for hereunder
(other than communications provided for under paragraph 2) shall be sent by
first class mail or nationwide overnight delivery service (with charges prepaid)
and (i) if to any Purchaser, addressed as specified for such communications in
the Purchaser Schedule attached hereto (in the case of the Series A Notes) or
the Purchaser Schedule attached to the applicable Confirmation of Acceptance (in
the case of any Shelf Notes) or at such other address as any such Purchaser
shall have specified to the Company in writing, (ii) if to any other holder of
any Note, addressed to it at such address as it shall have specified in writing
to the Company or, if any such holder shall not have so specified an address,
then addressed to such holder in care of the last holder of such Note which
shall have so specified an address to the Company and (iii) if to the Company,
addressed to it at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Chief Financial Officer, telephone (▇▇▇) ▇▇▇-▇▇▇▇,
telecopy (▇▇▇) ▇▇▇-▇▇▇▇, provided, however, that any such communication to the
Company may also, at the option of the Person sending such communication, be
delivered by any other means either to the Company at its address specified
above or to any Authorized Officer of the Company. Any communication pursuant to
paragraph 2 shall be made by the method specified for such communication in
paragraph 2, and shall be effective to create any rights or obligations under
this Agreement only if, in the case of a telephone communication, an Authorized
Officer of the party conveying the information and of the party receiving the
information are parties to the telephone call, and in the case of a telecopier
communication, the communication is signed by an Authorized Officer of the party
conveying the information, addressed to the attention of an Authorized Officer
of the party receiving the information, and in fact received at the telecopier
terminal the number of which is listed for the party receiving the communication
in the Information Schedule or at such other telecopier terminal as the party
receiving the information shall have specified in writing to the party sending
such information.
11.1J. Payments Due on Non-Business Days. Anything in this Agreement or
the Notes to the contrary notwithstanding, any payment of principal of or
interest on, or Yield-Maintenance Amount payable with respect to, any Note that
is due on a date other than a Business Day shall be made on the next succeeding
Business Day. If the date for any payment is extended to the next succeeding
Business Day by reason of the preceding sentence, the
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period of such extension shall be included in the computation of the interest
payable on such Business Day.
11.1K. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11.1L. Descriptive Headings. The descriptive headings of the several
paragraphs of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
11.1M. Satisfaction Requirement. If any agreement, certificate or other
writing, or any action taken or to be taken, is by the terms of this Agreement
required to be satisfactory to any Purchaser, to any holder of Notes or to the
Required Holder(s), the determination of such satisfaction shall be made by such
Purchaser, such holder or the Required Holder(s), as the case may be, in the
sole and exclusive judgment (exercised in good faith) of the Person or Persons
making such determination.
11.1N. Governing Law; Submission to Jurisdiction. This Agreement shall
be construed and enforced in accordance with, and the rights of the Parties
shall be governed by, the Internal Law of the State of New York. THE COMPANY
HEREBY SUBMITS TO THE JURISDICTION OF THE SUPREME COURT OF THE STATE OF NEW YORK
LOCATED IN NEW YORK COUNTY, NEW YORK AND THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK AND IRREVOCABLY AGREES THAT, SUBJECT TO THE
SOLE AND ABSOLUTE ELECTION OF THE REQUIRED HOLDER(S) AND TO THE EXTENT PERMITTED
BY APPLICABLE LAW, ALL ACTIONS OR PROCEEDINGS RELATING TO THIS AGREEMENT OR THE
NOTES SHALL BE LITIGATED IN SUCH COURTS, AND THE COMPANY WAIVES ANY OBJECTION
WHICH IT MAY HAVE BASED ON IMPROPER VENUE OR FORUM NON CONVENIENS TO THE CONDUCT
OF ANY PROCEEDING IN ANY SUCH COURTS.
11.1O. Severalty of Obligations. The sales of Notes to the Purchasers
are to be several sales, and the obligations of Prudential and the Purchasers
under this Agreement are several obligations. No failure by Prudential or any
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Purchaser to perform its obligations under this Agreement shall relieve
Prudential, any other Purchaser or the Company of any of its obligations
hereunder, and neither Prudential nor any Purchaser shall be responsible for the
obligations of, or any action taken or omitted by, any other such Person
hereunder.
11.1P. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
11.1Q. Binding Agreement. When this Agreement is executed and delivered
by the Company and Prudential, it shall become a binding agreement between the
Company and Prudential. This Agreement shall also inure to the benefit of each
Purchaser which shall have executed and delivered a Confirmation of Acceptance,
and each such Purchaser shall be bound by this Agreement to the extent provided
in such Confirmation of Acceptance.
Very truly yours,
WASTE INDUSTRIES, INC.
By:
Name:
Title:
The foregoing Agreement is
hereby accepted as of the
date first above written.
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By:
Name:
Title: