UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) March 31, 1995
Rollins Environmental Services, Inc.
(Exact name of registrant as specified in its charter)
Delaware 1-8368 51-0228924
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File number) Identification No.)
One Rollins Plaza, Wilmington, Delaware 19803
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (302) 426-2700
(Former name or former address, if changed since last report.)
<PAGE>
ITEM 2. ACQUISITION OF ASSETS.
On March 31, 1995, the Rollins Environmental Services, Inc.
("Registrant") acquired from Westinghouse Electric Corporation
("Seller") all of the issued and outstanding shares of capital stock of
National Electric, Inc. ("NEI"), a wholly owned subsidiary of the Seller.
NEI owns all of the issued and outstanding shares of capital stock
of Aptus, Inc. ("Aptus"). NEI is not conducting any business operations.
Aptus is engaged in the sale of services related to the transportation,
storage, laboratory analysis and incineration of certain types of
hazardous waste. The major facilities are located in Aragonite, Utah;
Coffeyville, Kansas; Denver, Colorado; Houston, Texas and Lakeville,
Minnesota. The Registrant intends to continue the business of Aptus.
The purchase price of $135 million consisted of a cash payment of
$6.5 million, the assumption of the Seller's obligations and duties in
connection with the $45.7 million of Tooele County, Utah Variable Rate
Hazardous Waste Treatment Revenue Bonds, Series A and the issuance to
the Seller of $16.8 million of 7.75% Senior Unsecured Debentures and
$66.0 million of 7.25% Subordinated Convertible Debentures.
The acquisition is being accounted for under the purchase method of
accounting.
ITEM 5. OTHER EVENTS
In connection with the acquisition described in Item 2, the
Registrant entered into Amendment No. 1 dated March 31, 1995 amending
the Rights Agreement dated as of June 14, 1989 between the Company and
Registrar and Transfer Company. In order to avoid a Triggering Event
(as defined in the Rights Agreement), the amendment provides that
Seller shall not be deemed to be the Beneficial Owner (as defined in
the Rights Agreement) of Common Stock of the Registrant due to its
ownership of the Convertible Debentures or any Common Stock acquired
upon conversion of the Convertible Debentures.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of business acquired
(1) Consolidated Financial Statements - National Electric,
Inc.
Consolidated Balance Sheet at December 31, 1994
and 1993
Consolidated Statement of Income for the years
ended December 31, 1994 and 1993
Consolidated Statement of Cash Flows for the years
ended December 31, 1994 and 1993
Notes to the Financial Statements
(2) Report of Independent Accountants
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (con'd.).
(4)(i) As of the date of this report, financial statements
subsequent to December 31, 1994
are not yet available.
(ii) Audited financial statements as identified in (a)(1)
above are included with this report.
(iii) The remaining required financial statements will be
filed on or before June 14, 1995.
(b) Pro forma financial information
As of the date of this report, pro forma information required
pursuant to Article 11 of Regulation S-X is not yet available.
Such required information will be filed on or before June 14, 1995.
(c) Exhibits:
Exhibit index
Exhibit
Number
(2) Stock Purchase Agreement between Westinghouse Electric
Corporation (Seller) and Rollins Environmental
Services, Inc. (Buyer) for National Electric, Inc., a
Minnesota corporation, dated as of March 7, 1995.
(4)(a) Indenture dated as of March 31, 1995 between Rollins
Environmental Services, Inc. and First Fidelity Bank,
National Association, as Trustee covering the issue of
$16,800,000 of 7.75% Senior Unsecured Debentures Due
March 31, 2005.
(b) Indenture dated as of March 31, 1995 between Rollins
Environmental Services, Inc. and Texas Commerce Bank
National Association, as Trustee covering the issue of
$66,000,000 of 7.25% Convertible Subordinated Debentures
Due March 31, 2005.
(c) Debenture Purchase Agreement dated as of March 31, 1995
between Rollins Environmental Services, Inc. and
Westinghouse Electric Corporation.
(d) Assignment and Assumption Agreement dated March 31, 1995
between Rollins Environmental Services, Inc. and
Westinghouse Electric Corporation assigning to Rollins
all of the obligations of Westinghouse under the Loan
Agreement dated as of June 1, 1990 between Tooele
County, Utah and Westinghouse Electric Corporation
relating to Variable Rate Hazardous Waste Treatment
Revenue Bonds, Series A (as attached to the Assignment
and Assumption Agreement).
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (con'd)
(e) Rights Agreement dated as of June 14, 1989 between
Rollins Environmental Services, Inc. and Registrar and
Transfer Company, as Rights Agent. The Rights Agreement
includes Exhibit A the form of Right Certificate.
Pursuant to the Rights Agreement, Rights Certificates
will not be distributed until after the Distribution
Date (as defined therein).
(f) Amendment No. 1 dated as of March 31, 1995 to Rights
Agreement between Rollins Environmental Services, Inc.
and Registrar and Transfer Company, as Rights Agent.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.
Rollins Environmental Services, Inc.
DATE: April 13, 1995 BY: /s/ Leo F. Rattigan, Jr.
Vice President-Finance and
Treasurer
ITEM 7(a)
Report of Independent Accountants
To the Board of Directors and Shareholders
of Westinghouse Electric Corporation
In our opinion, the accompanying consolidated balance sheet and the
related consolidated statements of income and of cash flows present
fairly, in all material respects, the financial position of National
Electric, Inc. and its subsidiary (collectively, NEI), a wholly owned
subsidiary of Westinghouse Electric Corporation (Westinghouse), at
December 31, 1994 and 1993, and the results of their operations and
their cash flows for the years then ended in conformity with
generally accepted accounting principles. These financial statements
are the responsibility of Westinghouse's management; our
responsibility is to express an opinion on these financial statements
based on our audits. We conducted our audits of these statements in
accordance with generally accepted auditing standards which require
that we plan and perform the audit to obtain reasonable assurance
about whether these financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for the opinion expressed above.
As discussed in Note 2 to the accompanying financial statements, NEI
adopted Statement of Financial Accounting Standard No. 112,
"Employers' Accounting for Postemployment Benefits," in 1993. As
discussed in Note 3 to the accompanying financial statements, NEI is
a wholly owned subsidiary of Westinghouse and has engaged in various
transactions and relationships with other Westinghouse entities.
Because of these relationships, it is possible that the terms of
these transactions are not the same as those that would result from
transactions among wholly unrelated parties.
Price Waterhouse LLP
600 Grant Street
Pittsburgh, Pennsylvania 15219
January 27, 1995
PAGE
<PAGE>
Westinghouse Electric Corporation
National Electric, Inc.
Consolidated Balance Sheet
(in thousands, except per share amounts)
At December 31,
1994 1993
Assets:
Cash (note 3) $ 1 $ 2
Accounts receivable (net of allowance for
doubtful accounts of $1,087 and $606)
(note 2) 14,937 19,376
Deferred income taxes (note 6) 4,250 4,682
Prepaid and other current assets (note 2) 853 1,100
Total current assets 20,041 25,160
Plant and equipment (net of accumulated
depreciation of $36,480 and $26,107)
(notes 2 and 7) 104,262 114,603
Goodwill (net of accumulated amortization
of $7,250 and $6,102) (note 2) 38,666 39,815
Total assets $162,969 $179,578
Liabilities and Shareholder's Equity:
Accounts payable $ 5,358 $ 5,533
Unearned revenue (note 2) 7,852 8,710
Reserve for groundwater remediation (note 9) 5,079 4,379
Current portion of capital lease obligations
(note 11) 302 459
Other current liabilities (note 8) 4,343 4,217
Total current liabilities 22,934 23,298
Deferred income taxes (note 6) 6,075 6,439
Capital lease obligations (note 11) 976 2,285
Other noncurrent liabilities 1,410 709
Total liabilities 31,395 32,731
Contingent liabilities and commitments
(note 9) - -
Shareholder's Equity:
Common stock, $100 par value (3,000 shares
authorized, issued and outstanding) 300 300
Capital in excess of par value 36,700 36,700
Retained earnings (deficit) (10,057) 2,066
Additional capital provided by parent
company (note 3) 104,631 107,781
Total shareholder's equity 131,574 146,847
Total liabilities and shareholder's equity $162,969 $179,578
The accompanying notes are an integral part of these financial
statements.
PAGE
<PAGE>
Westinghouse Electric Corporation
National Electric, Inc.
Consolidated Statement of Income
(in thousands)
Year ended December 31,
1994 1993
Revenues:
Customer revenues (note 2) $ 82,636 $ 77,683
Related party revenues (note 3) 5,811 6,994
Total revenues 88,447 84,677
Cost of revenues:
Cost of customer revenues (54,369) (51,503)
Cost of related party revenues (note 3) (2,125) (3,985)
Total cost of revenues (56,494) (55,488)
Expenses:
Selling, general and administrative (26,442) (27,767)
Depreciation and amortization (12,376) (13,100)
Provision for groundwater remediation
(note 9) (1,536) (268)
Provision for restructuring (notes 8 and 10) - (450)
Total cost of revenues and expenses (96,848) (97,073)
Loss from operations (8,401) (12,396)
Interest expense (note 3) (5,915) (6,309)
Other income and expenses, net (126) (18)
Loss before taxes (14,442) (18,723)
Income tax benefit (note 6) 2,319 4,493
Loss before cumulative effect of
change in accounting principle (12,123) (14,230)
Cumulative effect of change in accounting
for postemployment benefits (notes 2 and 5) - (272)
Net loss (12,123) (14,502)
Retained earnings at beginning of year 2,066 16,568
Retained earnings (deficit) at end of year $(10,057) $ 2,066
The accompanying notes are an integral part of these financial
statements.
<PAGE>
Westinghouse Electric Corporation
National Electric, Inc.
Consolidated Statement of Cash Flows
(in thousands)
Year ended December 31,
1994 1993
Operating Activities:
Net loss $(12,123) $(14,502)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 12,376 13,100
Deferred income taxes 68 4,105
Provision for losses on accounts receivable 492 491
Provision for groundwater remediation 1,536 268
Provision for restructuring - 450
Loss on sales of assets 125 80
Changes in assets and liabilities
excluding sales of assets:
Accounts receivable 3,947 (949)
Prepaid and other current assets 247 851
Accounts payable and other current
liabilities (1,742) (8,251)
Other noncurrent assets and liabilities 701 559
Net cash provided by (used in) operating
activities 5,627 (3,798)
Investing Activities:
Capital expenditures (2,075) (4,362)
Proceeds from sales of assets 38 16
Net cash used in investing activities (2,037) (4,346)
Financing Activities:
Payments under capital lease obligations (441) (405)
Net receipts from (payments to) parent company (3,150) 8,550
Net cash provided by (used in) financing
activities (3,591) 8,145
Increase (decrease) in cash (1) 1
Cash at beginning of year 2 1
Cash at end of year $ 1 $ 2
Non-cash investing and financing activities:
Transfers of equipment to affiliate and
related decrease in additional capital
provided by parent company $ - $ (2,138)
Capital lease asset additions and
related increase in obligation - 501
Capital lease asset terminations and
related decrease in obligation (1,025) -
The accompanying notes are an integral part of these financial
statements.
<PAGE>
National Electric, Inc.
Notes to the Financial Statements
Note 1: Basis of Presentation
National Electric, Inc. (NEI) is a wholly owned subsidiary of
Westinghouse Electric Corporation (Westinghouse) and is a distinct
legal entity. Westinghouse is incorporated in the Commonwealth of
Pennsylvania. NEI is incorporated in Minnesota.
NEI, acquired by Westinghouse in a stock purchase in 1988, primarily
provides services related to the transportation, storage, laboratory
analysis and incineration of certain types of hazardous waste. NEI
conducts these activities through Aptus, Inc. (Aptus), a Delaware
corporation and a wholly owned subsidiary of NEI. Aptus's major
facilities include two waste incineration and laboratory analysis
facilities located in Coffeyville, Kansas and Aragonite, Utah; a
waste transfer, storage and laboratory analysis facility located in
Lakeville, Minnesota; and sales offices located in Denver, Colorado,
Pittsburgh, Pennsylvania and Houston, Texas. Aptus also provides
waste transportation services out of its facilities in Kansas and
Minnesota. The facility in Coffeyville has the only commercially
licensed fixed-base dioxin incinerator in the U.S. NEI's customers
primarily operate in the petrochemical and chemical industries. See
note 2.
The Securities and Exchange Commission, in Staff Accounting Bulletin
Number 55, requires that historical financial statements of a
subsidiary, division, or lesser business component of another entity
include certain expenses incurred by the parent on its behalf.
These expenses generally include, but are not limited to, officer and
employee salaries, rent, depreciation, advertising, accounting and
legal services, other selling, general and administrative expenses
and other such expenses. These financial statements include the
estimated costs of such expenses and services. See note 3.
Historically, NEI's results of operations have been included in the
consolidated U.S. federal income tax return of Westinghouse. The
income tax expense and other tax related information in these
statements has been calculated as if NEI had not been eligible to be
included in the consolidated tax returns of Westinghouse (i.e. NEI on
a stand-alone basis). The calculation of tax provisions and deferred
taxes required certain assumptions, allocations and estimates which
management believes are reasonable to accurately reflect the tax
reporting for NEI as a stand-alone taxpayer.
These consolidated financial statements have been prepared by
Westinghouse management in conformity with generally accepted
accounting principles and include such estimates and adjustments as
deemed necessary to present fairly the consolidated financial
position of NEI at December 31, 1994 and 1993, and the results of
their operations and their cash flows for the years then ended.
<PAGE>
Note 2: Summary of Significant
Accounting Policies
Consolidation
These consolidated financial statements include the accounts of NEI
after elimination of intercompany accounts and transactions other
than those with other units of Westinghouse as described in note 3.
Revenue Recognition and Unearned Revenue
NEI's revenues are derived from contracting with customers for the
transportation, treatment, storage and incineration of hazardous
waste. Revenues are recognized generally in two phases during the
waste disposal process. The first phase is as waste is accepted into
Aptus's permitted warehouses. The acceptance process includes
transporting and receiving the waste, testing the waste to determine
that it meets certain minimum standards, and storing the waste until
incineration. The second phase is upon completion of waste
incineration. The amount of revenue recognized in each phase is
based on historical percentages of the total direct costs of each
phase to the total direct costs of the waste disposal process,
applied to the total revenue specified in the contract. For 1994 and
1993, the percentage of contract revenues recognized for waste
accepted was approximately 30 percent.
Unearned revenue represents amounts billed to customers for waste
incineration services yet to be performed.
Plant Closure Costs
In 1993, NEI adopted a program of providing for estimated plant
closure costs over a period of 15 years. NEI estimates that, in the
event the Corporation elected to shutdown all operations, the net
cost to dismantle its facilities and complete any necessary site
remediation would total approximately $4.5 million. At December 31,
1994 and 1993, the reserve for estimated plant closure costs totalled
$0.6 million and $0.3 million, respectively, and is classified as an
other noncurrent liability.
Accounts Receivable and Concentrations of Credit Risk
NEI's customers primarily operate in the petrochemical and chemical
industries. At December 31, 1994 and 1993, 88 percent and 82
percent, respectively, of accounts receivable were from customers in
those industries, with the remainder primarily from customers in the
utilities industry.
NEI's customers in the petrochemical and chemical industries include
those that contract directly with NEI for waste incineration
services, as well as hazardous waste brokers. At both December 31,
1994 and 1993, 41 percent and 45 percent, respectively, of accounts
receivable were from hazardous waste brokers.
Accounts receivable at December 31, 1994 and 1993 included no
significant geographic or individual borrower concentrations of
credit risk. NEI performs ongoing credit evaluations of its
customers and generally does not require collateral.
<PAGE>
Prepaid and Other Current Assets
Prepaid and other current assets is primarily comprised of supplies
and prepaid insurance.
Plant and Equipment and Accrued Incinerator Maintenance
Plant and equipment acquired in the 1988 stock purchase (note 1) was
recorded at historical cost, which approximated fair market value at
that time. Subsequent additions to plant and equipment were recorded
at cost.
Plant and equipment is depreciated under the straight-line method
over the estimated useful lives of various classes of assets.
Expenditures for additions and improvements are capitalized.
Capitalization of newly acquired assets during 1994 was limited to
those assets with cost in excess of $1,500. During 1993 the limit
was $1,000. See note 7.
NEI accrues for estimated incinerator maintenance to better match the
costs for repairs and maintenance with the revenues of the period of
incinerator service. See note 8.
Goodwill
Goodwill is being amortized under the straight-line method over 40
years.
Change in Accounting Principle
In December 1993, NEI adopted, retroactive to January 1, 1993,
Statement of Financial Accounting Standards No. 112, "Employers'
Accounting for Postemployment Benefits." This statement requires
employers to adopt accrual accounting for workers' compensation,
salary continuation, severance benefits and disability benefits
provided to former or inactive employees after employment but before
retirement. See note 5.
<PAGE>
Note 3: Related-Party Transactions
Related Party Revenue
Aptus provides waste incineration services to several Westinghouse
operations and receives credit through Westinghouse's centralized
cash management clearinghouse, discussed below, for such services
when provided. Accordingly, there are no intercompany receivables in
these financial statements. The terms and conditions of Aptus'
intercompany revenues have historically been governed generally on a
commercial basis by internal Westinghouse interunit agreements.
Corporate Services
NEI uses, and is charged directly for, certain services that
Westinghouse provides to its subsidiaries and other organizational
units. These services generally include marketing, information
systems support, certain accounting functions, legal and
environmental affairs, benefit administration and telecommunications.
NEI also purchases other Westinghouse internally-provided services as
required. These services may include printing, productivity and
quality consulting, and other purchased services.
Westinghouse centrally develops, negotiates and administers NEI's
insurance programs. The insurance includes a broad all-risk coverage
for real and personal property, third-party liability, pollution
liability, employer's liability, automobile liability, and other
standard liability coverages. Westinghouse also maintains a program
of self-insurance for workers' compensation. A portion of the cost
of this program is charged to NEI based on claims history.
All of the charges described above are included as costs of NEI's
operations in these financial statements. Such charges by
Westinghouse are based on costs which directly relate to NEI or a
percentage allocation of Westinghouse's total costs for the service
provided. Where percentage allocations are used, such allocations
are based on NEI's percent utilization compared to that of all
Westinghouse organizations. These costs have been allocated to NEI
on a basis that management believes is reasonable. However,
management believes that it is possible that the costs of these
transactions may differ from those that would result from
transactions among unrelated parties.
NEI also utilizes Westinghouse's centralized cash management
services. Under such service arrangements, cash collected on
accounts receivable is invested centrally. Additionally, disbursing
operations are funded centrally on demand. As a result, NEI carries
only petty cash, and increases and decreases its additional capital
provided by parent company account for cash used and collected
through a central clearinghouse arrangement.
The total charges to NEI for all of the services described above were
$15.2 million and $13.0 million for 1994 and 1993, respectively.
<PAGE>
Corporate Expenses
Westinghouse allocates a certain portion of its corporate expenses to
its subsidiaries and other organizational units. These allocated
costs include Westinghouse executive management and corporate
overhead; benefit costs associated with retired and divested business
employees; corporate-related pension charges; audit and tax services;
and other support and executive functions.
Corporate expenses are allocated to NEI based primarily on payroll
dollars. Such allocations are not necessarily indicative of actual
results and it is not practical for management to estimate the level
of expenses that might have been incurred had NEI operated as a
separate stand-alone entity. Corporate expenses allocated to NEI for
1994 and 1993 totalled $4.6 million and $3.1 million, respectively.
Interest Expense and Shareholder's Equity
NEI is a distinct legal entity and therefore maintains the customary
shareholder's equity and capital accounts. Additionally, NEI and
Westinghouse maintain an additional capital provided by parent
company account to recognize all interunit transactions as described
above, and other transactions which primarily includes the funding of
Aptus's capital expenditures by Westinghouse. For the purposes of
these financial statements, Westinghouse's total investment in NEI is
represented by total shareholder's equity.
NEI receives a charge from Westinghouse in the form of interest
expense for the portion of Westinghouse's total investment in NEI
which, for internal financial reporting purposes, represents debt.
For 1994 and 1993, approximately 40 percent of Westinghouse's average
total investment in NEI was considered to be debt for internal
reporting purposes. NEI's allocated interest expense for 1994 and
1993 was $5.7 million and $5.9 million, respectively. The effective
annualized percentage rates for both periods was approximately 10
percent. This method of calculating interest expense for internal
reporting purposes is not necessarily indicative of interest expense
that would have been incurred had NEI operated as a separate stand-
alone entity.
For purposes of these financial statements, interest expense and
interest paid are assumed to be equal.
Note 4: Pensions
Westinghouse sponsors various pension arrangements covering
substantially all NEI employees. Most plan benefits are based on
either years of service and compensation levels at the time of
retirement, a formula based on career earnings, or a final average
compensation amount. Pension benefits are paid from trusts funded by
contributions from employees and Westinghouse. The pension funding
policy is consistent with the funding requirements of U.S. federal
and other government laws and regulations. Plan assets consist
primarily of listed stocks, fixed income securities and real estate
investments.
<PAGE>
NEI's pension arrangements include only multiemployer plans as
defined in SFAS No. 87, "Employers' Accounting for Pensions." For
purposes of these financial statements, NEI's multiemployer plans
include the Westinghouse Pension Plan and the Westinghouse Executive
Pension Plan (the multiemployer plans). Each of these plans are
defined benefit plans and are sponsored by Westinghouse. They cover
the employees of NEI as well as other employees of Westinghouse. For
multiemployer plans, employers are required to recognize as net
pension costs total contributions for the period, and recognize a
liability for any unpaid contributions required for the period. In
1994 and 1993, NEI's pension expense for multiemployer plans was $1.5
million and $0.7 million, respectively. There were no contributions
due and unpaid at December 31, 1994 and 1993.
Note 5: Postretirement Benefits Other Than Pensions and
Postemployment Benefits
Postretirement Benefits Other Than Pensions
Westinghouse sponsors defined benefit postretirement plans that
provide medical, dental and life insurance benefits for eligible
retirees and dependents, including NEI's eligible retirees. During
1992, Westinghouse adopted SFAS No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions," on the immediate
recognition basis. NEI's defined benefit postretirement plans are
multiemployer plans as defined in SFAS No. 106. Therefore, no
provision has been made in these financial statements to recognize a
transition obligation for accumulated postretirement benefits.
For multiemployer plans, employers are required to recognize as net
postretirement benefit costs total required contributions for the
period, and recognize a liability for any unpaid contributions
required for the period. For 1994 and 1993, NEI's net postretirement
benefit cost for multiemployer plans was $0.3 million and $0.4
million, respectively, which represents NEI's contribution to
Westinghouse for eligible retiree and dependent benefits in each
year. There were no contributions due or unpaid at December 31, 1994
and 1993.
Postemployment Benefits
Westinghouse provides certain postemployment benefits to former or
inactive employees and their dependents during the time period
following employment but before retirement. During 1993,
Westinghouse adopted, retroactive to January 1, 1993, SFAS No. 112.
"Employer's Accounting for Postemployment Benefits." Prior to 1993,
Westinghouse recognized postemployment benefit expenses as they were
paid. Westinghouse recognized a charge, net of deferred taxes, for
postemployment benefits at January 1, 1993 as the cumulative effect
of a change in accounting for postemployment benefits. The portion
of this charge related to NEI was $0.3 million, net of $0.1 million
of deferred taxes. NEI's postemployment benefit expense for 1994 was
not significant. At December 31, 1994 and 1993, NEI's liability for
postemployment benefits totalled $0.3 million.
<PAGE>
Note 6: Income Taxes
Income taxes are calculated under the bases described in note 1. For
purposes of these financial statements, taxes paid are assumed to
equal income taxes currently payable. In 1992, NEI adopted SFAS No.
109,"Accounting for Income Taxes."
Consolidated Income Taxes
(in thousands)
Year ended December 31,
1994 1993
Current:
Federal $ 2,387 $ 8,742
Total income taxes - current 2,387 8,742
Deferred:
Federal (68) (3,875)
State - (230)
Total income taxes - deferred (68) (4,105)
Income tax benefit $ 2,319 $ 4,637
At December 31, 1994 and 1993, the consolidated balance sheet of NEI
included federal income tax receivables of $11.1 million and $8.7
million, respectively. These amounts were calculated as though NEI
was a stand-alone taxpayer and resulted from carrying back NEI's 1994
and 1993 net operating losses to NEI's taxable income from prior
years. As NEI's results of operations are included in the
consolidated U.S. federal income tax return of Westinghouse (note 1),
such amounts are included in the additional capital provided by
parent company account in the consolidated balance sheet.
The effect on deferred federal income taxes for 1993 resulting from
the enactment of an increase in the statutory federal income tax rate
from 34% to 35% was not significant.
Deferred income taxes result from temporary differences in the
financial bases and tax bases of assets and liabilities. The types
of differences that give rise to significant portions of deferred
income tax liabilities or assets are shown in the accompanying table.
Consolidated Deferred Income Tax Sources
(in thousands)
At December 31,
1994 1993
Accumulated depreciation $(11,939) $ (8,745)
Deferred revenue 2,748 3,049
Alternative minimum tax credits 4,767 2,524
Provisions for expenses and losses 2,930 2,441
Federal operating loss carryforwards 2,843 -
State operating loss carryforwards 1,343 869
Postemployment benefits 162 153
Other deferred tax assets 62 27
Valuation allowance (4,741) (2,075)
Deferred income taxes, net liability $ (1,825) $ (1,757)
<PAGE>
Calculated as though NEI was a stand-alone taxpayer, at December 31,
1994 and 1993, NEI had deferred tax assets related to alternative
minimum tax credits and state operating loss carryforwards totalling
$6.1 million and $3.4 million, respectively. Valuation allowances
for portions of these amounts have been established since, as
required by SFAS No. 109, it is considered more likely than not that
the total benefit of these deferred tax assets will not be realized.
The alternative minimum tax credits have no expiration and the state
operating loss carryforwards expire at various dates through the year
2009, according to respective state law. Deferred tax assets totalling
$2.8 million at December 31, 1994 related to federal operating loss
carryforwards which expire in 2009.
Consolidated Effective Tax Rate
Year ended December 31,
1994 1993
Federal statutory income tax (benefit) rate (35.0)% (35.0)%
Decrease in income tax (benefit) rate
resulting from:
Valuation allowance 15.2 6.4
Goodwill amortization 2.8 2.2
Other 0.9 1.6
Effective income tax (benefit) rate (16.1)% (24.8)%
The federal income tax returns of Westinghouse are settled through
the year ended December 31, 1986. Management believes that
adjustments to Westinghouse's federal income tax returns of all years
through December 31, 1994 related to NEI will not have a material
adverse effect on NEI for purposes of these financial statements.
Note 7: Plant and Equipment
Plant and Equipment
(in thousands)
At December 31,
1994 1993
Machinery and equipment $105,804 $104,657
Buildings 31,680 31,713
Land 2,448 2,471
Construction in progress 810 1,869
Plant and equipment, at cost 140,742 140,710
Accumulated depreciation (36,480) (26,107)
Plant and equipment, net $104,262 $114,603
Included in machinery and equipment at December 31, 1994 and 1993 are
$1.8 million and $3.3 million, respectively, related to trucking
equipment under capital leases (see note 11). Accumulated
depreciation related to such equipment at those dates was $0.7
million and $0.8 million, respectively.
<PAGE>
Note 8: Other Current Liabilities
Other Current Liabilities
(in thousands)
At December 31,
1994 1993
Accrued wages, vacations and other benefits $ 2,291 $ 2,066
Accrued incinerator maintenance (note 2) 418 725
Reserve for restructuring (note 10) 154 450
Other 1,480 976
Other current liabilities $ 4,343 $ 4,217
Note 9: Contingent Liabilities and Commitments
It is the policy of Westinghouse to operate and maintain its
facilities in compliance with all applicable laws and regulations to
protect the environment and the health and safety of its employees
and the community. Compliance with federal, state and local
regulations relating to the discharge of substances into the
environment, the disposal of hazardous wastes and other related
activities affecting the environment have had and will continue to
have an impact on the operations of NEI. Thus far, compliance with
environmental requirements and resolution of environmental claims
have been accomplished without material adverse effect on NEI's
liquidity, competitive status, financial condition or results of
operations.
While it is difficult to estimate the timing and ultimate costs to be
incurred in the future due to uncertainties about the status of laws,
regulations and technology, management has estimated the reasonably
possible remediation costs that could be incurred by NEI based on the
facts and circumstances known currently. Such estimates include the
professional judgment of Westinghouse's environmental experts,
outside environmental specialists and other experts and, when
necessary, legal counsel.
In accordance with the above policy, there is one ongoing
environmental evaluation and remediation program affecting NEI. This
program involves investigation and remediation of an identified
groundwater contamination problem at Aptus's facility in Coffeyville,
Kansas. Management has estimated the total probable costs based on
known information which could be incurred for investigation and
remediation of the Coffeyville site to be approximately $5.1 million
at December 31, 1994 and $4.4 million at December 31, 1993. These
amounts have been accrued for in these financial statements. Due to
the difficulty in estimating future environmental costs, NEI expects
that any amounts that may be required to be paid in excess of amounts
accrued for the Coffeyville groundwater contamination will not have a
material adverse effect on NEI's financial condition or results of
operation.
<PAGE>
There was no other material pending or overtly threatened litigation
related to NEI at December 31, 1994. Additionally, there were no
other contingent liabilities or commitments at December 31, 1994 that
would have a material impact on the financial position or results of
operations of NEI.
Note 10: Provision for Restructuring
In January 1994, Westinghouse announced various restructuring and
other actions which included providing for certain litigation and
environmental contingencies and the disposition of certain non-
strategic businesses. As a result of the announcement of these
actions, Westinghouse recorded various charges and provisions in the
fourth quarter of 1993. Of the fourth quarter 1993 charges and
provisions recorded by Westinghouse, approximately $0.5 million
related to NEI as a result of planned employee reductions. See note
8.
Note 11: Leases
NEI has commitments under capital leases for certain trucking
equipment. At December 31, 1994, future minimum payment commitments
under capital leases are as follows (in thousands):
Year ended December 31,
1995 $ 470
1996 443
1997 429
1998 294
1999 19
1,655
Imputed interest (377)
Capital lease obligations $1,278
EXHIBIT 2
STOCK PURCHASE AGREEMENT
between
WESTINGHOUSE ELECTRIC CORPORATION
(Seller)
and
ROLLINS ENVIRONMENTAL SERVICES, INC.
(Buyer)
for
NATIONAL ELECTRIC, INC.
A MINNESOTA CORPORATION
Dated as of this 7th day of March, 1995
ARTICLE 1
SALE OF APTUS. . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 The Sale . . . . . . . . . . . . . . . . . . . . . . 1
1.1.1 The Sale of the Shares. . . . . . . . . . . . 1
ARTICLE 2
PRICE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.1 Purchase Price . . . . . . . . . . . . . . . . . . . 1
2.2 Payment of Purchase Price. . . . . . . . . . . . . . 2
2.2.1 Closing Date Payment. . . . . . . . . . . . . 2
2.2.2 Issuance of Securities. . . . . . . . . . . . 2
2.2.3 Assumption of IDB Loan Agreement. . . . . . . 2
2.3 Purchase Price Adjustment. . . . . . . . . . . . . . 2
2.3.1 Post Closing Adjustment of
Purchase Price . . . . . . . . . . . . . . . . . . . 2
2.3.2 Adjustments Procedure . . . . . . . . . . . . 3
2.4 Interest Payment on Cash . . . . . . . . . . . . . . 3
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . . . . . 3
3.1 Organization; Power and Authority. . . . . . . . . . 3
3.2 Authorization, Execution and Validity of
Agreement. . . . . . . . . . . . . . . . . . . . . . 4
3.3 Capitalization . . . . . . . . . . . . . . . . . . . 4
3.3.1 NEI . . . . . . . . . . . . . . . . . . . . . 4
3.3.2 Aptus . . . . . . . . . . . . . . . . . . . . 4
3.4 Organizational Records . . . . . . . . . . . . . . . 5
3.5 Financial Statements . . . . . . . . . . . . . . . . 5
3.6 Absence of Undisclosed Liabilities . . . . . . . . . 5
3.7 Absence of Certain Changes . . . . . . . . . . . . . 6
3.8 No Conflict; Seller Consents . . . . . . . . . . . . 7
3.9 Real Property. . . . . . . . . . . . . . . . . . . . 7
3.9.1 Owned Real Property . . . . . . . . . . . . . 7
3.9.2 Leased Real Property. . . . . . . . . . . . . 7
3.10 Personal Property . . . . . . . . . . . . . . . . . 8
3.10.1 Owned Personal Property. . . . . . . . . . . 8
3.10.2 Leased Personal Property . . . . . . . . . . 8
3.10.3 Computer and Telecommunications
Equipment and Software . . . . . . . . . . . 8
3.10.3.1 Equipment . . . . . . . . . . . . . . 8
3.10.3.2 Software. . . . . . . . . . . . . . . 8
3.10.4 NEI Property . . . . . . . . . . . . . . . . 9
3.11 Condition of Assets . . . . . . . . . . . . . . . . 9
3.12 Insurance . . . . . . . . . . . . . . . . . . . . . 9
3.13 Contracts . . . . . . . . . . . . . . . . . . . . . 9
3.14 Inventory . . . . . . . . . . . . . . . . . . . . . 10
3.15 Accounts Receivable . . . . . . . . . . . . . . . . 11
3.16 Litigation. . . . . . . . . . . . . . . . . . . . . 11
3.17 Laws and Permits. . . . . . . . . . . . . . . . . . 11
3.17.1 Compliance with Laws . . . . . . . . . . . . 11
3.17.2 Permits and Licenses . . . . . . . . . . . . 11
3.18 Environmental Matters . . . . . . . . . . . . . . . 12
3.19 Patents, Trademarks and Similar Rights. . . . . . . 13
3.19.1 Intellectual Property. . . . . . . . . . . 13
3.19.2 Licenses; Infringement. . . . . . . . . . . 13
3.20 Employees . . . . . . . . . . . . . . . . . . . . . 13
3.20.1 Employees. . . . . . . . . . . . . . . . . . 13
3.20.2 Unions.. . . . . . . . . . . . . . . . . . . 13
3.20.3 Employee and Consulting Contracts. . . . . . 14
3.20.4 NLRB . . . . . . . . . . . . . . . . . . . . 14
3.21 Employee Benefits . . . . . . . . . . . . . . . . . 14
3.21.1 Plans. . . . . . . . . . . . . . . . . . . 14
3.21.2 Records. . . . . . . . . . . . . . . . . . 14
3.21.3 Actions. . . . . . . . . . . . . . . . . . 15
3.21.4 Funding. . . . . . . . . . . . . . . . . . 15
3.21.5 Multiemployer Plans. . . . . . . . . . . . . 15
3.21.6 Acceleration of Benefits . . . . . . . . . . 15
3.22 Taxes . . . . . . . . . . . . . . . . . . . . . . . 16
3.22.1 Returns. . . . . . . . . . . . . . . . . . . 16
3.22.2 Extensions. . . . . . . . . . . . . . . . . 16
3.22.3 Affiliated Groups. . . . . . . . . . . . . 16
3.22.4 Audits. . . . . . . . . . . . . . . . . . . 16
3.23 Brokers . . . . . . . . . . . . . . . . . . . . . . 16
3.24 No Subsidiaries or Investments. . . . . . . . . . . 16
3.25 Sufficiency of Assets . . . . . . . . . . . . . . . 16
3.26 Bank Accounts . . . . . . . . . . . . . . . . . . . 17
3.27 Certain Relationships . . . . . . . . . . . . . . . 17
3.28 Full Disclosure . . . . . . . . . . . . . . . . . . 17
3.29 Sophisticated Seller. . . . . . . . . . . . . . . . 17
3.30 Schedule References . . . . . . . . . . . . . . . . 17
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER. . . . . . . . . . . . 17
4.1 Organization; Power and Authority. . . . . . . . . . 17
4.2 Authorization, Execution and Validity. . . . . . . . 18
4.3 No Conflict; Buyer Consents. . . . . . . . . . . . . 18
4.4 Brokers. . . . . . . . . . . . . . . . . . . . . . . 18
4.5 Purchase for Investment. . . . . . . . . . . . . . . 18
ARTICLE 5
COVENANTS OF SELLER. . . . . . . . . . . . . . . . . . . . . . 18
5.1 Cooperation by Seller. . . . . . . . . . . . . . . . 18
5.2 Pre-Closing Access to Information. . . . . . . . . . 18
5.3 Conduct of Business. . . . . . . . . . . . . . . . . 19
5.3.1 Business in Ordinary Course . . . . . . . . . 19
5.3.2 Buyer's Consent . . . . . . . . . . . . . . . 20
5.3.3 Representations and Warranties. . . . . . . . 20
5.4 Further Assurances . . . . . . . . . . . . . . . . . 20
5.4.1 Additional Documents. . . . . . . . . . . . . 20
5.4.2 Certain Consents. . . . . . . . . . . . . . . 20
5.5 Supplements to Schedules . . . . . . . . . . . . . . 21
5.6 Certain Financial Covenants. . . . . . . . . . . . . 21
5.7 Exclusive Dealing. . . . . . . . . . . . . . . . . . 22
5.8 Closure and Post Closure Costs and Financial
Assurances . . . . . . . . . . . . . . . . . . . . . 22
5.8.1 Closing Date Closure and Post-Closure Costs
Defined . . . . . . . . . . . . . . . . . . . 22
5.8.2 Financial Assurances Defined. . . . . . . . . 22
5.8.3 Increases in Costs or Required Assurances . . 22
5.8.4 Insurance Premium Payments . . . . . . . . 22
5.8.5 Letters of Credit . . . . . . . . . . . . . . 22
5.9 Right to Seller Business Post Closing. . . . . . . . 24
5.10 Right to Seller Intellectual Property Post
Closing . . . . . . . . . . . . . . . . . . . . . . 24
5.11 MIS and Telecommunications Services Post Closing. . 24
5.12 Intercompany Accounts . . . . . . . . . . . . . . . 25
5.13 Preparation of Financial Statements . . . . . . . . 25
5.14 . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.15 Leased Real Property. . . . . . . . . . . . . . . . 26
5.16 Certain Environmental Clean-ups . . . . . . . . . . 26
ARTICLE 6
COVENANTS OF BUYER . . . . . . . . . . . . . . . . . . . . . . 26
6.1 Cooperation by Buyer . . . . . . . . . . . . . . . . 26
6.2 Due Diligence Activities . . . . . . . . . . . . . . 26
6.3 Further Assurances . . . . . . . . . . . . . . . . . 26
6.4 HSR Act Compliance . . . . . . . . . . . . . . . . . 26
6.5 Release from Guarantees. . . . . . . . . . . . . . . 27
6.6 Due Diligence - Post-Signing . . . . . . . . . . . . 27
6.7 Repayment of Working Capital Advance . . . . . . . . 27
ARTICLE 7
MUTUAL COVENANTS . . . . . . . . . . . . . . . . . . . . . . . 27
7.1 Employee Matters . . . . . . . . . . . . . . . . . . 27
7.1.1 Employment. . . . . . . . . . . . . . . . . . 27
7.1.2 Union Representation. . . . . . . . . . . . . 29
7.1.3 Termination of Coverage Under Seller's
Employee Benefit Plans and Coverage Under
Buyer's Employee Benefit Plans. . . . . . . . 29
7.1.4 Pension Plans . . . . . . . . . . . . . . . . 30
7.1.5 Savings Program . . . . . . . . . . . . . . . 30
7.1.6 Welfare and Fringe Benefits . . . . . . . . . 30
7.2 Tax Covenants. . . . . . . . . . . . . . . . . . . . 30
7.2.1 Apportionment of Income Taxes Between Pre-
Closing and Post-Closing Periods. . . . . . . 31
7.2.2 Payment of Income Taxes . . . . . . . . . . . 31
7.2.3 Preparation and Filing of Income Tax
Returns . . . . . . . . . . . . . . . . . . . 31
7.2.4 Cooperation . . . . . . . . . . . . . . . . . 32
7.2.5 Refund Claims . . . . . . . . . . . . . . . . 32
7.2.6 Tax Sharing Agreements. . . . . . . . . . . . 32
7.2.7 Notice of Audit . . . . . . . . . . . . . . . 32
7.2.8 Audits Controlled by Seller . . . . . . . . . 32
7.2.9 Audits Controlled by Buyer. . . . . . . . . . 33
7.2.10 338(h)(10) Election. . . . . . . . . . . . . 33
7.2.11 Net Operating Loss . . . . . . . . . . . . . 33
7.2.12 Carrybacks . . . . . . . . . . . . . . . . . 33
7.3 Books and Records. . . . . . . . . . . . . . . . . . 34
7.3.1 Access. . . . . . . . . . . . . . . . . . . 34
7.3.2 Destruction . . . . . . . . . . . . . . . . . 34
7.3.3 Confidentiality . . . . . . . . . . . . . . . 34
7.3.4 Assistance. . . . . . . . . . . . . . . . . . 34
7.4 Non-Competition. . . . . . . . . . . . . . . . . . . 34
7.5 Access to Information. . . . . . . . . . . . . . . . 37
7.6 Non-Solicitation of Employees. . . . . . . . . . . . 37
7.7 Rights Agreement . . . . . . . . . . . . . . . . . . 38
7.8 Remarketing of IDBs and Cost Sharing . . . . . . . . 38
7.8.1 Initial Remarketing. . . . . . . . . . . . 38
7.8.2 Remarketing of IDBs. . . . . . . . . . . . 38
7.8.3 Effective Conversion Date. . . . . . . . . 38
7.8.3.1 Option of Buyer . . . . . . . . . . . 38
7.8.3.2 Option of Seller. . . . . . . . . . . 39
7.8.4 IDB Cost Sharing . . . . . . . . . . . . . 40
7.8.4.1 Calculation and Payment . . . . . . . 40
7.8.5 Cooperation. . . . . . . . . . . . . . . . 40
7.8.5.1 Remarketing Agent . . . . . . . . . . 41
7.8.5.2 Interest Rate Cap . . . . . . . . . . 41
7.8.6 Underwriting Costs . . . . . . . . . . . . 41
7.8.7 Conversion . . . . . . . . . . . . . . . . 41
7.8.8 Rebate Obligation. . . . . . . . . . . . . 41
ARTICLE 8
CONDITIONS PRECEDENT TO CLOSING. . . . . . . . . . . . . . . . 41
8.1 Conditions Precedent to Buyer's Obligations. . . . . 41
8.1.1 Accuracy of Representations and Warranties. . 41
8.1.2 Litigation. . . . . . . . . . . . . . . . . . 42
8.1.3 Covenants . . . . . . . . . . . . . . . . . . 42
8.1.4 Deliveries. . . . . . . . . . . . . . . . . . 42
8.1.5 Consents. . . . . . . . . . . . . . . . . . . 42
8.1.6 Customers. . . . . . . . . . . . . . . . . 42
8.1.7 No Material Adverse Effect. . . . . . . . . . 42
8.2 Conditions Precedent to Seller's Obligations . . . . 42
8.2.1 Truth of Representations and Warranties . . . 42
8.2.2 Litigation. . . . . . . . . . . . . . . . . . 42
8.2.3 Covenants . . . . . . . . . . . . . . . . . . 42
8.2.4 Deliveries. . . . . . . . . . . . . . . . . . 42
8.2.5 [Intentionally Left Blank]. . . . . . . . . . 43
8.2.6 Permits . . . . . . . . . . . . . . . . . . . 43
ARTICLE 9
CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
9.1 Time and Place . . . . . . . . . . . . . . . . . . . 43
9.2 Deliveries by Seller . . . . . . . . . . . . . . . . 43
9.3 Deliveries by Buyer. . . . . . . . . . . . . . . . . 44
ARTICLE 10
TERMINATION PRIOR TO CLOSING DATE. . . . . . . . . . . . . . . 45
10.1 Termination . . . . . . . . . . . . . . . . . . . . 45
10.2 Effect of Termination . . . . . . . . . . . . . . . 45
10.2.1 General . . . . . . . . . . . . . . . . . . 45
ARTICLE 11
INDEMNIFICATION AND PROCEDURES . . . . . . . . . . . . . . . . 46
11.1 Indemnification by Seller . . . . . . . . . . . . . 46
11.2 Indemnification by Buyer. . . . . . . . . . . . . . 47
11.3 Notice and Resolution of Claim. . . . . . . . . . . 48
11.3.1 Notice. . . . . . . . . . . . . . . . . . . 48
11.3.2 Right to Assume Defense . . . . . . . . . . 48
11.3.3 Failure to Assume Defense . . . . . . . . . 48
11.4 Limits on Indemnification . . . . . . . . . . . . . 48
11.5 Survival. . . . . . . . . . . . . . . . . . . . . . 49
11.6 Exclusive Remedy. . . . . . . . . . . . . . . . . . 49
11.7 No Mitigation . . . . . . . . . . . . . . . . . . . 50
11.8 Indemnity Payments. . . . . . . . . . . . . . . . . 50
11.9 Buyer's Cooperation . . . . . . . . . . . . . . . . 50
11.10 Payment and Assignment of Claims. . . . . . . . . . 50
11.10.1 Payment . . . . . . . . . . . . . . . . . . 50
11.10.2 Assignment. . . . . . . . . . . . . . . . . 50
11.11 Other Beneficiaries. . . . . . . . . . . . . . . . 50
11.12 Consequential Damages; Other Limitations . . . . . 50
ARTICLE 12
CERTAIN ENVIRONMENTAL MATTERS. . . . . . . . . . . . . . . . . 51
12.1 Seller's Environmental Responsibility . . . . . . . 51
12.1.1 Seller Indemnity. . . . . . . . . . . . . . 51
12.2 Buyer Environmental Responsibility. . . . . . . . . 51
12.3 Identified Environmental Concerns . . . . . . . . . 52
12.4 Off-Site Disposal . . . . . . . . . . . . . . . . . 52
12.5 Environmental Violations. . . . . . . . . . . . . . 52
12.6 Third Party Environmental Claim . . . . . . . . . . 52
12.7 Government Remediation Claim. . . . . . . . . . . . 53
12.8 Limitations and Deductibles . . . . . . . . . . . . 53
12.9 Miscellaneous . . . . . . . . . . . . . . . . . . . 54
12.10 Certain Remediation Activities . . . . . . . . . . 55
12.10.1 Coffeyville Contamination . . . . . . . . . 55
12.10.1.1 Responsibility of Seller . . . . . . 55
12.10.1.2 TCE Cost Sharing . . . . . . . . . . 55
12.10.1.3 Survival . . . . . . . . . . . . . . 55
12.10.2 Control . . . . . . . . . . . . . . . . . . 56
12.10.3 Access. . . . . . . . . . . . . . . . . . . 56
12.10.4 Cooperation . . . . . . . . . . . . . . . . 56
12.10.5 Monitoring and Sampling . . . . . . . . . . 57
12.10.6 Conduct . . . . . . . . . . . . . . . . . . 57
ARTICLE 13
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 57
ARTICLE 14
MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . 66
14.1 Severability. . . . . . . . . . . . . . . . . . . . 66
14.2 Successors and Assigns. . . . . . . . . . . . . . . 66
14.3 Counterparts. . . . . . . . . . . . . . . . . . . . 66
14.4 Headings. . . . . . . . . . . . . . . . . . . . . . 66
14.5 Waiver. . . . . . . . . . . . . . . . . . . . . . . 66
14.6 No Third-Party Beneficiaries. . . . . . . . . . . . 67
14.7 Sales and Transfer Taxes. . . . . . . . . . . . . . 67
14.8 Other Expenses. . . . . . . . . . . . . . . . . . . 67
14.9 Notices . . . . . . . . . . . . . . . . . . . . . . 67
14.10 Governing Law; Interpretation. . . . . . . . . . . 68
14.11 Public Announcements . . . . . . . . . . . . . . . 68
14.12 Arbitration. . . . . . . . . . . . . . . . . . . . 68
14.13 Financial Projections. . . . . . . . . . . . . . . 69
14.14 Confidentiality. . . . . . . . . . . . . . . . . . 69
14.15 Entire Agreement; Amendment. . . . . . . . . . . . 70
14.16 Further Assurances . . . . . . . . . . . . . . . . 70
14.17 Exclusive Jurisdiction and Consent to Service of
Process. . . . . . . . . . . . . . . . . . . . . . 70
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is made as
of this 7th day of March, 1995 by and between WESTINGHOUSE ELECTRIC
CORPORATION, a Pennsylvania corporation ("Seller"), and ROLLINS
ENVIRONMENTAL SERVICES, INC., a Delaware corporation ("Buyer").
R E C I T A L S
A. Seller through Aptus, Inc., a Delaware Corporation
("Aptus") is engaged in the sale of services related to the
transportation, storage, laboratory analysis and incineration of
certain types of hazardous waste. Seller's transportation,
storage, laboratory analysis, incineration and certain of its
sales functions are conducted through Aptus. The major facilities are
located in Aragonite, Utah; Coffeyville, Kansas; Denver,
Colorado; Houston, Texas; and Lakeville, Minnesota. Seller also conducts
certain related sales functions and provides related administrative
support and information technology through facilities owned or
leased directly by the Seller which are located in Pittsburgh,
Pennsylvania. The foregoing business and operations shall
collectively be referred to as "the Business."
B. Aptus is a wholly owned subsidiary of National
Electric, Inc., a Minnesota corporation ("NEI"), which is a
wholly owned subsidiary of Seller.
C. Buyer wishes to acquire from the Seller, and Seller
wishes to sell to the Buyer all of the issued and outstanding
shares of capital stock of NEI in the manner, for the
consideration, and subject to the terms and conditions set forth
herein;
NOW, THEREFORE, Buyer and Seller, intending to be
legally bound, hereby agree as follows:
ARTICLE 1
SALE OF APTUS
1.1 The Sale.
1.1.1 The Sale of the Shares. On the terms and
subject to the conditions of this Agreement, on the Closing,
Seller shall sell and assign to Buyer and Buyer shall purchase
and acquire all of the Shares.
ARTICLE 2
PRICE
2.1 Purchase Price. The total consideration for the
purchase of the Business as set forth in Article 1 hereof shall
be One Hundred Thirty-Five Million Dollars ($135,000,000)
("Purchase Price"). The Purchase Price shall be composed of:
(a) Six Million, Five Hundred Thousand Dollars
($6,500,000) (the "Cash"); plus
(b) The assumption by Buyer of all of Seller's
obligations and duties under that certain Loan Agreement, dated
as of June 1, 1990, between Tooele County, Utah (the "Issuer")
and the Seller (the "IDB Loan Agreement") entered into in
connection with the issuance by the Issuer of in the aggregate
Forty-Five Million Seven Hundred Thousand Dollars ($45,700,000)
principal amount of its Variable Rate Hazardous Waste Treatment
Revenue Bonds (Westinghouse Electric Corporation Project), Series
A (the "IDBs"); plus
(c) The issuance by Buyer to Seller of Senior
Unsecured Debentures (the "Senior Unsecured Debentures") having
an aggregate principal amount of Sixteen Million Eight Hundred
Thousand Dollars ($16,800,000) and having terms and conditions
set forth in the form of indenture on Exhibit 2.1 (c), as the
same may be adjusted by an amendment to such indenture pursuant
to Section 2.4; plus
(d) The issuance by Buyer to Seller of Subordinated
Convertible Debentures (the "Subordinated Debentures") having an
aggregate principal amount of Sixty-Six Million Dollars
($66,000,000) and having terms and conditions set forth in the
form of indenture on Exhibit 2.1 (d).
2.2 Payment of Purchase Price.
2.2.1 Closing Date Payment. At the Closing,
Buyer shall pay the Cash to Seller by wire transfer in
immediately available funds.
Payment shall be made to a bank designated by
Seller in writing not less than one business day prior to the
Closing.
2.2.2 Issuance of Securities. At the Closing,
Buyer shall issue to Seller the Senior Unsecured Debentures and
the Subordinated Convertible Debentures (collectively the
"Securities") pursuant to the Debenture Purchase Agreement in the
form attached as Exhibit 2.2.2.
2.2.3 Assumption of IDB Loan Agreement. At
the Closing, Buyer shall assume all of the obligations and duties
of Seller under the IDB Loan Agreement and will deliver the
Assignment and Assumption Agreement in the form attached as
Exhibit 2.2.3.
2.3 Purchase Price Adjustment. The Purchase Price
will be adjusted based on changes in the amount of Net Worth
between the date of the December 1994 Balance Sheet and the
Closing Date as follows:
2.3.1 Post Closing Adjustment of Purchase Price.
As soon as practicable, but not later than sixty (60) days after
the Closing Date, Seller shall deliver to Buyer (i) the balance
sheet of Aptus and NEI for the Date of Closing and related
statements of income and cash flows for the period from December
31, 1994 to the Date of Closing, prepared in accordance with GAAP
applied on a basis consistent with that used by Price Waterhouse
in the preparation of the FYE 1993 and 1994 Financial Statements,
(ii) the Financial Statements required by Section 3.5 but not
available at the execution hereof, and (iii) Seller's calculation
of net worth which shall be calculated as of December 31, 1994
and adjusted in accordance with Schedule 2.3.1 (the "December
1994 Adjusted Net Worth") and at the Closing Date, also adjusted
in accordance with Schedule 2.3.1 (the "Final Adjusted Net
Worth"). Within thirty (30) days after receipt of the
aforementioned items, Buyer shall either inform Seller in writing
that the calculation of Final Adjusted Net Worth is acceptable or
object to the calculation of Final Adjusted Net Worth in writing
setting forth in reasonable detail Buyer's objections and the
basis for those objections. If Buyer so objects and the Parties
do not resolve such objections on a mutually agreeable basis
within thirty (30) days after Seller's receipt thereof, the
disagreement shall be resolved within an additional sixty (60)
day period by a "Big 6" accounting firm jointly selected by the
Parties (the "Independent Firm"). The decision of the
Independent Firm shall be final and binding upon the Parties.
Upon the agreement of the Parties or the decision of the
Independent Firm, or if Buyer fails to deliver an objection to
Seller within the thirty (30) day period provided above, the
calculation of Final Adjusted Net Worth shall be deemed final.
Each Party shall bear the fees, costs and expenses of its own
accountants and shall share equally the fees, costs and expenses
of the Independent Firm.
2.3.2 Adjustments Procedure. If Final Adjusted
Net Worth is equal to the December 1994 Adjusted Net Worth, no
adjustment shall be made to the amount of outstanding Senior
Unsecured Debentures. If Final Adjusted Net Worth is greater
than the December 1994 Adjusted Net Worth, the amount of then
outstanding Senior Unsecured Debentures shall be increased on a
dollar-for-dollar basis to reflect such increase in the Final
Adjusted Net Worth in excess of December 1994 Adjusted Net Worth.
If Final Adjusted Net Worth is less than the December 1994
Adjusted Net Worth, the amount of the then outstanding Senior
Unsecured Debentures shall be decreased on a dollar-for-dollar
basis to reflect such decrease in the Final Adjusted Net Worth
below the December 1994 Adjusted Net Worth.
2.4 Interest Payment on Cash. At Closing, Buyer shall
make an additional payment to Seller of Sixteen Thousand Dollars
($16,000.00) representing accrued interest on the Cash. This
payment is to be made since no down payment was made in
connection with this Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller makes the following representations and
warranties to Buyer:
3.1 Organization; Power and Authority.
3.1.1 NEI is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Minnesota. Aptus is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware. The jurisdictions in which NEI and Aptus are qualified
to conduct business as foreign corporations are set forth in
Schedule 3.1.1, listed separately for each company. NEI and
Aptus are duly qualified to transact business in each
jurisdiction in which such qualification is required by Law,
except where failure to be qualified would not have a Material
Adverse Effect. NEI and Aptus have all corporate power needed to
own or lease their respective assets and to carry on their
respective business as they are now being conducted.
3.1.2 The Seller is a corporation duly
organized, validly existing and in good standing under the laws
of the Commonwealth of Pennsylvania. The Seller has all
corporate power needed to execute, deliver and perform its
obligations under this Agreement and to consummate the sale of
the Shares.
3.1.3 Schedule 3.1.3 sets forth a brief
description of the corporate history and ownership of Aptus and
NEI, identifying all corporate or partnership predecessors of NEI
and Aptus, all Persons merged into NEI or Aptus, and all Persons
whose liabilities were assumed by NEI or Aptus as a result of an
acquisition, divestiture or reorganization, whether by operation
of law or contract.
3.2 Authorization, Execution and Validity of
Agreement. The execution, delivery and performance by Seller of
this Agreement and the consummation by Seller of the sale of the
Shares of Aptus and the Transferred Assets have been duly
authorized by all necessary corporate action. This Agreement has
been duly and validly executed by Seller, constitutes its valid
and binding obligation and is enforceable against Seller in
accordance with its terms.
3.3 Capitalization.
3.3.1 NEI. The authorized capital stock of NEI
consists of the Shares, all of which are issued and outstanding.
All of the Shares have been duly authorized and validly issued
and are fully-paid and non-assessable. Seller is the beneficial
and record owner of all of the Shares. The Shares are not
subject to Liens or restrictions on transfer, other than
restrictions imposed by applicable securities Laws. There is no
authorized or outstanding option, subscription, warrant, call,
right, commitment or other agreement obligating NEI to issue or
transfer any shares of its capital stock or any securities
convertible into or exercisable for any shares of its capital
stock.
3.3.2 Aptus. The authorized capital stock of
Aptus consists of the Aptus Shares, all of which are issued and
outstanding. All of the Shares have been duly authorized and
validly issued and are fully-paid and non-assessable. NEI is the
beneficial and record owner of all of the Aptus Shares. The
Aptus Shares are not subject to Liens or restrictions on
transfer, other than restrictions imposed by applicable
securities Laws. There is no authorized or outstanding option,
subscription, warrant, call, right, commitment or other agreement
obligating NEI to issue or transfer any shares of its capital
stock or any securities convertible into or exercisable for any
shares of its capital stock.
3.4 Organizational Records. Neither NEI or Aptus has
violated its articles of incorporation or its by-laws. Copies of
the articles of incorporation of Aptus and all amendments
thereto, and of the by-laws of NEI and Aptus and all amendments
thereto, certified to be complete and correct are attached as
Schedule 3.4 hereto.
3.5 Financial Statements.
3.5.1 Schedule 3.5 hereto includes all of the
Financial Statements. The Financial Statements have been
prepared in connection with the sale of the Business and are
prepared in accordance with GAAP applied on a basis consistent
with that used by Price Waterhouse in connection with preparation
of the FYE 1993 and 1994 Financial Statements. The Financial
Statements are correct and complete and in accordance with the
books and records of NEI and Aptus. The balance sheets included
in the Financial Statements in each case fairly present in all
material respects and in reasonable detail the financial
condition, assets and liabilities of NEI and Aptus as at the
respective dates specified therein, and the related statements of
income and cash flows, for each of the periods then ended, fairly
present in all material respects the results of the operations
for the periods then ended.
3.5.2 "Financial Statements" shall mean the
"Audited Financial Statements" and the "Unaudited Financial
Statements." "Audited Financial Statements" shall mean the
following: (i) audited balance sheets of Aptus and NEI as of
December 31, 1993 and December 31, 1994; and (ii) audited
statements of income and cash flows of Aptus and NEI for the
periods ended December 31, 1993 and December 31, 1994. The
Audited Financial Statements shall be prepared by Price
Waterhouse. "Unaudited Financial Statements" shall mean the
unaudited balance sheet of Aptus and NEI as of March 31, 1995
(the "March 1995 Balance Sheet") and the related statements of
income and cash flows for the period then ended.
3.6 Absence of Undisclosed Liabilities. Neither NEI
nor Aptus have any debts, liabilities or obligations of any
nature whatsoever, whether absolute, accrued, contingent or
otherwise (collectively, the "Undisclosed Liabilities") except:
(a) liabilities that are referred to or reflected or
reserved against on the December 1994 Balance Sheet or the March
1995 Balance Sheet or the notes thereto to the extent that the
applicable accounting principles require such action, including
matters relating to deferred tax accounts;
(b) Retained Liabilities or other liabilities that
were not required to be referred to or reflected or reserved
against on the December 1994 Balance Sheet or the March 1995
Balance Sheet; and
(c) liabilities, not referred to or reflected or
reserved against on the December 1994 Balance Sheet or the March
1995 Balance Sheet, incurred in the ordinary course of business
and consistent with past practices, none of which, individually
or in the aggregate has a Material Adverse Effect.
3.7 Absence of Certain Changes. Except as set forth
in Schedule 3.7 or as contemplated by Section 5.12 hereto
(Intercompany Accounts) or other provisions of this Agreement,
the business of Aptus has been conducted, since December 31,
1994, in the ordinary course, and Aptus has not entered into any
transaction (or committed to enter into any such transaction)
other than in the ordinary course of its business. NEI is not
conducting any business operations, and has not entered into any
transactions since December 31, 1994, except those transactions
necessary to vest title to the Owned Real Property in Aptus. In
particular, without limiting the generality of the foregoing,
Aptus has not since that date:
3.7.1 purchased or redeemed directly or
indirectly any shares of its capital stock;
3.7.2 issued or sold or agreed to issue or
sell any shares of its capital stock or any option, warrant,
conversion or other right to acquire any such share or any
securities convertible into or exchangeable for such shares, or
amended its articles or by-laws;
3.7.3 declared or paid any dividend or
declared or made any other distribution on any of the shares of
any class of their capital stock or on any other of their
securities;
3.7.4 acquired or sold, assigned, transferred,
licensed, terminated, leased or disposed of any intangible
assets;
3.7.5 suffered or incurred any damage,
destruction or liability (whether or not covered by any
insurance), or any strike or work stoppage, that either by itself
or in the aggregate has resulted in a Material Adverse Effect;
3.7.6 incurred any obligations or liabilities
for money borrowed (except for obligations to be discharged on or
before Closing);
3.7.7 mortgaged or pledged or subjected to any
Lien, any of its material assets, tangible or intangible
(excepting statutory liens of landlords, carriers, warehousemen,
mechanics, materialmen and similar Persons incurred in the
ordinary course of business for sums not yet due);
3.7.8 sold, transferred or disposed of any of
its assets except assets used or consumed in the ordinary course
of business and obsolete equipment and equipment which has been
replaced in the ordinary course of business;
3.7.9 made any individual capital expenditures
or commitments therefor in excess of $50,000.00;
3.7.10 altered or revised in any material way any
of its accounting principles, procedures, methods or practices;
3.7.11 made any material amendment to any
Contracts, other than in the ordinary course of business and
consistent with past practices; or
3.7.12 increased the compensation of any
employees, except for normal periodic increases in the ordinary
course of business and consistent with past practices, or entered
into any employment or consulting agreement not terminable at
will without penalty or continuing obligation.
3.8 No Conflict; Seller Consents. Except as set forth
on Schedule 3.8 or as would not have a Material Adverse Effect,
the execution, delivery and performance by Seller of this
Agreement will not (a) violate any Law, (b) violate any Charter
Document of Seller, (c) require any Consent from any Governmental
Authority, (d) breach any Charter Document, Material Contract,
Material Lease, or Material Permit of Aptus, or (e) result in the
creation of any Lien on any assets of Aptus, including
Transferred Assets. No governmental authorization, approval,
order, permission, license, permit, certificate, franchise or
consent, and no registration, declaration or filing with any
court, governmental department, commission, authority, board,
bureau, agency or other instrumentality, is required in
connection with the execution, delivery and performance of this
Agreement by Seller and the consummation by Seller of the
transactions contemplated hereby, other than (a) those that have
already been obtained (and copies provided to Buyer), (b) the
transfer of certain FCC licenses identified on Schedule 3.8 from
Seller to Aptus and (c) the transfer of certain Financial
Assurances.
3.9 Real Property.
3.9.1 Owned Real Property.
(a) Schedule 3.9.1 lists and sets forth the full
legal description for all of the real property owned by Aptus
(the "Owned Real Property"). Aptus has good and marketable title
to the Owned Real Property subject to no Liens, except Permitted
Liens and except as disclosed on Schedule 3.9.1. Aptus owns no
other real property and has no options or other interests in real
property, except as disclosed on Schedule 3.9.1.
(b) Aptus has not received any written notice for
assessments for public improvements against any of the Owned Real
Property which remains unpaid (nor is it negotiating any such
assessments) and, to the best of Seller's knowledge, no such
assessment has been proposed. There is no pending condemnation,
expropriation, eminent domain or similar proceeding affecting all
or any portion of any of such properties and, to the best of
Seller's knowledge, no such proceeding is contemplated.
3.9.2 Leased Real Property. Schedule 3.9.2 lists
all of the real property leased by Aptus (as landlord or tenant)
as of the date hereof (the "Leased Real Property"). All Leases
relating to the Leased Real Property (the "Real Property Leases")
and all amendments thereto are identified and described on
Schedule 3.9.2 and true and correct copies have been delivered or
made available to Buyer. All Leases are valid, binding and
enforceable and in full force and effect, except as would not
have a Material Adverse Effect. There has been no breach of any
Real Property Lease by Aptus that would have a Material Adverse
Effect which has not been cured or waived.
3.9.3 NEI does not own, lease or have any
interest in any real property.
3.10 Personal Property.
3.10.1 Owned Personal Property. Except as set
forth on Schedule 3.10.1 and except for Permitted Liens, Aptus
has good and marketable title, subject to no Liens, to all
personal property owned by Aptus, including property reflected on
the books and records of Aptus and all personal property acquired
or leased by Aptus since the date thereof, including the
Transferred Assets, other than (a) property that has been
disposed of in the ordinary course of business, (b) as
contemplated by Schedule 5.3 hereto and (c) Leased Personal
Property.
3.10.2 Leased Personal Property. Schedule 3.10.2
lists all of the personal property leased to Aptus pursuant to a
Material Personal Property Lease as of the date hereof ("Leased
Personal Property"). All Material Personal Property Leases and
all amendments thereto are identified and described on Schedule
3.10.2 and true and correct copies have been delivered or made
available to Buyer. All Material Personal Property Leases are
valid, binding and enforceable and in full force and effect,
except as would not have a Material Adverse Effect. There has
been no material breach of any such Material Personal Property
Lease by Aptus that would have a Material Adverse Effect which
has not been cured or waived.
3.10.3 Computer and Telecommunications Equipment
and Software.
3.10.3.1 Equipment. Schedule 3.10.3.1
sets forth a complete listing and description of all computer or
telecommunications equipment owned by Aptus or used by Aptus in
the Business (the "MIS Equipment") indicating for each item of
MIS Equipment whether it is owned by Aptus, owned by Seller,
leased by Aptus or leased by Seller. Leased MIS Equipment is
further identified by applicable lease and maintenance agreements
(including date and vendor), remaining term and amount of monthly
or yearly payments. If any MIS Equipment is leased by Seller,
the lease shall be transferred to Aptus on or prior to Closing
without modification and with no increase in the lease payments
for the then existing term. Certain MIS Equipment is identified
by Buyer on Schedule 3.10.3.1 as MIS Equipment not required by
Buyer past the MIS and Telecommunications Transition Period
identified in Section 5.11 and shall be retained by Seller, or if
leased equipment, the lease obligations shall be retained or
assumed by Seller.
3.10.3.2 Software. Schedule 3.10.3.2
sets forth a complete listing and description of all computer or
telecommunications software owned by Aptus or used by Aptus in
the Business (the "MIS Software") indicating for each item of MIS
Software whether it is proprietary to Aptus, proprietary to
Seller, licensed by Aptus or licensed by Seller. Licensed MIS
Software is further identified by applicable license and support
agreements (including date and vendor), whether fully paid and if
not, remaining term and amount of monthly or yearly payments. If
any MIS Software is licensed by Seller, the license shall be
transferred to Aptus (or to Buyer and all of its Subsidiaries) on
or prior to Closing without modification and with no increase in
the license fee for the then existing term of the license until
the next renewal or change in license fees. Certain MIS Software
is identified by Buyer on Schedule 3.10.3.2 as MIS Software not
required by Buyer past the MIS and Telecommunications Transition
Period identified in Section 5.11 and shall be retained by
Seller, or if licensed software, the license obligations shall be
retained or assumed by Seller.
3.10.4 NEI Property. NEI does not own, lease or
have any interest in any personal property.
3.11 Condition of Assets. The personal property owned
or leased by Aptus, including the Transferred Assets, and the
improvements and structures located on the Real Property and the
fixtures and appurtenances thereto are in working order,
reasonable wear and tear excepted, are reasonably suitable for
the uses for which they are intended and conform to the
requirements of applicable law in all material respects. Except
as specifically set forth in this Agreement, Seller makes no
express or implied warranty of merchantability or fitness for a
particular purpose, or any other warranty as to the condition or
operation of the assets.
3.12 Insurance.
3.12.1 NEI, Aptus and its businesses and
properties are insured as provided for in and by the policies and
contracts of insurance fully described in Schedule 3.12.2.
Schedule 3.12.2 also sets forth a three (3) year history of all
claims made under such policies and the status or disposition of
such claims. Such policies and contracts of insurance cover
risks and are in such amounts as are required by applicable laws,
permits, regulations, certificates, agreements and other
instruments.
3.12.2 All such policies are in full force and
effect, all premiums with respect thereto have been paid to the
extent due and no notice of cancellation or termination has been
received with respect to any such policy (other than policies
that have been replaced or are intended to be replaced prior to
expiration by policies providing substantially the same
coverage).
3.13 Contracts. As of the date hereof, Schedule 3.13
sets forth a listing of all written material leases, contracts or
commitments of any kind, or, to Seller's knowledge, all unwritten
material leases, contracts or commitments of Aptus (the "Material
Contracts"), including:
(i) Contracts pertaining to the borrowing of money,
including any letters of credit;
(ii) Contracts creating Liens;
(iii) Contracts creating Guarantees;
(iv) Contracts relating to material employment or
consulting services which are not cancellable
within sixty (60) days or are in excess of Fifty
Thousand Dollars ($50,000.00);
(v) Contracts relating to capital expenditures in
excess of Fifty Thousand Dollars ($50,000.00);
(vi) Contracts limiting the freedom of Aptus to engage
in or compete with any business;
(vii) Contracts not yet fully performed for the
purchase, lease or sale of real property or any
business or line of business or for any merger or
consolidation;
(viii) Joint venture or partnership agreements;
(ix) Contracts or orders for future purchase or
delivery of goods or rendition of services
involving the payment by any party of more than
Fifty Thousand Dollars ($50,000.00) or having a
term greater than one year;
(x) Powers of Attorney;
(xi) Performance Bonds; and
(xii) Contracts which commit Aptus to a volume guarantee
or price level and are not terminable within six
(6) months.
All Material Contracts are valid and binding and in
full force and effect, except as would not have a Material
Adverse Effect. There has been no breach of any Material
Contract by Aptus, that would have a Material Adverse Effect
which has not been cured or waived. True and correct copies of
all Material Contracts and all material amendments thereto have
been delivered or made available to Buyer.
NEI is not a party to any lease, contract or commitment
of any kind.
3.14 Inventory.
3.14.1 Schedule 3.14 lists the amount of
inventory held by Aptus for incineration or disposal by other
means. The list indicates inventory levels at the end of each
calendar month for the past twelve (12) months and is categorized
by type of waste. All inventory conforms to its corresponding
waste profile, except to the extent that nonconformance would not
have a Material Adverse Effect.
3.14.2 Inventory on the December 1994 Balance
Sheet, other than inventory held for incineration or other
disposal as described in 3.14.1 above, is of such a quantity that
is historically usable in the ordinary course of business, and it
has not been consigned to third parties.
3.15 Accounts Receivable. All of the accounts and
notes receivable of Aptus represent amounts receivable for
merchandise actually delivered or services actually provided (or,
in the case of non-trade accounts or notes represent amounts
receivable in respect of other bona-fide business transactions),
have arisen in the ordinary course of business, are not subject
to any counterclaims or offsets and have been billed and are
generally due within 30 days after such billing. All such
receivables are fully collectible in the normal and ordinary
course of business, except to the extent of a reserve in an
amount not in excess of the reserve for doubtful accounts
reflected on the balance sheet of Aptus. Schedule 3.15 hereto
sets forth (a) the total amount of accounts receivable of Aptus
outstanding as of the last day of the month immediately preceding
the present month and (b) the agings of such receivables based on
the following schedule: 0-30 days, 31-60 days, 61-90 days, and
over 90 days, from the date of the invoice therefor.
3.16 Litigation. Except as set forth on
Schedule 3.16, there is no Action by any Person by or before any
Governmental Authority that is pending or, to Seller's Knowledge,
threatened in writing against NEI, Aptus or Seller dealing with
the conduct or operation of the Business that involves an amount
in excess of Fifty Thousand Dollars ($50,000.00). Except as set
forth on Schedule 3.16, NEI, Aptus and Seller are not subject to
any Order dealing with the conduct or operation of the Business.
3.17 Laws and Permits.
3.17.1 Compliance with Laws. Except as disclosed
on Schedule 3.17.1, Aptus is in compliance with all federal,
state and local laws, statutes, rules and regulations in effect
as of the Closing Date that are applicable to Aptus, except where
such noncompliance would not have a Material Adverse Effect.
3.17.2 Permits and Licenses. All Permits
required by any federal, state, local or foreign law, rule or
regulation and necessary for the operation of Aptus as of the
Closing Date have been obtained. Aptus is in compliance with all
Permits in connection with the operation of the Business as of
the Closing Date, except where noncompliance would not have a
Material Adverse Effect. All Permits are current, valid and in
full force and effect and will not be terminated by the
consummation of the transactions contemplated by this Agreement.
A listing of all Permits is set forth on Schedule 3.17.2 and
complete and correct copies of each have been made available to
the Buyer. Except as set forth in Schedule 3.17.2, neither NEI
or Aptus has received from any Governmental Authority any claim
or notice of any violation or possible violation, of any
building, zoning, fire, health, employment, environmental or
other laws, ordinances, rules or regulations relating to its
properties, premises, business or employees, within the past five
(5) years with respect to environmental matters or within the
past three (3) years with respect to other matters, nor has
either received any notice that any revocation or limitation of
any license, permit, certificate, approval or other authorization
is threatened or pending. Aptus has complied or, with respect to
any such claim or notice received within the prior 60 days, will
resolve such claims or notices disclosed in Schedule 3.17.2 and
there are no outstanding issues resulting from any environmental,
health and safety inspections conducted by federal, state or
local regulatory bodies except as listed on Schedule 3.17.2 which
would have a Material Adverse Effect.
3.18 Environmental Matters.
3.18.1 Except as set forth in Schedule 3.18.1,
neither NEI nor Aptus has received written notice from any third
party including, without limitation any Governmental Authority,
(i) that any Hazardous Substance which it has generated,
transported or disposed of, has been found at any site at which
a
Governmental Authority or other Person has conducted, plans to
conduct, or has demanded that NEI or Aptus conduct a remedial
investigation, removal or other response action pursuant to any
Environmental Law; or (ii) that it is or shall be a named party
to any claim, action, cause of action, complaint, legal or
administrative proceeding arising out of any Person's incurrence
of costs, expenses, losses or damages of any kind whatsoever in
connection with the presence or release of Hazardous Substances.
3.18.2 Except as set forth in Schedule 3.18.2:
(i) no portion of the real property or other assets of NEI or
Aptus has been used by NEI or Aptus for the handling, processing,
storage or disposal of Hazardous Substances except in compliance
with applicable Environmental Laws, Permits, and Real Property
Leases, unless any such non-compliance would not have, or not be
reasonably expected to have, a Material Adverse Effect; (ii) in
the course of any activities conducted by NEI or Aptus, no
Hazardous Substances have been generated or are being used on
such properties except in compliance with applicable
Environmental Laws, Permits, and Real Property Leases unless any
such non-compliance would not have, and would not be reasonably
expected to have, a Material Adverse Effect; and (iii) to the
best of Seller's knowledge, (I) there have been no releases of
Hazardous Substances on, upon, from or into any real property
owned or leased by NEI or Aptus which would have, or would be
reasonably expected to have, a Material Adverse Effect; (II) no
underground tank or other underground storage receptacle for
Hazardous Substances is located on such properties; and (III) no
friable asbestos is located on such properties.
3.18.3 Schedule 3.18.3 hereto lists by category
or individual item all environmental inspections, investigations,
studies, audits, tests, data, reviews or other analysis conducted
by or on behalf of NEI or Aptus in the past five (5) years in
relation to compliance with Environmental Laws at any property or
business now or previously owned, operated or leased by NEI or
Aptus which have been submitted to a Governmental Authority or
conducted by or on behalf of any Governmental Authority and
submitted by such Governmental Authority to NEI or Aptus, true
and correct copies of which have been provided or made available
to Buyer.
3.18.4 To the best of Seller's knowledge,
neither NEI nor Aptus has disposed of any Hazardous Waste or PCBs
generated by Aptus or its customers (or under applicable
Environmental Laws deemed to have been generated by Aptus or its
customers) at any facility, except these set forth on Schedule
3.18.4.
3.19 Patents, Trademarks and Similar Rights.
3.19.1 Intellectual Property. Schedule 3.19
sets forth a true and complete list of all patents, patent
applications, customized software, trade names, registered
trademarks, registered copyrights and registered service marks
and all applications therefor that are owned, licensed or used by
Aptus (the "Intellectual Property") on the date of this
Agreement. Except as set forth on Schedule 3.19, Aptus owns all
right, title and interest in and to all Intellectual Property
necessary to the conduct of its business as presently conducted,
subject to no Lien or restriction (including confidentiality
agreements). To Seller's knowledge, Aptus has not suffered any
infringement or misappropriation of any Intellectual Property.
No Action is pending or, to Seller's Knowledge, threatened
asserting any such infringement or misappropriation by Aptus.
3.19.2 Licenses; Infringement. Schedule 3.19
sets forth a true and complete list, as of the date of this
Agreement, of all licenses for Intellectual Property between
Aptus and any other entity. All such licenses are valid and in
full force and effect. Except as set forth on Schedule 3.19,
there is no pending or, to Seller's Knowledge, threatened, Action
against Aptus contesting, its rights to or the validity of any
Intellectual Property that it owns or licenses.
3.20 Employees.
3.20.1 Employees. Schedule 3.20.1 lists all of
the employees who perform the majority of their work for Aptus as
of the most recent date for which such information is available
("Employees") and sets forth the position and job classification
of each such Employee as of that date, together with the
following additional information: employer (if other than Aptus),
location employed, date of hire, accrued vacation, and status
(active, union/nonunion, on worker's compensation, disability,
lay-off or leave). Seller has separately provided to Buyer
information relating to the compensation of all Employees.
3.20.2 Unions. Except as set forth on
Schedule 3.20.2, there are no collective bargaining agreements or
other union agreements applicable to any Aptus location. Since
January 1, 1994, there has not been and there is not presently
pending or existing any strike, slowdown, picketing, work
stoppage, labor arbitration or proceeding in respect of the
grievance of any employee or other labor dispute against or
affecting Aptus or threatened against Aptus. No application for
certification of a collective bargaining unit has been instituted
or is pending or, to the best knowledge of Seller, has been
threatened. Seller has not received any written notification or
threat of any work stoppage or other labor dispute. There is no
lock-out of any employee by Aptus nor is Seller contemplating or
threatening a lock-out. Aptus has complied and is in compliance
with all laws relating to the employment of labor, including,
without limitation, any provisions thereof relating to wages,
hours and collective bargaining except where failure to comply
with such laws would not have a Material Adverse Effect.
3.20.3 Employee and Consulting Contracts. Except
as listed and described in Schedule 3.20.3, the directors,
officers, employees and agents of Aptus are not covered by any
written contract, agreement, indenture, instrument or commitment
providing for a specified notice of termination or fixed term of
employment. Schedule 3.20.3 hereto contains list of all written
employment, service, agency, consulting, termination and
severance contracts and agreements currently in effect entered
into by Aptus with or for any or all of its directors, officers,
employees, agents, consultants or independent contractors.
3.20.4 NLRB. Except as set forth in
Schedule 3.20.4, to Seller's Knowledge, no Aptus location is
engaged in, nor has it received any written notice of any unfair
labor practice, and no such complaints are pending before the
National Labor Relations Board or any other Governmental
Authority.
3.21 Employee Benefits.
3.21.1 Plans. Schedule 3.21.1 lists, as of the
date of this Agreement, each written pension, retirement, profit-
sharing, deferred compensation, bonus, incentive, performance,
stock option, stock appreciation, phantom stock, stock purchase,
restricted stock, medical, hospitalization, vision, dental or
other health, life, disability, severance, termination or other
employee benefit plan, program, arrangement, agreement or policy
(including each ERISA Plan) (collectively, "Plans") which
currently covers any Employee and to which Aptus or Seller on
behalf of Aptus currently contributes (each, an "Employee Benefit
Plan"). Except as set forth in Schedule 3.21.1, on the date of
this Agreement each Employee Benefit Plan complies in all
material respects, and has been operated and administered in all
material respects, in accordance with all applicable requirements
of all Laws, including ERISA and the Code, and no "reportable
event", "prohibited transaction" (as such terms are defined in
ERISA and the Code, as applicable) or termination has occurred
with respect to any Employee Benefit Plan. Each ERISA Plan
intended to qualify under Section 401(a) of the Code has received
a ruling or determination letter or will file for such
determination letter within the applicable period, concluding
that such ERISA Plan so qualifies, and to Seller's Knowledge, no
event has occurred, amendment been adopted or action been taken
that would cause such ERISA Plan to lose its qualified status.
3.21.2 Records. Seller has delivered or made
available to Buyer, on or before the date of this Agreement,
copies of each Employee Benefit Plan and any amendments thereto
and any related trust agreement, and, if applicable (a) the most
recent actuarial valuation report, (b) the last filed Form 5500
or 5500-C, (c) the summary plan description currently in effect
for each Employee Benefit Plan and all material modifications
thereto, (d) the last financial statements for each Employee
Benefit Plan and its related trust, if any, (e) the most recent
determination letter issued with respect to each Employee Benefit
Plan, and (f) a sample form of loan document under the Savings
Program.
3.21.3 Actions. Except as set forth on
Schedule 3.21.3, on the date of this Agreement, there are no
Actions pending (other than routine claims for benefits) or, to
Seller's Knowledge, threatened, with respect to any Employee
Benefit Plan.
3.21.4 Funding. All contributions required under
applicable Law or the terms of any Plan to be made by Seller on
behalf of Aptus or Aptus to an Employee Benefit Plan have been
made within the time prescribed by the applicable Law or Plan.
There does not exist, on the date of this Agreement, any
accumulated funding deficiency as to any ERISA Plan, nor has any
waiver of the minimum funding standards been issued with respect
to any ERISA Plan. On the date of this Agreement the fair market
value of the assets of the Pension Plan does not equal or exceed
the actuarial present value of all accrued benefits under such
ERISA Plan, including early retirement subsidies, plant closing
benefits and all other amounts considered to be benefit
liabilities upon a standard termination of a defined benefit plan
subject to Title IV of ERISA, with the said actuarial present
value being determined by application of the actuarial methods
and assumptions applied by such ERISA Plan's enrolled actuary at
the most recent annual valuation of such ERISA Plan.
3.21.5 Multiemployer Plans. On the date of this
Agreement:
(a) Schedule 3.21.5 sets forth the ERISA Plans
which are "multiple employer" plan within the meaning of
Section 4063 or 4064 of ERISA;
(b) no ERISA Plan is a "multiemployer plan" within
the meaning of Section 4001(a)(3) of ERISA or other applicable
employee benefit legislation;
(c) Aptus has no primary or secondary liability
under the provisions of Section 4204 of ERISA or any agreement
entered into in accordance with the provisions of that Section;
and
(d) neither Seller nor Aptus has (i) engaged in
any transaction that could result in the imposition of any
material liability pursuant to Section 4069 or 4212 of ERISA or
(ii) incurred any material liability under or pursuant to Title
I
or IV of ERISA or the penalty or excise tax provisions of the
Code relating to employee benefit plans, and no event or
condition exists with respect to Seller or Aptus that may result
in the imposition of any material liability with respect to
Buyer, Seller or Aptus or pursuant to Title I or IV of ERISA or
the penalty or excise tax provisions of the Code relating to
Employee Benefit Plans.
3.21.6 Acceleration of Benefits. Except as set
forth on Schedule 3.21.6, on the date of this Agreement, the
consummation of the transactions contemplated by this Agreement
will not result in any increase in the amount of compensation or
benefits or accelerate the vesting or timing of payment of any
benefits payable to or in respect of any Employee or former
Employee or the beneficiary or dependent of any Employee or
former Employee.
3.22 Taxes.
3.22.1 Returns. All Covered Returns relating to
NEI or Aptus that were required to be filed on or before the
Closing have or will be timely filed. All Covered Taxes shown on
such Covered Returns that are payable on or before the Closing
Date by NEI or Aptus or are chargeable as a Lien upon any of
their assets have been paid to the extent due and payable on or
before the Closing Date. All Covered Taxes required to be
withheld by or on behalf of NEI or Aptus have been withheld, and
such withheld Covered Taxes have been duly and timely paid to the
proper Governmental Authorities or are being properly held by NEI
or Aptus for such payment.
3.22.2 Extensions. Except as set forth on
Schedule 3.22.2, no Contract extending the period of assessment
or collection of any Covered Taxes for which NEI or Aptus would
be held liable has been executed or filed, on or before the date
of this Agreement, with the Internal Revenue Service or any other
Governmental Authority.
3.22.3 Affiliated Groups. Except as set forth on
Schedule 3.22.3, neither NEI nor Aptus is (a) a member of any
combined, consolidated, affiliated or unitary tax group (an
"Affiliated Group") for purposes of filing Covered Returns or
paying Covered Taxes or (b) a party to or bound by any tax
sharing or similar Contract with respect to Covered Taxes.
3.22.4 Audits. Except as set forth on
Schedule 3.22.4, to Seller's Knowledge, (a) no unresolved issue
has been raised in writing by any Governmental Authority in the
course of any audit with respect to Covered Taxes for which NEI
or Aptus would be held liable and (b) no taxing authority is now
asserting or threatening to assert against NEI or Aptus any
deficiency or claim for additional Covered Taxes or any
adjustment of Covered Taxes. To Seller's Knowledge, there is no
reasonable basis for any such assertion.
3.23 Brokers. Except as set forth on Schedule 3.23,
as to which Seller agrees to indemnify Buyer, no Person is or
will become entitled to receive any brokerage or finder's fee,
advisory fee or other similar payment for the transactions
contemplated by this Agreement because it was engaged by or acted
on behalf of Seller.
3.24 No Subsidiaries or Investments. Aptus has no
Subsidiary nor any investment or participation in any other
Person. NEI has no Subsidiary other than Aptus nor any
investment or participation in any other Person.
3.25 Sufficiency of Assets. The assets of Aptus,
including the Transferred Assets, together with the rights and
interests of Aptus under the Material Contracts and the Material
Leases, constitute all of the assets, rights and/or interests
which are used in, and are sufficient for, the operation of the
Business as it is currently being conducted in all material
respects.
3.26 Bank Accounts. Schedule 3.26 hereto sets forth
the name of each bank in which Aptus has an account or safe
deposit box, the identifying numbers or symbols thereof and the
names of all persons authorized to draw thereon or to have access
thereto. NEI has no bank accounts.
3.27 Certain Relationships. Seller has provided to
Buyer access to the conflicts of interest forms required to be
completed by all Employees. Except as disclosed on Schedule
3.27, neither Seller nor any Affiliate is a party to any
agreement with Aptus that will extend past Closing.
3.28 Full Disclosure.
Section 3.28.1 To Seller's Knowledge, this
Agreement, including the representations and warranties and
schedules, does not contain any untrue statement of material fact
or omit to state a material fact necessary to make the statements
herein not misleading in light of the circumstances under which
they were made.
Section 3.28.2 There is no fact known to the
persons listed on Schedule 13 and not disclosed to Buyer which
has a Material Adverse Effect or could reasonably be expected to
have a Material Adverse Effect.
3.29 Sophisticated Seller. Seller is an "accredited
investor" as that term is used in Section 4.5 hereto and has
sufficient knowledge and experience in financial and business
matters so as to enable it to evaluate the risks and merits
inherent in the Securities which comprise the Purchase Price.
Seller acknowledges receipt and review of copies of Buyer's most
recent Annual Report to Shareholders, Proxy Statement, Form 10-K
and other filings with the Securities Exchange Commission and has
had access to such information concerning Buyer as it has felt
necessary or appropriate for its evaluation.
3.30 Schedule References. Any item disclosed in one
Section or Schedule shall be deemed to be disclosed in any other
Section or Schedule where such disclosure is relevant, even if
there is no express cross-reference, provided that the relevance
of the disclosure is reasonably apparent. Disclosure of items
that may or may not be required to be disclosed by this Agreement
does not mean that such items are material or create a standard
of materiality.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer makes the following representations and
warranties to Seller:
4.1 Organization; Power and Authority. Buyer is a
corporation duly organized, validly existing and in good standing
under the laws of Delaware. Buyer has all corporate power needed
to execute, deliver and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby.
4.2 Authorization, Execution and Validity. The
execution, delivery and performance by Buyer of this Agreement
and the consummation by Buyer of the purchase of the Shares have
been duly authorized by all necessary corporate action. This
Agreement has been duly and validly executed and delivered by
Buyer, constitutes its valid and binding obligation and is
enforceable against Buyer in accordance with its terms.
4.3 No Conflict; Buyer Consents. The execution,
delivery and performance by Buyer of this Agreement will not (a)
violate any Law, (b) violate any Charter Document of Buyer, (c)
require any Consent from any Governmental Authority, or (d)
breach any material Contract to which Buyer is a party or by
which it is bound.
4.4 Brokers. No Person is or will become entitled to
receive any brokerage or finder's fee, advisory fee or other
similar payment for the transactions contemplated by this
Agreement because it was engaged by or acted on behalf of Buyer.
4.5 Purchase for Investment. Buyer is acquiring the
Shares for its own account for investment and not with a view to
their sale or distribution. Buyer understands that the Shares
have not been registered under the Securities Act of 1933, as
amended, or under relevant state securities laws (the "Acts").
Buyer further understands that the Shares cannot be sold except
pursuant to an effective registration statement, an exemption
from such registration requirements and in compliance with the
Acts. Buyer is an accredited investor or institutional investor
under the Acts, and Buyer has sufficient knowledge and experience
in financial and business matters so as to enable it to evaluate
the risks and merits of purchasing the Shares and is capable of
bearing the economic risks of such investment. Buyer has had
access to such information concerning NEI and Aptus as Buyer has
felt necessary or appropriate for its evaluation.
ARTICLE 5
COVENANTS OF SELLER
Seller hereby covenants and agrees with Buyer as
follows:
5.1 Cooperation by Seller. Subject to its rights
under Article 10, prior to the Closing, Seller will use all
reasonable efforts to take all actions and to do all things
necessary or advisable to consummate the transactions
contemplated by this Agreement and to cooperate with Buyer in
connection with the foregoing, including using reasonable efforts
to obtain any Consents contemplated by Section 3.8. However,
Seller shall have no obligation to change any Permit or make any
payment to obtain any Consent.
5.2 Pre-Closing Access to Information. From the date
hereof through the Closing Date, Seller shall, subject to
applicable contractual obligations, afford to Buyer, its
accountants and its counsel reasonable access, upon reasonable
notice, to all of the relevant properties, books and records of
NEI and Aptus that Buyer needs to complete its due diligence.
Buyer's representatives shall be permitted to make and remove
photocopies of any documents. Seller shall cause the
representatives of NEI and Aptus to give to the Buyer the fullest
cooperation with the object of providing access to the assets and
to all information as the Buyer may deem necessary. The above
described access shall not extend to books and records or self-
evaluative audits subject to attorney-client privilege. In
addition to the foregoing, upon prior written notice to Seller,
and in the company of Aptus's representative, if Seller so
requests, the Buyer shall have access to the customers of Aptus.
Buyer shall direct all requests for information to:
David A. Brakoniecki, Esquire
Westinghouse Electric Corporation
Room 1750
11 Stanwix Street
Pittsburgh, Pennsylvania 15222-1384
5.3 Conduct of Business.
5.3.1 Business in Ordinary Course. From the date
hereof through the Closing Date, Seller shall use all reasonable
efforts to cause Aptus to: (a) preserve its relationships with
suppliers, customers, Employees, creditors and Governmental
Authorities, (b) maintain their existing insurance coverage in
all material respects, (c) perform their obligations under the
Material Contracts and Material Permits in all material respects,
(d) comply with all applicable Laws in all material respects and
(e) conduct its business in the ordinary course and consistent
with past practice. Except as contemplated by Section 5.14
hereto (Intercompany Accounts) or unless otherwise required by
this Agreement, without the consent of Buyer, Seller will not
permit Aptus to:
(i) amend its Charter Documents in any material
respect;
(ii) issue, sell or transfer any equity securities;
(iii) incur any debt for borrowed money, or guaranty any
debt;
(iv) sell, assign, transfer or permit the creation of
any Lien (other than Permitted Liens) on any of
its (x) assets, or (y) real property, provided
that the sale of assets entered into in the
ordinary course of business and involving the
payment by any party of less than Fifty Thousand
Dollars ($50,000.00) shall be permitted;
(v) enter into (x) any Material Contract outside the
ordinary course of business or (y) any customer
contract which commits Aptus to a volume guarantee
or price level and is not terminable within six
(6) months, provided that (z) contracts or orders
for future purchase or delivery of goods or
rendition of services entered into in the ordinary
course of business and involving the payment by
any party of less than Fifty Thousand Dollars
($50,000.00) shall be permitted;
(vi) amend or terminate any Material Contract or
Material Permit outside the ordinary course of
business;
(vii) waive any right, forgive any debt (other than
intercompany debt) or release any claim, except in
the ordinary course of business, if such waiver,
forgiveness or release would have a Material
Adverse Effect;
(viii) change its current practices with respect to
the payment of accounts payable at forty-five
(45) days (or as otherwise agreed to with the
vendor); or
(ix) agree to take any of the actions described in
Sections 5.3(i) through 5.3(viii).
5.3.2 Buyer's Consent. If Seller gives written
notice to Buyer that Aptus proposes to take any action for which
Buyer's consent is required under Section 5.3.1 and if Buyer has
not delivered within five (5) business days of Seller's notice
Buyer's written objection to the proposed action, Buyer shall be
deemed to have consented to the action described in Seller's
notice. Buyer shall not unreasonably withhold its consent under
Section 5.3.1 to any action taken or to be taken by Aptus.
5.3.3 Representations and Warranties. Seller
shall use reasonable efforts, and shall cause Aptus to use
reasonable efforts, to conduct its business in such a manner that
at the Closing the representations and warranties of Seller
contained in this Agreement shall be true and correct as though
such representations and warranties were made on, as of, and with
reference to such date. Seller will promptly notify the Buyer in
writing of (i) any event or fact which causes a breach of any of
its representations, warranties, covenants or agreements, or (ii)
the occurrence of any condition or development (exclusive of
general economic factors affecting business in general) of a
nature that is or may be reasonably expected to have a Material
Adverse Effect.
5.4 Further Assurances.
5.4.1 Additional Documents. Subject to the other
terms and conditions of this Agreement, at any time and from time
to time, whether before or after the Closing, Seller shall
execute and deliver all instruments and documents and take all
other action that Buyer may reasonably request to consummate or
to evidence the consummation of the transactions contemplated by
this Agreement.
5.4.2 Certain Consents. Notwithstanding anything
to the contrary in this Agreement, this Agreement shall not
constitute an agreement to assign or transfer any interest in any
Contract, Lease, Agreement or other instrument or arrangement or
any claim, right or benefit, or an agreement to assume any
liability, obligation or commitment arising thereunder or
resulting therefrom, if an assignment or transfer or an attempt
to make such an assignment or transfer without the Consent of a
third party would constitute a breach or violation thereof or a
breach of Law, or affect adversely the rights of the Buyer or the
Seller, or Aptus thereunder; and any transfer or assignment to,
or any assumption by, Buyer of any interest in, or liability,
obligation or commitment under, any such Contract, Lease,
Agreement or other instrument or arrangement that requires the
Consent of a third party shall be made subject to such Consent
being obtained. Prior to the Closing, each party will use all
reasonable efforts and cooperate in obtaining all Consents
necessary to effect the transfer of all such Contracts, Leases,
Agreements and other instruments and arrangements as contemplated
hereby, provided that, neither party shall be required to pay or
commit to pay any amount to (or incur any obligation in favor of)
any Person from whom any such Consent may be required (other than
nominal governmental filing fees payable to any governmental
authority or any fees which may be imposed under Section 3.10.3).
In the event any such Consent is not obtained on or prior to the
Closing Date, the parties will cooperate in any lawful and
reasonable arrangement to provide that the Buyer shall receive
the benefits under any Contract, Lease, Agreement or other
instrument or arrangement not assigned and transferred at the
Closing by reason of the failure to obtain such Consent (a "Non-
Transferred Instrument"), including, if necessary, at the request
and expense of Buyer, enforcing performance by any third party of
its obligations in respect of such Non-Transferred Instrument;
provided that Seller shall bear the expense of such enforcement
to the extent it relates to Seller's failure to obtain such
consent prior to Closing; and provided that, to the extent the
parties are successful in providing the benefits of such Non-
Transferred Instruments to the Buyer, the Buyer will pay, honor
and discharge when due all liabilities, obligations and
commitments of the Seller or Aptus related thereto to the extent
due to the operations of Aptus conducted after the Closing Date.
Seller shall use reasonable efforts to obtain any consents
necessary with respect to the transfer of Permits. Primary
responsibility shall rest with Seller and Buyer agrees to fully
cooperate.
5.5 Supplements to Schedules. If prior to Closing, to
Seller's Knowledge, any event occurs or condition changes that
causes any of its representations or warranties in this Agreement
to be inaccurate as of any date that is relevant for the
particular representation or warranty, Seller shall notify Buyer
in writing. With Buyer's consent, Seller may supplement the
Schedules to account for such event or change. Buyer need not
consent if the change discloses an item that is material or is in
violation of Seller's covenants under this Agreement. The
supplemental Schedules will cure and correct any breach of any
representation or warranty that otherwise would have existed.
5.6 Certain Financial Covenants. At Closing, Seller
shall have (i) satisfied all long-term liabilities required to be
disclosed as such on the balance sheet of NEI or Aptus (other
than capitalized leases); (ii) contributed sufficient cash to
Aptus such that at Closing, Aptus shall have a cash account of
not less than One Million Dollars ($1,000,000) (the "Working
Capital Advance"); and (iii) canceled any indebtedness or amounts
owing from NEI or Aptus to Seller or any Affiliate of Seller by
classifying such indebtedness as additional capital provided by
parent company and reflected as such in shareholder's equity (if
not already so classified). The Working Capital Advance is (a)
not to be used by Seller or Aptus prior to Closing to satisfy any
liabilities or obligations of Aptus and must be available in full
to Buyer immediately after Closing; (b) not to be included as
part of the assets of Aptus for purposes of calculating the Final
Adjusted Net Worth; and (c) to be treated as an interest free
advance by Seller to Buyer. Aptus or Buyer shall repay this
advance in accordance with Section 6.7.
5.7 Exclusive Dealing. Seller agrees not to enter
into or continue any discussions or negotiations relating to the
sale of Aptus or the Business prior to March 31, 1995 or, in the
event this Agreement is extended, prior to the date this
Agreement terminates.
5.8 Closure and Post Closure Costs and Financial
Assurances.
5.8.1 Closing Date Closure and Post-Closure Costs
Defined. Closure and post-closure costs with respect to the
three primary facilities of Aptus (Aragonite, Utah; Coffeyville,
Kansas; and Lakeville, Minnesota) pursuant to 40 C.F.R. Section
265.110 et seq and as implemented by applicable state and federal
regulatory agencies as of the date of Closing, shall be referred
to herein as "Closing Date Closure and Post-Closure Costs."
5.8.2 Financial Assurances Defined. Statutorily
imposed financial assurances provided to various state and
federal regulatory agencies with respect to Closing Date Closure
and Post-Closure Costs, pursuant to 40 C.F.R., Section 265.140 et
seq, shall be referred to herein as "Financial Assurances."
5.8.3 Increases in Costs or Required Assurances.
For purposes of this Section 5.8, the amount of Closing Date
Closure and Post-Closure Costs and Financial Assurances shall be
fixed at the date of Closing. Any increases in Closing Date
Closure and Post-Closure Costs or Financial Assurances, whether
brought about by inflation factors, facility changes or
additions, or changes in applicable law, shall be the
responsibility of Buyer and Aptus.
5.8.4 Insurance Premium Payments. At Closing,
Seller shall pay to an insurance company designated by Buyer a
premium payment on behalf of Buyer in the amount of One Million,
Five Hundred Thousand Dollars ($1,500,000.00). Buyer agrees make
a similar premium payment in the amount of One Million, Seven
Hundred and Fifty Thousand Dollars ($1,750,000.00). The total
amount of Three Million, Two Hundred and Fifty Thousand Dollars
($3,250,000.00) shall be applied to Buyer's insurance program for
the purpose of satisfying a portion of the Financial Assurances.
5.8.5 Letters of Credit.
5.8.5.1 For the period beginning on the
date of Closing and ending on the third anniversary thereof,
Seller shall procure and/or maintain in effect letters of credit
in an amount equal to the Financial Assurances less the Three
Million, Two Hundred and Fifty Thousand Dollars ($3,250,000.00)
provided for in Section 5.8.4 above, provided that Seller's
obligation with respect to such letters of credit shall not
exceed an aggregate of Twenty-five Million Dollars
($25,000,000.00). Buyer shall reimburse Seller for the amount
charged to Seller by its lender or lenders for providing the
letters of credit. For letters of credit in effect prior to the
date of Closing, this reimbursement shall be limited to a
reimbursement for the prorated cost relative to the period the
letters of credit are in effect after the date of Closing.
Payment shall be made in cash, without deduction or offset,
within ten (10) business days of Buyer's receipt of proof of
payment by Seller. The letters of credit shall be provided by
Seller without recourse, except as provided below. In the event
that all or a portion of the letters of credit are collected upon
for any reason, Seller shall have no right of indemnity or other
claim against Buyer arising therefrom; provided that Buyer agrees
to indemnify and hold harmless Seller from and against Damages
relative to its providing the letters of credit to the extent
arising from (a) any Increases in Costs or Required Assurances
set forth in Section 5.8.3; (b) any failure of Buyer to replace
the letters of credit with alternative financial assurances at
the end of the three (3) year period specified herein; (c) any
voluntary facility closure initiated by Buyer; or (d) any
violation of a permit by Buyer or its Subsidiaries, or any
negligent acts or omissions of Buyer or its Subsidiaries, that
result in the closure of a facility.
5.8.5.2 For the period beginning on the
third anniversary of the date of Closing and ending on the fifth
anniversary of the date of Closing, responsibility for satisfying
the Financial Assurances and obtaining letters of credit shall
rest with Buyer. Seller shall reimburse Buyer for the amount
charged to Buyer by its lender or lenders for providing letters
of credit in an amount equal to the Financial Assurances less the
Three Million, Two Hundred and Fifty Thousand Dollars
($3,250,000.00) provided for in Section 5.8.4 above, provided
that Seller's obligation with respect to such reimbursement shall
be limited to letters of credit in the aggregate amount of Twenty
Five Million Dollars ($25,000,000.00). Payment shall be made in
cash, without deduction or offset, within ten (10) business days
of Seller's receipt of proof of payment by Buyer. Should Buyer
choose to satisfy its obligation to provide Financial Assurances
by some alternative method, it may, upon presenting proof that
the alternative method is acceptable to the applicable federal
and state regulatory agencies, require that Seller reimburse it
for the amount that its lender or lenders would have charged for
the letters of credit.
5.8.5.3 This Section 5.8 contemplates that
a portion of the letters of credit already being provided by
Seller immediately prior to the date of Closing in order to
satisfy the Financial Assurances will be replaced by an insurance
certificate issued by the insurance company of Buyer designated
in Section 5.8.4. The parties recognize that there may be some
delay in accomplishing this replacement. Accordingly, and
notwithstanding Section 5.8.5.1, for a period of time equal to
the lesser of thirty (30) days or the date on which said
insurance certificate is issued, Seller agrees to maintain in
effect all letters of credit already being provided by Seller
immediately prior to the date of Closing to satisfy the Financial
Assurances. Buyer shall be obligated to reimburse Seller for the
cost of the letters of credit in accordance with Section 5.8.5.1.
5.8.5.4 The letters of credit provided by
Seller in 5.8.5.1 above shall be issued by a lender chosen by
Seller, shall designate Aptus as the applicant and shall
designate the relevant governmental authorities as the
beneficiaries. Notwithstanding the designation of Aptus as the
applicant, Seller's lender shall issue the letters of credit
based solely on the credit of Seller and shall have no recourse
against Aptus.
5.9 Right to Seller Business Post Closing. For a
period of five (5) years from the Closing Date, Seller shall
include Buyer on its approved list of vendors that provide off-
site Hazardous Waste incineration disposal services. Buyer will
remain on the Approved Vendor list during this time to the extent
Buyer's facilities maintain their permitted status and are not
barred by any governmental agency from accepting waste in
accordance with U.S. EPA's CERCLA off-site rule found at 40 CFR
300.440 et seq. or under imminent threat of being so barred by
any governmental agency. Seller will send a notice to its
operating divisions and facilities informing them of Buyer's
inclusion on such Approved Vendor list. In addition, Buyer will
be afforded the opportunity to bid on any project work
originating with the Seller's corporate Environmental Affairs
group during this five (5) year period, that requires Hazardous
Waste incineration services. For purposes of this Section, Buyer
shall include any Subsidiary of Buyer.
5.10 Right to Seller Intellectual Property Post
Closing. For five (5) years after Closing, Seller, to the extent
legally and contractually possible, shall provide technology
directly relating to the incineration of Hazardous Waste to Buyer
for Buyer's review. If Buyer desires, Seller will grant Buyer a
nonexclusive, nonassignable, nontransferable, royalty-free
license in perpetuity to use the technology for the incineration
of Hazardous Waste and for no other purpose. Seller will not be
liable to Buyer for the accuracy or commercial usefulness of the
technology. Seller will offer to Buyer access to its technical
personnel, if available, for a period not to exceed forty (40)
man hours per year. Buyer, to the exclusion of Seller, is liable
for all damages from the use of the technology by Buyer. These
terms and conditions will be set forth in a license agreement
between Seller and Buyer. For purposes of this Section, Buyer
shall include any Subsidiary of Buyer. None of the technologies
listed in Section 7.4.1 (j) (i) shall be considered to be
incineration technology.
5.11 MIS and Telecommunications Services Post Closing.
5.11.1 Seller provides to Aptus: (i) certain MIS
services, including payroll, accounts receivable and collections,
general ledger and fixed assets applications (the "Seller MIS
Services"); and (ii) certain telecommunications services,
including long distance, 800 service and voice communications
(the "Seller Telecommunications Services"). Seller agrees to
continue to provide the Seller MIS Services and the Seller
Telecommunications Services to Aptus after Closing (collectively,
the "Post Closing Services") in substantially the same manner as
provided prior to Closing, and agrees to cooperate with Buyer in
transferring such services to applications to be provided by
Buyer.
5.11.2 Seller's obligations under this Section
shall continue until the transition to Buyer's applications is
completed, but not longer than six (6) months after Closing
unless extended by mutual agreement (the "MIS and
Telecommunications Transition Period"). Seller and Buyer agree
to use reasonable efforts to effect the transfer of the Post
Closing Services to applications to be provided by Buyer as
promptly as practicable.
5.11.3 During the MIS and Telecommunications
Transition Period, Seller shall provide the Seller MIS Services
pursuant to the terms of the agreement attached as Exhibit 5.11.3
(1) hereto. During the MIS and Telecommunications Transition
Period, Seller shall provide personnel to assist Buyer in
transferring the Post Closing Services at no cost to Buyer or
Aptus. During the MIS and Telecommunications Transition Period,
Seller shall provide the Seller Telecommunications Services to
Aptus pursuant to the terms of the agreement attached as Exhibit
5.11.3 (2) hereto. Buyer shall be entitled to cancel either
agreement on thirty (30) days advance written notice with no
further liability or obligation, except for charges which may
have accrued up to the date of termination.
5.11.4 Seller's obligation under Section 3.10.3.2
to transfer to Buyer or Aptus software presently licensed to
Seller shall not require that Seller obtain the written consent
to a software license transfer if the software is what is
commonly understood in the industry to be "shrink wrap" software,
provided that the "shrink wrap" software license is not part of
a
master license with Seller that prohibits a transfer to a third
party without consent or payment of a fee. For a period of three
(3) years after Closing, Seller will indemnify Buyer against any
Actions for license fees or infringement made by the licensors of
such "shrink wrap" software arising out of the transfer of the
software to Buyer or Aptus hereunder.
5.12 Intercompany Accounts. Between execution hereof
and Closing, intercompany accounts shall be handled substantially
in the manner prior to Closing. At the Closing Date,
intercompany receivables, payables and loans then existing
between Seller, NEI or Aptus shall be terminated in accordance
with Section 5.6.
5.13 Preparation of Financial Statements. The
Financial Statements referred to in Section 3.5 shall include
such detail as is required by Form 8-K of the Securities Act of
1934 and be prepared at Seller's expense, except that Buyer
agrees to pay one-half of the fees of Seller's outside auditors
up to a maximum of Thirty Thousand and 00/100 Dollars
($30,000.00). Buyer shall, at its expense, prepare any pro forma
financial statements required in connection with its Form 8-K
filing. To the extent additional audited or unaudited financial
information relating to the operations of NEI or Aptus prior to
the Closing is necessary or desirable in connection with the
remarketing of the Bonds or the registration rights set forth in
the Senior Unsecured Debentures or Subordinated Convertible
Debentures, the preparation of such financial information shall
be at Seller's cost.
5.14 [Intentionally Left Blank]
5.15 Leased Real Property. On or prior to Closing,
Seller shall assume all obligations under certain Real Property
Leases that have been identified by notation on Schedule 3.9.2 as
Leases that Buyer does not require.
5.16 Certain Environmental Clean-ups.
5.16.1 Prior to Closing, or as soon thereafter as
is reasonably practicable, Seller shall clean up and properly
dispose of the construction debris presently stockpiled on the
southeast corner of the Coffeyville Facility.
ARTICLE 6
COVENANTS OF BUYER
Buyer hereby covenants and agrees with Seller as
follows:
6.1 Cooperation by Buyer. Subject to its rights under
Article 10, prior to the Closing, Buyer will use all reasonable
efforts to take all actions and to do all things necessary or
advisable to consummate the transactions contemplated by this
Agreement and to cooperate with Seller in connection with the
foregoing, including using reasonable efforts to obtain any
Consents contemplated by Section 4.3.
6.2 Due Diligence Activities. Each party shall comply
with the limitations on the disclosure and use of information set
forth in the Confidentiality Agreement with respect to
information that the other party provides in and pursuant to this
Agreement. Buyer shall coordinate its contacts with Employees
with officers of Seller and shall not conduct any soil,
groundwater or other environmental sampling in connection with
the transactions contemplated hereby without the prior written
consent of Seller. Buyer shall refrain from imposing any undue
burden upon Aptus and from interfering with its operations while
conducting due diligence activities and preparing for the
Closing. Buyer has concluded its due diligence investigation of
the Business.
6.3 Further Assurances. Subject to the other terms
and conditions of this Agreement, at any time and from time to
time, whether before or after the Closing, Buyer shall execute
and deliver all instruments and documents and take all other
action that Seller may reasonably request to consummate or to
evidence the consummation of the transactions contemplated by
this Agreement.
6.4 HSR Act Compliance. Buyer shall file any
notification required to be filed under the HSR Act to consummate
the transactions contemplated hereby. Buyer shall use all
reasonable efforts to comply as promptly as practicable with any
request made pursuant to the HSR Act for additional information.
Buyer shall cooperate with Seller in such compliance and shall
pay the statutory filing fees required by the HSR Act.
6.5 Release from Guarantees. Seller has not
guaranteed any obligations of Aptus, except for the Guarantees
listed on Schedule 6.5. Seller shall maintain the Guarantees in
effect until the Closing Date, but shall be entitled to terminate
the Guarantees effective after the Closing Date with respect to
operations of Aptus conducted after the Closing Date. After the
Closing Date, Buyer shall indemnify and hold Seller harmless from
and against all Damage attributable to any claims made under such
Guarantees, but only to the extent that they relate to operations
of Aptus conducted after the Closing Date.
6.6 Due Diligence - Post-Signing. Buyer agrees that
during the period from the signing of this Agreement through
Closing, Seller shall have reasonable access to senior management
of Buyer, the books and records of the Buyer, subject to any
attorney-client privilege so as to permit continued due diligence
by Seller of Buyer.
6.7 Repayment of Working Capital Advance. The Working
Capital Advance identified in Section 5.6 shall be repaid by
Aptus or Buyer, without deduction or offset, in accordance with
the following repayment schedule:
Number of Days Amount of
After Closing Payment
60 $200,000.00
90 $200,000.00
120 $200,000.00
150 $200,000.00
180 $200,000.00
ARTICLE 7
MUTUAL COVENANTS
7.1 Employee Matters.
7.1.1 Employment.
7.1.1.1 From the Employees designated on
Schedule 3.20.1, Buyer shall provide a list to Seller placing the
Employees into three (3) categories: (a) Employees that Buyer
shall offer employment to at Closing (the "Continuing
Employees"); (b) Employees that do not fall into category (c)
below and that Buyer shall not offer employment to at Closing
(the "Terminating Employees"); and (c) Employees that Buyer shall
not offer employment to at Closing but whose services Buyer
desires to retain on a contract basis for a limited transition
period (the "Transition Employees"). The parties acknowledge
that each category may be comprised of both exempt and non-exempt
Employees. Buyer shall provide this list to Seller as soon as
practicable, but in any event no later than ten (10) days prior
to the Closing Date. Seller shall have provided Buyer access to
the Employees and their personnel files in order to assist Buyer
in this process, subject to the terms of the December 12, 1994
Letter Agreement between Buyer and Seller.
7.1.1.2 Buyer agrees that the sum of the
number of Terminating Employees and Transition Employees shall
not exceed One Hundred (100). Buyer agrees that the number of
Transition Employees shall not exceed Twenty (20). To the extent
that Employees are hired or replaced by Seller or Aptus prior to
Closing, Buyer agrees to include such Employees on one of the
lists referred to in Section 7.1.1.1 above; provided that if the
number of Employees on Schedule 3.20.1 increases, Buyer reserves
the right to a corresponding increase in the number of
Terminating Employees or Transition Employees, provided that no
adjustment shall be allowed to Buyer with respect to the hiring
by Aptus of one personnel manager at its Coffeyville facility.
7.1.1.3 Buyer shall offer employment to the
Continuing Employees with (a) wages or salaries equal to such
wages and salaries as such Employees are now paid by Aptus or
Seller, and (b) benefits, including a defined benefit pension
plan, as set forth on Schedule 7.1.1.3. With respect to
Transition Employees, Seller agrees to continue the employment of
or hire such Employees as employees of Seller upon the same terms
and conditions as their present employment, except that such
Employees shall be leased to Aptus as contract employees of Aptus
for a period of time determined by Buyer but not to exceed one
hundred and twenty (120) days after the date of Closing (the
"Transition Period"). Buyer shall provide to Seller thirty (30)
days notice prior to terminating the contract with Seller for any
Transition Employee. Seller makes no guarantee that any
Transition Employee will choose to continue as an employee of
Seller under this Section 7.1.1.3 and Seller shall have no
obligation to replace any Transition Employee that leaves
Seller's employment. Employees whose services may be separately
provided post Closing pursuant to the MIS Services Agreement will
be included in the number of Terminating Employees, but will not
be deemed Transition Employees. Seller's wage and benefits costs
for such employees will be reimbursed pursuant to the MIS
Services Agreement. Seller shall be required to maintain
sufficient agreed upon staffing levels under the MIS Services
Agreement whether or not employees terminate their employment
with Seller. Buyer shall indemnify Seller against its out-of-
pocket costs for wages and benefits for Transition Employees to
the extent applicable to the Transition Period. Buyer reserves
the right to offer employment to any Transition Employee in the
manner and upon the same terms, conditions, wages and benefits
prescribed herein for Continuing Employees.
7.1.1.4 Any liability to an Employee that is
not designated as a Continuing Employee for severance pay or
other separation benefits that arises out of such Employee's
termination and any liability that arises out of any breach by
Seller of any of the provisions of the Benefits Sections, shall
be a Retained Liability. Buyer agrees to assume responsibility
for and retain any liability associated with these reductions in
employment levels to the extent that they trigger compliance with
the federal Worker Adjustment and Retraining Notification Act.
With respect to any claims, proceedings or lawsuits brought
against Buyer, Seller or Aptus alleging that Buyer's listing of
employees under Section 7.1.1.1 violates Title VII of the Civil
Rights Act, the Americans with Disabilities Act or the Family
Medical Leave Act or discriminates against an Employee in
violation of any applicable state or federal laws, each party
shall bear its own respective defense costs and expenses
(including attorneys' fees) and afford reasonable cooperation to
the other parties. In the event that Buyer is ultimately found
liable in any such proceeding, it shall indemnify Seller against
the judgment or settlement and also reimburse Seller's reasonable
defense costs and expenses (including attorneys' fees).
7.1.2 Union Representation. With respect to the
collective bargaining agreement identified on Schedule 3.20 which
expired by its terms on October 31, 1994, the parties agree as
follows: (i) Seller has postponed negotiations on a new
collective bargaining agreement by extending the existing
agreement until March 15, 1995 or thirty (30) days after Closing
and by agreeing that any wage increases will be effective
retroactively to October 31, 1994; (ii) Buyer agrees to cause
Aptus to assume the obligations under the collective bargaining
agreement and its extension and to continue to recognize the
union signatory thereto as the collective bargaining
representative of the employees covered by the agreement post
Closing, provided that Aptus will not be able to continue
providing any Westinghouse benefits but will instead provide the
Rollins benefits outlined on Schedule 7.1.1.3; and (iii) Seller
shall promptly reimburse Aptus within five (5) business days
after written notification (with documentation) to Seller of
payment by Aptus for any compensation paid to covered employees,
for the period between October 31, 1994 and Closing, provided
that this reimbursement by Seller shall be limited to not more
than three (3) percent of the prior regular hourly wages of the
covered employee for the period between October 31, 1994 and
Closing.
7.1.3 Termination of Coverage Under Seller's
Employee Benefit Plans and Coverage Under Buyer's Employee
Benefit Plans.
7.1.3.1 Effective as of the Closing, each
Continuing Employee who is a participant in an Employee Benefit
Plan sponsored by Seller (a "Seller's Plan") shall cease to be a
participant in each such Seller's Plan, and all of the Continuing
Employees (including Transition Employees hired by Buyer pursuant
to Section 7.1.1.3) effective as of the date of hire of such
Continuing Employee by Buyer shall become eligible to participate
in the employee benefit plans of Buyer in accordance with the
applicable provisions of this Agreement and the terms and
conditions of each such plan. Effective as of the Closing, if
Aptus has adopted any of Seller's Plans, Aptus shall withdraw as
an employer thereunder.
7.1.3.2 Employees of Aptus shall be entitled
to the accrued and vested benefits due to them as a result of
Aptus's termination of participation as described in Section
7.1.3.1 above or their termination of employment, under all
employee benefit plans, programs, practices or arrangements of
Seller, and Seller shall retain liability for the payment of such
accrued and vested benefits under and in accordance with such
plans, programs, practices and arrangements and shall indemnify
and hold Buyer and Aptus harmless from and against same.
7.1.4 Pension Plans. Buyer shall grant to each
Continuing Employee covered by the Pension Plan immediately
before the Closing credit for his or her period of employment
with Aptus and Seller prior to the Closing Date for the purpose
of eligibility and vesting under any defined benefit pension plan
maintained by Buyer ("Buyer's Pension Plan") for the benefit of
such Employees following the Closing, but not for the purpose of
benefit accrual, it being understood that the Buyer's pension
plan is a defined benefit plan based on salary earned with the
Buyer (beginning on Closing) and that no credit will be provided
for any earnings prior to the Closing Date.
7.1.5 Savings Program. As of the Closing Date,
the Savings Program of Seller shall not accept contributions from
Employees. Buyer shall grant to each Continuing Employee covered
by the Savings Plan immediately before the Closing credit for his
or her period of employment with Aptus and Seller prior to the
Closing Date for the purpose of eligibility and vesting under
Buyer's defined contribution plan (the "Buyer's Savings Plan"),
but not for the purpose of benefit accrual. The Buyer's Savings
Plan will accept "rollovers" of account balances of Continuing
Employees from the Savings Program with respect to before tax
contributions only, in accordance with the terms and
administrative policies of the Seller's Plan. Outstanding loans
under the Savings Program will not be transferable to the Buyer's
Savings Plan.
7.1.6 Welfare and Fringe Benefits.
(a) Buyer shall grant to each Continuing Employee who
is covered immediately before the Closing under Employee Welfare
Benefit Plans sponsored by Seller ("Seller's Employee Welfare
Benefit Plans") credit for his or her period of employment prior
to the Closing with Seller and Aptus under any Employee Welfare
Benefit Plan maintained by Buyer for the benefit of such
Employees following the Closing (a "Buyer's Employee Welfare
Benefit Plan") (including but not limited to arrangements
providing disability, vacation, severance and sick time benefits)
and shall grant credit for deductibles and co-payments previously
paid under any Seller's Employee Welfare Benefit Plan for the
year in which Closing occurs. Buyer's Employee Welfare Benefit
Plans shall not exclude from coverage or limit coverage for any
pre-existing condition of any of the Employees.
(b) All claims of Employees described in Section
7.1.6(a) which are made against Employee Welfare Benefit Plans
and which are incurred prior to the Closing (treating for this
purpose costs for hospital confinements that begin before the
Closing and continue after the Closing as having been incurred
before the Closing) shall be paid in accordance with the
provisions and administrative policies of Seller's Employee
Welfare Benefit Plans. All claims of Employees described in
Section 7.1.6(a) which are made against Employee Welfare Benefit
Plans and which are incurred after the Closing shall be paid
under Buyer's Employee Welfare Benefit Plans.
7.2 Tax Covenants.
7.2.1 Apportionment of Income Taxes Between Pre-
Closing and Post-Closing Periods. In order to appropriately
apportion any Income Tax relating to any taxable year or any
other period that is treated as a taxable year (a "Period") that
includes (but that would not, but for this Section, close on) the
Closing Date, the Parties will, unless specifically prohibited by
applicable law, elect with the relevant taxing authority to treat
for all purposes the Closing Date as the last day of a taxable
period of NEI or Aptus, and such Period shall be treated as a
Short Period and a Pre-Closing Period for purposes of this
Agreement. In any case where applicable law specifically
prohibits NEI or Aptus from treating the Closing Date as the last
day of a Short Period, then for purposes of this Agreement, the
portion of such Income Tax that is attributable to the
operations of NEI or Aptus for such Interim Period shall be the
Income Tax that would be due with respect to the Interim Period
if such Interim Period were a Short Period.
7.2.2 Payment of Income Taxes. In furtherance of
the foregoing, any Income Tax in respect of any Short Period
shall, except to the extent accrued or reserved for in the
aggregate on the balance sheet of NEI or Aptus at Closing, be
borne by Seller, and any refunds or credits in respect of such
Income Tax for any such Short Period or any Pre-Closing period,
in excess of the amount reflected on the balance sheet of NEI or
Aptus at Closing, shall be the property of Seller. Any Income
Tax in respect of any Interim Period (including amounts payable
as a result of an audit or other adjustment), to the extent not
paid on or before the Closing Date or accrued or reserved for on
the balance sheet of NEI or Aptus at Closing, shall be paid by
Seller to Buyer, which shall pay such Income Tax to the relevant
Governmental Authority, no later than fifteen (15) days prior to
the date such payment is due, and any refunds or credits received
by Buyer, NEI or Aptus in respect of such Income Tax for such
Interim Period, in excess of the amount reflected on the balance
sheet of NEI or Aptus at Closing, shall be the property of
Seller. Any Income Tax attributable to the operations of Buyer,
NEI or Aptus for any Post-Closing Period shall be borne by Buyer,
NEI or Aptus, as the case may be. Any refunds or credits in
respect of such Income Tax for any such Post-Closing Period
shall be the property of Buyer, NEI or Aptus, as the case may be.
7.2.3 Preparation and Filing of Income Tax
Returns. Seller shall be responsible, at its expense, for the
preparation and filing of all Income Tax Returns for any Short
Period. Seller shall prepare such Income Tax Returns in a manner
consistent with prior years and shall, in respect of such Income
Tax Returns, determine the income, gain, expenses, losses,
deductions and credits of NEI or Aptus in a manner consistent
with prior practice. The results of operations of NEI or Aptus
from the first day of the taxable year through the Closing Date
shall be included in Seller's consolidated federal income tax
return and in any consolidated, combined or unitary Income Tax
Returns required to be filed by Seller after the Closing Date.
The results of operations of NEI or Aptus from the first day of
the taxable year through the Closing Date shall be included in
any separate Income Tax Returns filed by NEI or Aptus after the
Closing Date; provided, however, that Seller shall prepare
(without cost to Buyer, NEI or Aptus) all such separate Income
Tax Returns for any Short Period (but not for any Period which
includes or ends after the Closing Date) and submit them to
Buyer, and Buyer shall have all such separate Income Tax Returns
appropriately executed and filed on a timely basis. With respect
to any Income Tax Return to be prepared by Seller, Buyer shall,
and shall cause NEI or Aptus to, provide to Seller information in
a manner consistent with past practice for use in preparation of
such Income Tax Returns, in each case, no later than sixty days
(60) after the relevant Period ends. Notwithstanding the
foregoing, Buyer shall be responsible for preparing and filing
all Income Tax Returns of NEI or Aptus for Periods not ending on
or before the Closing Date, even if such Income Tax Returns cover
Periods prior to the Closing Date.
7.2.4 Cooperation. Seller and Buyer shall, and
shall cause NEI or Aptus to, provide each other with such
assistance as may reasonably be requested by them in connection
with the preparation of any Income Tax Return, any Income Tax
audit or other examination by any Governmental Authority, or any
judicial or administrative proceedings related to liability for
Income Taxes. Seller and Buyer shall, and shall cause NEI or
Aptus to, retain and provide each other with any records or
information which may be relevant to such preparation, audit,
examination, proceeding or determination. Such assistance shall
include making employees available on a mutually convenient basis
to provide and explain such records and information and shall
include providing copies of any relevant Income Tax Returns and
supporting work schedules. The Party requesting assistance
hereunder shall reimburse the other for reasonable out-of-pocket
expenses incurred in providing such assistance.
7.2.5 Refund Claims. Subject to Section 7.2.11,
Seller will provide Buyer, NEI and Aptus with such assistance as
it may reasonably request to prepare any refund claim
attributable to the carryback of any tax losses or tax credits
incurred by Buyer, NEI or Aptus in any Pre-Closing Period to any
consolidated, combined or unitary Income Tax Return of Seller or
to any separate Income Tax Return of NEI or Aptus for any Pre-
Closing Period, and Seller shall receive and retain the amount of
any resulting refunds together with any interest thereon upon
receipt by any party.
7.2.6 Tax Sharing Agreements. Any and all Tax
(or similar) agreements, arrangements or undertaking among
Seller, NEI and Aptus that relate to any liability of NEI or
Aptus for the Taxes of Seller shall terminate as of the Closing
Date and any rights or obligations resulting from such agreements
shall be eliminated as of the Closing Date.
7.2.7 Notice of Audit. If, in connection with
any examination, investigation, audit or other proceeding
concerning any Income Tax Return covering the operations of NEI
or Aptus through the Closing Date, any Governmental Authority
issues to any of the Parties, NEI or Aptus a notice of
deficiency, a proposed adjustment, an assertion of claim or a
demand concerning the Period covered by such Income Tax Return,
the recipient shall notify the other Party that it has received
the same within twenty (20) days of its receipt.
7.2.8 Audits Controlled by Seller. Seller shall
have the sole and exclusive right, power and authority to
negotiate, resolve, settle or contest any such notice of
deficiency, proposed adjustment or assertion of claim or demand
and to represent and act for and on behalf of NEI or Aptus in
connection with any such examination, investigation, audit or
other proceeding, including refund claims of any Income Tax
Return of NEI or Aptus for Periods ending on or before the
Closing Date. Seller agrees to keep Buyer informed of the
progress of any such proceedings.
7.2.9 Audits Controlled by Buyer. Buyer shall
have the sole and exclusive right, power and authority to
negotiate, resolve, settle or contest any such notice of
deficiency, proposed adjustment or assertion of claim or demand
in connection with any such examination, investigation, audit or
other proceeding of any Income Tax Return of Buyer, NEI or Aptus
for Periods ending after the Closing Date. To the extent that
Seller has indemnified Buyer, NEI and Aptus with respect to any
such notice of deficiency, proposed adjustment or assertion or
claim or demand herein, Buyer shall not, and shall not permit NEI
or Aptus to, resolve, settle, compromise, or abandon any issue or
claim without the prior written consent of Seller if such action
would materially and adversely affect the Income Tax of Seller
for any Period. Such consent shall not be unreasonably delayed
or withheld, and shall not be necessary to the extent that Buyer
notifies Seller that Buyer will forego any obligation of Seller
to indemnify Buyer, NEI and Aptus against the effects of any such
settlement. Buyer shall keep, and shall cause NEI or Aptus to
keep, Seller informed of the progress of any such proceedings and
to consult with Seller in good faith in connection therewith.
7.2.10 338(h)(10) Election. Buyer and Seller
agree that no election under Code Section 338(h)(10) shall be made as
a
result of this transaction.
7.2.11 Net Operating Loss. NEI and Aptus
presently have a net operating loss ("NOL") for fiscal year ended
December 31, 1993 equal to or greater than $16,200,000,
representing their apportioned share of Seller's NOL for that
year. Seller agrees that the amount of the NOL shall equal or
exceed $16,200,000. To the extent that it does not, Seller shall
provide to Buyer thirty-five percent (35%) of the difference in
cash within thirty (30) days of its determination. Buyer and
Seller acknowledge that all NOL amounts are subject to adjustment
by the IRS and will not be final until the audit covering the
relevant period has been completed by the IRS. To the extent
that the NOL is less than or equal to $19,200,000, Buyer shall be
entitled to retain the full amount. To the extent that the NOL
exceeds $19,200,000, Seller shall be entitled to make the
appropriate election under the Code to enable it to utilize any
amount in excess of $19,200,000, provided that if Seller is
unable to utilize such amount, it shall be retained by Buyer, if
possible. There shall be no adjustments to Final Adjusted Net
Worth under Section 2.3.1 due to any payments by Seller under
this Section.
7.2.12 Carrybacks. Buyer agrees that it shall
make any election or exercise any option available to it under
the Code (or similar provisions, if any, under state, local or
foreign Tax laws) to waive the carryback of any post-Closing net
operating loss, net capital loss, foreign tax credit or other tax
benefit to a pre-Closing Period.
7.3 Books and Records.
7.3.1 Access. Each Party shall provide the other
Party with reasonable access during normal business hours to its
books and records and the books and records of NEI or Aptus
(other than books and records protected by the attorney-client
privilege) to the extent that they relate to the condition or
operation of NEI or Aptus prior to the Closing and are requested
by such Party to prepare its Income Tax Returns, to respond to
Third Party Claims, or for any other legitimate purpose specified
in writing. Each Party shall have the right, at its own expense,
to make copies of any such books and records.
7.3.2 Destruction. For a period of ten (10)
years, or the expiration of any longer period if required under
applicable law, neither Party shall dispose of or destroy any
books and records of NEI or Aptus to the extent that they relate
to the condition or operation of NEI or Aptus prior to Closing or
any facility operated by NEI or Aptus prior to Closing and any
records dealing with the personal medical records of any present
or former Employees prior to the Closing without first offering
to turn over possession thereof to the other Party by written
notice at least thirty (30) days prior to the proposed date of
disposition or destruction, provided however that this section
shall not be applicable to records required under applicable law
to be preserved longer than ten (10) years.
7.3.3 Confidentiality. Each Party may take such
action as it deems reasonably appropriate to separate or redact
information unrelated to NEI or Aptus from documents and other
materials requested and made available pursuant to this Section
and to condition access to materials that it deems confidential
to the execution and delivery of an Agreement by the other Party
not to disclose or misuse such information.
7.3.4 Assistance. Each Party shall, upon written
request and at the requesting Party's expense, make personnel
available to assist in locating and obtaining any books and
records of NEI or Aptus to the extent that they relate to
Retained Liabilities or the condition or operation of NEI or
Aptus prior to the Closing (or after the Closing with respect to
information relating to Identified Environmental Concerns) and
make personnel available whose assistance, participation or
testimony is reasonably required in anticipation of, preparation
for or the prosecution or defense of any Third Party Action in
which the other Party does not have any adverse interest.
7.4 Non-Competition.
7.4.1 Seller covenants that upon Closing and
until the expiration of five (5) years from the Closing Date,
Seller shall not, and shall not allow any Affiliate to i) engage
in the commercial business of fixed based incineration of
Hazardous Waste (as now defined under RCRA or TSCA) or ii) engage
in the commercial business of mobile incineration by treating a
stream of active industrial Hazardous Waste (as now defined under
RCRA or TSCA) at its manufacturing or processing point of origin
of such stream, (For purpose of this Section, the Business shall
mean those activities described in (i) and (ii).) within the
continental United States; provided, however, that the covenants
contained within this Section 7.4 shall not prevent Seller or any
Affiliate from:
(a) Maintaining and continuing existing
standard business operations in accordance with current and past
practice;
(b) Continuing to own its current shares of
capital stock, partnership or other equity interests in the
entities identified on Schedule 7.4;
(c) Acquiring shares of capital stock,
partnership or other equity interests in any Person as
investments of Seller's pension funds or funds of any other
employee benefit plan of Seller whether or not such Person is
engaged in the same business as the Business;
(d) Acquiring no more than five percent (5%)
of the outstanding capital stock, partnership or other equity
interests in any Person;
(e) Acquiring up to one hundred percent
(100%) of the outstanding capital stock, partnership or other
equity interests in any Person for which the annual revenues
derived directly from the operations of such Person from any
business that competes with the Business are not more than the
lesser of (i) ten percent (10%) of such Person's total annual
revenues or (ii) $10,000,000;
(f) Acquiring less than fifteen percent
(15%) but more than five percent (5%) of the outstanding capital
stock, partnership or other equity interests in any Person for
which the annual revenues derived directly from the operations of
such Person from any business that competes with the Business are
more than the lesser of (i) ten percent (10%) but less than
twenty-five percent (25%) of such Person's total annual revenues
or (ii) $10,000,000;
(g) Acquiring more than fifty percent (50%)
of the outstanding capital stock, partnership or other equity
interests (which includes debt which is convertible into an
equity interest) in any Person for which the annual revenues
derived directly from the operations of such Person from any
business that competes with the Business are more than ten
percent (10%) but less than twenty-five percent (25%) of such
Person's total annual revenues; provided, however, that Seller
shall use all commercially reasonable efforts to divest that
portion of such Person which competes with the Business on
commercially reasonable terms within three hundred sixty-five
(365) days after the acquisition of such ownership or interest;
and provided further if such divestiture cannot occur within this
period then Seller shall pay to Buyer a sum equal to five percent
(5%) of the annual gross revenues of the Person attributed to the
Business and prorated for Seller ownership interest but never
more than operating profits prorated for Seller's ownership
interest for the Business until the earlier of divestiture of
such Business or the expiration of this Agreement;
(h) Acquiring no more than fifty percent
(50%) but more than fifteen percent (15%) of the outstanding
capital stock, partnership or other equity interests (I) in any
Equity for which the annual revenues derived directly from the
operations of such Person from any business that competes with
the Business are more than ten percent (10%) but less than
twenty-five percent (25%) of such Person's total annual revenues;
provided, however, that Seller, directly or indirectly, will have
control of such Person sufficient to cause such Person to use all
commercially reasonable efforts to divest that portion of such
Person which competes with the Business on commercially
reasonable terms within three hundred sixty-five (365) days after
the acquisition of such ownership or interest; and provided, that
Seller shall, directly or indirectly, so cause such Person to so
divest; and provided further if such divestiture cannot occur
within this period then Seller shall pay to Buyer a sum equal to
five percent (5%) of the annual gross revenues of the Person
attributable to the Business and prorated for the Seller's
ownership interest but never more than operating profits prorated
for the Seller's ownership interest for the Business until the
earlier of divestiture of such Business or the expiration of this
Agreement;
(i) Performing any act or conducting any
business contemplated by this Agreement or the agreements
attached hereto or contemplated thereby; or
(j) Any business currently or in the future:
(i) involving the processing or
disposing of mixed / hazardous
radioactive waste, Hazardous Waste
or radioactive waste, including but
not limited to the following
technologies:
(a) Plasma Torch technology and
its applications;
(b) Thermal Desorption technology
and its applications;
(c) Catalytic Extraction
Processing (CEP) and Quantum
CEP Technology, both
proprietary technologies of
Molten Metal Technology, Inc.;
(d) Soil Washing technology and
its applications; and
(e) Metal Melting technology and
its applications;
(f) Steam Reformation technology
and its applications;
(g) Wet Oxidation technology and
its applications; and
(h) Electro-Magnetic or beam type
processing technology such as
ultra violet (UV), radio
frequency (RF), laser, or
electron beam and their
applications.
(ii) involving the incineration of
Hazardous Waste as part of a
contract involving environmental
remediation of either a Superfund
or non-Superfund site.
The provisions of (e), (f), (g), and (h) do not
apply to any partnership, joint venture, corporation or limited
liability company that is using the technologies listed in (j)
above.
7.4.2 In the event that any part of this Section
7.4 (including any subparagraphs hereto) is declared invalid or
unenforceable by a court of competent jurisdiction, the validity
or enforceability of the remainder of this Section 7.4 shall
nevertheless continue to be valid and enforceable as though the
invalid or unenforceable portions had not been a part hereof.
The territory and time limitations set forth in this Section 7.4
are reasonable and properly required for the adequate protection
of the Buyer and Aptus. In addition, the parties acknowledge
that the nature of the business of hazardous waste incineration
and laboratory analysis is such that competitive activities could
be conducted effectively regardless of the geographic distance
between Aptus's place of business and the place of any
competitive business. In the event that the territorial or time
restrictions, or both, are determined by a court of competent
jurisdiction to be unenforceable, Seller hereby requests and
authorizes such court to modify said area or periods of duration
to the extent necessary to render them enforceable; and Seller
shall accept and submit to such modification(s).
7.4.3 Seller recognizes that immediate and
irreparable damage will result to Aptus or Buyer if Seller
breaches any of the terms and conditions of this Section 7.4 and
accordingly, Seller acknowledges that Buyer may be entitled under
applicable law to an injunction against Seller to restrain any
such breach, in addition to any other remedies or claims for
money damages which Aptus or Buyer may otherwise have.
7.5 Access to Information. The parties shall
cooperate in any environmental due diligence and Buyer shall not
engage in any environmental due diligence investigation other
than so-called "Phase I" (i.e., documentary review and walk-
through inspection) preliminary environmental evaluations without
the prior written consent of Seller.
7.6 Non-Solicitation of Employees.
(a) For a period of two (2) years after the
Closing, Seller shall not, without the prior written consent of
Buyer, solicit the employment of, or employ or offer to employ,
any Continuing Employees or any employees of Buyer that Seller
had significant contact with during the negotiation of this
Agreement.
(b) For a period of two (2) years after the
Closing, Buyer shall not, without the prior written consent of
Seller, solicit the employment of, or employ or offer to employ,
any employee listed on Schedule 3.20.1 not employed by Buyer as
a
Continuing Employee or any employee of Seller that Buyer had
significant contact with during the negotiation of this
Agreement.
(c) This Section shall apply to employees in
senior management, operations, regulatory, financial, marketing
and sales, or permitting aspects of each Party's business. This
Section shall not apply to any employee ninety (90) days after
such employee has left the employ of either Party.
7.7 Rights Agreement. If necessary, Buyer shall take
such action as it determines is warranted to amend the Rights
Agreement dated as of June 14, 1989, between Buyer and Registrar
and Transfer Company (the "Rights Agreement"), to ensure that the
issuance of the Subordinated Debentures shall not cause a
"Triggering Event" under and as defined in the Rights Agreement.
7.8 Remarketing of IDBs and Cost Sharing.
7.8.1 Initial Remarketing. In connection with
the initial remarketing: (i) within four to six weeks from the
date of Closing (or as soon thereafter as is reasonably
practicable), Buyer shall use all reasonable efforts to cooperate
in good faith with the Remarketing Agent and Seller to effect the
remarketing of the IDBs to one or more third parties, including,
without limitation, entering into an underwriting agreement on
customary terms and conditions, obtaining a rating for the IDBs,
assisting in the preparation of an offering memorandum and
participating in any sales efforts (including any road shows).
7.8.2 Remarketing of IDBs. From and after the
Closing Date and until the IDB Backstop Expiry Date, (i) Seller
shall either, at its option, maintain a Letter of Credit enabling
the IDBs to be remarketed to one or more third parties at the
principal amount thereof, or hold the IDBs, and (ii) Buyer shall
take all action necessary to permit the Remarketing Agent to
remarket the IDBs pursuant to Section 3.03 of the IDB Indenture
at Weekly Rates or Flexible Rates as determined by Buyer (subject
to the consent of Seller, which consent shall not be unreasonably
withheld). Seller is to ensure that the Remarketing Agent's
total fees and expenses for remarketing the IDBs after the
Closing Date and prior to the Effective Conversion Date shall not
exceed a rate of one-eighth (1/8) of one (1) percent per annum of
the average daily outstanding principal amount of the IDBs (or
such higher rate which is then the prevailing industry rate).
7.8.3 Effective Conversion Date.
7.8.3.1 Option of Buyer. On any Mandatory
Tender Date prior to the IDB Backstop Expiry Date, Buyer shall
have the right to convert the Rate Period for the IDBs to a Term
Period with a term expiring on the maturity date for the IDB;
provided, that in the event of such a conversion, from and after
such Mandatory Tender Date (the "Effective Conversion Date"):
(a) For purposes of Section 7.8.4, the
IDB Interest Rate shall be the lesser of (i)
the actual IDB Interest Rate and (ii) 10% per
annum.
(b) On the Effective Conversion Date,
the remarketing proceeds shall be paid to the
Letter of Credit issuer in immediately
available funds in an amount equal to the sum
drawn related to principal on the IDBs under
the Letter of Credit in connection with such
Mandatory Tender Date, and any interest on
the IDBs drawn under the Letter of Credit
shall be reimbursed to the Letter of Credit
issuer and shall be treated as any other IDB
Costs.
(c) The obligation of Seller to either
cause the Letter of Credit to remain
outstanding or hold the IDBs shall
automatically and without further action
terminate.
7.8.3.2 Option of Seller. At any time
prior to the IDB Backstop Expiry Date, in the event Seller
delivers to Buyer a written notice from the Remarketing Agent to
the effect that at the time of such notice, a Term Rate could be
established pursuant to Section 2.03 (b) (iii) of the IDB
Indenture for a Term Period expiring on the maturity date for the
IDBs equal to or less than 10% per annum, unless there shall be
an IDB Remarketing Exception, (i) Buyer shall promptly give all
notices required pursuant to Section 2.04 of the IDB Indenture of
its election to convert on a date specified by Seller occurring
no earlier than sixteen (16) days thereafter the Rate Period to
a
Term Period expiring on the maturity date for the IDBs, (ii)
Buyer shall cooperate with the Remarketing Agent and Seller to
enable the IDBs to be sold on such Mandatory Tender Date at a
price equal to the principal amount thereof, including, without
limitation, furnishing information and making representations to
the Remarketing Agent and agreeing to such other terms and
conditions, including indemnification obligations, as are
customary or otherwise reasonably requested by the Remarketing
Agent in connection with the remarketing of the IDBs for a Term
Period expiring on the maturity date for the IDBs, and (iii)
unless either (a) when the Remarketing Agent determines that the
Term Rate described in Section 2.03 (b) (iii) of the IDB
Indenture, would be likely to exceed 10% per annum were the rate
period to be converted to a Term Period or (b) Seller gives
notice to Buyer prior to the time required on the Mandatory
Tender Date to effect the conversion that it does not consent to
the conversion of the Rate Period to a Term Period expiring on
the maturity date for the IDBs, Buyer shall arrange for and
comply with its delivery obligations under Section 2.04 (d) of
the IDB Indenture in order to cause such conversion to be
effected on such Mandatory Tender Date; provided, that in the
event of such a conversion, from and after such Mandatory Tender
Date (the "Effective Conversion Date"):
(a) For purposes of Section 7.8.4, the
amount of IDB Costs shall be the actual IDB
Costs.
(b) On the Effective Conversion Date,
the remarketing proceeds shall be paid to the
Letter of Credit issuer in immediately
available funds in an amount equal to the sum
drawn related to principal on the IDBs under
the Letter of Credit in connection with such
Mandatory Tender Date, and any interest on
the IDBs drawn under the Letter of Credit
shall be reimbursed to the Letter of Credit
issuer and shall be treated as any other IDB
Costs.
(c) The obligation of Seller to either
cause the Letter of Credit to remain
outstanding or hold the IDBs shall
automatically and without further action
terminate.
7.8.4 IDB Cost Sharing. If the IDB Costs
for any 12-month period following the Closing Date shall be (i)
greater than an amount equal to the interest on the aggregate
principal amount of the IDBs, calculated at a rate of 7-1/2 per
annum, based on the actual number of days in the year (the "IDB
Cost Base"), Seller shall pay Buyer one-half of the difference
between (a) the Effective Annual IDB Costs and (b) the IDB Cost
Base, or (ii) less than the IDB Cost Base, Buyer shall pay Seller
one-half of the difference between (a) the Effective Annual IDB
Costs and (b) the IDB Cost Base (in either event, the "IDB Cost
Spread"). Notwithstanding the foregoing, if the IDBs shall have
been converted at the option of Seller pursuant to Section
7.8.3.2 and the IDB Costs exceed 10% per annum, then IDB Costs
under 10% shall be addressed by the foregoing and IDB Costs in
excess of 10% shall be borne exclusively by Seller and reimbursed
to Buyer in accordance with 7.8.4.1.
7.8.4.1 Calculation and Payment.
Within ten business days after the end of each quarter during the
term of the IDBs, each of the parties shall provide the other
with a statement of each of the IDB Costs incurred by it for the
prior quarter. If there is an IDB Cost Spread, calculated on an
annual (360 days) cost basis, then the party having
responsibility for such IDB Cost Spread shall pay that amount
within 30 days after the end of each quarter to the party
entitled to such payment.
7.8.5 Cooperation. Each of the parties
shall use all reasonable efforts in good faith to take, or cause
to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable (other than to fund any
payment obligations of the other party as provided in this
Section 7.8) to cooperate with the other party in connection with
the foregoing.
7.8.5.1 Remarketing Agent. Until the
IDB Backstop Expiry Date, notwithstanding any provision herein or
in the IDB Indenture or the Remarketing Agreement entered into in
connection therewith to the contrary, Seller shall have the
exclusive right to remove the Remarketing Agent and to select a
successor Remarketing Agent, subject in the case of the selection
of a successor Remarketing Agent, to the consent of Buyer, which
consent shall not be unreasonably withheld.
7.8.5.2 Interest Rate Cap. From time
to time until the IDB Backstop Expiry Date, Buyer shall have the
right, subject to the reasonable consent of the Seller, which
consent shall not be unreasonably withheld, to obtain an Interest
Rate Cap and the cost of which shall be subject to the provisions
of Section 7.8.4.
7.8.6 Underwriting Costs. All
Underwriting Costs will be shared equally by Seller and Buyer;
provided that in no event will Buyer's share of the Underwriting
Costs exceed $400,000 in the initial remarketing or $600,000 in
the aggregate for both the initial remarketing and the conversion
to a fixed term.
7.8.7 Conversion. Any conversion of the
IDBs under 7.8.3.1 (Option of Buyer) or 7.8.3.2 (Option of
Seller) shall be accomplished such that the IDBs be sold without
a discount, with a term expiring on the current maturity date for
the IDB (2020), and with semi-annual interest payments.
7.8.8 Rebate Obligation. Seller shall
take all steps necessary to comply with the rebate provisions of
Article IV of the Tax Exemption Certificate and Agreement,
including, without limitation, making the calculations, transfers
and payments that may be necessary to comply with the rebate
requirements contained in Section 148(f) of the Code. Seller
shall prepare the I.R.S. Form 8038-T required to be filed in 1995
on the fifth anniversary of the Bond issue and Seller shall
deposit in the Rebate Fund an amount equal to the total rebate
payment, if any, then due. Buyer and Seller shall direct the
Trustee to make the required payment from the Rebate Fund to the
U.S. Government. Any subsequent filing obligations shall be the
responsibility of Buyer.
ARTICLE 8
CONDITIONS PRECEDENT TO CLOSING
8.1 Conditions Precedent to Buyer's Obligations. The
obligation of Buyer to consummate the transactions contemplated
by this Agreement shall be subject to the satisfaction of the
following conditions, any of which may be waived by Buyer:
8.1.1 Accuracy of Representations and Warranties.
The representations and warranties made by Seller in this
Agreement shall be true and correct as of the Closing Date except
for (a) representations and warranties made as of a specified
date, which shall be true and correct as of the specified date,
(b) breaches and inaccuracies that do not have a Material Adverse
Effect and (c) breaches and inaccuracies that Seller is working
diligently to cure or remedy at its cost or expense, provided
that Seller agrees to either cure or remedy such breaches or
inaccuracies as soon as practicable or indemnify Buyer against
any Damages relating thereto.
8.1.2 Litigation. No Order shall be in effect
forbidding or enjoining the consummation of the transactions
contemplated hereby and no Action shall be pending or threatened
which, if adversely determined, would result in any such Order.
8.1.3 Covenants. Seller shall have performed and
complied in all material respects with all covenants and
agreements required by this Agreement to be performed by Seller
prior to or at the Closing.
8.1.4 Deliveries. Seller shall have delivered to
Buyer the documents required by Section 9.2.
8.1.5 Consents. The execution, delivery and
performance of this Agreement by Seller shall not conflict with
any Law or result in the creation of any Lien (other than
Permitted Liens) on any assets of Aptus. Seller and Aptus shall
have obtained the Consents, if any, set forth on Schedule 3.8.
Such consents shall be in form and content reasonably
satisfactory to Buyer and shall have been reviewed with Buyer in
final (but unexecuted) form no less than fifteen (15) days prior
to Closing.
8.1.6 Customers. Aptus shall not have
suffered the loss of customers that would have a Material Adverse
Effect.
8.1.7 No Material Adverse Effect. There shall
have been no event or occurrence since December 31, 1994 that has
had a Material Adverse Effect on NEI or Aptus.
8.2 Conditions Precedent to Seller's Obligations. The
obligation of Seller to consummate the transactions contemplated
by this Agreement shall be subject to the satisfaction of the
following conditions, any of which may be waived by Seller:
8.2.1 Truth of Representations and Warranties.
The representations and warranties made by Buyer in this
Agreement shall be true and correct in all material respects as
of the Closing Date.
8.2.2 Litigation. No Order shall be in effect
forbidding or enjoining the consummation of the transactions
contemplated hereby and no Action shall be pending or threatened
which, if adversely determined, would result in any such Order.
8.2.3 Covenants. Buyer shall have performed and
complied in all material respects with all covenants and
agreements required by this Agreement to be performed by Buyer
prior to or at the Closing.
8.2.4 Deliveries. Buyer shall have delivered to
Seller the payment and documents required by Section 9.3.
8.2.5 [Intentionally Left Blank]
8.2.6 Permits. Seller shall have been able to
obtain any consents necessary to transfer the Permits.
ARTICLE 9
CLOSING
9.1 Time and Place. Subject to the terms and
conditions of this Agreement, the Closing shall take place at the
offices of Seller in Pittsburgh, Pennsylvania at 10:00 a.m., on
Friday, March 31, 1995 or at such other time and place as the
Parties shall agree upon in writing (the "Closing Date"). The
Closing shall be deemed effective at 11:59 p.m. Pittsburgh time
on the Closing Date.
9.2 Deliveries by Seller. At the Closing, Seller
shall deliver the following to Buyer:
9.2.1 Certificates representing all of the
Shares, together with duly executed stock transfer powers in
favor of Buyer.
9.2.2 The stock books, stock ledgers, minute
books and corporate seal of NEI and Aptus.
9.2.3 The recorded Charter Documents of NEI and
Aptus recently certified by the Delaware Secretary of State.
9.2.4 Certificates of the Secretary or Assistant
Secretary of Seller concerning (a) its good standing, (b) the
adoption of resolutions by its board of directors authorizing the
transactions contemplated by this Agreement and (c) the
incumbency of its officers, all in form and substance
satisfactory to Buyer.
9.2.5 Certificates of the Secretaries or
Assistant Secretaries (or the comparable officials) of NEI and
Aptus, or a certificate of an executive officer of Seller,
concerning the Charter Documents and good standing of NEI and
Aptus.
9.2.6 Recent (dated within thirty (30) days of
the Closing) good standing certificates (or the comparable
documents) for NEI and Aptus issued by the Secretary of State or
(the comparable officials) of each of the jurisdictions in which
NEI is incorporated, Aptus is incorporated, or either is
qualified to do business as a foreign corporation.
9.2.7 A certificate signed by an executive
officer of Seller and dated the Closing Date certifying that (a)
each of the representations and warranties made by Seller in this
Agreement is true and correct as of the Closing Date in all
material respects and (b) all of the terms, covenants and
conditions of this Agreement to be complied with and performed by
Seller on or before the Closing Date have been complied with and
performed in all material respects.
9.2.8 Copies of the Consents obtained by Seller
and Aptus pursuant to Section 3.8.
9.2.9 A receipt for the payment made as
contemplated by Section 2.2.1.
9.2.10 A written opinion addressed to Buyer from
counsel for Seller, in the form attached as Exhibit 9.2.10.
9.2.11 The written resignation of each director
and officer of Aptus and NEI. A complete list of all such
officers and directors is set forth on Schedule 9.2.11 hereto.
9.2.12 An executed Patent Assignment to Aptus in
the form of Exhibit 9.2.12 relating to the patent identified in
Schedule 3.19 as registered in the name of Seller.
9.2.13 An executed Assignment and Assumption
Agreement relating to the IDB Bonds in the form of Exhibit 2.2.3.
9.2.14 An opinion of Counsel to Seller (or
counsel to the IDB Issuer) addressed to Buyer to the effect that
the Assignment and Assumption Agreement relating to the IDB Bonds
will not adversely affect the excludability of interest on the
IDB Bonds from the gross income of the owners thereof for
purposes of federal income taxation.
9.2.15 An executed Assignment of Software License
Agreement in the form of Exhibit 9.2.15 relating to Seller's CORE
System.
9.2.16 An executed Debenture Purchase Agreement
in the form of Exhibit 2.2.2.
9.2.17 Such other documents, instruments and
certificates as Buyer may reasonably request for the transactions
contemplated by this Agreement.
9.3 Deliveries by Buyer. At the Closing, Buyer shall
deliver the following to Seller:
9.3.1 The payment of the Cash required under
Section 2.2.1.
9.3.2 The issuance of the Senior Unsecured
Debentures and Subordinated Convertible Debentures.
9.3.3 An executed Assignment and Assumption
Agreement relating to the IDB Bonds in the form of Exhibit 2.2.3.
9.3.4 An opinion of counsel to Buyer addressed to
Security Pacific National Trust Company (New York), as Trustee or
its successor, to the effect that Buyer has expressly assumed in
a writing delivered to such Trustee the obligations of Seller
under the IDB Loan Agreement, satisfying the requirements of
Section 6.1(b)(i) of the IDB Loan Agreement.
9.3.5 The recorded Charter Documents of Buyer,
recently certified by the Delaware Secretary of State.
9.3.6 A certificate of the Secretary or Assistant
Secretary of Buyer (or the comparable official) concerning (a)
Buyer's Charter Documents and good standing, (b) the adoption of
resolutions by its board of directors authorizing the
transactions contemplated by this Agreement and (c) the
incumbency of its officers, all in form and substance
satisfactory to Seller.
9.3.7 A recent good standing certificate for
Buyer issued by the Delaware Secretary of State.
9.3.8 A certificate signed by an executive
officer (or the comparable official) of Buyer and dated the
Closing Date certifying that (a) each of the representations and
warranties made by Buyer in this Agreement is true and correct as
of the Closing Date in all material respects and (b) all of the
terms, covenants and conditions of this Agreement to be complied
with and performed by Buyer on or before the Closing Date have
been complied with and performed in all material respects.
9.3.9 A written opinion addressed to Seller from
counsel for Buyer, in the form attached as Exhibit 9.3.9.
9.3.10 An executed Assignment or Assignments of
Software License Agreement in the form of Exhibit 9.2.15 relating
to Seller's CORE System and Seller's WISHES System.
9.3.11 An executed Debenture Purchase Agreement
in the form of Exhibit 2.2.2.
9.3.12 Such other documents, instruments and
certificates as Seller may reasonably request for the
transactions contemplated by this Agreement.
ARTICLE 10
TERMINATION PRIOR TO CLOSING DATE
10.1 Termination. This Agreement may be terminated
prior to the Closing Date only as follows:
10.1.1 By the mutual written consent of the
Parties;
10.1.2 By either Party immediately upon written
notice to the other Party, if the Closing has not occurred on or
before March 31, 1995 and the failure to close is not
attributable to the fault of the party terminating; or
10.1.3 By either Party immediately upon written
notice to the other Party if (a) a preliminary injunction is
issued at the request of any Governmental Authority that enjoins
or prohibits the Closing or (b) a permanent injunction is issued
by a Governmental Authority that enjoins or prohibits the Closing
and becomes final and non-appealable.
10.2 Effect of Termination.
10.2.1 General. If this Agreement terminates
pursuant to Section 10.1, no Party shall have any liability or
obligation to the other Party hereunder, other than the
confidentiality obligation set forth in Section 6.2. However,
such termination shall not relieve any Party of liability for any
willful, material breach of this Agreement. Without limiting the
foregoing, if Closing does not occur due to a breach by Seller of
its obligations under this Agreement, then Seller shall promptly
reimburse Buyer in full for the Forty-Five Thousand Dollar
($45,000.00) HSR filing fee previously paid by Buyer.
ARTICLE 11
INDEMNIFICATION AND PROCEDURES
11.1 Indemnification by Seller. Subject to the other
provisions of this Article 11 and Article 12 relating to certain
environmental indemnities, Seller shall indemnify and hold Buyer,
its Affiliates and their respective employees, representatives,
officers, directors and agents (the "Buyer Indemnitees") harmless
from and against any and all Damages suffered by any Buyer
Indemnitee arising out of:
(a) the breach of any representation or warranty made
by Seller in this Agreement or in any other agreement or
certificate delivered by Seller at the Closing;
(b) the breach of any covenant, undertaking or
agreement by Seller in this Agreement or in any other
agreement executed and delivered at the Closing;
(c) in addition to and without limiting the scope of
paragraphs (a) and (b) above:
(I) any claim against Aptus or NEI for workman's
compensation pending as of the Closing or any
such claim made after the Closing based upon
or alleging an incident occurring entirely
prior to Closing, including any unsatisfied
judgments or other final awards or
settlements reached, whether or not scheduled
in this Agreement, except to the extent
properly reserved for on the December 1994
Balance Sheet;
(II) any litigation instituted or threatened
against Aptus or NEI as of the Closing,
including any unsatisfied judgments or other
final awards or settlements reached, whether
or not scheduled in this Agreement, except to
the extent properly reserved for on the
December 1994 Balance Sheet;
(III) any litigation instituted or threatened
against Aptus or NEI after the Closing
based upon or alleging an incident
occurring entirely prior to Closing;
(IV) any litigation instituted or threatened
against Aptus or NEI, other than litigation
addressed by items (II) and (III) above, but
only to the extent attributable to the
business of Aptus or NEI prior to the
Closing;
(V) any liability of any kind whatsoever (i)
arising from any incident or occurrence prior
to July 1985 and relating in any way to the
business operations of NEI, any predecessor
of NEI, any Person merged into NEI or Aptus,
or any Person whose liabilities were assumed
by NEI or Aptus as a result of an
acquisition, divestiture or reorganizations
whether by operation of law or otherwise, or
(ii) relating in any way to the business
operations of National Oil Processing, Inc.,
Coffeyville Truck Center, Inc., National
Investment Company, or any Person required to
be identified on Schedule 3.1.3 but omitted
therefrom. This section is intended to
extend to any claims made against Aptus with
regard to the one (1) acre parcel of property
owned by Hawks and Meehan and located at the
Coffeyville Facility.
(VI) any Undisclosed Liabilities.
The foregoing items (a), (b) and (c) being collectively
referred to as the "Retained Liabilities."
11.2 Indemnification by Buyer. Subject to the other
provisions of this Article 11 and Article 12 relating to certain
environmental indemnities, Buyer shall indemnify and hold Seller,
its Affiliates and their respective employees, representatives,
officers, directors and agents (the "Seller Indemnitees")
harmless from and against any Damages suffered by any Seller
Indemnitee arising out of:
(a) the breach of any representation or warranty made
by Buyer in this Agreement or in any other agreement or
certificate delivered by Buyer at the Closing;
(b) the breach of any covenant by Buyer in this
Agreement or in any other agreement executed and delivered
at the Closing;
(c) any claim made against Aptus or NEI for workman's
compensation made after the Closing, except to the extent
such claim constitutes a Retained Liability;
(d) any litigation instituted or threatened against
Aptus or NEI after the Closing, except to the extent such
claim constitutes a Retained Liability;
(e) after the Closing Date, the failure by Buyer, NEI
or Aptus to perform any of its obligations, except to the
extent that such obligations arise from events or conditions
that entitle any Buyer Indemnitee to indemnification
pursuant to this Agreement; or
(f) the operation of the Business after the Closing
Date, including any liability of Seller as surety or
indemnitor for NEI or Aptus under any performance or surety
bond or letter of credit (other than those referred to and
specifically handled pursuant to Section 5.8.5) relating to
post closing operations of NEI or Aptus, except to the
extent that such Damages constitute a Retained Liability.
11.3 Notice and Resolution of Claims.
11.3.1 Notice. Each indemnified party (a
"Beneficiary") shall promptly give written notice to the
indemnifying Party after obtaining knowledge of any claim that it
may have pursuant to this Article 11. Such notice shall set
forth in reasonable detail the claim and the basis for
indemnification.
11.3.2 Right to Assume Defense. If such claim
for indemnity shall arise from a claim or Action involving a
third party (a "Third Party Claim"), the Beneficiary shall permit
the indemnifying Party to assume its defense. If the
indemnifying Party assumes the defense of such Third Party Claim,
it shall take all steps necessary to investigate, defend or
settle such Action and shall, subject to Section 11.4, hold the
Beneficiary harmless from and against any and all Damages caused
by or arising out of any settlement approved by the indemnifying
Party or any judgment in connection with such Third Party Claim.
Without the written consent of the Beneficiary, the indemnifying
Party shall not consent to entry of any judgment or enter into
any settlement that does not include an unconditional and
complete release of the Beneficiary by the claimant or plaintiff
making the Third Party Claim (except in the case of an Action
involving a Governmental Authority where the Governmental
Authority does not typically provide an unconditional and
complete release, in which case the indemnifying Party shall not
consent to entry of any judgment or enter into any settlement
that does not contain customary nonadmissions and settlement
terms peculiar to that Governmental Authority). The Beneficiary
may participate in such defense or settlement through its own
counsel, but at its own expense.
11.3.3 Failure to Assume Defense. Failure by the
indemnifying Party to notify the Beneficiary of its election to
assume the defense of any Third Party Claim within thirty (30)
days after its receipt of notice thereof shall be deemed a waiver
by the indemnifying Party of its right to assume the defense of
such Third Party Claim. In such event, the Beneficiary may
defend against such Third Party Claim in any manner it deems
appropriate, at the cost and expense of the Indemnifying Party.
The Beneficiary may settle such Third Party Claim or consent to
the entry of any judgment with respect thereto, provided that it
acts reasonably and in good faith.
11.4 Limits on Indemnification.
11.4.1 Seller shall not be liable to defend,
indemnify and hold harmless Buyer against any Damages under this
Article 11 unless and until the aggregate Damages exceed Five
Hundred Thousand ($500,000.00) Dollars (the "Basket"), and then
shall be liable only for Damages in excess of the Basket.
Furthermore, neither Party shall be liable to indemnify, defend
and hold harmless an Indemnitee against Damages in respect of
which indemnification may be available in excess of $135,000,000
(the "Cap"); provided, however, that the breach or non-
fulfillment of any covenant, undertaking or agreement (as
distinguished from a breach of a representation or warranty)
shall not be subject to, nor apply in calculating, the Basket or
the Cap. For purposes of determining the Basket, any breach by
Seller of a representation or warranty hereunder shall be
determined without regard to whether the breach resulted in a
Material Adverse Effect. Notwithstanding the foregoing, the
liability of Seller with respect to the following items shall not
be subject to, nor apply in calculating, the Basket or the Cap:
Section 3.22 (Taxes); Section 7.2 (Tax Covenants); Section 7.1
(Employee Matters); Section 11.1 (c) (I) (relating to Workman's
Compensation); Section 11.1 (c) (II) (relating to pending
litigation); Section 11.1 (c) (V) (relating to certain potential
predecessor liabilities); and Section 3.15 (Accounts Receivable).
In addition, the limitations period provided in Section 11.5
shall not apply to the items enumerated in the immediately
preceding sentence and Seller's representations and warranties
and indemnification obligations related to such items shall
survive indefinitely (subject only to applicable statutes of
limitations and any extensions thereto), with the exception of
Section 11.1 (c) (V) which shall survive for twenty-five (25)
years.
11.4.2 The determination of Final Adjusted Net
Worth and the post Closing adjustment of the Purchase Price in
accordance with Section 2.4 hereto shall not affect Buyer's
ability to seek indemnification for a breach of a representation
or warranty relating to the Financial Statements. Buyer may not
make a claim against Seller for breach of Section 3.15 relating
to accounts receivable, unless it has attempted to collect same
in accordance with its normal collection procedures. Buyer shall
also be required to apply amounts which it collects on
receivables in the order in which the accounts receivable were
created, except with respect to disputed receivables.
11.5 Survival. With the exception of those items
identified in Article 12 or Section 11.4, Seller's
representations and warranties and indemnification obligations
under this Agreement shall terminate three (3) years from the
Closing Date. Representations and warranties that are made as of
a specified date or are remade as of the Closing Date are not
intended to be deemed to be remade effective as of a date
subsequent to the Closing Date.
11.6 Exclusive Remedy. The remedies of Buyer and
Seller provided for in this Agreement shall be the exclusive
remedies of the Parties with respect to the matters covered by
this Agreement, the events giving rise to this Agreement, the
Purchased Assets and the Business. Without limiting the
generality or effect of the foregoing, as a material inducement
to the other party entering into this Agreement, except for the
remedies set forth in this Agreement, each of the Parties hereby
waives any claim or cause of action which it might assert,
including, without limitation, under the common law, federal,
state or foreign securities, trade regulation, or other law, by
reason of this Agreement, the matters covered hereby, the events
giving rise to this Agreement, the Purchased Assets or the
Business. Buyer shall not be entitled to a rescission of this
Agreement.
11.7 No Mitigation. The representations and
warranties of either Party shall not be mitigated by any
investigation conducted by the other Party or its representatives
prior to Closing.
11.8 Indemnity Payments. All payments made pursuant
to Section 11.1 (other than interest payments) will be treated by
the Parties on all Returns as an adjustment to the Purchase
Price.
11.9 Buyer's Cooperation.
11.9.1 Buyer shall promptly provide Seller with
(a) copies of all notices concerning the Retained Liabilities and
any indemnifiable claims that Buyer or Aptus receives after the
Closing Date, (b) the assistance, at Seller's cost, of all
directors, officers, employees, representatives and agents of
Aptus, and (c) all other information concerning the Retained
Liabilities that Seller needs or requests to manage and defend
the Retained Liabilities.
11.10 Payment and Assignment of Claims.
11.10.1 Payment. Upon final determination by
agreement of the Parties or pursuant to arbitration as set forth
in Section 14.12 that a Party is entitled to indemnification
under this Article, the indemnifying Party shall promptly pay or
reimburse, as appropriate, the Beneficiary for any Damages to
which it is entitled to be indemnified hereunder. Neither Party
shall permit any exercise of any right of set-off against the
other Party until such final determination is made.
11.10.2 Assignment. If any of the Damages for
which an indemnifying Party is responsible or allegedly
responsible under this Article 11 are recoverable or potentially
recoverable against any third party, other than a Beneficiary's
insurer, at the time when payment is due hereunder, the
Beneficiary shall assign any and all rights that it may have to
recover such Damages to the indemnifying Party or, if such rights
are not assignable for any reason, the Beneficiary hereunder
shall attempt in good faith, at the other party's cost and
expense, to collect any and all damages and losses on account
thereof from such third party for the benefit of the indemnifying
Party.
11.11 Other Beneficiaries. Buyer shall cause the
Buyer Indemnitees, and Seller shall cause the Seller Indemnitees,
to comply with the provisions and to abide by the limitations set
forth in this Article 11.
11.12 Consequential Damages; Other Limitations.
11.12.1 Seller shall have no obligation to
indemnify any of the Buyer Indemnitees against any Consequential
Damages suffered or alleged by any of the Buyer Indemnitees.
Buyer shall have no obligation to indemnify any of the Seller
Indemnitees against any Consequential Damages suffered or alleged
by any of the Seller Indemnitees. This restriction shall not
apply to a party's obligation to indemnify an Indemnitee against
Consequential Damages suffered or alleged by a Person other than
the Indemnitee.
11.12.2 Neither party shall have any obligation
to indemnify the other party or its Indemnitees to the extent
that Damages (including Retained Liabilities) are caused,
contributed to or exacerbated by the actions of the party seeking
indemnification or its contractors, subcontractors or agents.
ARTICLE 12
CERTAIN ENVIRONMENTAL MATTERS
12.1 Seller's Environmental Responsibility.
12.1.1 Seller Indemnity. Subject to the other
provisions of this Article 12, Seller shall indemnify and hold
harmless the Buyer Indemnitees from and against any and all
Damages suffered by any Buyer Indemnitee arising out of
(collectively, the "Seller's Environmental Responsibility"):
(a) Identified Environmental Concerns;
(b) Off-Site Disposal to the extent attributable to
the Business prior to Closing;
(c) Existing Environmental Violations, except to the
extent reserved for on the December 1994 Balance
Sheet;
(d) Environmental Violations discovered after Closing,
to the extent attributable to the Business prior
to Closing;
(e) Existing Third Party Environmental Claims;
(f) Third Party Environmental Claims to the extent
attributable to an Identified Environmental
Concern; and
(g) Third Party Environmental Claims (excluding those
under Sections 12.1 (e) and 12.1 (f) above) to the
extent attributable to the Business prior to
Closing.
(h) Government Remediation Claims to the extent
attributable to the Business prior to Closing.
12.1.2 For purposes of this Article 12, the
"Business" shall refer to any business conducted by NEI, Aptus or
any Person identified or required to be identified on Schedule
3.1.3.
12.2 Buyer Environmental Responsibility. Subject to
the other provisions of this Article 12, Buyer shall indemnify
and hold harmless the Seller Indemnitees from and against any and
all Damages suffered by any Seller Indemnitee arising out of
(collectively, the "Buyer's Environmental Responsibility"):
(a) Off-Site Disposal to the extent attributable to
Buyer, Aptus or NEI post Closing;
(b) Environmental Violations to the extent
attributable to Buyer, Aptus or NEI post Closing;
and
(c) Third Party Environmental Claims to the extent
attributable to Buyer, Aptus or NEI post Closing.
12.3 Identified Environmental Concerns. "Identified
Environmental Concerns" shall refer to the following items and
Seller's responsibility therefor shall be as set forth in Section
12.10:
(a) "Coffeyville Contamination". The identified
groundwater contamination and other sources of
contamination at the Coffeyville, Kansas facility
(the "Coffeyville Facility") identified on
Schedule 12.3 hereto.
12.4 Off-Site Disposal. "Off-Site Disposal" shall
refer to the disposal off-site of Hazardous Wastes or PCBs,
provided that the off-site migration of Hazardous Substances from
on-site disposal at a facility being transferred hereunder to
Buyer shall be treated as a Third Party Environmental Claim. In
the case of Seller's Environmental Responsibility, Seller's
indemnity shall extend to disposal sites whether or not listed by
Seller on Schedule 3.18 hereto, but shall not extend to (a) any
sites ever owned or operated by Buyer or its Subsidiaries, or (b)
sites identified on Schedule 3.18 which Buyer, in its sole
discretion, shall have identified prior to the execution hereof,
as acceptable facilities.
12.5 Environmental Violations. "Environmental
Violations" shall mean any violation, as of the Closing Date, of
Environmental Laws (as such laws exist as of the Closing Date) in
the operation of the Business, or the failure to have any Permit,
as of the Closing Date, required by Environmental Laws (as such
laws exist as of the Closing Date) which are imposed on or
incurred by Buyer as a result of an affirmative obligation
imposed upon Buyer by the actions of a Governmental Authority,
except to the extent reserved for on the December 1994 Balance
Sheet. "Existing Environmental Violations" shall be those that
are scheduled or required to be scheduled in this Agreement.
12.6 Third Party Environmental Claim.
12.6.1 "Third Party Environmental Claim" means
any claim for Damages, including those for personal injury or
property damage, resulting from or alleged to result from
exposure to any Hazardous Substance as a result of the operation
of the Business asserted by any Person other than a party
entitled to indemnification under this Agreement, whether or not
caused by an Environmental Violation. Third Party Environmental
Claims shall include (a) any claims made under performance or
surety bonds issued in connection with the Business prior to
Closing and (b) any claims that any Hazardous Substance
generated, transported or disposed of in connection with the
Business, has been found at a site at which any Person (other
than a party entitled to indemnification under this Agreement)
has conducted, plans to conduct, or has demanded that the
receiver of the notice conduct a remedial investigation, removal
or other response action pursuant to any Environmental Law. An
"Existing Third Party Environmental Claim" shall be one which has
been made in writing prior to Closing, whether or not scheduled
in this Agreement.
12.6.2 With respect to Third Party Environmental
Claims based upon or alleging Damages as a result of exposure
occurring or condition existing from or on any Real Property both
before and after the Closing, responsibility shall be borne pro
rata by Seller and Buyer in proportion to the relative lengths of
third party exposure during their respective periods of occupancy
of the Real Property; provided that, for purposes of this
allocation, (A) the respective periods of occupancy for any claim
shall be determined as of the date such claim is first presented
or filed and (B) subject to its right to pursue contribution or
indemnity from any other third party, Seller's occupancy shall
include any period of occupancy by its predecessors-in-interest
during which exposure is alleged.
12.7 Government Remediation Claim. "Government
Remediation Claim" means a Thirty Party Claim brought by a
Governmental Authority (other than an Identified Environmental
Concern) relative to the remediation of any contaminated property
and shall extend to any investigation, remediation or corrective
action mandated by such Government Authority (including
inspections, monitoring, sampling and removal of contaminated
property).
12.8 Limitations and Deductibles.
12.8.1 Seller's Environmental Responsibility
shall be limited in accordance with the following table which
identifies by cross reference the items in Section 12.1:
Category Limitations Period Deductible
12.1(a) (Identified Until remediated None
Environmental as set forth in
Concerns) Section 12.10
12.1(b) (Off-Site 15 years after Closing None
Disposal)
12.1(e) (Existing 30 months after Closing None
Environmental
Violations)
12.1(d) (Environmental 30 months after Closing $150,000
Violations in the
Discovered aggregate
after Closing)
12.1(e) (Existing Third 10 years after Closing None
Party Environ-
mental Claims)
12.1(f) (Third Party The later of 10 years None
Environmental after Closing or until
Claims the Identified Environmental
attributable to Concern is remediated as
an Identified set forth in Section 12.10
Environmental
Concern)
12.1(g) (Third Party 10 years after Closing $1,000,000
Environmental in the
Claims) aggregate
12.1(h) (Government 5 years after Closing $400,000
Remediation in the
Claims) aggregate
12.8.2 With respect to the items set forth in
Section 12.8.1 above: (a) Seller's Environmental Responsibility
shall expire at the end of the Limitations Period specified
unless Buyer has made a written claim for Damages prior to the
expiration of such period or upon Seller's completion of a
scheduled or specific item; and (b) Buyer shall assume
responsibility for Damages up to the amount of the Deductible
therein specified.
12.8.3 The responsibilities for Deductibles and
Damages set forth in this Article 12 shall be distinct from those
in Article 11 and not be subject to nor apply in calculating any
Baskets set forth in Article 11. To the extent that the recovery
of Damages is addressed by one of the categories set forth in
Section 12.1.1, Article 12 shall govern to the exclusion of
Article 11; provided that to the extent any Damages are
recoverable by any Buyer Indemnitee under Section 11.1 (c) (V)
(relating to certain potential predecessor liabilities), it shall
also be entitled to indemnification under such Section; provided
further that the exclusive remedy of any Buyer Indemnitee for
Damages with respect to Identified Environmental Concerns
recoverable under Section 12.10 shall be as set forth in that
Section.
12.8.4 Seller shall have no obligation to
indemnify and hold harmless the Buyer Indemnitees under this
Article 12 in excess of the $135,000,000 cap set forth in Section
11.4; provided that (a) for purposes of calculating this
limitation, Seller shall be afforded a dollar for dollar credit
for Damages it has indemnified Buyer against under Article 11 to
the extent that such Damages are governed by the cap; and (b) the
liability of Seller with respect to Off-Site Disposal shall not
be subject to, nor apply in calculating any deductibles or cap.
12.9 Miscellaneous. The following Sections of Article
11 shall apply equally to Article 12 and the obligations of
Seller under this Article 12 shall be deemed Retained
Liabilities.
11.3 Notice and Resolution of Claims
11.6 Exclusive Remedy
11.7 Mitigation
11.8 Indemnity Payments
11.9 Buyer's Cooperation
11.10 Payment and Assignment of Claims
11.11 Other Beneficiaries
11.12 Consequential Damages; Other Limitations
12.10 Certain Remediation Activities.
12.10.1 Coffeyville Contamination.
12.10.1.1 Responsibility of Seller. In the
case of the remediation of the Coffeyville Contamination, Seller
shall, at Seller's sole cost and expense, perform such
investigation, remediation or corrective action, in full
compliance with the requirements of any Governmental Authority
(whether or not pursuant to Environmental Laws in effect on or
prior to Closing) including inspections, monitoring, sampling and
the removal of any groundwater and associated soils and any other
materials mandated by an affirmative action of a Governmental
Authority. Seller's obligation under this Section shall extend
to (a) the ongoing RCRA corrective action (the "RCRA Action") and
(b) any other investigation, remediation or corrective action
initiated within ten (10) years after Closing by any Governmental
Authority in connection with the Coffeyville Contamination or the
items identified on Schedule 12.3 as sources or potential sources
of contamination. Seller shall also be responsible for
maintaining any financial assurances required by any Governmental
Authority in connection with the above, whether required under a
RCRA corrective action order or as part of the Coffeyville
Facility's RCRA or TSCA permits; provided that this obligation
shall not extend to any Financial Assurances otherwise required
of Buyer as part of the Coffeyville Facility's RCRA or TSCA
permits.
12.10.1.2 TCE Cost Sharing. Buyer shall not
be restricted by this Agreement in its ability post Closing to
transport, store, handle, incinerate or otherwise dispose of
waste streams containing trichloroethylene (TCE) at the
Coffeyville Facility. However, in the event the Coffeyville
Facility engages in any of the foregoing activities or otherwise
begins to use TCE in its operations post Closing, Buyer and
Seller agree that remediation costs under the RCRA Action shall
be borne by both Buyer and Seller in a ratio such that Seller's
percentage of liability decreases by five (5) percent for each
100,000 pounds of TCE, if any, brought onto the Coffeyville
Facility for use in Buyer's operations post Closing or spilled by
Buyer at the Coffeyville Facility post Closing.
12.10.1.3 Survival. Seller's responsibility
and liability under this Agreement with respect to the RCRA
Action shall terminate when the remediation has achieved to the
satisfaction of the Governmental Authority the established
remediation clean up levels required by the final remediation
plan and such levels have been sustained for one (1) year. After
this has been achieved, any post remediation monitoring of the
Coffeyville Facility required as a result of the facility's RCRA
permit or the groundwater contamination shall be the sole
responsibility of Buyer.
12.10.2 Control. With respect to Identified
Environmental Concerns or Government Remediation Claims, Seller
shall have full control in dealing and negotiating with the
cognizant regulatory authorities; provided that (a) Buyer shall
have the right to attend, at its own expense, any meetings with
the regulatory authorities and shall be provided copies of all
correspondence, reports, or other documents (including
inspections, monitoring, sampling and analytical results)
submitted or received by or on behalf of Seller, and (b) Seller
shall not, without the prior written consent of Buyer (which
shall not be unreasonably withheld), take any measure or step
that imposes any unreasonable burden or encumbrance upon the
operation or conduct of Buyer's business unless mandated to do so
by a Governmental Authority. In this regard, Seller agrees to
coordinate its activities with Buyer's plant manager and safety
manager at the facility in question. In the event that Buyer
shares liability due to its actions post Closing as provided
herein, Buyer shall have equal responsibility in proportion to
its liability in dealing with the regulatory agency(ies). In any
event, Buyer shall have the right to review all submissions or
proposals to the cognizant regulatory agency(ies) reasonably in
advance of such submissions or proposals being offered to such
agency(ies).
12.10.3 Access. Buyer hereby grants to Seller
and its consultants a right of reasonable access to its
facilities (and those of its tenants, if required) in order to
meet its obligations under this Article 12; provided that Seller
shall conduct any such remediation or corrective action in a
manner so as to assure no unreasonable interference with the
ongoing operations or conduct of Buyer's business unless mandated
to do so by a Governmental Authority. Any dispute under this
Section as to the reasonableness of Seller's actions may be
submitted for resolution to arbitration as set forth in Section
14.12. Buyer shall allow Seller and its representatives and
agents to store all equipment and materials that are necessary or
desirable for undertaking remediation or corrective actions
required.
12.10.4 Cooperation. With respect to Identified
Environmental Concerns or Government Remediation Claims, each
party shall reasonably cooperate with the other towards effecting
any remediation or corrective action required and shall provide
the other with copies of any studies, analytical test results or
reports which may come into its possession or control, including
consultants retained by or on its behalf with respect to
environmental conditions. As long as Seller's Environmental
Responsibility at a facility is in effect, (a) each party shall
provide notice and documentation to the other of any spill
incidents, whether or not reportable, occurring after the Closing
Date in, on or around the Coffeyville Facility, Lakeville
facility or Utah facility within ten (10) days of such incident
and (b) each party shall also promptly provide to the other a
copy of any written statement, report, notice, registration,
application, permit, license, claim, action or proceeding given
to or received from any Person entering or occupying the
Coffeyville Facility, Lakeville facility or Utah facility
concerning the spill, release, discharge of or exposure to any
Hazardous Substance or contamination in, on, or about the
Coffeyville Facility, Lakeville facility or Utah facility
including but not limited to all such documents as may be
involved in any air and water discharges from the site. Further,
the Buyer shall provide to Seller reasonable access to its
purchasing and disposal records and shall provide timely notice
of any material change in type or volume of product used in its
operations at the Coffeyville Facility greater than thirty-three
and one-third (33 1/3%) percent of the preceding year's annual
inventory.
12.10.5 Monitoring and Sampling. Buyer agrees
that Seller may for the purposes of (a) complying with government
ordered remediation; or (b) establishing baseline assessments of
contamination; or (c) monitoring of any new, preexisting or
suspected contamination; take soil samples or install additional
groundwater monitoring wells and sample such wells and soils as
needed in specific areas of concern; provided that Seller shall
conduct any such remediation or corrective action in a manner so
as to assure no unreasonable interference with the ongoing
operations or conduct of Buyer's business unless mandated to do
so by a Governmental Authority. Any disputes under this Section
as to the reasonableness of Seller's actions may be submitted for
resolution to arbitration as set forth in Section 14.12 with the
exception of government mandated actions. Buyer shall be given
advance notice of such testing and sampling and shall be entitled
to split samples, if requested, at its expense. Buyer may also
choose to conduct its own testing and sampling (including
sampling of groundwater wells installed by Seller). Buyer and
Seller agree, at Seller's sole cost and expense (except as noted
below) to the establishment and permanent location, if necessary,
of a Westinghouse representative on the Coffeyville site and
further agree to provide such representative with office space to
perform the remediation, monitoring and oversight of planned
remediation activities at the site as well as baseline monitoring
of activities at site. Buyer agrees to absorb the costs of
office space for such full time representative over the lifetime
of the remedial action.
12.10.6 Conduct. If Seller or its officers,
employees, agents or representatives enter any properties of
Aptus, pursuant to this Agreement after the Closing, each Party
shall indemnify and save harmless the other and its Indemnitees
from and against any Damages arising therefrom to the extent
resulting from the negligence or willful misconduct of the
Indemnifying Party or its contractors, subcontractors or agents.
ARTICLE 13
DEFINITIONS
For purposes of this Agreement, the terms set forth
below shall have the following meanings:
"AAA" shall have the meaning set forth in Section
14.12.
"Action" means any action, suit, arbitration, inquiry,
proceeding or investigation by or before any Governmental
Authority.
"Affiliate" means, for any Person, any other Person
controlling, controlled by, or under common control with such
Person. The term "control" means the possession, directly or
indirectly, of the power to direct the management and policies of
such Person, whether through ownership of voting securities, by
contract or otherwise.
"Agreement" means this Purchase Agreement, together
with the Schedules and Exhibits.
"Aptus" shall have the meaning set forth in the
recitals to this Agreement.
"Aptus Shares" means 1,000 shares of Common Stock of
Aptus, constituting all of the issued and outstanding shares of
capital stock of Aptus.
"Assignment and Assumption Agreement" shall have the
meaning set forth in Section 2.2.3.
"Audited Financial Statements" shall have the meaning
set forth in Section 3.5.
"Authenticating Agent" shall have the meaning set forth
in the IDB Indenture.
"Basket" shall have the meaning set forth in Section
11.4 hereto.
"Beneficiary" shall have the meaning set forth in
Section 11.3.1.
"Business" shall have the meaning set forth in the
Recitals Section.
"Buyer" shall have the meaning set forth in the heading
to this Agreement.
"Buyer Indemnitees" shall have the meaning set forth
in Section 11.1.
"Buyer's Employee Welfare Benefit Plan" shall have the
meaning set forth in Section 7.1.6.
"Buyer's Environmental Responsibility" shall have the
meaning set forth in Section 12.2.
"Buyer's Pension Plan" shall have the meaning set forth
in Section 7.1.4(a).
"Cap" shall have the meaning set forth in Section 11.4
hereto.
"Charter Documents" means the articles or certificate
of incorporation and its by-laws, as each has been amended or
supplemented from time to time.
"Closing" shall have the meaning set forth in
Section 2.2.1.
"Closing Date" shall have the meaning set forth in
Section 9.1.
"Closing Date Closure and Post Closure Costs" shall
have the meaning set forth in Section 5.8 hereto.
"Code" means the Internal Revenue Code of 1986, as
amended from time to time.
"Coffeyville Facility" shall have the meaning set forth
in Section 12.3.
"Coffeyville Contamination" shall have the meaning set
forth in Section 12.3.
"Confidentiality Agreement" means the Confidentiality
Agreement dated as of November 30, 1993 between Seller and Buyer.
"Consent" means a consent, approval, authorization,
waiver or notification from any Person, including any
Governmental Authority.
"Consequential Damages" are Damages that arise out of
any interruption of business, loss of profits, loss of use of the
facilities, claims of customers or other indirect damages.
Consequential Damages shall exclude compensatory or actual
damages and incidental damages (as that term is used in the
Uniform Commercial Code).
"Continuing Employees" shall have the meaning set forth
in Section 7.1.1.
"Covered Returns" means Returns with respect to Covered
Taxes.
"Covered Taxes" means any Taxes.
"Damages" means all losses, claims, damages, costs,
fines, penalties, obligations, payments and liabilities
(including those arising out of any Action), together with all
reasonable costs and expenses (including reasonable outside
attorneys' fees and reasonable out-of-pocket expenses) incurred
in connection with any of the foregoing. Damages shall include
any costs of actions within the definition of "response action"
under CERCLA Section 101(25) or any similar or successor
legislation, including the installation of equipment at a
facility required to address an Environmental Violation.
"December 1994 Adjusted Net Worth" shall have the
meaning set forth in Section 2.3.2.
"December 1994 Balance Sheet" means the Balance Sheet
dated December 31, 1994 and attached to Schedule 3.5 hereto.
"Dollars" or "$" means lawful currency of the United
States.
"Effective Conversion Date" shall have the meaning set
forth in either Section 7.8.3.1 or Section 7.8.3.2, as
applicable.
"Employee" shall have the meaning set forth in Section
3.20.1.
"Employee Benefit Plans" shall have the meaning set
forth in Section 3.21.1.
"Employee Welfare Benefit Plans" shall have the meaning
set forth in Section 3(1) of ERISA, whether or not such plans are
subject to ERISA.
"Environmental Laws" means any of the following in
effect and as interpreted as of the Closing Date: the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, 42 U.S.C. Section 9601 et seq.; the
Toxic Substance Control Act, as amended, 15 U.S.C. Section 2601
et seq.; the Hazardous Materials Transportation Act, as amended
49 U.S.C. Section 1802 et seq.; the Resource Conservation
Recovery Act, as amended, 42 U.S.C. Section 9601, et seq.; the
Clean Water Act, as amended, 33 U.S.C. Section 1251 et seq.; the
Safe Drinking Water Act, 42 U.S.C. Section 7401 et seq.; the
Occupational Safety and Health Act, 29 U.S.C. Section 651 et
seq.; and all applicable U.S. federal, state,
municipal, local and foreign laws, principles of common law
ordinances, codes, as well as orders, decrees, judgments,
seizures or injunctions issued, promulgated, approved or entered
on or before the Closing Date thereunder relating to pollution,
protection of the environment, or protection of the public from
pollution or employee health and safety, including, but not
limited to the release or threatened release of Hazardous
Substances into the environment or otherwise relating to the
presence, manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Substances.
"Environmental Violations" shall have the meaning set
forth in Section 12.5.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
"ERISA Plan" shall have the meaning set forth in
Section 3(3) of ERISA with respect to employee benefit plans
maintained or contributed to by Seller on behalf of Aptus or
Aptus that currently cover Employees and are subject to ERISA.
"Existing Environmental Violations" shall have the
meaning set forth in Section 12.5.
"Existing Third Party Environmental Claim" shall have
the meaning set forth in Section 12.6.
"Final Adjusted Net Worth" shall have the meaning set
forth in Section 2.4.1.
"Financial Assurances" shall have the meaning set forth
in Section 5.8.
"Financial Statements" shall have the meaning set forth
in Section 3.5.
"Flexible Period" shall have the meaning set forth in
the IDB Indenture.
"Flexible Rate" shall have the meaning set forth in the
IDB Indenture.
"GAAP" means generally accepted accounting principles.
"Governmental Authority" means any federal, state or
local government, any of its subdivisions, agencies, authorities,
commissions, boards or bureaus, any special improvement district,
any federal, state or local court or tribunal of competent
jurisdiction.
"Governmental Remediation Claim" shall have the meaning
set forth in Section 12.7.
"Guarantee" means any guarantee, any indemnification
obligation and any other contingent obligation to purchase, to
provide funds for payment, to supply funds to invest in any
Person or otherwise to assure a creditor against loss including
performance bonds and letters of credit.
"Hazardous Substance" means any of the following in
effect and as interpreted as of the Closing Date: any "hazardous
substance" as defined under CERCLA or the rules and regulations
promulgated thereunder, any Hazardous Waste, radioactive
materials, petroleum or petroleum-derived substance or waste,
PCB, asbestos, or any constituent or combination of any of the
above.
"Hazardous Waste" means "hazardous waste" as defined in
RCRA or the rules and regulations promulgated thereunder (as in
effect and as interpreted as of the Closing Date).
"HSR Act" means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the regulations
promulgated thereunder.
"IDB Backstop Expiry Date" means the earliest to occur
of (i) the discharge of the lien of the IDB Indenture pursuant to
Section 12.01 thereof, (ii) June 1, 2020, and (iii) the Effective
Conversion Date.
"IDB Costs" whether incurred by Buyer or Seller, shall
consist of (i) any annual or other periodic fees and expenses
relating to a Letter of Credit, (ii) any fees or premium payable
with respect to an IDB Interest Rate Cap, (iii) any annual or
other periodic fees and expenses payable to the Remarketing Agent
(subject to Section 7.8.2 hereof), (iv) any annual or other
periodic fees and any expenses payable to any rating agency, (v)
the interest payable on the aggregate principal amount of the
IDBs at the IDB Interest Rate, but shall not include any
Underwriting Costs.
"IDB Indenture" means the Indenture of Trust between
Tooele County, Utah and Security Pacific National Trust Company
(New York), as Trustee, dated as of June 1, 1990, as amended.
"IDB Interest Rate" means at any time the actual
interest payable (without giving effect to any penalty charges)
on the IDBs by the Company (after giving effect to the Interest
Rate Cap but before giving effect to the cost sharing provision
of this Agreement), as it may be adjusted pursuant to Section
7.8.3.2 (a).
"IDB Interest Rate Cap" means a policy or contract
allocating to the provider thereof the obligation to pay a
portion of the interest which Buyer obligated to pay with respect
to the IDBs, issued in accordance with Section 7.8.5.2, as the
same may from time to time be reissued or extended in accordance
with its terms, or any substitute therefor which, in any case
shall be issued by a provider and be on terms and subject to
conditions reasonably acceptable to Seller.
"IDB Loan Agreement" shall have the meaning set forth
in Section 2.1.
"IDBs" means the industrial development bonds defined
in Section 2.1(b).
"Identified Environmental Concerns" shall have the
meaning set forth in Section 12.3.
"Immediate Notices" shall have the meaning set forth in
the IDB Indenture.
"Income Tax" means any federal, state or local income,
alternative minimum and franchise or other similar tax, duty,
governmental charge or assessment imposed by or on behalf of any
Governmental Authority that is based on or measured by income
(including, interest and penalties on any of the forgoing).
"Income Tax Returns" means any Returns with respect to
Income Tax.
"Independent Firm" shall have the meaning set forth in
Section 2.3.1.
"Intellectual Property" shall have the meaning set
forth in Section 3.19.1.
"Interim Period" means, with respect to any Tax,
imposed on NEI or Aptus on a periodic basis for which the
Closing Date is not the last day of a Short Period, the period of
time beginning on the first day of the actual taxable period that
includes (but does not end on) the Closing Date and ending on the
Closing Date.
"Issuer" shall have the meaning set forth in the IDB
Indenture.
"Law" means any statute, rule, regulation or ordinance.
"Lease" means any lease or sublease of real or personal
property to Aptus.
"Leased Personal Property" shall have the meaning set
forth in Section 3.10.2.
"Leased Real Property" shall have the meaning set forth
in Section 3.9.2.
"Letter of Credit" shall mean an irrevocable letter of
credit to be dated the Closing Date from a bank in favor of the
trustee under the IDB Indenture, issued at the request of Seller,
as the same may from time to time be reissued or extended in
accordance with its terms, or any substitute therefor.
"Letter of Intent" shall mean the Letter of Intent
entered into on August 22, 1994 between Buyer and Seller.
"Lien" means any lien, mortgage, deed of trust,
security interest, charge, pledge, retention of title agreement,
easement, encroachment, condition, reservation, covenant or other
encumbrance affecting title.
"Mandatory Tender Date" shall have the meaning set
forth in the IDB Indenture.
"Material Adverse Effect" means a material adverse
effect on (a) the Business, financial condition or results of
operations of the Business, taken as a whole (without giving
effect to any effect in the Retained Liabilities), or (b) the
ability of Seller to consummate the transactions contemplated by
this Agreement.
"Material Contracts" means the Contracts identified on
Schedule 3.13.
"Material Lease" means any Real Property Lease or
Material Personal Property Lease.
"Material Personal Property Lease" means any lease of
personal property involving one (1) year or rental obligations
exceeding Fifty Thousand Dollars ($50,000.00).
"NEI" shall have the meaning set forth in the recitals
to this Agreement.
"Non-Transferred Instrument" shall have the meaning set
forth in Section 5.4.2.
"Off-Site Disposal" shall have the meaning set forth in
Section 12.4.
"Order" means any order, judgment, injunction, decree
or award of any Governmental Authority.
"Owned Real Property" shall have the meaning set forth
in Section 3.9.1.
"Party" means Buyer or Seller.
"PCB" means PolyChlorinated Biphenyl.
"Pension Plan" means the Westinghouse Pension Plan.
"Period" has the meaning set forth in Section 7.2.1.
"Permit" means any permit, license, certificate
(including a certificate of occupancy) registration,
authorization or approval issued by a Governmental Authority.
"Permitted Liens" means (a) Liens for Taxes that are
not yet due and payable or that are being contested in good faith
by appropriate proceedings and as to which reserves have been
established consistent with GAAP, (b) landlords' and similar
Liens imposed by Law that have been incurred in the ordinary
course of business, and (c) other title defects, easements,
encroachments and encumbrances that do not, individually or in
the aggregate, materially impair the value or continued use of
the property to which they relate, assuming that Aptus uses such
property for commercial purposes.
"Person" means an individual, partnership, joint
venture, association, corporation, trust or any Governmental
Authority.
"Plan" shall have the meaning set forth in Section
3.21.1.
"Post-Closing Period" means any Period that begins
after the Closing Date and, with respect to any Period beginning
before and ending after the Closing Date, the portion of such
Period commencing on the day following the Closing Date.
"Purchase Price" shall have the meaning set forth in
Section 2.1.
"Rate Period" shall have the meaning set forth in the
IDB Indenture.
"Real Property" means the Owned Real Property and the
Leased Real Property.
"Real Property Lease" shall have the meaning set forth
in Section 3.9.2.
"Remarketing Agent" shall have the meaning set forth in
the IDB Indenture.
"Retained Liabilities" shall have the meaning set forth
in Section 11.1 hereto.
"Returns" means any federal, state or local tax
Returns, reports, declarations and forms with respect to Taxes.
"Savings Program" means the Westinghouse Savings
Program.
"Seller" shall have the meaning set forth in the
heading to this Agreement.
"Seller Indemnitees" shall have the meaning set forth
in Section 11.2.
"Seller's Employee Welfare Benefit Plan" shall have the
meaning set forth in Section 7.1.6.
"Seller's Environmental Responsibility" shall have the
meaning set forth in Section 12.1.
"Seller's Knowledge" or "to the knowledge of Seller"
shall mean the actual knowledge, after due and appropriate
inquiry of the person identified on Schedule 13.
"Seller's Plan" shall have the meaning set forth in
Section 7.1.3.
"Senior Unsecured Debentures" shall have the meaning
set forth in Section 2.1.
"Shares" means 3,000 shares of Common Stock of NEI,
constituting all of the issued and outstanding shares of capital
stock of NEI.
"Short-Period" means any Period ending on the Closing
Date.
"Subordinated Debentures" shall have the meaning set
forth in Section 2.1.
"Subsidiary" of any Person means any corporation of
which 50% or more of its shares of stock having general voting
power under ordinary circumstances to elect a majority of the
board of directors, managers, or trustees of such corporation,
irrespective of whether or not 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, are owned or controlled
directly or indirectly by such Person or by any other Subsidiary
of such Person.
"Tax" or "Taxes" means all income, profits, franchise,
gross receipts, capital, sales, use, withholding, value added, ad
valorem, transfer, employment, social security, disability,
occupation, property, severance, production, waste, excise and
other taxes, duties and similar governmental charges and
assessments imposed by or on behalf of any Governmental
Authority (including interest and penalties thereon).
"Tax Exemption Certificate and Agreement" shall mean
such document dated June 26, 1990 among Seller, Issuer and
Trustee.
"Tax Laws" means the Code and all other Laws relating
to Taxes.
"Tender Agent" shall have the meaning set forth in the
IDB Indenture.
"Term Period" shall have the meaning set forth in the
IDB Indenture.
"Terminating Employees" shall have the meaning set
forth in Section 7.1.1.
"Third Party Claim" shall have the meaning set forth in
Section 11.3.2.
"Third Party Environmental Claim" shall have the
meaning set forth in Section 12.6.
"Transition Employees" shall have the meaning set forth
in Section 7.1.1.
"Trustee" shall have the meaning set forth in the IDB
Indenture.
"Unaudited Financial Statements" shall have the meaning
set forth in Section 3.5.
"Underwriting Costs" shall mean the underwriting fees
and expenses of the Remarketing Agent in connection with the
remarketing of the IDBs at the Closing Date and at the Effective
Conversion Date, and all related underwriting costs, including,
without limitation, the fees and expenses of accountants and bond
counsel, fees and expenses in connection with the delivery of
other legal opinions or required in connection with obtaining a
rating on the IDBs, fees and expenses relating to any feasibility
study required in connection with remarketing the IDBs, fees and
expenses incurred in connection with the initial issuance of the
Letter of Credit and the initial rating agency fees, and printing
and mailing fees, but shall not include any IDB Costs.
"Undisclosed Liabilities" shall have the meaning set
forth in Section 3.6.
ARTICLE 14
MISCELLANEOUS
14.1 Severability. If any provision of this Agreement
shall be held invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions of this
Agreement will not be affected or impaired thereby.
14.2 Successors and Assigns. The terms and conditions
of this Agreement shall inure to the benefit of and be binding
upon the successors and assigns of the Parties; provided,
however, that this Agreement may not be assigned by any Party
without the express written consent of the other Party.
14.3 Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall for all purposes be
deemed to be an original and all of which when taken together
shall constitute the same instrument.
14.4 Headings. The headings of the Sections are
inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction
hereof.
14.5 Waiver. Any of the terms or conditions of this
Agreement may be waived in writing at any time by the Party which
is entitled to the benefits thereof. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute
a waiver of such provision at any time in the future or a waiver
of any other provision hereof.
14.6 No Third-Party Beneficiaries. Nothing in this
Agreement shall create any third-party beneficiary rights in any
Person other than the Beneficiaries.
14.7 Sales and Transfer Taxes. Seller shall pay all
sales, transfer, deed, duties, stamp, notary public and other
similar taxes, duties and transfer fees applicable to the
transactions contemplated by this Agreement, if any, including
fees to record assignments.
14.8 Other Expenses. Except as otherwise expressly
provided for herein or in any agreement entered into on the date
hereof, Seller and Buyer shall each pay all costs and expenses
incurred by it or on its behalf in connection with this Agreement
and the transactions contemplated hereby, including fees and
expenses of its own financial consultants, accountants and legal
counsel. Costs or expenses of Seller shall be paid by Seller and
not by Aptus or from the assets of Aptus. Any and all fees,
costs and expenses for title or survey work related to any of the
Real Property shall be paid by Buyer. Any further or additional
environmental investigations, studies or analyses relating to any
of the Real Property shall be paid by Buyer.
14.9 Notices. Any notice, request, instruction,
consent or other document to be given hereunder by either party
hereto to the other party shall be in writing and delivered
personally, by nationally recognized overnight courier service,
or sent by registered or certified mail, postage prepaid, as
follows:
If to Seller:
Office of the Chairman
Westinghouse Electric Corporation
11 Stanwix Street
Pittsburgh, PA 15222-1384
Fax Number:
With a copy to:
Office of General Counsel
Westinghouse Electric Corporation
11 Stanwix Street
Pittsburgh, PA 15222-1384
Fax Number:
If to Buyer:
Office of the Vice Chairman
Rollins Environmental Services, Inc.
2200 Concord Pike
Wilmington, DE 19803
With a copy to:
Klaus M. Belohoubek, Esquire
Rollins Environmental Services, Inc.
2200 Concord Pike
Wilmington, DE 19803
or at such other address for a Party as shall be specified in
writing by that Party. Any notice which is delivered personally
or by nationally recognized overnight courier service to the
addresses provided herein shall be deemed to have been duly given
to the Party to whom it is directed upon actual receipt by such
Party. Any notice which is addressed and mailed in the manner
herein provided shall be deemed given to the Party to which it is
addressed when received.
14.10 Governing Law; Interpretation. This Agreement
shall be construed in accordance with and governed by the Laws of
Pennsylvania applicable to agreements made and to be performed
wholly within the Commonwealth. Unless specifically stated,
otherwise, references to Articles, Sections, Exhibits and
Schedules refer to Articles, Sections, Exhibits and Schedules in
this Agreement. References to "includes" and "including" mean
"includes without limitation" and "including without limitation."
14.11 Public Announcements. Seller and Buyer shall
agree on the terms of the press releases to be issued upon the
execution of this Agreement and shall consult with each other
before issuing any other press releases with respect to this
Agreement and the transactions contemplated hereby, including any
termination of this Agreement for any reason.
14.12 Arbitration.
14.12.1 In the event of any dispute arising
between the parties hereto, regarding any of the terms or
provisions or breach of this Agreement, such disputes shall be
resolved by submitting same to arbitration, the results of which
shall be final and binding upon the parties and in accordance
with the Commercial Arbitration Rules of the American Association
of Arbitrators ("AAA"). Such arbitration shall be held in
Pittsburgh, Pennsylvania or Wilmington, Delaware, as determined
in the sole discretion of the arbitrators, before a three person
arbitration panel consisting of practicing attorneys familiar
with environmental law if the dispute involves environmental
issues. The arbitrators shall not reside in Pittsburgh or
Wilmington and shall be subject to the AAA's no conflict rules.
The arbitration panel shall be selected from a list of
arbitrators supplied by AAA as follows: one arbitrator by
Seller, one arbitrator by Buyer, and the third arbitrator
selected by the arbitrators appointed by Seller and Buyer:
(a) Upon the written or telexed demand for arbitration
by any of the parties hereto, Buyer and Seller shall appoint
their respective selection as arbitrator not later than ten days
following receipt of the list supplied by AAA.
(b) The two arbitrators so selected by Buyer and
Seller, shall appoint a third arbitrator not later than ten (10)
days thereafter and the three man arbitration panel so
constituted shall call for an arbitration hearing not later than
thirty (30) days thereafter. The period of arbitration, from the
time of the first hearing, shall not exceed ninety (90) days
unless such period be extended by the arbitrators for good cause
shown.
(c) The final decision of the arbitrators shall be a
written decision setting forth the findings of fact and
conclusions reached by the arbitrators, shall be rendered not
more than thirty (30) days following the final hearing and shall
be sent to the parties by registered mail forthwith, thereafter.
(d) The prevailing party in any such arbitration shall
be entitled to interest on amounts due and to reimbursement of
fees and expenses (including reasonable attorneys' fees) as
determined by the arbitrators.
(e) The decision of the arbitrators shall be final and
nonappealable in accordance with AAA rules, except as follows: to
the extent that either the claim for damages or the amount of
damages awarded exceeds Ten Million and 00/100 Dollars
($10,000,000.00), then the arbitrators shall be required to
include in their decision both the factual and the legal
conclusions reached in support of the decision and either party
shall be entitled to appeal the decision to a court of competent
jurisdiction based on error in the application of governing legal
principles only. In this regard, the arbitrators shall be
required to observe Section 11.6 to this Agreement (Exclusive
Remedy). The findings of fact shall remain undisturbed unless
manifestly in error. The prevailing party in any such litigation
shall be entitled to interest on amounts due and to reimbursement
of fees and expenses (including reasonable attorneys' fees) as
determined by the court. For purposes of this Section, the
parties consent to the jurisdiction of federal and state courts
within Pennsylvania and Delaware.
14.12.2 This Section, with the exception of the
last sentence of 14.1.2.1, shall not apply to disputes under
Section 7.4 (Non-Competition). In addition, any disputes brought
under the Indentures governing the Senior Unsecured Debentures or
the Subordinated Debentures shall be governed by such Indentures
and not by this Section.
14.13 Financial Projections. Buyer and Seller may
have shared with each other certain financial projections
relating to their respective businesses or the combined business
of Buyer and Aptus post Closing. Buyer and Seller acknowledge
that such financial projections should not be relied upon as
accurate or reliable since they are based on various estimates
and assumptions that may be unwarranted or speculative.
Accordingly, neither Party shall have any liability to the other
based on the sharing of such financial projections.
14.14 Confidentiality. The terms of the
Confidentiality Agreement shall be extended for a period of five
(5) years post Closing. Without limiting the generality of the
foregoing, the terms of the Confidentiality Agreement shall
extend to the Parties ongoing business and contractual
relationships under this Agreement as long as such relationships
continue (whether or not beyond the five (5) year period),
including without limitation Section 5.9 (Right to Seller
Business Post Closing), Section 5.10 (Right to Seller
Intellectual Property Post Closing), and Articles 11 and 12
(relating to Indemnification Post Closing).
14.15 Entire Agreement; Amendment. This Agreement,
the Confidentiality Agreement and the other written agreements,
if any, entered into on the date hereof constitute the sole
understanding of the Parties with respect to the matters
contemplated hereby and thereby and supersede all prior
agreements and understandings, including the Letter of Intent,
between the Parties with respect to such matters. No amendment,
modification or alteration of the terms or provisions of this
Agreement shall be binding unless the same shall be in writing
and duly executed by the Party against whom it would apply.
14.16 Further Assurances. At any time and from time
to time prior to and after the Closing Date, each party shall, at
the reasonable request of the other, execute and deliver any
further instruments or documents and take all such further action
as such party may reasonably request in order to consummate more
effectively the transactions contemplated by this Agreement.
14.17 Exclusive Jurisdiction and Consent to Service of
Process. Subject to Section 14.12, the Parties agree that any
legal action, suit or proceeding arising out of or relating to
this Agreement or the transactions contemplated hereby, shall be
instituted in a Federal or state court sitting in either
Pennsylvania or Delaware. Such courts shall be the exclusive
jurisdiction and venue of said legal proceedings and each Party
hereto waives any objection which such party may now or hereafter
have to the laying of venue of any such action, suit or
proceeding, and irrevocably submits to the jurisdiction of any
such court in any such action, suit or proceeding. Any and all
service of process and any other notice in any such action, suit
or proceeding shall be effective against such Party when
transmitted in accordance with this Agreement. Nothing contained
herein shall be deemed to affect the right of any Party hereto to
serve process in any manner permitted by law.
IN WITNESS WHEREOF, the Parties have executed this
Agreement as of the date first written above.
WESTINGHOUSE ELECTRIC CORPORATION
By:
Title:
ROLLINS ENVIRONMENTAL
SERVICES, INC.
By:
Title:
<PAGE>
LIST OF SCHEDULES / EXHIBITS
SCHEDULES DESCRIPTION
2.3.1 Final Adjusted Net Worth Calculation
3.1.1 Foreign Jurisdiction Qualifications
3.1.3 Corporate History
3.4 Charter and By-laws of NEI and Aptus
3.5 Financial Statements
3.7 Absence of Certain Changes
3.8 No Conflict; Seller Consents
3.9.1 Owned Real Property / Liens
3.9.2 Leased Real Property
3.10.1 Owned Personal Property
3.10.2 Leased Personal Property
3.10.3.1 MIS Equipment
3.10.3.2 MIS Software
3.12.2 Insurance
3.13 Material Contracts
3.14 Inventory
3.15 Accounts Receivable
3.16 Litigation
3.17.1 Compliance with Laws
3.17.2 Permits
3.18.1 Environmental Matters - Notices
3.18.2 Environmental Matters - Violations, Releases,
USTs
3.18.3 Environmental Matters - Inspections
3.18.4 Environmental Matters - Disposal Sites
3.19 Intellectual Property
3.20.1 Employees
3.20.2 Collective Bargaining
3.20.3 Employee and Consulting Contracts
3.20.4 NLRB Notices/Complaints
3.21.1 Employee Benefit Plans
<PAGE>
SCHEDULES DESCRIPTION
3.21.3 Actions Pending With Respect to Employee
Benefit Plans
3.21.5 ERISA Plans
3.21.6 Acceleration of Benefits
3.22.2 Tax Extensions
3.22.3 Affiliated Tax Groups
3.22.4 Tax Audits
3.23 Brokers
3.26 Bank Accounts
3.27 Certain Relationships
7.1.1.3 Summary of Benefits of Buyer
7.4 Exceptions to Non-Competition Covenant
9.2.11 Aptus Officers and Directors
12.3 Certain Identified Environmental Concerns
13 Certain Senior Management
EXHIBITS
2.1 (c) Senior Unsecured Debentures
2.1 (d) Subordinated Convertible Debentures
2.2.2 Debenture Purchase Agreement
2.2.3 Assignment and Assumption Agreement (IDB)
5.11.3 (1) Services Agreement - MIS Services Post
Closing
5.11.3 (2) Services Agreement - Telecommunications
Services Post Closing
9.2.10 Opinion to Buyer from Counsel to Seller
9.2.12 Patent Assignment
9.2.15 Assignments of Software License Agreement
(CORE)
9.3.9 Opinion to Seller from Counsel to Buyer
<PAGE>
SCHEDULE 2.3.1
Net worth shall include: (1) total assets, comprising current
assets net of valuation reserves, property, plant and equipment
net of accumulated depreciation, goodwill net of accumulated
amortization and other assets, less (2) total liabilities
comprising current liabilities, deferred income taxes, long-term
portion of capital lease obligations, post employment benefits
reserve, plant closure reserve and other long-term liabilities
excluding any indebtedness or amounts owing from NEI or Aptus to
seller or any affiliate of seller.
For purposes of calculating the December 1994 Adjusted Net Worth
and the Final Adjusted Net Worth, net worth as of December 31,
1994 financial statements and as of the closing date balance
sheet shall both be adjusted to reflect the exclusion of
following liabilities and reserve accounts:
1.) Reserve for Ground Water Remediation
2.) Accrued Medical Costs
3.) Post Employment Benefits
4.) Notes Payable
5.) Restructuring Reserve
6.) Deferred Income Taxes and Deferred Tax Liabilities
7.) Drixin Discount Accrual
8.) Bonus Accrual
9.) Consent Agreement
10.) Plant Closure Reserve
Page 1 of 2<PAGE>
SCHEDULE 3.9.2
(BUYER'S SUPPLEMENT TO SCHEDULE 3,9.2 AS REQUIRED BY SECTION
5.15)
Real property leases at:
Pittsburgh
Houston
Littleton
<PAGE>
SCHEDULE 12.3
CERTAIN IDENTIFIED ENVIRONMENTAL CONCERNS
Coffeyville
- Aircraft engine cleaning area
- Halliburton soil pile
- Residuals management building
<PAGE>
SCHEDULE 13
CERTAIN SENIOR MANAGEMENT
Ed Kilpela
Roger Anthony
Ron Garner
Fran Ito
Marty Bergstedt
Ron Bryant
Tom Langhorst
Bill Bednarchik
Sharla Barber
Peter Hanley
Tim Hinchliff
Chris Logelin
Mike Copeland
<PAGE>
EXHIBIT 5.11.3 (1)
SERVICES AGREEMENT - MIS SERVICES POST CLOSING
<PAGE>
ADMINISTRATIVE SERVICES AGREEMENT
BETWEEN WESTINGHOUSE ELECTRIC CORPORATION
AND ROLLINS ENVIRONMENTAL SERVICES, INC.
This Administrative Services Agreement ("Services Agreement")
is
entered into as of this 31st day of March, 1995 by and between
WESTINGHOUSE ELECTRIC CORPORATION, a corporation organized and
existing under the laws of the Commonwealth of Pennsylvania
("WEC")
and ROLLINS ENVIRONMENTAL SERVICES, INC., a corporation organized
and existing under the laws of the State of Delaware ("BUYER").
BUYER and WEC are sometimes hereinafter collectively referred to
as
the "Parties."
W I T N E S S E T H:
WHEREAS, BUYER is purchasing the stock of NATIONAL ELECTRIC,
INC. ("NEI") pursuant to a Stock Purchase Agreement dated as of
the
7th day of March, 1995 ("Agreement"); and
WHEREAS, pursuant to Section 5.11 to the Agreement, BUYER is
interested in purchasing certain services from WEC during a
transition period from the date hereof;
NOW, THEREFORE, the Parties, intending to become legally bound,
hereby agree as follows:
SECTION 1.
DEFINITIONS
For the purposes of this Services Agreement, the following
terms
shall have the definitions hereinafter specified:
1.1 "Agreement" shall mean the Stock Purchase Agreement
entered
into as of the 7th day of March, 1995 by and between WEC and
BUYER.
1.2 "BUYER" shall mean ROLLINS ENVIRONMENTAL SERVICES, INC.
.
1.3 "Parties" shall mean WEC and BUYER, collectively.
1.4 "Premises" shall mean the locations of the Business listed
on Schedule D where the Services shall be rendered hereunder.
1.5 "Service" or "Services" shall mean those services
described
on Schedules A, B and C attached hereto to be provided on a
temporary basis.
1.6 "Services Agreement" shall mean this contract between the
Parties and all exhibits hereto.
1.7 "WEC" shall mean Westinghouse Electric Corporation.
1.8 "NEI" shall refer to NEI and the business conducted by its
wholly-owned subsidiary, Aptus, Inc.
Except as otherwise defined in this Section 1, all terms, the
first letters of which are capitalized, shall have the meanings
assigned to them in the Agreement.
SECTION 2
AGREEMENT TO SELL AND BUY
2.1 Provision of Services: WEC shall sell to Buyer, and BUYER
shall purchase from WEC, the Services listed and described, for
the
periods of time and at the prices set forth, with respect to each
such Service, on Schedule A hereto. In every case, all of the
aforesaid Services shall be provided in accordance with the
terms,
limitations and conditions hereinafter set forth.
SECTION 3
SERVICES; PAYMENT; INDEPENDENT CONTRACTOR
3.1 Services to be Provided. Unless otherwise agreed by the
Parties, the Services shall be performed by WEC for BUYER in a
manner that is substantially the same as the manner in which such
Services were performed by WEC for NEI immediately prior to the
date of this Services Agreement and BUYER shall use such Services
for substantially the same purposes and in substantially the same
manner as NEI had used such Services prior to the date hereof.
WEC
shall act under this Services Agreement solely as an independent
contractor and not as an agent of BUYER.
3.2 Payment.
(a) Statements will be rendered each month by WEC to
BUYER
for Services delivered during the preceding month, and each such
statement shall be payable net thirty (30) days after the date
thereof. Statements not paid within such 30-day period shall be
subject to late charges for each month the statement is overdue,
calculated as the greater of the following:
(i) in the event WEC is entitled to a late charge by virtue of
its provision to BUYER of such Service, said late charge,
or
(ii) the then current prime rate offered by Mellon Bank, N.A.
of
Pittsburgh, Pennsylvania, plus one percentage point.
In either event, the late charge shall be calculated to a rate no
higher than that allowed by applicable law.
3.3 Disclaimer of Warranty. EXCEPT AS PROVIDED FOR HEREIN,
THE
SERVICES AND GOODS TO BE PURCHASED UNDER THIS SERVICES AGREEMENT
ARE FURNISHED AS IS, WHERE IS, WITH ALL FAULTS AND WITHOUT
WARRANTY
OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE. WEC DOES
NOT MAKE ANY WARRANTY THAT ANY SERVICE COMPLIES WITH ANY LAW,
DOMESTIC OR FOREIGN.
SECTION 4
TERM
The term is as set forth in the Agreement.
SECTION 5
FORCE MAJEURE
WEC shall not be liable for any interruption of Service, delay
or failure to perform under this Services Agreement when such
interruption, delay or failure results from causes beyond its
reasonable control or from any act or failure to act of the BUYER
or any governmental authority, or as the result of strikes, lock-
outs or other labor difficulties; riot, insurrection or other
hostilities; embargo, fuel or energy shortage, fire, flood, acts
of
God, wrecks or transportation delays; or inability to obtain
necessary labor, materials or utilities from usual sources. In
such event, WEC's obligations hereunder shall be postponed for
such
time as its performance is suspended or delayed on account
thereof.
WEC will use reasonable efforts to promptly notify BUYER, either
orally or in writing, upon learning of the occurrence of such
event
of force majeure. Upon the cessation of the force majeure event,
WEC will use reasonable efforts to resume its performance with
the
least possible delay.
SECTION 6
INJURY TO PERSONS OR PROPERTY
6.1 Consequential and Other Damages. WEC shall not be liable,
whether in contract, in tort (including negligence and strict
liability), or otherwise, for any special, indirect, incidental
or
consequential damages whatsoever, including, but not limited to,
loss of profits or revenue, loss of use of equipment or
facilities,
business interruptions, costs of capital and claims of customers
which in any way arise out of, relate to, or are a consequence
of,
its performance or nonperformance hereunder, or the provision of
or
failure to provide any Service hereunder.
6.2 Limitation of Liability. In any event, the liability of
WEC with respect to this Services Agreement or anything done in
connection herewith, including but not limited to the performance
or breach hereof, or from the sale, delivery, provision or use of
any Service or product provided under or covered by this Services
Agreement, whether in contract, tort (including negligence or
strict liability) or otherwise, shall not exceed the monthly
price
of the Service, or the price of the product, whichever is
applicable, from which such liability flows; provided that WEC
uses
reasonable efforts to meet its obligations hereunder.
SECTION 7
TERMINATION
7.1 Breach of Services Agreement. If either party shall cause
or suffer to exist any breach of any of its obligations under
this
Services Agreement, including but not limited to any failure to
make payments when due, and said party does not cure such default
within thirty (30) days after receiving written notice thereof
from
the non-breaching party, the non-breaching party may terminate
this
Services Agreement, including the provision of Services pursuant
hereto, immediately by providing written notice of termination.
7.2 Sums Due. In the event of a termination of this Services
Agreement, WEC shall be entitled to all outstanding amounts due
from the BUYER up to the date of termination under Sections 3 and
4 hereof.
SECTION 8
MISCELLANEOUS
8.1 Ingress and Egress. WEC shall at all times during the
continuance of this Services Agreement have the right of ingress
to
and egress from the Premises for any purposes connected with the
delivery of Services hereunder or the exercise of any right under
this Services Agreement or the performance of any obligations
required by this Services Agreement.
8.2 Integration. This Services Agreement embodies the entire
understanding of the Parties with respect to the subject matter
hereof and, with the exception of the Agreement (and the
transactions contemplated thereby), there are no further
agreements
or understandings, written or oral, between the Parties with
respect thereto. This Services Agreement supersedes all previous
negotiations, discussions and commitments with respect to the
subject matter hereof. The Parties agree that the terms of this
Services Agreement shall have priority and control over the terms
of any order form, invoice or other document which relates to
this
Services Agreement or the Services unless said document is signed
by both Parties, refers to this Services Agreement and
unambiguously indicates that it is an amendment of this Services
Agreement.
8.3 Buyer's Obligation to Cooperate. WEC's obligations under
this Services Agreement are conditioned upon Buyer's obligation
to
provide WEC with all information and service WEC deems necessary
in
order to provide the services, including but not limited to, the
provision by Buyer of operating procedures that Buyer will
utilize
for any service provided under this Services Agreement.
8.4 Miscellaneous. The following provisions of the Agreement
are incorporated herein by reference:
14.1 Severability
14.2 Successors and Assigns
14.3 Counterparts
14.4 Headings
14.5 Waiver
14.6 No Third Party Beneficiaries
14.9 Notices
14.10 Governing Law; Interpretation
14.12 Arbitration
IN WITNESS WHEREOF, the Parties have executed this Services
Agreement as of the date first written above.
WESTINGHOUSE ELECTRIC CORPORATION
By
Its
ROLLINS ENVIRONMENTAL SERVICES, INC.
By
Its
<PAGE>
EXHIBIT 9.2.15
ASSIGNMENT OF
SOFTWARE LICENSE AGREEMENT
This Assignment entered into this 31st day of March, 1995
between and among Westinghouse Electric Corporation
("Westinghouse"), Rollins Environmental Services, Inc.
("Rollins"),
and Aptus, Inc. ("Aptus").
WHEREAS, Rollins and Westinghouse have entered into a
Stock
Purchase Agreement dated March 7, 1995 (the "Purchase Agreement")
pursuant to which Rollins is to acquire all of the outstanding
stock of National Electric, Inc., which in turn owns all of the
outstanding stock of Aptus; and
WHEREAS, Westinghouse and Aptus have entered into a
Software License Agreement dated the 3rd day of October, 1994
(the
"License Agreement") relating to the Westinghouse "CORE System"
(as
defined in the License Agreement);
NOW THEREFORE, in consideration of the covenants and
premises contained herein and in the Purchase Agreement, the
parties agree as follows:
1. Aptus hereby assigns all of its right, title and
interest in and to the License Agreement to Rollins.
2. Rollins hereby agrees to assume all of the
obligations
under the License Agreement. Without limiting the foregoing,
Rollins agrees that Revisions, Modifications and Enhancements (as
defined in the License Agreement) made by Aptus or Rollins after
the date of execution of the License Agreement will not be sold
or
licensed to third parties.
3. The license grant under Section 2 to the License
Agreement shall extend to Rollins and any of its Affiliates (as
defined in the Purchase Agreement).
4. Section 14 to the License Agreement shall be revised
so that both references to "within ninety (90) days of the date
of
execution of this Agreement" shall read "within ninety (90) days
of
the date of execution of the Purchase Agreement."
5. The training and maintenance responsibilities under
Section 5 to the License Agreement and the provision of updates
under Section 14 to the License Agreement shall be modified by
the
MIS Services Agreement attached to and executed pursuant to the
Purchase Agreement, but only for the term of the MIS Services
Agreement.
6. Westinghouse hereby consents to the terms of this
Assignment.
Executed by the parties' duly authorized representatives
as
of the date first above written.
Westinghouse Electric Corporation
By:
Rollins Environmental Services, Inc.
By:
Aptus, Inc.
By:
<PAGE>
EXHIBIT 9.2.10
OPINION TO BUYER FROM COUNSEL TO SELLER
Rollins Environmental Services, Inc.
2200 Concord Pike
Wilmington, DE 19803
Ladies and Gentlemen:
I am Counsel of Westinghouse Electric Corporation, a
Pennsylvania corporation ("Seller") and have acted in such
capacity
in connection with the execution and delivery of a Stock Purchase
Agreement dated as of March 7, 1995 ("Agreement") between
Westinghouse Electric Corporation and Rollins Environmental
Services, Inc., a Delaware corporation ("Buyer") in connection
with
the acquisition of the stock of National Electric, Inc., a
Minnesota corporation ("NEI") and the business of Aptus, Inc., a
Delaware corporation ("Aptus"), and the Debenture Purchase
Agreement between Westinghouse and Rollins dated as of
, 1995 ("Debenture Agreement").
Capitalized terms used herein and not otherwise defined herein
have the respective meanings given in the Agreement.
In so acting, I or members of my staff have participated in the
preparation of the Agreement.
I or members of my staff have examined and relied upon the
representations and warranties as to factual matters contained in
or made pursuant to the Agreement and have examined and relied
upon
originals or copies, certified or otherwise identified to my
satisfaction, of such other agreements, instruments, certificates
of public officials, certificates of offices or other
representatives of Westinghouse and others, and such other
documents, certificates, corporate or other records,
authorizations, proceedings and other instruments, and have made
such additional examinations and conducted such other
investigations of fact and laws, as I have deemed necessary or
appropriate for the purposes of rendering the opinions expressed
below. I have assumed the genuineness of all signatures of, and
the authority of, persons signing the Agreement on behalf of
parties thereto other than Westinghouse, and the authenticity of
all documents submitted to me as originals, the conformity to
original documents of all documents submitted to us as certified
or
photostatic copies and the authenticity of the originals of such
copies.
This Opinion Letter is governed by and shall be interpreted in
accordance with the Legal Opinion Accord ("Accord") of the ABA
Section of Business Law (1991).
Based upon the foregoing, I am of the opinion that:
1. Seller is a corporation duly organized, validly existing
and in good standing under the laws of the Commonwealth of
Pennsylvania. Seller has all requisite corporate power and
authority to enter into the Agreement and the Debenture Agreement
and to carry out its obligations thereunder.
2. NEI's authorized capital stock consists solely of
shares of common stock, all of which are presently
issued
and outstanding. All NEI Shares have been duly authorized,
validly
issued and fully paid and non-assessable. There are no
outstanding
options, warrants, rights, agreements, calls, relating to the
unissued stock of NEI and no securities convertible into or
exchangeable for any NEI stock. Seller is the record owner of
all
of the issued and outstanding capital stock of NEI.
3. Aptus' authorized capital stock consists solely of
shares of common stock, all of which are presently
issued and outstanding. All Aptus Shares have been duly
authorized, validly issued and fully paid and non-assessable.
There are no outstanding options, warrants, rights, agreements,
calls, relating to the unissued stock of Aptus and no securities
convertible into or exchangeable for any Aptus stock. NEI is the
record owner of all of the issued and outstanding capital stock
of
Aptus.
4. NEI is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Minnesota.
Aptus is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware. NEI and
Aptus each has all requisite corporate power and authority to
own,
lease, occupy or otherwise hold the property and rights now
owned,
leased, occupied or otherwise held by it and to carry on its
business as presently conducted. NEI and Aptus are duly
authorized
to do business in all jurisdictions wherein the character of the
properties owned or leased or the nature of activities conducted
by
either of them makes such qualification necessary, except for
those
jurisdictions where the failure to be so qualified would not have
a Material Adverse Effect.
5. The Agreement and the Debenture Agreement have been duly
authorized, executed and delivered by the Seller and constitutes
the legal, valid and binding obligation of the Seller enforceable
in accordance with their terms, except (a) that such
enforceability
may be subject to bankruptcy, insolvency, reorganization,
moratorium or other laws, decisions or equitable principles now
or
hereafter in effect relating to or affecting the enforcement of
creditors' rights or debtors' obligations generally, and (b)
general principles of equity including the remedy of specific
performance and injunctive and other forms of equitable relief
may
be subject to equitable defenses and to the discretion of the
court
before which any proceeding therefor may be brought.
6. The execution and delivery of the Agreement and the
Debenture Agreement do not, and the consummation of the
transactions contemplated by the Agreement and the Debenture
Agreement and the compliance with the terms, conditions and
provisions of the Agreement and the Debenture Agreement by the
Seller, will not (a) contravene any provision of the articles of
incorporation or bylaws of Seller, NEI or Aptus; or (b) conflict
with or result in a breach of or constitute a default (or an
event
which might, with the passage of time or the giving of notice or
both, constitute a default) under, under any indenture, mortgage,
loan or credit agreement, license, contract or any other
agreement
or commitment to which Aptus or NEI is a party or by which either
of them or any of their assets may be bound or affected and which
is known to me after due inquiry, or any judgment or order of any
court or governmental department, commission, board, agency or
instrumentality, domestic or foreign, which is known to me after
due inquiry, or any applicable law, rule or regulation except in
the case of clause (b) for violations and defaults that will not
have a result in a Material Adverse Effect or will not materially
impair the ability of Seller to perform its obligations under the
Agreement.
7. To the best of my knowledge, except as scheduled in the
Agreement, there are no actions, suits, investigations or
proceedings pending or threatened against or affecting NEI or
Aptus
or any of their assets or affecting the NEI Shares or any of
Seller's rights thereto, at law or in equity, by or before any
court or governmental department, agency or instrumentality. To
the best of my knowledge, except as scheduled in the Agreement,
there are presently no outstanding judgments, decrees or orders
of
any court or any governmental or administrative agency against or
affecting NEI or Aptus, or any of its assets or businesses or
affecting the NEI and Aptus Shares or any of the Seller's rights
thereto.
8. The waiting period under HSR Act with respect to the
transaction contemplated by the Agreement has been terminated.
No
consent, approval or authorization of, or registration or filing
with any governmental authority or other regulatory agency, is
required in connection with the execution and delivery of the
Agreement or the consummation of the transactions contemplated
thereby, except such as have been made or obtained except where
the
failure to make or obtain such governmental or regulatory agency
consent individually or in the aggregate will not result in a
Material Adverse Effect or materially impair the ability of
Seller
to perform its obligations under the Agreement.
I am licensed to practice law only in the Commonwealth of
Pennsylvania, and accordingly, the foregoing opinion is based on
and is limited to the present law of the Commonwealth of
Pennsylvania and the present federal law of the United States of
America, and I express no opinion with respect to the law of any
other jurisdiction.
This opinion is for the sole benefit of the addressee and may
not be relied upon by any other person other than the addressee
without the express prior written consent of the undersigned.
The
opinions expressed herein are as of the date hereof and I make no
undertaking to amend or supplement such opinions if facts come to
my attention or changes in the present law of the jurisdictions
mentioned herein occur which could affect such opinions.
The opinions expressed herein are based on states of facts and
law as they exist on the date hereof.
Nothing contained herein shall create any obligation or right
to
look to me individually for any claim, liability, damage, loss or
expense whatsoever whether arising in contract, in tort
(including
negligence and strict liability) or otherwise in connection with
this opinion, or otherwise in connection with the transactions
contemplated therein.
Sincerely,
<PAGE>
EXHIBIT 9.3.9
OPINION TO SELLER FROM COUNSEL TO BUYER
March 31, 1995
Westinghouse Electric Corporation
Westinghouse Building
6 Gateway Center
Pittsburgh, PA 15222
RE: Acquisition of National Electric, Inc.
Ladies and Gentlemen:
I am Counsel of Rollins Environmental Services, Inc. ("Buyer").
I have acted as counsel to Buyer in connection with its
acquisition
of National Electric, Inc. pursuant to a Stock Purchase Agreement
between Buyer and Westinghouse Electric Corporation entered into
on
the 7th of March, 1995 (the "Agreement"); Buyer's issuance of the
Senior Unsecured Debentures dated to
Westinghouse ("Senior Debentures") and the Subordinated
Convertible
Debentures issued to Westinghouse and dated
("Convertible Debentures"); and the obligations under the
Debenture Purchase Agreement between Buyer and Westinghouse dated
("Debenture Agreement"). The Senior
Debentures, Convertible Debentures and Debenture Agreement are
herein after referred to as the Collateral Agreements.
In so acting, I have considered such matters of law and of
fact,
and relied upon such certificates and other information furnished
to me, as I have deemed appropriate as a basis for the opinions
set
forth below.
This Opinion Letter is governed by, and shall be interpreted in
accordance with, the Legal Opinion Accord (the "Accord") of the
ABA
Section of Business Law (1991).
Based upon the foregoing, I am of the opinion that:
1. Buyer is a corporation duly organized validly existing and
in good standing under the laws of the State of Delaware. Buyer
has all requisite corporate power and authority to enter into the
Agreement and the Collateral Agreements and to carry out its
obligations thereunder.
2. The Agreement and the Collateral Agreements have been duly
authorized, executed and delivered by the Buyer and constitute
the
legal, valid and binding obligations of Buyer enforceable in
accordance with their terms, except (a) that such enforceability
may be subject to bankruptcy, insolvency, reorganization,
moratorium or other laws, decisions or equitable principles now
or
hereafter in effect relating to or affecting the enforcement of
creditors' rights or debtors' obligations generally, and (b)
general principles of equity including the remedy of specific
performance and injunctive and other forms of equitable relief
may
be subject to equitable defenses and to the discretion of the
court
before which any proceeding therefor may be brought.
3. The execution and deliver of the Agreement and the
Collateral Agreements do not, and the consummation of the
transactions contemplated by the Agreement and the Collateral
Agreements and the compliance with the terms, conditions and
provisions of the Agreement and the Collateral Agreement by the
Buyer, will not (a) contravene any provision of the articles of
incorporation or by-laws of the Buyer; or (b) conflict with or
result in a breach of or constitute a default (or an event which
might, with the passage of time or the giving of notice or both,
constitute a default) under any indenture, mortgage, loan or
credit
agreement, license, contract or any other agreement or commitment
to which the Buyer is a party or any other agreement or
commitment
to which the Buyer is a party or by which its assets may be bound
or affected and which is known to me after due inquiry, or any
judgment or order of any court or governmental department,
commission, board, agency or instrumentality, domestic or
foreign,
which is known to me after due inquiry, or any applicable law,
rule
or regulation except in the case of clause (b) for violations and
defaults that will not have or result in a Material Adverse
Effect
or will not materially impair the ability of Buyer to perform its
obligations under the Agreement and the Collateral Agreements.
4. To the best of my knowledge, after due inquiry, there are
no actions, suits, investigations or proceedings pending or
threatened against or affecting the Buyer or any of its assets at
law or in equity, by or before any court or governmental
department, agency or instrumentality affecting, challenging or
contesting Buyer's execution and performance of the Agreement or
the Collateral Agreements.
5. The waiting period under HSR Act with respect to the
transaction contemplated by the Agreement has been terminated.
No
consent, approval or authorization of, or registration or filing
with any governmental authority or other regulatory agency, is
required in connection with the Buyer's execution and delivery of
the Agreement or the Collateral Agreements or the consummation of
the transactions contemplated thereby, except such as have been
made or obtained except where the failure to make or obtain such
governmental or regulatory agency consent individually or in the
aggregate will not result in a Material Adverse Effect or
materially impair the ability of Buyer to perform its obligations
under the Agreement or the Collateral Agreements.
I am licensed to practice law only in the Commonwealth of
Pennsylvania, and accordingly, the foregoing opinion is based on
and is limited to the present law of the Commonwealth of
Pennsylvania and the present federal law of the United States of
America, and I express no opinion with respect to the law of any
other jurisdiction.
This opinion is for the sole benefit of the addressee and may
not be relied upon by any other person other than the addressee
without the express prior written consent of the undersigned.
The
opinions expressed herein are as of the date hereof and I make no
undertaking to amend or supplement such opinions if facts come to
my attention or changes in the present law of the jurisdictions
mentioned herein occur which could affect such opinions.
The opinions expressed herein are based on states of facts and
law as they exist on the date hereof.
Nothing contained herein shall create any obligation or right
to
look to me individually for any claim, liability, damage, loss or
expense whatsoever whether arising in contract, in tort
(including
negligence and strict liability) or otherwise in connection with
this opinion, or otherwise in connection with the transactions
contemplated therein.
Very truly yours,
Klaus M. Belohoubek
Assistant Secretary
KMB/gmh
EXHIBIT 4(a)
ROLLINS ENVIRONMENTAL SERVICES, INC.
TO
FIRST FIDELITY BANK, NATIONAL ASSOCIATION
as Trustee
Indenture
Dated as of March 31, 1995
$16,800,000
7.75% Senior Unsecured Debentures Due 2005
- --------------------
Certain Sections of this Indenture relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Section 310(a)(1) . . . . . . . . . . . . . . . . . . .6.9
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . .6.9
(a)(3) . . . . . . . . . . . . . . . . . . Not Applicable
(a)(4) . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . .6.8
6.10
Section 311(a) . . . . . . . . . . . . . . . . . . . . . 6.13
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 6.13
Section 312(a) . . . . . . . . . . . . . . . . . . . . . .7.1
7.2(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 7.2(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 7.2(c)
Section 313(a) . . . . . . . . . . . . . . . . . . . . 7.3(a)
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . .1.1
10.4
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 7.3(a)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 7.3(a)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . 7.3(b)
Section 314(a) . . . . . . . . . . . . . . . . . . . . . .7.4
(b) . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . .1.2
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . .1.2
(c)(3) . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . .1.2
Section 315(a) . . . . . . . . . . . . . . . . . . . . . .6.1
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . .6.2
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . .6.1
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . .6.1
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . 5.14
Section 316(a) . . . . . . . . . . . . . . . . . . . . . .1.1
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . .5.2
5.12
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . 5.13
(a)(2) . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . .5.8
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 1.4(c)
Section 317(a)(1) . . . . . . . . . . . . . . . . . . .5.3
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . .5.4
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 10.3
Section 318(a) . . . . . . . . . . . . . . . . . . . . . .1.7
- ---------------------
Note: This reconciliation and tie shall not, for any
purpose, be deemed to be a part of the
Indenture.
TABLE OF CONTENTS
Page
ARTICLE 1
Definitions and Other Provisions
of General Application
SECTION 1.1 Definitions. . . . . . . . . . . . . . 1
SECTION 1.3 Form of Documents Delivered to
Trustee. . . . . . . . . . . . . . . . 10
SECTION 1.4 Acts of Holders; Record Dates. . . . . 10
SECTION 1.5 Notices Etc., to Trustee and
Company. . . . . . . . . . . . . . . . 12
SECTION 1.6 Notice to Holders; Waiver. . . . . . . 12
SECTION 1.7 Incorporation by Reference of Trust
Indenture Act. . . . . . . . . . . . . 12
SECTION 1.8 Effect of Headings and Table of
Contents.. . . . . . . . . . . . . . . 13
SECTION 1.9 Successors and Assigns.. . . . . . . . 13
SECTION 1.10 Separability Clause. . . . . . . . . . 13
SECTION 1.11 Benefits of Indenture. . . . . . . . . 13
SECTION 1.12 Governing Law. . . . . . . . . . . . . 13
SECTION 1.13 Legal Holidays.. . . . . . . . . . . . 13
SECTION 1.14 No Security Interest Created.. . . . . 14
SECTION 1.15 Limitation on Individual Liability.. . 14
SECTION 1.16 No Right of Set-Off. . . . . . . . . . 14
ARTICLE 2
Security Forms
SECTION 2.1 Forms Generally. . . . . . . . . . . . 14
SECTION 2.2 Form of Face of Security.. . . . . . . 15
SECTION 2.3 Form of Reverse of Security. . . . . . 16
SECTION 2.4 Form of Trustee's Certificate of
Authentication.. . . . . . . . . . . . 18
SECTION 2.5 Private Placement Legend . . . . . . . 19
ARTICLE 3
The Securities
SECTION 3.1 Title and Terms. . . . . . . . . . . . 20
SECTION 3.2 Denominations. . . . . . . . . . . . . 20
SECTION 3.3 Execution, Authentication, Delivery
and Dating.. . . . . . . . . . . . . . 20
SECTION 3.4 Temporary Securities.. . . . . . . . . 21
SECTION 3.5 Registration, Registration of
Transfer and Exchange. . . . . . . . . 22
SECTION 3.6 Mutilated, Destroyed, Lost and
Stolen Securities. . . . . . . . . . . 23
SECTION 3.7 Payment of Interest; Interest Rights
Preserved. . . . . . . . . . . . . . . 24
SECTION 3.8 Persons Deemed Owners. . . . . . . . . 25
SECTION 3.9 Cancellation.. . . . . . . . . . . . . 25
SECTION 3.10 Computation of Interest. . . . . . . . 25
ARTICLE 4
Satisfaction and Discharge
SECTION 4.1 Satisfaction and Discharge of
Indenture. . . . . . . . . . . . . . . 26
SECTION 4.2 Application of Trust Money.. . . . . . 27
SECTION 4.3 Reinstatement. . . . . . . . . . . . . 27
ARTICLE 5
Remedies
SECTION 5.1 Events of Default. . . . . . . . . . . 27
SECTION 5.2 Acceleration of Maturity; Rescission
and Annulment. . . . . . . . . . . . . 29
SECTION 5.3 Collection of Indebtedness and Suits
for Enforcement by Trustee.. . . . . . 31
SECTION 5.4 Trustee May File Proofs of Claim.. . . 32
SECTION 5.5 Trustee May Enforce Claims Without
Possession of Securities.. . . . . . . 32
SECTION 5.6 Application of Money Collected . . . . 32
SECTION 5.7 Limitation on Suits. . . . . . . . . . 33
SECTION 5.8 Unconditional Right of Holders to
Receive Principal, Premium and
Interest.. . . . . . . . . . . . . . . 33
SECTION 5.9 Restoration of Rights and Remedies.. . 34
SECTION 5.10 Rights and Remedies Cumulative.. . . . 34
SECTION 5.11 Delay or Omission Not Waiver.. . . . . 34
SECTION 5.12 Control by Holders.. . . . . . . . . . 34
SECTION 5.13 Waiver of Past Defaults. . . . . . . . 35
SECTION 5.14 Undertaking for Costs. . . . . . . . . 35
SECTION 5.15 Waiver of Stay or Extension Laws.. . . 36
ARTICLE 6
The Trustee
SECTION 6.1 Certain Duties and
Responsibilities.. . . . . . . . . . . 36
SECTION 6.2 Notice of Defaults.. . . . . . . . . . 36
SECTION 6.3 Certain Rights of Trustee. . . . . . . 36
SECTION 6.4 Not Responsible for Recitals or
Issuance of Securities.. . . . . . . . 37
SECTION 6.5 May Hold Securities. . . . . . . . . . 38
SECTION 6.6 Money Held in Trust. . . . . . . . . . 38
SECTION 6.7 Compensation and Reimbursement.. . . . 38
SECTION 6.8 Disqualification; Conflicting
Interests. . . . . . . . . . . . . . . 39
SECTION 6.9 Corporate Trustee Required;
Eligibility. . . . . . . . . . . . . . 39
SECTION 6.10 Resignation and Removal; Appointment
of Successor.. . . . . . . . . . . . . 39
SECTION 6.11 Acceptance of Appointment by
Successor. . . . . . . . . . . . . . . 40
SECTION 6.12 Merger, Conversion, Consolidation or
Succession to Business.. . . . . . . . 41
SECTION 6.13 Preferential Collection of Claims
Against Company. . . . . . . . . . . . 41
SECTION 6.14 Appointment of Authenticating
Agent. . . . . . . . . . . . . . . . . 41
ARTICLE 7
Holders' Lists and Reports by Trustee and Company
SECTION 7.1 Company to Furnish Trustee Names and
Addresses of Holders of Securities.. . 43
SECTION 7.2 Preservation of Information;
Communications to Holders. . . . . . . 44
SECTION 7.3 Reports by Trustee.. . . . . . . . . . 44
SECTION 7.4 Reports by Company.. . . . . . . . . . 45
ARTICLE 8
Supplemental Indentures
SECTION 8.1 Supplemental Indentures Without
Consent of Holders.. . . . . . . . . . 45
SECTION 8.2 Supplemental Indentures with Consent
of Holders.. . . . . . . . . . . . . . 46
SECTION 8.3 Execution of Supplemental
Indentures.. . . . . . . . . . . . . . 47
SECTION 8.4 Effect of Supplemental Indentures. . . 47
SECTION 8.5 Conformity with Trust Indenture
Act. . . . . . . . . . . . . . . . . . 47
SECTION 8.6 Reference in Securities to
Supplemental Indentures. . . . . . . . 47
SECTION 8.7 Notice of Supplemental Indenture.. . . 47
ARTICLE 9
Affirmative Covenants
SECTION 9.1 Payment of Principal, Premium and
Interest.. . . . . . . . . . . . . . . 47
SECTION 9.2 Maintenance of Office or Agency. . . . 48
SECTION 9.3 Money for Security Payments to be
Held in Trust. . . . . . . . . . . . . 48
SECTION 9.4 Statement by Officers as to
Default. . . . . . . . . . . . . . . . 49
SECTION 9.5 Existence. . . . . . . . . . . . . . . 50
SECTION 9.6 Payment of Taxes and Other Claims. . . 50
SECTION 9.7 Maintenance of Properties. . . . . . . 50
SECTION 9.8 Access to Properties, Books and
Records. . . . . . . . . . . . . . . . 50
SECTION 9.9 Compliance with Laws . . . . . . . . . 50
SECTION 9.10 Environmental Law Compliance . . . . . 51
SECTION 9.11 Maintenance of Insurance . . . . . . . 51
SECTION 9.12 Waiver of Certain Covenants. . . . . . 51
ARTICLE 10
Negative Covenants
SECTION 10.1 Maintenance of Fixed Charges
Coverage Ratio . . . . . . . . . . . . 51
SECTION 10.2 Maintenance of Net Worth . . . . . . . 51
SECTION 10.3 Limitation on Indebtedness . . . . . . 52
SECTION 10.4 Limitation on Liens. . . . . . . . . . 52
SECTION 10.5 Limitation on Sale/Leaseback
Transactions.. . . . . . . . . . . . . 54
SECTION 10.6 Limitations on Dividends,
Acquisitions of Stock, Investments
in Subsidiaries, and Restricted
Investments. . . . . . . . . . . . . . 54
SECTION 10.7 Limitation on Consolidation or
Merger . . . . . . . . . . . . . . . . 55
SECTION 10.8 Limitation on Sale of Assets . . . . . 56
SECTION 10.9 Transactions with Affiliates . . . . . 56
SECTION 10.10 Nature of Business . . . . . . . . . . 57
SECTION 10.11 ERISA Matters. . . . . . . . . . . . . 57
ARTICLE 11
Redemption of Securities
SECTION 11.1 Right of Redemption. . . . . . . . . . 57
SECTION 11.2 Applicability of Article.. . . . . . . 58
SECTION 11.3 Election to Redeem; Notice to
Trustee. . . . . . . . . . . . . . . . 58
SECTION 11.4 Selection by Trustee of Securities
to Be Redeemed.. . . . . . . . . . . . 58
SECTION 11.5 Notice of Redemption.. . . . . . . . . 59
SECTION 11.6 Deposit of Redemption Price. . . . . . 59
SECTION 11.7 Securities Payable on Redemption
Date.. . . . . . . . . . . . . . . . . 59
SECTION 11.8 Securities Redeemed in Part. . . . . . 60
ARTICLE 12
Sinking Fund
SECTION 12.1 Sinking Fund Payments. . . . . . . . . 60
SECTION 12.2 Satisfaction of Sinking Fund
Payments with Securities.. . . . . . . 60
SECTION 12.3 Redemption of Securities for Sinking
Fund.. . . . . . . . . . . . . . . . . 60
EXHIBIT A Form of Rule 144A/Regulation S
Certificate
INDENTURE, dated as of March 31, 1995 between
ROLLINS ENVIRONMENTAL SERVICES, INC., a corporation duly
organized and existing under the laws of the State of
Delaware (herein called the "Company"), having its principal
executive offices at 2200 Concord Pike, One Rollins Plaza,
Wilmington, Delaware 19803, and FIRST FIDELITY BANK, NATIONAL
ASSOCIATION, a national banking association, as Trustee
(herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an
issue of its 7.75% Senior Unsecured Debentures due 2005
(herein called the "Securities") of substantially the tenor
and amount hereinafter set forth, and to provide therefor the
Company has duly authorized the execution and delivery of
this Indenture.
All things necessary to make the Securities, when
executed by the Company and authenticated and delivered
hereunder and duly issued by the Company, the valid
obligations of the Company, and to make this Indenture a
valid agreement of the Company, in accordance with their and
its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the
purchase of the Securities by the Holders (as hereinafter
defined) thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities, as
follows:
ARTICLE 1
Definitions and Other Provisions
of General Application
SECTION 1.1 Definitions
For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise
requires:
(a) the terms defined in this Article have the
meanings assigned to them in this Article and include
the plural as well as the singular;
(b) all accounting terms not otherwise defined
herein have the meanings assigned to them in accordance
with generally accepted accounting principles, and,
except as otherwise herein expressly provided the term
"generally accepted accounting principles" with respect
to any computation required and permitted hereunder
shall mean such accounting principles as are generally
accepted and accepted and adopted by the Company at the
date of this Indenture; and
(c) the words "herein", "hereof" and "hereunder"
and other words of similar import refer to this
Indenture as a whole and not to any particular Article,
Section or other subdivision.
"Act", when used with respect to any Holder, has
the meaning specified in Section 1.4.
"Affiliate" of any specified Person means any other
Person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified
Person. For the purposes of this definition, "control" when
used with respect to any specified Person means the power to
direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to
the foregoing.
"Attributable Debt" means in connection with a Sale
and Lease-Back Transaction which is not exempt under Section
10.5, the greater of (a) the fair value of the assets subject
to such transaction, or (b) the present value (discounted
according to generally accepted accounting principles at the
debt rate implicit in the lease) of the obligations of the
lessee for rental payments during the term of any lease.
"Authenticating Agent" means any Person authorized
by the Trustee pursuant to Section 6.14 to act on behalf of
the Trustee to authenticate Securities.
The term "Beneficial Owner" is determined in
accordance with Rule 13d-3, promulgated by the Commission
under the Exchange Act.
"Board of Directors" means either the board of
directors of the Company or any duly authorized committee of
that board.
"Board Resolution" means a copy of a resolution
certified by the Secretary or an Assistant Secretary of the
Company to have been duly adopted by the Board of Directors
and to be in full force and effect on the date of such
certification and delivered to the Trustee.
"Business Day" means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which
banking institutions in New York, New York or the city in
which the Corporate Trust Office is located are authorized or
obligated to close by law or executive order.
"Code" means the Internal Revenue Code of 1986, as
amended.
"Commission" means the Securities and Exchange
Commission, as from time to time constituted, created under
the Exchange Act.
"Common Stock" includes any stock of any class of
the Company which has no preference in respect of dividends
or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding-up of the
Company and which is not subject to redemption by the
Company.
"Company" means the Person named as the "Company"
in the first paragraph of this instrument until a Successor
Person shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Company" shall
mean such successor Person.
"Company Request" or "Company Order" means a
written request or order signed in the name of the Company by
its Chairman of the Board, its Vice Chairman of the Board,
its President or a Vice President, and by its Treasurer, an
Assistant Treasurer, its Secretary or an Assistant Secretary,
and delivered to the Trustee.
"Consolidated Net Income" means, for any period,
the aggregate amount of net income (or loss) after taxes of
the Company and its Subsidiaries determined on a consolidated
basis as determined in accordance with GAAP, but excluding
(a) extraordinary gains or losses and (b) any equity
interests of the Company or any Subsidiary in the unremitted
earnings of any Person that is not a Subsidiary.
"Consolidated Net Income Available for Fixed
Charges" means, for the relevant period, the Consolidated Net
Income of the Company and its Subsidiaries determined on a
consolidated basis in accordance with GAAP after eliminating
all nonrecurring items plus the following items to the extent
deducted in computing Consolidated Net Income: (a) interest
on Indebtedness, (b) amortization expense, (c) depreciation
expense, (d) rentals for leased properties in excess of one
year, and (e) income taxes paid or accrued, but excluding the
net income of any Subsidiary to the extent that the
declaration or payment of dividends or similar distributions
by that Subsidiary of that net income is not at the
determination permitted, directly or indirectly, by operation
of any agreement, instrument, judgment, decree, rule or
governmental regulation applicable to that Subsidiary or its
stockholders.
"Continuing Directors" means any directors of the
Company who either (a) were directors of the Company on the
date of issuance or the securities or (b) became directors of
the Company subsequent to the date of the issuance of the
Securities and whose election or nomination for election by
the shareholders of the Company was duly approved by the
Continuing Directors who were at the time of election or
nomination directors of the Company, either by a specific
vote or by approval of the proxy statement issued by the
Company in which such individual was named as a nominee for
director of the Company
"Corporate Trust Office" means the office of the
principal Trustee in the County of Philadelphia, City of
Philadelphia, which initially shall be 123 South Broad
Street, Philadelphia, PA 19109, at which at any particular
time its corporate trust business shall principally be
administered.
"Corporation" means a corporation, association,
company, joint-stock company or business trust.
"Current Maturities" means any indebtedness that is
payable or scheduled to be paid within one year.
"Defaulted Interest" has the meaning specified in
Section 3.7.
"Environmental Laws" means all Federal, state,
local and foreign laws, rules, regulations, ordinances,
permits, orders, decisions, determinations or requirements
relating in any way to any Hazardous Substance or to health,
safety or the environment.
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended.
"ERISA Affiliate" means 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" has the meaning specified in
Section 5.1.
"Exchange Act" means the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated
thereunder.
"Fixed Charges Coverage Ratio" means at any
specified date a ratio of Consolidated Net Income Available
for Fixed Charges for the immediately preceding four
consecutive fiscal quarters to Fixed Charges for such period.
"Fixed Charges" means the sum for the relevant
period of (a) interest on Indebtedness, (b) scheduled
repayments of principal of Indebtedness, (c) federal income
taxes actually paid in cash, (d) Maintenance Capital, and (e)
rental payments for leased properties in excess of one year.
"Funded Debt" shall mean all items of Indebtedness
which by their terms mature more than one year from the date
of determination thereof or which are renewable at the option
of the obligor beyond one year.
"GAAP" means generally accepted accounting
principles applied on a basis consistent with those which are
to be used in making the calculations for purposes of
determining compliance with the terms of this Indenture. All
references to GAAP will be to GAAP as in effect on the date
of execution of this Indenture.
"Hazardous Substance" means any "hazardous
substance" as defined under CERCLA or the rules and
regulations promulgated thereunder, any Hazardous Waste,
radioactive materials, petroleum or petroleum-derived
substance or waste, PCB, asbestos, or any constituent or
combination of any of the above may be amended from time to
time.
"Holder" means a Person in whose name a Security is
registered in the Security Register.
"Indebtedness" means any indebtedness and interest
thereon, whether or not contingent, in respect of borrowed
money or evidenced by bonds, notes, debentures or similar
instruments, hedging agreements or letters of credit (or
reimbursement agreements in respect thereof), if and to the
extent any of the foregoing indebtedness would appear as a
liability on a balance sheet of the Company and its
Subsidiaries prepared on a consolidated basis in accordance
with GAAP.
"Indenture" means this instrument as originally
executed or as it may from time to time be supplemented or
amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof.
"Interest" means interest expense from all
Indebtedness that appears as a liability on a balance sheet
of the Company and its Subsidiaries.
"Interest Payment Date" means the stated Maturity
of an installment of interest on the Securities.
"Lien" means any mortgage, pledge, security
interest, conditional sale, encumbrance, charge or adverse
claim affecting title or resulting in an encumbrance against
real or personal property, or a security interest of any
kind.
"Maintenance Capital" means $12,000,000, annually.
"Maturity", when used with respect to any Security,
means the date on which the principal of such Security
becomes due and payable as therein or herein provided,
whether at the Stated Maturity thereof or by declaration of
acceleration, redemption or otherwise.
"Multiemployer Plan" means any Plan which is a
"multiemployer plan" as such term in defined in section
4001(a)(3) of ERISA.
"Officers' Certificate" means a certificate signed
by the Chairman of the Board, the Vice Chairman of the Board,
the President or a Vice President, and by the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary,
of the Company, and delivered to the Trustee. One of the
officers signing an Officers' Certificate given pursuant to
Section 9.4 shall be the principal executive, financial or
accounting officer of the Company.
"Opinion of Counsel" means a written opinion of
counsel, who may be counsel for or an employee of the
Company.
"Outstanding", when used with respect to
Securities, means, as of the date of determination, all
Securities theretofore authenticated and delivered under this
Indenture, except:
(a) Securities theretofore canceled by the Trustee
or delivered to the Trustee for cancellation;
(b) Securities, or portions thereof, for the
payment or redemption of which moneys in the necessary
amount have been theretofore deposited with the Trustee
or any Paying Agent (other than the Company) in trust or
set aside and segregated in trust by the Company (if the
Company shall act as its own Paying Agent) for the
Holders of such Securities; provided that, if such
Securities, or portions thereof, are to be redeemed,
notice of such redemption has been duly given pursuant
to this Indenture or provision therefore satisfactory to
the Trustee has been made; and
(c) Securities which have been paid pursuant to
Section 3.6 or in exchange for or in lieu of which other
Securities have been authenticated and delivered
pursuant to this Indenture, other than any such
Securities in respect of which there shall have been
presented to the Trustee proof satisfactory to it that
much Securities are held by a bona fide purchaser in
whose hands such Securities are valid obligations of the
Company;
provided, however, that in determining whether the Holders of
the requisite principal amount of the Outstanding Securities
have given any request, demand, authorization, direction,
notice, consent or waiver under Securities owned by the
Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying
upon any such request, demand, authorization, direction,
notice, consent or waiver, only Securities which the Trustee
has actual knowledge of being so owned shall be so
disregarded. Securities so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's
right so to act with respect to such Securities and that the
pledge is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other
obligor.
"Paying Agent" means any Person authorized by the
Company to pay the principal of and premium, if any, or
interest on Securities on behalf of the Company.
"Person" means any individual, corporation,
partnership, joint venture, trust, unincorporated
organization or government or any agency or political
subdivision thereof.
"Plan" means any "employee pension benefit plan"
(as such term in 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.
"Predecessor Security" of any particular Security
means every previous Security evidencing all or a portion of
the same debt as that evidenced by such particular Security;
and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.6 in exchange for
or in lieu of a mutilated, destroyed, lost or stolen Security
shall be deemed to evidence the same debt as the mutilated,
destroyed, lost or stolen Security.
"Qualified Institutional Buyer" has the meaning set
forth in Rule 144A.
"Record Date" means either a Regular Record Date or
a Special Record Date, as applicable.
"Redemption Date", when used with respect to any
Security to be redeemed, means the date fixed for such
redemption by or pursuant to this Indenture.
"Redemption Price", when used with respect to any
Security to be redeemed, means the price at which it is to be
redeemed pursuant to this Indenture on the applicable
Redemption Date.
"Regular Record Date", for the interest payable on
any Interest Payment Date means the August 31 or February 28
(whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date.
"Regulation S" means Regulation S under the
Securities Act and any successor regulation thereto.
"Regulation S Certificate" means a certificate in
the form attached hereto as Exhibit A.
"Restricted Investments" means all investments or
advances made by the Company or its Subsidiaries in any
person or property except the following:
(a) investments in and advances to Subsidiaries,
or companies which simultaneously become Subsidiaries;
(b) investments in property to be used in the
ordinary course of business;
(c) investments in obligations, maturing within
three years, issued by or guaranteed by the United
States or an agency thereof;
(d) investments in municipal securities, maturing
within three years, which are rated "BBB" or better by
at least one national rating agency;
(e) investments in certificates of deposit or
bankers' acceptances issued by commercial banks located
in the United States, Canada, Western Europe or Japan,
and having capital, surplus and undivided profits
aggregating at least $50,000,000;
(f) investments in commercial paper maturing
within 270 days and rated "BBB" or better by at least
one national rating agency;
(g) investments in money market investment
programs which are classified as a current asset in
accordance with generally accepted accounting principles
and which are administered by reputable financial
institutions having capital of at least $50 million;
(h) investments in money market and auction rate
preferred stocks rated "A" or better by at least one
national rating agency;
(i) other investments existing as of the date
hereof, including extensions and renewals thereof; and
(j) other investments up to an aggregate of $10
million.
"Rule 144" means Rule 144 under the Securities Act
as amended and/or supplemented from time to time and any
successor rule thereto.
"Rule 144A" means Rule 144A under the Securities
Act as amended and/or supplemented from time to time and any
successor rule thereto.
"Rule 144A Certificate" means a certificate in the
form attached hereto as Exhibit A.
"Sale/Leaseback Transaction" means the sale of an
asset with the intention of leasing it back, which
transaction (a) occurs after the date hereof, (b) occurs more
than 180 days after the acquisition or occupancy of such
asset, whichever shall be the later to occur, and (c)
involves leases of three years or more.
"Secured Debt" means all Indebtedness for borrowed
money which is secured by a Lien or other interest on any of
the property or assets of the Company or its Subsidiaries.
"Securities Act" means the Securities Act of 1933,
as amended.
"Securities Legend" has the meaning given such term
in Section 2.5.
"Security Register" and "Security Registrar" have
the respective meanings specified in Section 3.5.
"Special Record Date" for the payment of any
Defaulted Interest means a date fixed by the Trustee pursuant
to Section 3.7.
"Stated Maturity", when used with respect to any
Security or any installment of interest thereon, means the
date specified in such Security as the fixed date on which
the principal of such Security or such installment of
interest is due and payable.
"Subsidiary" means a corporation more than 50% of
the outstanding voting stock of which is owned, directly or
indirectly, by the Company or by one or more wholly-owned
Subsidiaries or by the Company and one or more wholly-owned
Subsidiaries. For the purposes of this definition, "voting
stock" means stock which ordinarily has voting power for the
election of directors, whether at all times or only so long
as no senior class of stock has such voting power by reason
any contingency.
"Tangible Net Worth" means the gross book value of
the assets of the Company and its Subsidiaries (exclusive of
goodwill in excess of $26,000,000, patents, trademarks, trade
names, organization expense, unamortized debt discount and
expense in excess of $500,000 and other like intangibles)
plus (a) 50% of deferred income taxes and (b) 50% of
cumulative Consolidated Net Income less (i) reserves
applicable thereto and (ii) all liabilities required to be
reflected on a balance sheet prepared in accordance with
GAAP.
"Trust Indenture Act" means the Trust Indenture Act
of 1939 as in force at the date as of which this instrument
was executed; provided, however, that in the event the Trust
Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee"
in the first paragraph of this instrument until a successor
Trustee shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Trustee" shall
mean such successor Trustee.
"Vice President", when used with respect to the
Company means any vice president, whether or not designated
by a number or a word or words added before or after the
title "vice president".
SECTION 1.2 Compliance Certificates and Opinions.
Subject to Section 1.7, upon any application or
request by the Company to the Trustee to take any action
under any provision of this Indenture, the Company shall
furnish to the Trustee such certificates and opinions as may
be required under the Trust Indenture Act. Each such
certificate or opinion shall be given in the form of an
Officers' Certificate, if to be given by an officer of the
Company, or an Opinion of Counsel, if to be given by counsel,
and shall comply with the requirements of the Trust Indenture
Act and any other requirement set forth in this Indenture.
Every certificate or opinion with respect to
compliance with a condition or covenant provided for in this
Indenture shall include:
(a) a statement that each individual signing such
certificate or opinion has read such covenant or
condition and the definitions herein relating thereto;
(b) a brief statement as to the nature and scope
of the examination or investigation upon which the
statements or opinions contained in such certificate or
opinion are based;
(c) a statement that, in the opinion of each such
individual, he has made such examination or
investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of
each such individual, such condition or covenant has
been complied with.
SECTION 1.3 Form of Documents Delivered to Trustee.
In any case where several matters are required to
be certified by, or covered by an opinion of, any specified
Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one
document, but one such Person may certify or give an opinion
with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several
documents.
Any certificate or opinion of an officer of the
Company may be based, insofar as it relates to legal matters,
upon a certification or opinion of, or representations by,
counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion
or representations with respect to the matters upon which his
certificate or opinion is based are erroneous. Any such
certificate or Opinion of Counsel may be based, insofar as it
relates to factual matters, upon a certificate or opinion of,
or representations by, an officer or officers of the Company
stating that the information with respect to such factual
matters is in the possession of the Company, unless such
counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with
respect to such matters are erroneous.
Where any Person is required to make, give or
execute two or more applications, requests, consents,
certificates, statements, opinions or other instruments under
this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.4 Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this
Indenture to be given or taken by Holders may be embodied in
and evidenced by one or more instruments of substantially
similar tenor signed by such Holders in person or by agents
duly appointed in writing; and except as herein otherwise
expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Trustee
and, where it is hereby expressly required, to the Company.
Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred
to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for
any purpose of this Indenture and (subject to Section 6.1)
conclusive in favor of the Trustee and the Company, if made
in the manner provided in this Section.
(b) The fact and date of the execution by any
Person of any such instrument or writing may be proved by the
affidavit of a witness of such execution or by a certificate
of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the
execution thereof. Where such execution is by a signer
acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient
proof of his authority. The fact and date of the execution
of any such instrument or writing, or the authority of the
Person executing the same, may also be proved in any other
manner which the Trustee deems sufficient.
(c) The Company may fix any day as the record date
for the purpose of determining the Holders entitled to give
or take any request, demand, authorization direction, notice,
consent, waiver or other action, or to vote on any action,
authorized or permitted to be given or taken by Holders. If
not set by the Company prior to the first solicitation of a
Holder made by any Person in respect of any such action, or,
in the case of any such vote, prior to such vote, the record
date for any such action or vote shall be the 30th day (or,
if later, the date of the most recent list of Holders
required to be provided pursuant to Section 7.1) prior to
such first Solicitation or vote, as the case may be. With
regard to any record date, only the Holders on such date (or
their duly designated proxies) shall be entitled to give or
take, or vote on, the relevant action. Notwithstanding the
foregoing, the Company shall not set a record date for, and
the provisions of this paragraph shall not apply with respect
to, any Act by the Holders pursuant to Section 5.1, 5.2 or
5.12.
(d) The ownership of Securities shall be proved by
the Security Register.
(e) Any Act of the Holder of any Security shall
bind every future Holder of the same Security and the Holder
of every Security issued upon the registration of transfer
therefor or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by
the Trustee or the Company in reliance thereon, whether or
not notation of such action is made upon such Security.
(f) Without limiting the foregoing, a Holder
entitled hereunder to give or take any action hereunder with
regard to any particular Security may do so with regard to
all or any part of the principal amount of such Security or
by one or more duly appointed agents each of which may do so
pursuant to such appointment with regard to all or any
different part of such principal amount.
SECTION 1.5 Notices Etc., to Trustee and Company.
Any Act of Holders or other documents provided or
permitted by this Indenture to be made upon, given or
furnished to, or filed with,
(a) the Trustee by any Holder or by the Company
shall be sufficient for every purpose hereunder if made,
given, furnished or filed in writing to or with the
Trustee at its Corporate Trust Office, Attention: Chief
Financial Officer, with a copy to the General Counsel,
or
(b) the Company by the Trustee or by any Holder
shall be sufficient for every purpose hereunder (unless
otherwise herein expressly provided) if in writing and
mailed, first-class postage prepaid, to the Company
addressed to it, at the address of its principal
executive offices specified in the first paragraph of
this instrument or at any other address previously
furnished in writing to the Trustee by the Company.
SECTION 1.6 Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders
of any event, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and
mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security
Register, not later than the latest date (if any), and not
earlier than the earliest date (if any), prescribed for the
giving of such notice. In any case where notice to Holders
is given by mail, neither the failure to mail any notice, nor
any defect in any notice so mailed, to any particular Holder
shall affect the sufficiency of such notice with respect to
other Holders. Where this Indenture provides for notice in
any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or
after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed
with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance
upon such waiver.
In case, by reason of the suspension of regular
mail service or by reason of any other cause, it shall be
impracticable to give such notice by mail, then such
notification as shall be made with the approval of the
Trustee shall constitute a sufficient notification for every
purpose hereunder.
SECTION 1.7 Incorporation by Reference of Trust Indenture
Act.
The provisions and requirements of the Trust
Indenture Act are hereby incorporated by reference herein and
made a part of this Indenture; provided, however, until such
time as this Indenture is qualified with the Commission in
accordance with the provisions of the Trust Indenture Act, no
party hereto shall be required to file any reports or other
such documentation with the Commission or as elsewhere
provided in connection with this Indenture.
All terms used in this Indenture defined by the
Trust Indenture Act, defined by Trust Indenture Act reference
to another statute or defined by Commission rule under the
Trust Indenture Act have the meanings so assigned to them.
SECTION 1.8 Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the
construction hereof.
SECTION 1.9 Successors and Assigns.
All covenants and agreements in this Indenture by
the Company shall bind its successors and assigns, whether so
expressed or not.
SECTION 1.10 Separability Clause.
In case any provision in this Indenture or in the
Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired
thereby.
SECTION 1.11 Benefits of Indenture.
Nothing in this Indenture or in the Securities,
express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder and the Holders
of Securities, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
SECTION 1.12 Governing Law.
This Indenture and the Securities shall be governed
by and construed in accordance with the laws of the State of
Delaware, but without regard to the principles of conflicts
of laws.
SECTION 1.13 Legal Holidays.
In any case where any Interest Payment Date,
Redemption Date or Stated Maturity of any Security shall not
be a Business Day, then (notwithstanding any other provision
of this Indenture or of the Securities) payment of interest
or principal and premium, if any, need not be made on such
date, but may be made on the next succeeding Business Day
with the same force and effect as if made on the Interest
Payment Date or Redemption Date, or at the Stated Maturity;
provided that no interest shall accrue for the period from
and after such Interest Payment Date, Redemption Date or
Stated Maturity, as the case may be.
SECTION 1.14 No Security Interest Created.
Nothing in this Indenture or in the Securities,
express or implied, shall be construed to constitute a
security interest under the Uniform Commercial Code or
similar legislation, as now or hereafter enacted and in
effect in any jurisdiction where property of the Company or
its Subsidiaries is or may be located.
SECTION 1.15 Limitation on Individual Liability.
No recourse under or upon any obligation, covenant
or agreement contained in this Indenture or in any Security,
or for any claim based thereon or otherwise in respect
thereof, shall be had against any incorporator, stockholder,
officer or director, as such, past, present or future, of the
Company or any successor corporation, either directly or
through the Company, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly
understood that this Indenture and the obligations issued
hereunder are solely corporate obligations, and that no such
personal liability whatever shall attach to, or is or shall
be incurred by, the incorporators, shareholders, officers or
directors, as such, of the Company or any successor Person,
or any of them, because of the creation of the indebtedness
hereby authorized, or under or by reason of the obligations,
covenants or agreements contained in this Indenture or in any
Security or implied therefrom; and that any and all such
personal liability of every name and nature, either at common
law or in equity or by constitution or statute, of, and any
and all such rights and claims against, every such
incorporator, shareholder, officer or director, as such,
because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations,
covenants or agreements contained in this Indenture or in any
Security or implied therefrom, are hereby expressly waived
and released as a condition of, and as a consideration for,
the execution of this Indenture and the issuance of such
Security.
SECTION 1.16 No Right of Set-Off.
The obligations of the Company to pay and perform
hereunder shall be absolute and unconditional and not subject
to any set-off or counterclaim.
ARTICLE 2
Security Forms
SECTION 2.1 Forms Generally.
The Securities and the Trustee's certificates of
authentication shall be in substantially the forms set forth
in this Article, with such appropriate insertions, omissions,
substitutions and other variations as are required or
permitted by this Indenture, and may have such letters,
numbers or other marks of identification and such legends or
endorsements placed thereon, as may be required to comply
with any law or with the rules of any securities exchange on
which the Securities are listed or as may, consistently
herewith, be determined by the officers executing such
Securities, as evidenced by their execution of the
Securities.
The definitive Securities shall be printed,
lithographed or engraved or produced by any combination of
these methods on steel engraved borders or may be produced in
any other manner permitted by the rules of any securities
exchange on which the Securities may be listed, all as
determined by the officers executing such Securities, as
evidenced by their execution of such Securities.
SECTION 2.2 Form of Face of Security.
ROLLINS ENVIRONMENTAL SERVICES, INC.
7.75% Senior Unsecured Debentures
Due March 31, 2005
No. __________ $_______
Rollins Environmental Services, Inc., a corporation
duly organized and existing under the laws of the State of
Delaware (herein called the "Company", which term includes
any successor Person under the Indenture hereinafter referred
to), for value received, hereby promises to pay to
__________________, or registered assigns, the principal sum
of _______________________ Dollars on March 31, 2005, and to
pay interest thereon from March 31, 1995 or from and
including the most recent Interest Payment Date to which
interest has been paid or duly provided for, semi-annually on
March 31 and September 30 in each year, commencing September
30, 1995, at the rate of 7.75% per annum, until the principal
hereof is paid or made available for payment. The interest
so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture, be
paid to the Person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest, which
shall be the February 28 or August 31 (whether or not a
Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually
paid or duly provided for will forthwith cease to be payable
to the Holder on such Regular Record Date and may either be
paid to the Person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Trustee or be paid at
any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the
securities may be listed and upon such notice as may be
required by such exchange, all as more fully provided in said
Indenture. Notice of a Special Record Date shall be given to
Holders of Securities not less than 10 days prior to such
Special Record Date. Payment of the principal of and
premium, if any, and interest on this Security will be made
at the office or agency of the Company maintained for that
purpose pursuant to Section 9.2 of the Indenture, in such
coin or currency of the United States of America as of the
time of payment is legal tender for payment of public and
private debts; provided, however, that at the option of the
Company payment of interest may be made by check mailed to
the address of the Person entitled thereto as such address
shall appear in the Security Register.
Reference is hereby made to the further provisions
of this Security set forth on the reverse hereof, which
further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has
been executed by the Trustee referred to on the reverse
hereof by manual signature, this Security shall not be
entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed under its corporate seal.
Dated:
ROLLINS ENVIRONMENTAL SERVICES, INC.
By
Attest:
SECTION 2.3 Form of Reverse of Security.
This Security is one of a duly authorized issue of
Securities of the Company issued as its 7.75% Senior
Unsecured Debentures Series 2005 (herein called the
"Securities"), limited in aggregate principal amount to
$16,800,000, issued and to be issued under an Indenture,
dated as of March 31, 1995 (herein called the "Indenture"),
between the Company and First Fidelity Bank, National
Association, as Trustee (herein called the "Trustee" which
term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are,
and are to be, authenticated and delivered.
The Securities are subject to redemption at the
election of the Company, upon not more than 15 days' notice
by mail to the Holder, at any time on or after March 31,
2000, as a whole or in part, (in a minimum principal amount
of $1,000,000 and in integral multiples of $1,000 in excess
thereof), each such Redemption to be made at 100% of the
principal amount of the Securities so to be redeemed,
together in the case of any such redemption with accrued
Interest to the Redemption Date (whether through operation of
a sinking fund or otherwise), but interest installments whose
Maturity is on or prior to such Redemption Date will be
payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on
the relevant Record Dates, all as provided in the Indenture.
The sinking fund provides for the redemption on
March 31 in each year beginning with the year 2001 through
2005 of an amount equal to one-fifth of the total amount
outstanding under this Indenture. Securities acquired
or redeemed by the Company otherwise than through sinking
fund payments may be credited against subsequent sinking fund
payments otherwise required to be made.
In the event of redemption of this Security in part
only, a new Security or Securities for the unredeemed portion
hereof will be issued in the name of the Holder hereof upon
the cancellation hereof.
If an Event of Default shall occur and be
continuing, the principal of all the Securities may be
declared due and payable in the manner and with the effect
provided in the Indenture.
The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification
of the rights and obligations of the Company and the rights
of the Holders of the Securities under the Indenture at any
time by the Company and the Trustee with the consent of the
Holders of not less than 66 2/3% in aggregate principal
amount of the Securities at the time Outstanding. The
Indenture also contains provisions permitting the Holders of
specified percentages in aggregate principal amount of the
Securities at the time Outstanding, on behalf of the Holders
of all the Securities, to waive compliance by the Company
with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any
such consent or waiver by the Holder of this Security shall
be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Security.
No reference herein to the Indenture and no
provision of this Security or of the Indenture shall alter or
impair the obligation of the Company, which is absolute and
unconditional, to pay the principal of and premium, if any,
and interest on this Security at the times, place and rate,
and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security
shall be registered in the Security Register, and thereupon
one or more new Securities, of authorized denominations, for
the same aggregate principal amount, will be issued to the
designated transferee or transferees, upon (i) surrender of
this Security for registration of transfer at the office or
agency of the Company in any place where the principal of and
any premium, if any, and interest on this Security are
payable, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company
and the Security Registrar duly executed by, the Holder
hereof or such Holder's attorney duly authorized in writing
and (ii) so long as this Security bears the Securities
Legend, delivery to the Security Registrar of a written
opinion of legal counsel to the transferor (who shall be
acceptable to the Security Registrar) stating that such
transfer complies with applicable securities laws or, in the
case of a transfer pursuant to Rule 144A or Regulation S, a
Rule 144A or Regulation S Certificate, as the case may be,
executed by the transferor.
The Securities are issuable only in fully
registered form without coupons in denominations of $1,000
and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set
forth, Securities are exchangeable for a like aggregate
principal amount of Securities of a different authorized
denomination, as requested by the Holder surrendering the
same.
No service charge shall be made for any such
registration of transfer or exchange except as provided in
the Indenture, and the Company may require payment of a sum
sufficient to cover any tax or other governmental charge
payable in connection therewith.
Prior to due presentment of this Security for
registration of transfer, the Company, the Trustee and any
agent of the Company or the Trustee may treat the Person in
whose name this Security is registered as the owner hereof
for all purposes, except as provided in this Security,
whether or not this Security be overdue, and neither the
Company, the Trustee nor any such agent shall be affected by
notice to the contrary.
All terms used in this Security which are defined
in the Indenture shall have the meanings assigned to them in
the Indenture.
SECTION 2.4 Form of Trustee's Certificate of
Authentication.
The Trustee's certificates of authentication shall
be in substantially the following form:
This is one of the Securities referred to in the
within-mentioned Indenture.
_________________,
as Trustee
By
Authorized Officer
SECTION 2.5 Private Placement Legend.
Unless sold pursuant to an effective registration
statement under the Securities Act and except as set forth in
this Section, Securities shall bear the following legend (the
"Securities Legend"):
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND MAY NOT BE OFFERED OR
SOLD EXCEPT IN COMPLIANCE WITH THE REGISTRATION
REQUIREMENTS OF SUCH ACT AND OF THE APPLICABLE LAWS
OF EACH STATE OF THE UNITED STATES OR IN
TRANSACTIONS EXEMPT FROM, OR NOT SUBJECT TO, SUCH
REGISTRATION REQUIREMENTS.
By purchase of a Security bearing the Securities
Legend, whether upon original issuance or subsequent
transfer, each Holder of such a Security acknowledges the
restrictions on the transfer of such Security set forth in
such legend and agrees that it will transfer such a Security
only as provided herein.
The Company shall re-issue any Security, without
the Securities Legend, and the Trustee, at the Company's
direction, shall authenticate such re-issued Security, if:
(a) such Security has been transferred in a
transaction that (i) is in compliance with Rule 144(k)
under the Securities Act, (ii) is in compliance with
Rule 904 of Regulation S under the Securities Act or
(iii) is pursuant to an effective registration statement
under the Securities Act; or
(b) such Security has been transferred in a
transaction that does not require registration under the
Securities Act and the transferor of such Security shall
have delivered to the Company such documentation and
legal opinions as the Company may reasonably request,
such documentation and legal opinions to be reasonably
satisfactory in form and substance to the Company; or
(c) three years shall have elapsed since the later
to occur of (i) the issuance of the Securities or (ii)
the date, if any, on which such Security was transferred
by an affiliate (within the meaning of Rule 144) of the
Company or by a Person that had been such an affiliate
at any time during the three months prior to such
transfer (provided, however, that the Holder of such
Security is not such an affiliate or a Person that had
been such an affiliate at any time during the three
months prior to such re-issuance).
ARTICLE 3
The Securities
SECTION 3.1 Title and Terms.
The aggregate principal amount of Securities which
may be authenticated and delivered under this Indenture is
limited to $16,800,000, except for Securities authenticated
and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Securities of the series
pursuant to Section 3.4, 3.5, 3.6, 8.6 or 11.8.
The Securities shall be collectively known and
designated as the "7.75% Senior Unsecured Debentures Due
March 31, 2005" of the Company. Their Stated Maturity shall
be March 31, 2005, and they shall bear interest at the rate
of 7.75% per annum, from March 31, 1995 or from the most
recent Interest Payment Date to which interest has been paid
or duly provided for, as the case may be, payable semi-
annually on March 31 and September 30 commencing September
30, 1995, until the principal thereof is paid or made
available for payment.
The principal of and premium, if any, and interest
on the Securities shall be payable at the office or agency of
the Company maintained for such purpose pursuant to Section
9.2; provided, however, that at the option of the Company
payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address shall
appear in the Security Register.
The Securities shall be redeemable as provided in
Article 11.
SECTION 3.2 Denominations.
The Securities shall be issuable only in fully
registered form without coupons and only in denominations of
$1,000 and any integral multiple thereof.
SECTION 3.3 Execution, Authentication, Delivery and
Dating.
The Securities shall be executed on behalf of the
Company by its Chairman of the Board, its Vice Chairman of
the Board, its President or one of its Vice Presidents, under
its corporate seal or a facsimile thereof reproduced thereon,
attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the
Securities may be manual or facsimile.
Securities bearing the original or facsimile
signatures of individuals who were at any time the proper
officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and
delivery of such Securities or did not hold such offices at
the date of such Securities.
At any time and from time to time after the
execution and delivery of this Indenture, the Company may
deliver Securities executed by the Company to the Trustee for
authentication, together with a Company Order for the
authentication and delivery of such Securities, and the
Trustee in accordance with such Company Order shall either at
one time or from time to time pursuant to such instructions
as may be described therein authenticate and deliver such
Securities as in this Indenture provided and not otherwise.
Each Security shall be dated the date of its
authentication.
No Security shall be entitled to any benefit under
this Indenture or be valid or obligatory for any purpose
unless there appears on such Security a certificate of
authentication substantially in the form provided for herein
duly executed by the Trustee by manual signature, and such
certificate upon any Security shall be conclusive evidence,
and the only evidence, that such Security has been duly
authenticated and delivered hereunder and is entitled to the
benefits of the Indenture.
SECTION 3.4 Temporary Securities.
Pending the preparation of definitive Securities,
the Company may execute, and upon Company Order the Trustee
shall authenticate and deliver, temporary Securities which
are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in
lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as
evidenced by their execution of such Securities. Any such
temporary Security shall be in global form. Every such
temporary Security shall be executed by the Company and shall
be authenticated and delivered by the Trustee upon the same
conditions and in substantially the same manner, and with the
same effect, as the definitive Security or Securities in lieu
of which it is issued.
If temporary Securities are issued, the Company
will cause definitive Securities to be prepared without
unreasonable delay. After the preparation of definitive
Securities, the temporary Securities shall be exchangeable
for definitive Securities upon surrender of the temporary
Securities at any office or agency of the Company designated
pursuant to Section 9.2, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary
Securities the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor one or more
definitive Securities of a like principal amount of
authorized denominations. Until so exchanged the temporary
Securities shall in all respects be entitled to the same
benefits under this Indenture as definitive Securities.
SECTION 3.5 Registration, Registration of Transfer and
Exchange.
The Company shall cause to be kept at the Corporate
Trust Office of the Trustee a register (the register
maintained in such office and in any other office or agency
designated pursuant to Section 9.2 being herein sometimes
collectively referred to as the "Security Register") in
which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of
Securities and of transfers of Securities. The Trustee is
hereby appointed "Security Registrar" for the purpose of
registering Securities and transfers of Securities as herein
provided. At all reasonable times the Security Register
shall be open for inspection by the Company.
Upon surrender for registration of transfer of any
Security at an office or agency of the Company designated
pursuant to Section 9.2 for such purpose, the Company shall
execute, and the Trustee shall authenticate and deliver, in
the name of the designated transferee or transferees, one or
more new Securities of any authorized denominations and of a
like aggregate principal amount.
At the option of the Holder, Securities may be
exchanged for other Securities of any authorized
denominations and of a like aggregate principal amount, upon
surrender of the Securities to be exchanged at the office or
agency maintained for that purpose. Whenever any Securities
are so surrendered for exchange, the Company shall execute,
and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled
to receive.
All Securities issued upon any registration of
transfer or exchange of Securities shall be the valid
obligation of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or
exchange.
Every Security presented or surrendered for
registration of transfer or for exchange shall (if so
required by the Company or the Trustee) be duly endorsed, or
be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly
executed, by the Holder thereof or his attorney duly
authorized in writing.
No service charge shall be made for any
registration of transfer or exchange of Securities except as
provided in Section 3.6. The Company may require payment of
a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any
registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 3.4, 8.6 or 11.8 not
involving any transfer.
The Security Registrar shall register any transfer
of a Security that complies with the applicable requirements
of this Section; provided that in the case of a Security
bearing the Securities Legend, before registering any
transfer the Security Registrar shall receive a written
opinion of legal counsel to the transferor (who shall be
acceptable to the Security Registrar) stating that such
transfer complies with applicable securities laws or, in the
case of a transfer pursuant to Rule 144A or Regulation S, a
Rule 144A or Regulation S Certificate, as the case may be,
executed by the transferor.
The Company shall not be required (a) to issue,
register the transfer of or exchange any Security during a
period beginning at the opening of business 15 days before
the day of the mailing of a notice of redemption of
Securities selected for redemption under Section 11.4 and
ending at the close of business on the day of such mailing,
or (b) to register the transfer of or exchange any Security
so selected for redemption in whole or in part, except the
unredeemed portion of any Security being redeemed in part.
SECTION 3.6 Mutilated, Destroyed, Lost and Stolen
Securities.
If any mutilated Security is surrendered to the
Trustee, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a new Security,
like tenor and principal amount and bearing a number not
contemporaneously outstanding.
If there shall be delivered to the Company and the
Trustee (a) evidence to their satisfaction of the
destruction, loss or theft of any Security and (b) such
security or indemnity as may be required by them to save each
of them and any agent of either of them harmless, then, in
the absence of notice to the Company or the Trustee that such
Security has been acquired by a bona fide purchaser, the
Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of like tenor and principal amount
and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or
stolen Security has become or is about to become due and
payable, the Company in its discretion may, instead of
issuing a new Security, pay such Security.
Upon the issuance of any new Security under this
Section, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Trustee) connected
therewith.
Every new Security issued pursuant to this Section
in lieu of any destroyed, lost or stolen Security shall
constitute an original additional contractual obligation of
the Company, whether or not the destroyed, lost or stolen
Security shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture
equally and proportionately with any and all other Securities
duly issued hereunder.
The provisions of this Section are exclusive and
shall preclude (to the extent lawful) all other rights and
remedies with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities.
SECTION 3.7 Payment of Interest; Interest Rights
Preserved.
Interest on any Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose name that Security
(or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such
interest. At the option of the Company, interest on any
Security may be paid by mailing checks to the addresses of
the Holders thereof as such addresses appear in the
Securities Register.
Any interest on any Security which is payable, but
is not punctually paid or duly provided for, on any Interest
Payment Date (herein called "Defaulted Interest") shall
forthwith cease to be payable to the Holder on the relevant
Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in Clause (a) or (b)
below:
(a) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the
Securities (or their respective Predecessor Securities)
are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest,
which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each
Security and the date of the proposed payment, and at
the same time the Company shall deposit with the Trustee
an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the
Trustee for such deposit prior to the date of the
proposed payments such money when deposited to be held
in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this clause provided.
Thereupon the Trustee shall fix a Special Record Date
for the payment of such Defaulted Interest which shall
be not more than 15 days and not less than 10 days prior
to the date of the proposed payment and not less than 10
days after the receipt by the Trustee of the notice of
the proposed payment. The Trustee shall promptly notify
the Company of such Special Record Date and, in the name
and at the expense of the Company, shall cause notice of
the proposed payment of such Defaulted Interest and the
Special Record Date therefor to be mailed, first-class
postage prepaid, to each Holder at his address as it
appears in the Security Register, not less than 10 days
prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so mailed, such
Defaulted Interest shall be paid to the Persons in whose
names the Securities (or their respective Predecessor
Securities) are registered at the close of business on
such Special Record Date and shall no longer be payable
pursuant to the following clause (b).
(b) The Company may make payment of any Defaulted
Interest in any other lawful manner not inconsistent
with the requirements of any securities exchange on
which the Securities may be listed, and upon such notice
as may be required by such exchange, if, after notice
given by the Company to the Trustee of the proposed
payment pursuant to this Clause, such manner of payment
shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this
Section, each Security delivered under this Indenture upon
registration of transfer of or in exchange for or in lieu of
any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other
Security.
SECTION 3.8 Persons Deemed Owners.
Prior to due presentment of a Security for
registration of transfer, the Company, the Trustee and any
agent of the Company or the Trustee may treat the Person in
whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of
and premium, if any, and (subject to Section 3.7) interest on
such Security and for all other purposes whatsoever, whether
or not such Security be overdue, and neither the Company, the
Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
SECTION 3.9 Cancellation.
All Securities surrendered for payment, redemption,
registration of transfer or exchange or for credit against
any sinking fund payment pursuant to Section 12.2 shall, if
surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly cancelled by
it. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in
any manner whatsoever, and all Securities so delivered shall
be promptly canceled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities
canceled as provided in this Section, except as expressly
permitted by this Indenture. All canceled Securities held by
the Trustee shall be disposed of as directed by a Company
Order.
SECTION 3.10 Computation of Interest.
Interest on the Securities shall be computed on the
basis of a 360-day year of twelve 30-day months.
ARTICLE 4
Satisfaction and Discharge
SECTION 4.1 Satisfaction and Discharge of Indenture
This Indenture shall upon Company Request cease to
be of further effect (except as to any surviving rights of
registration of transfer or exchange of Securities herein
expressly provided for), and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(a) either
(i) all Securities theretofore
authenticated and delivered (other than (A)
Securities which have been destroyed, lost or
stolen and which have been replaced or paid as
provided in Section 3.5 and (B) Securities for
whose payment money has theretofore been deposited
in trust or segregated and held in trust by the
Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section
9.3) have been delivered to the Trustee for
cancellation; or
(ii) all such Securities not theretofore
delivered to the Trustee for cancellation
(A) have become due and payable, or
(B) will become due and payable at their
Stated Maturity within one year, or
(C) are to be called for redemption
within one year under arrangements
satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the
name, and at the expense, of the Company,
and the Company, in the case of (A), (B) or (C)
above, has deposited or caused to be deposited with
the Trustee as trust funds in trust for the purpose
an amount sufficient to pay and discharge the
entire indebtedness on such Securities not
theretofore delivered to the Trustee for
cancellation for principal and premium, if any, and
interest to the date of such deposit (in the case
of Securities which have become due and payable) or
to the Stated Maturity or Redemption Date, as the
case may be;
(a) the Company has paid or caused to be paid all
other sums payable hereunder by the Company; and
(b) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent herein provided
for relating to the satisfaction and discharge of this
Indenture have been complied with.
Notwithstanding the satisfaction and discharge of
this Indenture, the obligations of the Company to the Trustee
under Section 6.7, the obligations of the Trustee to any
Authenticating Agent under Section 6.14 and, if money shall
have been deposited with the Trustee pursuant to sub-clause
(ii) of Clause (a) of this Section, the obligations of the
Trustee under Section 4.2 and the last paragraph of Section
9.3 shall survive.
SECTION 4.2 Application of Trust Money.
Subject to the provisions of the last paragraph of
Section 9.3, all money deposited with the Trustee pursuant to
Section 4.1 shall be held in trust and applied by it, in
accordance with the provisions of the Securities of that
series and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Person
entitled thereto, of the principal and premium, if any, and
interest for whose payment such money has been deposited with
the Trustee.
SECTION 4.3 Reinstatement.
If the Trustee or the Paying Agent is unable to
apply any money in accordance with this Article by reason of
any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this
Indenture and the Securities shall be revived and reinstated
as though no deposit had occurred pursuant to this Article
until such time as the Trustee or Paying Agent is permitted
to apply all money held in trust with respect to the
Securities; provided, however, that if the Company makes any
payment of principal of or any premium, if any, or interest
on any Security following the reinstatement of its
obligations, the Company shall be subrogated to the rights of
the Holders of the Securities to receive such payment from
the money so held in trust.
ARTICLE 5
Remedies
SECTION 5.1 Events of Default.
"Event of Default", wherever used herein, means any
one of the following events (whatever the reason for such
Event of Default and whether it be voluntary or involuntary
or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(a) default in the payment of any interest upon
any Security when it becomes due and payable, and
continuance of such default for a period of fifteen
Business Days; or
(b) default in the payment of the principal of or
premium, if any, on any Security at its Maturity; or
(c) default in the deposit of any sinking fund
payment, when and as due by the terms of Sections 12.1
and 12.3; or
(d) default in the performance, or breach, of any
covenant or warranty of the Company in this Indenture
(other than a covenant or warranty a default in whose
performance or whose breach is elsewhere in this Section
specifically dealt with), and continuance of such
default or breach for a period of 30 days after an
officer of the Company eligible to execute an Officers'
Certificate has knowledge of such default or there has
been given, by registered or certified mail, to the
Company by the Trustee or to the Company and the Trustee
by the Holders of at least 25% in principal amount of
the Outstanding Securities a written notice specifying
such default or breach and requiring it to be remedied
and stating that such notice is a "Notice of Default"
hereunder; or
(e) the Company or any of its Subsidiaries shall
have failed to pay principal at maturity of, or an event
of default shall have occurred and be continuing under
and resulted in the acceleration of, any loan agreement,
mortgage, indenture or other instrument under which
there is issued or by which there is secured or
evidenced any Indebtedness of the Company (other than
the Securities) or any of its Subsidiaries whether such
Indebtedness now exists or shall be created hereafter,
and the principal amount of such Indebtedness which,
together with any such other Indebtedness so accelerated
or not paid at maturity, aggregates an amount equal to
or greater than $5,000,000, and such acceleration is not
waived or rescinded within a period of 10 Business Days
after there shall have been given, by registered or
certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25%
in principal amount of the Securities then outstanding a
written notice specifying such default and requiring the
Company to cause such acceleration to be rescinded,
annulled or discharged and stating that such notice is a
"Notice of Default" hereunder; or
(f) the entry by a court having jurisdiction in
the premises of (i) a decree or order for relief in
respect of the Company in an involuntary case or
proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar
law or (ii) a decree or order adjudging the Company a
bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement, adjustment
or composition of or in respect of the Company under any
applicable Federal or State law, or appointing a
custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or
of any substantial part of its property, or ordering the
winding up or liquidation of its affairs, and the
continuance of any such decree or order for relief or
any such other decree or order unstayed and in effect
for a period of 60 consecutive days; or
(g) the commencement by the Company of a voluntary
case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar
law or of any other case or proceeding to be adjudicated
a bankrupt or insolvent, or the consent by it to the
entry of a decree or order for relief in respect of the
Company in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or
proceeding against it, or the filing by it of a petition
or answer or consent seeking reorganization or relief
under any applicable Federal or State law, or the
consent by it to the filing or such petition or to the
appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or
other similar official of the Company or of any
substantial part of its property, or the making by it of
an assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its
debts generally as they become due, or the taking of
corporate action by the Company in furtherance of any
such action; or
(h) final judgment or judgments (after the
expiration of all times to appeal therefrom) for the
payment of money in excess of $5,000,000 in the
aggregate shall be rendered against the Company or any
of its Subsidiaries and the same shall not be (i) fully
covered by insurance in accordance with Section 9.11 or
(ii) vacated, stayed, bonded, paid or discharged for a
period of fifteen (15) days.
Upon receipt by the Trustee of any Notice of
Default pursuant to this Section 5.1, a record date shall
automatically and without any other action by any Person be
set for the purpose of determining the Holders of Outstanding
Securities entitled to join in such Notice of Default, which
record date shall be the close of business on the day the
Trustee receives such Notice of Default. The Holders of
Outstanding Securities on such record date (or their duly
appointed agents), and only such Persons, shall be entitled
to join in such Notice of Default, whether or not such
Holders remain Holders after such record date; provided that
unless such Notice of Default shall have become effective by
virtue of the Holders of the requisite principal amount of
Outstanding Securities on such record date (or their duly
appointed agents) having joined therein on or prior to the
90th day after such record date, such Notice of Default shall
automatically and without any action by any Person be
cancelled and of no further force or effect.
SECTION 5.2 Acceleration of Maturity; Rescission and
Annulment.
If an Event of Default occurs and is continuing,
then and in every such case the Trustee or the Holders of not
less than (a) 25% in principal amount of the Outstanding
Securities in the case of a default under Section 5.1(a) or
5.1(b), or (b) 50% in principal amount of the Outstanding
Securities, in the case of any other default, may declare the
principal of all the Outstanding Securities to be due and
payable immediately, by a notice in writing to the Company
(and to the Trustee if given by Holders), and upon any such
declaration such principal plus any interest accrued on the
Securities to the date of declaration shall become
immediately due and payable. Notwithstanding the above, in
the case of a default under Section 5.1(a) or 5.1(b), any
Holder may accelerate its own Securities without regard to
the actions of other Holders.
At any time after such a declaration of
acceleration has been made and before a judgment or decree
for payment of the money due has been obtained by the Trustee
as hereinafter in this Article provided, the Holders of a
majority in principal amount of the Outstanding Securities,
by written notice to the Company and the Trustee, may rescind
and annul such declaration and its consequences if
(a) the Company has paid or deposited with the
Trustee a sum sufficient to pay
(i) all overdue interest on all
Securities,
(ii) the principal of and premium, if
any, on any Securities which have become due
otherwise than by such declaration of acceleration
and interest thereon at the rate borne by the
Securities plus 1%,
(iii) to the extent that payment of such
interest is lawful, interest upon overdue interest
at the rate borne by the Securities plus 1%, and
(iv) all sums paid or advanced by the
Trustee hereunder and the reasonable compensation,
expenses, disbursements and advances of the
Trustee, its agents and counsel;
and
(b) all Events of Default, other than the non-
payment of the principal of Securities which has become
due solely by such declaration of acceleration, have
been cured or waived as provided in Section 5.13.
No such rescission and annulment shall affect any subsequent
default or impair any right consequent thereon.
Upon receipt by the Trustee of any declaration of
acceleration, or any rescission and annulment of any such
declaration, of all Outstanding Securities pursuant to this
Section, a record date shall automatically and without any
other action by any Person be set for the purpose of
determining the Holders of Outstanding Securities entitled to
join in such declaration, or rescission and annulment, as the
case may be, which record date shall be the close of business
on the day the Trustee receives such declaration, or
rescission and annulment, as the case may be. The Holders of
Outstanding Securities on such record date (or their duly
appointed agents), and only such Persons, shall be entitled
to join in such declaration, or rescission and annulment, as
the case may be, whether or not such Holders remain Holders
after such record date; provided that unless such
declaration, or rescission and annulment, as the case may be,
shall have become effective by virtue of Holders of the
requisite principal amount of outstanding Securities on such
record date (or their duly appointed agents) having joined
therein on or prior to the 90th day after such record date,
such declaration, or rescission and annulment, as the case
may be, shall automatically and without any action by any
Person be canceled and of no further force or effect.
SECTION 5.3 Collection of Indebtedness and Suits for
Enforcement by Trustee.
The Company covenants that if
(a) default is made in the payment of any interest
on any Security when such interest becomes due and
payable and such default continues for a period of 30
days, or
(b) default is made in the payment of the
principal of or premium, if any, on any Security at the
Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for
the benefit of the Holders of such Securities, the whole
amount then due and payable on such Securities for principal
and premium, if any, and interest, and, to the extent that
payment of such interest shall be legally enforceable,
interest on any overdue principal and premium, if any, and on
any overdue interest, at the rate borne by the Securities
plus 1%; and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel.
If the Company fails to pay such amounts forthwith
upon such demand, the Trustee in its own name and as trustee
of an express trust, may institute a judicial proceeding for
the collection of the sums so due and unpaid, may prosecute
such proceeding to judgment or final decree and may enforce
the same against the Company or any other obligor upon the
Securities and collect the money adjudged or decreed to be
payable in the manner provided by law out of the property of
the Company or any other obligor upon the Securities,
wherever situated.
If an Event of Default occurs and is continuing,
the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders by such
appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or
agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.
SECTION 5.4 Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the
Company (or any other obligor upon the Securities), its
property or its creditors, the Trustee shall be entitled and
empowered, by intervention in such proceeding or otherwise,
to take any and all actions in order to have the claims of
the Holders and the Trustee allowed in any such proceeding.
In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable
on any such claims and to distribute the same; and any
custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel, and any other amounts
due the Trustee under Section 6.7.
No provision of this Indenture shall be deemed to
authorize the Trustee to authorize or consent to or accept or
adopt on behalf of any Holder any plan of reorganization,
arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to
authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding; provided, however, that the
Trustee may, on behalf of the Holders, vote for the election
of a trustee in bankruptcy or similar official and may be a
member of the Creditors' Committee.
SECTION 5.5 Trustee May Enforce Claims Without Possession
of Securities.
All rights of action and claims under this
Indenture or the Securities may be prosecuted and enforced by
the Trustee without the possession of any of the Securities
or the production thereof in any proceeding relating thereto,
and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and
any recovery of judgment shall, after provision for the
payment of the reasonable compensation, expenses,
disbursements and advances or the Trustee, its agents and
counsel, be for the ratable benefit of the Holders of the
Securities in respect of which such judgment has been
recovered.
SECTION 5.6 Application of Money Collected.
Any money collected by the Trustee pursuant to this
Article shall be applied in the following order, at the date
or dates fixed by the Trustee and, in case of the
distribution of such money on account or principal or
premium, if any, or interest, upon presentation of the
Securities and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
FIRST: To payment of all amounts due the Trustee
under Section 6.7; and
SECOND: To the payment of the amounts then due
and unpaid for principal of and premium, if any, and
interest on the Securities in respect of which or for
the benefit of which such money has been collected,
ratably, without preference or priority of any kind,
according to the amounts due and payable on such
Securities for principal and premium, if any, and
interest, respectively.
SECTION 5.7 Limitation on Suits.
No Holder of any Security shall have any right to
institute any proceeding, judicial or otherwise, with respect
to this Indenture, or for the appointment of a receiver or
trustee, or for any other remedy hereunder, unless
(a) such Holder has previously given written
notice to the Trustee of a continuing Event of Default;
(b) the Holders of not less than 25% in principal
amount of the outstanding Securities shall have made
written request to the Trustee to institute proceedings
in respect of such Event of Default in its own name as
Trustee hereunder;
(c) such Holder or Holders have offered to the
Trustee reasonable indemnity against the costs, expenses
and liabilities to be incurred in compliance with such
request;
(d) the Trustee for 60 days after its receipt of
such notice, request and offer of indemnity has failed
to institute any such proceeding; and
(e) no direction inconsistent with such written
request has been given to the Trustee during such 60-day
period by the Holders of a majority in principal amount
of the Outstanding Securities;
it being understood and intended that no one or more holders
shall have any right in any manner whatever by virtue of, or
by availing of any provision of this Indenture to affect,
disturb or prejudice the rights of any other Holders, or to
obtain or to seek to obtain priority or preference over any
other Holders or to enforce any right under this Indenture,
except in the manner herein provided and for the equal and
ratable benefit of all the Holders.
SECTION 5.8 Unconditional Right of Holders to Receive
Principal, Premium and Interest.
Notwithstanding any other provision in this
Indenture, the Holder of any Security shall have the right,
which is absolute and unconditional, to receive payment of
the principal of and premium, if any, and (subject to Section
3.7) interest on such Security on the respective Stated
Maturities expressed in such Security (or, in the case of
redemption, on the Redemption Date) and to institute suit for
the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
SECTION 5.9 Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any
proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case,
subject to any determination in such proceeding, the Company,
the Trustee and the Holders shall be restored severally and
respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the
Holders shall continue as though no such proceeding had been
instituted.
SECTION 5.10 Rights and Remedies Cumulative.
Except as otherwise provided with respect to the
replacement or payment of mutilated, destroyed, lost or
stolen Securities in Section 3.6, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders
is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law,
be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 5.11 Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any
Holder of any Security to exercise any right or remedy
accruing upon any Event of Default shall impair any such
right or remedy or constitute a waiver of any such Event of
Default or an acquiescence therein. Every right and remedy
given by this Article or by law to the Trustee or to the
Holders may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee or by the Holders, as
the case may be.
SECTION 5.12 Control by Holders.
The Holders of a majority in principal amount of
the Outstanding Securities shall have the right to direct the
time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or
power conferred on the Trustee; provided that
(a) such direction shall not be in conflict with
any rule of law or with this Indenture;
(b) the Trustee may take any other action deemed
proper by the Trustee which is not inconsistent with
such direction; and
(c) subject to the provisions of Section 6.1, the
Trustee shall have the right to decline to follow any
such direction if the Trustee in good faith shall
determine that the action so directed would involve the
Trustee in personal liability or would be unduly
prejudicial to Holders not joining in such direction.
Upon receipt by the Trustee of any such direction,
a record date shall automatically and without any other
action by any Person be set for the purpose of determining
the Holders of Outstanding Securities entitled to join in
such direction, which record date shall be the close of
business on the day the Trustee receives such direction. The
Holders of Outstanding Securities on such record date (or
their duly appointed agents), and only such Persons, shall be
entitled to join in such direction, whether or not such
Holders remain Holders after such record date; provided that
unless such direction shall have become effective by virtue
of Holders of the requisite principal amount of Outstanding
Securities on such record date (or their duly appointed
agents) having joined therein on or prior to the 90th day
after such record date, such direction shall automatically
and without any action by any Person be canceled and of no
further force or effect.
SECTION 5.13 Waiver of Past Defaults.
The Holders of not less than a majority in
principal amount of the Outstanding Securities may on behalf
of the Holders of all the Securities waive any past default
hereunder and its consequences, except a default
(a) in the payment of the principal of or premium,
if any, or interest on any Security, or
(b) in respect of a covenant or provision hereof
which under Article 8 cannot be modified or amended
without the consent of the Holder of each Outstanding
Security affected.
Upon any such waiver, such default shall cease to
exist, and any Event of Default arising therefrom shall be
deemed to have been cured, for every purpose of this
Indenture; but no such waiver shall extend to any subsequent
or other default or impair any right consequent thereon.
SECTION 5.14 Undertaking for Costs.
In any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the
Trustee for any action taken, suffered or omitted by it as
Trustee, a court may require any party litigant in such suit
to file an undertaking to pay the costs of such suit, and may
assess costs against any such party litigant; provided that
this Section shall not be deemed to authorize any court to
require such an undertaking or to make such an assessment in
any suit instituted by the Trustee, to any suit instituted by
any Holder, or group of Holders, holding in the aggregate
more than 25% in principal amount of the Outstanding
Securities, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of (or premium,
if any) or interest on any Security on or after the
respective Stated Maturities expressed in such Security (or,
in the case of redemption, on or after the Redemption Date).
SECTION 5.15 Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, or
plead, or in any manner whatsoever claim or take the benefit
or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the
Company (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law and
covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as
though no such law had been enacted.
ARTICLE 6
The Trustee
SECTION 6.1 Certain Duties and Responsibilities.
No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it.
Whether or not therein expressly so provided, every provision
of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.
SECTION 6.2 Notice of Defaults.
The Trustee shall give the Holders notice of any
default hereunder as and to the extent provided by the Trust
Indenture Act; provided, however, that in the case of any
default of the character specified in Section 5.1(d), no such
notice to Holders shall be given until at least 30 days after
the occurrence thereof. For the purpose of this Section, the
term "default" means any event which is, or after notice or
lapse of time or both would become, an Event of Default.
SECTION 6.3 Certain Rights of Trustee.
Subject to the provisions of Section 6.1:
(a) the Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to
have been signed or presented by the proper party or
parties;
(b) any request or direction of the Company
mentioned herein shall be sufficiently evidenced by a
Company Request or Company Order and any resolution of
the Board of Directors may be sufficiently evidenced by
a Board Resolution;
(c) whenever in the administration of this
Indenture the Trustee shall deem it desirable that a
matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee
(unless other evidence be herein specifically
prescribed) may, in the absence of bad faith on its
part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the
written advice of such counsel or any Opinion of Counsel
shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by
it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by
this Indenture at the request or direction of any of the
Holders pursuant to this Indenture, unless such Holders
shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities
which might be incurred by it in compliance with such
request or direction;
(f) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or
other paper or document, but the Trustee, in its
discretion, may make such further inquiry or
investigation into such facts or matters as it may see
fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled
to examine the books, records and premises of the
Company, personally or by agent or attorney; and
(g) the Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys and the
Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney
appointed with due care by it hereunder.
SECTION 6.4 Not Responsible for Recitals or Issuance of
Securities.
The recitals contained herein and in the
Securities, except the Trustee's certificates of
authentication, shall be taken as the statements of the
Company, and the Trustee and any Authenticating Agent assume
no responsibility for their correctness. The Trustee makes
no representations as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee and any
Authenticating Agent shall not be accountable for the use or
application by the Company of Securities or the proceeds
thereof.
SECTION 6.5 May Hold Securities.
The Trustee, any Authenticating Agent, any Paying
Agent, any Security Registrar or any other agent of the
Company, in its individual or any other capacity, may become
the owner or pledgee of Securities and, subject to Sections
6.8 and 6.13, may otherwise deal with the Company with the
same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Security Registrar or
such other agent.
SECTION 6.6 Money Held in Trust.
Money held by the Trustee or any Paying Agent in
trust hereunder need not be segregated from other funds
except to the extent required by law. The Trustee or any
Paying Agent shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed
with the Company.
SECTION 6.7 Compensation and Reimbursement.
The Company agrees:
(a) to pay to the Trustee from time to time
reasonable compensation for all services rendered by it
hereunder as may be mutually agreed upon in writing by
the Company and the Trustee (which compensation shall
not be limited by any provision of law in regard to the
compensation of a trustee of an express trust);
(b) except as otherwise expressly provided herein,
to reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred
or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation
and the expenses and disbursements of its agents and
counsel) except to the extent any such expense,
disbursement or advance may be attributable to its
negligence or bad faith; and
(c) to indemnify the Trustee for, and to hold it
harmless against, any loss, liability or expense
incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or
administration of this trust, including the costs and
expenses of defending itself against any claim or
liability in connection with the exercise or performance
of any of its powers or duties hereunder.
As security for the performance of the obligations
of the Company under this Section, the Trustee shall have a
Lien prior to the Securities upon all property and funds held
or collected by the Trustee as such, except funds held in
trust for the benefit of the Holders of particular
Securities.
SECTION 6.8 Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting
interest within the meaning of the Trust Indenture Act, the
Trustee shall either eliminate such interest or resign, to
the extent and in the manner provided by, and subject to the
provisions of, the Trust Indenture Act and this Indenture.
SECTION 6.9 Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder
which shall be a Person that is eligible pursuant to the
Trust Indenture Act to act as such, has a combined capacity
and surplus of at least $50 million and has an office or
agency in the Borough of Manhattan, The City of New York. If
such Person publishes reports of condition at least annually,
pursuant to law or to the requirements of a Federal or state
supervising or examining authority, then for the purposes of
this Section, the combined capital and surplus of such Person
shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published.
If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect
hereinafter specified in this Article.
SECTION 6.10 Resignation and Removal; Appointment of
Successor.
(a) No resignation or removal of the Trustee and
no appointment of a successor Trustee pursuant to this
Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the
applicable requirements of Section 6.11.
(b) The Trustee may resign at any time by giving
written notice thereof to the Company. If an instrument of
acceptance by a successor Trustee required by Section 6.11
shall not have been delivered to the resigning Trustee within
30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by an
Act of the Holders of a majority in principal amount of the
Outstanding Securities delivered to the Trustee and to the
Company after the Trustee has failed to comply with his
duties and responsibilities under this Indenture.
(d) If at any time:
(i) the Trustee shall fail to comply with
Section 6.8 after written request therefor by the
Company or by any Holder who has been a bona fide Holder
of a Security for at least six months, or
(ii) the Trustee shall cease to be eligible
under Section 6.9 and shall fail to resign after written
request therefor by the Company or by any such Holder,
or
(iii) the Trustee shall become incapable of
acting or shall be adjudged a bankrupt or insolvent or a
receiver of the Trustee or of its property shall be
appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (A) the Company by a Board Resolution
may remove the Trustee, or (B) subject to Section 5.14, any
Holder who has been a bona fide Holder of a Security for at
least six months may, on behalf of himself and all others
similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or
become incapable of acting, or if a vacancy shall occur in
the office of Trustee for any cause, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee and
such successor Trustee shall comply with the applicable
requirements of Section 6.11. If, within one year after such
resignation, removal or incapability, or the occurrence of
such vacancy, a successor Trustee shall be appointed by Act
of the Holders of a majority in principal amount of the
Outstanding Securities delivered to the Company and the
retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment in
accordance with the applicable requirements of Section 6.11
become the successor Trustee and supersede the successor
Trustee appointed by the Company. If no successor Trustee
shall have been so appointed by the Company or the Holders
and accepted appointment in the manner required by Section
6.11, any Holder who has been a bona fide Holder of a
Security for at least six months may, on behalf of himself
and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor
Trustee.
(f) The Company shall give notice of each
resignation and each removal of the Trustee and each
appointment of a successor Trustee to all Holders in the
manner provided in Section 1.6. Each notice shall include
the name of the successor Trustee and the address of its
Corporate Trust Office.
SECTION 6.11 Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall
execute, acknowledge and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment,
and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the
retiring Trustee; but, on request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment
of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers
and trusts of the retiring Trustee, and shall duly assign,
transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder. Upon
request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such
rights, powers and trusts.
No successor Trustee shall accept its appointment
unless at the time of such acceptance such successor Trustee
shall be qualified and eligible under this Article.
SECTION 6.12 Merger, Conversion, Consolidation or
Succession to Business.
Any corporation into which the Trustee may be
merged or converted or with which it may be consolidated, or
any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the
corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided such corporation
shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further
act on the part of any of the parties hereto. In case any
Securities shall have been authenticated, but not delivered,
by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee
may adopt such authentication and deliver the Securities so
authenticated with the same effect as if such successor
Trustee had itself authenticated such securities.
SECTION 6.13 Preferential Collection of Claims Against
Company.
If and when the Trustee shall be or become a
creditor of the Company (or any other obligor upon the
Securities), the Trustee shall be subject to the provisions
of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor).
SECTION 6.14 Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or
Agents which shall be authorized to act on behalf of the
Trustee to authenticate Securities issued upon original issue
and upon exchange, registration of transfer, partial
redemption or pursuant to Section 3.6, and Securities so
authenticated shall be entitled to the benefits of this
Indenture and shall be valid and obligatory for all purposes
as if authenticated by the Trustee hereunder. Wherever
reference is made in this Indenture to the authentication and
delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed
to include authentication and delivery on behalf of the
Trustee by an Authenticating Agent and a certificate of
authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a Person
organized and doing business under the laws of the United
States of America, any State thereof or the District or
Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than
$50 million and subject to supervision or examination by
Federal or State authority. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to
law or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the
combined capital and surplus of such Authenticating Agent
shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published.
If at any time an Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section,
such Authenticating Agent shall resign immediately in the
manner and with the effect specified in this Section.
Any Person into which an Authenticating Agent may
be merged or converted or with which it may be consolidated,
or any Person resulting from any merger, conversion or
consolidation to which such Authenticating Agent shall be a
party, or any Person succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall
continue to be an Authenticating Agent, provided such Person
shall be otherwise eligible under this Section, without the
execution or filing of any paper or any further act on the
part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by
giving written notice thereof to the Trustee and to the
Company. The Trustee may at any time terminate the agency of
an Authenticating Agent by giving written notice thereof to
such Authenticating Agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or
in case at any time such Authenticating Agent shall cease to
be eligible in accordance with the provisions of this
Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail
notice of such appointment by first-class mail, postage
prepaid, to all Holders as their names and addresses appear
in the Security Register. Any successor Authenticating Agent
upon acceptance of its appointment under this Section shall
become vested with all the rights, powers and duties of its
predecessor hereunder, with like effect as if originally
named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible to
act as such under the provisions of this Section.
Any Authenticating Agent by the acceptance of its
appointment shall be deemed to have represented to the
Trustee that it is eligible for appointment as Authenticating
Agent under this Section and to have agreed with the Trustee
that it will perform and carry out the duties of an
Authenticating Agent as herein set forth, including among
other things the duties to authenticate Securities when
presented to it in connection with the original issuance and
with exchanges, registrations of transfer or redemptions
thereof or pursuant to Section 3.6; it will keep and
maintain, and furnish to the Trustee from time to time as
requested by the Trustee, appropriate records of all
transactions carried out by it as Authenticating Agent and
will furnish to the Trustee such other information and
reports as the Trustee may reasonably require; and it will
notify the Trustee promptly if it shall cease to be eligible
to act as Authenticating Agent in accordance with the
provisions of this Section. Any Authenticating Agent by the
acceptance of its appointment shall be deemed to have agreed
with the Trustee to indemnify the Trustee against any loss,
liability or expense incurred by the Trustee and to defend
any claim asserted against the Trustee by reason of any acts
or failure to act of such Authenticating Agent, but such
Authenticating Agent shall have no liability for any action
taken by it in accordance with the specific written direction
of the Trustee.
The Trustee agrees to pay to each Authenticating
Agent from time to time reasonable compensation for its
services under this Section, and the Trustee shall be
entitled to be reimbursed for such payments, subject to the
provisions of Section 6.7.
If an appointment is made pursuant to this Section,
the Securities may have endorsed thereon, in addition to the
Trustees certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the Securities described in the
within-mentioned Indenture.
_________________,
As Trustee
By
As Authenticating Agent
By
Authorized Officer
ARTICLE 7
Holders' Lists and Reports by Trustee and Company
SECTION 7.1 Company to Furnish Trustee Names and Addresses
of Holders of Securities.
The Company will furnish or cause to be furnished
to the Trustee
(a) semi-annually, not more than 15 days after
each Regular Record Date, a list, in such form as the
Trustee may reasonably require, of the names and
addresses of the Holders as of such Regular Record Date,
and
(b) at such other times as the Trustee may request
in writing, within 30 days after the receipt by the
Company of any such request, a list of similar form and
content as of a date not more than 15 days prior to the
time such list is furnished;
notwithstanding the foregoing, so long as the Trustee is the
Security Registrar, no such list shall be required to be
furnished.
SECTION 7.2 Preservation of Information; Communications to
Holders.
(a) The Trustee shall preserve, in as current a
form as is reasonably practicable, the names and addresses of
Holders contained in the most recent list furnished to the
Trustee as provided in Section 7.1 and the names and
addresses of Holders received by the Trustee in its capacity
as Security Registrar. The Trustee may destroy any list
furnished to it as provided in Section 7.1 upon receipt of a
new list so furnished.
(b) The rights of Holders to communicate with
other Holders with respect to their rights under this
Indenture or under the Securities, and the corresponding
rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and
holding the same, agrees with the Company and the Trustee
that neither the Company nor the Trustee nor any agent of
either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of
Holders made pursuant to applicable law.
(d) For as long as any of the Securities remain
Outstanding and are "restricted securities" within the
meaning of Rule 144(a)(3) under the Securities Act, the
Company shall, during any period in which it is neither
subject to Section 13 or 15(d) of the Exchange Act nor exempt
from reporting under the Exchange Act pursuant to Rule
12g3-2(b) thereunder, provide to each Holder in connection
with the sale of any Security held by such Holder and to each
prospective transferee (designated by such Holder) of such
Security, upon the request of such Holder or prospective
transferee to the Company, the information required to be
provided pursuant to Rule 144A(d)(4) under the Securities
Act.
SECTION 7.3 Reports by Trustee.
(a) Subject to Section 1.7, the Trustee shall
transmit to Holders such reports concerning the Trustee and
its actions under this Indenture as may be required pursuant
to the Trust Indenture Act, within 120 days after January 1
of each year commencing with January 1, 1996, or at such
other times required by the Trust Indenture Act, and in the
manner provided therein.
(b) Subject to Section 1.7, a copy of each such
report shall, at the time of such transmission to Holders, be
filed by the Trustee with each stock exchange upon which the
Securities are listed, with the Commission and with the
Company. The Company will notify the Trustee when the
Securities are listed on any stock exchange.
SECTION 7.4 Reports by Company.
The Company will file with the Trustee and transmit
to the Holders, within 15 days after it files them with the
Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may by
rules and regulations prescribe) which the Company is
required to file with the Commission pursuant to Section 13
or 15(d) of the Exchange Act. Notwithstanding that the
Company may not be subject to Section 13 or 15(d) of the
Exchange Act, the Company shall continue to provide the
Trustee and the Holders with such annual reports and such
information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may by
rules and regulations prescribe) which are specified in
Sections 13 and 15(d) of the Exchange Act. The Company will
also comply with the applicable provisions of the Trust
Indenture Act.
ARTICLE 8
Supplemental Indentures
SECTION 8.1 Supplemental Indentures Without Consent of
Holders.
Without the consent of any Holders, the Company,
when authorized by a Board Resolution, and the Trustee, at
any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(a) to evidence the succession of another Person
to the Company and the assumption by any such successor
of the covenants of the Company herein and in the
Securities; or
(b) to add to the covenants of the Company for the
benefit of the Holders or an additional Event of
Default, or to surrender any right or power herein
conferred upon the Company; or
(c) to secure the Securities; or
(d) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with
respect to the Securities; or
(e) to cure any ambiguity, to correct or
supplement any provision herein which may be defective
or inconsistent with any other provision herein, or to
make any other provisions with respect to matters or
questions arising under this Indenture which shall not
be inconsistent with the provisions of this Indenture;
provided that such action pursuant to this clause (e)
shall not adversely affect the interests of the Holders
in any material respect.
SECTION 8.2 Supplemental Indentures with Consent of
Holders.
With the consent of the Holders of not less than
66 2/3% in principal amount of the Outstanding Securities
(exclusive of Securities held by the Company or its
Subsidiaries or affiliates), by Act of said Holders delivered
to the Company and the Trustee, the Company, when authorized
by a Board Resolution, and the Trustee may enter into an
indenture or indentures supplemental hereto for the purpose
of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders under this
Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(a) change the Stated Maturity of the principal
of, or any installment of interest on, any Security, or
reduce the principal amount thereof or the rate of
interest thereon or any premium payable upon the
redemption thereof, or change the place of payment
where, or the coin or currency in which, any Security or
any premium or interest thereon is payable, or impair
the right to institute suit for the enforcement of any
such payment on or after the Stated Maturity thereof
(or, in the case of redemption, on or after the
Redemption Date), or
(b) reduce the percentage in principal amount of
the Outstanding Securities, the consent of whose Holders
is required for any such supplemental indenture, or the
consent of whose Holders is required for any waiver of
compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences
provided for in this Indenture, or
(c) modify any of the provisions of this Section,
Section 5.13 or Section 9.6, except to increase any such
percentage or to provide that certain other provisions
of this Indenture cannot be modified or waived without
the consent of the Holder of each Outstanding Security
affected thereby; provided, however, that this Clause
shall not be deemed to require the consent of any Holder
with respect to changes in the references to "the
Trustee" and concomitant changes in this Section and
Section 9.6, or the deletion of this proviso, in
accordance with the requirements of Section 8.1(e).
It shall not be necessary for any Act of Holders
under this Section to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient
if such Act shall approve the substance thereof.
SECTION 8.3 Execution of Supplemental Indentures.
In executing, or accepting the additional trusts
created by, any supplemental indenture permitted by this
Article or the modifications thereby of the trusts created by
this Indenture, the Trustee shall be entitled to receive, and
(subject to Section 6.1) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by
this Indenture. The Trustee may, but shall not be obligated
to, enter into any such supplemental indenture which
adversely affects in a material way the Trustee's own rights,
duties or immunities under this Indenture or otherwise.
SECTION 8.4 Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture
under this Article, this Indenture shall be modified in
accordance therewith, and such supplemental indenture shall
form a part of this Indenture for all purposes; and every
Holder of Securities theretofore or thereafter authenticated
and delivered hereunder shall be bound thereby.
SECTION 8.5 Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to
this Article shall conform to the requirements of the Trust
Indenture Act.
SECTION 8.6 Reference in Securities to Supplemental
Indentures.
Securities authenticated and delivered after the
execution of any supplemental indenture pursuant to this
Article may, and shall if required by the Trustee, bear a
notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company
shall so determine, new Securities so modified as to conform,
in the opinion of the Trustee and the Company, to any such
supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities.
SECTION 8.7 Notice of Supplemental Indenture.
Promptly after the execution by the Company and the
Trustees of any supplemental indenture pursuant to Section
8.2, the Company shall transmit to the Holders a notice
setting forth the substance of such supplemental indenture.
ARTICLE 9
Affirmative Covenants
SECTION 9.1 Payment of Principal, Premium and Interest.
The Company will duly and punctually pay the
principal of and premium, if any, and interest on the
Securities in accordance with the terms of the Securities and
this Indenture.
SECTION 9.2 Maintenance of Office or Agency.
The Company will maintain in New York, New York an
office or agency, which office or agency may be maintained
through the Trustee or the Paying Agent, where Securities may
be presented or surrendered for payment, where Securities may
be surrendered for registration of transfer, where Securities
may be surrendered for exchange and where notices and demands
to or upon the Company in respect of the Securities and this
Indenture may be served. The Company will give prompt
written notice to the Trustee of the location, and any change
in the location, of any such office or agency. If at any
time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with
the address thereof, such presentations, surrenders, notices
and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations,
surrenders, notices and demands.
The Company may also from time to time designate
one or more other offices or agencies where the Securities
may be presented or surrendered for any or all such purposes
and may from time to time rescind such designations;
provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to
maintain an office or agency in New York, New York for such
purposes. The Company will give prompt written notice to the
Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
SECTION 9.3 Money for Security Payments to be Held in
Trust.
If the Company shall at any time act as its own
Paying Agent, it will, on or before each due date of the
principal of and premium, if any, or interest on any of the
Securities, segregate and hold in trust for the benefit of
the Persons entitled thereto a sum sufficient to pay the
principal and premium, if any, or interest so becoming due
until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the
Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying
Agents, it will, prior to each due date of the principal of
and premium, if any, or interest on any Securities, deposit
with a Paying Agent a sum sufficient to pay the principal and
any premium, if any, and interest so becoming due and (unless
such Paying Agent is the Trustee) the Company will promptly
notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent other than
the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the
Trustee, subject to the provisions of this Section, that such
Paying Agent will (a) hold all sums held by it for the
payment of principal and premium, if any, and interest on the
Securities in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided; and (b) at any time
during the continuance of any default by the Company (or any
other obligor upon the Securities) in the making of any
payment in respect of the Securities, upon the written
request of the Trustee, forthwith pay to the Trustee all sums
held in trust by such Paying Agent for payment in respect of
the Securities.
The Company may at any time, for the purpose of
obtaining the satisfaction and discharge of this Indenture or
for any other purpose, pay, or by Company Order direct any
Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums
were held by the Company or such Paying Agent; and, upon such
payment by any Paying Agent to the Trustee, such Paying Agent
shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying
Agent or then held by the Company, in trust for the payment
of the principal of and premium, if any, or interest on any
Security and remaining unclaimed for two years after such
principal and premium, if any, or interest has become due and
payable shall be paid to the Company on Company Request, or
(if then held by the Company) shall be discharged from such
trust; and the Holder of such Security shall thereafter, as
an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all
liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying
Agent, before being required to make any such repayment, may
at the expense of the Company cause to be published once, in
a newspaper published in the English language, customarily
published on each Business Day and of general circulation in
New York, New York, notice that such money remains unclaimed
and that, after a date specified therein, which shall not be
less than 30 days from the date of such publication, any
unclaimed balance of such money then remaining will be repaid
to the Company.
SECTION 9.4 Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120
days after the end of each fiscal year of the Company ending
after the date hereof, an Officers' Certificate stating
whether or not to the best knowledge of the signers thereof
after due inquiry the Company is in default in the
performance and observance of any of the terms, provisions
and conditions of this Indenture (without regard to any
period of grace or requirement of notice provided hereunder)
and, if the Company shall be in default, specifying all such
defaults and the nature and status thereof of which they may
have knowledge.
SECTION 9.5 Existence.
Subject to Section 10.7, the Company will, and will
cause each of its Subsidiaries to, do or cause to be done all
things necessary to preserve and keep in full force and
effect its existence, rights (charter and statutory) and
franchises; provided, however, that neither the Company nor
any Subsidiary will be required to preserve any such right or
franchise if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of
the business of the Company and that the loss thereof is not
disadvantageous in any material respect to the Holders.
SECTION 9.6 Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be
paid or discharged, before any penalty accrues from the
failure to so pay or discharge, (a) all taxes, assessments
and governmental charges levied or imposed upon the Company
or any Subsidiary or upon the income, profits or property of
the Company or any Subsidiary, and (b) all lawful claims for
labor, materials and supplies which, if unpaid, might by law
become a Lien upon the property of the Company or any
Subsidiary; provided, however, that the Company shall not be
required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim the
amount, applicability or validity of which is being contested
in good faith by appropriate proceedings and for which
adequate provision has been made.
SECTION 9.7 Maintenance of Properties.
The Company will, and will cause each of its
Subsidiaries to, maintain its respective properties and
assets (including all licenses) in good working order and
condition (ordinary wear and tear excepted) and make all
necessary repairs, renewals, replacements, additions,
betterments and improvements thereto, as, in the reasonable
judgment of the Company in its sole discretion, shall be
reasonably necessary for the proper conduct of its business.
SECTION 9.8 Access to Properties, Books and Records.
The Company will keep proper books of record and account in
which full and correct entries will be made of its
transactions in accordance with GAAP. Upon the written
request of the Trustee, the Company will permit the Trustee
and its agents, auditors, attorneys and counsel, at all
reasonable times, to examine all the books of record and
account of the Company and to take copies and extracts
therefrom. The Company will from time to time furnish , or
cause to be furnished, to the Trustee such information and
statements as it may reasonably request with respect to the
performance or observance by the Company of the covenants,
conditions and obligations contained in this Indenture.
SECTION 9.9 Compliance with Laws.
Each of the Company and its Subsidiaries will
comply with all applicable Federal, state, local and foreign
laws, rules, regulations or ordinances.
SECTION 9.10 Environmental Law Compliance.
Each of the Company and its Subsidiaries will
comply with, or operate pursuant to valid waivers of, the
provisions of all Environmental Laws, where a failure to
comply or operate pursuant to a valid waiver could 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 or the ability of the
Company to perform its obligations hereunder; provided that
the Company shall not be deemed to have breached or violated
this covenant if the necessity of such compliance or
operation pursuant to a valid waiver is being contested in
good faith through appropriate proceedings.
SECTION 9.11 Maintenance of Insurance.
Each of the Company and its Subsidiaries will
maintain, with financially sound and reputable insurance
companies, insurance on all its property in at least such
amounts and against at least such risks as are usually
insured against in the same general area by companies of
established repute engaged in the same or similar business.
SECTION 9.12 Waiver of Certain Covenants.
The Company may omit in any particular instance to
comply with any covenant or condition set forth in Section
9.5, 9.6 or 9.7, if before the time for such compliance the
Holders of at least a majority in principal amount of the
Outstanding Securities shall, by Act of such Holders, either
waive such compliance in such instance or generally waive
compliance with such covenant or condition, but no such
waiver shall extend to or affect such covenant or condition
except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company
and the duties of the Trustee in respect of any such covenant
or condition shall remain in full force and effect.
ARTICLE 10
Negative Covenants
SECTION 10.1 Maintenance of Fixed Charges Coverage Ratio.
The Company will maintain a Fixed Charges Coverage
Ratio in excess of 1.4:1.0 for the first year and thereafter
1.5:1.0.
SECTION 10.2 Maintenance of Net Worth.
The Company will maintain at all times a Tangible
Net Worth in excess of $160,000,000, plus 50% of the
cumulative Consolidated Net Income during any period after
March 31, 1995 (taken as one accounting period), calculated
quarterly but excluding from such calculations of
Consolidated Net Income for purposes of this clause any
quarter in which the Consolidated Net Income is negative.
SECTION 10.3 Limitation on Indebtedness.
(a) The Company will not become liable for any
Indebtedness unless immediately thereafter the aggregate
amount of Indebtedness shall not exceed 90% of Consolidated
Tangible Net Worth.
(b) The Company will not permit any Subsidiary to
create, incur, assume or become liable, contingently or
otherwise, with respect to any Indebtedness that is senior to
the Securities; provided, however, that any Subsidiary may
incur Indebtedness that is senior to the Securities if such
Indebtedness is (i) incurred in the ordinary course of
business in connection with a governmental authority (federal
or state) requiring financial assurance, letters of credit,
or payment and performance bonds in order to obtain, maintain
or renew a permit or other approval to operate its business
or (ii) incurred in connection with the posting of any letter
of credit or payment on performance bonds required in
connection with contracts for the performance of services
entered into in the ordinary course of business.
Notwithstanding the foregoing, any Subsidiary shall be
permitted to create Liens referred to in Section 10.6(i).
(c) The provisions of this Section will not
prevent the Company or any Subsidiary from becoming liable
for any Indebtedness for the purpose of extending, renewing
or refunding its Indebtedness as long as the outstanding
consolidated Indebtedness is not thereby increased
immediately after giving effect to such Indebtedness.
SECTION 10.4 Limitation on Liens.
The Company will not, and will not permit any
Subsidiary to, directly or indirectly, create, incur, assume
or permit to exist any Lien on or with respect to any
property or asset of any character of the Company or any of
its Subsidiaries (whether held on the date hereof or
hereafter acquired) or any interest therein or any income or
profits therefrom except:
(a) Liens for taxes, assessments or governmental
charges or levies either not yet due or the payment of
which is not at the time required by Section 9.6;
(b) statutory Liens of landlords and Liens of
carriers, warehousemen, mechanics, materialmen and other
similar Persons incurred in the ordinary course of
business for sums either not yet due or the payment of
which is not at the time required by Section 9.6;
(c) Liens incurred or deposits made in the
ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of
social security, or to secure the performance of
tenders, statutory obligations, bids, government
contracts, performance and return-of-money bonds and
other similar obligations (exclusive in any case of
obligations incurred in connection with the borrowing of
money or the obtaining of advances or credit other than
those (i) incurred in the ordinary course of business in
connection with a governmental authority (federal or
state) requiring financial assurance, letters of credit,
or payment and performance bonds in order to obtain,
maintain or renew a permit or other approval to operate
its business or (ii) incurred in connection with the
posting of any letter of credit or payment on
performance bonds required in connection with contracts
for the performance of services entered into in the
ordinary course of business);
(d) Liens incidental to the conduct of business or
to the ownership of property of a character which
customarily exist on properties of corporations engaged
in similar activities and similarly situated and which
were not incurred in connection with the borrowing of
money or the obtaining of advances or credit, and which
do not, individually or in the aggregate, interfere with
the ordinary conduct of the business of the Company or
any of its Subsidiaries or detract from the value or use
of the properties subject to any such Liens;
(e) any attachment, judgment or other similar Lien
arising in connection with court proceedings, so long as
(i) the execution or other enforcement of such Lien is
effectively stayed and the claims secured thereby are
being actively contested in good faith and by
appropriate proceedings diligently conducted and
effective to prevent the forfeiture or sale of any
property of the Company or any Subsidiary or any
interference with the ordinary use thereof by the
Company or any Subsidiary, and (ii) such reserve or
other appropriate provision, if any, in the amount and
of the type as shall be required by GAAP shall be
maintained therefor;
(f) Liens on assets of any Subsidiary securing
Indebtedness or other obligations of such Subsidiary
owing to the Company;
(g) Liens described on Schedule 10.6 existing on
the date of this Agreement and securing existing
Indebtedness; provided that (i) no such Lien shall at
any time be extended to or cover any property of the
Company or any Subsidiary other than the property
subject thereto on the date hereof and (ii) the
principal amount of the Indebtedness secured by such
Liens shall not be extended, renewed, refunded or
refinanced;
(h) Liens securing Indebtedness relating to
industrial development bonds ("IDB Debt"); provided that
no such Lien shall at any time extend to or cover any
property of the Company or any Subsidiary other than the
equipment and facilities acquired or constructed with
the proceeds of such IDB Debt, real property appurtenant
to such facilities, and proceeds of such equipment,
facilities and real property; and
(i) Liens (including capitalized lease
obligations) created solely to secure the deferred
purchase price of fixed assets useful and intended to be
used in carrying on the business of the Company and its
Subsidiaries acquired or constructed by the Company or
any Subsidiary after the date hereof, or any Lien
(including a capitalized lease obligation) created to
secure Indebtedness incurred solely for the purpose of
financing the acquisition or construction, as the case
may be, of any such asset (if such Indebtedness is
incurred at the time of or within 90 days after such
acquisition or the completion of such construction) or
any Lien existing on acquired assets at the time of
acquisition thereof, or, in the case of any Person which
hereafter becomes a Subsidiary, any Lien in respect of
its assets existing at the time such Person becomes a
Subsidiary; provided that:
(i) no such Lien shall at any time extend to
or cover any asset of the Company or any of its
Subsidiaries other than the acquired assets on
which it was originally imposed and improvements
thereto and proceeds thereof, and
(ii) at the time of and immediately after
giving effect to the creation or incurrence of each
such Lien, the aggregate principal amount of all
Indebtedness secured by all such Liens on any such
asset shall not exceed an amount equal to the
lesser of (A) the purchase price of such asset
(including, for purposes of determining such
purchase price, the principal amount of any pre-
existing Indebtedness secured by any such Liens,
whether or not the Company or a Subsidiary has any
personal liability with respect thereto) and (B)
the fair market value of such asset (as determined
by the Board of Directors) at such time.
SECTION 10.5 Limitation on Sale/Leaseback Transactions.
The Company will not, nor will it permit any
Subsidiary to enter into, or otherwise become liable with
respect to, any Sale/Leaseback Transaction unless the
proceeds of the sale of the assets to be leased are applied
within 180 days to the purchase or acquisition (or, in the
case of real property, the construction) of assets to be used
in the Company's business or to the retirement of Funded
Debt; provided, however, that in the event of a
Sale/Leaseback Transaction involving assets having a book
value of more than $25,000,000, the proceeds of the sale of
the assets to be leased shall be at least equal to their fair
market value.
SECTION 10.6 Limitations on Dividends, Acquisitions of
Stock, Investments in Subsidiaries, and
Restricted Investments.
(a) Neither the Company nor any Subsidiary will
pay dividends or make other distributions of cash, securities
or other property or assets on any capital stock of the
Company or such Subsidiaries, redeem, purchase or otherwise
acquire or retire capital stock of the Company or such
Subsidiaries, make investments in or advances to Subsidiaries
or make any Restricted Investments, unless immediately after
giving effect thereto (i) no Event of Default shall have
occurred or be continuing, (ii) the Company could incur an
additional $1 of Indebtedness under Section 10.3, and (iii)
the aggregate of all such payments after March 31, 1995 would
not exceed the sum of (A) 25% of Consolidated Net Income (net
of any consolidated net loss) from March 31, 1995 plus (B)
the net cash proceeds to the Company and its Subsidiaries
from issuance or sale on and after March 31, 1995 (other than
to the Company or a Subsidiary) of any capital stock of the
Company and of any convertible debt which has been converted
into capital stock of the Company, plus (C) any net return of
capital from investments in or advances to Subsidiaries or
Restricted Investments.
(b) The Company will not 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
by-laws) that directly or indirectly restricts in any manner
its ability to pay dividends or similar distributions on
account of
its stock to the Company other than as provided in this
Section.
SECTION 10.7 Limitation on Consolidation or Merger.
Neither the Company nor any Subsidiary will
consolidate with or merge into any other Person or convey,
transfer or lease its properties and assets other than in the
ordinary course of business to any Person, and the Company
shall not permit any Person to consolidate with or merge into
the Company, unless:
(a) in case the Company shall consolidate with or
merge into another Person or convey, transfer or lease
its properties and assets substantially as an entirety
to any Person, the Person formed by such consolidation
or into which the Company is merged or the Person which
acquires by conveyance or transfer, or which leases, the
properties and assets of the Company substantially as an
entirety shall be a corporation, partnership or trust,
shall be organized and validly existing under the laws
of the United States of America, any State thereof or
the District of Columbia and shall expressly assume, by
an indenture supplemental hereto, executed and delivered
to the Trustee, in form satisfactory to the Trustee, the
due and punctual payment of the principal of and
premium, if any, and interest on all the Securities and
the performance or observance of every covenant of this
Indenture on the part of the Company to be performed or
observed;
(b) immediately after giving effect to such
transaction, no Event of Default, and no event which,
after notice or lapse of time or both, would become an
Event of Default, shall have happened and be continuing;
(c) immediately after giving effect to such
transaction, the continuing corporation could incur an
additional $1 of Indebtedness pursuant to Section 10.3;
(d) such consolidation, merger, conveyance,
transfer or lease does not adversely affect the validity
or enforceability of the Securities; and
(e) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each
stating that such consolidation, merger, conveyance,
transfer or lease and, if a supplemental indenture is
required in connection with such transaction, such
supplemental indenture comply with this Article and that
all conditions precedent herein provided for relating to
such transaction have been complied with.
Upon any consolidation of the Company with, or
merger of the Company into, any other Person or any
conveyance, transfer or lease of the properties and assets of
the Company substantially as an entirety in accordance with
this Section, the successor Person formed by such
consolidation or into which the Company is merged or to which
such conveyance, transfer or lease is made shall succeed to,
and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same
effect as if such successor Person had been named as the
Company herein, and thereafter, except in the case of a
conveyance, transfer or lease, the predecessor Person shall
be relieved of all obligations and covenants under this
Indenture and the Securities.
SECTION 10.8 Limitation on Sale of Assets.
Other than in the ordinary course of business, the
Company will not, and will not permit any Subsidiary to, sell
or otherwise dispose of any assets if, on a pro forma basis,
the aggregate net book value of all such sales (on a
consolidated basis) (a) during the most recent 12-month
period would exceed 10% of Consolidated Net Tangible Assets
of the Company and its Subsidiaries and (b) from and after
the date hereof would exceed 20% of Consolidated Net Tangible
Assets of the Company and its Subsidiaries, in each case
computed at the end of the most recent quarter preceding such
sale; provided, however, that any such sales shall be
disregarded for purposes of this limitation if the proceeds
are used (x) to acquire, within 180 days, productive assets
for the Company or its Subsidiaries or (y) to reduce Funded
Debt of the Company or its Subsidiaries. Notwithstanding the
foregoing, neither the Company nor any Subsidiary will sell
or otherwise dispose of any common stock of any Subsidiary.
SECTION 10.9 Transactions with Affiliates.
Neither the Company nor any Subsidiary will (a)
enter into or be a party to any transaction with any
Affiliate of the Company or such Subsidiary, except as
otherwise provided herein or in the ordinary course of and
pursuant to the reasonable requirements of the Company's or
such Subsidiary's business and upon fair and reasonable terms
that are fully disclosed to the or contained in documents
filed with the Commission pursuant to Section 7.4 and are no
less favorable to the Company or such Subsidiary than could
be obtained in a comparable arm's length transaction with a
Person not an Affiliate of the Company or such Subsidiary, or
(b) enter into any agreement or transaction to pay to any
Person any management or similar fee based on or related to
the Company's or such Subsidiary's operating performance or
income or any percentage thereof, nor pay any management or
similar fee to an Affiliate.
SECTION 10.10 Nature of Business.
The Company and its Subsidiaries provide full service
hazardous chemical and waste management, including
containment, collection, packaging, transportation,
treatment, analysis, and disposal by incineration and other
methods, and without limiting the ability of the Company or
its Subsidiaries from conducting ancillary or unrelated
businesses, the Company agrees not to substantially alter the
general nature of its business taken as a whole.
SECTION 10.11 ERISA Matters.
Neither the Company nor any of its Subsidiaries
will:
(a) terminate or withdraw from any Plan resulting
in the incurrence of any material liability to the
Pension Benefit Guaranty Corporation;
(b) 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;
(c) 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
(d) allow or suffer to exist any risk or condition
which presents a risk of incurring a material liability
to the Pension Benefit Guaranty Corporation.
ARTICLE 11
Redemption of Securities
SECTION 11.1 Right of Redemption.
The Securities may be redeemed otherwise than
through operation of the sinking fund provided for in Article
12 at the election of the Company at any time in whole or
from time to time in part (in a minimum principal amount of
$1,000,000 and in integral multiples of $1,000 in excess
thereof), each such Redemption to be made at 100% of the
principal amount of the Securities so to be prepaid together
with interest accrued on such principal amount to the date of
prepayment, plus premium, if any.
SECTION 11.2 Applicability of Article.
Redemption of Securities at the election of the
Company as permitted by any provision of this Indenture shall
be made in accordance with such provision and this Article.
SECTION 11.3 Election to Redeem; Notice to Trustee.
The election of the Company to redeem any
Securities pursuant to Section 11.1 shall be evidenced by a
Board Resolution. In case of any redemption at the election
of the Company of less than all the Securities of any series,
the Company shall, at least 30 days prior to the Redemption
Date fixed by the Company (unless a shorter period shall be
satisfactory to the Trustee), notify the Trustee of such
Redemption Date and of the principal amount of Securities of
such series to be redeemed. In case of any redemption at the
election of the Company of all of the Securities, the Company
shall, at least 30 days prior to the Redemption Date fixed by
the Company (unless a shorter period shall be satisfactory to
the Trustee), notify the Trustee of such Redemption Date.
SECTION 11.4 Selection by Trustee of Securities to Be
Redeemed.
If less than all the Securities are to be redeemed,
the particular Securities to be redeemed shall be selected
not more than 60 days prior to the Redemption Date by the
Trustee, from the Outstanding Securities not previously
called for redemption, by lot and which may provide for the
selection for redemption of portions (equal to $1,000 or any
integral multiple thereof) of the principal amount of
Securities of a denomination larger than $1,000. In any case
where more than one Security is registered in the same name,
the Trustee in its discretion may treat the aggregate
principal amount so registered as if it were represented by
one Security.
The Trustee shall promptly notify the Company and
each Security Registrar in writing of the Securities selected
for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be
redeemed.
For all purposes of this Indenture, unless the
context otherwise requires, all provisions relating to the
redemption or Securities shall relate, in the case of any
Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has
been or is to be redeemed.
SECTION 11.5 Notice of Redemption.
Notice of redemption shall be given by first-class
mail, postage prepaid, mailed not less than 30 nor more than
60 days prior to the Redemption Date, to each Holder of
Securities to be redeemed, at his address appearing in the
Security Register.
All notices of redemption shall state:
(a) the Redemption Date,
(b) the Redemption Price,
(c) if less than all the Outstanding Securities
are to be redeemed, the identification (and, in the case
of partial redemption of any Securities, the principal
amounts) of the particular Securities to be redeemed,
(d) that on the Redemption Date the Redemption
Price will become due and payable upon each such
Security to be redeemed and that interest thereon will
cease to accrue on and after said date,
(e) the place or places where such Securities are
to be surrendered for payment of the Redemption Price,
and
(f) that the redemption is for the sinking fund,
if such is the case.
Notice of redemption of Securities to be redeemed
at the election of the Company shall be given by the Company
or, at the Company's request, by the Trustee in the name and
at the expense of the Company.
SECTION 11.6 Deposit of Redemption Price.
At or prior to the opening of business on any
Redemption Date, the Company shall deposit with the Trustee
or with a Paying Agent (or, if the Company is acting as its
own Paying Agent, segregate and hold in trust as provided in
Section 9.3) an amount of available funds sufficient to pay
the Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date) accrued interest on, all
the Securities or portions thereof which are to be redeemed
on that date.
SECTION 11.7 Securities Payable on Redemption Date.
Notice of redemption having been given as
aforesaid, the Securities so to be redeemed shall, on the
Redemption Date, become due and payable at the Redemption
Price therein specified, and from and after such date (unless
the Company shall default in the payment of the Redemption
Price and accrued interest) such Securities shall cease to
bear interest. Upon surrender of any such Security for
redemption in accordance with said notice, such Security
shall be paid by the Company at the Redemption Price,
together with accrued interest to the Redemption Date;
provided, however, that installments of interest whose
Maturity is on or prior to the Redemption Date shall be
payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of
business on the relevant Record Dates according to their
terms and the provisions of Section 3.7.
If any Security called for redemption shall not be
so paid upon surrender thereof for redemption, the principal
and premium, if any, shall, until paid, bear interest from
the Redemption Date at the rate borne by the Security.
SECTION 11.8 Securities Redeemed in Part.
Any Security which is to be redeemed only in part
shall be surrendered at an office or agency of the Company
maintained for that purpose pursuant to Section 9.2 (with, if
the Company or the Trustee so requires, due endorsement by,
or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), and the
Company shall execute, and the Trustee shall authenticate and
deliver to the Holder of such Security without service
charge, a new Security or Securities, of any authorized
denomination as requested by such Holder, in aggregate
principal amount equal to and in exchange for the unredeemed
portion of the principal of the Security so surrendered.
ARTICLE 12
Sinking Fund
SECTION 12.1 Sinking Fund Payments.
As and for a sinking fund for the retirement of the
Securities, the Company will, until all Securities are paid
or payment thereof provided, deposit in accordance with
Section 11.6, on or prior to March 31 in each year,
commencing in 2001 through 2005, an amount equal to one-fifth
of the total amount outstanding under this Indenture.
The cash amount of any sinking fund payment is
subject to reduction as provided in Section 12.2. Each
sinking fund payment shall be applied to the redemption of
Securities on such March 31 as herein provided.
SECTION 12.2 Satisfaction of Sinking Fund
Payments with Securities.
The Company (a) may deliver Outstanding Securities
(other than any previously called for redemption) and (b) may
apply as a credit Securities which have been redeemed at the
election of the Company pursuant to Section 11.1, in each
case in satisfaction of all or any part of any sinking fund
payment required to be made pursuant to section 12.1;
provided that such Securities have not been previously so
credited. Each such Security shall be received and credited
for such purpose by the Trustee at the Redemption Price
specified in the form of Security hereinbefore set forth for
redemption through operation of the sinking fund and the
amount of such sinking fund payment shall be reduced
accordingly.
SECTION 12.3 Redemption of Securities for Sinking Fund.
On or before 60 days prior to March 31 in each year
commencing with year 2000 and ending in year 2005, the
Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund
payment pursuant to Section 12.1, the portion thereof, if
any, which is to be satisfied by payment of cash and the
portion thereof, if any, which is to be satisfied by
delivering and crediting Securities pursuant to Section 12.2
and will also deliver to the Trustee any Securities to be so
delivered. Upon receipt of such Officers' Certificate, the
Trustee shall select the Securities to be redeemed upon the
next ensuing March 31 in the manner specified in Section 11.4
and cause notice of the redemption thereof to be given in the
name of and at the expense of the Company in the manner
provided in Section 11.5. Such notice having been duly
given, the redemption of such Securities shall be made upon
the terms and in the manner stated in Sections 11.7 and 11.8.
This instrument may be executed in any number of
counterparts each of which when so executed shall be deemed
to be an original, but all such Counterparts shall together
constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused
this Indenture to be duly executed, and their respective
corporate seals to be hereunto affixed and attested, all as
of the day and year first above written.
ROLLINS ENVIRONMENTAL SERVICES, INC.
By
Name:
Title:
Attest:
FIRST FIDELITY BANK, NATIONAL
ASSOCIATION, as Trustee
By
Name:
Title:
Attest:
)
) ss.:
)
On the day of , 1995,
before me personally came ______________________________, to
me known, who, being by me duly sworn, did depose and say
that he is ____________________________________ of Rollins
Environmental Services, Inc., one of the corporations
described in and which executed the foregoing instrument;
that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it
was so affixed by authority of the Board of Directors of said
corporation; and that he signed his name thereto by like
authority.
)
) ss.:
)
On the __________ day of ________________, 1995,
before me personally came ______________________________, to
me known, who, being by me duly sworn, did depose and say
that he is ______________________________________________ of
First Fidelity Bank, N. A., a national banking association,
one of the entities described in and which executed the
foregoing instrument; that he knows the seal of said
association; that the seal affixed to said instrument is such
seal; that it was so affixed by authority of the Board of
Directors of said association; and that he signed his name
thereto by like authority.
<PAGE>
EXHIBIT A
FORM OF RULE 144A/REGULATION S CERTIFICATE
______________________, as Security Registrar
____________________________________
____________________________________
____________________________________
Re: Rollins Environmental Services, Inc.
7.75% Senior Unsecured Debentures Due 2005
(the "Securities")
The undersigned (the "Transferor") has requested
the Security Registrar to register the transfer to [name of
transferee] of U.S. $___________ principal amount of
Securities which are held by the Transferor in [book-entry
form with The Depository Trust Company ("DTC")] [the form of
definitive Securities bearing the following identification
numbers:
In connection with such request, the Transferor
does hereby certify that such Securities to be transferred
were offered and sold pursuant to the terms of the following
rule or regulation of the U.S. Securities and Exchange
Commission under the Securities Act of 1933, as amended:
[check one] / / Rule 144A
/ / Regulation S
and makes the further representations and warranties set
forth below (as applicable) as to the offer and sale of such
Securities. Terms used in this certificate have the meanings
set forth in Rule 144A or Regulation S.
IF PURSUANT TO RULE 144A:
The Transferor (and any person acting on its
behalf) (a) reasonably believes that the purchaser of such
Securities is a "qualified institutional investor" (b), has
taken reasonable steps to ensure that the purchaser is aware
that the Transferor may rely on Rule 144A in making such
offer or sale and (c) at or prior to the time of sale of the
Securities, has delivered to the Transferee any information
concerning the issuer of the Securities which the Transferee
has requested (and the Transferor has received) in accordance
with subsection (d)(4) of Rule 144A.
IF PURSUANT TO REGULATION S:
The offer and sale was made in an "offshore
transaction" and no "directed selling efforts" have been made
in the United States in connection therewith.
This certificate and the statements made herein are
for your benefit and that the issuer of the Securities.
[Name of Transferor]
by
Name:
Title
Dated:
EXHIBIT 4(b)
ROLLINS ENVIRONMENTAL SERVICES, INC.
AND
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
as Trustee
Indenture
Dated as of March 31, 1995
$66,000,000
7.25% Convertible Subordinated Debentures Due March 31, 2005
INDENTURE, dated as of March 31, 1995 between
ROLLINS ENVIRONMENTAL SERVICES, INC., a corporation duly
organized and existing under the laws of the State of
Delaware (herein called the "Company"), having its principal
executive offices at 2200 Concord Pike, One Rollins Plaza,
Wilmington, Delaware 19803, and TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, a national banking association organized and
existing under the laws of the United States of America, as
Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an
issue of its 7.25% Convertible Subordinated Debentures due
March 31, 2005 (herein called the "Securities") of
substantially the tenor and amount hereinafter set forth, and
to provide therefor the Company has duly authorized the
execution and delivery of this Indenture.
All things necessary to make the Securities, when
executed by the Company and authenticated and delivered
hereunder and duly issued by the Company, the valid
obligations of the Company, and to make this Indenture a
valid agreement of the Company, in accordance with their and
its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the
purchase of the Securities by the Holders thereof, it is
mutually agreed, for the equal and proportionate benefit of
all Holders of the Securities, as follows:
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 101. Definitions.
For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise
requires:
(a) the terms defined in this Article have the
meanings assigned to them in this Article and include
the plural as well as the singular;
(b) all other terms used herein which are defined
in the Trust Indenture Act, either directly or by
reference therein, have the meanings assigned to them
therein;
(c) all accounting terms not otherwise defined
herein have the meanings assigned to them in accordance
with generally accepted accounting principles, and,
except as otherwise herein expressly provided the term
"generally accepted accounting principles" with respect
to any computation required and permitted hereunder
shall mean such accounting principles as are generally
accepted and accepted and adopted by the Company at the
date of this Indenture; and
(d) the words "herein", "hereof" and "hereunder"
and other words of similar import refer to this
Indenture as a whole and not to any particular Article,
Section or other subdivision.
Certain terms used in Article Eleven, Twelve or
Thirteen are defined in such Article.
"Act", when used with respect to any Holder, has
the meaning specified in Section 104.
"Affiliate" of any specified Person means any other
Person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified
Person. For the purposes of this definition, "control" when
used with respect to any specified Person means the power to
direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to
the foregoing.
"Authenticating Agent" means any Person authorized
by the Trustee pursuant to Section 614 to act on behalf of
the Trustee to authenticate Securities.
The term "Beneficial Owner" is determined in
accordance with Rule 13d-3, promulgated by the Commission
under the Exchange Act.
"Board of Directors" means either the board of
directors of the Company or any duly authorized committee of
that board.
"Board Resolution" means a copy of a resolution
certified by the Secretary or an Assistant Secretary of the
Company to have been duly adopted by the Board of Directors
and to be in full force and effect on the date of such
certification and delivered to the Trustee.
"Business Day" means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which
banking institutions in New York, New York or the city in
which the Corporate Trust Office is located are authorized or
obligated to close by law or executive order.
"Closing Price" has the meaning specified in
Section 1304(h).
"Commission" means the Securities and Exchange
Commission, as from time to time constituted, created under
the Exchange Act, or, if at any time after the execution of
this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties at such
time.
"Common Stock" includes any stock of any class of
the Company which has no preference in respect of dividends
or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding-up of the
Company and which is not subject to redemption by the
Company. However, subject to the provisions of Section 1108
and Section 1309, shares issuable on redemption or conversion
of Securities shall include only shares of the class
designated as Common Stock at the date of this Indenture or
shares of any class or classes resulting from any
reclassification or reclassifications thereof and which have
no preference in respect of dividends or of amounts payable
in the event of any voluntary or involuntary liquidation,
dissolution or winding-up of the Company and which are not
subject to redemption by the Company; provided, that if at
any time there shall be more than one such resulting class,
the shares of each such class then so issuable shall be
substantially in the proportion which the total number of
shares of such class resulting from all such
reclassifications bears to the total number of shares or all
such classes resulting from all such reclassifications.
"Company" means the Person named as the "Company"
in the first paragraph of this instrument until a Successor
Person shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Company" shall
mean such successor Person.
"Company Request" or "Company Order" means a
written request or order signed in the name of the Company by
its Chairman of the Board, its Vice Chairman of the Board,
its President or a Vice President, and by its Treasurer, an
Assistant Treasurer, its Secretary or an Assistant Secretary,
and delivered to the Trustee.
"Continuing Directors" means any directors of the
Company who either (a) were directors of the Company on the
date of issuance or the securities or (b) became directors of
the Company subsequent to the date of the issuance of the
Securities and whose election or nomination for election by
the shareholders of the Company was duly approved by the
Continuing Directors who were at the time of election or
nomination directors of the Company, either by a specific
vote or by approval of the proxy statement issued by the
Company in which such individual was named as a nominee for
director of the Company.
"Conversion Price" has the meaning specified in
Section 203 as the same may be adjusted pursuant to Section
1304.
"Corporate Trust Office" means the office of the
Trustee in Austin, Texas, or such other location as the
Trustee designates.
"Corporation" means a corporation, association,
company, joint-stock company or business trust.
"Current Market Price" has the meaning specified in
Section 1304.
"Defaulted Interest" has the meaning specified in
Section 307.
"Event of Default" has the meaning specified in
Section 501.
"Exchange Act" means the Securities Exchange Act of
1934, as amended.
"Holder" means a Person in whose name a Security is
registered in the Security Register.
"Indenture" means this instrument as originally
executed or as it may from time to time be supplemented or
amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof, including,
for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are
deemed to be a part of and govern this instrument and any
such supplemental indenture, respectively.
"Interest Payment Date" means the Stated Maturity
of an installment of interest on the Securities.
"Maturity", when used with respect to any Security,
means the date on which the principal of such Security
becomes due and payable as therein or herein provided,
whether at the Stated Maturity thereof or by declaration of
acceleration, redemption or otherwise.
"Officers' Certificate" means a certificate signed
by the Chairman of the Board, the Vice Chairman of the Board,
the President or a Vice President, and by the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary,
of the Company, and delivered to the Trustee. One of the
officers signing an Officers' Certificate given pursuant to
Section 1004 shall be the principal executive, financial or
accounting officer of the Company.
"Opinion of Counsel" means a written opinion of
counsel, who may be counsel for or an employee of the
Company.
"Outstanding", when used with respect to
Securities, means, as of the date of determination, all
Securities theretofore authenticated and delivered under this
Indenture, except:
(a) Securities theretofore cancelled by the
Trustee or delivered to the Trustee for cancellation;
(b) Securities, or portions thereof, for the
payment or redemption of which moneys in the necessary
amount have been theretofore deposited with the Trustee
or any Paying Agent (other than the Company) in trust or
set aside and segregated in trust by the Company (if the
Company shall act as its own Paying Agent) for the
Holders of such Securities, provided, that if such
Securities, or portions thereof, are to be redeemed,
notice of such redemption has been duly given pursuant
to this Indenture or provision therefore satisfactory to
the Trustee has been made; and
(c) Securities which have been paid pursuant to
Section 306 or in exchange for or in lieu of which other
Securities have been authenticated and delivered
pursuant to this Indenture, other than any such
Securities in respect of which there shall have been
presented to the Trustee proof satisfactory to it that
such Securities are held by a bona fide purchaser in
whose hands such Securities are valid obligations of the
Company;
provided, however, that in determining whether the Holders of
the requisite principal amount of the Outstanding Securities
have given any request, demand, authorization, direction,
notice, consent or waiver under Securities owned by the
Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying
upon any such request, demand, authorization, direction,
notice, consent or waiver, only Securities which the Trustee
knows to be so owned shall be so disregarded. Securities so
owned which have been pledged in good faith may be regarded
as Outstanding if the pledgee establishes to the satisfaction
of the Trustee the pledgee's right so to act with respect to
such Securities and that the pledge is not the Company or any
other obligor upon the Securities or any Affiliate of the
Company or of such other obligor.
"Paying Agent" means any Person authorized by the
Company to pay the principal of and premium, if any, or
interest on any Securities on behalf of the Company.
"Person" means any individual, Corporation,
partnership, joint venture, trust, unincorporated
organization or government or any agency or political
subdivision thereof.
"Predecessor Security" of any particular Security
means every previous Security evidencing all or a portion of
the same debt as that evidenced by such particular Security;
and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for
or in lieu of a mutilated, destroyed, lost or stolen Security
shall be deemed to evidence the same debt as the mutilated,
destroyed, lost or stolen Security.
"Record Date" means either a Regular Record Date or
a Special Record Date, as applicable.
"Redemption Date", when used with respect to any
Security to be redeemed, means the date fixed for such
redemption by or pursuant to this Indenture.
"Redemption Event" has the meaning specified in
Section 1401.
"Redemption Price", when used with respect to any
Security to be redeemed, means the number of shares of Common
Stock to be delivered upon redemption pursuant to this
Indenture on the applicable Redemption Date.
"Regular Record Date", for the interest payable on
any Interest Payment Date, means the August 31 or February 28
(whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date.
"Security Register" and "Security Registrar" have
the respective meanings specified in Section 305.
"Senior Indebtedness" means the principal of and
premium, if any, and interest on (a) all indebtedness of the
Company or any Subsidiary for money borrowed, other than the
Securities, whether outstanding on the date of execution of
this Indenture or thereafter created, incurred or assumed,
including, but not limited to, the 7.75% Senior Unsecured
Debentures Due 2010, excluding such indebtedness that by the
terms of the instrument or instruments by which such
indebtedness was created or incurred expressly provides that
it (i) is junior in right of payment to the Securities, or
(ii) ranks pari passu with the Securities, and (b)
amendments, renewals, extensions, modifications and
refundings of any such indebtedness. For the purposes of
this definition, "indebtedness for money borrowed" when used
with respect to the Company and any Subsidiary means (x) any
obligation of, or any obligation guaranteed by, the Company
or any Subsidiary for the repayment of borrowed money,
whether or not evidenced by bonds, debentures, notes or other
written instruments, (y) any deferred payment obligation of,
or any such obligation guaranteed by, the Company or any
Subsidiary for the payment of the purchase price of property
or assets evidenced by a note or similar instrument, and (z)
any obligation of, or any such obligation guaranteed by, the
Company or any Subsidiary for the payment of rent or other
amounts under a lease of property or assets which obligation
is required to be classified and accounted for as a
capitalized lease on the balance sheet of the Company or any
Subsidiary under generally accepted accounting principles.
"Special Record Date" for the payment of any
Defaulted Interest means a date fixed by the Trustee pursuant
to Section 307.
"Stated Maturity", when used with respect to any
Security or any installment of interest thereon, means the
date specified in such Security as the fixed date on which
the principal of such Security or such installment of
interest is due and payable.
"Subsidiary" means a Corporation more than 50% of
the outstanding voting stock of which is owned, directly or
indirectly, by the Company or by one or more other
Subsidiaries or by the Company and one or more other
Subsidiaries. For the purposes of this definition, "voting
stock" means stock which ordinarily has voting power for the
election of directors, whether at all times or only so long
as no senior class of stock has such voting power by reason
any contingency.
"Trading Day" has the meaning specified in Section
1304(h).
"Trust Indenture Act" means the Trust Indenture Act
of 1939 as in force at the date as of which this instrument
was executed; provided, however, that in the event the Trust
Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee"
in the first paragraph of this instrument until a successor
Trustee shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Trustee" shall
mean such successor Trustee.
"Vice President", when used with respect to the
Company means any vice president, whether or not designated
by a number or a word or words added before or after the
title "vice president".
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to
the Trustee to take any action under any provision of this
Indenture, the Company shall furnish to the Trustee such
certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be
given in the form of an Officers' Certificate, if to be given
by an officer of the Company, or an Opinion of Counsel, if to
be given by counsel, and shall comply with the requirements
of the Trust Indenture Act and any other requirement set
forth in this Indenture.
Every certificate or opinion with respect to
compliance with a condition or covenant provided for in this
Indenture shall include:
(a) a statement that each individual signing such
certificate or opinion has read such covenant or
condition and the definitions herein relating thereto;
(b) a brief statement as to the nature and scope
of the examination or investigation upon which the
statements or opinions contained in such certificate or
opinion are based;
(c) a statement that, in the opinion of each such
individual, he has made such examination or
investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of
each such individual, such condition or covenant has
been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to
be certified by, or covered by an opinion of, any specified
Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one
document, but one such Person may certify or give an opinion
with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several
documents.
Any certificate or opinion of an officer or the
Company may be based, insofar as it relates to legal matters,
upon a certification or opinion of, or representations by,
counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion
or representations with respect to the matters upon which his
certificate or opinion is based are erroneous. Any such
certificate or Opinion of Counsel may be based, insofar as it
relates to factual matters, upon a certificate or opinion of,
or representations by, an officer or officers of the Company
stating that the information with respect to such factual
matters is in the possession of the Company, unless such
counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with
respect to such matters are erroneous.
Where any Person is required to make, give or
execute two or more applications, requests, consents,
certificates, statements, opinions or other instruments under
this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this
Indenture to be given or taken by Holders may be embodied in
and evidenced by one or more instruments of substantially
similar tenor signed by such Holders in person or by agents
duly appointed in writing; and except as herein otherwise
expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Trustee
and, where it is hereby expressly required, to the Company.
Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred
to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for
any purpose of this Indenture and (subject to Section 601)
conclusive in favor of the Trustee and the Company, if made
in the manner provided in this Section.
(b) The fact and date of the execution by any
Person of any such instrument or writing may be proved by the
affidavit of a witness of such execution or by a certificate
of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the
execution thereof. Where such execution is by a signer
acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient
proof of his authority. The fact and date of the execution
of any such instrument or writing, or the authority of the
Person executing the same, may also be proved in any other
manner which the Trustee deems sufficient.
(c) The Company may, in the circumstances
permitted by the Trust Indenture Act, fix any day as the
record date for the purpose of determining the Holders
entitled to give or take any request, demand, authorization
direction, notice, consent, waiver or other action, or to
vote on any action, authorized or permitted to be given or
taken by Holders. If not set by the Company prior to the
first solicitation of a Holder made by any Person in respect
of any such action, or, in the case of any such vote, prior
to such vote, the record date for any such action or vote
shall be the 30th day (or, if later, the date of the most
recent list of Holders required to be provided pursuant to
Section 701) prior to such first Solicitation or vote, as the
case may be. With regard to any record date, only the
Holders on such date (or their duly designated proxies) shall
be entitled to give or take, or vote on, the relevant action.
Notwithstanding the foregoing, the Company shall not set a
record date for, and the provisions of this paragraph shall
not apply with respect to, any Act by the Holders pursuant to
Section 501, 502 or 512.
(d) The ownership of Securities shall be proved by
the Security Register.
(e) Any Act of the Holder of any Security shall
bind every future Holder of the same Security and the Holder
of every Security issued upon the registration of transfer
therefor or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by
the Trustee or the Company in reliance thereon, whether or
not notation of such action is made upon such Security.
(f) Without limiting the foregoing, a Holder
entitled hereunder to give or take any action hereunder with
regard to any particular Security may do so with regard to
all or any part of the principal amount of such Security or
by one or more duly appointed agents each of which may do so
pursuant to such appointment with regard to all or any
different part of such principal amount.
SECTION 105. Notices Etc., to Trustee and Company.
Any Act of Holders or other documents provided or
permitted by this Indenture to be made upon, given or
furnished to, or filed with,
(a) the Trustee by any Holder or by the Company
shall be sufficient for every purpose hereunder if made,
given, furnished or filed in writing to or with the
Trustee at its Corporate Trust Office, Attention:
[Corporate Trust Department], or
(b) the Company by the Trustee or by any Holder
shall be sufficient for every purpose hereunder (unless
otherwise herein expressly provided) if in writing and
mailed, first-class postage prepaid, to the Company
addressed to it, at the address of its principal
executive offices specified in the first paragraph of
this instrument or at any other address previously
furnished in writing to the Trustee by the Company,
Attention: Chief Financial Officer, with a copy to the
General Counsel.
SECTION 106. Notice to Holders: Waiver.
Where this Indenture provides for notice to Holders
of any event, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and
mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security
Register, not later than the latest date (if any), and not
earlier than the earliest date (if any), prescribed for the
giving of such notice. In any case where notice to Holders
is given by mail, neither the failure to mail any notice, nor
any defect in any notice so mailed, to any particular Holder
shall affect the sufficiency of such notice with respect to
other Holders. Where this Indenture provides for notice in
any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or
after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed
with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance
upon such waiver.
In case, by reason of the suspension of regular
mail service or by reason of any other cause, it shall be
impracticable to give such notice by mail, then such
notification as shall be made with the approval of the
Trustee shall constitute a sufficient notification for every
purpose hereunder.
SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or
conflicts with a provision of the Trust Indenture Act that is
required under such Act to be a part of and govern this
Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any
provision of the Trust Indenture Act that may be so modified
or excluded, the latter provision shall be deemed to apply to
this Indenture as so modified or to be excluded, as the case
may be.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the
construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by
the Company shall bind its successors and assigns, whether so
expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the
Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired
thereby.
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities,
express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, the holders of
Senior Indebtedness and the Holders of Securities, any
benefit or any legal or equitable right, remedy or claim
under this Indenture.
SECTION 112. Governing Law.
This Indenture and the Securities shall be governed
by and construed in accordance with the laws of the State of
Delaware, but without regard to the principles of conflicts
of laws.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date,
Redemption Date or Stated Maturity of any Security or the
last date on which a Holder has the right to convert his
Securities shall not be a Business Day, then (notwithstanding
any other provision of this Indenture or of the Securities)
payment of interest or principal and premium, if any, or
conversion of the Securities need not be made on such date,
but may be made on the next succeeding Business Day with the
same force and effect as if made on the Interest Payment Date
or Redemption Date, or at the Stated Maturity, or on such
last day for conversion; provided, that no interest shall
accrue for the period from and after such Interest Payment
Date, Redemption Date or Stated Maturity, as the case may be.
SECTION 114. No Security Interest Created.
Nothing in this Indenture or in the Securities,
express or implied, shall be construed to constitute a
security interest under the Uniform Commercial Code or
similar legislation, as now or hereafter enacted and in
effect in any jurisdiction where property of the Company or
its Subsidiaries is or may be located.
SECTION 115. Limitation on Individual Liability.
No recourse under or upon any obligation, covenant
or agreement contained in this Indenture or in any Security,
or for any claim based thereon or otherwise in respect
thereof, shall be had against any incorporator, stockholder,
officer or director, as such, past, present or future, of the
Company or any successor Corporation, either directly or
through the Company, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly
understood that this Indenture and the obligations issued
hereunder are solely corporate obligations, and that no such
personal liability whatever shall attach to, or is or shall
be incurred by, the incorporators, shareholders, officers or
directors, as such, of the Company or any successor Person,
or any of them, because of the creation of the indebtedness
hereby authorized, or under or by reason of the obligations,
covenants or agreements contained in this Indenture or in any
Security or implied therefrom; and that any and all such
personal liability of every name and nature, either at common
law or in equity or by constitution or statute, of, and any
and all such rights and claims against, every such
incorporator, shareholder, officer or director, as such,
because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations,
covenants or agreements contained in this Indenture or in any
Security or implied therefrom, are hereby expressly waived
and released as a condition of, and as a consideration for,
the execution of this Indenture and the issuance of such
Security.
SECTION 116. No Right of Set-Off.
The obligations of the Company to pay and perform
hereunder shall be absolute and unconditional and not subject
to any set-off or counterclaim.
ARTICLE TWO
Security Forms
SECTION 201. Forms Generally.
The Securities and the Trustee's certificates of
authentication shall be in substantially the forms set forth
in this Article, with such appropriate insertions, omissions,
substitutions and other variations as are required or
permitted by this Indenture, and may have such letters,
numbers or other marks of identification and such legends or
endorsements placed thereon, as may be required to comply
with any law or with the rules of any securities exchange on
which the Securities are listed or as may, consistently
herewith, be determined by the officers executing such
Securities, as evidenced by their execution of the
Securities.
The definitive Securities shall be printed,
lithographed or engraved or produced by any combination of
these methods on steel engraved borders or may be produced in
any other manner permitted by the rules of any securities
exchange on which the Securities may be listed, all as
determined by the officers executing such Securities, as
evidenced by their execution of such Securities.
SECTION 202. Form of Face of Security.
ROLLINS ENVIRONMENTAL SERVICES, INC.
7.25% Convertible Subordinated Debentures Due March 31, 2005
No. __________ $_______
Rollins Environmental Services, Inc., a corporation
duly organized and existing under the laws of the State of
Delaware (herein called the "Company", which term includes
any successor Person under the Indenture hereinafter referred
to), for value received, hereby promises to pay to
__________________, or registered assigns, the principal sum
of _______________________ Dollars on March 31, 2005, and to
pay interest thereon from March 31, 1995 or from and
including the most recent Interest Payment Date to which
interest has been paid or duly provided for, semi-annually on
March 31 and September 30 in each year, commencing September
30, 1995, at the rate of 7.25% per annum, until the principal
hereof is paid or made available for payment. The interest
so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture, be
paid to the Person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest, which
shall be the August 31 or February 28 (whether or not a
Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually
paid or duly provided for will forthwith cease to be payable
to the Holder on such Regular Record Date and may either be
paid to the Person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Trustee or be paid at
any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the
securities may be listed and upon such notice as may be
required by such exchange, all as more fully provided in said
Indenture. Notice of a Special Record Date shall be given to
Holders of Securities not less than 10 days prior to such
Special Record Date. Payment of the principal of and
premium, if any, and interest on this Security will be made
at the office or agency of the Company maintained for that
purpose pursuant to Section 1002 of the Indenture, in such
coin or currency of the United States of America as of the
time of payment is legal tender for payment of public and
private debts; provided, however, that at the option of the
Company payment of interest may be made by check mailed to
the address of the Person entitled thereto as such address
shall appear in the Security Register.
Reference is hereby made to the further provisions
of this Security set forth on the reverse hereof, which
further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has
been executed by the Trustee referred to on the reverse
hereof by manual signature, this Security shall not be
entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed under its corporate seal.
Dated:
ROLLINS ENVIRONMENTAL SERVICES, INC.
By
Attest:
SECTION 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of
Securities of the Company designated as its 7.25% Convertible
Subordinated Debentures Due March 31, 2005 (herein called the
"Securities"), limited in aggregate principal amount to
$66,000,000, issued and to be issued under an Indenture,
dated as of March 31, 1995 (herein called the "Indenture"),
between the Company and Texas Commerce Bank National
Association, as Trustee (herein called the "Trustee" which
term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee, the holders of Senior
Indebtedness and the Holders of the Securities and of the
terms upon which the Securities are, and are to be,
authenticated and delivered.
Subject to and upon compliance with the provisions
of the Indenture, the Holder of this Security is entitled, at
such Holder's option, at any time on or before the close of
business on March 31, 2005, or in case this Security is
called for redemption, then in respect of this Security until
and including, but (unless the Company defaults in making the
payment due upon redemption) not after, the close of business
on the Redemption Date, to convert this Security (or any
portion of the principal amount hereof which is $1,000 or an
integral multiple thereof), at the principal amount hereof,
or of such portion, into fully paid and nonassessable shares
(calculated as to each conversion to the nearest 1/100 of a
share) of Common Stock at a conversion price (the "Conversion
Price") equal to $6.15 principal amount for each share of
Common Stock (or at a current adjusted Conversion Price if an
adjustment has been made as provided in the Indenture) by
surrender of this Security, duly endorsed or assigned to the
Company or in blank, to the Company at its office or agency
maintained for that purpose pursuant to Section 1002 of the
Indenture, accompanied by written notice to the Company in
the form provided in this Security (or such other notice as
is acceptable to the Company) that the Holder hereof elects
to convert this Security, or if less than the entire
principal amount hereof is to be converted, the portion
hereof to be converted. If this Security (or any portion
hereof) is surrendered for conversion during the period from
the opening of business on any Regular Record Date next
preceding any Interest Payment Date to the close of business
on such Interest Payment Date (unless this Security has been
called for redemption on a Redemption Date within such
period), it shall also be accompanied by payment in New York
Clearing House funds or other funds acceptable to the Company
of an amount equal to the interest payable on such Interest
Payment Date on the principal amount of this Security then
being converted. If this Security (or any portion hereof) is
converted after any Regular Record Date and on or prior to
the next succeeding Interest Payment Date (unless the
Maturity hereof is prior to such Interest Payment Date),
interest whose Stated Maturity is on such Interest Payment
Date shall be payable on such Interest Payment Date
notwithstanding such conversion, and such interest (whether
or not punctually paid or duly provided for) shall be paid to
the Person in whose name such Security (or one or more
Predecessor Securities) is registered at the close of
business on such Regular Record Date. Subject to the
aforesaid requirement for payment and, in the case of a
conversion after the Regular Record Date next preceding any
Interest Payment Date and on or before such Interest Payment
Date, to the right of the Holder of this Security (or any
Predecessor Security) of record at such Regular Record Date
to receive an installment of interest (with certain
exceptions provided in the Indenture), no payment or
adjustment is to be made upon conversion on account of any
interest accrued hereon or on account of any dividends on the
Common Stock issued upon conversion. The Conversion Price is
subject to adjustment as provided in the Indenture.
This Security is subject to redemption, in whole
but not in part, at the election of the Company, upon not
more than 15 days' notice by mail to the Holder, at any time
on or after March 31, 1998 when the price per share of Common
Stock exceeds $6.97 for ten consecutive Trading Days at a
Redemption Price equal to the number of fully paid and
nonassessable shares (calculated to the nearest 1/100 of a
share) of Common Stock determined by dividing the principal
amount of Outstanding Securities by $6.15 (or at a current
adjusted Conversion Price if an adjustment has been made as
provided in the Indenture), together in the case of any such
redemption with accrued Interest to the Redemption Date
payable in cash, but interest installments whose Maturity is
on or prior to such Redemption Date will be payable to the
Holders of such Securities, or one or more Predecessor
Securities, of record at the close of business on the
relevant Record Dates, all as provided in the Indenture or,
if greater, that number of fully paid and nonassessable
shares (calculated to the nearest 1/100 of a share) of Common
Stock determined by dividing the principal amount of
Outstanding Securities by the price per share of Common Stock
on the Redemption Date provided that the total number of
shares so issued will not exceed eleven million shares in the
aggregate for all redemptions, such eleven million shares
subject to adjustment in the case of any subdivision or
combination of all outstanding shares of Common Stock. Such
additional shares will be distributed on a pro rata basis,
with no fractional shares being issued.
This Security is subject to redemption, in whole or
in part, at the election of the Holder if not previously
called for redemption by the Company, upon the occurrence of
a Redemption Event at a Redemption Price equal to the number
of fully paid and nonassessable shares (calculated to the
nearest 1/100 of a share) of Common Stock determined by
dividing the principal amount of the Holder's Securities (or
any portion of the Principal amount thereof which is $1,000
or an integral multiple thereof) by the Current Market Price,
together in the case of any such redemption with accrued
interest to the Redemption Date payable in cash, but interest
installments whose Stated Maturity is on or prior to such
Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, of record
at the close of business on the relevant Record Dates
referred to on the face hereof, all as provided in the
Indenture. The Company shall give each Holder of a Security
notice of the occurrence of a Redemption Event no later than
15 days after the occurrence thereof.
Notice of redemption having been given as
aforesaid, a Holder of Securities electing to require
redemption of all or a portion of such Holder's Securities
shall make such election by delivering an irrevocable written
notice to the Company at its office or agency to be
maintained by the Company pursuant to Section 1002 of the
Indenture not later than two Business Days prior to the
Redemption Date, setting forth the name of the Holder, the
principal amount of the Securities to be so redeemed at the
Redemption Price and a statement that the election to require
redemption is being made thereby.
In the event of redemption or conversion of this
Security in part only, a new Security or Securities for the
unredeemed or unconverted portion hereof will be issued in
the name of the Holder hereof upon the cancellation hereof.
No fractional shares or scrip representing fractions of
shares will be issued on redemption or conversion, but
instead of any fractional share the Company shall pay a cash
adjustment as provided in the Indenture. In addition, the
Indenture provides that in case of certain consolidations or
mergers to which the Company is a party or the sale or
transfer of all or substantially all of the assets of the
Company, the Indenture shall be amended, without the consent
of any Holders of Securities, so that this Security, if then
Outstanding, will be convertible or redeemable thereafter,
during the period this Security shall be convertible or
redeemable as specified above, only into the kind and amount
of securities, cash and other property receivable upon the
consolidation, merger, sale or transfer by a holder of the
number of shares of Common Stock into which this Security
might have been converted or redeemed immediately prior to
such consolidation, merger, sale or transfer (assuming such
holder of Common Stock failed to exercise any right of
election and received per share the kind and amount received
per share by a plurality of non-electing shares).
The indebtedness evidenced by this Security is, to
the extent provided in the Indenture, subordinate and subject
in right of payment to the prior payment in full of all
Senior Indebtedness, and this Security is issued subject to
the provisions of the Indenture with respect thereto. Each
Holder of this Security, by accepting the same, (a) agrees to
and shall be bound by such provisions, (b) authorizes and
directs the Trustee on his behalf to take such action as may
be necessary or appropriate to effectuate the subordination
so provided, and (c) appoints the Trustee his attorney-in-
fact for any and all such purposes.
If an Event of Default shall occur and be
continuing, the principal of all the Securities may be
declared due and payable in the manner and with the effect
provided in the Indenture.
The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification
of the rights and obligations of the Company and the rights
of the Holders of the Securities under the Indenture at any
time by the Company and the Trustee with the consent of the
Holders of not less than a majority in aggregate principal
amount of the Securities at the time Outstanding. The
Indenture also contains provisions permitting the Holders of
specified percentages in aggregate principal amount of the
Securities at the time Outstanding, on behalf of the Holders
of all the Securities, to waive compliance by the Company
with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any
such consent or waiver by the Holder of this Security shall
be conclusive and binding upon such Holder and upon all
future Holders of this Security and any Security issued upon
the registration of transfer hereof or in exchange herefor or
in lieu hereof, whether or not notation of such consent or
waiver is made upon this Security.
No reference herein to the Indenture and no
provision of this Security or of the Indenture shall alter or
impair the obligation of the Company, which is absolute and
unconditional, to pay the principal of and premium, if any,
and interest on this Security at the times, place and rate,
and in the coin or currency, herein prescribed or to convert
this Security as provided in the Indenture.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security
is registrable in the Security Register, upon surrender of
this Security for registration of transfer at the office or
agency of the Company in any place where the principal of and
premium, if any, and interest on this Security are payable,
duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security
Registrar duly executed by, the Holder hereof or his attorney
duly authorized in writing, and thereupon one or more new
Securities, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated
transferee or transferees.
The Securities are issuable only in fully
registered form without coupons in denominations of $1,000
and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set
forth, Securities are exchangeable for a like aggregate
principal amount of Securities of a different authorized
denomination, as requested by the Holder surrendering the
same.
No service charge shall be made for any such
registration of transfer or exchange except as provided in
the Indenture, and the Company may require payment of a sum
sufficient to cover any tax or other governmental charge
payable in connection therewith.
Prior to due presentment of this Security for
registration of transfer, the Company, the Trustee and any
agent of the Company or the Trustee may treat the Person in
whose name this Security is registered as the owner hereof
for all purposes, except as provided in this Security,
whether or not this Security be overdue, and neither the
Company, the Trustee nor any such agent shall be affected by
notice to the contrary.
All terms used in this Security which are defined
in the Indenture shall have the meanings assigned to them in
the Indenture.
CONVERSION NOTICE
To: Rollins Environmental Services, Inc.
The undersigned registered owner of this Security
hereby irrevocably exercises the option to convert this
Security, or the portion hereof (which is $1,000 or a
multiple thereof) designated below, into shares of Common
Stock in accordance with the terms of the Indenture referred
to in this Security, and directs that the shares issuable and
deliverable upon the conversion, together with any check in
payment for a fractional share and any Security representing
any unconverted principal amount hereof, be issued and
delivered to the registered owner hereof unless a different
name has been provided below. If this Notice is being
delivered on a date after the opening of business on any
Regular Record Date next preceding any Interest Payment Date
to the close of business on such Interest Payment Date
(except in the case of Securities which have been called for
redemption on a Redemption Date within such period), this
Notice is accompanied by payment in New York Clearing House
funds or other funds acceptable to the Company of an amount
equal to the interest payable on such Interest Payment Date
on the principal of this Security to be converted. If shares
or any portion of this Security not converted are to be
issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with
respect thereto. Any amount required to be paid by the
undersigned on account of interest accompanies this Security.
Dated:
Signature(s)
Signature(s) must be guaranteed
by a commercial bank or trust
company or a member firm of a
national stock exchange if shares
of Common Stock are to be
delivered, or Securities to be
issued, other than to and in the
name of the registered owner.
Signature Guarantee
Fill in for registration of
shares if they are to be delivered,
or Securities if they are to be
issued, other than to and in the
name of the registered owner:
(Name)
(Street Address)
(City, State and zip code)
(Please print name and address)
Register: __ Common Stock
__ Securities
(Check appropriate line(s))
Principal amount to be converted
(if less than all):
$ ,000
Social Security or other
Taxpayer Identification Number
of owner
SECTION 204. Form of Trustee's Certificate of
Authentication.
The Trustee's certificates of authentication shall
be in substantially the following form:
This is one of the Securities referred to in the
within-mentioned Indenture.
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION,
as
Trustee
By
Authorized Officer
ARTICLE THREE
The Securities
SECTION 301. Title and Terms.
The aggregate principal amount of Securities which
may be authenticated and delivered under this Indenture is
limited to $66,000,000, except for Securities authenticated
and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Securities pursuant to
Section 304, 305, 306, 906, 1302 or 1406.
The Securities shall be known and designated as the
"7.25% Convertible Subordinated Debentures Due March 31,
2005" of the Company. Their Stated Maturity shall be March
31, 2005 and they shall bear interest at the rate of 7.25%
per annum, from March 31, 1995 or from the most recent
Interest Payment Date to which interest has been paid or duly
provided for, as the case may be, payable semi-annually on
March 31 and September 30 commencing September 30, 1995,
until the principal thereof is paid or made available for
payment.
The principal of and premium, if any, and interest
on the Securities shall be payable at the office or agency of
the Company maintained for such purpose pursuant to Section
1002; provided, however, that at the option of the Company
payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address shall
appear in the Security Register.
The Securities shall be redeemable for Common Stock
as provided in Article Eleven and Article Fourteen. The
Securities shall be subordinated in right of payment to
Senior Indebtedness as provided in Article Twelve. The
Securities shall be convertible into Common Stock as provided
in Article Thirteen.
SECTION 302. Denominations.
The Securities shall be issuable only in fully
registered form without coupons and only in denominations of
$1,000 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and
Dating.
The Securities shall be executed on behalf of the
Company by its Chairman of the Board, its Vice Chairman of
the Board, its President or one of its Vice Presidents, under
its corporate seal or a facsimile thereof reproduced thereon,
attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the
Securities may be manual or facsimile.
Securities bearing the original or facsimile
signatures of individuals who were at any time the proper
officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and
delivery of such Securities or did not hold such offices at
the date of such Securities.
At any time and from time to time after the
execution and delivery of this Indenture, the Company may
deliver Securities executed by the Company to the Trustee for
authentication, together with a Company Order for the
authentication and delivery of such Securities, and the
Trustee in accordance with such Company Order shall either at
one time or from time to time pursuant to such instructions
as may be described therein authenticate and deliver such
Securities as in this Indenture provided and not otherwise.
Each Security shall be dated the date of its
authentication.
No Security shall be entitled to any benefit under
this Indenture or be valid or obligatory for any purpose
unless there appears on such Security a certificate of
authentication substantially in the form provided for herein
duly executed by the Trustee by manual signature, and such
certificate upon any Security shall be conclusive evidence,
and the only evidence, that such Security has been duly
authenticated and delivered hereunder and is entitled to the
benefits of the Indenture.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities,
the Company may execute, and upon Company Order the Trustee
shall authenticate and deliver, temporary Securities which
are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in
lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as
evidenced by their execution of such Securities. Any such
temporary Security shall be in global form. Every such
temporary Security shall be executed by the Company and shall
be authenticated and delivered by the Trustee upon the same
conditions and in substantially the same manner, and with the
same effect, as the definitive Security or Securities in lieu
of which it is issued.
If temporary Securities are issued, the Company
will cause definitive Securities to be prepared without
unreasonable delay. After the preparation of definitive
Securities, the temporary Securities shall be exchangeable
for definitive Securities upon surrender of the temporary
Securities at any office or agency of the Company designated
pursuant to Section 1002, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary
Securities the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor one or more
definitive Securities of a like principal amount of
authorized denominations. Until so exchanged the temporary
Securities shall in all respects be entitled to the same
benefits under this Indenture as definitive Securities.
SECTION 305. Registration, Registration of Transfer and
Exchange.
The Company shall cause to be kept at the Corporate
Trust Office of the Trustee a register (the register
maintained in such office and in any other office or agency
designated pursuant to Section 1002 being herein sometimes
collectively referred to as the "Security Register") in
which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of
Securities and of transfers of Securities. The Trustee is
hereby appointed "Security Registrar" for the purpose of
registering Securities and transfers of Securities as herein
provided. At all reasonable times the Security Register
shall be open for inspection by the Company.
Upon surrender for registration of transfer of any
Security at an office or agency of the Company designated
pursuant to Section 1002 for such purpose, the Company shall
execute, and the Trustee shall authenticate and deliver, in
the name of the designated transferee or transferees, one or
more new Securities of any authorized denominations and of a
like aggregate principal amount.
At the option of the Holder, Securities may be
exchanged for other Securities of any authorized
denominations and of a like aggregate principal amount, upon
surrender of the Securities to be exchanged at the office or
agency maintained for that purpose. Whenever any Securities
are so surrendered for exchange, the Company shall execute,
and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled
to receive.
All Securities issued upon any registration of
transfer or exchange of Securities shall be the valid
obligation of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or
exchange.
Every Security presented or surrendered for
registration of transfer or for exchange shall (if so
required by the Company or the Trustee) be duly endorsed, or
be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly
executed, by the Holder thereof or his attorney duly
authorized in writing.
No service charge shall be made for any
registration of transfer or exchange of Securities except as
provided in Section 306. The Company may require payment of
a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any
registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 304, 906, 1302 or 1406 not
involving any transfer.
The Company shall not be required (a) to issue,
register the transfer of or exchange any Security during a
period beginning at the opening of business 15 days before
the day of the mailing of a notice of redemption of
Securities under Section 1104 and ending at the close of
business on the day of such mailing, or (b) to register the
transfer of or exchange any Security after such notice of
redemption.
SECTION 306. Mutilated, Destroyed, Lost and Stolen
Securities.
If any mutilated Security is surrendered to the
Trustee, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a new security
of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
If there shall be delivered to the Company and the
Trustee (a) evidence to their satisfaction of the
destruction, loss or theft of any Security and (b) such
security or indemnity as may be required by them to save each
of them and any agent of either of them harmless, then, in
the absence of notice to the Company or the Trustee that such
Security has been acquired by a bona fide purchaser, the
Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of like tenor and principal amount
and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or
stolen Security has become or is about to become due and
payable, the Company in its discretion may, instead of
issuing a new Security, pay such Security.
Upon the issuance of any new Security under this
Section, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Trustee) connected
therewith.
Every new Security issued pursuant to this Section
in lieu of any destroyed, lost or stolen Security shall
constitute an original additional contractual obligation of
the Company, whether or not the destroyed, lost or stolen
Security shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture
equally and proportionately with any and all other Securities
duly issued hereunder.
The provisions of this Section are exclusive and
shall preclude (to the extent lawful) all other rights and
remedies with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights
Preserved.
Interest on any Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose name that Security
(or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such
interest. At the option of the Company, interest on any
Security may be paid by mailing checks to the addresses of
the Holders thereof as such addresses appear in the
Securities Register.
Any interest on any Security which is payable, but
is not punctually paid or duly provided for, on any Interest
Payment Date (herein called "Defaulted Interest") shall
forthwith cease to be payable to the Person who is the Holder
on the relevant Regular Record Date, and, instead, such
Defaulted Interest may be paid by the Company, at its
election in each case, as provided in Clause (a) or (b)
below:
(a) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the
Securities (or their respective Predecessor Securities)
are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest,
which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each
Security and the date of the proposed payment, and at
the same time the Company shall deposit with the Trustee
an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the
Trustee for such deposit prior to the date of the
proposed payments such money when deposited to be held
in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this clause provided.
Thereupon the Trustee shall fix a Special Record Date
for the payment of such Defaulted Interest which shall
be not more than 15 days and not less than 10 days prior
to the date of the proposed payment and not less than 10
days after the receipt by the Trustee of the notice of
the proposed payment. The Trustee shall promptly notify
the Company of such Special Record Date and, in the name
and at the expense of the Company, shall cause notice of
the proposed payment of such Defaulted Interest and the
Special Record Date therefor to be mailed, first-class
postage prepaid, to each Holder at his address as it
appears in the Security Register, not less than 10 days
prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so mailed, such
Defaulted Interest shall be paid to the Persons in whose
names the Securities (or their respective Predecessor
Securities) are registered at the close of business on
such Special Record Date and shall no longer be payable
pursuant to the following Clause (b).
(b) The Company may make payment of any Defaulted
Interest in any other lawful manner not inconsistent
with the requirements of any securities exchange on
which the Securities may be listed, and upon such notice
as may be required by such exchange, if, after notice
given by the Company to the Trustee of the proposed
payment pursuant to this Clause, such manner of payment
shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this
Section, each Security delivered under this Indenture upon
registration of transfer of or in exchange for or in lieu of
any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other
Security.
In the case of any Security which is converted
after any Regular Record Date and on or prior to the next
succeeding Interest Payment Date (other than any Security
whose Maturity is prior to such Interest Payment Date),
interest whose Stated Maturity is on such Interest Payment
Date shall be payable on such Interest Payment Date
notwithstanding such conversion, and such interest (whether
or not punctually paid or duly provided for) shall be paid to
the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of
business on such Regular Record Date. Except as otherwise
expressly provided in the immediately preceding sentence, in
the case of any Security which is converted, interest whose
Stated Maturity is after the date of conversion of such
Security shall not be payable.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Security for
registration of transfer, the Company, the Trustee and any
agent of the Company or the Trustee may treat the Person in
whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of
and premium, if any, and (subject to Section 307) interest on
such Security and for all other purposes whatsoever, whether
or not such Security be overdue, and neither the Company, the
Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption,
registration of transfer, exchange or conversion shall, if
surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly cancelled by
it. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in
any manner whatsoever, and all Securities so delivered shall
be promptly cancelled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities
cancelled as provided in this Section, except as expressly
permitted by this Indenture. All cancelled Securities held
by the Trustee shall be disposed of as directed by a Company
Order.
SECTION 310. Computation of Interest.
Interest on the Securities shall be computed on the
basis of a 360-day year of twelve 30-day months.
ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to
be of further effect (except as to any surviving rights of
conversion or registration of transfer or exchange of
Securities herein expressly provided for), and the Trustee,
at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this
Indenture, when
(a) either
(i) all Securities theretofore authenticated
and delivered (other than (A) Securities which have been
destroyed, lost or stolen and which have been replaced
or paid as provided in Section 306 and (B) Securities
for whose payment money has theretofore been deposited
in trust or segregated and held in trust by the Company
and thereafter repaid to the Company or discharged from
such trust, as provided in Section 1003) have been
delivered to the Trustee for cancellation; or
(ii) all such Securities not theretofore
delivered to the Trustee for cancellation
(A) have become due and payable, or
(B) will become due and payable at their
Stated Maturity within one year, or
(C) are to be called for redemption
within one year under arrangements
satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the
name, and at the expense, of the Company, or
(D) are delivered to the Trustee for
conversion in accordance with Article
Thirteen,
and the Company, in the case of (A), (B), (C) or
(D) above, has deposited or caused to be deposited
with the Trustee as trust funds in trust for the
purpose an amount sufficient to pay and discharge
the entire indebtedness on such Securities not
theretofore delivered to the Trustee for
cancellation for principal and premium, if any, and
interest to the date of such deposit (in the case
of Securities which have become due and payable) or
to the Stated Maturity or Redemption Date, as the
case may be;
(b) the Company has paid or caused to be paid all
other sums payable hereunder by the Company; and
(c) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent herein provided
for relating to the satisfaction and discharge of this
Indenture have been complied with.
Notwithstanding the satisfaction and discharge of
this Indenture, the obligations of the Company to the Trustee
under Section 607, the obligations of the Trustee to any
Authenticating Agent under Section 614 and, if money shall
have been deposited with the Trustee pursuant to sub-clause
(ii) of Clause (a) of this Section, the obligations of the
Trustee under Section 402 and the last paragraph of Section
1003 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of
Section 1003, all money deposited with the Trustee pursuant
to Section 401 shall be held in trust and applied by it, in
accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying
Agent) as the Trustee may determine, to the Person entitled
thereto, of the principal and premium, if any, and interest
for whose payment such money has been deposited with the
Trustee. All moneys deposited with the Trustee pursuant to
Section 401 (and held by it or any Paying Agent) for the
payment of Securities subsequently converted shall be
returned to the Company upon Company Request.
SECTION 403. Reinstatement.
If the Trustee or the Paying Agent is unable to
apply any money in accordance with this Article Four by
reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting
such application, then the Company's obligations under this
Indenture and the Securities shall be revived and reinstated
as though no deposit had occurred pursuant to this Article
Four until such time as the Trustee or Paying Agent is
permitted to apply all money held in trust with respect to
the Securities; provided, however, that if the Company makes
any payment of principal of or premium, if any, or interest
on any Security following the reinstatement of its
obligations, the Company shall be subrogated to the rights of
the Holders of the Securities to receive such payment from
the money so held in trust.
ARTICLE FIVE
Remedies
SECTION 501. Events of Default.
"Event of Default", wherever used herein, means any
one of the following events (whatever the reason for such
Event of Default and whether it shall be occasioned by the
provisions of Article Twelve or be voluntary or involuntary
or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(a) default in the payment of any interest upon
any Security when it becomes due and payable, whether or
not such payment is prohibited by the provisions of
Article Twelve, and continuance of such default for a
period of 30 days; or
(b) default in the payment of the principal of or
premium, if any, on any Security at its Maturity,
whether or not such payment is prohibited by the
provisions of Article Twelve; or
(c) default in the performance, or breach, of any
covenant or warranty of the Company in this Indenture
(other than a covenant or warranty a default in whose
performance or whose breach is elsewhere in this Section
specifically dealt with), and continuance of such
default or breach for a period of 60 days after there
has been given, by registered or certified mail, to the
Company by the Trustee or to the Company and the Trustee
by the Holders of at least 25% in principal amount of
the Outstanding Securities a written notice specifying
such default or breach and requiring it to be remedied
and stating that such notice is a "Notice of Default"
hereunder; or
(d) the Company or any of its Subsidiaries shall
have failed to pay principal at maturity of, or an event
of default shall have occurred and be continuing under
and resulted in the acceleration of, any loan agreement,
mortgage, indenture or other instrument under which
there is issued or by which there is secured or
evidenced any Indebtedness of the Company (other than
the Securities) or any of its Subsidiaries whether such
Indebtedness now exists or shall be created hereafter,
and the principal amount of such Indebtedness which,
together with any such other Indebtedness so accelerated
or not paid at maturity, aggregates an amount equal to
or greater than $5,000,000, and such acceleration is not
waived or rescinded within a period of 10 Business Days
after there shall have been given, by registered or
certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25%
in principal amount of the Securities then outstanding a
written notice specifying such default and requiring the
Company to cause such acceleration to be rescinded,
annulled or discharged and stating that such notice is a
"Notice of Default" hereunder; or
(e) the entry by a court having jurisdiction in
the premises of (i) a decree or order for relief in
respect of the Company in an involuntary case or
proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar
law or (ii) a decree or order adjudging the Company a
bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement, adjustment
or composition of or in respect of the Company under any
applicable Federal or State law, or appointing a
custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or
of any substantial part of its property, or ordering the
winding up or liquidation of its affairs, and the
continuance of any such decree or order for relief or
any such other decree or order unstayed and in effect
for a period of 60 consecutive days; or
(f) the commencement by the Company of a voluntary
case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar
law or of any other case or proceeding to be adjudicated
a bankrupt or insolvent, or the consent by it to the
entry of a decree or order for relief in respect of the
Company in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or
proceeding against it, or the filing by it of a petition
or answer or consent seeking reorganization or relief
under any applicable Federal or State law, or the
consent by it to the filing or such petition or to the
appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or
other similar official of the Company or of any
substantial part of its property, or the making by it of
an assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its
debts generally as they become due, or the taking of
corporate action by the Company in furtherance of any
such action.
Upon receipt by the Trustee of any Notice of
Default pursuant to this Section, a record date shall
automatically and without any other action by any Person be
set for the purpose of determining the Holders of Outstanding
Securities entitled to join in such Notice of Default, which
record date shall be the close of business on the day the
Trustee receives such Notice of Default. The Holders of
Outstanding Securities on such record date (or their duly
appointed agents), and only such Persons, shall be entitled
to join in such Notice of Default, whether or not such
Holders remain Holders after such record date; provided, that
unless such Notice of Default shall have become effective by
virtue of the Holders of the requisite principal amount of
Outstanding Securities on such record date (or their duly
appointed agents) having joined therein on or prior to the
90th day after such record date, such Notice of Default shall
automatically and without any action by any Person be
cancelled and of no further force or effect.
SECTION 502. Acceleration of Maturity; Rescission and
Annulment.
If an Event of Default occurs and is continuing,
then and in every such case the Trustee or the Holders of not
less than 25% in principal amount of the Outstanding
Securities may declare the principal of all the Securities to
be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by Holders), and upon
any such declaration such principal plus any interest accrued
on the Securities to the date of declaration shall become
immediately due and payable.
At any time after such a declaration of
acceleration has been made and before a judgment or decree
for payment of the money due has been obtained by the Trustee
as hereinafter in this Article provided, the Holders of a
majority in principal amount of the Outstanding Securities,
by written notice to the Company and the Trustee, may rescind
and annul such declaration and its consequences if
(a) the Company has paid or deposited with the
Trustee a sum sufficient to pay
(i) all overdue interest on all
Securities,
(ii) the principal of and premium, if
any, on any Securities which have become due
otherwise than by such declaration of acceleration
and interest thereon at the rate borne by the
Securities,
(iii) to the extent that payment of such
interest is lawful, interest upon overdue interest
at the rate borne by the Securities, and
(iv) all sums paid or advanced by the
Trustee hereunder and the reasonable compensation,
expenses, disbursements and advances of the
Trustee, its agents and counsel;
and
(b) all Events of Default, other than the non-
payment of the principal of Securities which has become
due solely by such declaration of acceleration, have
been cured or waived as provided in Section 513.
No such rescission and annulment shall affect any subsequent
default or impair any right consequent thereon.
Upon receipt by the Trustee of any declaration of
acceleration, or any rescission and annulment of any such
declaration, pursuant to this Section, a record date shall
automatically and without any other action by any Person be
set for the purpose of determining the Holders of Outstanding
Securities entitled to join in such declaration, or
rescission and annulment, as the case may be, which record
date shall be the close of business on the day the Trustee
receives such declaration, or rescission and annulment, as
the case may be. The Holders of Outstanding Securities on
such record date (or their duly appointed agents), and only
such Persons, shall be entitled to join in such declaration,
or rescission and annulment, as the case may be, whether or
not such Holders remain Holders after such record date;
provided, that unless such declaration, or rescission and
annulment, as the case may be, shall have become effective by
virtue of Holders of the requisite principal amount of
outstanding Securities on such record date (or their duly
appointed agents) having joined therein on or prior to the
90th day after such record date, such declaration, or
rescission and annulment, as the case may be, shall
automatically and without any action by any Person be
cancelled and of no further force or effect.
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee.
The Company covenants that if
(a) default is made in the payment of any interest
on any Security when such interest becomes due and
payable and such default continues for a period of 30
days, or
(b) default is made in the payment of the
principal of or premium, if any, on any Security at the
Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for
the benefit of the Holders of such Securities, the whole
amount then due and payable on such Securities for principal
and premium, if any, and interest, and, to the extent that
payment of such interest shall be legally enforceable,
interest on any overdue principal and premium, if any, and on
any overdue interest, at the rate borne by the Securities;
and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel.
If the Company fails to pay such amounts forthwith
upon such demand, the Trustee in its own name and as trustee
of an express trust, may institute a judicial proceeding for
the collection of the sums so due and unpaid, may prosecute
such proceeding to judgment or final decree and may enforce
the same against the Company or any other obligor upon the
Securities and collect the money adjudged or decreed to be
payable in the manner provided by law out of the property of
the Company or any other obligor upon the Securities,
wherever situated.
If an Event of Default occurs and is continuing,
the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders by such
appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or
agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the
Company (or any other obligor upon the Securities), its
property or its creditors, the Trustee shall be entitled and
empowered, by intervention in such proceeding or otherwise,
to take any and all actions authorized under the Trust
Indenture Act in order to have the claims of the Holders and
the Trustee allowed in any such proceeding. In particular,
the Trustee shall be authorized to collect and receive any
moneys or other property payable or deliverable on any such
claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is
hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to
the making of such payments directly to the Holders, to pay
to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due
the Trustee under Section 607.
No provision of this Indenture shall be deemed to
authorize the Trustee to authorize or consent to or accept or
adopt on behalf of any Holder any plan of reorganization,
arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to
authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding; provided, however, that the
Trustee may, on behalf of the Holders, vote for the election
of a trustee in bankruptcy or similar official and may be a
member of the Creditors' Committee.
SECTION 505. Trustee May Enforce Claims Without Possession
of Securities.
All rights of action and claims under this
Indenture or the Securities may be prosecuted and enforced by
the Trustee without the possession of any of the Securities
or the production thereof in any proceeding relating thereto,
and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and
any recovery of judgment shall, after provision for the
payment of the reasonable compensation, expenses,
disbursements and advances or the Trustee, its agents and
counsel, be for the ratable benefit of the Holders of the
Securities in respect of which such judgment has been
recovered.
SECTION 506. Application of Money Collected.
Subject to Article Twelve, any money collected by
the Trustee pursuant to this Article shall be applied in the
following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account or
principal or premium, if any, or interest, upon presentation
of the Securities and the notation thereon of the payment if
only partially paid and upon surrender thereof if fully paid:
FIRST: To payment of all amounts due the Trustee
under Section 607; and
SECOND: To the payment of the amounts then due
and unpaid for principal of and premium, if any, and
interest on the Securities in respect of which or for
the benefit of which such money has been collected,
ratably, without preference or priority of any kind,
according to the amounts due and payable on such
Securities for principal and premium, if any, and
interest, respectively.
SECTION 507. Limitation on Suits.
No Holder of any Security shall have any right to
institute any proceeding, judicial or otherwise, with respect
to this Indenture, or for the appointment of a receiver or
trustee, or for any other remedy hereunder, unless
(a) such Holder has previously given written
notice to the Trustee of a continuing Event of Default;
(b) the Holders of not less than 25% in principal
amount of the outstanding Securities shall have made
written request to the Trustee to institute proceedings
in respect of such Event of Default in its own name as
Trustee hereunder;
(c) such Holder or Holders have offered to the
Trustee reasonable indemnity against the costs, expenses
and liabilities to be incurred in compliance with such
request;
(d) the Trustee for 60 days after its receipt of
such notice, request and offer of indemnity has failed
to institute any such proceeding; and
(e) no direction inconsistent with such written
request has been given to the Trustee during such 60-day
period by the Holders of a majority in principal amount
of the Outstanding Securities;
it being understood and intended that no one or more holders
shall have any right in any manner whatever by virtue of, or
by availing of any provision of this Indenture to affect,
disturb or prejudice the rights of any other Holders, or to
obtain or to seek to obtain priority or preference over any
other Holders or to enforce any right under this Indenture,
except in the manner herein provided and for the equal and
ratable benefit of all the Holders.
SECTION 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest and to
Convert.
Notwithstanding any other provision in this
Indenture, the Holder of any Security shall have the right,
which is absolute and unconditional, to receive payment of
the principal of and premium, if any, and (subject to Section
307) interest on such Security on the respective Stated
Maturities expressed in such Security (or, in the case of
redemption, on the Redemption Date) and to convert such
Security in accordance with Article Thirteen and to institute
suit for the enforcement of any such payment and right to
convert, and such rights shall not be impaired without the
consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any
proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case,
subject to any determination in such proceeding, the Company,
the Trustee and the Holders shall be restored severally and
respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the
Holders shall continue as though no such proceeding had been
instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the
replacement or payment of mutilated, destroyed, lost or
stolen Securities in Section 306, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders
is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law,
be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any
Holder of any Security to exercise any right or remedy
accruing upon any Event of Default shall impair any such
right or remedy or constitute a waiver of any such Event of
Default or an acquiescence therein. Every right and remedy
given by this Article or by law to the Trustee or to the
Holders may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee or by the Holders, as
the case may be.
SECTION 512. Control by Holders.
The Holders of a majority in principal amount of
the Outstanding Securities shall have the right to direct the
time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or
power conferred on the Trustee; provided, that
(a) such direction shall not be in conflict with
any rule of law or with this Indenture;
(b) the Trustee may take any other action deemed
proper by the Trustee which is not inconsistent with
such direction; and
(c) subject to the provisions of Section 601, the
Trustee shall have the right to decline to follow any
such direction if the Trustee in good faith shall
determine that the action so directed would involve the
Trustee in personal liability or would be unduly
prejudicial to Holders not joining in such direction.
Upon receipt by the Trustee of any such direction,
a record date shall automatically and without any other
action by any Person be set for the purpose of determining
the Holders of Outstanding Securities entitled to join in
such direction, which record date shall be the close of
business on the day the Trustee receives such direction. The
Holders of Outstanding Securities on such record date (or
their duly appointed agents), and only such Persons, shall be
entitled to join in such direction, whether or not such
Holders remain Holders after such record date; provided, that
unless such direction shall have become effective by virtue
of Holders of the requisite principal amount of Outstanding
Securities on such record date (or their duly appointed
agents) having joined therein on or prior to the 90th day
after such record date, such direction shall automatically
and without any action by any Person be cancelled and of no
further force or effect.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in
principal amount of the Outstanding Securities may on behalf
of the Holders of all the Securities waive any past default
hereunder and its consequences, except a default
(a) in the payment of the principal of or premium,
if any, or interest on any Security, or
(b) in respect of a covenant or provision hereof
which under Article Nine cannot be modified or amended
without the consent of the Holder of each Outstanding
Security affected.
Upon any such waiver, such default shall cease to
exist, and any Event of Default arising therefrom shall be
deemed to have been cured, for every purpose of this
Indenture; but no such waiver shall extend to any subsequent
or other default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
In any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the
Trustee for any action taken, suffered or omitted by it as
Trustee, a court may require any party litigant in such suit
to file an undertaking to pay the costs of such suit, and may
assess costs against any such party litigant, in the manner
and to the extent provided in the Trust Indenture Act;
provided, that neither this Section nor the Trust Indenture
Act shall be deemed to authorize any court to require such an
undertaking or to make such an assessment in any suit
instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more
than 10% in principal amount of the Outstanding Securities,
or to any suit instituted by any Holder for the enforcement
of the payment of the principal of (or premium, if any) or
interest on any Security on or after the respective Stated
Maturities expressed in such Security (or, in the case of
redemption, on or after the Redemption Date) or in any suit
for the enforcement of the right to convert any Security in
accordance with Article Thirteen.
SECTION 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, or
plead, or in any manner whatsoever claim or take the benefit
or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the
Company (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law and
covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as
though no such law had been enacted.
ARTICLE SIX
The Trustee
SECTION 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee
shall be as provided by the Trust Indenture Act.
Notwithstanding the foregoing, no provision of this Indenture
shall require the Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of
any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to
it. Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the
Trustee shall be subject to the provisions of this Section.
SECTION 602. Notice of Defaults.
The Trustee shall give the Holders notice of any
default hereunder as and to the extent provided by the Trust
Indenture Act; provided, however, that in the case of any
default of the character specified in Section 501(c), no such
notice to Holders shall be given until at least 30 days after
the occurrence thereof. For the purpose of this Section, the
term "default" means any event which is, or after notice or
lapse of time or both would become, an Event of Default.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to
have been signed or presented by the proper party or
parties;
(b) any request or direction of the Company
mentioned herein shall be sufficiently evidenced by a
Company Request or Company Order and any resolution of
the Board of Directors may be sufficiently evidenced by
a Board Resolution;
(c) whenever in the administration of this
Indenture the Trustee shall deem it desirable that a
matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee
(unless other evidence be herein specifically
prescribed) may, in the absence of bad faith on its
part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the
written advice of such counsel or any Opinion of Counsel
shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by
it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by
this Indenture at the request or direction of any of the
Holders pursuant to this Indenture, unless such Holders
shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities
which might be incurred by it in compliance with such
request or direction;
(f) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or
other paper or document, but the Trustee, in its
discretion, may make such further inquiry or
investigation into such facts or matters as it may see
fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled
to examine the books, records and premises of the
Company, personally or by agent or attorney; and
(g) the Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys and the
Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney
appointed with due care by it hereunder.
SECTION 604. Not Responsible for Recitals or Issuance of
Securities.
The recitals contained herein and in the
Securities, except the Trustee's certificates of
authentication, shall be taken as the statements of the
Company, and the Trustee and any Authenticating Agent assume
no responsibility for their correctness. The Trustee makes
no representations as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee and any
Authenticating Agent shall not be accountable for the use or
application by the Company of Securities or the proceeds
thereof.
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying
Agent, any Security Registrar or any other agent of the
Company, in its individual or any other capacity, may become
the owner or pledgee of Securities and, subject to Sections
608 and 613, may otherwise deal with the Company with the
same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Security Registrar or
such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee or any Paying Agent in
trust hereunder need not be segregated from other funds
except to the extent required by law. The Trustee or any
Paying Agent shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed
with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees:
(a) to pay to the Trustee from time to time
reasonable compensation for all services rendered by it
hereunder as may be mutually agreed upon in writing by
the Company and the Trustee (which compensation shall
not be limited by any provision of law in regard to the
compensation of a trustee of an express trust);
(b) except as otherwise expressly provided herein,
to reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred
or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation
and the expenses and disbursements of its agents and
counsel) except to the extent any such expense,
disbursement or advance may be attributable to its
negligence or bad faith; and
(c) to indemnify the Trustee for, and to hold it
harmless against, any loss, liability or expense
incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or
administration of this trust, including the costs and
expenses of defending itself against any claim or
liability in connection with the exercise or performance
of any of its powers or duties hereunder.
As security for the performance of the obligations
of the Company under this Section, the Trustee shall have a
lien prior to the Securities upon all property and funds held
or collected by the Trustee as such, except funds held in
trust for the benefit of the Holders of particular
Securities.
SECTION 608. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting
interest within the meaning of the Trust Indenture Act, the
Trustee shall either eliminate such interest or resign, to
the extent and in the manner provided by, and subject to the
provisions of, the Trust Indenture Act and this Indenture.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder
which shall be a Person that is eligible pursuant to the
Trust Indenture Act to act as such, has a combined capacity
and surplus of at least $50,000,000 and has its Corporate
Trust Office in the Borough of Manhattan, The City of New
York. If such Person publishes reports of condition at least
annually, pursuant to law or to the requirements of a Federal
or state supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of
such Person shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition
so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section,
it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
SECTION 610. Resignation and Removal; Appointment of
Successor.
(a) No resignation or removal of the Trustee and
no appointment of a successor Trustee pursuant to this
Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
(b) The Trustee may resign at any time by giving
written notice thereof to the Company. If an instrument of
acceptance by a successor Trustee required by Section 611
shall not have been delivered to the resigning Trustee within
30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time after
the Trustee has failed to comply with its duties and
responsibilities under this Indenture by an Act of the
Holders of a majority in principal amount of the Outstanding
Securities delivered to the Trustee and to the Company.
(d) If at any time:
(i) the Trustee shall fail to comply with
Section 608 after written request therefor by the
Company or by any Holder who has been a bona fide Holder
of a Security for at least six months, or
(ii) the Trustee shall cease to be eligible
under Section 609 and shall fail to resign after written
request therefor by the Company or by any such Holder,
or
(iii) the Trustee shall become incapable of
acting or shall be adjudged a bankrupt or insolvent or a
receiver of the Trustee or of its property shall be
appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (x) the Company by a Board Resolution
may remove the Trustee, or (y) subject to Section 514, any
Holder who has been a bona fide Holder of a Security for at
least six months may, on behalf of himself and all others
similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or
become incapable of acting, or if a vacancy shall occur in
the office of Trustee for any cause, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee and
such successor Trustee shall comply with the applicable
requirements of Section 611. If, within one year after such
resignation, removal or incapability, or the occurrence of
such vacancy, a successor Trustee shall be appointed by Act
of the Holders of a majority in principal amount of the
Outstanding Securities delivered to the Company and the
retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment in
accordance with the applicable requirements of Section 611
become the successor Trustee and supersede the successor
Trustee appointed by the Company. If no successor Trustee
shall have been so appointed by the Company or the Holders
and accepted appointment in the manner required by Section
611, any Holder who has been a bona fide Holder of a Security
for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give notice of each
resignation and each removal of the Trustee and each
appointment of a successor Trustee to all Holders in the
manner provided in Section 106. Each notice shall include
the name of the successor Trustee and the address of its
Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall
execute, acknowledge and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment,
and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the
retiring Trustee; but, on request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment
of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers
and trusts of the retiring Trustee, and shall duly assign,
transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder. Upon
request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such
rights, powers and trusts.
No successor Trustee shall accept its appointment
unless at the time of such acceptance such successor Trustee
shall be qualified and eligible under this Article.
SECTION 612. Merger, Conversion, Consolidation or
Succession to Business.
Any Corporation into which the Trustee may be
merged or converted or with which it may be consolidated, or
any Corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any
Corporation succeeding to all or substantially all the
corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided such Corporation
shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further
act on the part of any of the parties hereto. In case any
Securities shall have been authenticated, but not delivered,
by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee
may adopt such authentication and deliver the Securities so
authenticated with the same effect as if such successor
Trustee had itself authenticated such securities.
SECTION 613. Preferential Collection of Claims Against
Company.
If and when the Trustee shall be or become a
creditor of the Company (or any other obligor upon the
Securities), the Trustee shall be subject to the provisions
of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor).
SECTION 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or
Agents which shall be authorized to act on behalf of the
Trustee to authenticate Securities issued upon original issue
and upon exchange, registration of transfer, partial
conversion or partial redemption or pursuant to Section 306,
and Securities so authenticated shall be entitled to the
benefits of this Indenture and shall be valid and obligatory
for all purposes as if authenticated by the Trustee
hereunder. Wherever reference is made in this Indenture to
the authentication and delivery of Securities by the Trustee
or the Trustee's certificate of authentication, such
reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the
Trustee by an Authenticating Agent. Each Authenticating
Agent shall be acceptable to the Company and shall at all
times be a Person organized and doing business under the laws
of the United States of America, any State thereof or the
District or Columbia, authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus
of not less than $50,000,000 and subject to supervision or
examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least
annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of
this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined
capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating
Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall
resign immediately in the manner and with the effect
specified in this Section.
Any Person into which an Authenticating Agent may
be merged or converted or with which it may be consolidated,
or any Person resulting from any merger, conversion or
consolidation to which such Authenticating Agent shall be a
party, or any Person succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall
continue to be an Authenticating Agent, provided such Person
shall be otherwise eligible under this Section, without the
execution or filing of any paper or any further act on the
part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by
giving written notice thereof to the Trustee and to the
Company. The Trustee may at any time terminate the agency of
an Authenticating Agent by giving written notice thereof to
such Authenticating Agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or
in case at any time such Authenticating Agent shall cease to
be eligible in accordance with the provisions of this
Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail
notice of such appointment by first-class mail, postage
prepaid, to all Holders as their names and addresses appear
in the Security Register. Any successor Authenticating Agent
upon acceptance of its appointment under this Section shall
become vested with all the rights, powers and duties of its
predecessor hereunder, with like effect as if originally
named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible to
act as such under the provisions of this Section.
Any Authenticating Agent by the acceptance of its
appointment shall be deemed to have represented to the
Trustee that it is eligible for appointment as Authenticating
Agent under this Section and to have agreed with the Trustee
that it will perform and carry out the duties of an
Authenticating Agent as herein set forth, including among
other things the duties to authenticate Securities when
presented to it in connection with the original issuance and
with exchanges, registrations of transfer or redemptions or
conversions thereof or pursuant to Section 306; it will keep
and maintain, and furnish to the Trustee from time to time as
requested by the Trustee, appropriate records of all
transactions carried out by it as Authenticating Agent and
will furnish to the Trustee such other information and
reports as the Trustee may reasonably require; and it will
notify the Trustee promptly if it shall cease to be eligible
to act as Authenticating Agent in accordance with the
provisions of this Section. Any Authenticating Agent by the
acceptance of its appointment shall be deemed to have agreed
with the Trustee to indemnify the Trustee against any loss,
liability or expense incurred by the Trustee and to defend
any claim asserted against the Trustee by reason of any acts
or failure to act of such Authenticating Agent, but such
Authenticating Agent shall have no liability for any action
taken by it in accordance with the specific written direction
of the Trustee.
The Trustee agrees to pay to each Authenticating
Agent from time to time reasonable compensation for its
services under this Section, and the Trustee shall be
entitled to be reimbursed for such payments, subject to the
provisions of Section 607.
If an appointment is made pursuant to this Section,
the Securities may have endorsed thereon, in addition to the
Trustees certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the Securities described in the
within-mentioned Indenture.
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION,
As Trustee
By
As Authenticating Agent
By
Authorized Officer
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
SECTION 701. Company to Furnish Trustee Names and Addresses
of Holders.
The Company will furnish or cause to be furnished
to the Trustee
(a) semi-annually, not more than 15 days after
each Regular Record Date, a list, in such form as the
Trustee may reasonably require, of the names and
addresses of the Holders as of such Regular Record Date,
and
(b) at such other times as the Trustee may request
in writing, within 30 days after the receipt by the
Company of any such request, a list of similar form and
content as of a date not more than 15 days prior to the
time such list is furnished;
notwithstanding the foregoing, so long as the Trustee is the
Security Registrar, no such list shall be required to be
furnished.
SECTION 702. Preservation of Information; Communications to
Holders.
(a) The Trustee shall preserve, in as current a
form as is reasonably practicable, the names and addresses of
Holders contained in the most recent list furnished to the
Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity
as Security Registrar. The Trustee may destroy any list
furnished to it as provided in Section 701 upon receipt of a
new list so furnished.
(b) The rights of Holders to communicate with
other Holders with respect to their rights under this
Indenture or under the Securities, and the corresponding
rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and
holding the same, agrees with the Company and the Trustee
that neither the Company nor the Trustee nor any agent of
either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of
Holders made pursuant to the Trust Indenture Act.
SECTION 703. Reports by Trustee.
(a) The Trustee shall transmit to Holders such
reports concerning the Trustee and its actions under this
Indenture as may be required pursuant to the Trust Indenture
Act, within 120 days after January 1 of each year
commencing with January 1, 1996, or at such other times
required by the Trust Indenture Act, and in the manner
provided therein.
(b) A copy of each such report shall, at the time
of such transmission to Holders, be filed by the Trustee with
each stock exchange upon which the Securities are listed,
with the Commission and with the Company. The Company will
notify the Trustee when the Securities are listed on any
stock exchange.
SECTION 704. Reports by Company.
The Company shall file with the Trustee and the
Commission, and transmit to Holders, such information,
documents and other reports, and such summaries thereof, as
may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act;
provided, that any such information, documents or reports
required to be filed with the Commission pursuant to Section
13 or 15(d) of the Exchange Act shall be filed with the
Trustee within 15 days after the same is so required to be
filed with the Commission.
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 801. Company May Consolidate, Etc., Only on Certain
Terms.
The Company shall not consolidate with or merge
into any other Person or convey, transfer or lease its
properties and assets substantially as an entirety to any
Person, and the Company shall not permit any Person to
consolidate with or merge into the Company, unless:
(a) in case the Company shall consolidate with or
merge into another Person or convey, transfer or lease
its properties and assets substantially as an entirety
to any Person, the Person formed by such consolidation
or into which the Company is merged or the Person which
acquires by conveyance or transfer, or which leases, the
properties and assets of the Company substantially as an
entirety shall be a Corporation, partnership or trust,
shall be organized and validly existing under the laws
of the United States of America, any State thereof or
the District of Columbia and shall expressly assume, by
an indenture supplemental hereto, executed and delivered
to the Trustee, in form satisfactory to the Trustee, the
due and punctual payment of the principal of and
premium, if any, and interest on all the Securities and
the performance or observance of every covenant of this
Indenture on the part of the Company to be performed or
observed and shall have provided for rights of
redemption in accordance with Section 1108 and
conversion privileges in accordance with Section 1309;
(b) immediately after giving effect to such
transaction, no Event of Default, and no event which,
after notice or lapse of time or both, would become an
Event of Default, shall have happened and be continuing;
(c) such consolidation, merger, conveyance,
transfer or lease does not adversely affect the validity
or enforceability of the Securities; and
(d) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each
stating that such consolidation, merger, conveyance,
transfer or lease and, if a supplemental indenture is
required in connection with such transaction, such
supplemental indenture comply with this Article and that
all conditions precedent herein provided for relating to
such transaction have been complied with.
SECTION 802. Successor Substituted.
Upon any consolidation of the Company with, or
merger of the Company into, any other Person or any
conveyance, transfer or lease of the properties and assets of
the Company substantially as an entirety in accordance with
Section 801, the successor Person formed by such
consolidation or into which the Company is merged or to which
such conveyance, transfer or lease is made shall succeed to,
and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same
effect as if such successor Person had been named as the
Company herein, and thereafter, except in the case of a
lease, the predecessor Person shall be relieved of all
obligations and covenants under this Indenture and the
Securities.
ARTICLE NINE
Supplemental Indentures
SECTION 901. Supplemental Indentures Without Consent of
Holders.
Without the consent of any Holders, the Company,
when authorized by a Board Resolution, and the Trustee, at
any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(a) to evidence the succession of another Person
to the Company and the assumption by any such successor
of the covenants of the Company herein and in the
Securities; or
(b) to add to the covenants of the Company for the
benefit of the Holders or an additional Event of
Default, or to surrender any right or power herein
conferred upon the Company; or
(c) to secure the Securities; or
(d) to make provision with respect to the rights
of redemption and conversion privileges of Holders
pursuant to the requirements of Section 1108 and Section
1309, respectively; or
(e) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with
respect to the Securities; or
(f) to cure any ambiguity, to correct or
supplement any provision herein which may be defective
or inconsistent with any other provision herein, or to
make any other provisions with respect to matters or
questions arising under this Indenture which shall not
be inconsistent with the provisions of this Indenture;
provided, that such action pursuant to this Clause (f)
shall not adversely affect the interests of the Holders
in any material respect.
SECTION 902. Supplemental Indenture with Consent of
Holders.
With the consent of the Holders of not less than a
majority in principal amount of the Outstanding Securities,
by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution,
and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions
to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner
the rights of the Holders under this Indenture; provided,
however, that no such supplemental indenture shall, without
the consent of the Holder of each Outstanding Security
affected thereby,
(a) change the Stated Maturity of the principal
of, or any installment of interest on, any Security, or
reduce the principal amount thereof or the rate of
interest thereon or any premium payable upon the
redemption thereof, or change the place of payment
where, or the coin or currency in which, any Security or
any premium or interest thereon is payable, or impair
the right to institute suit for the enforcement of any
such payment on or after the Stated Maturity thereof
(or, in the case of redemption, on or after the
Redemption Date), or adversely affect the right to
convert any Security as provided in Article Thirteen
including, without limitation, Section 1304 (except as
permitted by Section 901(d)), or modify the provisions
of this Indenture with respect to the subordination of
the Securities in a manner adverse to the Holders, or
(b) reduce the percentage in principal amount of
the Outstanding Securities, the consent of whose Holders
is required for any such supplemental indenture, or the
consent of whose Holders is required for any waiver of
compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences
provided for in this Indenture, or
(c) modify any of the provisions of this Section,
Section 513 or Section 1009, except to increase any such
percentage or to provide that certain other provisions
of this Indenture cannot be modified or waived without
the consent of the Holder of each Outstanding Security
affected thereby; provided, however, that this Clause
shall not be deemed to require the consent of any Holder
with respect to changes in the references to "the
Trustee" and concomitant changes in this Section and
Section 1009, or the deletion of this proviso, in
accordance with the requirements of Section 901(e).
It shall not be necessary for any Act of Holders
under this Section to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient
if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts
created by, any supplemental indenture permitted by this
Article or the modifications thereby of the trusts created by
this Indenture, the Trustee shall be entitled to receive, and
(subject to Section 601) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by
this Indenture. The Trustee may, but shall not be obligated
to, enter into any such supplemental indenture which
adversely affects in a material way the Trustee's own rights,
duties or immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture
under this Article, this Indenture shall be modified in
accordance therewith, and such supplemental indenture shall
form a part of this Indenture for all purposes; and every
Holder of Securities theretofore or thereafter authenticated
and delivered hereunder shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to
this Article shall conform to the requirements of the Trust
Indenture Act.
SECTION 906. Reference in Securities to Supplemental
Indentures.
Securities authenticated and delivered after the
execution of any supplemental indenture pursuant to this
Article may, and shall if required by the Trustee, bear a
notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company
shall so determine, new Securities so modified as to conform,
in the opinion of the Trustee and the Company, to any such
supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities.
SECTION 907. Notice of Supplemental Indenture.
Promptly after the execution by the Company and the
Trustees of any supplemental indenture pursuant to Section
902, the Company shall transmit to the Holders a notice
setting forth the substance of such supplemental indenture.
ARTICLE TEN
Covenants
SECTION 1001. Payment of Principal, Premium and Interest.
The Company will duly and punctually pay the
principal of and premium, if any, and interest on the
Securities in accordance with the terms of the Securities and
this Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in New York, New York an
office or agency, which office or agency may be maintained
through the Trustee or the Paying Agent, where Securities may
be presented or surrendered for payment, where Securities may
be surrendered for registration of transfer, where Securities
may be surrendered for exchange or conversion and where
notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served. The Company
will give prompt written notice to the Trustee of the
location, and any change in the location, of any such office
or agency. If at any time the Company shall fail to maintain
any such required office or agency or shall fail to furnish
the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.
The Company may also from time to time designate
one or more other offices or agencies where the Securities
may be presented or surrendered for any or all such purposes
and may from time to time rescind such designations;
provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to
maintain an office or agency in New York, New York for such
purposes. The Company will give prompt written notice to the
Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
SECTION 1003. Money for Security Payments to be Held in
Trust.
If the Company shall at any time act as its own
Paying Agent, it will, on or before each due date of the
principal of and premium, if any, or interest on any of the
Securities, segregate and hold in trust for the benefit of
the Persons entitled thereto a sum sufficient to pay the
principal and premium, if any, or interest so becoming due
until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the
Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying
Agents, it will, prior to each due date of the principal of
and premium, if any, or interest on any Securities, deposit
with a Paying Agent a sum sufficient to pay the principal and
premium, if any, and interest so becoming due, such sum to be
held as provided by the Trust Indenture Act, and (unless such
Paying Agent is the Trustee) the Company will promptly notify
the Trustee of its action or failure so to act.
The Company will cause each Paying Agent other than
the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the
Trustee, subject to the provisions of this Section, that such
Paying Agent will (a) comply with the provisions of the Trust
Indenture Act applicable to it as a Paying Agent and hold all
sums held by it for the payment of principal and premium, if
any, and interest on the Securities in trust for the benefit
of the Persons entitled thereto until such sums shall be paid
to such Persons or otherwise disposed of as herein provided;
and (b) at any time during the continuance of any default by
the Company (or any other obligor upon the Securities) in the
making of any payment in respect of the Securities, upon the
written request of the Trustee, forthwith pay to the Trustee
all sums held in trust by such Paying Agent for payment in
respect of the Securities.
The Company may at any time, for the purpose of
obtaining the satisfaction and discharge of this Indenture or
for any other purpose, pay, or by Company Order direct any
Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums
were held by the Company or such Paying Agent; and, upon such
payment by any Paying Agent to the Trustee, such Paying Agent
shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying
Agent or then held by the Company, in trust for the payment
of the principal of and premium, if any, or interest on any
security and remaining unclaimed for two years after such
principal and premium, if any, or interest has become due and
payable shall be paid to the Company on Company Request, or
(if then held by the Company) shall be discharged from such
trust; and the Holder of such Security shall thereafter, as
an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all
liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying
Agent, before being required to make any such repayment, may
at the expense of the Company cause to be published once, in
a newspaper published in the English language, customarily
published on each Business Day and of general circulation in
New York, New York, notice that such money remains unclaimed
and that, after a date specified therein, which shall not be
less than 30 days from the date of such publication, any
unclaimed balance of such money then remaining will be repaid
to the Company.
SECTION 1004. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120
days after the end of each fiscal year of the Company ending
after the date hereof, an Officers' Certificate stating
whether or not to the best knowledge of the signers thereof
after due inquiry the Company is in default in the
performance and observance of any of the terms, provisions
and conditions of this Indenture (without regard to any
period of grace or requirement of notice provided hereunder)
and, if the Company shall be in default, specifying all such
defaults and the nature and status thereof of which they may
have knowledge.
SECTION 1005. Existence.
Subject to Article Eight, the Company will, and
will cause each of its Subsidiaries to, do or cause to be
done all things necessary to preserve and keep in full force
and effect its existence, rights (charter and Statutory) and
franchises; provided, however, that neither the Company nor
any Subsidiary shall be required to preserve any such right
or franchise if the Board of Directors shall determine that
the preservation thereof is no longer desirable in the
conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the
Holders.
SECTION 1006. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be
paid or discharged, before any penalty accrues from the
failure to so pay or discharge, (a) all taxes, assessments
and governmental charges levied or imposed upon the Company
or any Subsidiary or upon the income, profits or property of
the Company or any Subsidiary, and (b) all lawful claims for
labor, materials and supplies which, if unpaid, might by law
become a Lien upon the property of the Company or any
Subsidiary; provided, however, that the Company shall not be
required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim the
amount, applicability or validity of which is being contested
in good faith by appropriate proceedings and for which
adequate provision has been made.
SECTION 1007. Maintenance of Properties.
The Company will, and will cause each of its
Subsidiaries to, maintain its respective properties and
assets (including all licenses) in good working order and
condition (ordinary wear and tear excepted) and make all
necessary repairs, renewals, replacements, additions,
betterments and improvements thereto, as, in the reasonable
judgment of the Company in its sole discretion, shall be
reasonably necessary for the proper conduct of its business.
SECTION 1008. Commission Reports.
The Company will file with the Trustee, within 15
days after it files them with the Commission, copies of the
annual reports and of the information, documents and other
reports (or copies of such portions of any of the foregoing
as the Commission may by rules and regulations prescribe)
which the Company is required to file with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act. The
Company will also comply with the applicable provisions of
the Trust Indenture Act.
SECTION 1009. Waiver of Certain Covenants.
The Company may omit in any particular instance to
comply with any covenant or condition set forth in Section
1005, 1006 or 1007, if before the time for such compliance
the Holders of at least a majority in principal amount of the
Outstanding Securities shall, by Act of such Holders, either
waive such compliance in such instance or generally waive
compliance with such covenant or condition, but no such
waiver shall extend to or affect such covenant or condition
except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company
and the duties of the Trustee in respect of any such covenant
or condition shall remain in full force and effect.
SECTION 1010. Reservation and Issuance of Common Stock.
The Company will at all times reserve and keep
available, free from preemptive rights, out of the authorized
but unissued Common Stock or out of the Common Stock held in
treasury, for the purpose of effecting the redemption of
Securities pursuant to Section 1101 or Section 1401 or the
conversion of Securities pursuant to Section 1301, the full
number of shares of Common Stock then issuable upon the
redemption or conversion of all Outstanding Securities.
All shares of Common Stock which may be issued upon
redemption of Securities pursuant to Section 1101 or Section
1401 or conversion of Securities pursuant to Section 1301
will upon issue be fully paid and nonassessable and, except
as provided in Section 1107 and Section 1307, the Company
will pay all taxes, liens and charges with respect to the
issue thereof.
SECTION 1011. Registration and Listing of Shares.
If any shares of Common Stock required to be
reserved for purposes of redemption of Securities under
Article Eleven or Article Fourteen or conversion of
Securities under Article Thirteen require registration with
or approval of any governmental authority under any Federal
or State law before such shares may be issued upon redemption
or conversion, the Company will in good faith and as
expeditiously as possible endeavor to cause such shares of
Common Stock to be duly registered or approved, as the case
may be. Further, if and so long as the Common Stock is
listed on the New York Stock Exchange or any other national
securities exchange, the Company will, if permitted by the
rules of such exchange, list and keep listed on such
exchange, upon official notice of issuance, all shares of
Common Stock issuable upon redemption of Securities pursuant
to Section 1101 or Section 1401 or upon conversion of
Securities pursuant to Section 1301.
ARTICLE ELEVEN
Redemption of Securities
SECTION 1101. Right of Redemption.
The Securities may be redeemed at the election of
the Company, in whole at any time after March 31, 1998 when
the price per share of Common Stock exceeds $6.97 for ten
consecutive Trading Days at the Redemption Price specified in
the form of Security hereinbefore set forth, together with
accrued interest to the Redemption Date, payable in cash.
SECTION 1102. Applicability of Article.
Redemption of Securities at the election of the
Company as permitted by any provision of this Indenture shall
be made in accordance with such provision and this Article.
SECTION 1103. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any
Securities pursuant to Section 1101 shall be evidenced by a
Board Resolution. Upon a redemption, the Company shall, at
least 30 days prior to the Redemption Date fixed by the
Company (unless a shorter period shall be satisfactory to the
Trustee), notify the Trustee of such Redemption Date.
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given by first-class
mail, postage prepaid, mailed not more than 15 days prior to
the Redemption Date, to each Holder of Securities, at his
address appearing in the Security Register.
All notices of redemption shall state:
(a) the Redemption Date,
(b) the Redemption Price,
(c) that on the Redemption Date the Redemption
Price will become due and payable upon each such
Security to be redeemed and that interest thereon will
cease to accrue on and after said date,
(d) the Conversion Price, the date on which the
right to convert the Securities to be redeemed will
terminate and the place or places where such Securities
may be surrendered for conversion, and
(e) the place or places where such Securities are
to be surrendered for payment of the Redemption Price.
Notice of redemption of Securities to be redeemed
at the election of the Company shall be given by the Company
or, at the Company's request, by the Trustee in the name and
at the expense of the Company.
SECTION 1105. Securities Payable on Redemption Date.
Notice of redemption having been given as
aforesaid, the Securities shall, on the Redemption Date,
become due and payable at the Redemption Price therein
specified, and from and after such date (unless the Company
shall default in the payment of the Redemption Price and
accrued interest) such Securities shall cease to bear
interest. Upon surrender of any such Security for redemption
in accordance with the notice of redemption, such Security
shall be paid by the Company at the Redemption Price,
together with accrued interest to the Redemption Date payable
in cash; provided, however, that installments of interest
whose Maturity is on or prior to the Redemption Date shall be
payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of
business on the relevant Record Dates according to their
terms and the provisions of Section 307.
If any Security called for redemption shall not be
so paid upon surrender thereof for redemption, the principal
and premium, if any, shall, until paid, bear interest from
the Redemption Date at the rate borne by the Security.
Securities redeemed pursuant to Section 1101 or
Section 1401 shall be deemed to have been redeemed
immediately prior to the close of business on the Redemption
Date, and at such time the rights of the Holders of such
Securities as Holders shall cease, and the Person or Persons
entitled to receive the Common Stock issuable upon redemption
shall be treated for all purposes as the record holder or
holders of such Common Stock as and after such time. As
promptly as practicable on or after the Redemption Date, the
Company shall issue and shall deliver at such office or
agency a certificate or certificates for the number of full
shares of Common Stock issuable upon redemption, together
with payment in lieu of any fraction of a share, as provided
in Section 1106.
SECTION 1106. Fractions of Shares.
No fractional shares of Common Stock shall be
issued upon redemption of Securities pursuant to Section
1101. Instead of any fractional share of Common Stock which
would otherwise be issuable upon redemption of any Security
or Securities, the Company shall pay a cash adjustment in
respect of such fraction in an amount equal to the same
fraction of the Closing Price (as hereafter defined) at the
close of business on the Redemption Date (or, if such day is
not a Trading Day (as hereafter defined), on the Trading Day
immediately preceding such day).
SECTION 1107. Taxes on Redemptions.
The Company will pay any and all taxes that may be
payable in respect of the issue or delivery of shares of
Common Stock on redemption of Securities pursuant to Section
1101 or Section 1401. The Company shall not, however, be
required to pay any tax which may be payable in respect of
any transfer involved in the issue and delivery of shares of
Common Stock in a name other than that of the Holder of the
Security or Securities to be redeemed, and no such issue or
delivery shall be made unless and until the Person requesting
such issue has paid to the Company the amount of any such
tax, or has established to the satisfaction of the Company
that such tax has been paid.
SECTION 1108. Provisions of Consolidation,
Merger or Sale of Assets.
In case of any consolidation of the Company with,
or merger of the Company into, any other Person, any merger
of another Person into the Company (other than a merger which
does not result in any reclassification, conversion, exchange
or cancellation of outstanding shares of Common Stock) or any
sale or transfer of all or substantially all of the assets of
the Company, the Person formed by such consolidation or
resulting from such merger or which acquires such assets, as
the case may be, shall execute and deliver to the Trustee a
supplemental indenture providing that the Securities shall be
redeemable as specified in Section 1101 or Section 1401 only
in exchange for the kind and amount of securities, cash and
other property, if any, receivable upon such consolidation,
merger, sale or transfer by a holder of the number of shares
of Common Stock which the Holder of such Security might have
received upon a redemption immediately prior to such
consolidation, merger, sale or transfer, assuming such holder
of Common Stock (a) is not a Person with which the Company
consolidated or into which the Company merged or which merged
into the Company or to which such sale or transfer was made,
as the case may be (a "Constituent Person"), or an Affiliate
of a Constituent Person and (b) failed to exercise his rights
of election, if any, as to the kind or amount of securities,
cash and other property receivable upon such consolidation,
merger, sale or transfer (provided that if the kind or amount
of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer is not the same for
each share of Common Stock held immediately prior to such
consolidation, merger, sale or transfer by other than a
Constituent Person or an Affiliate thereof and in respect of
which such rights of election shall not have been exercised
("nonelecting share"), then for the purpose of this Section
the kind and amount of securities, cash and other property
receivable upon such consolidation, merger, sale or transfer
by each nonelecting share shall be deemed to be the kind and
amount so receivable per share by a plurality of the
nonelecting shares). Such supplemental indenture shall
provide for adjustments which, for events subsequent to the
effective date of such supplemental indenture, shall be as
nearly equivalent as may be practicable to the adjustments
provided for in this Indenture. The above provisions of this
Section shall similarly apply to successive consolidations,
mergers, sales or transfers.
ARTICLE TWELVE
Subordination of Securities
SECTION 1201. Securities Subordinated to Senior
Indebtedness.
The Company covenants and agrees, and each Holder
of a Security, by his acceptance thereof, likewise covenants
and agrees, that, to the extent and in the manner hereinafter
set forth in this Article, the indebtedness represented by
the Securities and the payment of the principal of and
premium, if any, and interest on each and all of the
Securities are hereby expressly made subordinate and subject
in right of payment to the prior payment in full of all
Senior Indebtedness.
SECTION 1202. Payment Over of Proceeds Upon Dissolution,
Etc.
In the event of (a) any insolvency or bankruptcy
case or proceeding, or any receivership, liquidation,
reorganization or other similar case or proceeding, relative
to the Company or to its creditors, as such, or to a
substantial part of its assets, or (b) any proceeding for the
liquidation, dissolution or other winding up of the Company,
whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (c) any assignment for the
benefit of creditors or any other marshalling of assets and
liabilities of the Company, then and in any such event the
holders of Senior Indebtedness shall be entitled to receive
payment in full of all amounts due or to become due on or in
respect of all Senior Indebtedness, or provision shall be
made for such payment in money or money's worth, before the
Holders of the Securities are entitled to receive any payment
or distribution of any kind or character, whether in cash,
property or securities, on account of principal of or
premium, if any, or interest on the Securities, and to that
end the holders of Senior Indebtedness shall be entitled to
receive, for application to the payment thereof, any payment
or distribution of any kind or character, whether in cash,
property or securities, including any such payment or
distribution which may be payable or deliverable by reason of
the payment of any other indebtedness of the Company being
subordinated to the payment of the Securities, which may be
payable or deliverable in respect of the Securities in any
such case, proceeding, dissolution, liquidation or other
winding up or event.
In the event that, notwithstanding the foregoing
provisions of this Section, the Trustee or the Holder of any
Security shall have received any payment or distribution of
assets of the Company of any kind or character, whether in
cash, property or securities, including any such payment or
distribution which may be payable or deliverable by reason of
the payment of any other indebtedness of the Company being
subordinated to the payment of the Securities, before all
Senior Indebtedness is paid in full or payment thereof
provided for, and if such fact shall, at or prior to the time
of such payment or distribution, have been made known to the
Trustee or such Holder, as the case may be, then and in such
event such payment or distribution shall be paid over or
delivered forthwith to the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee, agent or other
Person making payment or distribution of assets of the
Company for application to the payment of all Senior
Indebtedness remaining unpaid, to the extent necessary to pay
all Senior Indebtedness in full, after giving effect to any
concurrent payment or distribution to or for the holders of
Senior Indebtedness.
For purposes of this Article only, the words "cash,
property or securities" shall not be deemed to include
securities of the Company as reorganized or readjusted, or
securities of the Company or any other Corporation provided
for by a plan of reorganization or readjustment which are
subordinated in right of payment to all Senior Indebtedness
which may at the time be outstanding to substantially the
same extent as, or to a greater extent than, the Securities
are so subordinated as provided in this Article. The
consolidation of the Company with, or the merger of the
Company into, another Person or the liquidation or
dissolution of the Company following the conveyance or
transfer of its properties and assets substantially as an
entirety to another Person upon the terms and conditions set
forth in Article Eight shall not be deemed a dissolution,
winding up, liquidation, reorganization, assignment for the
benefit of creditors or marshalling of assets and liabilities
of the Company for the purposes of this Section if the Person
formed by such consolidation or into which the Company is
merged or which acquires by conveyance or transfer such
properties and assets substantially as an entirety, as the
case may be, shall, as a part of such consolidation, merger,
conveyance or transfer, comply with the conditions set forth
in Article Eight.
SECTION 1203. Prior Payment to Senior Indebtedness Upon
Acceleration of Securities.
In the event that any Securities are declared due
and payable before their Stated Maturity, then and in such
event the holders of Senior Indebtedness outstanding at the
time such Securities so become due and payable shall be
entitled to receive payment in full of all amounts due on or
in respect of such Senior Indebtedness, or provision shall be
made for such payment in money or money's worth, before the
Holders of the Securities are entitled to receive any payment
(including any payment which may be payable by reason of the
payment of any other indebtedness of the Company being
subordinated to the payment of the Securities) by the Company
on account of the principal of or premium, if any, or
interest on the Securities or on account of the purchase or
other acquisition of Securities.
In the event that, notwithstanding the foregoing,
the Company shall make any payment to the Trustee or the
Holder of any Security prohibited by the foregoing provisions
of this Section, and if such fact shall, at or prior to the
time of such payment, have been made known to the Trustee or
such Holder, as the case may be, then and in such event such
payment shall be paid over and delivered forthwith to the
Company.
The provisions of this Section shall not apply to
any payment with respect to which Section 1202 would be
applicable.
SECTION 1204. No Payment When Senior Indebtedness in
Default.
(a) In the event and during the continuation of
any default in the payment of principal of or premium, if
any, or interest on any Senior Indebtedness beyond any
applicable grace period with respect thereto, or in the event
that any event of default with respect to any Senior
Indebtedness shall have occurred and be continuing and shall
have resulted in such Senior Indebtedness becoming or being
declared due and payable prior to the date on which it would
otherwise have become due and payable, unless and until such
event of default shall have been cured or waived or shall
have ceased to exist and such acceleration shall have been
rescinded or annulled, or (b) in the event any judicial
proceeding shall be pending with respect to any such default
in payment or event of default, then no payment (including
any payment which may be payable by reason of the payment of
any other indebtedness of the Company being subordinated to
the payment of the Securities) shall be made by the Company
on account of the principal of or premium, if any, or
interest on the Securities or on account of the purchase or
other acquisition of Securities.
In the event that, notwithstanding the foregoing,
the Company shall make any payment to the Trustee or the
Holder of any Security prohibited by the foregoing provisions
of this Section, and if such fact shall, at or prior to the
time of such payment, have been made known to the Trustee or
such Holder, as the case may be, then and in such event such
payment shall be paid over and delivered forthwith to the
Company.
The provisions of this Section shall not apply to
any payment with respect to which Section 1202 would be
applicable.
SECTION 1205. Payment Permitted If No Default.
Nothing contained in this Article or elsewhere in
this Indenture or in any of the Securities shall prevent (a)
the Company, at any time except during the pendency of any
case, proceeding, dissolution, liquidation or other winding
up, assignment for the benefit of creditors or other
marshalling of assets and liabilities of the Company referred
to in Section 1202 or under the conditions described in
Section 1203 or 1204, from making payments at any time of
principal of and premium, if any, or interest on the
Securities, or (b) the application by the Trustee of any
money deposited with it hereunder to the payment of or on
account of the principal of and premium, if any, or interest
on the Securities or the retention of such payment by the
Holders, if, at the time of such application by the Trustee,
it did not have knowledge that such payment would have been
prohibited by the provisions of this Article.
SECTION 1206. Subrogation to Rights of Holders of Senior
Indebtedness.
Subject to the payment in full of all amounts due
on or in respect of Senior Indebtedness, the Holders of the
Securities shall be subrogated to the extent of the payments
or distributions made to the holders of such Senior
Indebtedness pursuant to the provisions of this Article
(equally and ratably with the holders of all indebtedness of
the Company which by its express terms is subordinated to
other indebtedness of the Company to substantially the same
extent as the Securities are subordinated and is entitled to
like rights of subrogation) to the rights of the holders of
such Senior Indebtedness to receive payments and
distributions of cash, property and securities applicable to
the Senior Indebtedness until the principal of and premium,
if any, and interest on the Securities shall be paid in full.
For purposes of such subrogation, no payments or
distributions to the holders of the Senior Indebtedness of
any cash, property or securities to which the Holders of the
Securities or the Trustee would be entitled except for the
provisions of this Article, and no payments over pursuant to
the provisions of this Article to the holders of Senior
Indebtedness by Holders of the Securities or the Trustee,
shall, as among the Company, its creditors other than holders
of Senior Indebtedness and the Holders of the Securities, be
deemed to be a payment or distribution by the Company to or
on account of the Senior Indebtedness.
SECTION 1207. Provisions Solely to Define Relative Rights.
The provisions of this Article are and are intended
solely for the purpose of defining the relative rights of the
Holders of the Securities on the one hand and the holders of
Senior Indebtedness on the other hand. Nothing contained in
this Article or elsewhere in this Indenture or in the
Securities is intended to or shall (a) impair, as among the
Company, its creditors other than holders of Senior
Indebtedness and the Holders of the Securities, the
obligation of the Company, which is absolute and
unconditional, to pay to the Holders of the Securities the
principal of and premium, if any, and interest on the
Securities as and when the same shall become due and payable
in accordance with their terms; or (b) affect the relative
rights against the Company of the Holders of the Securities
and creditors of the Company other than the holders of Senior
Indebtedness; or (c) prevent the Trustee or the Holder of any
Security from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to
the rights, if any, under this Article of the holders of
Senior Indebtedness to receive cash, property and securities
otherwise payable or deliverable to the Trustee or such
Holder.
SECTION 1208. Trustee to Effectuate Subordination.
Each Holder of a Security by his acceptance thereof
authorizes and directs the Trustee on his behalf to take such
action as may be necessary or appropriate to effectuate the
subordination provided in this Article and appoints the
Trustee his attorney-in-fact for any and all such purposes.
SECTION 1209. No Waiver of Subordination Provisions.
No right of any present or future holder of any
Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the
Company or by any act or failure to act, in good faith, by
any such holder, or by any noncompliance by the Company with
the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof any such holder may have
or be otherwise charged with.
Without in any way limiting the generality of the
foregoing paragraph, the holders of Senior Indebtedness may,
at any time and from time to time, without the consent of or
notice to the Trustee or the Holders of the Securities,
without incurring responsibility to the Holders of the
Securities and without impairing or releasing the
subordination provided in this Article or the obligations
hereunder of the Holders of the Securities to the holders of
Senior Indebtedness, do any one or more of the following:
(a) change the manner, place or terms of payment or extend
the time of payment of, or renew or alter, Senior
Indebtedness, or otherwise amend or supplement in any manner
Senior Indebtedness or any instrument evidencing the same or
any agreement under which Senior Indebtedness is outstanding;
(b) sell, exchange, release or otherwise deal with any
property pledged, mortgaged or otherwise securing Senior
Indebtedness; (c) release any Person liable in any manner for
the collection of Senior Indebtedness; and (d) exercise or
refrain from exercising any rights against the Company and
any other Person.
SECTION 1210. Notice to Trustee.
The Company shall give prompt written notice to the
Trustee of any fact known to the Company which would prohibit
the making of any payment to or by the Trustee in respect of
the Securities. Notwithstanding the provisions of this
Article or any other provision of this Indenture, the Trustee
shall not be charged with knowledge of the existence of any
facts which would prohibit the making of any payment to or by
the Trustee in respect of the Securities, unless and until
the Trustee shall have received written notice thereof from
the Company or a holder of Senior Indebtedness or from any
trustee therefor; and, prior to the receipt of any such
written notice, the Trustee, subject to the provisions of
Section 601, shall be entitled in all respects to assume that
no such facts exist; provided, however, that if the Trustee
shall not have received the notice provided for in this
Section at least three Business Days prior to the date upon
which by the terms hereof any money may become payable for
any purpose (including, without limitation, the payment of
the principal of and premium, if any, or interest on any
Security), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and
authority to receive such money and to apply the same to the
purpose for which such money was received and shall not be
affected by any notice to the contrary which may be received
by it within three Business Days prior to such date.
Subject to the provisions of Section 601, the
Trustee shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself to be a
holder of Senior Indebtedness (or a trustee therefor) to
establish that such notice has been given by a holder of
Senior Indebtedness (or a trustee therefor). In the event
that the Trustee determines in good faith that further
evidence is required with respect to the right of any Person
as a holder of Senior Indebtedness to participate in any
payment or distribution pursuant to this Article, the Trustee
may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior
Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or
distribution and any other facts pertinent to the rights of
such Person under this Article, and if such evidence is not
furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person
to receive such payment.
SECTION 1211. Reliance on Judicial Order or Certificate of
Liquidating Agent.
Upon any payment or distribution of assets of the
Company referred to in this Article, the Trustee, subject to
the provisions of Section 601, and the Holders of the
Securities shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such
insolvency, bankruptcy, receivership, liquidation,
reorganization, dissolution, winding up or similar case or
proceeding is pending, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian,
assignee for the benefit of creditors, agent or other Person
making such payment or distribution, delivered to the Trustee
or to the Holders of Securities, for the purpose of
ascertaining the Persons entitled to participate in such
payment or distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the
amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto
or to this Article.
SECTION 1212. Trustee Not Fiduciary For Holders of Senior
Indebtedness.
The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness and
shall not be liable to any such holders if it shall in good
faith mistakenly pay over or distribute to Holders of
Securities or to the Company or to any other Person cash,
property or securities to which any holders of Senior
Indebtedness shall be entitled by virtue of this Article or
otherwise.
SECTION 1213. Right of Trustee as Holder of Senior
Indebtedness; Preservation of Trustee's
Rights.
The Trustee in its individual capacity shall be
entitled to all the rights set forth in this Article with
respect to any Senior Indebtedness which may at any time be
held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the
Trustee of any of its rights as such holder.
Nothing in this Article shall apply to any claim
of, or payments to, the Trustee under or pursuant to Section
607.
SECTION 1214. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the
Trustee shall have been appointed by the Company and be then
acting hereunder, the term "Trustee" as used in this Article
shall in such case (unless the context otherwise requires) be
construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as
if such Paying Agent were named in this Article in addition
to or in place of the Trustee; provided, however, that
Section 1213 shall not apply to the Company or any Affiliate
of the Company if it or such Affiliate acts as Paying Agent.
SECTION 1215. Certain Conversions Deemed Payment.
For the purposes of this Article only, (a) the
issuance and delivery of junior securities upon conversion of
Securities in accordance with Article Thirteen shall not be
deemed to constitute a payment or distribution on account of
the principal of or premium, if any, or interest on
Securities or on account of the purchase or other acquisition
of Securities, and (b) the payment, issuance or delivery of
cash, property or securities (other than junior securities)
upon conversion of a Security shall be deemed to constitute
payment on account of the principal of such Security. For
the purposes of this Section, the term "junior securities"
means (i) shares of any class of capital stock of the Company
and (ii) securities of the Company which are subordinated in
right of payment to all Senior Indebtedness which may be
outstanding at the time of issuance or delivery of such
securities to substantially the same extent as, or to a
greater extent than, the Securities are so subordinated as
provided in this Article. Nothing contained in this Article
or elsewhere in this Indenture or in the Securities is
intended to or shall impair, as among the Company, its
creditors other than holders of Senior Indebtedness and the
Holders or the Securities, the right, which is absolute and
unconditional, of the Holder of any Security to convert such
Security in accordance with Article Thirteen.
ARTICLE THIRTEEN
Conversion of Securities
SECTION 1301. Conversion Privilege and Conversion Price.
Subject to and upon compliance with the provisions
of this Article, at any time on or before the close of
business on March 31, 2005 and at the option of the Holder
thereof, any Security or any portion of the principal amount
thereof which equals $1,000 or any integral multiple thereof
may be converted at the principal amount thereof, or of such
portion thereof, into fully paid and nonassessable shares
(calculated as to each conversion to the nearest 1/100 of a
share) of Common Stock, at the Conversion Price, determined
as hereinafter provided, in effect at the time of conversion.
In case the Securities are called for redemption, such
conversion privilege in respect of each Security shall expire
at the close of business on the Redemption Date, unless the
Company defaults in making the payment due upon redemption.
The Conversion Price shall be $6.15 principal
amount per share of Common Stock. The number of shares of
Common Stock received shall be equal to the principal amount
of the Securities converted divided by the Conversion Price.
The Conversion Price shall be adjusted in certain instances
as provided in paragraphs (a), (b), (c), (d), (e), (f) and
(i) of Section 1304.
SECTION 1302. Exercise of Conversion Privilege.
In order to exercise the conversion privilege, the
Holder of any Security shall surrender such Security, duly
endorsed or assigned to the Company or in blank, at any
office or agency of the Company maintained pursuant to
Section 1002, accompanied by written notice to the Company in
the form provided in the Security (or such other notice as is
acceptable to the Company) at such office or agency that the
Holder elects to convert such Security or, if less than the
entire principal amount thereof is to be converted, the
portion thereof to be converted. Securities surrendered for
conversion during the period from the opening of business on
any Regular Record Date next preceding any Interest Payment
Date to the close of business on such Interest Payment Date
shall (except in the case of Securities which have been
called for redemption on a Redemption Date within such
period) be accompanied by payment in New York Clearing House
funds or other funds acceptable to the Company of an amount
equal to the interest payable on such Interest Payment Date
on the principal amount being surrendered for conversion.
Except as provided in the immediately preceding sentence and
subject to the fourth paragraph of Section 307, no payment or
adjustment shall be made upon any conversion on account of
any interest accrued on the Securities surrendered for
conversion or on account of any dividends on the Common Stock
issued upon conversion.
Securities shall be deemed to have been converted
immediately prior to the close of business on the day of
surrender of such Securities for conversion in accordance
with the foregoing provisions, and at such time the rights of
the Holders of such Securities as Holders shall cease, and
the Person or Persons entitled to receive the Common Stock
issuable upon conversion shall be treated for all purposes as
the record holder or holders of such Common Stock as and
after such time. As promptly as practicable on or after the
conversion date, the Company shall issue and shall deliver at
such office or agency a certificate or certificates for the
number of full shares of Common Stock issuable upon
conversion, together with payment in lieu of any fraction of
a share, as provided in Section 1303.
In the case of any Security which is converted in
part only, upon such conversion the Company shall execute and
the Trustee shall authenticate and deliver to the Holder
thereof, at the expense of the Company, a new Security or
Securities of authorized denominations in aggregate principal
amount equal to the unconverted portion of the principal
amount of such Security.
So long as any rights pursuant to the Company's
rights plan (the "Rights Plan"), adopted by the Board of
Directors of the Company on June 14, 1989, have not expired,
been redeemed or otherwise terminated (other than the
termination of rights held by an Acquiring Person or an
affiliate of an Acquiring Person (as defined in the Rights
Plan) in accordance with the terms of the Rights Plan), the
Holder of any Security surrendered for conversion will be
entitled to receive upon such conversion, in addition to the
shares of Common Stock issuable upon such conversion (the
"Issuable Shares"), a number of rights with the terms
described in the Rights Plan to be determined as follows:
(a) if such conversion occurs on or prior to the Distribution
Date (as defined in the Rights Plan), the same number of
rights to which a holder of a number of shares of Common
Stock equal to the number of Issuable Shares is entitled at
the time of such conversion in accordance with the terms and
provisions of the Rights Plan applicable to the rights, and
(b) if such conversion occurs after the Distribution Date,
the same number of rights to which a holder of the number of
shares of Common Stock into which such Security was
convertible immediately prior to the Distribution Date would
have been entitled on the Distribution Date in accordance
with the terms and provisions of the Rights Plan applicable
to the rights. The conversion price of the Securities will
not be subject to adjustment on account of any declaration,
distribution or exercise of the rights. If the Rights Plan
shall terminate in accordance with its terms and the Company
shall adopt a successor plan with substantially similar terms
which provide that the Common Stock issuable hereunder is
entitled to the benefits of such successor plan, the
provisions of this paragraph shall apply to such successor
plan as if it were the Rights Plan.
SECTION 1303. Fractions of Shares.
No fractional shares of Common Stock shall be
issued upon conversion of Securities. If more than one
Security shall be surrendered for conversion at one time by
the same Holder, the number of full shares which shall be
issuable upon conversion thereof shall be computed on the
basis of the aggregate principal amount of the Securities (or
specified portions thereof) so surrendered. Instead of any
fractional share of Common Stock which would otherwise be
issuable upon conversion of any Security or Securities (or
specified portions thereof), the Company shall pay a cash
adjustment in respect of such fraction in an amount equal to
the same fraction of the Closing Price at the close of
business on the day of conversion (or, if such day is not a
Trading Day, on the Trading Day immediately preceding such
day).
SECTION 1304. Adjustment of Conversion Price.
(a) In case the Company shall pay or make a
dividend or other distribution on the Common Stock
exclusively in Common Stock or shall pay or make a dividend
or other distribution on any other class of capital stock of
the Company which dividend or distribution includes Common
Stock, the Conversion Price in effect at the opening of
business on the day following the date fixed for the
determination of stockholders entitled to receive such
dividend or other distribution shall be reduced by
multiplying such Conversion Price by a fraction of which the
numerator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for
such determination and the denominator shall be the sum of
such number of shares and the total number of shares
constituting such dividend or other distribution, such
reduction to become effective immediately after the opening
of business on the day following the date fixed for such
determination. For the purposes of this paragraph (a), the
number of shares of Common Stock at any time outstanding
shall not include shares held in the treasury of the Company
but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common
Stock. The Company shall not pay any dividend or make any
distribution on shares of Common Stock held in the treasury
of the Company.
(b) Subject to the last sentence of paragraph (g)
of this Section, in case the Company shall pay or make a
dividend or other distribution on the Common Stock consisting
exclusively of, or shall otherwise issue to all holders of
the Common Stock, rights or warrants entitling the holders
thereof to subscribe for or purchase shares of Common Stock
at a price per share less than the Current Market Price
(determined as provided in paragraph (h) of this Section) on
the date fixed for the determination of stockholders entitled
to receive such rights or warrants, the Conversion Price in
effect at the opening of business on the day following the
date fixed for such determination shall be reduced by
multiplying such Conversion Price by a fraction of which the
numerator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for
such determination plus the number of shares of Common Stock
which the aggregate of the offering price of the total number
of shares of Common Stock so offered for subscription or
purchase would purchase at such Current Market Price and the
denominator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for
such determination plus the number of shares of Common Stock
so offered for subscription or purchase, such reduction to
become effective immediately after the opening of business on
the day following the date fixed for such determination. For
the purposes of this paragraph (b), the number of shares of
Common Stock at any time outstanding shall not include shares
held in the treasury of the Company but shall include shares
issuable in respect of scrip certificates issued in lieu of
fractions of shares of Common Stock. The Company shall not
issue any rights or warrants in respect of shares of Common
Stock held in the treasury of the Company.
(c) In case outstanding shares of Common Stock
shall be subdivided into a greater number of shares of Common
Stock, the Conversion Price in effect at the opening of
business on the day following the day upon which such
subdivision becomes effective shall be proportionately
reduced, and, conversely, in case outstanding shares of
Common Stock shall be combined into a smaller number of
shares of Common Stock, the Conversion Price in effect at the
opening of business on the day following the day upon which
such combination becomes effective shall be proportionately
increased, such reduction or increase, as the case may be, to
become effective immediately after the opening of business on
the day following the day upon which such subdivision or
combination becomes effective.
(d) Subject to the last sentence of this paragraph
(d) and the last sentence of paragraph (g) of this Section,
in case the Company shall, by dividend or otherwise,
distribute to all holders of the Common Stock evidences of
its indebtedness, shares of any class of its capital stock,
cash or other assets (including securities, but excluding any
rights or warrants referred to in paragraph (b) of this
Section, excluding any dividend or distribution paid
exclusively in cash and excluding any dividend or
distribution referred to in paragraph (a) of this Section),
the Conversion Price shall be reduced by multiplying the
Conversion Price in effect immediately prior to the close of
business on the date fixed for the determination of
stockholders entitled to such distribution by a fraction of
which the numerator shall be the Current Market Price
(determined as provided in paragraph (h) of this Section) on
such date less the fair market value (as determined by the
Board of Directors, whose determination shall be conclusive
and described in a Board Resolution) on such date of the
portion of the evidences of indebtedness, shares of capital
stock, cash and other assets to be distributed applicable to
one share of Common Stock and the denominator shall be such
Current Market Price, such reduction to become effective
immediately prior to the opening of business on the day
following such date. If the Board of Directors determines
the fair market value of any distribution for purposes of
this paragraph (d) by reference to the actual or when issued
trading market for any securities comprising part or all of
such distribution, it must in doing so consider the prices in
such market over the same period used in computing the
Current Market Price pursuant to paragraph (h) of this
Section, to the extent possible. For purposes of this
paragraph (d), any dividend or distribution that includes
shares of Common Stock, rights or warrants to subscribe for
or purchase shares of Common Stock or securities convertible
into or exchangeable for shares of Common Stock shall be
deemed to be (x) a dividend or distribution of the evidences
of indebtedness, cash, assets or shares of capital stock
other than such shares of Common Stock, such rights or
warrants or such convertible or exchangeable securities
(making any Conversion Price reduction required by this
paragraph (d)) immediately followed by (y) in the case of
such shares of Common Stock, such rights or warrants, a
dividend or distribution thereof (making any further
Conversion Price reduction required by paragraph (a) or (b)
of this Section, except any shares of Common Stock included
in such dividend or distribution shall not be deemed
"outstanding at the close of business on the date fixed for
such determination" within the meaning of paragraph (a) of
this Section), or (b) in the case of such convertible or
exchangeable securities, a dividend or distribution of the
number of shares of Common Stock as would then be issuable
upon the conversion or exchange thereof, whether or not the
conversion or exchange of such securities is subject to any
conditions (making any further Conversion Price reduction
required by paragraph (a) of this Section, except the shares
deemed to constitute such dividend or distribution shall not
be deemed "outstanding at the close of business on the date
fixed for such determination" within the meaning of paragraph
(a) of this Section).
(e) In case the Company shall, by dividend or
otherwise, at any time distribute to all holders of the
Common Stock cash (excluding any cash that is distributed as
part of a distribution referred to in paragraph (d) of this
Section or in connection with a transaction to which Section
1309 applies) in an aggregate amount that, together with (i)
the aggregate amount of any other distributions to all
holders of the Common Stock made exclusively in cash within
the 12 months preceding the date fixed for the determination
of stockholders entitled to such distribution and in respect
of which no Conversion Price adjustment pursuant to this
paragraph (e) has been made previously and (ii) the aggregate
of any cash plus the fair market value (as determined by the
Board of Directors, whose determination shall be conclusive
and described in a Board Resolution) as of such date of
determination of consideration payable in respect of any
tender offer by the Company or a Subsidiary for all or any
portion of the Common Stock consummated within the 12 months
preceding such date of determination and in respect of which
no Conversion Price adjustment pursuant to paragraph (f) of
this Section has been made previously, exceeds 12.5% of the
product of the Current Market Price (determined as provided
in paragraph (h) of this Section) on such date of
determination times the number of shares of Common Stock
outstanding on such date, the Conversion Price shall be
reduced by multiplying the Conversion Price in effect
immediately prior to the close of business on such date of
determination by a fraction of which the numerator shall be
the Current Market Price (determined as provided in paragraph
(h) of this Section) on such date less the amount of cash to
be distributed at such time applicable to one share of Common
Stock and the denominator shall be such Current Market Price,
such reduction to become effective immediately prior to the
opening of business on the day after such date.
(f) In case a tender offer made by the Company or
any Subsidiary for all or any portion of the Common Stock
shall be consummated and such tender offer shall involve an
aggregate consideration having a fair market value (as
determined by the Board of Directors, whose determination
shall be conclusive and described in a Board Resolution) as
of the last time (the "Expiration Time") that tenders may be
made pursuant to such tender offer (as it shall have been
amended) that, together with (i) the aggregate of the cash
plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and
described in a Board Resolution) as of the Expiration Time of
the other consideration paid in respect of any other tender
offer by the Company or a Subsidiary for all or any portion
of the Common Stock consummated within the 12 months
preceding the Expiration Time and in respect of which no
Conversion Price adjustment pursuant to this paragraph (f)
has been made previously and (ii) the aggregate amount of any
distributions to all holders of the Common Stock made
exclusively in cash within the 12 months preceding the
Expiration Time and in respect of which no Conversion Price
adjustment pursuant to paragraph (e) of this Section has been
made previously, exceeds 12.5% of the product of the Current
Market Price (determined as provided in paragraph (h) of this
Section) immediately prior to the Expiration Time times the
number of shares of Common Stock outstanding (including any
tendered shares) at the Expiration Time, the Conversion Price
shall be reduced by multiplying the Conversion Price in
effect immediately prior to the Expiration Time by a fraction
of which the numerator shall be (x) the product of the
Current Market Price (determined as provided in paragraph (h)
of this Section) immediately prior to the Expiration Time
times the number of shares of Common Stock outstanding
(including any tendered shares) at the Expiration Time minus
(y) the fair market value (determined as aforesaid) of the
aggregate consideration payable to stockholders upon
consummation of such tender offer and the denominator shall
be the product of (A) such Current Market Price times (B)
such number of outstanding shares at the Expiration Time
minus the number of shares accepted for payment in such
tender offer (the "Purchased Shares"), such reduction to
become effective immediately prior to the opening of business
on the day following the Expiration Time; provided, that if
the number of Purchased Shares or the aggregate consideration
payable therefor have not been finally determined by such
opening of business, the adjustment required by this
paragraph (f) shall, pending such final determination, be
made based upon the preliminarily announced results of such
tender offer, and, after such final determination shall have
been made, the adjustment required by this paragraph (f)
shall be made based upon the number of Purchased Shares and
the aggregate consideration payable therefor as is finally
determined.
(g) The reclassification of Common Stock into
securities which include securities other than Common Stock
(other than any reclassification upon a consolidation or
merger to which Section 1309 applies) shall be deemed to
involve (i) a distribution of such securities other than
Common Stock to all holders of Common Stock (and the
effective date of such reclassification shall be deemed to be
"the date fixed for the determination of stockholders
entitled to such distributions" within the meaning of
paragraph (d) of this Section), and (ii) a subdivision or
combination, as the case may be, of the number of shares of
Common Stock outstanding immediately prior to such
reclassification into the number of shares of Common Stock
outstanding immediately thereafter (and the effective date of
such reclassification shall be deemed to be "the day upon
which such subdivision becomes effective" or "the day upon
which such combination becomes effective", as the case may
be, and "the day upon which such subdivision or combination
becomes effective" within the meaning of paragraph (c) of
this Section). Rights or warrants issued by the Company to
all holders of the Common Stock entitling the holders thereof
to subscribe for or purchase shares of Common Stock (either
initially or under certain circumstances), which rights or
warrants (i) are deemed to be transferred with such shares of
Common Stock, (ii) are not exercisable and (iii) are also
issued in respect of future issuances of Common Stock, in
each case in clauses (i) through (iii) until the occurrence
of a specified event or events ("Trigger Event"), shall for
purposes of this Section 1304 not be deemed issued until the
occurrence of the earliest Trigger Event.
(h) For the purpose of any computation under this
paragraph and paragraphs (b), (d) and (e) of this Section,
the current market price per share of Common Stock (the
"Current Market Price") on any date shall be deemed to be the
average of the daily Closing Prices for the five consecutive
Trading Days selected by the Company commencing not more than
20 Trading Days before, and ending not later than, the date
in question; provided, however, that (i) if the "ex" date for
any event (other than the issuance or distribution requiring
such computation) that requires an adjustment to the
Conversion Price pursuant to paragraph (a), (b), (c), (d),
(e) or (f) above occurs on or after the 20th Trading Day
prior to the date in question and prior to the "ex" date for
the issuance or distribution requiring such computation, the
Closing Price for each Trading Day prior to the "ex" date for
such other event shall be adjusted by multiplying such
Closing Price by the same fraction by which the Conversion
Price is so required to be adjusted as a result of such other
event, (ii) if the "ex" date for any event (other than the
issuance or distribution requiring such computation) that
requires an adjustment to the Conversion Price pursuant to
paragraph (a), (b), (c), (d), (e) or (f) above occurs on or
after the "ex" date for the issuance or distribution
requiring such computation and on or prior to the date in
question, the Closing Price for each Trading Day on and after
the "ex" date for such other event shall be adjusted by
multiplying such Closing Price by the reciprocal of the
fraction by which the Conversion Price is so required to be
adjusted as a result of such other event, and (iii) if the
"ex" date for the issuance or distribution requiring such
computation is on or prior to the date in question, after
taking into account any adjustment required pursuant to
clause (ii) of this proviso, the Closing Price for each
Trading Day on or after such "ex" date shall be adjusted by
adding thereto the amount of any cash and the fair market
value on the date in question (as determined by the Board of
Directors in a manner consistent with any determination of
such value for purposes of paragraph (d) or (e) of this
Section, whose determination shall be conclusive and
described in a Board Resolution) of the evidences of
indebtedness, shares of capital stock or assets being
distributed applicable to one share of Common Stock as of the
close of business on the day before such "ex" date. For the
purpose of any computation under paragraph (f) of this
Section, the Current Market Price on any date shall be deemed
to be the average of the daily Closing Prices for the five
consecutive Trading Days selected by the Company commencing
on or after the latest (the "Commencement Date") of (i) the
date 20 Trading Days before the date in question, (ii) the
date of commencement of the tender offer requiring such
computation and (iii) the date of the last amendment, if any,
of such tender offer involving a change in the maximum number
of shares for which tenders are sought or a change in the
consideration offered, and ending not later than the
Expiration Time of such tender offer; provided, however, that
if the "ex" date for any event (other than the tender offer
requiring such computation) that requires an adjustment to
the Conversion Price pursuant to paragraph (a), (b), (c),
(d), (e) or (f) above occurs on or after the Commencement
Date and prior to the Expiration Time for the tender offer
requiring such computation, the Closing Price for each
Trading Day prior to the "ex" date for such other event shall
be adjusted by multiplying such Closing Price by the same
fraction by which the Conversion Price is so required to be
adjusted as a result of such other event. The closing price
for any Trading Day (the "Closing Price") shall be the last
reported sales price regular way or, in case no such reported
sale takes place on such day, the average of the reported
closing bid and asked prices regular way, in either case on
the New York Stock Exchange or, if the Common Stock is not
listed or admitted to trading on such exchange, on the
principal national securities exchange on which the Common
Stock is listed or admitted to trading or, if not listed or
admitted to trading on any national securities exchange, on
the NASDAQ, National Market System or, if the Common Stock is
not listed or admitted to trading on any national securities
exchange or quoted on such National Market System, the
average of the closing bid and asked prices in the over-the-
counter market as furnished by any New York Stock Exchange
member firm selected from time to time by the Company for
that purpose. For purposes of this paragraph, the term
"Trading Day" means each Monday, Tuesday, Wednesday, Thursday
and Friday, other than any day on which securities are
generally not traded on the applicable securities exchange or
in the applicable securities market and the term "ex" date",
(i) when used with respect to any issuance or distribution,
means the first date on which the Common Stock trades regular
way on the relevant exchange or in the relevant market from
which the Closing Prices were obtained without the right to
receive such issuance or distribution, (ii) when used with
respect to any subdivision or combination of shares of Common
Stock, means the first date on which the Common Stock trades
regular way on such exchange or in such market after the time
at which such subdivision or combination becomes effective,
and (iii) when used with respect to any tender offer means
the first date on which the Common Stock trades regular way
on such exchange or in such market after the last time that
tenders may be made pursuant to such tender offer (as it
shall have been amended).
(i) The Company may make such reductions in the
Conversion Price, in addition to those required by paragraphs
(a), (b), (c), (d), (e) and (f) of this Section, as it
considers to be advisable in order that any event treated for
federal income tax purposes as a dividend of stock or stock
rights shall not be taxable to the recipients or, if that is
not possible, to diminish any income taxes that are otherwise
payable because of such event.
(j) No adjustment in the Conversion Price shall be
required unless such adjustment (plus any other adjustments
not previously made by reason of this paragraph (j)) would
require an increase or decrease of at least 1% in the
Conversion Price; provided, however, that any adjustments
which by reason of this paragraph (j) are not required to be
made shall be carried forward and taken into account in any
subsequent adjustment.
(k) Notwithstanding any other provision of this
Section 1304, no adjustment to the Conversion Price shall
reduce the Conversion Price below the then par value per
share of the Common Stock, and any such purported adjustment
shall instead reduce the Conversion Price to such par value.
The Company hereby covenants not to take any action to
increase the par value per share of the Common Stock.
SECTION 1305. Notice of Adjustments of Conversion Price.
Whenever the Conversion Price is adjusted as herein
provided:
(a) the Company shall compute the adjusted
Conversion Price in accordance with Section 1304 and
shall prepare a certificate signed by the Treasurer of
the Company setting forth the adjusted Conversion Price
and showing in reasonable detail the facts upon which
such adjustment is based, and such certificate shall
forthwith be filed (with a copy to the Trustee) at each
office or agency maintained for the purpose of
conversion of Securities pursuant to Section 1002; and
(b) a notice stating that the Conversion Price has
been adjusted and setting forth the adjusted Conversion
Price shall forthwith be prepared, and as soon as
practicable after it is prepared, such notice shall be
mailed by the Company to all Holders at their last
addresses as they shall appear in the Security Register.
SECTION 1306. Notice of Certain Corporate Action.
In case:
(a) the Company shall declare a dividend (or any
other distribution) on its Common Stock payable (i)
otherwise than exclusively in cash or (ii) exclusively
in cash in an amount that would require a Conversion
Price adjustment pursuant to paragraph (e) of Section
1304; or
(b) the Company shall authorize the granting to
the holders of its Common Stock of rights or warrants to
subscribe for or purchase any shares of capital stock of
any class or of any other rights (excluding shares of
capital stock or options for capital stock issued
pursuant to a benefit plan for employees, officers or
directors of the Company); or
(c) of any reclassification of the Common Stock
(other than a subdivision or combination of the
outstanding shares of Common Stock), or of any
consolidation, merger or share exchange to which the
Company is a party and for which approval of any
stockholders of the Company is required, or of the sale
or transfer of all or substantially all of the assets of
the Company; or
(d) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company; or
(e) the Company or any Subsidiary shall commence a
tender offer for all or a portion of the outstanding
shares of Common Stock (or shall amend any such tender
offer to change the maximum number of shares being
sought or the amount or type of consideration being
offered therefor);
then the Company shall cause to be filed at each office or
agency maintained pursuant to Section 1002, and shall cause
to be mailed to all Holders at their last addresses as they
shall appear in the Security Register, at least 21 days (or
11 days in any case specified in clause (a), (b) or (e)
above) prior to the applicable record, effective or
expiration date hereinafter specified, a notice stating (x)
the date on which a record is to be taken for the purpose of
such dividend, distribution or granting of rights or
warrants, or, if a record is not to be taken, the date as of
which the holders of Common Stock of record who will be
entitled to such dividend, distribution, rights or warrants
are to be determined, (y) the date on which such
reclassification, consolidation, merger, share exchange,
sale, transfer, dissolution, liquidation or winding up is
expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for
securities, cash or other property deliverable upon such
reclassification, consolidation, merger, share exchange,
sale, transfer, dissolution, liquidation or winding up, or
(z) the date on which such tender offer commenced, the date
on which such tender offer is scheduled to expire unless
extended, the consideration offered and the other material
terms thereof (or the material terms of any amendment
thereto). Neither the failure to give any such notice nor
any defect therein shall affect the legality or validity of
any action described in clauses (a) through (e) of this
Section 1306.
SECTION 1307. Taxes on Conversions.
The Company will pay any and all taxes that may be
payable in respect of the issue or delivery of shares of
Common Stock on conversion of Securities pursuant hereto.
The Company shall not, however, be required to pay any tax
which may be payable in respect of any transfer involved in
the issue and delivery of shares of Common Stock in a name
other than that of the Holder of the Security or Securities
to be converted, and no such issue or delivery shall be made
unless and until the Person requesting such issue has paid to
the Company the amount of any such tax, or has established to
the satisfaction of the Company that such tax has been paid.
SECTION 1308. Cancellation of Converted Securities.
All Securities delivered for conversion shall be
delivered to the Trustee to be cancelled by or at the
direction of the Trustee, which shall dispose of the same as
provided in Section 309.
SECTION 1309. Provisions of Consolidation,
Merger or Sale of Assets.
In case of any consolidation of the Company with,
or merger of the Company into, any other Person, any merger
of another Person into the Company (other than a merger which
does not result in any reclassification, conversion, exchange
or cancellation of outstanding shares of Common Stock) or any
sale or transfer of all or substantially all of the assets of
the Company, the Person formed by such consolidation or
resulting from such merger or which acquires such assets, as
the case may be, shall execute and deliver to the Trustee a
supplemental indenture providing that the Holder of each
Security then outstanding shall have the right thereafter,
during the period such Security shall be convertible as
specified in Section 1301, to convert such Security only into
the kind and amount of securities, cash and other property,
if any, receivable upon such consolidation, merger, sale or
transfer by a holder of the number of shares of Common Stock
into which such Security might have been converted
immediately prior to such consolidation, merger, sale or
transfer, assuming such holder of Common Stock (a) is not a
Constituent Person or an Affiliate of a Constituent Person
and (b) failed to exercise his rights of election, if any, as
to the kind or amount of securities, cash and other property
receivable upon such consolidation, merger, sale or transfer
(provided that if the kind or amount of securities, cash and
other property receivable upon such consolidation, merger,
sale or transfer is not the same for each nonelecting share,
then for the purpose of this Section the kind and amount of
securities, cash and other property receivable upon such
consolidation, merger, sale or transfer by each nonelecting
share shall be deemed to be the kind and amount so receivable
per share by a plurality of the nonelecting shares). Such
supplemental indenture shall provide for adjustments which,
for events subsequent to the effective date of such
supplemental indenture, shall be as nearly equivalent as may
be practicable to the adjustments provided for in this
Article. The above provisions of this Section shall
similarly apply to successive consolidations, mergers, sales
or transfers.
ARTICLE FOURTEEN
Redemption at Holder's Option
SECTION 1401. Right to Redemption.
(a) Upon the occurrence of a Redemption Event,
each Holder of Securities shall have the right, at the
Holder's option, to require the Company to redeem on the
Redemption Date all or any portion (equal to $1,000 or any
integral multiple thereof) of the Holder's Securities for
Common Stock at the Redemption Price equal to 100% of the
principal amount of the Securities to be so redeemed,
together with accrued interest to the Redemption Date payable
in cash. The Redemption Date for purposes of this Article
Fourteen shall be the 60th day after the occurrence of a
Redemption Event.
(b) A "Redemption Event" shall be deemed to have
occurred at such time as (i) any Person, which for this
purpose shall include any group as defined by Sections 13(d)
and 14(d)(2) of the Exchange Act, becomes the Beneficial
Owner, directly or indirectly, of shares of stock of the
Company, entitling such Person to exercise 50% or more of the
total voting power of all classes of stock of the Company,
entitled to vote in elections of directors or (ii) Continuing
Directors cease to constitute at least a majority of the
Board of Directors of the Company.
SECTION 1402. Applicability of Article.
Redemption of Securities at the election of the
Holder thereof shall be made in accordance with the
provisions of this Article.
SECTION 1403. Notice of Redemption Event.
Unless the Company shall have theretofore called
all the outstanding securities for redemption pursuant to
Article Eleven, notice with respect to a Redemption Event
shall be given by first class mail, postage prepaid, mailed
not more than 15 days after the occurrence of such Redemption
Event, to each Holder of Securities, at his address appearing
in the Security Register, but failure to give such notice by
mailing in the manner herein provided to the Holder of any
Security, or any defect in the notice to any Holder, shall
not affect the validity of the proceedings for the redemption
of any other Security.
All such notices shall state:
(a) the event constituting the Redemption Event;
(b) the Redemption Date;
(c) the Redemption Price;
(d) that on the Redemption Date the Redemption
Price will become due and payable upon each Security
with respect to which a Holder has elected redemption,
and interest thereon shall cease to accrue on and after
such date;
(e) the place or places where such Securities are
to be surrendered for payment of the Redemption Price,
and that the Securities must be surrendered at such
place[s] to collect the Redemption Price; and
(f) the date on which the Holder must exercise its
redemption option.
Notice of a Redemption Event shall be given by the
Company or, at the Company's request, by the Trustee in the
name and at the expense of the Company.
No failure of the Company to give the foregoing
notice shall limit any Holder's right to require the
redemption of Securities pursuant to this Article.
SECTION 1404. Notice of Election.
A Holder of Securities electing to require
redemption of all or any portion of such Securities shall
make such election by delivering to the office or agency to
be maintained by the Company pursuant to Section 1002 not
later than two Business Days prior to the Redemption Date a
validly executed notice of election ("Notice of Election"),
setting forth the name of the Holder, the principal amount of
the Securities, or portions thereof, with respect to which an
election to require redemption is being made and a statement
that the election to require redemption is being made
thereby. A Notice of Election shall be irrevocable.
SECTION 1405. Securities Payable on Redemption Date.
The Securities with respect to which Holders shall
have elected to require redemption shall, on the Redemption
Date, become due and payable at the Redemption Price, and
from and after such date such Securities shall not bear
interest. Upon surrender of any such Security for redemption
in accordance with any Notice of Election pursuant to Section
1404, such Security shall be paid by the Company at the
Redemption Price; provided, however, that installments of
interest whose Stated Maturity is prior to or on the
Redemption Date and after the relevant Record Dates shall be
payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of
business on the relevant Record Dates according to their
terms and the provisions of Section 307.
If any Security to be redeemed shall not be so paid
upon surrender thereof for redemption, the principal shall,
until paid, bear interest from the Redemption Date at the
rate borne by the Security.
SECTION 1406. Securities Redeemed in Part.
Any Security that is to be redeemed only in part
shall be surrendered at any office or agency of the Company
designated for that purpose pursuant to Section 1002 (with,
if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory
to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), and the
Company shall execute, and the Trustee shall authenticate and
deliver to the Holder of such Security without service
charge, a new Security or Securities, of any authorized
denomination as requested by such Holder, in aggregate
principal amount equal to and in exchange for the unredeemed
portion of the principal of the Security so surrendered.
For all purposes of this Article, unless the
context otherwise requires, all provisions relating to the
redemption of Securities shall relate, in the case of any
Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security that has
been or is to be redeemed.
SECTION 1407. Fractions of Shares.
No fractional shares of Common Stock shall be
issued upon redemption of Securities pursuant to Section
1401. If more than one Security shall be surrendered for
redemption at one time by the same Holder, the number of full
shares which shall be issuable upon redemption thereof shall
be computed on the basis of the aggregate principal amount of
the Securities (or specified portions thereof) so
surrendered. Instead of any fractional share of Common Stock
which would otherwise be issuable upon redemption of any
Security or Securities, the Company shall pay a cash
adjustment in respect of such fraction in an amount equal to
the same fraction of the Closing Price at the close of
business on the Redemption Date (or, if such day is not a
Trading Day, on the Trading Day immediately preceding such
day).
_______________________________________________
This instrument may be executed in any number of
counterparts each of which when so executed shall be deemed
to be an original, but all such Counterparts shall together
constitute but one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused
this Indenture to be duly executed, and their respective
corporate seals to be hereunto affixed and attested, all as
of the day and year first above written.
ROLLINS ENVIRONMENTAL SERVICES, INC.
By
Name:
Title:
Attest:
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION,
as
Trustee
By
Name:
Title:
Attest:
<PAGE>
) ss.:
)
On the day of March, 1995, before me
personally came ______________________________, to me known,
who, being by me duly sworn, did depose and say that he is
___________________________________________________ of
Rollins Environmental Services, Inc., one of the corporations
described in and which executed the foregoing instrument;
that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it
was so affixed by authority of the Board of Directors of said
corporation; and that he signed his name thereto by like
authority.
<PAGE>
) ss.:
)
On the __________ day of March, 1995, before me
personally came ______________________________, to me known,
who, being by me duly sworn, did depose and say that he is
______________________________________________ of Texas
Commerce Bank National Association, a national banking
association organized under the laws of the United States of
America, one of the entities described in and which executed
the foregoing instrument; that he knows the seal of said
association; that the seal affixed to said instrument is such
seal; that it was so affixed by authority of the Board of
Directors of said association; and that he signed his name
thereto by like authority.
<PAGE>
TABLE OF CONTENTS
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 101. Definitions. . . . . . . . . . . . . . 1
SECTION 102. Compliance Certificates and
Opinions . . . . . . . . . . . . . . . 7
SECTION 103. Form of Documents Delivered to
Trustee. . . . . . . . . . . . . . . . 7
SECTION 104. Acts of Holders; Record Dates. . . . . 8
SECTION 105. Notices Etc., to Trustee and
Company. . . . . . . . . . . . . . . . 9
SECTION 106. Notice to Holders: Waiver. . . . . . . 10
SECTION 107. Conflict with Trust Indenture Act. . . 10
SECTION 108. Effect of Headings and Table of
Contents.. . . . . . . . . . . . . . . 10
SECTION 109. Successors and Assigns.. . . . . . . . 10
SECTION 110. Separability Clause. . . . . . . . . . 11
SECTION 111. Benefits of Indenture. . . . . . . . . 11
SECTION 112. Governing Law. . . . . . . . . . . . . 11
SECTION 113. Legal Holidays.. . . . . . . . . . . . 11
SECTION 114. No Security Interest Created.. . . . . 11
SECTION 115. Limitation on Individual Liability.. . 11
SECTION 116. No Right of Set-Off. . . . . . . . . . 12
ARTICLE TWO
Security Forms
SECTION 201. Forms Generally. . . . . . . . . . . . 12
SECTION 202. Form of Face of Security.. . . . . . . 12
SECTION 203. Form of Reverse of Security. . . . . . 14
SECTION 204. Form of Trustee's Certificate of
Authentication.. . . . . . . . . . . . 19
ARTICLE THREE
The Securities
SECTION 301. Title and Terms. . . . . . . . . . . . 20
SECTION 302. Denominations. . . . . . . . . . . . . 20
SECTION 303. Execution, Authentication, Delivery
and Dating.. . . . . . . . . . . . . . 20
SECTION 304. Temporary Securities.. . . . . . . . . 21
SECTION 305. Registration, Registration of
Transfer and Exchange. . . . . . . . . 22
SECTION 306. Mutilated, Destroyed, Lost and
Stolen Securities. . . . . . . . . . . 23
SECTION 307. Payment of Interest; Interest Rights
Preserved. . . . . . . . . . . . . . . 24
SECTION 308. Persons Deemed Owners. . . . . . . . . 25
SECTION 309. Cancellation.. . . . . . . . . . . . . 25
SECTION 310. Computation of Interest. . . . . . . . 26
ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. Satisfaction and Discharge of
Indenture. . . . . . . . . . . . . . . 26
SECTION 402. Application of Trust Money.. . . . . . 26
SECTION 403. Reinstatement. . . . . . . . . . . . . 26
ARTICLE FIVE
Remedies
SECTION 501. Events of Default. . . . . . . . . . . 28
SECTION 502. Acceleration of Maturity; Rescission
and Annulment. . . . . . . . . . . . . 30
SECTION 503. Collection of Indebtedness and Suits
for Enforcement by Trustee.. . . . . . 31
SECTION 504. Trustee May File Proofs of Claim.. . . 32
SECTION 505. Trustee May Enforce Claims Without
Possession of Securities.. . . . . . . 32
SECTION 506. Application of Money Collected . . . . 32
SECTION 507. Limitation on Suits. . . . . . . . . . 33
SECTION 508. Unconditional Right of Holders to
Receive Principal, Premium and
Interest and to Convert. . . . . . . . 34
SECTION 509. Restoration of Rights and Remedies.. . 34
SECTION 510. Rights and Remedies Cumulative.. . . . 34
SECTION 511. Delay or Omission Not Waiver.. . . . . 34
SECTION 512. Control by Holders.. . . . . . . . . . 34
SECTION 513. Waiver of Past Defaults. . . . . . . . 35
SECTION 514. Undertaking for Costs. . . . . . . . . 36
SECTION 515. Waiver of Stay or Extension Laws.. . . 36
ARTICLE SIX
The Trustee
SECTION 601. Certain Duties and
Responsibilities.. . . . . . . . . . . 36
SECTION 602. Notice of Defaults.. . . . . . . . . . 37
SECTION 603. Certain Rights of Trustee. . . . . . . 37
SECTION 604. Not Responsible for Recitals or
Issuance of Securities.. . . . . . . . 38
SECTION 605. May Hold Securities. . . . . . . . . . 38
SECTION 606. Money Held in Trust. . . . . . . . . . 38
SECTION 607. Compensation and Reimbursement.. . . . 38
SECTION 608. Disqualification; Conflicting
Interests. . . . . . . . . . . . . . . 39
SECTION 609. Corporate Trustee Required;
Eligibility. . . . . . . . . . . . . . 39
SECTION 610. Resignation and Removal; Appointment
of Successor.. . . . . . . . . . . . . 39
SECTION 611. Acceptance of Appointment by
Successor. . . . . . . . . . . . . . . 41
SECTION 612. Merger, Conversion, Consolidation or
Succession to Business.. . . . . . . . 41
SECTION 613. Preferential Collection of Claims
Against Company. . . . . . . . . . . . 41
SECTION 614. Appointment of Authenticating
Agent. . . . . . . . . . . . . . . . . 42
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
SECTION 701. Company to Furnish Trustee Names and
Addresses of Holders.. . . . . . . . . 44
SECTION 702. Preservation of Information;
Communications to Holders. . . . . . . 44
SECTION 703. Reports by Trustee.. . . . . . . . . . 44
SECTION 704. Reports by Company.. . . . . . . . . . 45
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 801. Company May Consolidate, Etc.. . . . . 45
SECTION 802. Successor Substituted. . . . . . . . . 46
ARTICLE NINE
Supplemental Indentures
SECTION 901. Supplemental Indentures Without
Consent of Holders.. . . . . . . . . . 46
SECTION 902. Supplemental Indenture with Consent
of Holders.. . . . . . . . . . . . . . 47
SECTION 903. Execution of Supplemental
Indentures.. . . . . . . . . . . . . . 48
SECTION 904. Effect of Supplemental Indentures. . . 48
SECTION 905. Conformity with Trust Indenture
Act. . . . . . . . . . . . . . . . . . 48
SECTION 906. Reference in Securities to
Supplemental Indentures. . . . . . . . 48
SECTION 907. Notice of Supplemental Indenture.. . . 49
ARTICLE TEN
Covenants
SECTION 1001. Payment of Principal, Premium and
Interest.. . . . . . . . . . . . . . . 49
SECTION 1002. Maintenance of Office or Agency. . . . 49
SECTION 1003. Money for Security Payments to be
Held in Trust. . . . . . . . . . . . . 49
SECTION 1004. Statement by Officers as to
Default. . . . . . . . . . . . . . . . 51
SECTION 1005. Existence. . . . . . . . . . . . . . . 51
SECTION 1006. Payment of Taxes and Other Claims. . . 51
SECTION 1007. Maintenance of Properties. . . . . . . 51
SECTION 1008. Commission Reports.. . . . . . . . . . 52
SECTION 1009. Waiver of Certain Covenants. . . . . . 52
SECTION 1010. Reservation and Issuance of Common
Stock. . . . . . . . . . . . . . . . . 52
SECTION 1011. Registration and Listing of Shares.. . 52
ARTICLE ELEVEN
Redemption of Securities
SECTION 1101. Right of Redemption. . . . . . . . . . 53
SECTION 1102. Applicability of Article.. . . . . . . 53
SECTION 1103. Election to Redeem; Notice to
Trustee. . . . . . . . . . . . . . . . 53
SECTION 1104. Notice of Redemption.. . . . . . . . . 53
SECTION 1105. Securities Payable on Redemption
Date.. . . . . . . . . . . . . . . . . 54
SECTION 1106. Fractions of Shares. . . . . . . . . . 54
SECTION 1107. Taxes on Redemptions.. . . . . . . . . 54
SECTION 1108. Provisions of Consolidation,
Merger or Sale of Assets . . . . . . . 55
ARTICLE TWELVE
Subordination of Securities
SECTION 1201. Securities Subordinated to Senior
Indebtedness.. . . . . . . . . . . . . 56
SECTION 1202. Payment Over of Proceeds Upon
Dissolution, Etc.. . . . . . . . . . . 56
SECTION 1203. Prior Payment to Senior Indebtedness
Upon Acceleration of Securities. . . . 57
SECTION 1204. No Payment When Senior Indebtedness
in Default.. . . . . . . . . . . . . . 58
SECTION 1205. Payment Permitted If No Default. . . . 58
SECTION 1206. Subrogation to Rights of Holders of
Senior Indebtedness. . . . . . . . . . 59
SECTION 1207. Provisions Solely to Define Relative
Rights.. . . . . . . . . . . . . . . . 59
SECTION 1208. Trustee to Effectuate
Subordination. . . . . . . . . . . . . 59
SECTION 1209. No Waiver of Subordination
Provisions.. . . . . . . . . . . . . . 60
SECTION 1210. Notice to Trustee. . . . . . . . . . . 60
SECTION 1211. Reliance on Judicial Order or
Certificate of Liquidating Agent.. . . 61
SECTION 1212. Trustee Not Fiduciary For Holders of
Senior Indebtedness. . . . . . . . . . 61
SECTION 1213. Right of Trustee as Holder of Senior
Indebtedness; Preservation of
Trustee's Rights.. . . . . . . . . . . 62
SECTION 1214. Article Applicable to Paying
Agents.. . . . . . . . . . . . . . . . 62
SECTION 1215. Certain Conversions Deemed Payment.. . 62
ARTICLE THIRTEEN
Conversion of Securities
SECTION 1301. Conversion Privilege and Conversion
Price. . . . . . . . . . . . . . . . . 63
SECTION 1302. Exercise of Conversion Privilege.. . . 63
SECTION 1303. Fractions of Shares. . . . . . . . . . 64
SECTION 1304. Adjustment of Conversion Price.. . . . 65
SECTION 1305. Notice of Adjustments of Conversion
Price. . . . . . . . . . . . . . . . . 71
SECTION 1306. Notice of Certain Corporate Action.. . 71
SECTION 1307. Taxes on Conversions.. . . . . . . . . 73
SECTION 1308. Cancellation of Converted
Securities.. . . . . . . . . . . . . . 73
SECTION 1309. Provisions of Consolidation,
Merger or Sale of Assets . . . . . . . 73
ARTICLE FOURTEEN
Redemption at Holder's Option
SECTION 1401. Right to Redemption. . . . . . . . . . 74
SECTION 1402. Applicability of Article . . . . . . . 74
SECTION 1403. Notice of Redemption Event . . . . . . 74
SECTION 1404. Notice of Election . . . . . . . . . . 75
SECTION 1405. Securities Payable on Redemption
Date . . . . . . . . . . . . . . . . . 75
SECTION 1406. Securities Redeemed in Part. . . . . . 76
SECTION 1407. Fractions of Shares. . . . . . . . . . 76
.............................
Certain Sections of this Indenture relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Section 310(a)(1) . . . . . . . . . . . . . . . . . . . . . .609
(a)(2) . . . . . . . . . . . . . . . . . . . . . .609
(a)(3) . . . . . . . . . . . . . . . . Not Applicable
(a)(4) . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . .608
610
Section 311(a) . . . . . . . . . . . . . . . . . . . . . .613
(b) . . . . . . . . . . . . . . . . . . . . . .613
Section 312(a) . . . . . . . . . . . . . . . . . . . . . .701
702(a)
(b) . . . . . . . . . . . . . . . . . . . . 702(b)
(c) . . . . . . . . . . . . . . . . . . . . 702(c)
Section 313(a) . . . . . . . . . . . . . . . . . . . . 703(a)
(b) . . . . . . . . . . . . . . . . . . . . 703(a)
(c) . . . . . . . . . . . . . . . . . . . . 703(a)
(d) . . . . . . . . . . . . . . . . . . . . 703(b)
Section 314(a) . . . . . . . . . . . . . . . . . . . . . .704
(b) . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . . . . .102
(c)(2) . . . . . . . . . . . . . . . . . . . . . .102
(c)(3) . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . .102
Section 315(a) . . . . . . . . . . . . . . . . . . . . . .601
(b) . . . . . . . . . . . . . . . . . . . . . .602
(c) . . . . . . . . . . . . . . . . . . . . . .601
(d) . . . . . . . . . . . . . . . . . . . . . .601
(e) . . . . . . . . . . . . . . . . . . . . . .514
Section 316(a) . . . . . . . . . . . . . . . . . . . . . .101
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . .502
512
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . .513
(a)(2) . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . .508
(c) . . . . . . . . . . . . . . . . . . . . 104(c)
Section 317(a)(1) . . . . . . . . . . . . . . . . . . . . . .503
(a)(2) . . . . . . . . . . . . . . . . . . . . . .504
(b) . . . . . . . . . . . . . . . . . . . . . 1003
Section 318(a) . . . . . . . . . . . . . . . . . . . . . .107
- ---------------------
Note: This reconciliation and tie shall not, for any
purpose, be deemed to be a part of the
Indenture.
EXHIBIT 4(c)
DEBENTURE PURCHASE AGREEMENT
This DEBENTURE PURCHASE AGREEMENT ("Agreement") is
dated as of March 31, 1995 by and between ROLLINS ENVIRONMENTAL
SERVICES, INC., a Delaware corporation ("Rollins"), and
WESTINGHOUSE ELECTRIC CORPORATION, a Pennsylvania corporation
("Westinghouse").
R E C I T A L S
A. Rollins wishes to acquire from Westinghouse, and
Westinghouse wishes to sell to Rollins, all of the issued and
outstanding shares of capital stock (the "Shares") of National
Electric, Inc., a Minnesota corporation and a wholly owned
subsidiary of Westinghouse, pursuant to that certain Stock
Purchase Agreement dated as of March 7, 1995 by and between
Rollins and Westinghouse (the "Stock Purchase Agreement").
B. In connection with and pursuant to Section 2.1 of
the Stock Purchase Agreement, Rollins proposes to issue and sell
to Westinghouse $66,000,000 aggregate principal amount of its
7.25% Convertible Subordinated Securities Due 2005 (the "Subordinated
Securities"), to be issued pursuant to an indenture (the "Subordinated
Debt Indenture") to be dated as of the date of issue, between Rollins
and Texas Commerce Bank National Association, as Trustee. Any capitalized
term used but not defined herein will have the meaning ascribed to such
term in the Subordinated Debt Indenture.
C. In connection with and pursuant to Section 2.1 of
the Stock Purchase Agreement, Rollins proposes to issue and sell
to Westinghouse $16,800,000 aggregate principal amount of its
7.75% Senior Unsecured Series Securities Due 2005 subject to
adjustment pursuant to Section 2.4 of the Stock Purchase
Agreement (the "Senior Securities"; together with the
Subordinated Securities, the "Securities"), to be issued pursuant
to an indenture (the "Senior Debt Indenture", together with the
Subordinated Debt Indenture, the "Indentures") to be dated as of
the date of issue, between Rollins and First Fidelity Bank, National
Association, as Trustee.
NOW, THEREFORE, Rollins and Westinghouse, intending to
be legally bound, hereby agree as follows:
ARTICLE 1
Definitions
1.1 Definitions. For purposes of this Agreement, the
terms set forth below will have the following meanings:
"Demand Registration Statement" has the meaning
ascribed to such term in Section 6.2(a).
"Indentures" has the meaning ascribed to such term in
the Recitals.
"Other Holders" has the meaning ascribed to such term
in Section 6.3(b).
"Other Securities" has the meaning ascribed to such
term in Section 6.3(a).
"Permitted Transferee" means any Person who acquires
Registrable Securities from Westinghouse in a transaction exempt
from registration under the Securities Act, or any subsequent
purchaser from any such Person in any such transaction.
"Piggyback Registration Statement" has the meaning
ascribed to such term in Section 6.3(a).
"Registrable Securities" means the Subordinated
Securities and the Senior Securities owned by Westinghouse. As
to any particular Registrable Securities, once issued such
securities will cease to be Registrable Securities when (a) a
registration statement with respect to the sale of such
securities will have become effective under the Securities Act
and such securities will have been disposed of in accordance with
such registration statement, (b) they will have been sold as
permitted by Rule 144 (or any successor provision) under the
Securities Act, (c) they will have been transferred or sold to
any Person, or (d) they will have ceased to be outstanding.
"Registration Expenses" means all expenses, other than
Selling Expenses, incurred by Rollins in effecting any
registration of Securities under the Securities Act, including,
without limitation, all underwriting discounts, fees, spreads and
selling commissions, all registration, qualification, listing and
filing fees applicable to any sale of Securities for the account
of Westinghouse (including, without limitation, fees relating to
registration or qualification under the "blue sky" or securities
laws of any jurisdiction), printing expenses, fees and
disbursements of counsel to Rollins and the independent
accountants of Rollins relating to any Registration Statement,
and expenses associated with any communications with Westinghouse
required or permitted hereunder, including without limitation the
cost of mailing such communications to Westinghouse.
"Registration Request" has the meaning ascribed to such
term in Section 6.2(a).
"Registration Statement" means a Piggyback Registration
Statement or a Demand Registration Statement.
"Rollins" means Rollins Environmental Services, Inc., a
Delaware corporation.
"Rule 415" means Rule 415 under the Securities Act and
any successor rule thereto.
"Rule 430A" means Rule 430A under the Securities Act
and any successor rule thereto.
"Rule 424" means Rule 424 under the Securities Act and
any successor rule thereto.
"Securities" has the meaning ascribed to such term in
the Recitals.
"Securities Legend" has the meaning ascribed to such
term in Section 4.1(c).
"Selling Expenses" means all underwriting discounts,
fees, spreads, and selling commissions applicable to the sale of
Registrable Securities for the account of Westinghouse when
participating in any registration by Rollins of any securities
under the Securities Act, any fees and disbursements of counsel,
any accountants, and financial or other advisors for Westinghouse
when participating in such registration, and any direct or
indirect costs incurred under this Agreement by Westinghouse.
"Stock Purchase Agreement" has the meaning ascribed to
such term in the Recitals.
"Westinghouse" means Westinghouse Electric Corporation,
a Pennsylvania corporation.
ARTICLE 2
Issuance of Securities
2.1 Issuance of Securities. Subject to the terms and
conditions set forth herein, Rollins hereby agrees to issue, and
Westinghouse hereby agrees to accept, the Securities in the face
amount set forth in the Recitals as part of the total
consideration for the purchase of the Shares pursuant to the
Stock Purchase Agreement.
ARTICLE 3
Representations and
Warranties of Rollins
3.1 Authorization, Execution and Validity of
Agreement. The execution, delivery and performance by Rollins of
this Agreement, the Indentures and the issuance of the Securities
have been duly authorized by all necessary corporate action.
This Agreement and the Indentures have been duly and validly
executed by Rollins, constitutes its valid and binding obligation
and is enforceable against Rollins in accordance with its terms.
3.2 No Conflict; Rollins Consents. The execution,
delivery and performance by Rollins of this Agreement will not
(a) violate any Law, (b) violate and Charter Document of Rollins,
(c) require any Consent from any Governmental Authority, or (d)
breach any material Contract to which Rollins is a party or by
which it is bound (each of the foregoing capitalized terms as
defined in the Stock Purchase Agreement).
3.3 No Defaults. Assuming that the Securities were
outstanding on the date hereof, no Event of Default has occurred
and is continuing, and no event has occurred and is continuing
which with the lapse of time or the giving of notice, or both,
would constitute an Event of Default thereunder.
3.4 Use of Proceeds. The issuance of the Securities
will be part of the total consideration for the purchase of the
Shares pursuant to the Stock Purchase Agreement. None of the
transactions contemplated in this Agreement or the Indentures
(including, without limitation, the use of proceeds from the
issuance and sale of the Securities) will violate or result in a
violation of Section 7 of the Exchange Act, or any regulation
issued pursuant thereto, including, without limitation,
Regulations G, T and X of the Board of Governors of the United
State Federal Reserve System (the "Board"), 12 CFR, Article II.
Neither Rollins or any Subsidiary of Rollins owns or intends to
carry or purchase any "margin stock" within the meaning of
Regulation G of the Board. None of the proceeds from the sale of
the Securities hereunder will be used, directly or indirectly, to
purchase or refinance any borrowing, the proceeds of which were
used to purchase any "security" within the meaning of the
Exchange Act.
3.5 Private Offering. Neither Rollins, directly or
indirectly, nor any agent on its behalf has offered or will offer
the Securities or any similar security or has solicited or will
solicit an offer to acquire the Securities or any similar
security from any Person so as to cause the issuance and sale of
the Securities to violate the provisions of Section 5 of the
Securities Act.
ARTICLE 4
Representations and
Warranties of Westinghouse
4.1 Purchase of Securities; Restrictions on Transfer.
(a) Westinghouse is acquiring the Securities for its own account
for investment purposes only and not with a view to distribution
or for resale in a manner that would violate the securities law
but subject, nevertheless, to the disposition of the Securities
being at all times within Westinghouse's control.
(b) Westinghouse understands that the Securities have
not been registered under the Securities Act or under relevant
state securities laws (collectively, the "Acts"). Westinghouse
further understands that the Securities cannot be sold except
pursuant to an effective registration statement under the
Securities Act or an exemption from such registration
requirements and in compliance with the Securities Act and the
Acts.
(c) Unless sold pursuant to an effective registration
statement under the Securities Act and except as set forth in
this Section, Securities will bear the following legend (the
"Securities Legend"):
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND MAY NOT BE OFFERED OR SOLD
EXCEPT IN COMPLIANCE WITH THE REGISTRATION REQUIREMENTS
OF SUCH ACT AND OF THE APPLICABLE LAWS OF EACH STATE OF
THE UNITED STATES OR IN TRANSACTIONS EXEMPT FROM, OR
NOT SUBJECT TO, SUCH REGISTRATION REQUIREMENTS.
Rollins will re-issue any Security, without the
Securities Legend, and Rollins will cause the Trustee to
authenticate such re-issued Security, if:
(i) such Security has been transferred in a
transaction that (A) is in compliance with Rule 144(k) under
the Securities Act, (B) is in compliance with Rule 904 of
Regulation S under the Securities Act or (C) does not
require registration under the Securities Act, and in the
case of the foregoing Westinghouse will have delivered to
Rollins such documentation and legal opinions as Rollins may
reasonably request, such documentation and legal opinions to
be reasonably satisfactory in form and substance to Rollins;
or
(ii) such Security has been transferred in a
transaction that is pursuant to an effective registration
statement under the Securities Act; or
(iii) three years will have elapsed since the later to
occur of (A) the issuance of the Securities or (B) the date,
if any, on which such Security was transferred by an
affiliate (within the meaning of Rule 144) of Rollins or by
a Person that had been such an affiliate at any time during
the three months prior to such transfer (provided, however,
that Westinghouse is not such an affiliate or a Person that
had been such an affiliate at any time during the three
months prior to such re-issuance).
4.2 Accredited Investor. Westinghouse is an
"accredited investor" as that term is used in Section 4.5 of the
Stock Purchase Agreement and has sufficient knowledge and
experience in financial and business matters so as to enable it
to evaluate the risks and merits inherent in the Securities which
comprise the Purchase Price (as defined in the Stock Purchase
Agreement). Westinghouse acknowledges receipt and review of
copies of Rollins' most recent Annual Report to Shareholders,
Proxy Statement, Form 10-K and other filings with the Commission
and has had access to such information concerning Rollins as it
has felt necessary or appropriate for its evaluation.
ARTICLE 5
Covenants of Westinghouse
5.1 Resale of Securities. Westinghouse will not,
without the prior written consent of Rollins, knowingly and
intentionally sell, transfer or otherwise dispose of Common Stock
or a principal amount of the Subordinated Securities equal to
more than .843793% of the Outstanding Common Stock on a fully-
diluted basis (including shares issuable upon redemption or
conversion pursuant to the Subordinated Indenture) to any
individual purchaser or its Affiliates in a private transaction.
5.2 Acquisition of Ownership of Rollins. As of the
date hereof, Westinghouse does not beneficially own any Voting
Securities (as defined below). So long as no Default or Event of
Default has occurred and is continuing under either of the
Indentures, and no event has occurred and is continuing which
with the lapse of time or the giving of notice, or both, would
constitute an Event of Default, Westinghouse agrees that except
within the terms of a specific request from Rollins, neither
Westinghouse nor any of its Affiliates will propose or publicly
announce or otherwise disclose an intent to propose, or enter
into or agree to enter into, singly or with any other person or
directly or indirectly, (a) any form of business combination,
acquisition, or other transaction relating to Rollins or any
majority-owned Affiliate thereof, (b) any form of restructuring,
recapitalization or similar transaction with respect to Rollins
or any such Affiliate, or (c) any demand, request or proposal to
amend, waive or terminate any provision of this Agreement, nor
will Westinghouse or any Affiliate as a principal (i) acquire, or
offer, propose or agree to acquire, by purchase or otherwise, any
securities entitled to be voted generally in the election of
directors of Rollins or any direct or indirect options or other
rights to acquire such securities ("Voting Securities"), (ii)
make, or in any way participate in, any solicitation of proxies
with respect to any Voting Securities (including by the execution
of action by written consent), become a participant in any
election contest with respect to Rollins, seek to influence any
person with respect to any Voting Securities or demand a copy of
Rollins' list of stockholders or other books and records, (iii)
participate in or encourage the formation of any partnership,
syndicate or other group which owns or seeks or offers to acquire
beneficial ownership of any Voting Securities or which seeks to
affect control of Rollins or for the purpose of circumventing
this Agreement, or (iv) otherwise act, alone or in concert with
others (including by providing financing for another person) to
seek or to offer to control or influence, in any manner, the
management, Board of Directors, or policies of Rollins. For
purposes of this Section, an "Affiliate" of Westinghouse will be
deemed not to include the Westinghouse Pension Fund, its trustees
and investment managers.
5.3 Voting Power. So long as no Default or Event of
Default has occurred and is continuing under either of the
Indentures, and no event has occurred and is continuing which
with the lapse of time or the giving of notice, or both, would
constitute an Event of Default, with respect to any matter as to
which all holders of Common Stock have a right to vote,
Westinghouse will deliver to Rollins proxies to vote all shares
of Common Stock which Westinghouse owns on each matter submitted
for a vote to all holders of the Common Stock in the same
proportion as all other shares of Common Stock are voted. The
parties intend for this Section to be an enforceable voting
agreement under Section 218 to the Delaware General Corporation
Law, or any successor legislation. To the extent that counsel
to either party is of the written opinion that this Section
may not be enforceable, the parties agree to negotiate and enter
into a separate voting agreement, voting trust or similar instrument
that effects the intent of this Section. Westinghouse agrees
to execute such voting instructions, proxies, or similar instruments
as shall be reasonably requested by Rollins or its transfer agent
in order to effect the intent of this Section.
ARTICLE 6
Registration Rights
6.1 Limitation on Obligations of Rollins.
(a) Termination of Obligation to Register. The demand
registration rights and the piggyback registration rights
provided under this Section will terminate upon the earlier of
the date (i) counsel for Rollins will have delivered to
Westinghouse an opinion that all of the shares of Registrable
Securities then owned by Westinghouse can be sold without
registration under Section 5 of the Securities Act or (ii)
Westinghouse will have sold all of the Securities held by it.
6.2 Demand Registration Rights.
(a) Registration Request. Upon the written request of
Westinghouse that Rollins effect the registration under the
Securities Act of all or part of the Registrable Securities
representing not less than 5% of the aggregate principal amount
of the Registrable Securities (a "Registration Request"), at any
time after March 31, 1996, Rollins will use its best efforts to
effect the registration under the Securities Act. Pursuant to
such Registration Request, Rollins will prepare and file, on such
appropriate form as Rollins in its discretion will determine
(which form will satisfy any relevant provisions of the
Registration Request), a registration statement under the
Securities Act (a "Demand Registration Statement") to effect such
registration and seek to have such Demand Registration Statement
become effective as promptly as practicable.
A Registration Request will (i) specify the number of
shares of Registrable Securities intended to be offered and sold,
(ii) express the present intention of Westinghouse to offer or
cause the offering of such Registrable Securities for
distribution, (iii) describe the nature or method of the proposed
offer and sale thereof and (iv) contain the undertaking of
Westinghouse to provide all such information and materials and
take all such action as may be required in order to permit
Rollins to comply with all applicable requirements of the
Commission and to obtain any desired acceleration of the
effective date of such Demand Registration Statement.
(b) Company Piggyback Registration Rights. If Rollins
files a registration statement pursuant to this Section for an
underwritten offering, Rollins will be entitled to include in
such registration statement, as a part of such underwritten
offering, additional shares of Common Stock to be sold for the
account of Rollins or for any other Persons, on the same terms
and conditions as the Registrable Securities being sold by
Westinghouse; provided, however, that if the managing
underwriters of such offering advises in writing that in their
opinion the inclusion in such Demand Registration Statement of
all securities proposed to be included by Rollins or such other
Persons exceeds the number of securities which can be sold in
such offering or substantially affects the price that
Westinghouse could obtain in such offering, then the number of
securities to be included in such Demand Registration Statement
for the account of Rollins or such other Persons will be reduced,
pro rata, to such number that such managing underwriters advise
could be included in such underwriting without interfering with
the successful marketing of the Registrable Securities proposed
to be sold by Westinghouse.
(c) Selection of Underwriters. The underwriter or
underwriters of each underwritten offering of the Registrable
Securities so to be registered will be selected by Rollins with
the consent of Westinghouse, such consent not to be unreasonably
withheld.
(d) Priority in Requested Registration. In addition
to cutbacks required pursuant to paragraph (b) above, if the
managing underwriter of any underwritten offering will advise
Rollins in writing (with a copy to Westinghouse) that, in its
opinion, the number of securities requested to be included in
such registration exceeds the number which can be sold in such
offering within a price range acceptable to Westinghouse, Rollins
will include Registrable Securities in such registration to the
extent of the number which Rollins is so advised can be sold in
such offering. In connection with any such registration to which
this paragraph is applicable, no securities other than
Registrable Securities will be covered by such registration.
(e) Current Demand Registration Statement Obligation.
Upon any Demand Registration Statement becoming effective,
Rollins will use its best efforts to keep such Demand
Registration Statement current for a period of 90 days or such
shorter period which will terminate when all Registrable
Securities covered by such Demand Registration Statement have
been sold.
(f) Permissible Delays and Other Limitations of
Rollins's Obligations. Notwithstanding the foregoing, (i)
Rollins will not be obligated to cause any special audit to be
undertaken in connection with any Demand Registration Statement,
(ii) Rollins will be entitled to postpone for a reasonable period
of time the filing of any Demand Registration Statement otherwise
required to be prepared and filed by it (A) to the extent
necessary to prepare the financial statements of Rollins for the
fiscal period most recently ended prior to the related
Registration Request, (B) if Rollins would be required to
disclose in such Demand Registration Statement the existence of
any fact relating to a material business situation, transaction
or negotiation not otherwise required to be disclosed, or (C) if
Rollins notifies Westinghouse that a registration at the time and
on the terms requested would adversely affect any equity
financing by Rollins that had been contemplated by Rollins prior
to receipt of notice requesting registration pursuant to
paragraph (a) above; provided, however, that in the event of a
delay pursuant to clause (B), Rollins will not be entitled to
delay the filing for more than 100 days and (iii) Rollins will
not be obligated to file a Demand Registration Statement during
the 100-day period following the effectiveness of the
registration statement filed by Rollins in connection with an
underwritten primary or a secondary offering of its securities.
(g) Expenses. Rollins will pay all of the
Registration Expenses incurred in connection with up to two
Demand Registration Statements that become effective pursuant to
this Section, and Westinghouse will pay for any Registration
Expenses incurred in connection with any additional Demand
Registration Statements up to the limit for such registrations
set forth in paragraph (i) below; provided that if any securities
are registered for sale for the account of any Person other than
Westinghouse or Rollins pursuant to paragraph (b) above, each
such Person will bear its pro rata share of all Registration
Expenses (provided that for purposes of this Section, Rollins may
pay such pro rata expenses on behalf of the Persons other than
Westinghouse; provided, further, that in no event will
Westinghouse be required to pay any internal costs of Rollins.
Westinghouse will pay all Selling Expenses under any such Demand
Registration Statement.
(h) Effectiveness of Registration Statement. For
purposes of this Agreement, a Registration Statement will not be
deemed to have become effective:
(i) if, after a Registration Statement has become
effective, such Registration Statement is interfered
with by any stop order, injunction or other order or
requirement of the Commission or other governmental
authority for any reason other than an act or omission
of Westinghouse;
(ii) if the conditions to closing specified in
the purchase agreement or underwriting agreement
entered into in connection with such registration are
not satisfied other than by reason of some act or
omission by Westinghouse; or
(iii) if Rollins voluntarily takes any action
that would result in Westinghouse not being able to
sell such Registrable Securities covered thereby during
the period specified in paragraph (b) above, unless
such action is required under applicable laws, provided
that the foregoing will not apply to actions taken by
Rollins in good faith and for valid business reasons,
including without limitation the acquisition or
divestiture of assets.
(i) Limitation on Demand Registration Rights.
Notwithstanding anything in this Section to the contrary, in no
event will Rollins be required to effect, in the aggregate,
without regard to Westinghouse making such request, more than two
effective registrations pursuant to this Section; subject to
diminution pursuant to Section 6.3(d). The use of any demand
registration right will not diminish the number of piggyback
registration rights available to Westinghouse pursuant to Section
6.3(c).
6.3 Incidental Registration.
(a) Piggyback Rights. If Rollins at any time proposes
to register any of its securities ("Other Securities") under the
Securities Act (other than a registration on Form S-4 or S-8 or
an S-3 registration statement which relates solely to a dividend
reinvestment plan or employee purchase plan), whether or not for
sale for its own account, in a manner which would permit
registration of Registrable Securities for sale to the public
under the Securities Act, it will each such time give prompt
written notice to Westinghouse of its intention to do so at least
30 days prior to the anticipated filing date of the registration
statement relating to such registration. Such notice will offer
Westinghouse the opportunity to include in such registration
statement (a "Piggyback Registration Statement") such number of
Registrable Securities as Westinghouse may request. Upon the
written request of Westinghouse made within 10 days after the
receipt of Rollins's notice (which request will specify the
number of Registrable Securities intended to be disposed of and
the intended method of disposition thereof), Rollins will use its
best efforts to effect, in connection with the registration of
the Other Securities, the registration under the Securities Act
of all Registrable Securities which Rollins has been so requested
to register by Westinghouse to the extent required to permit the
disposition (in accordance with such intended methods as
requested by Westinghouse) of the Registrable Securities to be so
registered on the same terms and conditions as any similar
securities of Rollins included in such Piggyback Registration
Statement; provided that if, at any time after giving such
written notice of its intention to register any Other Securities
and prior to the effective date of the Piggyback Registration
Statement, Rollins will determine for any reason not to register
the Other Securities, Rollins may, at its election, give written
notice of such determination to Westinghouse and thereupon
Rollins will be relieved of its obligation to register such
Registrable Securities in connection with the registration of
such Other Securities (but not from its obligation to pay
Registration Expenses to the extent incurred in connection
therewith as provided in paragraph (e) below).
(b) Priority in Incidental Registrations. If the
registration referred to in the first sentence of paragraph (a)
above is to be: (i) an underwritten primary registration on
behalf of Rollins, and the managing underwriters advise Rollins
in writing that in their opinion the total number of securities
requested to be included in such registration exceeds the number
of securities which can be sold in such offering or substantially
affects the price that Rollins could obtain in such offering,
Rollins will include in such registration (A) first, up to the
full number of securities Rollins proposes to sell and (B)
second, up to the full number of securities that such
underwriters advise can be so sold allocated pro rata among the
holders of Other Securities (other than the securities sold by
Rollins) (the "Other Holders") who have also requested
registration of their securities and Westinghouse on the basis of
the number of securities (including Registrable Securities)
requested to be included therein by the each Other Holder and by
Westinghouse; or (ii) an underwritten secondary registration of
other securities of Rollins on behalf of Persons other than
Westinghouse or Rollins ("Initiating Persons"), and the managing
underwriters advise Rollins in writing that in their opinion (A)
the total number of securities requested to be included in such
registration exceeds the number of securities which can be sold
in such offering or substantially affects the price that the
Initiating Persons could obtain in such offering, Rollins will
include in such registration (x) first, up to the full number of
securities the Initiating Persons requesting registration propose
to sell and (y) second, up to the full number of securities that
such underwriters advise can be so sold allocated pro rata among
Rollins, Westinghouse and the Other Holders (other than the
Initiating Persons), who have also requested registration of
their securities, on the basis of the number of securities
(including Registrable Securities) requested to be included
therein by Rollins, Westinghouse and the Other Holders (other
than the Initiating Persons) or (B) the request to include
Registrable Securities would be detrimental to such secondary
offering, Rollins may exclude such securities.
(c) Limitation of Piggyback Obligation.
Notwithstanding anything in this Section to the contrary, in no
event will Rollins be required to effect, in the aggregate,
without regard to Westinghouse making such request, more than two
effective registrations pursuant to this Section. The use of any
demand registration right will not diminish the number of
piggyback registration rights available to Westinghouse pursuant
to this Section. Without limiting the generality or effect of
any other provision hereof, Rollins will not be required to
effect any registration of Registrable Securities under this
Section incidental to the registration of any of its securities
in connection with mergers, acquisitions, exchange offers,
subscription offers, dividend reinvestment plans or stock option
or other employee benefit plans.
(d) Limitation on Piggyback Registration Rights. No
registration of Registrable Securities effected under this
Section will relieve Rollins of its obligation to effect a
registration of Registrable Securities pursuant to Section 6.2;
provided, however, that such number of demand rights will be
decreased by the number of piggyback registrations that will have
become effective as to the full number of shares requested to be
registered by Westinghouse.
(e) Expenses. Rollins will pay all Registration
Expenses in connection with any registration pursuant to this
Section, except that Westinghouse will pay any Selling Expenses
in connection with any registration pursuant to this Section.
6.4 Hold-Back Agreements.
(a) Restrictions on Public Sale by Westinghouse. If
Westinghouse holds any Registrable Securities covered by a
Registration Statement, Westinghouse agrees, if requested by the
managing underwriters in an underwritten offering, not to effect
any public sale or distribution of securities of Rollins of the
same class as the securities included in such Registration
Statement, including a sale pursuant to Rule 144 (except as part
of such underwritten registration), during the 10-day period
prior to, and during the 90-day period beginning on, the closing
date of each underwritten offering made pursuant to such
Registration Statement, or such other period to which Rollins and
Westinghouse may agree, to the extent timely notified in writing
by Rollins or the managing underwriters. The foregoing
provisions will not apply to Westinghouse if it is prevented by
any applicable statute or regulation from entering any such
agreement; provided, however, that Westinghouse will undertake,
in its request to participate in any such underwritten offering,
not to effect any public sale or distribution of any applicable
class of Registrable Securities commencing on the date of sale of
such applicable class of Registrable Securities unless it has
provided 45 days' prior written notice of such sale or
distribution to the underwriter or underwriters.
(b) Restrictions on Sale of Securities by Rollins and
Others. Rollins agrees (i) not to effect any public or private
offer, sale or distribution of its securities, including a sale
pursuant to Regulation D under the Securities Act, (A) during the
10-day period prior to, and during the 90-day period beginning
with, the effectiveness of any Registration Statement, or such
other period to which Rollins and Westinghouse may agree, (except
as part of such registration, if permitted, or pursuant to
registrations on Forms S-4 or S-8 or any successor form to such
forms) and (B) during the 20-day period following receipt by
Rollins of a notice in writing from Westinghouse of an intention
to sell Registrable Securities pursuant to an effective
Registration Statement (except as part of such registration, if
permitted, or pursuant to registrations on Forms S-4 or S-8 or
any successor form to such Forms) and (ii) to use its best
efforts to cause its directors and executive officers to comply
with all restrictions of the securities laws during the periods
set forth in clauses (A) or (B) above.
6.5 Registration Procedures.
(a) Prospectuses; State Qualification. In connection
with any offering of Registrable Securities pursuant to this
Agreement, Rollins (i) will furnish to Westinghouse such number
of copies of any prospectus (including any preliminary
prospectus) and prospectus supplement as it may reasonably
request in order to effect the offering and sale of the
Registrable Securities to be offered and sold, but only while
Rollins will be required under the provisions hereof to cause the
Registration Statement to remain current, and (ii) take such
action as will be necessary to qualify the Registrable Securities
covered by such registration under such blue sky or other state
securities laws for offer and sale as Westinghouse will request;
provided, however, that Rollins will not be obligated to qualify
as a foreign corporation to do business under the laws of any
jurisdiction in which it will not be then qualified or to file
any general consent to service of process.
(b) Underwriting Agreements. If requested, Rollins
will enter into an underwriting agreement with an investment
banking firm selected by Rollins in connection with a Piggyback
Registration Statement, or with a nationally recognized
investment banking firm selected pursuant to Section 6.2(c) in
connection with a Demand Registration Statement; in either case
containing representations, warranties, indemnities and
agreements then customarily included by an issuer in underwriting
agreements with respect to secondary distributions.
(c) Certificates. In connection with any offering of
Registrable Securities registered pursuant to this Agreement,
Rollins will (i) furnish Westinghouse, at Rollins's expense, with
unlegended certificates (in such denominations as Westinghouse
will request) representing ownership of the Registrable
Securities which are sold pursuant to any Registration Statement
and (ii) instruct the Trustee and registrar of the Securities to
release any transfer restrictions with respect to the Registrable
Securities so sold.
(d) Covenants of Rollins. In connection with
Rollins's obligations pursuant to Sections 6.2 and 6.3, Rollins
will:
(i) cooperate and assist in any filings required
to be made the Trust Indenture Act of 1939, as amended;
(ii) cooperate and assist in any filings required
to be made with any national securities exchange; and
before filing a Registration Statement or prospectus or
any amendments or supplements thereto, Rollins will
furnish to counsel selected by Westinghouse (at
Westinghouse's expense) copies of all such documents
proposed to be filed, which documents will be subject
to their review and comments;
(iii) cause the prospectus to be supplemented by
any required prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424;
(iv) notify Westinghouse when Registrable
Securities are covered by a Registration Statement
promptly: (A) when the prospectus or any prospectus
supplement or post-effective amendment has been filed,
and, with respect to such Registration Statement or any
post-effective amendment, when the same has become
effective; (B) of any request by the Commission for any
amendments or supplements to such Registration
Statement or the prospectus or for additional
information; (C) of the issuance by the Commission of
any stop order suspending the effectiveness of such
Registration Statement or the initiation of any
proceedings for that purpose; (D) if, at any time prior
to the closing contemplated by an underwriting
agreement entered into in connection with such
Registration Statement, that the representations and
warranties of Rollins contemplated by paragraph (b)
above cease to be true and correct; (E) of the receipt
by Rollins of any notification with respect to the
suspension of the qualification of the Registrable
Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such
purpose; and (F) of the happening of any event which
makes any statement made in such Registration
Statement, the prospectus or any document incorporated
therein by reference untrue and which requires the
making of any changes in such Registration Statement,
the prospectus or any document incorporated therein by
reference in order to make the statements therein not
misleading;
(v) make reasonable efforts to obtain the
withdrawal of any order suspending the effectiveness of
a Registration Statement;
(vi) furnish to Westinghouse when Registrable
Securities are covered by a Registration Statement,
without any additional charge, one signed copy of such
Registration Statement and any post-effective amendment
thereto, including financial statements and schedules,
all documents incorporated therein by reference and all
exhibits (including those incorporated by reference);
(vii) upon the occurrence of any event
contemplated by paragraph (d)(iii)(F) above, prepare a
supplement or post-effective amendment to the
Registration Statement, the related prospectus or any
document incorporated therein by reference or file any
other required document so that, as thereafter
delivered to the purchasers of the Registrable
Securities, the prospectus will not contain an untrue
statement of a material fact or omit to state any
material fact necessary to make the statements therein
not misleading;
(viii) cause all Registrable Securities covered
by a Registration Statement to be listed on each
securities exchange on which similar securities issued
by Rollins are then listed if requested by Westinghouse
or the managing underwriters, if any; and
(ix) otherwise use its best efforts to comply
with all applicable rules and regulations of the
Commission.
6.6 Indemnification and Contribution.
(a) Indemnification by Rollins. In the case of any
offering registered pursuant to this Agreement, Rollins agrees to
indemnify and hold Westinghouse, each underwriter of securities
of Rollins under such registration approved by Rollins as
provided in Section 6.4 of this Agreement and each person who
controls any of the foregoing within the meaning of Section 15 of
the Securities Act harmless against any and all losses, claims,
damages or liabilities to which they or any of them may become
subject under the Securities Act or any other statute or common
law or otherwise, and to reimburse them for any reasonable legal
or other expenses incurred by them in connection with
investigating any claims and defending any actions, insofar as
any such losses, claims, damages, liabilities or actions will
arise out of or will be based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement relating to the sale of such Registrable
Securities, or the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to
make the statements therein not misleading, or (ii) any untrue
statement or alleged untrue statement of a material fact
contained in any preliminary prospectus (as amended or
supplemented if Rollins will have filed with the Commission any
amendment or supplement thereof), if used prior to the effective
date of such Registration Statement, or contained in the
prospectus (as amended or supplemented if Rollins will have filed
with the Commission any amendment or supplement thereof,
including the information deemed part of such Registration
Statement pursuant to Rule 430A), if used within the period
during which Rollins will be required to keep the Registration
Statement to which such prospectus relates current pursuant to
the terms of this Agreement, or the omission or alleged omission
to state therein (if so used) a material fact necessary in order
to make the statements therein, in light of the circumstances
under which they were made, not misleading; provided, however,
that the indemnification agreement contained in this Section will
not apply to such losses, claims, damages, liabilities or actions
which will arise from the sale of Registrable Securities to any
person if such losses, claims, damages, liabilities or actions
will arise out of or will be based upon any such untrue statement
or alleged untrue statement, or any such omission or alleged
omission, if such statement or omission will have been made in
reliance upon and in conformity with information furnished in
writing to Rollins by Westinghouse or any such underwriter
specifically for use in connection with the preparation of the
Registration Statement or any preliminary prospectus or
prospectus contained in the Registration Statement or any such
amendment thereof or supplement thereto.
(b) Indemnification by Westinghouse and Underwriters.
In the case of each offering registered pursuant to this
Agreement Westinghouse agrees, and each underwriter participating
therein will agree, in the same manner and to the same extent as
set forth in paragraph (a) above severally to indemnify and hold
harmless Rollins and each person, if any, who controls Rollins
within the meaning of Section 15 of the Securities Act, its
directors and those officers of Rollins who will have signed any
such Registration Statement with respect to any statement in or
omission from such Registration Statement or any preliminary
prospectus (as amended or as supplemented, if amended or
supplemented as aforesaid) or prospectus contained in such
Registration Statement (as amended or as supplemented, if amended
or supplemented as aforesaid), if such statement or omission will
have been made in reliance upon and in conformity with
information furnished in writing to Rollins by Westinghouse or
such underwriter specifically for use in connection with the
preparation of such Registration Statement or any preliminary
prospectus or prospectus contained in such Registration Statement
or any such amendment or supplement thereof.
(c) Conduct of Indemnification Procedures. Each party
indemnified under paragraphs (a) or (b) above will, promptly
after receipt of notice of the commencement of any action against
such indemnified party in respect of which indemnity may be
sought, notify the indemnifying party in writing of the
commencement thereof. The omission of any indemnified party so
to notify an indemnifying party of any such action will not
relieve the indemnifying party from any liability in respect of
such action which it may have to such indemnified party on
account of the indemnity agreement in paragraphs (a) or (b)
above, unless and to the extent the indemnifying party was
prejudiced by such omission, and in no event will relieve the
indemnifying party from any other liability which it may have to
such indemnified party. In case any such action will be brought
against any indemnified party and it will notify an indemnifying
party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under paragraphs (a) or (b)
above for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof
other than reasonable costs of investigations; provided, however,
that the indemnifying party will not be entitled to assume the
defense of the indemnified party if in the reasonable judgment of
such indemnified party based on written advice of counsel, a
conflict of interest may exist between such indemnified party and
any other of the indemnified parties with respect to such claim.
(d) Contribution. If for any reason the
indemnification provided for in paragraphs (a) and (b) above is
unavailable to an indemnified party or insufficient to hold it
harmless as contemplated in paragraphs (a) and (b) above, then
the indemnifying party will contribute to the amount paid or
payable by the indemnified party as a result of such loss, claim,
damage or liability in such proportion as is appropriate to
reflect not only the relative benefits received by the
indemnified party and the indemnifying party, but also the
relative fault of the indemnified party and the indemnifying
party, as well as any other relevant equitable considerations,
provided that Westinghouse will not be required to contribute in
an amount greater than the dollar amount of the proceeds received
by Westinghouse with respect to the sale of any securities. No
Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) will be entitled to
contribution from any Person who was not guilty of such
fraudulent misrepresentation.
ARTICLE 7
Miscellaneous
7.1 Certain Rights of Westinghouse if Named in a
Registration Statement. If any Registration Statement refers to
Westinghouse by name or otherwise as the holder of any securities
of Rollins, then Westinghouse will have the right to require (a)
the insertion therein of language, in form and substance
reasonably satisfactory to Westinghouse and Rollins, to the
effect that the holding by Westinghouse of such securities (i)
does not necessarily make Westinghouse a "controlling person" of
Rollins within the meaning of the Securities Act, (ii) is not to
be construed as a recommendation by Westinghouse of the
investment quality of Rollins's securities covered thereby and
(iii) does not imply that Westinghouse will assist in meeting any
future financial requirements of Rollins or (b) in the event that
such reference to Westinghouse by name or otherwise is not
required by the Securities Act or any of the rules and
regulations promulgated thereunder, the deletion of the reference
to Westinghouse.
7.2 Public Company Status. Rollins will take all
actions reasonably necessary to maintain its registration under
the Securities Exchange Act of 1934, as amended. If Rollins
fails to maintain such registration, Westinghouse will have the
right to require Rollins to redeem all or any portion of
Westinghouse's Subordinated Securities for cash at a price equal
to the product of (i) $6.82 multiplied by (ii) the number of
shares (calculated as to each conversion to the nearest 1/100 of
a share) of Common Stock into which the principal amount of
Subordinated Securities is convertible at the Conversion Price
(or at a current adjusted Conversion Price if an adjustment has
been made as provided in the Subordinated Debt Indenture),
together with accrued interest to the date of payment.
7.3 Severability. If any provision of this Agreement
or in the Securities will be held invalid, illegal or
unenforceable, the validity, legality and enforceability of the
remaining provisions will not be affected or impaired thereby.
7.4 Successors and Assigns. The terms and conditions
of this Agreement will inure to the benefit of and be binding
upon the successors and assigns of the parties hereto; provided,
however, that this Agreement may not be assigned by and party
hereto without the express written consent of the other party.
rs Counterparts. This Agreement may be executed in
one or more counterparts, each of which will for all purposes be
deemed to be an original and all of which when taken together
will constitute the same instrument.
7.6 Headings. The headings of the Sections are
inserted for convenience only and will not be deemed to
constitute part of this Agreement or to affect the construction
hereof.
7.7 Waiver. Any of the terms or conditions of this
Agreement may be waived in writing at any time by the party which
is entitled to the benefits thereof. No waiver of any of the
provisions of this Agreement will be deemed or will constitute a
waiver of such provision at any time in the future or a waiver of
any other provision hereof.
7.8 No Third-Party Beneficiaries. Nothing in this
Agreement or in the Securities will create any third-party
beneficiary rights in any Person other than the Beneficiaries (as
defined in the Stock Purchase Agreement).
7.9 Notices. Any notice, request, instruction,
consent or other document to be given hereunder by either party
hereto to the other party will be in writing and delivered
personally, by telecopy or sent by registered or certified mail,
postage prepaid, as follows:
If to Westinghouse:
Office of the Chairman
Westinghouse Electric Corporation
11 Stanwix Street
Pittsburgh, PA 15222-1384
facsimile: 412/642-3851
With a copy to:
Office of General Counsel
Westinghouse Electric Corporation
11 Stanwix Street
Pittsburgh, PA 15222-1384
facsimile: 412/642-5224
If to Rollins, to:
Office of the Vice Chairman
Rollins Environmental Services, Inc.
2200 Concord Pike
Wilmington, DE 19803
facsimile: 302/426-3555
With a copy to:
Klaus M. Belohoubek, Esquire
Rollins Environmental Services, Inc.
2200 Concord Pike
Wilmington, DE 19803
facsimile: 302/426-3555
or at such other address for a party as will be specified in
writing by that Party. Notice delivered as provided above will
be deemed to have been duly given to the party to whom it is
directed upon actual receipt by such party.
7.10 Governing Law; Interpretation. This Agreement
will be construed in accordance with and governed by the laws of
the State of Delaware applicable to agreements made and to be
performed wholly within the State. Unless specifically stated
otherwise, references to Articles, Sections and Exhibits refer to
Articles, Sections and Exhibits in this Agreement. References to
"includes" and "including" mean "includes without limitation" and
"including without limitation."
7.11 Arbitration. In the event of any dispute arising
between the parties hereto regarding any of the terms or
provisions or breach of this Agreement, such disputes will be
resolved by submitting same to arbitration, the results of which
will be final and binding upon the parties and in accordance with
the Commercial Arbitration Rules of the American Association of
Arbitrators ("AAA"). Such arbitration will be held in
Pittsburgh, Pennsylvania or Wilmington, Delaware, as determined
in the sole discretion of the arbitrators, before a three person
arbitration panel. The arbitration panel will be selected from a
list of arbitrators supplied by AAA as follows: one arbitrator
by Westinghouse, one arbitrator by Rollins, and the third
arbitrator selected by the arbitrators appointed by Westinghouse
and Rollins:
(a) Upon the written or telexed demand for
arbitration by any of the parties hereto, Westinghouse and
Rollins will appoint their respective selection as
arbitrator not later than ten days following receipt of the
list supplied by AAA.
(b) The two arbitrators so selected by
Westinghouse and Rollins will appoint a third arbitrator not
later than ten days thereafter and the three person
arbitration panel so constituted will call for an
arbitration hearing not later than 30 days thereafter. The
period of arbitration, from the time of the first hearing,
will not exceed 90 days unless such period be extended by
the arbitrators for good cause shown.
(c) The final decision of the arbitrators will be
a written decision setting forth the findings of fact and
conclusions reached by the arbitrators, will be rendered not
more than 30 days following the final hearing and will be
sent to the parties by registered mail forthwith,
thereafter.
(d) The prevailing party in any such arbitration
will be entitled to interest on amounts due and to
reimbursement of fees and expenses (including reasonable
attorneys' fees) as determined by the arbitrators. The
decision of the arbitrators will be final and nonappealable
in accordance with AAA rules, except as follows: to the
extent that either the claim for damages or the amount of
damages awarded exceeds Ten Millon and 00/100 Dollars
($10,000,000.00), then the arbitrators will be required to
include in their decision both the factual and the legal
conclusions reached in support of the decision and either
party will be entitled to appeal the decision to a court of
competent jurisdiction based on error in the application of
governing legal principles only. The findings of fact will
remain undisturbed unless manifestly in error. The
prevailing party in any such litigation will be entitled to
interest on amounts due and to reimbursement of fees and
expenses (including reasonable attorneys' fees) as
determined by the court. For purposes of this Section, the
parties consent to the jurisdiction of Federal and state
courts within Pennsylvania and Delaware.
7.12 Entire Agreement; Amendments. This Agreement
constitutes the sole understanding of the parties hereto with
respect to the matters contemplated hereby and thereby and
supersede all prior agreements and understandings between the
parties hereto with respect to such matters. No amendment,
modification or alteration of the terms or provisions of this
Agreement will be binding unless the same will be in writing and
duly executed by the party against whom it would apply.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the day and year first above
written.
ROLLINS ENVIRONMENTAL SERVICES, INC.
By:_______________________________
Name:
Title:
WESTINGHOUSE ELECTRIC CORPORATION
By:_______________________________
Name:
Title:
EXHIBIT 4(d)
ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT dated March 31, 1995 by and between
WESTINGHOUSE ELECTRIC CORPORATION, a Pennsylvania corporation ("Assignor") and
ROLLINS ENVIRONMENTAL SERVICES, INC., a Delaware corporation ("Assignee").
WHEREAS, Assignor and Assignee have entered into a Stock Purchase
Agreement (the "Purchase Agreement") dated as of March 7, 1995 pursuant to
which Assignee has agreed to assume all of the obligations and duties of
Assignor under the Loan Agreement (the "Loan Agreement") dated as of
June 1, 1990, between Tooele County, Utah (the "Issuer"), and Assignor
and the Indenture of Trust (the "Trust Indenture") dated as of June 1, 1990
between the Issuer and Security Pacific National Trust Company (New York),
as trustee (the "Trustee"), and pursuant to which this Assignment and
Assumption Agreement is being entered into;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in the Purchase Agreement, and for other good and valuable
consideration, the receipt of which is hereby acknowledged, and intending to
be legally bound, the parties hereto covenant and agree as follows:
1. Assignor hereby grants, transfers, sets over and assigns to
Assignee all of Assignor's rights, obligations and duties, financial and
otherwise, which accrue and are to be performed from and after the date
hereof under (i) the Loan Agreement, (ii) the Trust Indenture,
(iii) the Project Certificate executed by Assignor dated June 26, 1990
as supplemented by the First Supplemental Project Certificate dated
June 7, 1991 (the "Project Certificate"), (iv) the Tax Exemption Certificate
and Agreement dated June 26, 1990 by and among the Trustee, the Assignor
and the Issuer as supplemented by the First Supplemental Tax Exemption
Certificate dated June 7, 1991 (the "Tax Certificate"), and
(v) the Remarketing Agreement dated as of June 1, 1990, by and among
Assignor, the Issuer and Goldman, Sachs & Co. (collectively, the "Assumed
Obligations"), subject to the provisions of paragraph 3 hereof.
2. Assignee hereby accepts the foregoing assignment, subject to the
provisions of paragraph 3 hereof.
3. Under the Purchase Agreement, Assignor and Assignee have certain
continuing rights and obligations with respect to the Tooele County, Utah,
Variable Rate Hazardous Waste Treatment Revenue Bonds (Westinghouse Electric
Corporation Project), Series A (the "Bonds"). This Assignment and Assumption
Agreement shall in no way affect the rights and obligations under the
Purchase Agreement, financial or otherwise, of Assignor and Assignee with
respect to the Bonds.
4. Assignor hereby represents and warrants to Assignee that
(a) the representations and warranties of Assignor in the Assumed Obligations
were true and correct as of the respective dates of the Assumed Obligations
and (b) Assignor is not as of the date hereof in default in the performance
of its obligations under the Assumed Obligations.
5. Assignor and Assignee agree that from time to time each will
execute any and all instruments requested by the other in order to effectuate
this Assignment and Assumption Agreement and to accomplish any of the
purposes that are necessary or appropriate in connection herewith.
6. Assignee agrees that this Assignment and Assumption Agreement
shall inure to the benefit of Assignor, its successors and assigns and shall
be binding upon Assignee, its successors and assigns. Assignor agrees that
this Assignment and Assumption Agreement shall inure to the benefit of
Assignee, its successors and assigns and shall be binding on Assignor, its
successors and assigns.
7. This Assignment and Assumption Agreement shall be governed and
construed in accordance with the laws of the State of Delaware.
8. Attached to this Assignment and Assumption Agreement is a Consent
by Westinghouse Electric Corporation, as 100% owner of the Bonds.
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
and Assumption Agreement this 31st day of March, 1995.
WESTINGHOUSE ELECTRIC CORPORATION, as
Assignor
By:/s/ Frederic G. Reynolds
Title: Executive Vice President &
Chief Financial Officer
ROLLINS ENVIRONMENTAL SERVICES, INC., as
Assignee
By: /s/ L. F. Rattigan, Jr.
Title: Vice President-Finance and Treasurer
CONSENT TO ASSIGNMENT AND ASSUMPTION AGREEMENT
WESTINGHOUSE ELECTRIC CORPORATION, a Pennsylvania corporation, in its
capacity as owner of the Bonds described below (the "Bondholder"), hereby:
1. Represents and warrants that it is the owner of 100% of the
issued and outstanding Tooele County, Utah Variable Rate Hazardous Waste
Treatment Revenue Bonds (Westinghouse Electric Corporation Project),
Series A (the "Bonds"); and
2. Consents to the foregoing Assignment and Assumption Agreement
dated as of March 31, 1995 (the "Agreement") and waives any inconsistencies
with or breaches of the covenants in the Loan Agreement or Trust Indenture
resulting from the transactions effectuated by the Agreement.
Any capitalized terms used but not defined in this Consent shall have
the meanings set forth in the Agreement.
IN WITNESS WHEREOF, the Bondholder has executed this Consent to
Assignment and Assumption Agreement this 31st day of March, 1995.
WESTINGHOUSE ELECTRIC CORPORATION,
as 100% Bondholder
BY: /s/ Frederic G. Reynolds
Title:Executive Vice President &
Chief Financial Officer
_________________________________________________________________
_________________________________________________________________
LOAN AGREEMENT
between
TOOELE COUNTY, UTAH
and
WESTINGHOUSE ELECTRIC CORPORATION
________________________________
Dated as of June 1, 1990
________________________________
Relating to
Not to exceed $80,000,000 Tooele County, Utah
Variable Rate Hazardous Waste
Treatment Revenue Bonds
(Westinghouse Electric Corporation Project),
Series A
_________________________________________________________________
_________________________________________________________________
All right, title and interest of Tooele County, Utah (the
"Issuer"), in this Loan Agreement (except the Issuer's rights
relating to reimbursement, indemnification and notice) have been
assigned to Security Pacific National Trust Company (New York), as
Trustee (the "Trustee"), under the Indenture of Trust dated as of
the date hereof between the Issuer and the Trustee, as security for
the payment of the Bonds and payment of certain other amounts as
described herein. For purposes of perfecting a security interest
in this Loan Agreement by the Trustee under Article 9 of the Utah
Uniform Commercial Code, or otherwise, only the coutnerpart hereof
delivered, pledged and assigned to the Trustee shall be deemed the
original.<PAGE>
TABLE OF CONTENTS
Section Page
Parties . . . . . . . . . . . . . . . . . . . . . . . 1
Recitals . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.1. Definitions and Interpretations . . . . . 2
Section 1.2. Rules of Construction . . . . . . . . . . 6
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations and Warranties of Issuer. 7
Section 2.2. Representations and Warranties of Company 10
ARTICLE III
ISSUANCE OF THE BONDS
Section 3.1. Agreement to Issue Bonds; Application of Bond
Proceeds . . . . . . . . . . . . . . . . 12
Section 3.2. Disbursements from Construction Fund. . . 12
Section 3.3. Establishment of Completion Date. . . . . 13
Section 3.4. Completion of Project . . . . . . . . . . 14
Section 3.5. Plans and Specifications. . . . . . . . . 14
Section 3.6. Investment of Moneys. . . . . . . . . . . 15
Section 3.7. Arbitrage and Tax Exemption Certification and
Covenants. . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE IV
LOAN PAYMENTS AND PURCHASE PRICE
Section 4.1. Repayment of Loan; Certain Other Payments 16
Section 4.2. Purchase of Bonds . . . . . . . . . . . . 17
Section 4.3. Payments to Trustee, Authenticating Agent,
Tender Agent and Remarketing Agent . . . 18
Section 4.4. Payments to Issuer. . . . . . . . . . . . 18
Section 4.5. Payments Under Tax Certificate. . . . . . 18
Section 4.6. Payments Assigned; Obligation Absolute. . 18
ARTICLE V
SPECIAL COVENANTS
Section 5.1. Maintenance of Existence. . . . . . . . . 19
Section 5.2. Sale or Transfer of Project . . . . . . . 19
Section 5.3. Permits or Licenses . . . . . . . . . . . 20
Section 5.4. Form 8038 Information Return Regarding the Bonds 20
Section 5.5. Indemnification of Issuer . . . . . . . . 20
Section 5.6. Indemnification of Trustee, Authenticating
Agent and Tender Agent. . . . . . . . . . 21
Section 5.7. Records of Company and Subsidiary . . . . 21
Section 5.8. Covenants of Company Relating to Project
and Bond Proceeds . . . . . . . . . . . . 22
Section 5.9. Notice of Default . . . . . . . . . . . . 23
ARTICLE VI
ASSIGNMENT
Section 6.1. Assignment by Company . . . . . . . . . . 23
Section 6.2. Issuer's Rights of Assignment . . . . . . 24
ARTICLE VII
LOAN AGREEMENT EVENTS OF DEFAULT AND REMEDIES
Section 7.1. Loan Agreement Events of Default. . . . . 24
Section 7.2. Force Majeure . . . . . . . . . . . . . . 25
Section 7.3. Remedies on Default . . . . . . . . . . . 25
Section 7.4. Agreement to Pay Attorneys' Fees and Expenses 26
Section 7.5. No Remedy Exclusive . . . . . . . . . . . 27
Section 7.6. Waiver of Loan Agreement Event of Default 27
Section 7.7. Company to Give Notice of Default . . . . 27
ARTICLE VIII
PREPAYMENT
Section 8.1. Option of Prepay Installments . . . . . . 27
Section 8.2. Additional Option to Prepay . . . . . . . 27
Section 8.3. Prepayment Under Section 3.3. . . . . . . 28
Section 8.4. Amount of Prepayment Under Sections 8.1, 8.2 and
8.3. . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 8.5. Notice of Prepayment. . . . . . . . . . . 28
Section 8.6. Redemption of Bonds with Prepayment Moneys 28
ARTICLE IX
MISCELLANEOUS
Section 9.1. Notices . . . . . . . . . . . . . . . . . 28
Section 9.2. Severability. . . . . . . . . . . . . . . 29
Section 9.3. Execution of Counterparts . . . . . . . . 30
Section 9.4. Amounts Remaining in Bond Fund,
Construction Fund and Bond Purchase Fund. 30
Section 9.5. Amendments, Changes and Modifications . . 30
Section 9.6. Governing Law . . . . . . . . . . . . . . 30
Section 9.7. Reliance on Authorized Representatives. . 30
Section 9.8. Term of Loan Agreement. . . . . . . . . . 30
Section 9.9. Binding Effect. . . . . . . . . . . . . . 31
Section 9.10. No Charge Against Issuer Credit . . . . . 31
Section 9.11. Issuer Not Liable . . . . . . . . . . . . 31
Section 9.12. Third-Party Beneficiaries . . . . . . . . 31
Section 9.13. If Payment or Performance Date Not a Business Day 31
Section 9.14. Right of Company to Perform Issuer's Agreements 31
Testimonium . . . . . . . . . . . . . . . . . . . . . 33
Signatures . . . . . . . . . . . . . . . . . . . . . 33
EXHIBIT A Form of Written Requisition
EXHIBIT B Project Description
<PAGE>
LOAN AGREEMENT
THIS LOAN AGREEMENT, made and entered into as of June 1, 1990,
between TOOELE COUNTY, UTAH, a duly organized and validly existing
political subdivision of the State of Utah (the "Issuer"), and
WESTINGHOUSE ELECTRIC CORPORATION, a corporation duly organized and
validly existing under the laws of the Commonwealth of Pennsylvania
(the "Company"),
WITNESSETH:
WHEREAS, the Legislature of the State of Utah has enacted the
Utah Industrial Facilities and Development Act, Title 11, Chapter
17, Utah Code Annotated 1953, as amended (the "Act"), for the
purpose of achieving greater industrial development in the State of
Utah and to protect and promote the health, welfare and safety of
the citizens of the State of Utah; and
WHEREAS, the Act authorizes counties of the State of Utah to
issue revenue bonds for the purpose, among other things, of
defraying the cost of financing, acquiring, constructing,
improving, equipping, furnishing or maintaining any project or
projects suitable for, among other things, industrial purposes, for
the reduction, abatement or prevention of pollution and for any
other business purpose, such project or projects to consist of any
land, interest in land, building, structure, facility, system,
fixture, improvement, appurtenance, machinery or equipment; and
WHEREAS, the Issuer is a county duly organized and validly
existing under the laws of the State of Utah; and
WHEREAS, the Company desires to obtain a portion of the moneys
which will, together with certain other moneys provided by or on
behalf of the Company or Aptus, a Pennsylvania general partnership
which is wholly owned, indirectly, by the Company, be sufficient
(a) to pay certain costs of financing, acquiring, constructing,
improving, equipping, furnishing and maintaining certain facilities
consisting of land, interests in land, buildings, structures,
facilities, systems, fixtures, improvements, appurtenances,
machinery and equipment, to be located within the boundaries of the
Issuer and suitable for use as a hazardous waste treatment facility
for industrial purposes, for the reduction, abatement or prevention
of pollution and for other business purposes, (b) to provide
capitalized interest to pay a portion of the interest to accrue on
the Bonds (as hereinafter defined) during construction of the
Project (as hereinafter defined) and (c) to pay all or a portion of
the costs and expenses incurred in connection with the issuance of
the Bonds, all as permitted under the Act; and
WHEREAS, pursuant to and in accordance with the provisions of
the Act, by resolution or resolutions duly adopted, and in
furtherance of the intent and purposes of the Act, the Issuer has
authorized the issuance of its Variable Rate Hazardous Waste
Treatment Revenue Bonds (Westinghouse Electric Corporation
Project), Series A, in an aggregate principal amount not to exceed
$80,000,000 (the "Bonds"), and the execution and delivery of the
Indenture (as hereinafter defined) providing for the issuance of
the Bonds and for their security; and
WHEREAS, the Issuer has agreed to loan the proceeds of the
Bonds to the Company pursuant to this Loan Agreement (the "Loan
Agreement"), and the Company has agreed to make payments pursuant
to this Loan Agreement at such times and in such amounts so as to
provide for the payment of (among other things) the principal of,
premium, if any, and interest on the Bonds; and
WHEREAS, the Issuer is authorized under the Act to issue its
revenue bonds for the aforesaid purposes, and the Issuer has
determined that the public interest will be best served and that
the purposes of the Act can be advantageously achieved by the
Issuer's issuance of the Bonds in order to obtain funds to loan to
the Company for the foregoing purposes.
NOW, THEREFORE, for and in consideration of the respective
representations and covenants contained herein, the parties hereto
agree as follows (provided, however, that in the performance of the
agreements of the Issuer herein contained, any obligation it may
thereby incur for the payment of money shall be a limited
obligation of the Issuer and shall not constitute an indebtedness,
debt or pecuniary liability or loan of credit of the Issuer, the
State of Utah or any political subdivision thereof or a charge
against their respective general credit or taxing powers within the
meaning of any constitutional or statutory provision, but shall be
payable solely out of the proceeds derived from this Loan Agreement
and the sale of the Bonds referred to in Section 3.1 hereof, all as
provided herein).
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.1. Definitions and Interpretations. Capitalized
terms used in this Loan Agreement and not defined below or
elsewhere in this Loan Agreement shall have the same meanings as
set forth in the Indenture. The following words and terms as used
in this Loan Agreement shall have the following meanings unless the
context clearly requires otherwise:
"Act" means the Utah Industrial Facilities and Development
Act, Title 11,
Chapter 17, Utah Code Annotated 1953, as amended.
"Authorized Company Representative" means the person or
persons at the time and from time to time designated, by written
certificate furnished to the Issuer and the Trustee, as the person
or persons authorized to act on behalf of the Company. Such
certificate shall contain the specimen signature of such person or
persons, shall be signed on behalf of the Company by the President,
any Vice President, a Treasurer or any Assistant Treasurer of the
Company and may designate an alternate Authorized Company Rep-
resentative. The Authorized Company Representative may, but need
not, be an employee of the Company.
"Authorized Issuer Representative" means the person or persons
at the time and from time to time designated, by written
certificate furnished to the Company and the Trustee, as the person
or persons authorized to act on behalf of the Issuer. Such
certificate shall contain the specimen signature of such person or
persons, shall be signed on behalf of the Issuer by the Chairman of
the Governing Body and may designate an alternate Authorized Issuer
Representative. The Authorized Issuer Representative may, but need
not, be an employee of the Issuer.
"Bond Resolution" means, collectively, (a) the resolution of
the Governing Body adopted May 22, 1990 authorizing the issuance of
not to exceed $80,000,000 of the Bonds, establishing certain
parameters with respect thereto and directing the publication of a
Notice of Bonds to be Issued relating to the Bonds, and (b) the
final bond resolution of the Governing Body adopted June 19, 1990,
authorizing the issuance and confirming the sale of the Bonds.
"Bonds" means the Issuer's Variable Rate Hazardous Waste
Treatment Revenue Bonds (Westinghouse Electric Corporation
Project), Series A, in an aggregate principal amount not to exceed
$80,000,000.
"Chairman" means the duly elected Chairman or Vice Chairman of
the Governing Body or any successor to the principal functions
thereof or any other member of the Governing Body temporarily
designated by the Governing Body to serve pro tempore as Chairman.
"Company" means Westinghouse Electric Corporation, a
Pennsylvania corporation, its successors and assigns and any
surviving, resulting or transferee corporation as permitted
hereunder.
"Company Documents" means this Loan Agreement, the Remarketing
agreement, the Project Certificate and the Tax Certificate.
"Completion Date" means the date of completion of Construction
of the Project as that date shall be certified by the Company as
provided in Section 3.3 hereof.
"Construction" (and other forms of the word "construct"), when
used with reference to any portion of the Project, means the
acquisition, construction, improvement, renovation, equipping,
installation and furnishing thereof.
"Costs of the Project" means those items authorized by Section
11-17-8 of the Act, which were or are paid or incurred on or after
July 11, 1989, including:
(i) all costs which the Issuer, the Company or any
Affiliate of the Company shall be required to pay under the
terms of any contract or contracts for the Construction of the
Project;
(ii) obligations of the Issuer, the Company or any
Affiliate of the Company incurred for labor and materials
(including reimbursements payable to the Issuer, the Company
or any Affiliate of the Company and payments on contracts in
the name of the Issuer, the Company or any Affiliate of the
Company in connection with the Construction of the Project);
(iii) the cost of performance or other bonds and any
and all types of insurance that may be necessary or
appropriate to have in effect during the course of
Construction of the Project;
(iv) all costs of engineering and architectural
services, including the costs of the Issuer, the Company or
any Affiliate of the Company for test borings, surveys,
estimates, plans and specifications and preliminary
investigations thereof, and for supervising construction, as
well as for the performance of all other duties required by or
consequent to the Construction of the Project, including site
preparation and qualification;
(v) all items of expense directly or indirectly
payable by or reimbursable to the Issuer, the Company or any
Affiliate of the Company relating to the financing of the
Construction of the Project hereunder, including, but not
limited to, all costs paid or incurred by the Company, the
Issuer or any Affiliate of the Company at any time prior to or
after delivery of the Bonds, with respect to the
authorization, issuance, sale, and delivery of the Bonds,
including initial or acceptance fees and expenses of the
Trustee, the Tender Agent, the Authenticating Agent and the
Remarketing Agent, letter of credit fees, line of credit or
other liquidity agreement fees, bank acceptance fees, premiums
for bond insurance or insurance of the obligations of users
under security agreements, costs of legal and other
professional services, including financial advisor fees and
expenses, costs of underwriting the Bonds (including
underwriting fees or bond discount), costs of preparing all
documentation related to the Bonds and any supplements to any
thereof and any other documents in connection with the
authorization, issuance and sale of the Bonds, rating agency
fees and expenses, recording and filing fees, costs of title
insurance, printing and engraving and other fees and costs in
connection therewith; provided, however, that the expenditure
of proceeds of the Bonds for Costs of the Project described in
this paragraph (v) shall be subject to the provisions of
Section 147(g) of the Code to the extent such provisions are
applicable to such expenditures;
(vi) all costs and expenses relating to the
procurement of all licenses, permits, authorizations,
approvals, easements, grants, contracts and determinations
relating to the Construction, ownership and operation of the
Project, including all costs and expenses, including
litigation expenses, associated with (A) compliance with the
final permit requirements under subtitle C of Title II of the
Solid Waste Disposal Act (commonly referred to as the Resource
Conservation and Recovery Act), as in effect on the date of
the enactment of the Tax Reform Act of 1986, (B) compliance
with all applicable requirements of State law, including the
Solid and Hazardous Waste Act and the Air Conservation Act of
the State and (C) the procurement from the Issuer or any other
governmental body of the State of all construction permits and
conditional use permits;
(vii) payment of expenses incurred in seeking to
enforce any remedy against any contractor or subcontractor
with respect to any default under, or in settling any dispute
with respect to, a contract relating to the Construction of
the Project;
(viii) the cost of equipment and furnishings for the
Project and all other costs authorized by the Act which are
considered to be a part of the Costs of the Project in
accordance with generally accepted accounting principles and
which will not adversely affect the excludability from gross
income for federal income tax purposes of interest on the
Bonds, including interest (exclusive of accrued interest, if
any, paid upon initial authentication and delivery of each of
the Bonds on each Delivery Date) accruing on the Bonds during
Construction of the Project;
(ix) interest on any interim construction loan
incurred solely in connection with the Project;
(x) repayment of the principal of any interim
construction loan; provided that such loan was incurred by or
on behalf of the Company or any Affiliate of the Company to
finance any of the costs set forth in subsections (i) through
(ix) above paid or incurred on or after July 11, 1989;
(xi) all costs of acquiring land or interest in
land; provided, however, that in no event shall such costs
exceed 25% of the net proceeds of the Bonds;
(xii) any other costs or expenses paid or incurred by
the Company or any Affiliate of the Company, and any sums
required to reimburse the Company or any Affiliate of the
Company for work done or advances made, with respect to the
Project, which are attributable to property of a character
subject to the allowance for depreciation under Section 107 of
the Code, and which is charged to the capital account of the
Company for federal income tax purposes or would be so
chargeable either with a proper election by the Company or but
for a proper election by the Company or any Affiliate of the
Company, as appropriate to deduct such amounts; and
(xiii) payment of any other costs incurred in
connection with the Project and permitted by the Act.
"Loan Agreement Event of Default" means any of the events
described as such in Section 7.1 hereof.
"Indenture" means that certain Indenture of Trust, dated as of
June 1, 1990, between the Issuer and the Trustee, as the same may
from time to time be amended or supplemented in accordance with the
terms thereof.
"Indenture Event of Default" means any of the events described
as such in Section 8.01 of the Indenture.
"Independent Engineer" means an engineer which is a nationally
recognized consulting engineering firm selected by the Company and
reasonably satisfactory to the Issuer.
"Issuer"' means Tooele County, Utah.
"Issuer Documents" means the Bond Resolution, this Loan
Agreement, the Indenture, the Purchase Contract, the Tax
Certificate, the Remarketing Agreement, the Representation and
Indemnity Agreement and the Official Statement.
"Loan Agreement" means this Loan Agreement, as from time to
time supplemented and amended as permitted hereby.
"Maximum Rate" means the lesser of (a) twenty percent (20%)
per annum or (b) the maximum interest rate per annum permitted
under State law to be borne by the Bonds.
"Official Statement" means the Official Statement, dated June
25, 1990, relating to the Bonds, including all information
incorporated therein by reference as of such date or thereafter and
all supplements and amendments thereto.
"Plans and Specifications" means the plans and specifications
describing the Project, as amended from time to time, as duly
certified by an Authorized Company Representative.
"Project" means the Project described in Exhibit B attached
hereto, as such description may be amended from time to time in
accordance with the provisions of Section 3.5 hereof.
"Project Certificate" means that certain Project Certificate
relating to the Project, dated June 26, 1990, and executed by the
Company.
"Remarketing Agreement" means that certain Remarketing
Agreement, dated as of June 1, 1990, by and among the Company, the
Issuer and Goldman, Sachs & Co., as remarketing agent, or any
subsequent Remarketing Agreement entered into among the Company,
the Issuer and the Remarketing Agent.
"Representation and Indemnity Agreement" means that certain
Representation and Indemnity Agreement, dated June 26, 1990, by and
among the Issuer, the Company and Goldman, Sachs & Co. and First
Commerce Capital, a division of Porter, White & Yardley Inc., as
underwriters for the Bonds.
"State" means the State of Utah.
"Subsidiary" means, as of any time, each Person (other than an
individual) which, alone or together with any other Person or
Persons (other than an individual or individuals), owns and
operates the Project and which is wholly or partially owned, and
controlled, directly or indirectly, by the Company including, as of
the date hereof, Aptus, a Pennsylvania general partnership.
Section 1.2. Rules of Construction. Unless the context shall
otherwise require,
(a) an accounting term not otherwise defined shall
have the meaning assigned to it in accordance with generally
accepted accounting principles as the same shall be in effect
from time to time;
(b) references to Articles and Sections are to the
Articles and Sections of this Loan Agreement;
(c) words of the masculine gender shall be deemed
and construed to include correlative words of the feminine and
neuter genders;
(d) the term "or" is not exclusive, unless
otherwise so specified;
(e) the term "including" means "including without
limitation";
(f) unless the context shall otherwise indicate,
words importing the singular number shall include the plural
and vice versa; and
(g) the headings of Articles and Sections herein
and the Table of Contents hereof are solely for convenience of
reference, do not constitute a part hereof and shall not
affect the meaning, construction or effect hereof.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations and Warranties of Issuer. The
Issuer makes the
following representations and warranties as the basis for the
undertakings on its part herein
contained:
(a) The Issuer (i) is a county and a political
subdivision of the State duly organized and validly existing
under the laws of the State, (ii) has the power, under the
provisions of the laws of the State, including particularly
the Act, to issue the Bonds and loan the proceeds thereof to
the Company against delivery by the Company to the Trustee of
this Loan Agreement, for the purpose of financing for the
Company all or a portion of the Costs of the Project, and to
otherwise enter into the Issuer Documents and consummate the
transactions contemplated by the Issuer Documents and to carry
out its obligations thereunder and hereunder, and (iii) by
proper action has duly adopted the Bond Resolution and has
duly authorized the execution and delivery of, and performance
by the Issuer of its obligations under, the Issuer Documents
and, subject to Section 2.1(p) hereof, the issuance, sale,
execution and delivery of the Bonds. Each Issuer Document
constitutes, and each of the Bonds when issued will
constitute, a legal, valid and binding obligation of the
Issuer enforceable against the Issuer in accordance with its
terms.
(b) The Issuer is not in violation of any of the
provisions of the Constitution or laws of the State which
would affect its existence or its powers referred to in
Section 2.1 hereof.
(c) The Project constitutes a "project" within the
meaning of the Act.
(d) The Issuer proposes to issue the Bonds for the
purpose of financing, as provided in the Indenture, all or a
portion of the Costs of the Project. The Bonds are to be
issued under and secured by the Indenture, pursuant to which
the Issuer's interest in this Loan Agreement (except for the
Issuer's rights relating to reimbursement, indemnification and
notice) will be pledged to the Trustee as security, to the
extent provided in the Indenture, for payment of the principal
of (including the principal component of the redemption price
and the Purchase Price), premium, if any, and interest on the
Bonds.
(e) The Issuer has not pledged or assigned and will
not pledge or assign its interest in this Loan Agreement other
than to secure the Bonds.
(f) All actions required on the part of the Issuer
for the authorization of the issuance of the Bonds (subject to
Section 2.1(p) hereof) and the execution and delivery by it of
the Issuer Documents have been duly and effectively taken and
have not been rescinded, modified or revoked.
(g) The execution and delivery of the Issuer
Documents, the issuance, sale, execution and delivery of the
Bonds (subject to Section 2.1(p) hereof), and the performance
by the Issuer of all of its obligations thereunder and
consummation of the transactions contemplated thereby, do not
conflict with or constitute a breach of or a default under any
charter, rules, regulations, by-laws or other similar
restrictions, or under the terms and conditions of any
agreement or commitment, to which the Issuer is a party or by
which the Issuer is bound.
(h) Under existing statutes and decisions, no taxes
on income or profits are imposed on the Issuer.
(i) The Issuer has found and determined that the
financing of all or a portion of the Costs of the Project in
the manner provided in this Loan Agreement will further the
public purposes of the Act, and all requirements of the Act
relating to the issuance and sale of the Bonds (subject to
Section 2.1(p) hereof) and the Construction of the Project
have been complied with.
(j) Within the meaning of the Utah Public Officers'
and Employees' Ethics Act, Title 67, Chapter 16, Utah Code
Annotated 1953, as amended, no "public officer" or "public
employee" of the Issuer, or any member of the Governing Body
has a "substantial interest" in or is an officer, director,
agent, employee, investor in or owner of the Company or the
Subsidiary, or has personal investments in any business entity
which will create a substantial conflict between his private
interests and his public duties in connection with, or has any
direct or indirect pecuniary interest in, or will receive or
has agreed to receive any compensation with respect to, any
contract, lease, purchase, sale, or employment made or to be
made in connection with the proposed transaction contemplated
by the Bond Resolution, the Bonds and the Issuer Documents.
(k) Within the meaning of the County Officers and
Employees Disclosure Act Title 17, Chapter 16a, Utah Code
Annotated 1953, as amended, no "appointed officer" or "elected
officer" of the Issuer, or any member of the Governing Body
has a "substantial interest" in or is an officer, director,
agent, employee, investor in or owner of the Company or the
Subsidiary, or has any personal interest or investment which
creates a potential or actual conflict between his personal
interests and his public duties in connection with, or has any
direct or indirect pecuniary interest in, or will receive or
has agreed to receive any compensation with respect to, any
contract, lease, purchase, sale, or employment made or to be
made in connection with the proposed transaction contemplated
by the Bond Resolution, the Bonds or the Issuer Documents.
(l) A public hearing relating to the plan of
financing for the Project was held on June 19, 1990, following
reasonable public notice thereof, all within the meaning of
Section 147(f) of the Code. Subsequent to such public
hearing, on June 19, 1990, the Governing Body, being the
applicable elected representative of the Issuer within the
meaning of Section 147(f) of the Code, adopted a resolution
approving the issuance of the Bonds and the plan of financing
relating to the Project.
(m) The Project is and will be located within the
boundaries of the Issuer.
(n) There is no action, suit, proceeding or
investigation at law or in equity before or by any court,
either state or federal, or public board or body pending or,
to the Issuer's knowledge, threatened calling into question
the creation or existence or boundaries of the Issuer, the
validity of the Bonds or any of the Issuer Documents to be
executed and delivered by it, the authority of the Issuer to
execute and deliver the Bonds or any of the Issuer Documents
to be executed and delivered by it or to perform its
obligations thereunder, or the title of any person to the
office held by that person with the Issuer or which in any
other way could, to the Issuer's knowledge, adversely affect
the validity of the Bonds or any of the Issuer Documents or
the ability of the Issuer to comply with its obligations under
the Bonds or any of the Issuer Documents.
(o) To the Issuer's knowledge, no event has
occurred, and no condition currently exists, which constitutes
or may, with the passage of time or the giving of notice, or
both, constitute an event of default on the part of the Issuer
under the Bonds or the Issuer Documents.
(p) Pursuant to the provisions of the Indenture,
Bonds may be authenticated and delivered thereunder from time
to time only upon the receipt by the Authenticating Agent of
a request and authorization of the Issuer to authenticate and
deliver Bonds in an aggregate principal amount specified
therein, and upon the issuance of an opinion of Bond Counsel
as described in the Indenture. Representations of the Issuer
in this Section 2.1 with respect to the Bonds as of any date
shall apply only to those Bonds authorized by the Issuer to be
authenticated and delivered in one or more requests and
authorizations delivered to the Authenticating Agent on or
prior to such date.
Each of the foregoing representations and warranties shall be
deemed to have been made with respect to the Bonds as of the date
of this Loan Agreement and again as of each Delivery Date.
THE ISSUER MAKES NO EXPRESS OR IMPLIED WARRANTY OF ANY KIND
WHATSOEVER WITH RESPECT TO THE PROJECT, INCLUDING THE FITNESS
THEREOF FOR ANY PARTICULAR PURPOSE, THE DESIGN OR CONDITION
THEREOF, THE WORKMANSHIP, QUALITY OR CAPACITY THEREOF, COMPLIANCE
THEREOF WITH THE REQUIREMENTS OF ANY LAW, RULE, SPECIFICATION OR
CONTRACT PERTAINING THERETO, PATENT INFRINGEMENT, PATENT DEFECTS OR
THE SUFFICIENCY OF PROCEEDS DERIVED FROM THE SALE OF THE BONDS TO
PAY THE COSTS OF THE PROJECT TO BE FINANCED THROUGH THE ISSUANCE OF
THE BONDS.
Section 2.2. Representations and Warranties of Company. The
Company hereby makes the following representations and warranties
as the basis for the undertakings on its part contained herein:
(a) The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania, and is duly qualified,
authorized and licensed to transact business in each
jurisdiction wherein failure to qualify would have a material
adverse effect on the conduct of its business. The Company
has the power to enter into, and by proper corporate action
has duly authorized the execution and delivery of, the Company
Documents. No event of default has occurred and is continuing
and no condition exists which, with the giving of notice or
the lapse of time, or both, would constitute an event of
default or a default under any agreement or instrument to
which the Company is a party or by which the Company is or may
be bound or to which any of the property or assets of the
Company is or may be subject and which would have a material
adverse effect on the Company or which would impair in any
material respect its ability to carry out its obligations
under the Company Documents.
(b) Neither the execution and delivery of any of
the Company Documents, the consummation of the transactions
contemplated hereby or thereby, nor the fulfillment of or
compliance with the terms and conditions of any of the Company
Documents, conflicts with or results in a breach of any of the
terms, conditions or provisions of any material corporate
restriction or any material agreement or instrument to which
the Company is now a party or by which it is bound, or
constitutes a default under any of the foregoing, or results
in the creation or imposition of any lien, charge or
encumbrance (a "Lien") whatsoever upon any of the property or
assets of the Company under the terms of any instrument or
agreement to which the Company is now a party or by which it
is bound, and which in the case of any such conflict, breach,
default or lien, would have a material adverse effect on the
Company or which would impair in any material respect its
ability to carry out its obligations under the Company
Documents, except as described in the Company Documents.
(c) All of the documents, instruments and written
information furnished by the Company or any Subsidiary or to
the knowledge of the Company on behalf of the Company or any
Subsidiary to the Issuer or the Trustee in connection with the
issuance of the Bonds are true and correct in all material
respects as of the date of delivery thereof and did not, as of
the date of delivery thereof, omit or fail to state any
material facts necessary to be stated therein to make the
information provided not misleading.
(d) Except as disclosed in writing in connection
with the offering of the Bonds, there is no action, suit,
proceeding or investigation at law or in equity against the
Company or any Subsidiary before or by any court or
governmental agency or body pending or, to the knowledge of
the Company or any Subsidiary, threatened, wherein an adverse
decision, ruling or holding (i) would result in any material
adverse change in the condition (financial or otherwise),
results of operations, business or prospects of the Company or
which would materially and adversely affect the properties of
the Company and which has not been disclosed to the Issuer, or
(ii) would materially and adversely affect the transactions
contemplated by, or the validity or enforceability of, the
Company Documents.
(e) All authorizations, approvals, consents and
other orders of any governmental authority or agency necessary
for the execution and delivery by the Company of each of the
Company Documents and for the Construction, use and operation
of the Project for its intended purpose have been obtained and
are in full force and effect or are reasonably expected to be
obtained as necessary in a timely fashion. The Subsidiary has
obtained or reasonably expects to obtain all permits,
approvals and certifications relating to the Project required
by the Solid and Hazardous Waste Act, Title 25, Chapter 14,
Utah Code Annotated 1953, as amended and the Air Conservation
Act, Title 26, Chapter 13, Utah Code Annotated 1953, as
amended, and the Company and the Subsidiary expect the
Subsidiary to, and know of no reason why the Subsidiary would
not, obtain all other permits, licenses, approvals and
certificates relating to the Construction, use and operation
of the Project as may be required by any other governmental
body, agency or board, either federal, State or local.
(f) The statements, information and descriptions
contained in the Project Certificate, as supplemented from
time to time by the Company as of each Delivery Date, will, as
of such Delivery Date, be true, correct and complete, will
not, as of such Delivery Date, contain any untrue statement or
misleading statement of a material fact and will not, as of
such Delivery Date, omit to state a material fact necessary to
make the statements, information and descriptions contained
therein, in light of the circumstances under which they will
be made, not misleading, and the estimates and assumptions
contained in the Project Certificate, as supplemented from
time to time by the Company as of each Delivery Date, will, as
of such Delivery Date, be reasonable and based on the best
information available to the Company.
(g) Any certificate with respect to factual or
financial matters signed by an Authorized Company
Representative and delivered to the Issuer shall be deemed a
representation and warranty by the Company as to the
statements made therein.
(h) The representations, warranties and covenants
of the Company set forth in the Project Certificate, as
supplemented from time to time by the Company, are
incorporated herein by reference and are hereby made a part of
this Loan Agreement as if set forth herein.
Each of the foregoing representations and warranties shall be
deemed to have been made with respect to the Bonds as of the date
of this Loan Agreement and again as of each Delivery Date.
ARTICLE III
ISSUANCE OF THE BONDS
Section 3.1. Agreement to Issue Bonds; Application of Bond
Proceeds. The Issuer agrees to issue the Bonds, subject to the
conditions and limitations set forth in the Indenture, and in an
aggregate principal amount not to exceed $80,000,000, and to cause
the same to be authenticated and delivered from time to time, for
the purpose of providing all or a portion of the funds necessary to
pay the Costs of the Project. Such Bonds shall bear such rate or
rates of interest per annum as shall be established pursuant to the
Indenture, and shall mature on the dates and shall have the terms
and provisions set forth in the Indenture. It is hereby
specifically agreed that the Issuer will cause Bonds to be
authenticated and delivered under the Indenture from time to time
only upon the written request and approval of the Company, and only
in such amounts as shall not exceed the then applicable
authorization and approval of the Board of Directors of the Company
as evidenced by the certificates of the Company delivered to the
Trustee pursuant to Sections 2.09(a)(iii) and 2.09(b)(ii) of the
Indenture, which certificates shall constitute conclusive evidence
of such authorization and approval for all purposes of this Loan
Agreement; provided, however, that the limitation upon
authentication and delivery contained in this sentence shall apply
only to the original authentication and delivery of Bonds and not
to the authentication and delivery of Bonds pursuant to Sections
2.10 and 2.12 of the Indenture.
The principal proceeds received by the Trustee for the account
of the Issuer on each Delivery Date upon the delivery of any of the
Bonds to the purchasers thereof shall be loaned to the Company by
depositing the same into the appropriate account of the
Construction Fund pursuant to Section 4.02 of the Indenture, and
shall be disbursed from the Construction Fund in accordance with
the provisions of Section 4.03 of the Indenture and Section 3.2
hereof. All accrued interest received by the Trustee upon the sale
of any Bonds shall be deposited into the Bond Fund pursuant to
Section 4.02 of the Indenture and shall be disbursed from the Bond
Fund in accordance with the provisions of Section 4.04 of the
Indenture.
Section 3.2. Disbursements From Construction Fund. The Costs
of the Project shall be financed in whole or in part through the
disbursement of moneys on deposit from time to time in the
Construction Fund to or to the order of the Company. Such
disbursements shall be made by the Trustee upon receipt of a
written requisition in substantially the form set forth in Exhibit
A attached hereto. The written requisition shall be effective to
authorize disbursements if executed by an Authorized Company
Representative. Moneys in the Construction Fund shall not be used
for any purpose except the payment for or reimbursement of Costs of
the Project (except that after delivery of the Completion
Certificate described in Section 3.3(a) hereof, moneys in the
Construction Fund may be transferred to the Bond Fund and used for
the purposes described in Section 3.3(b) hereof. In approving any
written requisition, the Trustee may rely as to completeness and
accuracy on all statements in any and all such written
requisitions, and the Company hereby covenants and agrees to
indemnify and save harmless the Trustee from any liability incurred
in connection with any requisitions so approved. All moneys
remaining in the Construction Fund after the Completion Date shall,
at the direction of the Company, be used in accordance with Section
3.3 hereof.
Section 3.3. Establishment of Completion Date. (a) The
Completion Date shall be evidenced to the Trustee by delivery to
the Trustee of the Completion Certificate, signed by an Authorized
Company Representative, stating that, except for amounts to be
retained by the Trustee at the direction of the Company for any
Costs of the Project not then due and payable or with respect to
which the liability for payment is in dispute, (i) Construction of
the Project has been substantially completed, (ii) all costs and
expenses incurred in connection with the Construction of the
Project have been paid, (iii) all facilities necessary in
connection with the Project have been acquired and installed, (iv)
total disbursements pursuant to written requisitions have resulted
in 100% of the total of such disbursements having been used for
Costs of the Project, (v) the disbursements pursuant to written
requisitions have resulted in at least 95% of all such
disbursements having been used (A) to provide land or depreciable
property of a character subject to the allowance for depreciation
under Section 167 of the Code or (B) for the payment of such
amounts which are, for federal income tax purposes, chargeable to
the Project's capital account or would be so chargeable either with
a proper election by the Company or an Affiliate of the Company or
but for a proper election by the Company or an Affiliate of the
Company to deduct such amounts, (vi) the disbursements pursuant to
written requisitions have resulted in not more than 2% of the face
amount of the Bonds theretofore initially authenticated and
delivered having been used to pay costs and expenses of issuing the
Bonds and (vii) all permits from requisite government authorities
for the use and operation of the Project have been obtained.
Notwithstanding the foregoing, the Completion Certificate shall
state that it is given without prejudice to any rights against
third parties which exist at the date of the Completion Certificate
or which may subsequently come into being. The Company agrees to
cause the Completion Certificate to be delivered to the Issuer and
the Trustee as soon as the Project is completed and accepted by the
Company.
(b) Subject to compliance with the terms and
provisions of the Tax Certificate, moneys remaining in the
Construction Fund (including any earnings on investments which
remain in the Construction Fund) at the time the Completion
Certificate is delivered to the Trustee (other than amounts to
be retained by the Trustee to pay Costs of the Project not
then due and payable or amounts for which the liability for
payment is in dispute) shall, without further authorization,
be deposited by the Trustee into a segregated account in the
Bond Fund. Amounts on deposit in such segregated account may
be invested only at a yield which does not exceed the yield on
the Bonds. Such amounts shall be used by the Trustee upon the
direction of the Company in accordance with Section 4.04 of
the Indenture (i) to redeem Bonds pursuant to Section 6.01(a)
of the Indenture, (ii) to redeem Bonds pursuant to Section
6.01(b) of the Indenture on the earliest redemption date on
which the Bonds can be redeemed at par, (iii) to purchase
Bonds on the open market, provided that such Bonds are
promptly delivered to the Authenticating Agent with
instructions to cancel such Bonds pursuant to Section 2.11 of
the Indenture or (iv) for such other purposes as shall be
requested by the Company and as shall, in the opinion of Bond
Counsel, not be inconsistent with the provisions of the Act as
it shall then be in effect and which shall not cause interest
on any of the Bonds to become includible in the gross income
of the Owners thereof for purposes of federal income taxation,
which opinion shall be in writing and filed by the Company
with the Issuer and the Trustee prior to the application of
any such amount. From time to time as the proper disposition
of the amounts retained in the Construction Fund shall be
determined, to the extent that such amounts are not to be paid
out by the Trustee pursuant to Section 3.2 hereof, upon
notification by the Company the Trustee shall deposit such
amounts in the Bond Fund to be applied as aforesaid.
Section 3.4. Completion of Project. The Company has
represented to the Issuer in the Project Certificate that it is the
Company's intention as of the date hereof to complete the Project
in the manner contemplated by the parties hereto. THE ISSUER DOES
NOT MAKE ANY WARRANTY, EITHER EXPRESS OR IMPLIED, THAT THE MONEYS
WHICH WILL BE PAID INTO THE CONSTRUCTION FUND AND WHICH, UNDER THE
PROVISIONS OF THIS LOAN AGREEMENT, WILL BE AVAILABLE FOR PAYMENT OF
THE COSTS OF THE PROJECT WILL BE SUFFICIENT TO PAY ALL OF THE COSTS
WHICH WILL BE INCURRED IN THAT CONNECTION. The Company agrees that
if, after exhaustion for the moneys in the Construction Fund the
Company should pay, or deposit moneys in the Construction Fund for
the payment of, any portion of the Costs of the Project pursuant to
the provisions of this Section 3.4, it shall not be entitled to any
reimbursement therefor from the Issuer, the Trustee or the Owners
of any of the Bonds nor shall it be entitled to any diminution of
the amounts payable under this Loan Agreement.
Section 3.5. Plans and Specifications. The Company may
supplement or amend the Plans and Specifications (including
additions thereto or omissions therefrom), provided that no such
supplement or amendment shall change the description of the Project
set forth in Exhibit B attached hereto, or change the function of
any principal component of the Project described in the Project
Certificate, unless, in either case, the Trustee and the Issuer
receive an opinion of Bond Counsel to the effect that after giving
effect to such change, the Project will constitute a "project"
under the Act and that such change will not impair the
excludability of interest on the Bonds from gross income of the
Owners thereof for purposes of federal income taxation. In the
event of a supplement or amendment changing the description of the
Project set forth in Exhibit B attached hereto or changing the
function of a major component of the Project, the Company shall
provide to the Issuer a supplemental Loan Agreement or Project
Certificate, as appropriate, which shall reflect such supplement or
amendment, which supplemental Loan Agreement or Project Certificate
shall not be considered as an amendment to this Loan Agreement
which requires the consent of any Owner or of the Trustee for the
purposes of Article XI of the Indenture. The Company may identify
any proprietary information in the Plans and Specifications, and
the Issuer agrees, to the extent permitted by law, to keep such
information confidential except as required by law, and then only
in accordance with the provisions contained in Section 5.7 hereof.
Section 3.6. Investment of Moneys. Moneys on deposit with the
Trustee in the Construction Fund and the Bond Fund or any other
fund or account created pursuant to the Indenture, except for the
Bond Purchase Fund, shall be invested and reinvested by the Trustee
from time to time, in Tax-Exempt Obligations at the request of and
as directed by an Authorized Company Representative, in accordance
with the provisions of Article V of the Indenture, until such time
or times as said moneys shall be needed for the purpose for which
they were deposited; provided, however, that no investment shall be
made which would violate the covenant set forth in Section 3.7
hereof or the Tax Certificate.
Section 3.7. Arbitrage and Tax Exemption Certifications and
Covenants. The Issuer and the Company, jointly and severally,
covenant with all purchasers and Owners of the Bonds from time to
time Outstanding, and with each other, for so long as any of the
Bonds remain Outstanding, that they will not take any action, or
permit to be taken any action over which they or either of them
have control, and that moneys on deposit in any fund or account in
connection with the Bonds, whether or not such moneys were derived
from the proceeds of the sale of the Bonds or from any other
sources, will not be used or invested in a manner, which in either
case will cause any of the Bonds to be "arbitrage bonds" within the
meaning of Section 148 of the Code or which will otherwise cause
interest on any of the Bonds to be includible in the gross income
of the Owners thereof for purposes of federal income taxation. To
such end the Company, the Issuer and the Trustee have entered into
the Tax Certificate. The Company and the Issuer covenant and agree
that they will comply with the Tax Certificate, as the same may be
amended from time to time, in accordance with its terms. Pursuant
to such covenant the Issuer and the Company obligate themselves to
comply with the requirements of Section 148 of the Code so long as
any of the Bonds are Outstanding. The Company reserves the right,
however, to direct the investment of such moneys as permitted by
State law and the Indenture if, when and to the extent that said
Section 148 of the Code or regulations promulgated thereunder shall
be repealed or relaxed or shall be held void by final judgment of
a court of competent jurisdiction, but only if any investment made
by virtue of such repeal, relaxation or decision would not, in the
opinion of Bond Counsel, result in any of the interest on the Bonds
becoming includible in the gross income of the Owners thereof for
purposes of federal income taxation. Neither the Company nor the
Issuer shall have violated this covenant by virtue of the fact that
interest on any of the Bonds becomes includible (a) in gross income
of a person who is a "substantial user" of the Project or a
"related person" within the meaning of Section 147(a) of the Code
or (b) in the computation of the alternative minimum tax imposed by
Section 55 of the Code, the environmental tax imposed by Section
59A of the Code or the branch profits tax on foreign corporations
imposed by Section 884 of the Code.
ARTICLE IV
LOAN PAYMENTS AND PURCHASE PRICE
Section 4.1. Repayment of Loan; Certain Other Payments. (a) In
consideration of the Issuer's agreement to issue the Bonds, subject
to the conditions and limitations set forth in the Indenture, and
to loan the proceeds thereof to the Company for the purpose of
financing all or a portion of the Costs of the Project, and for the
other purposes specified herein and in the Indenture, the Company
hereby covenants and agrees with the Issuer to pay or cause to be
paid to the Trustee (or, at the written direction of the Trustee,
to the Tender Agent), for the account of the Issuer, (i) an amount
equal to the aggregate principal amount of, and premium, if any,
on, the Bonds, together with interest thereon, at the times and in
the manner provided in Section 4.1(b) hereof, (ii) the Purchase
Price to be paid with respect to the Bonds, as provided in Section
4.2 hereof, and (iii) certain other amounts described in Sections
4.3, 4.4 and 4.5 hereof.
(b) The amounts required to be paid pursuant to Section
4.1(a)(1) hereof shall be paid as follows:
(i) on each Interest Payment Date, an amount equal to
the interest on the Bonds which is payable on such Interest
Payment Date; and
(ii) on the Maturity Date, the principal amount of the
Bonds Outstanding on such date; and
(iii) on or before any redemption date, a sum equal to
the redemption price of the Bonds to be redeemed on such
redemption date; and
(iv) upon the declaration of the principal amount of
the Bonds Outstanding to be immediately due and payable
pursuant to Section 8.02 of the Indenture, an amount equal to
the principal amount of the Bonds so declared to be
immediately due and payable, plus any accrued interest thereon
to the date of payment; and
(v) except to the extent of payments made pursuant to
subsections (i), (ii), (iii) and (iv) above, on any date on
which the payment of the principal of, premium, if any, or
interest on, any Bond pursuant to the terms and provisions of
the Indenture, an amount sufficient, together with other
moneys available therefor on deposit in the Bond Fund, to pay
the amounts due with respect to such Bond on such date.
Each payment pursuant to this Section 4.1(b) shall at all
times be sufficient to pay the total amount of interest and
principal (whether at stated maturity or upon mandatory or optional
redemption or acceleration) and premium, if any, payable on the
Bonds on each date that such payment is due; provided, however,
that (A) the Excess Amount (as hereinafter defined) held by the
Trustee in the Bond Fund on any required date of payment shall be
credited against the payment due on such date and (B) if at any
time the amount held by the Trustee in the Bond Fund shall be
sufficient (and remain sufficient) to pay at the times required the
principal of, premium, if any, and interest on, the Bonds then
Outstanding, the Company shall not be obligated to make any further
payments under the provisions of this Section 4.1(b). The term
"Excess Amount" as of any payment date shall mean the amount in the
Bond Fund on such date in excess of the amount required for payment
of the principal of the Bonds which have matured at maturity or on
a redemption date, premium, if any, on such Bonds and past due
interest in all cases where such Bonds have not been presented for
payment.
(c) Each payment made pursuant to Section 4.1(b) shall be in
federal or other immediately available funds, other than payments
of principal of, or premium or interest on, Bonds bearing interest
at Term Rates, which shall be paid in either federal or other
immediately available funds or New York clearinghouse (next day)
funds. All payments shall be paid directly to the Trustee (or, at
the written direction of the Trustee, to the Tender Agent), for the
account of the Issuer, for deposit into the Bond Fund.
(d) In the event the Company should fall to make any of the
payments required in this Section 4.1, the item or installment so
in default shall continue as its obligation until the amount in
default shall have been fully paid, and the Company agrees to pay
the same, with interest thereon to the extent permitted by law, at
the rate of interest per annum then borne by the applicable Bonds.
Section 4.2. Purchase of Bonds. (a) In consideration of the
issuance of the Bonds by the Issuer, but for the benefit of the
Owners thereof, the Company does hereby agree and covenant with the
Issuer to make the necessary payments and to otherwise cause the
necessary arrangements to be made and to be continued whereby
Owners of Bonds may, subject to the terms and conditions set forth
in the Indenture, deliver such Bonds for purchase at the Purchase
Price thereof and whereby such Bonds shall be so purchased on a
timely basis. In furtherance of the foregoing covenant of the
Company, the Issuer, at the direction of the Company, has set forth
in Article III of the Indenture the terms and conditions relating
to the delivery of the Bonds by the Owners thereof to the Tender
Agent for purchase and the duties and responsibilities of the
Tender Agent with respect to the purchase of Bonds and of the
Remarketing Agent with respect to the remarketing of such Bonds.
The Company hereby authorizes and directs the Tender Agent and the
Remarketing Agent to purchase, offer, sell and deliver Bonds in
accordance with such provisions.
Without limiting the generality of the foregoing covenant of
the Company, and in consideration of the Issuer's having set forth
in the Indenture the aforesaid provisions of Article III thereof,
the Company covenants, for the benefit of the Owners of Outstanding
Bonds, to pay or cause to be paid to the Tender Agent such amounts
as shall be necessary to enable the Tender Agent to pay the
Purchase Price of Outstanding Bonds delivered to it for purchase,
all as more particularly described in Article III of the Indenture;
provided, however, that the obligation of the Company to make any
such payments hereunder shall be reduced by the amount of any
moneys available for such payment received by the Remarketing Agent
through the remarketing of such Bonds. All payments hereunder
shall be made immediately upon receipt from the Tender Agent of
notice that such payment is required, and shall be made in
immediately available funds in the case of payments on Bonds
bearing interest at Flexible or Weekly Rates and in either federal
or other immediately available funds or New York clearinghouse
(next day) funds in the case of Bonds bearing interest at Term
Rates.
(b) The Issuer shall have no obligation or responsibility,
financial or otherwise, with respect to the purchase of Bonds or
the making or continuation of arrangements therefor other than as
expressly set forth in this Section 4.2, except that the Issuer
shall appoint any successor Tender Agent, as provided in the
Indenture, and shall generally cooperate with the Company, the
Tender Agent and the Remarketing Agent as contemplated in the
Indenture and the Remarketing Agreement.
Section 4.3. Payments to Trustee, Authenticating Agent, Tender
Agent and Remarketing Agent. The Company shall pay to the Trustee,
the Authenticating Agent and the Tender Agent the amounts required
to be so paid pursuant to Section 9.18 and Section 9.15 of the
Indenture, such amounts to be paid at the times and in the manner
as required by Section 9.15 and Section 9.18 of the Indenture. The
Company also agrees to pay the Remarketing Agent the amounts
described in the Remarketing Agreement, at the times and in the
manner set forth therein.
Section 4.4. Payments to Issuer. The Company agrees to pay,
upon request, the reasonable expenses incurred by the Issuer
relating to the Bonds or the Project, which are not otherwise
required to be paid by the Company under the terms of this Loan
Agreement or the Indenture.
Section 4.5. Payments Under Tax Certificate. The Company
hereby further agrees to make any payments to the United States
Department of the Treasury required by the Tax Certificate in order
to maintain the excludability of interest on the Bonds from the
gross income of the Owners thereof for federal income tax purposes.
Section 4.6. Payments Assigned; Obligation Absolute. It is
understood and agreed that all payments to be made under Sections
4.1(b) and 4.2 hereof are, by the Indenture, pledged by the Issuer
to the Trustee, and that all rights and interests of the Issuer
hereunder (except for the rights of the Issuer relating to
reimbursement, indemnification and notice), are pledged and
assigned to the Trustee. The Company assents to such pledge and
assignment and agrees that the obligation of the Company to make
the payments to be made under this Loan Agreement, including the
payment of the Purchase Price of Bonds pursuant to Section 4.2
hereof, shall be absolute, irrevocable and unconditional and shall
not be subject to cancellation, termination or abatement, or to any
defense other than payment or to any right of setoff, counterclaim
or recoupment arising out of any breach under this Loan Agreement,
the Indenture or otherwise by the Company, the Trustee, the Tender
Agent, the Authenticating Agent, the Remarketing Agent or any other
party, or out of any obligation or liability at any time owing to
the Company by the Issuer, the Trustee, the Tender Agent, the
Authenticating Agent, the Remarketing Agent or any other party, it
being understood, however, that the Company does not hereby waive
any rights which it may have against such party, and further that
the payments hereunder shall continue to be payable at the times
and in the amounts herein specified whether or not the Project, or
any portion thereof, shall have been completed or shall have been
destroyed by fire or other casualty, or title thereto, or the use
thereof, shall have been taken by the exercise of the power of
eminent domain, and that there shall be no abatement of or
diminution in any such payments by reason thereof, whether or not
the Project shall be used or useful and whether or not any
applicable laws, regulations or standards shall prevent or prohibit
the use of the Project, or for any other reason.
ARTICLE V
SPECIAL COVENANTS
Section 5.1. Maintenance of Existence. The Company will
maintain its existence as a corporation, will not dissolve or
otherwise dispose of all or substantially all of its assets and
will not consolidate with or merge with or into any other entity;
provided, however, that the Company (a) may consolidate with or
merge with or into another entity if the Company is the surviving
entity and (b) may consolidate with or merge with or into or sell
or otherwise transfer all or substantially all of its assets to
another entity and may thereafter dissolve if such other entity:
(i) is organized under the laws of the United States,
one of the states thereof or the District of Columbia;
(ii) assumes, by delivery to the Trustee of an
instrument in writing, all the obligations of the Company
hereunder; and
(iii) the Trustee receives an opinion of counsel to the
Company to the effect that such consolidation, merger, sale or
other transfer complies with this Section 5.1, and an opinion
of Bond Counsel to the effect that such consolidation, merger,
sale or other transfer does not adversely affect the
excludability of interest on the Bonds from the gross income
of the Owners thereof for purposes of federal income taxation.
If a consolidation, merger, sale or other transfer is made as
permitted by this Section 5.1, the provisions of this Section 5.1
shall continue in full force and effect and no further
consolidation, merger, sale or other transfer shall be made except
in compliance with the provisions of this Section 5.1.
Section 5.2. Sale or Transfer of Project. The Company may not
sell, transfer or otherwise dispose of a Subsidiary or any interest
therein and the Company will cause each Subsidiary not to sell,
transfer or otherwise dispose of any interest in the Project unless
(a) prior to any such sale, transfer or other disposition, the
Company shall have obtained an opinion of Bond Counsel to the
effect that such sale, transfer or other disposition will not
adversely affect the excludability of interest on the Bonds from
gross income of the Owners thereof for purposes of federal income
taxation, or (b) the surviving Subsidiary or Subsidiaries continues
to own and operate 100% of the Project and the Company continues to
own, directly or indirectly, 100% of the surviving Subsidiary or
Subsidiaries or (c)(i) the owner of the Project, if not then a
signatory to the Project Certificate and the Tax Certificate, makes
all representations, warranties and covenants with respect to the
Project and the use of the proceeds of the Bonds as the Company has
made, by duly executing the Project Certificate and the Tax
Certificate, as such documents are then in effect, (ii) such owner
owns, directly or indirectly, 100% of the Project and (iii) such
sale, transfer or other disposition would not adversely affect the
excludability of interest on the Bonds from the gross income of the
Owners thereof for purposes of federal income taxation. No sale,
transfer or other disposition permitted as described above will
relieve the Company of any of its obligations under the Loan
Agreement, except as described below under "Assignment of Loan
Agreement."
Section 5.3. Permits or Licenses. In the event that it may be
necessary for the proper performance of this Loan Agreement on the
part of the Company or the Issuer that any application or
applications for any permit or license to do or to perform certain
things be made to any governmental or other agency by the Company
or the Issuer, the Company and the Issuer each shall, upon the
request of either, execute such application or applications.
Section 5.4. Form 8038 Information Return Regarding the Bonds.
The Issuer covenants that it shall, not later than the 15th day of
the second calendar month after the close of each calendar quarter
during which any Bonds were authenticated and delivered on a
Delivery Date, file a statement concerning such Bonds, as required
by Section 149(e) of the Code, and such statement shall be
completed and filed in accordance with the applicable regulations
or procedures of the Internal Revenue Service. The Company
covenants that it shall furnish to the Issuer whatever information
is necessary for the Issuer to file such statements.
Section 5.5. Indemnification of Issuer. The Company agrees
that the Issuer and its elected or appointed officials, officers,
agents, servants and employees, shall not be liable for, and agrees
that it will at all times indemnify and hold harmless the Issuer,
its elected or appointed officials, officers, agents, servants and
employees against, and pay all expenses of the Issuer, its elected
or appointed officials, officers, agents, servants and employees,
relating to, any lawsuit, proceeding or claim arising during the
term of this Loan Agreement resulting from any action taken by or
on behalf of the Issuer or its elected or appointed officials,
officers, agents, servants or employees pursuant to this Loan
Agreement or the Indenture, or resulting from any loss or damage to
property or any injury to or death of any person that may be
occasioned by any cause whatsoever pertaining to the Project (other
than as a result of failure by the Issuer to comply with the terms
or provisions hereof or of the Indenture or the negligence or
willful misconduct of the Issuer or its elected or appointed
officials, officers, agents, servants or employees); provided,
however, that the Company shall not be obligated to indemnify the
Issuer or any of its elected or appointed officials, officers,
agents, servants or employees, or hold any of them harmless,
against or from or in respect of any claim, damage, demand,
expense, liability or loss arising from any untrue statement or
alleged untrue statement of material fact or omission or alleged
omission of a material fact under the caption "The County" in any
Official Statement or Preliminary Official Statement relating to
the Bonds. In case any action shall be brought against the Issuer
with respect to which indemnity may be sought against the Company,
the Issuer shall promptly notify the Company in writing and the
Company shall assume the defense thereof, including the employment
of counsel and the payment of all expenses. Failure by the Issuer
to notify the Company shall relieve the Company from any liability
which it may have to the Issuer to the extent damage is
attributable to such failure, but shall not relieve the Company
from any liability to the Issuer otherwise than under this Section
5.5. The Issuer shall have the right to employ separate counsel in
any such action and participate in the defense thereof, but the
fees and expenses of such counsel shall be paid by the Issuer
unless the employment of such counsel has been authorized by the
Company. The Company shall not be liable for any settlement of any
such action without its consent, but if any such action is settled
with the consent of the Company or if there be final judgment for
the plaintiff in any such action, the Company agrees to indemnify
and hold harmless the Issuer from and against any loss or liability
by reason of such settlement or judgment.
In addition to the foregoing, the Company agrees to reimburse
the Issuer for any action taken by the Issuer pursuant to Section
7.07 of the Indenture.
Section 5.6. Indemnification of Trustee, Authenticating Agent
and Tender Agent. The Company hereby agrees to assume liability
for and does hereby indemnify, protect, save and keep harmless the
Trustee, the Authenticating Agent and the Tender Agent and their
respective agents, successors, assigns and legal representatives
from and against any and all liabilities, obligations, losses,
damages to property, injury to or death of any person that may be
occasioned by any cause whatsoever pertaining to the Project,
penalties, taxes (the term "taxes" shall include all taxes related
to this Loan Agreement, the Indenture or the Project and exclude
any income taxes on fees or other compensation received by the
Trustee in its capacity as Trustee), claims, actions, suits, costs,
expenses, fines or attorneys' fees of any kind whatsoever which may
be imposed on, incurred by or asserted against the Trustee, the
Authenticating Agent or the Tender Agent in any way relating to or
arising out of this Loan Agreement, the Indenture or any document
contemplated thereby, the Project or the administration of the
Trust Estate (unless arising due to failure by the party seeking
indemnification to comply with the terms or provisions hereof or of
the Indenture or the negligence or willful misconduct of the party
seeking indemnification). The indemnities contained in this
Section 5.6 shall survive the termination of this Loan Agreement
and the Indenture or the removal or resignation of the Trustee, the
Authenticating Agent or the Tender Agent or any successor pursuant
to the terms of the Indenture.
Section 5.7. Records of Company and Subsidiary. The Trustee
and the Issuer shall be permitted at all reasonable times during
the term of this Loan Agreement to examine the books and records of
the Company and the Subsidiary with respect to the Project;
provided, however, that information and data contained in the books
and records of the Company shall be considered proprietary and
shall not be disclosed by the Trustee or the Issuer except as
required by law; and then only after the Trustee or the Issuer, as
the case may be, shall have notified the Company that such
information and data is to be disclosed and shall have given the
Company a reasonable opportunity (which shall be at least ten (10)
days whenever possible) to object to such disclosure and seek
judicial relief.
Section 5.8 Covenants of Company Relating to Project and Bond
Proceeds. The Company hereby covenants as follows:
(a) The Company will use (or cause to be used) the principal
Proceeds of the sale of the Bonds (including investment earnings
thereon) in accordance with the terms and conditions set forth in
the Company Documents to pay, among other things, all or a portion
of the Costs of the Project and to accomplish the public purposes
contemplated by the Act, and, in any case, will not use the
proceeds of the sale of the Bonds in a manner which would impair
the excludability of interest on any of the Bonds from gross income
of the Owners thereof for federal income tax purposes.
(b) The Company will at all times comply with (or cause to be
complied with) the requirements and conditions set forth in the
permits, licenses, approvals or certificates referred to in the
Project Certificate or otherwise applicable to the Project under
any federal, state or local law, except where the consequences of
such failure to comply would not have a material adverse effect on
the Company or impair in any material respect its ability to
operate the Project or to carry out its obligations under the
Company Documents and would not have an adverse effect on the
excludability of interest on the Bonds from the gross income of the
Owners thereof for purposes of federal income taxation.
(c) The Company agrees to supplement the Project Certificate
from time to time so that the statements, information and
descriptions contained therein will, as of each Delivery Date,
comply with Section 2.2(f) hereof.
(d) The Company intends to cause Construction of the Project
to be prosecuted with diligence and continuity and will complete
the Project in the manner contemplated under the Project
Certificate.
(e) The Company covenants that at least $100,000 of Bonds
proceeds will be expended on the first Delivery Date to reimburse
the Company for Costs of Construction (other than costs of issuing
the Bonds).
(f) The Company covenants that it will not permit any
Subsidiary to take any action or omit to take any action, with
respect to the Project or the proceeds of the Bonds, which would
cause the Company to be in violation of any of the covenants
contained in the Project Certificate, the Tax Certificate or this
Loan Agreement.
Section 5.9. Notice of Default. Upon learning of any material
default by the Company in the performance or observance of any
covenant, agreement, representation, warranty or obligation of the
Company set forth in this Loan Agreement, the Issuer will give
notice thereof to the Trustee and the Company. Upon learning of a
default by the Company under this Loan Agreement which constitutes
a Loan Agreement Event of Default the Issuer will give notice
thereof to the Trustee, the Tender Agent, the Remarketing Agent,
the Authenticating Agent and the Company. Nothing herein shall be
deemed to require the Issuer to verify performance by the Company
of its obligations under this Loan Agreement.
ARTICLE VI
ASSIGNMENT
Section 6.1. Assignment by Company. The Company may not
transfer or assign this Loan Agreement or transfer or assign any or
all of its rights or delegate any or all of its duties hereunder
except that the Company may transfer and assign all its rights and
duties hereunder:
(a) in connection with a merger, consolidation, sale or other
transfer of substantially all of the assets of the Company as
permitted pursuant to Section 5.1 hereof; or
(b) if the following conditions are satisfied (in which case
the Company shall be released from its obligations under this Loan
Agreement):
(i) the assignee of such rights and obligations shall
have expressly assumed in a writing delivered to the Trustee
the Company's obligations under this Loan Agreement and the
Project Certificate and shall have delivered to the Trustee an
opinion of counsel to such effect;
(ii) prior to such release, the Company shall have
obtained an opinion of Bond Counsel to the effect that such
release and assumption will not adversely affect the
excludability of interest on the Bonds from the gross income
of the Owners thereof for purposes of federal income taxation;
and
(iii) (x) such release shall occur on a Mandatory Tender
Date applicable to all Bonds;or (y)(1) in the opinion of an
Independent Engineer, after giving effect to such transfer,
the operator of the Project will be a Person who is qualified
to operate the Project in accordance with all applicable laws,
regulations, permits and licenses and prudent industry
practice; provided, however, that if any Subsidiary is the
operator, this condition shall be deemed satisfied; and
(2) after giving effect to such transfer, any
rating on the Bonds by any Rating Service would not be
lower than the rating in effect at the earliest
commencement date of any of the then current Rate Periods
for the Bonds.
Section 6.2. Issuer's Rights of Assignment. The Issuer may
not sell, assign or otherwise dispose of, nor create or permit to
exist any lien, encumbrance or other security interest in or on,
this Loan Agreement, or any interest therein, except as
contemplated by Section 4.6 hereof.
ARTICLE VII
LOAN AGREEMENT EVENTS OF DEFAULT AND REMEDIES
Section 7.1. Loan Agreement Events of Default. The occurrence
and continuance of any of the following shall constitute a Loan
Agreement Event of Default:
(a) failure by the Company to pay any amounts required to be
paid under Sections 4.1(b) or 4.2 hereof, at the times and in the
manner specified therein; provided, however, that the failure to
make any payment of interest with respect to any Bond bearing
interest at a Term Rate shall not constitute a "Loan Agreement
Event of Default" hereunder unless such failure shall continue for
a period of thirty (30) days following the date such payment is due
and payable; or
(b) failure by the Company to make any payment required to be
made by it under this Loan Agreement (other than as described in
Section 7.1(a)), or failure by the Company to observe and perform
any covenant, condition or agreement on their part to be observed
or performed in this Loan Agreement, for a period of sixty (60)
days after the giving of written notice to the Company, as
appropriate, by the Issuer, the Company, the Trustee, the Tender
Agent or the Remarketing Agent, or by the Owners of at least
twenty-five percent (25%) in aggregate principal amount of the
Bonds then Outstanding specifying such failure and requesting that
it be remedied, unless the party giving such notice and to whom
such payment, observation or performance is owed shall agree in
writing to an extension of such time prior to its expiration;
provided, however, if the failure stated in the notice cannot be
corrected within the applicable period, it shall not constitute a
Loan Agreement Event of Default if corrective action is instituted
within the applicable period and diligently pursued until the
default is corrected; or
(c) the entry by a court having jurisdiction in the premises
of (i) a decree or order for relief with respect to the Company in
an involuntary case or proceeding under any applicable federal or
state bankruptcy, insolvency, reorganization or other similar law
or (ii) a decree or order adjudging the Company a bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or with
respect to the Company under any applicable federal or state law,
or appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any
substantial part of its property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree
or order for relief or any such other decree or order unstayed and
in effect for a period of 90 consecutive days; or
(d) the commencement by the Company of a voluntary case or
proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law or of any other
case or proceeding to be adjudicated a bankrupt or insolvent, or
the consent by it to the entry of a decree or order for relief with
respect to the Company in an involuntary case or proceeding under
any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against it, or the
filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable federal or state law,
or the consent by it to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official of
the Company or of any substantial part of its property, or the
making by it of an assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its debts
generally as they become due, or the taking of corporate action by
the Company in furtherance of any such action; or
(e) an Indenture Event of Default shall have occurred.
Section 7.2. Force Majeure. Notwithstanding the provisions of
Section 7.1 hereof, if by reason of acts of God; strikes, lockouts
or other industrial disturbances; acts of public enemies; orders of
any kind of the government of the United States or of the State, or
any department, agency, political subdivision, court or official of
any of them, or any civil or military authority; insurrections;
riots; epidemics; landslides; lightning; earthquakes; volcanoes;
fires; hurricanes; tornadoes; storms; floods; washouts; droughts;
arrests; restraint of government and people; civil disturbances;
explosions; breakage of or accident to machinery; partial or entire
failure of utilities; or any cause or event not reasonably within
the control of the Company, the Company is unable in whole or in
part to carry out any one or more of its agreements or obligations
contained herein, other than its obligations under Sections 4.1(b)
and 4.2 hereof, the Company shall not be deemed in default by
reason of not carrying out said agreement or agreements or
performing said obligation or obligations during the continuance of
such inability. The Company shall make reasonable effort to remedy
with all reasonable dispatch the cause or causes preventing it from
carrying out Its agreements; provided that the settlement of
strikes, lockouts and other industrial disturbances shall be
entirely within the discretion of the Company, and the Company
shall not be required to make settlement of strikes, lockouts and
other industrial disturbances by acceding to the demands of the
opposing party or parties when in the judgment of the Company such
course is unfavorable to the Company. UNDER NO CIRCUMSTANCES SHALL
THE COMPANY BE RELIEVED OF ITS PAYMENT OBLIGATIONS AT THE TIMES AND
IN THE AMOUNTS SPECIFIED IN SECTIONS 4.1(b) AND 4.2 HEREOF.
Section 7.3. Remedies on Default. Whenever any Loan Agreement
Event of Default shall have happened and be continuing, the Trustee
may take any one or more of the following remedial steps:
(a) the Trustee, by giving notice to the Company, may declare
the unpaid installments payable under Section 4.1(b) of this Loan
Agreement to be due and payable immediately, if concurrently with
or prior to the giving of such notice the unpaid principal amount
of the Bonds has been declared to be due and payable, and upon any
such declaration the same shall become and shall be immediately due
and payable in the amount set forth in Section 8.02 of the
Indenture; or
(b) the Issuer or the Trustee may, by mandamus, or other
suit, action or proceeding at law or in equity, take whatever
action may appear necessary or desirable to collect the payments
and other amounts then due and thereafter to become due or to
enforce performance and observance of any obligation, agreement or
covenant of the Company under this Loan Agreement.
In case the Trustee shall have proceeded to enforce its rights
under this Loan Agreement and such proceedings shall have been
discontinued or abandoned for any reason or shall have been
determined adversely to the Trustee, then and in every such case
the Company, the Issuer, the Trustee, the Authenticating Agent, the
Tender Agent and the Remarketing Agent shall be restored
respectively to their several positions and rights hereunder, and
all rights, remedies and powers of the Company, the Issuer, the
Trustee, the Authenticating Agent, the Tender Agent and the
Remarketing Agent shall continue as though no such proceedings had
been taken (except as such rights, remedies and powers shall have
been determined adversely to the Trustee as aforesaid).
In case there shall be pending a proceeding of the nature
described in Section 7.1(c) or (d) above, the Trustee shall be
entitled and empowered, by intervention in such proceeding or
otherwise, to file and prove a claim or claims for the whole amount
owing and unpaid pursuant to this Loan Agreement and, in case of
any judicial proceedings, to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to
have the claims of the Trustee allowed in such judicial proceedings
relative to the Company, its creditors or its property, and to
collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute the same after
the deduction of its charges and expenses; and any custodian
(including, without limitation a receiver, trustee or liquidator)
of the Company appointed in connection with such proceedings is
hereby authorized to make such payments to the Trustee, and to pay
to the Trustee any amount due it for compensation and expenses,
including reasonable counsel fees incurred by it up to the date of
such distribution.
Any amounts collected pursuant to action taken under this
Section 7.3 shall be paid to the Trustee, to be applied in
accordance with Section 8.07 of the Indenture.
Section 7.4. Agreement to Pay Attorneys' Fees and Expenses.
If the Company defaults under any of the provisions of this Loan
Agreement and the Issuer employs attorneys or incurs other expenses
for the collection of the payments due under this Loan Agreement or
the enforcement of performance or observance of any obligation or
agreement of the Company herein contained, the Company will on
demand therefor pay to the Issuer the reasonable fees of such
attorneys and such other reasonable expenses so incurred by the
Issuer.
Section 7.5. No Remedy Exclusive. No remedy herein conferred
upon or reserved to the Issuer is intended to be exclusive of any
other available remedy or remedies, but each and every such remedy
shall be cumulative and shall be in addition to every other remedy
given under this Loan Agreement or now or hereafter existing at law
or in equity or by statute. No delay or omission to exercise any
right or power accruing upon any default shall impair any such
right or power or shall be construed to be a waiver thereof, but
any such right and power may be exercised from time to time and as
often as may be deemed expedient. In order to entitle the Issuer
to exercise any remedy reserved to it in this Article VII, it shall
not be necessary to give any notice, other than such notice as may
be herein expressly required.
Section 7.6. Waiver of Loan Agreement Event of Default. The
Trustee may in its discretion waive any Loan Agreement Event of
Default and its consequences and rescind any declaration of
acceleration of principal and interest and shall do so upon the
written request of the Owners of a majority in aggregate principal
amount of the Outstanding Bonds affected by such Loan Agreement
Event of Default; provided, however, that there shall not be waived
any Loan Agreement Event of Default in the payment of the principal
of, or premium or interest on, any Outstanding Bond unless prior to
such waiver or rescission all arrears of principal, premium, if
any, and interest, with interest to the extent not prohibited by
law, as in the Bonds provided and all expenses of the Trustee in
connection with such default shall have been paid or provided for,
and in case of any such waiver or rescission, or in case any
proceeding taken by the Trustee on account of any such default
shall have been discontinued or abandoned or determined adversely,
then in every such case the Issuer, the Trustee and the Owners
shall be restored to their former positions and rights hereunder,
respectively. In the event any covenant or agreement contained in
this Loan Agreement should be breached by the Company and
thereafter waived, such waiver shall be limited to the particular
breach so waived and shall not be deemed to waive any other breach
hereunder.
Section 7.7. Company to Give Notice of Default. The Company
covenants that it will promptly give to the Issuer, the Trustee,
the Tender Agent, the Authenticating Agent and the Remarketing
Agent written notice of any Loan Agreement Event of Default or of
any event which, with the giving of notice or the passage of time,
or both, would give rise to a Loan Agreement Event of Default, of
which it shall have actual knowledge or written notice.
ARTICLE VIII
PREPAYMENT
Section 8.1. Option to Prepay Installments. The Company shall
have, and is hereby granted, the option to prepay all or any part
of the installment payments payable hereunder with respect to the
Bonds, including the principal, premium, if any, and interest
thereon to the date of payment, by taking or causing the Issuer to
take the actions required and permitted by the Indenture to effect
the redemption or provide for the payment or redemption of all or
part of the Bonds then Outstanding as provided in Section 6.01 of
the Indenture.
Section 8.2. Additional Option to Prepay. The Company shall
have the option to prepay installment payments payable hereunder
with respect to the Bonds and thereby effect the redemption of the
Bonds under Section 6.02 of the Indenture, under the circumstances
contemplated by Section 6.02 of the Indenture.
Section 8.3. Prepayment Under Section 3.3. The application of
amounts transferred to the Bond Fund under Section 3.3 hereof for
the purpose of effecting a redemption of Bonds pursuant to Section
3.3 hereof shall constitute a prepayment of the installment
payments payable hereunder.
Section 8.4. Amount of Prepayment Under Sections 8.1, 8.2 and
8.3. In the case of a prepayment pursuant to Sections 8.1, 8.2 or
8.3 hereof, of all or a portion of the amounts payable hereunder,
the amount to be prepaid will be a sum sufficient, together with
other funds deposited with the Trustee and available for such
purpose, to pay the principal amount of all Bonds to be redeemed,
premium, if any, and accrued interest thereon to the date of
redemption.
Section 8.5. Notice of Prepayment. To exercise an option
granted in or to fulfill an obligation required by this Article
VIII, the Company shall give notice to the Issuer, the Trustee, the
Authenticating Agent, the Tender Agent and the Remarketing Agent
which shall specify therein the date upon which prepayment of
installments will be made, which date shall be not less than forty-
five (45) days (unless the Trustee shall agree to a shorter period
of notice) nor more than sixty (60) days from the date notice is
given. The Issuer, at the request of the Company, shall forthwith
take all steps (other than the payment of the money required for
such redemption) necessary under the applicable provisions of the
Indenture to effect redemption of all or part of the then
Outstanding Bonds, as may be the case, on the earliest practicable
date thereafter on which such redemption may be made under
applicable provisions of the Indenture.
Section 8.6. Redemption of Bonds With Prepayment Moneys. By
virtue of the assignment of the rights of the Issuer under this
Loan Agreement to the Trustee as referred to in Section 4.6 hereof,
the Company agrees to and shall pay any amount required to be paid
by it under this Article VIII directly to the Trustee. Pursuant to
Article VI of the Indenture, the Trustee has agreed to use the
moneys so paid to it by the Company to redeem the Bonds on the date
set for redemption pursuant to Section 8.5 hereof.
ARTICLE IX
MISCELLANEOUS
Section 9.1. Notices. Except as otherwise provided in this
Loan Agreement, and except when Immediate Notice is required, all
notices, certificates, requests, requisitions or other
communications by the Issuer, the Company, the Trustee, the
Authenticating Agent, the Tender Agent or the Remarketing Agent
pursuant to this Loan Agreement shall be in writing and shall be
deemed given when delivered by hand or four (4) days after being
mailed by first-class mail, postage prepaid, addressed as follows
(provided, however, that notice to the Trustee shall be deemed
given only upon receipt thereof by the Trustee):
If to the Issuer: Tooele County Board of County
Commissioners
County Courthouse
47 South Main Street
Tooele, Utah 84074
Attention: Chairman
If to the Trustee: Security Pacific National Trust Company
(New York)
2 Rector Street, 9th Floor
New York, New York 10006
Attention: Corporate Trust Division
If to the Company: Westinghouse Electric Corporation
Westinghouse Building
11 Stanwix Street
Pittsburgh, Pennsylvania 15222
Attention: Secretary
If to the Tender Agent: Security Pacific National Trust
Company (New York)
2 Rector Street, 9th Floor
New York, New York 10006
Attention: Corporate Trust Division
If to the Goldman, Sachs & Co.
Remarketing Agent: 85 Broad Street, 26th Floor
New York, New York 10004
Attention: Municipal Bond Department
If to the Security Pacific National Trust Company
(New York)
Authenticating 2 Rector Street, 9th Floor
Agent: New York, New York 10006
Attention: Corporate Trust Division
The Issuer, the Company, the Trustee, the Tender Agent, the
Remarketing Agent or the Authenticating Agent may, by notice given
hereunder, designate any further or different addresses to which
subsequent notices, approvals, consents, requests, complaints,
demands or other communications shall be sent or persons to whose
attention the same shall be directed.
A duplicate copy of each notice, certificate or other
communication given hereunder by the Issuer to the Company or by
the Company to the Issuer shall also be given to the Trustee, the
Tender Agent, the Authenticating Agent and the Remarketing Agent.
Section 9.2. Severability. If any provision of this Loan
Agreement shall be held or deemed to be or shall, in fact, be
illegal, inoperative or unenforceable, the same shall not affect
any other provision or provisions herein contained or render the
same invalid, inoperative or unenforceable to any extent whatever.
Section 9.3. Execution of Counterparts. This Loan Agreement
may be simultaneously executed in several counterparts, each of
which shall be an original and all of which shall constitute but
one and the same instrument.
Section 9.4. Amounts Remaining in Bond Fund, Construction Fund
and Bond Purchase Fund. It is agreed by the parties hereto that
after payment in full of (a) the Bonds (or the provision for
payment thereof having been made in accordance with the provisions
of the Indenture), (b) the fees, charges and expenses of the
Issuer, the Trustee, the Tender Agent, the Authenticating Agent and
the Remarketing Agent in accordance with the Indenture and (c) all
other amounts required to be paid under this Loan Agreement and the
Indenture, any amounts remaining in the Bond Fund, the Construction
Fund and the Bond Purchase Fund shall belong to and be paid to the
Company by the Trustee and the Tender Agent.
Section 9.5. Amendments, Changes and Modifications. Except as
otherwise provided in this Loan Agreement or the Indenture,
subsequent to the initial issuance of any Bonds and prior to their
payment in full (or provision for payment thereof having been made
in accordance with the provisions of the Indenture), this Loan
Agreement may be amended, changed, modified, altered or terminated
only as provided in the Indenture.
Section 9.6. Governing Law. This Loan Agreement shall be
governed exclusively by and construed in accordance with the
applicable laws of the State.
Section 9.7. Reliance on Authorized Representatives. Whenever
under the provisions of this Loan Agreement the approval of the
Company is required or the Company is required to take some action
at the request of the Issuer, such approval or such request shall
be given for the Company by an Authorized Company Representative,
and the Issuer, the Trustee, the Tender Agent, the Authenticating
Agent and the Remarketing Agent shall be authorized to act on any
such approval or request and no party hereto shall have any
complaint or recourse against the others or against the Trustee as
a result of any such action taken. Whenever under the provisions
of this Agreement the approval of the Issuer is required or the
Company, or the Trustee is required to take some action at the
request of the Issuer, such approval shall be given or such request
shall be made by the Authorized Issuer Representative unless
otherwise specified in this Loan Agreement, and the Company, the
Trustee, the Tender Agent, the Authenticating Agent and the
Remarketing Agent shall be authorized to act on any such approval
or request and no party hereto shall have any complaint or recourse
against the others or against the Trustee, the Tender Agent, the
Authenticating Agent and the Remarketing Agent as a result of any
such action taken.
Section 9.8. Term of Loan Agreement. This Loan Agreement
shall be in full force and effect from the date hereof and shall
continue in effect so long as any Bonds are Outstanding; provided,
that all obligations of the Company under Sections 4.3, 4.4, 4.5
and 7.4 hereof (a) to pay fees and expenses of the Trustee, the
Issuer, the Tender Agent and the Authenticating Agent, and (b) to
pay any amount required by Section 4.5 hereof shall continue in
effect even though Bonds may no longer be Outstanding. All
representations and certifications by the Company as to all matters
affecting the tax-exempt status of interest on the Bonds, and all
obligations of the Company contained herein relating to
indemnification of the Issuer, Trustee, Authenticating Agent and
Tender Agent shall survive the termination of this Loan Agreement.
Section 9.9. Binding Effect. This Loan Agreement shall inure
to the benefit of and shall be binding upon the Issuer, the Company
and their respective successors and assigns; subject, however, to
the limitations contained in Sections 4.6 and 5.1 hereof.
Section 9.10. No Charge Against Issuer Credit. No provision
hereof shall be construed to impose a charge against the general
credit of the Issuer or any personal or pecuniary liability upon
any official, officer, agent, servant or employee of the Issuer.
Section 9.11. Issuer Not Liable. Notwithstanding any other
provision of this Loan Agreement, neither the Issuer nor any
official, officer, agent, servant or employee of the Issuer shall
be liable (other than, notwithstanding Section 13.01 of the
Indenture, with respect to gross negligence or willful misconduct
(to the extent permitted by the Act and other applicable Utah law))
to the Company, the Trustee or any other Person for (a) any action
taken by the Issuer or by any official, officer, agent, servant or
employee of the Issuer under this Loan Agreement or the Indenture,
or (b) any failure of the Issuer or any official, officer, agent,
servant or employee of the Issuer to take action under this Loan
Agreement or the Indenture unless the Issuer (i) is requested in
writing by an appropriate person to take such action, (ii) is
assured of payment of or reimbursement for any expenses in such
action and (iii) is afforded a reasonable period under the
circumstances to take such action, except that the Issuer agrees to
take, or refrain from taking, any action as required by an
injunction and to comply with any final judgment for specific
performance. In acting under this Loan Agreement, or in refraining
from acting under this Loan Agreement, the Issuer may conclusively
rely on the advice of its counsel.
Section 9.12. Third-Party Beneficiaries. Except for the
rights of the Owners of the Bonds and the Trustee pursuant to the
Indenture or as otherwise expressly provided herein or therein, it
is specifically agreed between the parties executing this Loan
Agreement that it is not intended by any of the provisions of any
part of this Loan Agreement to make the public or any member
thereof a third-party beneficiary hereunder, or to authorize anyone
not a party to this Loan Agreement to maintain a suit for personal
injuries or property damage pursuant to the terms or provisions of
this Loan Agreement.
Section 9.13. If Payment or Performance Date Not a Business
Day. If the date for making any payment, or the last date for
performance of any act or the exercising of any right, as provided
in this Loan Agreement, shall not be a Business Day such payment
may be made or act performed or right exercised on the next
succeeding Business Day with the same force and effect as if made
on the actual payment or performance date.
Section 9.14. Right of Company to Perform Issuer's Agreements.
The Issuer irrevocably authorizes and empowers the Company to
perform in the name and on behalf of the Issuer (a) any agreement
made by the Issuer in this Loan Agreement or in the Indenture which
the Issuer fails to perform in a timely fashion if the continuance
of such failure could result in a Loan Agreement Event of Default
or an Indenture Event of Default or (b) termination, pursuant to
Section 12 of the Purchase Contract, of the Underwriters (as
defined in the Purchase Contract); provided, however, that the
Company shall not be required by this Section 9.14 or otherwise to
perform any agreement of the Issuer.
<PAGE>
IN WITNESS WHEREOF, TOOELE COUNTY, UTAH has caused this Loan
Agreement to be executed by the Chairman of its Board of County
Commissioners, and attested by its County Clerk, and WESTINGHOUSE
ELECTRIC CORPORATION has caused this Loan Agreement to be executed
by its Vice President and Treasurer, all as of the day and year
first above written.
TOOELE COUNTY, UTAH
BY:/s/ Kelly H. Gubler, M.D.
Kelly H. Gubler, M.D., Chairman,
Board of County Commissioners
Attest:
/s/ Dennis D. Ewing
Dennis D. Ewing,
County Clerk
WESTINGHOUSE ELECTRIC CORPORATION
a Pennsylvania corporation
By________________________________
Vice President and Treasurer
<PAGE>
EXHIBIT A
No._______
[Form of Written Requisition]
WRITTEN REQUISITION
Security Pacific National Trust Company (New York)
2 Rector Street, 9th Floor
New York, New York 10006
Attention: Corporate Trust Division
Re: Written Requisition for Disbursement of Funds from the
Tooele County, Utah
Variable Rate Hazardous Waste Treatment Revenue Bonds
(Westinghouse Electric Corporation Project), Series A
Construction Fund
As Trustee under that certain Indenture of Trust dated as of
June 1, 1990 (the "Indenture"), between Tooele County, Utah (the
"Issuer") and Security Pacific National Trust Company (New York),
as Trustee (the "Trustee"), you are hereby requested to disburse
from the Construction Fund described above, which was created by
Section 4.01 of the Indenture, the amounts more fully set forth on
Schedule A attached hereto, to be paid pursuant to this Written
Requisition No.____ to the payees listed on Schedule A attached
hereto for the purposes therein set forth. All capitalized terms
used herein and not otherwise defined herein shall have the meaning
set forth in the Indenture or, if not defined therein, in the Loan
Agreement (as such term is defined in the Indenture).
The undersigned, as an Authorized Company Representative, does
hereby certify that:
(a) none of the payments for which the payment
or reimbursement set forth on Schedule A attached hereto has
formed the basis for any payment or reimbursement heretofore
made from the Construction Fund;
(b) each item for which payment or reimbursement
is requested as set forth on Schedule A attached hereto is or
was necessary in connection with the Construction of the
Project;
(c) all of the principal proceeds of the Bonds
have been or are being used to provide for Costs of the
Project;
(d) payment or reimbursement of the amounts set
forth on Schedule A attached hereto will be in accordance with
all applicable provisions of the Loan Agreement;
(e) the Costs of the Project for which such
disbursement is being requested have, prior to the date
hereof, been paid or incurred by the Company or an Affiliate
of the Company and 100% of the amount hereby requested to be
disbursed will, on the date hereof, be used to pay Costs of
the Project, the liability for payment of which has heretofore
been incurred by the Company or an Affiliate of the Company,
or to reimburse the Company or an Affiliate of the Company for
Costs of the Project heretofore paid by the Company or an
Affiliate of the Company;
(f) the disbursement requested will result in at
least 95% of all such disbursements, other than disbursements
for issuance expenses, having been used (a) to provide land or
depreciable property of a character subject to the allowance
for depreciation under Section 167 of the Internal Revenue
Code of 1986 or (b) for payment of such amounts which are, for
federal income tax purposes, chargeable to the Project's
capital account or would be so chargeable either with a proper
election by the Company or an Affiliate of the Company or but
for a proper election by the Company or an Affiliate of the
Company to deduct such amounts; and
(g) the disbursement requested will result in 2%
or less of the face amount of the Bonds theretofore initially
authenticated and delivered having been used to pay costs and
expenses of issuing the Bonds.
Executed this ____ day of ______________, 199___.
WESTINGHOUSE ELECTRIC CORPORATION
By_______________________________________
Authorized Company
Representative
<PAGE>
SCHEDULE A
NAME AND ADDRESS OF PERSON
TO WHOM PAYMENT OR AMOUNT TO BE PAID
REIMBURSEMENT IS TO BE MADE OR REIMBURSED
$
<PAGE>
EXHIBIT B
PROJECT DESCRIPTION
The Project is located approximately 70 miles west of Salt
Lake City, Utah, within the "West Desert Hazardous Industry Area"
established by the Issuer. The primary functions of the Project
are:
(a) to treat, by way of thermal destruction,
certain hazardous, toxic and solid waste materials from
various manufacturing and other industrial and non-industrial
operations and from remediation activities, consisting of
solids, liquids and sludge residues;
(b) to temporarily store such materials prior to
incineration; and
(c) to act as a transfer station for certain
wastes which do not require thermal treatment prior to
disposal at an EPA-approved disposal facility.
The Project is expected to have the capacity to treat
approximately 70,000 tons of waste per year. Functional
descriptions of the various major components of the Project are:
1. Laboratory. The Project laboratory will conduct analyses
to determine the acceptability of waste samples for treatment, to
verify the composition of wastes received at the Project, to assist
in proper blending of wastes for treatment, and to determine the
composition of materials leaving the Project for permanent
disposal.
2. Kiln and Afterburner. Wastes are thermally treated in a
slagging rotary kiln. Volatilized gases from the kiln are
discharged into an afterburner chamber for thermal destruction of
hazardous components. In addition, certain liquid wastes may be
directly injected into the afterburner for treatment. Slag from
the kiln is delivered to an EPA-approved disposal facility.
3. Gas Cleaning System. Combustion gases are cooled in a
quench tower/spray dryer and pass through a baghouse to remove
particulate pollutants. The gases are then sprayed with a water
solution to further reduce the temperature, and pass through a wet
scrubber where acids are removed and neutralized. The gases then
pass through a wet electrostatic precipitation unit where mists,
aerosols and very fine particulates are removed prior to discharge
to the atmosphere.
4. Ancillary Facilities. The Project also includes various
facilities for the receipt, handling and storage of wastes and
process residues, for receiving and distributing utility services,
for providing operating and process controls, and for providing
administrative and maintenance services.
EXHIBIT 4(e)
RIGHTS AGREEMENT
This agreement ("Rights Agreement"), dated as of June 14, 1989,
between Rollins Environmental Services, Inc., a Delaware
corporation (the "Company"), and Registrar and Transfer Company
(the "Rights Agent").
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company on June 14, 1989
(i) authorized the issuance and declared a dividend of one right (a
"Right") for each share of the common stock, par value $1.00 per
share ("Common Stock"), of the Company outstanding as of the close
of business on June 16, 1989 (the "Record Date"), each Right
representing the right to purchase one share (subject to
adjustment) of Common Stock of the Company upon the terms and
subject to the conditions hereinafter set forth, and (ii) further
authorized the issuance of one Right (subject to adjustment) with
respect to each share of Common Stock of the Company that shall
become outstanding (whether originally issued or delivered from the
Company's treasury) between the Record Date and the Distribution
Date (as defined herein);
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Rights
Agreement, the following terms shall have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term
is hereinafter defined) who or which, together with all
Affiliates (as such term is hereinafter defined) of such Person,
shall be the Beneficial Owner (as such term is hereinafter
defined) of 15% or more of the outstanding Common Stock;
provided, however, that an Acquiring Person shall not include an
Exempt Person (as such term is hereinafter defined).
Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" as a result of an acquisition of shares of
Common Stock by the Company which, by reducing the number of such
shares then outstanding, increases the proportionate number of
shares beneficially owned by such person to 15% or more of the
outstanding Common Stock; provided that if a Person (other than
an Exempt Person) becomes the Beneficial Owner of 15% or more of
the outstanding Common Stock by reason of share purchases by the
Company and, after such share purchases by the Company, becomes
the Beneficial Owner of any additional shares of Common Stock,
such Person shall be deemed to be an "Acquiring Person." The
word "outstanding," when used with reference to a Person's
Beneficial Ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together
with the number of such securities not then issued and
outstanding which such Person would be deemed to own beneficially
hereunder.
(b) "Adjustment Shares" shall have the meaning set forth
in Section 11(a)(ii) hereof.
(c) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General
Rules and Regulations under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), as in effect on the date of this
Rights Agreement.
(d) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own", any securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or
indirectly;
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire
(whether such right is exercisable immediately or only after
the passage of time) pursuant to any agreement, arrangement
or understanding, whether or not in writing, or upon the
exercise of conversion rights, exchange rights, rights,
warrants or options, or otherwise; provided, however, that
a Person shall not be deemed the "Beneficial Owner" of, or
to "beneficially own", (x) securities tendered pursuant to
a tender or exchange offer made by such Person or any of
such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange or (y)
securities which such Person has a right to acquire on the
exercise of Rights at any time prior to the occurrence of a
Section 11(a)(ii) Event or a Section 13 Event or (z)
securities issuable upon exercise of Rights from and after
the occurrence of a Section 11(a)(ii) Event or a Section 13
Event, provided such Rights were acquired by such Person or
any of such Person's Affiliates or Associates prior to the
Distribution Date or pursuant to Section 3(a) or Section 22
hereof ("original Rights") or pursuant to Section 11(i) with
respect to an adjustment to original Rights; or (B) the
right to vote pursuant to any agreement, arrangement or
understanding (whether or not in writing); provided,
however, that a Person shall not be deemed the "Beneficial
Owner" of, or to "beneficially own", any securities if the
agreement, arrangement or understanding to vote such
security (1) arises solely from a revocable proxy or consent
given in response to a public proxy or consent solicitation
made pursuant to, and in accordance with, the applicable
rules and regulations of the Exchange Act and (2) is not
also then reportable by such Person on Schedule 13D under
the Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or
any of such Person's Affiliates or Associates has any
agreement, arrangement or understanding, whether or not in
writing, for the purpose of acquiring, holding, voting
(except as described in clause (B) of subparagraph (ii) of
this paragraph (d)) or disposing of any securities of the
Company. Notwithstanding anything in this paragraph (d) to
the contrary, a Person engaged in the business of
underwriting securities shall not be deemed the "Beneficial
Owner" of, or to "beneficially own", any securities acquired
in good faith in a firm commitment underwriting until the
expiration of forty days after the date of such acquisition.
(e) "Board of Directors" shall mean the Board of Directors
of the Company or any duly authorized committee thereof.
(f) "Business Day" shall mean any day other than a
Saturday, Sunday, or a day on which banking institutions in the
City of New York are authorized or obligated by law or executive
order to close.
(g) "close of business" on any given date shall mean 5:00
P.M., New York City time, on such date; provided, however, that
if such date is not a Business Day it shall mean 5:00 P.M., New
York City time, on the next succeeding Business Day.
(h) "Common Stock" when used with reference to the Company
shall mean the common stock (currently $1.00 par value per
share) of the Company. "Common Stock" when used with reference
to any Person other than the Company which shall be organized in
corporate form shall mean the capital stock or other equity
security with the greatest per share voting power of such Person.
"Common Stock" when used with reference to any Person other than
the Company which shall not be organized in corporate form shall
mean units of beneficial interest which shall represent the right
to participate in profits, losses, deductions and credits of such
Person and which shall be entitled to exercise the greatest
voting power per unit of such Person.
(i) "common stock equivalents" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(j) "Current Market Price" shall have the meaning set forth
in section 11(d) hereof.
(k) "Current Value" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(l) "Distribution Date" shall have the meaning set forth
in Section 3(a) hereof.
(m) "equivalent common stock" shall have the meaning set
forth in Section 11(b) hereof.
(n) "Exchange Act" shall have the meaning set forth in
Section 1(c) hereof.
(o) "Exempt Person" shall mean the Company, any Subsidiary
of the Company, any employee benefit plan or employee stock plan,
including, but not limited to, a Stock Option Plan, of the
Company or of any Subsidiary of the Company, or any person or
entity organized, appointed, established or holding Common stock
for or pursuant to the terms of any such plan.
(p) "Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(q) "Final Expiration Date" shall have the meaning set
forth in Section 7(a) hereof.
(r) "invalidation time" shall have the meaning set forth
in Section 11(a)(ii) hereof.
(s) "NASDAQ"shall have the meaning set forth in Section
11(d) hereof.
(t) "NYSE" shall have the meaning set forth in Section 9(b)
hereof.
(u) "Permitted Tender Offer" shall mean an all cash tender
offer for all outstanding shares of Common Stock of the Company
on the same terms (i) which is made pursuant to schedule 14D-1
filed with the Securities and Exchange Commission, (ii) pursuant
to which no purchases of Common Stock are made for at least 60
days from the date the offer is first published, sent or given
within the meaning of Rule 14d-2(a) under the Exchange Act and
(iii) which is accepted by the holders of not less than the
number of shares of Common Stock that, when aggregated with the
number of shares of Common Stock owned by the person making the
offer (and its Affiliates or Associates) equals or exceeds 80%
of the then outstanding shares of Common Stock.
(v) "Person" shall mean any individual, firm, corporation,
partnership or other entity.
(w) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
(x) "PSE" shall have the meaning set forth in Section 9(d)
hereof.
(y) "Purchase Price" shall have the meaning set forth in
Section 4(a) hereof.
(z) "Redemption Price" shall have the meaning set forth in
Section 23(a) hereof.
(aa) "Right Certificate" shall have the meaning set forth
in Section 3(a) hereof.
(bb) "Section 11(a)(ii) Event" shall mean any event
described in Section 11(a)(ii) (A), (B) or (C) hereof.
(cc) "Section 11(a)(ii) Trigger Date" shall have the meaning
set forth in Section 11(a)(iii) hereof.
(dd) "Section 13 Event" shall mean any event described in
clause (x), (y) or (z) of Section 13(a) hereof.
(ee) "Securities Act" shall mean the Securities Act of 1933,
as amended.
(ff) "Stock Acquisition Date" shall mean the first date of
public announcement by the Company or an Acquiring Person that
Acquiring Person has become such or such earlier date as a
majority of the Board of Directors of the Company shall become
aware of the existence of an Acquiring Person.
(gg) "Substitution Period" shall have the meaning set forth
in Section 11(a)(iii) hereof.
(hh) "Subsidiary" of a Person shall mean any corporation or
other entity of which securities or other ownership interests
having ordinary voting power sufficient to elect a majority of
the board of directors or other persons performing similar
functions are beneficially owned, directly or indirectly, by such
Person and any corporation or other entity that is otherwise
controlled by such Person.
(ii) "Summary of Rights" shall have the meaning set forth
in Section 3(b) hereof.
(jj) "Trading Day" shall have the meaning set forth in
Section 11(d) hereof.
(kk) "Triggering Event" shall mean any event described in
Section 11(a)(ii)(A), (B), or (C) or Section 13 hereof.
Any determination required by the definitions contained or referred
to in this Section 1 shall be made by the Board of Directors in
good faith, and any such determination shall be binding on the
Rights Agent and the holders of the Rights.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company in
accordance with the terms and conditions hereof, and the Rights
Agent hereby accepts such appointment. The Company may change
Rights Agents at its discretion. The Company may from time to time
appoint such Co-Rights Agents as it may deem necessary or
desirable.
Section 3. Issuance of Right Certificates.
(a) Until the close of business on the day (the "Distribution
Date") which is the earlier of (i) the tenth day after the Stock
Acquisition Date or (ii) such date as the Board of Directors may
fix following the commencement by any Person (other than an Exempt
Person) of, or the first public announcement of the intent of any
Person (other than an Exempt Person) to commence, a tender or
exchange offer upon the successful consummation of which such
Person, together with its Affiliates and Associates, would be the
Beneficial Owner of 15% or more of the outstanding Common Stock
(irrespective of whether any shares are actually purchased pursuant
to any such offer), provided that such date fixed by the Board of
Directors shall not be later than the nineteenth Business Day after
the date of such commencement or public announcement (the date
specified in clauses (i) and (ii) being subject to extension by the
Board of Directors pursuant to Section 25 hereof), (x) the Rights
will be evidenced (subject to the provisions of Section 3(c)
hereof) by the certificates for the Common Stock registered in the
names of the holders of the Common Stock and not by separate Right
certificates, and (y) each Right will be transferable only in
connection with the transfer of a share (subject to adjustment as
hereinafter provided) of Common Stock; provided that if the
Distribution Date would be prior to the Record Date, the Record
date shall be the Distribution Date; and provided, further, that if
a tender or exchange offer referred to in clause (ii) above is
cancelled or withdrawn prior to the Distribution Date, such offer
shall be deemed, for purposes of this Rights Agreement, never to
have been made. As soon as practicable after the Distribution
Date, the Rights Agent will mail, by first-class, postage prepaid
mail, to each record holder of the Common Stock as of the close of
business on the Distribution Date, as shown by the records of the
Company, at the address of such holder shown on such records, a
Right certificate in substantially the form of Exhibit A hereto
("Right Certificate") evidencing one Right for each share of Common
Stock so held, subject to adjustment as provided herein. In the
event that an adjustment in the number of Rights per share of
Common Stock has been made pursuant to Section 11(p) hereof, at the
time of distribution of the Right Certificates, the Company shall
make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a) hereof) so that Right Certificates
representing only whole numbers of Rights are distributed and cash
is paid in lieu of any fractional Rights. As of and after the
Distribution Date the rights will be evidenced solely by such Right
Certificates.
(b) On the Record Date or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights to Purchase Common
Stock, substantially in the form attached hereto as Exhibit B
("Summary of Rights"), by first-class, postage prepaid mail, to
each record holder of Common Stock as of the close of business on
the Record Date, at the address of such holder shown on the records
of the Company.
(c) With respect to certificates for Common Stock outstanding as
of the Record Date, until the Distribution Date (or, if earlier,
the Expiration Date), the Rights will be evidenced by such
certificates for Common Stock registered in the names of the
holders thereof together with a copy of the Summary of Rights.
Until the Distribution Date (or, if earlier, the Expiration Date),
the surrender for transfer of any certificate for Common Stock
outstanding on the Record Date, with or without a copy of the
Summary of Rights, shall also constitute the surrender for transfer
of the Rights associated with the Common Stock represented thereby.
(d) Rights shall be issued in respect of all shares of Common
Stock that become outstanding after the Record Date but prior to
the earlier of the Distribution Date or the expiration Date and, in
certain circumstances provided in Section 22 hereof, may be issued
in respect of shares of Common Stock that become outstanding after
the Distribution Date. Certificates issued for Common Stock
(including, without limitation, certificates issued upon original
issuance, disposition from the Company's treasury or transfer or
exchange of Common Stock) after the Record date but prior to the
earlier of the Distribution Date, the Expiration Date or the Final
Expiration Date (or, in certain circumstances as provided in
Section 22 hereof, after the Distribution Date) shall have
impressed on, printed on, written on or otherwise affixed to them
the following legend:
This certificate also evidences and entitles the
holder hereof to certain Rights as set forth in a
Rights Agreement between Rollins Environmental
Services, Inc. and Registrar and Transfer Company, as
Rights Agent, dated as of June 14, 1989 (the "Rights
Agreement"), the terms of which are incorporated
herein by reference and a copy of which is on file at
the principal executive office of Rollins
Environmental Services, Inc. Under certain
circumstances, as set forth in the Rights Agreement,
such Rights will be evidenced by separate certificates
and will no longer be evidenced by this certificate.
Rollins Environmental Services, Inc. will mail to the
holder of this certificate a copy of the Rights
Agreement without charge within five days after
receipt by it of a written request therefor. Under
certain circumstances as provided in the Rights
Agreement, Rights issued to or beneficially owned by
Acquiring Persons or their Associates or Affiliates
(as such terms are defined in the Rights Agreement) or
any subsequent holder of such Rights may become null
and void as provided in Section 11(a)(ii) of the
Rights Agreement.
With respect to such certificates containing the foregoing legend, the
Rights associated with the Common Stock represented by such
certificates shall, until the Distribution Date, be evidenced by such
certificates alone, and the surrender for transfer of any such
certificate shall also constitute the surrender for transfer of the
Rights associated with the Common Stock represented thereby.
Section 4. Form of Right Certificates.
(a) The Right Certificates (and the forms of election to purchase
shares and of assignment to be printed on the reverse thereof), when,
as and if issued, shall be substantially in the form set forth in
Exhibit A hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon
as the Company may deem appropriate and as are not inconsistent with
the provisions of this Rights Agreement, or as may be required to
comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which
the Rights may from time to time be listed, or to conform to usage.
Subject to the provisions of Sections 11 and 22 hereof, the Right
Certificates evidencing the Rights, whenever issued, shall be dated as
of the Record Date, and on their face Right Certificates shall entitle
the holders thereof to purchase one share of Common Stock, or other
securities or property as provided herein, as the same may from time
to time be adjusted as provided herein, at the price per share set
forth therein, as the same may from time to time be adjusted as
provided herein (the "Purchase Price")
(b) Notwithstanding any other provision of this Rights Agreement,
any Right Certificate that represents Rights that are beneficially
owned by (i) an Acquiring Person or any Affiliate or Associate thereof,
(ii) a transferee of an Acquiring Person (or any such Affiliate or
Associate) who becomes a transferee after the Acquiring Person became
such or (iii) a transferee of an Acquiring Person who becomes a
transferee prior to or concurrently with the Acquiring Person's
becoming such pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of its equity
securities or to any Person with whom it has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B)
a transfer (whether or not for consideration) which the Board of
Directors has determined is part of a plan, arrangement or
understanding which has the purpose or effect of avoiding the
provisions of Section 11(a)(ii) hereof, and subsequent transferees of
such Persons (or of any transferee of such Rights), and any Right
Certificate issued pursuant to Section 6 hereof upon transfer,
exchange, replacement or adjustment of any other Right Certificate
referred to in this sentence, shall have impressed on, printed on,
written on or otherwise affixed to it (if the Company or the Rights
Agent has knowledge that such Person is an Acquiring Person or an
Associate or Affiliate thereof or transferee of such Persons or a
nominee of any of the foregoing) the following legend:
The beneficial owner of the Rights represented by this
Right Certificate is an Acquiring Person or an
Affiliate or Associate (as defined in the Rights
Agreement) of an Acquiring Person or a subsequent
holder of such Right Certificates beneficially owned
by such Persons. Accordingly, under certain
circumstances as provided in the Rights Agreement,
this Right Certificate and the Rights represented
hereby may become null and void as provided in Section
11(a)(ii) of the Rights Agreement.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its President or any Vice
President, either manually or by facsimile signature, and have affixed
thereto the Company's seal or a facsimile thereof which shall be
attested by the Secretary or an Assistant Secretary of the Company,
either manually or by facsimile signature. The Right Certificates
shall be manually countersigned by the Rights Agent and shall not be
valid for any purpose unless so countersigned. In case any officer of
the Company who shall have signed any of the Right Certificates shall
cease to be such officer of the Company before countersignature by the
Rights Agent and issuance and delivery by the Company, such Right
Certificates, nevertheless, may be countersigned by the Rights Agent,
issued and delivered with the same force and effect as though the
person who signed such Right Certificates had not ceased to be such
officer of the Company; and any Right Certificates may be signed on
behalf of the Company by any person who, at the actual date of the
execution of such Right Certificate, shall be a proper officer of the
Company to sign such Right Certificate, although at the date of the
execution of this Rights Agreement any such person was not such an
officer.
(b) Following the Distribution Date, the Rights Agent will keep
or cause to be kept, at its principal office, books for registration
and transfer of the Right Certificates issued hereunder. Such books
shall show the names and addresses of the respective holders of the
Right Certificates, the number of Rights evidenced on its face by each
of the Right Certificates, the date of each of the Right Certificates,
and the certificate numbers for each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates.
(a) Subject to the provisions hereof, at any time after the close
of business on the Distribution Date and at or prior to the close of
business on the Expiration Date, any Right Certificate or Certificates
may be (i) transferred or (ii) split up, combined or exchanged for
another Right Certificate or Right Certificates, entitling the
registered holder to purchase a like number of shares of Common Stock
as the Right Certificate or Right Certificates surrendered then
entitled such holder to purchase. Any registered holder desiring to
transfer any Right Certificate shall surrender the Right Certificate
at the shareholder services office of the Rights Agent with the form
of assignment on the reverse side thereof duly endorsed (or enclose
with such Right Certificate a written instrument of transfer in form
satisfactory to the Company and the Rights Agent), duly executed by the
registered holder thereof or his attorney duly authorized in writing,
and with such signature duly guaranteed. Any registered holder
desiring to split up, combine or exchange any Right Certificate shall
make such request in writing delivered to the Rights Agent, and shall
surrender the Right Certificate or Right Certificates to be split up,
combined or exchanged at the shareholder services office of the Rights
Agent. Thereupon the Rights Agent, subject to the provisions hereof,
shall countersign (by manual signature) and deliver to the person
entitled thereto a Right Certificate or Right Certificates, as the case
may be, as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed
in connection with any transfer, split up, combination or exchange of
Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or
mutilation or a Right Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them,
and, if requested by the Company, reimbursement to the Company of all
reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Right Certificate if mutilated,
the Company will execute and deliver a new Right Certificate of like
tenor to the Rights Agent for delivery to the registered owner in lieu
of the Right Certificate to lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights.
(a) Except as otherwise provided herein, the Rights shall become
exercisable at the close of business on the Distribution Date, and may
be exercised in whole or in part at any time after the Distribution
Date upon surrender of the Right Certificates, with the form of
election to purchase on the reverse side thereof duly executed (with
such signature duly guaranteed), to the Rights Agent at its principal
office in New York, New York, together with payment of the aggregate
Purchase Price, subject to adjustment as hereinafter provided, with
respect to the number of shares of Common Stock (except as otherwise
provided herein) as to which such surrendered Rights are then being
exercised, at or prior to the close of business on the date (the
"Expiration Date") which is the earlier of (i) June 30, 1999 (the
"Final Expiration Date"), or (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof.
(b) The Purchase Price shall initially be $200 for each share of
Common Stock issued pursuant to the exercise of a Right. The Purchase
Price shall be subject to adjustment from time to time as provided in
Sections 11 and 13 hereof. The Purchase Price shall be payable in
lawful money of the United States of America, in accordance with
Section 7(c) hereof.
(c) Except as provided in Section 7(d) hereof, upon receipt of a
Right Certificate representing exercisable Rights with the form of
election to purchase duly executed, accompanied by payment of the
aggregate Purchase Price for the shares to be purchased and an amount
equal to any applicable transfer tax, by cash, certified or official
bank check or draft payable to the order of the Company or the Rights
Agent, the Rights Agent shall, subject to Section 20(j) hereof,
thereupon promptly (i) provide itself or requisition from any transfer
agent of the Common Stock certificates for the number of shares of
Common Stock so elected to be purchased and the Company will comply and
hereby authorizes and directs such transfer agent to comply with all
such requests, (ii) requisition from the Company the amount of cash to
be paid in lieu of issuance of fractional shares in accordance with
Section 14(b) hereof, and (iii) promptly after receipt of such Common
Stock certificates cause the same to be delivered to or upon the order
of the registered holder of such Right Certificate, registered in such
name or names as may be designated by such holder, and, when
appropriate, after receipt promptly deliver such cash to or upon the
order of the registered holder of such Right Certificate; provided,
however, that in the case of a purchase of securities, other than
Common Stock of the Company, pursuant to Section 13 hereof, the Rights
Agent shall promptly take the appropriate actions corresponding to the
foregoing clauses (i) through (iii). In the event that the Company is
obligated to issue other securities of the Company, pay cash and/or
distribute other property pursuant to Section 11(a) hereof, the Company
will make all arrangements necessary so that such other securities,
cash and/or other property are available for distribution by the Rights
Agent, if and when appropriate.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent to the registered
holder of such Right Certificate or to his duly authorized assigns,
subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the
occurrence of any purported exercise as set forth in this Section 7
unless such registered holder shall have (i) completed and signed the
certificate contained in the form of election to purchase set forth on
the reverse side of the Right Certificate surrendered for such exercise
and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to
the Company or to any of its agents, be delivered to the Rights Agent
for cancellation or in cancelled form, or, if surrendered to the Rights
Agent, shall be cancelled by it, and no Right Certificates shall be
issued in lieu thereof except as expressly permitted by any of the
provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent
shall so cancel and retire, any Right Certificate purchased or acquired
by the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all cancelled Right Certificates to the Company,
or shall, at the written request of the Company, destroy such cancelled
Right Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
Section 9. Reservation and Availability of Shares of Common
Stock.
(a) The Company covenants and agrees that at all times it will
cause to be reserved and kept available, out of and to the extent of
its authorized and unissued shares of Common Stock not reserved for
another purpose or shares held in its treasury, the number of shares
of Common Stock (and, following the occurrence of a Triggering Event,
other securities) that, as provided in this Agreement, including
Section 11(a)(ii) hereof, will be sufficient to permit the exercise in
full of all outstanding Rights; provided, however, that the Company
shall not be required to reserve and keep available shares of Common
Stock or other securities sufficient to permit the exercise in full of
all outstanding Rights pursuant to the adjustments set forth in Section
11(a)(ii), Section 11(a)(iii) or Section 13 hereof unless the Rights
become exercisable pursuant to such adjustments, and then only to the
extent the Rights become exercisable pursuant to such adjustments.
(b) The Company shall (i) use its best efforts to cause, from and
after such times as the Rights become exercisable, the Rights and all
shares of Common Stock (and following the occurrence of a Triggering
Event, other securities) issued or reserved for issuance upon exercise
thereof to be listed on the New York Stock Exchange (the "NYSE") and
the Pacific Stock Exchange (the "PSE") upon official notice of issuance
upon such exercise and (ii) if then necessary to permit the offer and
issuance of such shares of Common Stock (and, following the occurrence
of a Triggering Event, other securities), register and qualify such
shares of Common Stock (and, following the occurrence of a Triggering
Event, other securities) under the Securities Act and any applicable
state securities or "blue sky" laws (to the extent exemptions therefrom
are not available), cause such registration statement and
qualifications to become effective as soon as possible after such
filing and keep such registration and qualifications effective until
the earlier of the date as of which the Rights are no longer
exercisable for such securities or the Expiration Date of the Rights.
The Company may temporarily suspend, for a period of time not to exceed
ninety days, the exercisability of the Rights in order to prepare and
file a registration statement under the Securities Act and permit it
to become effective. Upon any such suspension, the Company shall issue
a public announcement stating that the exercisability of the Rights has
been temporarily suspended, as well as a public announcement at such
time as the suspension is no longer in effect. Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not be
exercisable in any jurisdiction unless the requisite qualification in
such jurisdiction shall have been obtained and until a registration
statement under the Securities Act (if required) shall have been
declared effective.
(c) The Company covenants and agrees that it will take all such
actions as may be necessary to insure that all shares of Common Stock
(and following the occurrence of a Triggering Event, other securities)
delivered upon exercise of Rights shall, to the extent applicable, at
the time of delivery of the certificates for such shares (subject to
payment of the Purchase Price in respect thereof), be duly and validly
authorized and issued and fully paid and nonassessable shares in
accordance with applicable law.
(d) The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and
charges which may be payable in respect of the issuance or delivery of
the Right Certificates or of any shares of common Stock (or other
securities, as the case may be) upon the exercise of Rights. The
Company shall not, however, be required to pay any transfer tax which
may be payable in respect of any transfer or delivery of Right
Certificates to a Person other than the registered holder of the Right
Certificate, or the issuance or delivery of certificates for Common
Stock (or other securities, as the case may be) upon exercise of Rights
in a name other than that of, the registered holder of the Right
Certificate, and the Company shall not be required to issue or deliver
a Right Certificate or certificate for Common Stock (or other
securities, as the case may be) to a person other than such registered
holder until any such tax shall have been paid (any such tax being
payable by the holder of such Right Certificate at the time of
surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
Section 10. Common Stock Record Date. Each Person in whose name
any certificate for shares of Common Stock (or other securities, as the
case may be) is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of the Common
Stock (or other securities, as the case may be) represented thereby on,
and such certificate shall be dated, the date upon which the Right
Certificate evidencing such rights was duly surrendered and payment of
the Purchase Price (and any applicable transfer taxes) was made.
Section 11. Adjustments to Number and Kind of Shares, Number of
Rights or Purchase Price.
The number and kind of shares subject to purchase upon the exercise
of each Right, the number of Rights outstanding and the Purchase Price
are subject to adjustment from time to time as provided in this Section
11.
(a) (i) In the event the Company shall at any time after the
Record Date (A) declare or pay any dividend on Common Stock payable in
shares of Common Stock, (B) subdivide or split the outstanding shares
of Common Stock into a greater number of shares, (C) combine or
consolidate the outstanding shares of Common Stock into a smaller
number of shares or effect a reverse split of the outstanding shares
of Common Stock or (D) issue any shares of its capital stock in a
reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), except as
otherwise provided in this Section 11(a), the Purchase Price in effect
immediately prior to the time of the record date for such dividend or
of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of Common Stock or
capital stock, as the case may be, issuable upon exercise of a Right
on such date, shall be proportionately adjusted so that the holder of
any Right exercised after such time shall be entitled to receive, upon
payment of an amount equal to (x) the Purchase Price in effect
immediately prior to the record date or effective date of such
dividend, subdivision , combination or reclassification multiplied by
(y) the number of shares of Common Stock or capital stock, as the case
may be, as to which a Right was exercisable immediately prior to such
date, the aggregate number and kind of shares of Common Stock or
capital stock, as the case may be, which, if such Right had been
exercised immediately prior to such date, the holder thereof would have
owned upon such exercise and been entitled to receive, or would be
deemed to have owned, by virtue of such dividend, subdivision,
combination or reclassification. If an event occurs which would
require an adjustment under both this Section 11(a)(i) and Section
11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i)
shall be in addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii).
(ii) In the event, at any time after the date of this
Agreement
(A) any Acquiring Person, directly or indirectly, other
than pursuant to any transaction set forth in Section 13(a)
hereof, (1) shall merge with and into the Company or any of
its Subsidiaries or otherwise combine with the Company or any
of its Subsidiaries and the Company or such Subsidiary shall
be the continuing or surviving corporation of such merger or
combination and the Common Stock of the Company shall remain
outstanding and no shares thereof shall be changed into or
exchanged for stock or other securities of the Company or of
any other Person or cash or any other property, or (2) shall,
in one or more transactions, other than in connection with the
exercise of a Right or Rights and other than in connection
with the exercise or conversion of securities exercisable for
or convertible into securities of the Company or of any
Subsidiary of the Company (which securities were outstanding
prior to the time the Acquiring Person became such), transfer
any assets or property to the Company or any of its
Subsidiaries in exchange (in whole or in part) for any shares
of any class of capital stock of the Company or any of its
Subsidiaries or any securities exercisable for or convertible
into shares of any class of capital stock of the Company or
any of its Subsidiaries, or otherwise obtain from the Company
or any of its Subsidiaries, with or without consideration, any
additional shares of any class of capital stock of the Company
or any of its Subsidiaries or any securities exercisable for
or convertible into shares of any class of capital stock of
the Company or any of its Subsidiaries (other than as part of
a pro rata offer or distribution by the Company or such
Subsidiary to all holders of such shares), or (3) shall sell,
purchase, lease, exchange, mortgage, pledge, transfer or
otherwise acquire (other than as a pro rata dividend) or
dispose, in one transaction or a series of transactions, to,
from or with, as the case may be, the Company or any of its
Subsidiaries, assets (including securities) on terms and
conditions less favorable to the Company or such Subsidiary
than the Company or such Subsidiary would be able to obtain
in arm's-length negotiation with an unaffiliated third party,
or (4) shall receive any compensation from the Company or any
of its Subsidiaries for services other than compensation for
employment as a regular or part time employee, or fees for
serving as a director, at rates in accordance with the
Company's (or its Subsidiaries') past practices, or (5) shall
receive the benefit, directly or indirectly (except
proportionately as a shareholder), of any loans, advances,
guarantees, pledges or other financial assistance or any tax
credits or tax advantage provided by the Company or any of its
Subsidiaries, or (6) shall sell, purchase, lease, exchange,
mortgage, pledge, transfer or otherwise acquire (other than
as a pro rata dividend) or dispose, in one transaction or a
series of transactions, to, from or with, as the case may be,
the Company or any of its subsidiaries (other than in
connection with the lines of business, if any, engaged in
between the Company and the Acquiring Person or Associate or
Affiliate thereof prior to the time the Acquiring Person
became such) assets having an aggregate fair market value of
more than $100,000,000; or
(B) any Person, alone or together with its Affiliates
and Associates, shall become an Acquiring Person; other than
pursuant to a Permitted Tender Offer; or
(C) during such time as there is an Acquiring Person,
there shall be any reclassification of securities (including
any reverse stock split), or any recapitalization of the
Company, or any merger or consolidation of the Company with
any of its Subsidiaries or any other transaction or series
of transactions involving the Company or any of its
Subsidiaries (whether or not with or into or otherwise
involving an Acquiring Person or any Affiliate or Associate
of such Acquiring Person) which has the effect, directly or
indirectly, of increasing by more than 1% the proportionate
share of the outstanding shares of any class of equity
securities of the Company or any of its Subsidiaries, or
securities exercisable for or convertible into equity
securities of the Company or any of its Subsidiaries, which
is directly or indirectly beneficially owned by any Acquiring
Person or any Affiliate or Associate of any Acquiring Person;
then, subject to the last sentence of Section 23(a) hereof, and except
as otherwise provided in this Section 11, each holder of a Right shall
thereafter have the right to receive, upon exercise of a Right in
accordance with the terms of this Rights Agreement and payment of the
aggregate Purchase Price with respect to the total number of shares of
Common Stock for which a Right was exercisable immediately prior to the
first occurrence of a Section 11(a)(ii) Event, such number of shares
of Common Stock of the Company as shall equal the result obtained by
(x) multiplying the then current Purchase Price by the number of shares
of Common Stock for which a Right was exercisable immediately prior to
the first occurrence of a Section 11(a)(ii) Event, and (y) dividing
that product by 50% of the Current Market Price per share of Common
Stock on the date of such first occurrence (such number of shares is
herein called the "Adjustment Shares"); provided that the number of
Adjustment Shares shall be further appropriately adjusted to reflect
any events described in Sections 11(a)(i), (b) or (c) hereof occurring
after the date of such first occurrence; and provided, further, that
if the transaction that would otherwise give rise to the foregoing
adjustment is also subject to the provisions of Section 13 hereof, then
only the provisions of Section 13 hereof shall apply and no adjustment
shall be made pursuant to this Section 11(a)(ii).
Notwithstanding anything in this Rights Agreement to the contrary,
from and after the time (the "invalidation time") when (A) any Person
first becomes an Acquiring Person, other than through a Permitted
Tender Offer or (B) there occurs any event described in Section
11(a)(ii)(A) or (C) in respect of any Acquiring Person who became such
through a Permitted Tender Offer, any Rights that are beneficially
owned by (x) such Acquiring Person (or any Associate or Affiliate of
such Acquiring Person), (y) a transferee of such Acquiring Person (or
any such Associate or Affiliate) who becomes a transferee after the
invalidation time or (z) a transferee of such Acquiring Person (or any
such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the invalidation time pursuant to either (I) a
transfer from the Acquiring Person to holders of its equity securities
or to any Person with whom it has any continuing agreement, arrangement
or understanding regarding the transferred Rights or (II) a transfer
which the Board of Directors has determined is part of a plan,
arrangement or understanding which has the purpose or effect of
avoiding the provisions of this paragraph, and subsequent transferees
of such Persons, shall be void without any further action and any
holder of such Rights shall thereafter have no rights whatsoever with
respect to such rights under any provision of this Rights Agreement.
The Company shall use all reasonable effort to insure that the
provisions of this Section 11(a)(ii) and of Section 4(b) hereof are
complied with, but shall have no liability to any holder of Right
Certificates or other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder. No Right Certificate shall be
issued pursuant to Section 3 hereof that represents Rights beneficially
owned by an Acquiring Person whose Rights would be void pursuant to the
provisions of this paragraph or any Associate or Affiliate thereof; no
Right Certificate shall be issued at any time upon the transfer of any
Rights to an Acquiring Person whose Rights would be void pursuant to
the provisions of this paragraph or any Associate or Affiliate thereof
or to any nominee of such Acquiring Person, Associate or Affiliate; and
any Right Certificate delivered to the Rights Agent for transfer to an
Acquiring Person whose Rights would be void pursuant to the provisions
of this paragraph shall be cancelled.
(iii) In the event that the number of shares of Common
Stock which are authorized by the Company's certificate of
incorporation but not outstanding or reserved for issuance for purposes
other than upon exercise of the Rights is not sufficient to permit the
exercise in full of the Rights in accordance with Section 11(a)(ii) and
the Rights shall become so exercisable, the Company shall, to the
extent permitted by applicable law and any material agreements in
effect on the date hereof to which the Company is a party: (A)
determine the value of the Adjustment Shares issuable upon the exercise
of a Right (the "Current Value") and (B) with respect to each Right,
upon exercise of such Right, issue shares of Common Stock to the extent
available for the exercise in full of such Right and, to the extent
shares of Common Stock are not so available, make adequate provision
to substitute for the Adjustment Shares not received upon exercise of
such Right (1) cash, (2) other equity securities of the Company
(including, without limitation, shares or units of shares of preferred
stock which, by virtue of having dividend, voting and liquidation
rights substantially comparable to those of the Common Stock, are
deemed in good faith by the Board of Directors to have substantially
the same value as shares of Common Stock (such shares or units of
shares of preferred stock are herein called "common stock
equivalents")), (3) debt securities of the Company, (4) other assets,
(5) a reduction of the Purchase Price or (6) any combination of the
foregoing, having a value which, when added to the value of the shares
of Common Stock actually issued upon exercise of such Right, shall have
an aggregate value equal to the Current Value, where such aggregate
value has been determined in good faith by the Board of Directors based
upon the advice of a nationally recognized independent investment
banking firm selected in good faith by the Board of Directors;
provided, however, if the Company shall not have made adequate
provision to deliver value pursuant to clause (B) above within thirty
days following the date (the "Section 11(a)(ii) Trigger Date") which
is the later of (x) the first occurrence of a Section 11(a)(ii) Event
and (y) the date on which the Company's right of redemption pursuant
to Section 23(a) expires, then the Company shall be obligated to
deliver, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, shares of Common Stock (to the
extent available) and then, if necessary, cash, which shares and/or
cash have an aggregate value equal to the excess of (x) the Current
Value over (y) the Purchase Price times the number of shares of Common
Stock for which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event. If the Board of Directors
shall determine in good faith that it is likely sufficient additional
shares of Common Stock could be authorized for issuance upon exercise
in full of the Rights, the thirty day period set forth above may be
extended to the extent necessary, but not more than ninety days after
the Section 11(a)(ii) Trigger Date, in order that the Company may seek
shareholder approval for the authorization of such additional shares
(such thirty day period, as it may be extended, is herein called the
"Substitution Period"). To the extent that the Company determines that
some action must be taken pursuant to the first and/or second sentence
of this Section 11(a)(iii), the Company (x) shall provide, subject to
Section 11(a)(ii) hereof and the last sentence of this Section
11(a)(iii), that such action shall apply uniformly to all outstanding
Rights until the expiration of the Substitution Period in order to seek
any authorization of additional shares and/or to decide the appropriate
form of distribution to be made pursuant to such first sentence and to
determine the value thereof. In the event of any such suspension, the
Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well
as a public announcement at such time as the suspension is no longer
in effect. For purposes of this Section 11(a)(iii), the value of the
Common Stock shall be the Current Market Price per share of the Common
Stock on the Section 11(a)(ii) Trigger Date and the per share or per
unit value of any "common stock equivalent" shall be deemed to equal
the Current Market Price per share of the Common Stock on such date.
The Board of Directors may, but shall not be required to, establish
procedures to allocate the right to receive Common Stock upon the
exercise of the Rights among holders of rights pursuant to this Section
11(a)(iii).
(b) In case the Company shall fix a record date for the
issuance of rights (other than the Rights), options or warrants to all
holders of Common Stock entitling them to subscribe for or purchase
(for a period expiring within forty-five calendar days after such
record date) Common Stock, shares having the same rights, privileges
and preferences as the Common Stock ("equivalent common stock") or
securities convertible into Common Stock or equivalent common stock at
a price per share of Common Stock or equivalent common stock (or having
a conversion price per share, if a security convertible into Common
Stock or equivalent common stock) less than the Current Market Price
per share of Common Stock on such record date, the Purchase Price to
be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by
a fraction, the numerator of which shall be the number of shares of
Common Stock outstanding on such record date, plus the number of shares
of Common Stock which the aggregate offering price of the total number
of shares of Common Stock and/or equivalent common stock (and/or the
aggregate initial conversion price of the convertible securities so to
be offered, including the price required to be paid to purchase such
convertible security) would purchase at such current Market Price, and
the denominator of which shall be the number of shares of Common Stock
outstanding on such record date, plus the number of additional shares
of Common Stock and/or equivalent common stock to be offered for
subscription or purchase (or into which the convertible securities so
to be offered are initially convertible). In case such subscription
price may be paid by delivery of consideration part or all of which may
be in a form other than cash, the value of such non-cash consideration
shall be as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed
with the Rights Agent. Shares of Common stock owned by or held for the
account of the Company shall not be deemed outstanding for the purpose
of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed, and in the event that such rights
or warrants are not so issued, the Purchase Price shall be adjusted to
be the Purchase Price which would then be in effect if such record date
had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Common Stock (including any such
distribution made in connection with a consolidation or merger in which
the Company is the continuing corporation) of evidences of
indebtedness, cash (other than a regular quarterly cash dividend out
of the earnings or retained earnings of the Company), assets (other
than a dividend payable in Common Stock, but including any dividend
payable in stock other than Common Stock) or subscription rights or
warrants (excluding those referred to in Section 11(b) hereof), the
Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall
be the Current Market Price per share of Common Stock on such record
date, less the fair market value (as described in good faith by the
Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent) of the portion
of the cash, assets or evidences of indebtedness so to be distributed
or of such subscription rights or warrants applicable to a share of
Common Stock and the denominator of which shall be such Current Market
Price per share of Common Stock. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event
that such distribution is not so made, the Purchase Price shall be
adjusted to be the Purchase Price which would have been in effect if
such record date had not been fixed.
(d) For the purpose of any computation hereunder (including
computations pursuant to Section 14 hereof), other than computations
made pursuant to Section 11(a)(iii) hereof, the "Current Market Price"
per share of Common Stock on any date shall be deemed to be the average
of the daily closing prices per share of the Common Stock for the
thirty consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date, and for purpose of computations made
pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per
share of the Common Stock on any date shall be deemed to be the average
of the daily closing prices per share of the Common Stock for the ten
consecutive Trading Days immediately following such date; provided,
however, that in the event that the Current Market Price per share of
the Common Stock is determined during a period following the
announcement by the issuer of the Common Stock of (i) any dividend or
distribution on the Common Stock (other than a regular quarterly cash
dividend) or (ii) any subdivision, combination or reclassification of
the Common Stock, and prior to the expiration of the requisite thirty
Trading Day or ten Trading Day period, as set forth above, the
ex-dividend date for such dividend or distribution, or the effective
date of such subdivision, combination or reclassification occurs, then,
and in each such case, the current Market Price shall be properly
adjusted to take into account ex-dividend trading. The closing price
for each day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading on the NYSE or, if the shares of common
stock are not listed or admitted to trading on the NYSE, as reported
in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on
which the shares of Common Stock are listed or admitted to trading or,
if the shares of Common Stock are not listed or admitted to trading on
any national securities exchange, the last quoted sale price or, if not
so quoted, the average of the high bid and low asked price in the
over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotations System ("NASDAQ") or such
other system then is use, or, if on any such date the shares of Common
Stock are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market
maker making a market in the Common Stock selected by the Board of
Directors of the Company. If on any such date no market maker is
making a market in the Common Stock, the fair value of such shares on
such date as determined in good faith by the Board of Directors shall
be used. The term "Trading Day" shall mean a day on which the
principal national securities exchange on which the shares of Common
Stock are listed or admitted to trading is open for the transaction of
business or, if the shares of Common Stock are not listed or admitted
to trading on any national securities exchange, a Business Day. If the
Common Stock is not publicly held or not so listed or traded, "Current
Market Price" per share shall mean the fair value per share as
determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least one
percent in the Purchase Price; provided, however, that any adjustments
which by reason of this Section 11(e) are not required to be made shall
be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 11 shall be made to the nearest
cent or to the nearest ten-thousandth of a share, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the
earlier of (i) three years from the date of the transaction which
mandates such adjustment, or (ii) one month prior to the Expiration
Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(i) or (ii) or Section 13(a) hereof, the holder of any Right
thereafter exercised shall become entitled to receive any shares of
capital stock other than Common Stock, thereafter the number of such
other shares so receivable upon exercise of any Right and the Purchase
Price thereof shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the
applicable provisions with respect to the shares of common stock
contained in Sections 7, 9, 10, 11, 13, and 14 hereof, and such
provisions shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent
to any adjustment made to the Purchase Price hereunder shall evidence
the right to purchase, at the adjusted Purchase Price, the number of
shares of Common Stock purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided
herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price
as a result of the calculations made in Sections 11(b) and (c), each
Right outstanding immediately prior to the making of such adjustment
shall thereafter evidence the right to purchase that number of shares
of Common Stock (calculated to the nearest ten-thousandth) obtained by
(i) multiplying (x) the number of shares covered by a Right immediately
prior to this adjustment, by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price, and (ii)
dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect, on or after the date of any
adjustment of the Purchase Price, to adjust the number of Rights, in
addition to the adjustment provided in Section 11(p) hereof. Each of
the Rights outstanding after the adjustment in the number of Rights
shall be exercisable for a number of shares of Common Stock equal to
the number of shares of Common Stock for which a Right was exercisable
immediately prior to such adjustment multiplied by a fraction the
numerator of which shall be the total number of Rights outstanding
immediately prior to such adjustment and the denominator of which shall
be the total number of Rights outstanding immediately following such
adjustment. The Company shall make a public announcement of its
election to adjust the number of Rights, indicating the record date for
the adjustment, and, if known at the time, the amount of the adjustment
to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Right Certificates
have been issued, shall be at least ten days later than the date of the
public announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to
holders of record of Right Certificates on such record date Right
Certificates evidencing, subject to Section 14 hereof, the additional
Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement
for the Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new
Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and countersigned in the manner
provided for herein (and may bear, at the option of the Company, the
adjusted Purchase Price) and shall be registered in the names of the
holders of record of Right Certificates on the record date specified
in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of shares of Common Stock issuable upon the
exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the Purchase Price and the
number of shares which were expressed in the initial Right Certificates
issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value of the shares of
Common Stock issuable upon exercise of the Rights, the Company shall
take any corporate action, including using its best efforts to obtain
any required shareholder approvals, which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable shares of Common Stock at such
adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that
an adjustment in the Purchase Price be made effective as of a record
date for a specified event, the Company may elect to defer until the
occurrence of such event the issuance to the holder of any Right
exercised after such record date the shares of Common Stock and cash,
other capital stock or securities of the Company, if any, issuable upon
such exercise over and above the shares of Common Stock and cash, other
capital stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to such
holder a due bill or other appropriate instrument evidencing such
holder's right to receive such additional shares of Common Stock and
cash, other capital stock or securities upon the occurrence of the
event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions
in the Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that in their good
faith judgment the Board of Directors of the Company shall determine
to be advisable in order that any (i) consolidation or subdivision of
the Common Stock, (ii) issuance for cash of any shares of Common Stock
at less than the current market price, (iii) issuance for cash of
shares of Common Stock or securities which by their terms are
convertible into or exchangeable for shares of Common Stock, (iv) stock
dividends or (v) issuance of rights, options or warrants referred to
in this Section 11, hereafter made by the Company to holders of its
Common Stock shall not be taxable to such shareholders. No reduction
in the Purchase Price shall be made as a consequence of the exercise
of qualified or unqualified stock options by employees of the Company
to whom stock options have been granted.
(n) The Company covenants and agrees that it shall not, at
any time after the earlier of the Distribution Date or the Stock
Acquisition Date, (i) consolidate with any other Person, (ii) merge
with or into any other Person, (iii) sell or transfer (or permit any
Subsidiary to sell or transfer), in one transaction or a series of
related transactions, assets or earning power aggregating more than 50%
of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to, any other Person or Persons, or (iv) engage in
any transaction described in Section 11(a)(ii) (A) or (C) hereof if (x)
at the time of or immediately after such consolidation, merger, sale
or other transaction there are any rights, warrants or other
instruments or securities outstanding or agreements in effect which
would substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights, (y) prior to, simultaneously
with or immediately after such consolidation, merger, sale or other
transactions, the shareholders of the Person who constitutes, or would
constitute, the "Principal Party" for purposes of Section 13(a) hereof
shall have received a distribution of Rights previously owned by such
Person or any of its Affiliates and Associates or (z) the form or
nature of organization of the Principal Party would preclude or limit
the exercisability of the Rights.
(o) The Company covenants and agrees that, after the earlier
of the Distribution Date or the Stock Acquisition Date, it will not,
except as permitted by Section 23 or Section 26 hereof, take (or permit
any Subsidiary to take) any action if at the time such action is taken
it is reasonably foreseeable that such action will diminish
substantially or eliminate the benefits intended to be afforded by the
Rights.
(p) Anything in this Rights Agreement to the contrary
notwithstanding, in the event that the Company shall at anytime after
the Record Date and prior to the Distribution Date (i) declare a
dividend on the outstanding shares of Common Stock payable in shares
of Common Stock, (ii) subdivide the outstanding shares of Common Stock,
or (iii) combine the outstanding shares of Common Stock into a smaller
number of shares, the number of Rights associated with each share of
Common Stock then outstanding, or issued or delivered thereafter, shall
be proportionately adjusted so that the number of Rights thereafter
associated with each share of Common Stock following any such event
shall equal the result obtained by multiplying the number of Rights
associated with each share of Common Stock immediately prior to such
event by a fraction the numerator of which shall be the total number
of shares of Common Stock outstanding immediately prior to the
occurrence of the event and the denominator of which shall be the total
number of shares of Common stock outstanding immediately following the
occurrence of such event.
Section 12. Certification of Adjustments. Whenever an
adjustment is made as provided in Sections 11 and 13 hereof, the
Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts giving rise to such
adjustment, (b) promptly file with the Rights Agent and with each
transfer agent for the Common Stock a copy of such certificate and (c)
mail a brief summary thereof to each record holder of a Right (or, if
prior to the Distribution Date, to each holder of Common Stock) in
accordance with Section 25 hereof. Notwithstanding the foregoing
sentence, the failure of the Company to give such notice shall not
affect the validity of or the force or effect of or the requirement for
such adjustment. The Rights Agent shall be fully protected in relying
on any certificate prepared by the Company pursuant to Sections 11 and
13 and on any adjustment therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power.
(a) In the event that, at anytime on or after the Stock
Acquisition Date, directly or indirectly, (x) the Company shall
consolidate with any other Person or Persons or shall merge with and
into any other Person or Persons and the Company shall not be the
surviving or continuing corporation of such merger, or (y) any Person
or Persons shall merge with and into the Company, and the Company shall
be the continuing or surviving corporation of such merger and, in
connection with such merger, all or part of the outstanding shares of
Common stock shall be changed into or exchanged for stock or other
securities of any other Person or of the Company or cash or any other
property, or (z) the Company or one or more of its subsidiaries shall
sell or otherwise transfer to any other Person or any Affiliate or
Associate of such Person, in one or more transactions, or the Company
or one or more of its Subsidiaries shall sell or otherwise transfer to
any Person in one or a series of related transactions, assets or
earning power aggregating more than 50% of the assets or earning power
of the Company and its Subsidiaries (taken as a whole), then, on the
first occurrence of any such event, except as may be contemplated by
Section 13(d), proper provision shall be made so that (i) each holder
of record of a Right, other than as provided in Section 11(a)(ii),
shall thereafter have the right to receive, upon the exercise thereof
and payment of the aggregate Purchase Price with respect to the total
number of shares for which a Right was exercisable immediately prior
to the first occurrence of a Section 13 Event (or, if earlier, the
first occurrence of a Section 11(a)(ii) Event) in accordance with the
terms of this Rights Agreement, such number of shares of validly
issued, fully paid and nonassessable and freely tradeable Common Stock
of the Principal Party (as defined herein) not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as shall
be equal to the result obtained by (1) multiplying the then current
Purchase Price by the number of shares of Common Stock for which a
Right was exercisable immediately prior to the first occurrence of a
Section 13 Event (or, if a Section 11(a)(ii) Event has occurred prior
to the first occurrence of a Section 13 Event, multiplying the Purchase
Price in effect immediately prior to the first occurrence of a Section
11(a)(ii) Event by the number of shares of Common Stock for which a
Right was exercisable immediately prior to such first occurrence of a
Section 11(a)(ii) Event) and (2) dividing that product by 50% of the
Current Market Price (determined as provided in Section 11(d) hereof
with respect to the Common Stock) per share of the Common Stock of such
Principal Party on the date of consummation of such Section 13 Event;
provided that the Purchase Price and the number of shares of Common
Stock of such Principal Party issuable upon exercise of each Right
shall be further adjusted as provided in this Agreement to reflect any
events occurring after the date of the first occurrence of a Section
13 Event; (ii) such Principal Party shall thereafter be liable for, and
shall assume, by virtue of such Section 13 Event, all the obligations
and duties of the Company pursuant to this Rights Agreement; (iii) the
term "Company" for all purposes of this Rights Agreement shall
thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 hereof shall
apply only to such Principal Party following the first occurrence of
a Section 13 Event; and (iv) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient number
of shares of its Common Stock in accordance with Section 9 hereof) in
connection with the consummation of any such transaction as may be
necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its shares
of Common Stock thereafter deliverable upon the exercise of the Rights;
provided, however, that, upon the subsequent occurrence of any merger,
consolidation, sale of all or substantially all of the assets,
recapitalization, reclassification of shares, reorganization or other
extraordinary transaction in respect of such Principal Party, each
holder of a Right shall thereupon be entitled to receive, upon exercise
or a Right and payment of the Purchase Price, such cash, shares,
rights, warrants and other property which such holder would have been
entitled to receive had he, at the time of such transaction, owned the
shares of Common Stock of the Principal Party purchasable upon the
exercise of a Right, and such Principal Party shall take such steps
(including, but not limited to, reservation of shares of stock) as may
be necessary to permit the subsequent exercise of the Rights in
accordance with the terms hereof for such cash, shares, rights,
warrants and other property and (v) the provisions of Section 11(a)(ii)
hereof shall be of no effect following the occurrence of any Section
13 Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in (x) or
(y) of the first sentence of Section 13(a) hereof; (A) the
Person that is the issuer of the securities into which shares
of Common stock of the Company are converted in such merger
or consolidation, or, if there is more than one such issuer,
the issuer the Common Stock of which has the greatest
aggregate market value of shares outstanding or (B) if no
securities are so issued, (x) the Person that is the other
party to the merger, if such Person survives said merger or,
if there is more than one such Person, the Person the Common
Stock of which has the greatest aggregate market value of
shares outstanding or (y) if the Person that is the other
party to the merger does not survive the merger, the Person
that does survive the merger (including the Company if it
survives) or (x) the Person resulting from the consolidation;
and
(ii) in the case of any transaction described in (z) of
the first sentence in Section 13(a) hereof, the Person that
is the party receiving the greatest portion of the assets or
earning power transferred pursuant to such transaction or
transactions, or, if each Person that is a party to such
transaction or transactions receives the same portion of the
assets or earning power so transferred or if the Person
receiving the greatest portion of the assets or earning power
cannot be determined, whichever of such Persons as is the
issuer of Common Stock having the greatest aggregate market
value of shares outstanding,
provided, however, that in any such case described in the foregoing
(b)(i) or (b)(ii), if the Common Stock of such Person is not at such
time or has not been continuously over the preceding 12-month period
registered under Section 12 of the Exchange Act, and (1) if such Person
is a direct or indirect Subsidiary of another Person the Common Stock
of which is and has been so registered, the term "Principal Party"
shall refer to such other Person, or (2) if such Person is a
Subsidiary, directly or indirectly, of more than one Person, the Common
stocks of all of which are and have been so registered, the term
"Principal Party" shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest aggregate market value
of shares outstanding or (3) if such Person is owned, directly or
indirectly, by a joint venture formed by two or more Persons that are
not owned, directly or indirectly, by the same Person, the rules set
forth in clauses (1) and (2) above shall apply to each of the owners
having an interest in the venture as if the Person owned by the joint
venture was a Subsidiary of both or all of such joint venturers, and
the Principal Party in each such case shall bear the obligations set
forth in this Section 13 in the same ratio as its interest in such
Person bears to the total of such interests.
(c) The Company shall not consummate any consolidation,
merger, sale or transfer referred to in Section 13(a) unless prior
thereto the Company and the Principal Party involved therein shall have
executed and delivered to the Rights Agent an agreement confirming that
the requirements of Sections 13(a) and (b) hereof shall promptly be
performed in accordance with their terms and that such consolidation,
merger, sale or transfer of assets shall not result in a default by the
Principal Party under this Rights Agreement as the same shall have been
assumed by the Principal Party pursuant to Sections 13(a) and (b)
hereof and further providing that, as soon as practicable after
executing such agreement pursuant to this Section 13, the Principal
Party will:
(i) prepare and file a registration statement under the
Securities Act, if necessary, with respect to the Rights and
the securities purchasable upon exercise of the Rights on an
appropriate form, use its best efforts to cause such
registration statement to become effective as soon as
practicable after such filing and use its best efforts to
cause such registration statement to remain effective (with
a prospectus at all times meeting the requirements of the
Securities Act) until the Expiration Date, and similarly
comply with applicable state securities laws;
(ii) use its best efforts, if the Common Stock of the
Principal Party shall become listed on a national securities
exchange, to list (or continue the listing of) the Rights and
the securities purchasable upon exercise of the Rights on such
securities exchange and, if the Common Stock of the Principal
Party shall not be listed on a national securities exchange,
to cause the Rights and the securities purchasable upon
exercise of the Rights to be reported by NASDAQ or such other
system then in use;
(iii) deliver to holders of the Rights historical
financial statements for the Principal Party which comply in
all respects with the requirements
for registration on Form 10 (or any successor form) under the
Exchange Act; and
(iv) obtain waivers of any rights of first refusal or
preemptive rights in respect of the shares of Common Stock of
the Principal Party subject to purchase upon exercise of
outstanding Rights.
In the event that any of the transactions described in Section 13(a)
hereof shall occur at any time after the occurrence of a transaction
described in Section 11(a)(ii) hereof, the Rights which have not
theretofore been exercised shall thereafter be exercisable in the
manner described in Section 13(a).
(d) Furthermore, in case the Principal Party which is to be
a party to a transaction referred to in this Section 13 has provision
in any of its authorized securities or in its Certificate of
Incorporation or By-laws or other instrument governing its corporate
affairs, which provision would have the effect of (i) causing such
Principal Party to issue, in connection with, or as a consequence of,
the consummation of a transaction referred to in this Section 13,
shares of Common stock of such Principal Party at less than the then
Current Market Price per share (determined pursuant to Section 11(d)
hereof) or securities exercisable for, or convertible into, Common
Stock of such Principal Party at less than such then Current Market
Price (other than to holders of Rights pursuant to this Section 13) or
(ii) providing for any special payment, tax or similar provisions in
connection with the issuance of the Common Stock of such Principal
Party pursuant to the provisions of Section 13; then, in such event,
the Company hereby agrees with each holder of Rights that it shall not
consummate any such transaction unless prior thereto the Company and
such Principal Party shall have executed and delivered to the Rights
Agent a supplemental agreement providing that the provision in question
of such Principal Party shall have been cancelled, waived or amended,
or that the authorized securities shall be redeemed, so that the
applicable provision will have no effect in connection with, or as a
consequence of, the consummation of the proposed transaction.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence fractional
Rights. If the Company shall not issue fractions of Rights, in lieu
of such fractional Rights, there shall be paid to the holders of record
of the Right Certificates with regard to which such fractional Rights
would otherwise be issuable, an amount in cash equal to the same
fraction of the then current market value of a whole Right. For the
purposes of this Section 14(a), the then current market value of a
Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which fractional Rights would have
been issuable, determined in the same manner as the closing price of
a share of Common Stock shall be determined pursuant to Section 11(d)
hereof.
(b) The Company shall not be required to issue fractions of
shares of Common Stock or other securities of the Company upon exercise
of the Rights or to distribute certificates which evidence fractional
shares. In lieu of issuing fractions of shares of Common Stock or
other securities of the Company, there shall be paid to the holders of
record of Right Certificates at the time such Right Certificates are
exercised as herein provided an amount in cash equal to the same
fraction of the then current market value of a share of Common Stock
or other securities of the Company. For purposes of this Section
14(b), the then current market value of a share of Common Stock or
other securities of the Company shall be the closing price thereof for
the Trading Day immediately prior to the date of such exercise, as
determined pursuant to Section 11(d) hereof or in the same manner as
the closing price of a share of Common Stock shall be determined
pursuant to Section 11(d) hereof, as the case may be.
(c) The holder of a Right by the acceptance of a Right
expressly waives his right to receive any fractional Right or any
fractional shares of Common Stock or other securities of the Company
upon exercise of a Right.
Section 15. Rights of Action. All rights of action in respect
of this Agreement are vested in the respective holders of record of the
Right Certificates (and, prior to the Distribution Date, the holders
of record of the Common Stock); and any holder of record of any Right
Certificate (or, prior to the Distribution Date, of the Common Stock),
without the consent of the Rights Agent or of the holder of any other
Right Certificate (or, prior to the Distribution Date, of the Common
Stock), may, in his own behalf and for his own benefit, enforce, and
may institute and maintain any suit, action or proceeding against the
Company or any other Person to enforce, or otherwise act in respect of,
his right to exercise the Rights evidenced by such Right Certificate
in the manner provided in such Right Certificate and in this Agreement.
Without limiting the foregoing or any remedies available to the holders
of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this
Agreement and, accordingly, that they will be entitled to specific
performance of the obligations under, and injunctive relief against
actual or threatened violations of, the obligations of any Person
subject to this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right
by accepting the same consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will not be
evidenced by a Right Certificate and will be transferable only in
connection with the transfer of Common Stock;
(b) after the Distribution Date, the Right Certificates will
be transferable only on the registry books of the Rights Agent if
surrendered at the shareholder services office of the Rights Agent,
duly endorsed or accompanied by a proper instrument of transfer;
(c) the Company and the Rights Agent may deem and treat the
person in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on the
Right Certificate or the associated Common Stock certificate made by
anyone other than the Company or the Rights Agent or the transfer agent
of the Common stock) for all purposes whatsoever, and neither the
Company nor the Rights Agent shall be affected by any notice to the
contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or other Person as a result of its
inability to perform any of its obligations under this Agreement by
reason of any preliminary or permanent injunction or other order,
decree or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or any
statute, rule, regulation or executive order promulgated or enacted by
any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use
its best efforts to have any such order, decree or ruling lifted or
otherwise overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a Shareholder.
No holder of a Right, as such, shall be entitled to vote, receive
dividends in respect of or be deemed for any purpose to be the holder
of Common stock or any other securities of the Company which may at any
time be issuable upon the exercise of the Rights, nor shall anything
contained herein or in any Right Certificate be construed to confer
upon the holder of any Right Certificate, as such, any of the rights
of a shareholder of the Company or any right to vote for the election
of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate
action, or to receive notice of meetings or other actions affecting
shareholders, or to receive dividends or subscription rights in respect
of any such stock or securities, or otherwise, until the Right or
Rights evidenced by such Right Certificate shall have been exercised
in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time
to time, on demand of the Rights Agent, its reasonable expenses and
counsel fees and other disbursements incurred in the administration and
execution of this Rights Agreement and the exercise and performance of
its duties hereunder. The Company also agrees to indemnify the Rights
Agent for, and to hold it harmless against, any loss, liability or
expense incurred without negligence, bad faith or willful misconduct
on the part of the Rights Agent for anything done or omitted to be done
by the Rights Agent in connection with the acceptance and
administration of this Rights Agreement, including the cost and
expenses of defending against any claim of liability in the premises.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted
by it in connection with its administration of this Rights Agreement
in reliance upon any Right Certificate, certificate for Common Stock
or other securities of the Company, instrument or assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement or other paper or document
believed by it to be genuine and to be signed, executed and, where
necessary, guaranteed, verified or acknowledged, by the proper person
or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights Agent
shall be a party, or any corporation succeeding to the corporate trust
or stock transfer business of the Rights Agent or any successor Rights
Agent, shall be the successor to the Rights Agent under this Rights
Agreement without the execution or filing of any paper or any further
act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Rights
Agent under the provisions of Section 31 hereof. In case at the time
such successor Rights Agent shall succeed to the agency created by the
Rights Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of the predecessor Rights Agent and deliver
such Right Certificates so countersigned; and in case at that time any
of the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates either
in the name of the predecessor Rights Agent or in the name of the
successor Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in
this Rights Agreement.
(b) In case at any time the name of the Rights Agent shall
be changed and at such time any of the Right Certificates shall have
been countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver such Right
Certificates so countersigned; and in case at that time any of the
Right Certificates shall not have been countersigned, the Rights Agent
may countersign such Right Certificates either in its prior name or in
its changed name; and in all such cases such Right Certificates shall
have the full force provided in the Right Certificates and in this
Rights Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes
the duties and obligations imposed by this Rights Agreement upon the
following terms and conditions, by all of which the Company and the
holders of Right Certificates, by their acceptance thereof, shall be
bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel
shall be full and complete authorization and protection to the Rights
Agent as to any action taken or omitted to be taken by it in good faith
and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Rights Agreement the Rights Agent shall deem it necessary or desirable
that any fact or matter be proved or established by the Company prior
to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by
a certificate signed by the Chairman of the Board, the President or any
Vice President and by the Treasurer or any Assistant Treasurer or the
Secretary or any Assistant Secretary of the Company and delivered to
the Rights Agent; and such certificate shall be full authorization to
the Rights Agent for any action taken or suffered in good faith by it
under the provisions of this Rights Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or wilful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Rights
Agreement or in the Right Certificates (except its countersignature
thereof) or be required to verify the same, but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility
in respect of the validity of this Rights Agreement or the execution
and delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the validity or execution of any Right
Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or condition
contained in this Rights Agreement or in any Right Certificate; nor
shall it be responsible for any adjustment required under the
provisions of Section 11 or 13 hereof or responsible for the manner,
method or amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment (except with
respect to the exercise of Rights evidenced by Right Certificates after
actual notice of any such adjustment); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock to be issued
pursuant to this Rights Agreement or any Right Certificate or as to
whether any shares of Common Stock will, when issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts, instruments
and assurances as may reasonably be required by the Rights Agent for
the carrying out or performing by the Rights Agent of the provisions
of this Rights Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of is duties
hereunder from the Chairman of the Board or the President or any Vice
President or the Secretary or any Assistant Secretary or the Treasurer
or any Assistant Treasurer of the Company, and to apply to such
officers for advice or instructions in connection with its duties, and
it shall not be liable for any action taken or suffered to be taken by
it in good faith in accordance with instructions of any such officer.
(h) The Rights Agent and any shareholder, director, officer
or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested,
or contract with or otherwise act as fully and freely as though it were
not the Rights Agent under this Rights Agreement. Nothing herein shall
preclude the Rights Agent from acting in any other capacity for the
Company or for any other entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the Rights
Agent shall not be answerable or accountable for any act, default,
neglect or misconduct of any such attorneys or agents or for any loss
to the Company resulting from any such act, default, neglect or
misconduct, provided reasonable care was exercised in the selection and
continued employment thereof.
(j) If, with respect to any Rights Certificates surrendered
to the Rights Agent for exercise or transfer, the certificate contained
in the form of assignment or the form of election to purchase set forth
on the reverse thereof, as the case may be, has either not been
completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with
respect to such requested exercise of transfer without first consulting
with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties
under this Rights Agreement upon 30 days' notice in writing mailed to
the Company and to each transfer agent of the Common Stock by
registered or certified mail, and to the holders of the Right
Certificates by first-class mail. The Company may remove the Rights
Agent or any successor Rights Agent (with or without cause) upon 30
days' notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Common
Stock by registered or certified mail, and to the holders of the Right
Certificates by first class mail. If the Rights Agent shall resign or
be removed or shall otherwise become incapable of acting, the Company
shall appoint a successor to the Rights Agent. Notwithstanding the
foregoing provisions of this Section 21, in no event shall the
resignation or removal of a Rights Agent be effective until a successor
Rights Agent shall have been appointed and have accepted such
appointment. If the Company shall fail to make such appointment within
a period of 30 days after such removal or after it has been notified
in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who
shall, with such notice, submit his Right Certificate for inspection
by the Company), then the incumbent Rights Agent or the holder of
record of any Right Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court,
shall be (a) a corporation organized and doing business under the laws
of the United States or any State thereof, in good standing, which is
authorized under such laws to exercise corporate trust or stock
transfer powers and is subject to supervision or examination by federal
or state authority and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $50,000,000 or
(b) an Affiliate controlled by a corporation described in clause (a)
of this sentence. After appointment, the successor Rights Agent shall
be vested with the same powers, rights, duties and responsibilities as
if it had been originally named as Rights Agent without further act or
deed; but the predecessor Rights Agent shall deliver and transfer to
the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance, conveyance,
act or deed necessary for the purpose. Not later than the effective
date of any such appointment the Company shall file notice thereof in
writing with the predecessor Rights Agent and each transfer agent of
the Common Stock, and mail a notice thereof in writing to the
registered holders of the Right Certificates. Failure to give any
notice provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal
of the Rights Agent or the appointment of the successor Rights Agent,
as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding
any of the provisions of this Rights Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by the Board of
Directors to reflect any adjustment or change in the Purchase Price and
the number or kind or class of shares of stock or other securities or
property purchasable under the Right Certificates made in accordance
with the provisions of this Rights Agreement. In addition, in
connection with the issuance or sale of shares of Common Stock
following the Distribution Date and prior to the redemption or
expiration of the Rights, the Company may, with respect to shares of
Common Stock so issued or sold pursuant to the exercise of stock
options or under any employee plan or arrangement, or upon the
exercise, conversion or exchange of securities hereafter issued by the
Company, or in any other case, if deemed necessary or appropriate by
the Board of Directors, issue Right Certificates representing the
appropriate number of Rights in connection with such issuance or sale;
provided, however, that (i) no such Right Certificate shall be issued
if, and to the extent that, the Company shall be advised by counsel
that such issuance would create a significant risk of material adverse
tax consequences to the Company or the Person to whom such Rights
Certificate would be issued, and (ii) no such Rights Certificate shall
be issued, if, and to the extent that, appropriate adjustment shall
otherwise have been made in lieu of the issuance thereof.
Section 23. Redemption.
(a) The Board of Directors of the Company may, at its option,
at any time prior to the earlier of (i) the close of business on the
tenth day following the Stock Acquisition Date, subject to extension
by the Board of Directors as provided in Section 26 hereof, or (ii) the
close of business on the Final Expiration Date, cause the Company to
redeem all but not less than all of the then outstanding Rights at a
redemption price of $0.01 per Right, as such amount may be
appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such redemption
price being hereinafter referred to as the "Redemption Price").
Notwithstanding anything contained in this Rights Agreement to the
contrary, the Rights shall not be exercisable after the first
occurrence of any of the transactions referred to in Section 11(a)(ii)
hereof until such time as the Board of Directors' right of redemption
hereunder has expired.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights, and without any
further action and without any notice, the right to exercise the Rights
will terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price, without any interest thereon.
Within 10 days after the action of the Board of Directors ordering the
redemption of the Rights, the Company shall give notice of such
redemption to the holders of the then outstanding Rights by mailing
such notice to all such holders at their last addresses as they appear
upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent of the
Common Stock. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice.
Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made and the time for such
payment. The failure to give notice required by this Section 23(b) or
any defect therein shall not affect the legality or validity of the
action taken by the Company.
Section 24. Notice of Proposed Actions.
(a) In case the Company, after the earlier of the
Distribution Date or the Stock Acquisition Date, shall propose (i) to
effect any of the transactions referred to in Section 11(a)(i) or to
pay any dividend to the holders of record of its Common Stock payable
in stock of any class or to make any other distribution to the holders
of record of its Common Stock (other than a regular quarterly cash
dividend), or (ii) to offer to the holders of record of its Common
Stock options, warrants, or other rights to subscribe for or to
purchase shares of Common Stock (including any security convertible
into or exchangeable for Common Stock) or shares of stock of any class
or any other securities, options, warrants, convertible or exchangeable
securities or other rights, or (iii) to effect any reclassification of
its Common Stock or any recapitalization or reorganization of the
Company, or (iv) to effect any consolidation or merger with or into,
or to effect any sale or other transfer (or to permit one or more of
its Subsidiaries to effect any sale or other transfer), in one or more
transactions, of more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to, any other Person
or Persons, or (v) to effect the liquidation, dissolution or winding
up of the Company, then, in each such case, the Company shall give to
each holder of record of a Right Certificate, in accordance with
Section 25 hereof, notice of such proposed action, which shall specify
the record date for the purpose of such transaction referred to in
Section 11(a)(i), or such dividend or distribution, or the date on
which such reclassification, recapitalization, reorganization,
consolidation, merger, sale or transfer of assets, liquidation,
dissolution, or winding up is to take place and the record date for
determining participation therein by the holders of record of Common
Stock, if any such date is to be fixed, and such notice shall be so
given in the case of any action covered by clause (i) or (ii) above at
least 10 days prior to the record date for determining holders of
record of the Common Stock for purposes of such action, and in the case
of any such other action, at least 10 days prior to the date of the
taking of such proposed action or the date of participation therein by
the holders of record of Common Stock, whichever shall be the earlier.
The failure to give notice required by this Section 24 or any defect
therein shall not affect the legality or validity of the action taken
by the Company or the vote upon any such action.
(b) In case any of the transactions referred to in Section
11(a)(ii)(A) or (C) or Section 13 of this Rights Agreement are proposed
after the earlier of the Distribution Date or the Stock Acquisition
Date, then, in any such case, the Company shall give to each holder of
Rights, in accordance with Section 25 hereof, notice of the proposal
of such transaction, which notice shall specify the proposed event and
the consequences of the event to holders of Rights under Section
11(a)(ii)(A) or (C) or Section 13 hereof, as the case may be, and, upon
consummating such transaction, shall similarly give notice thereof to
each holder of Rights.
Section 25. Notices. Notices or demands authorized by this
Rights Agreement to be given or made by the Rights Agent or by the
holder of record of any Right Certificate or Right to or on the Company
shall be sufficiently given or made if sent by first class mail,
postage prepaid, addressed (until another address is filed in writing
with the Rights Agent) as follows:
Rollins Environmental Services, Inc.
One Rollins Plaza
2200 Concord Pike
Wilmington, DE 19803
Attention: Secretary
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Rights Agreement to be given or made by the Company
or by the holder of record of any Right Certificate or Right to or on
the Rights Agent shall be sufficiently given or made if sent by first
class mail, postage prepaid, addressed (until another address is filed
in writing with the Company) as follows:
Registrar and Transfer Company
61 Broadway
New York, NY 10006
Notices or demands authorized by this Rights Agreement to be given or
made by the Company or the Rights Agent to the holder of record of any
Right Certificate or Right shall be sufficiently given or made if sent
by first class mail, postage prepaid, addressed to such holder at the
address of such holder as it appears upon the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry books
of the Transfer Agent.
Section 26. Supplements and Amendments. For as long as the
Rights are then redeemable and except as provided in the penultimate
sentence of this Section 26, the Company may in its sole and absolute
discretion, and the Rights Agent shall if the Company so directs,
supplement or amend any provision of this Agreement without the
approval of any holders of the Rights or the Common Stock. At any time
when the Rights are not then redeemable and except as provided in the
penultimate sentence of this Section 26, the Company may, and the
Rights Agent shall if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Right Certificates in
order (i) to cure any ambiguity, (ii) to correct or supplement any
provision contained herein which may be defective or inconsistent with
any other provisions herein, or (iii) to change or supplement the
provisions hereunder in any manner which the Company may deem necessary
or desirable; provided, that no such supplement or amendment shall
adversely affect the interests of the holders of Right Certificates as
such (other than any Acquiring Person who became such other than
pursuant to a Permitted Tender Offer or has participated in a Section
11(a)(ii) Event or an Affiliate or Associate of such an Acquiring
Person); provided, further, that this Rights Agreement may not be
supplemented or amended to lengthen, pursuant to clause (iii) of this
sentence, (A) a time period relating to when the Rights may be redeemed
or this Agreement amended at the sole and absolute discretion of the
Company at such time as the Rights are not then redeemable or (B) any
other time period unless such lengthening is for the purpose of
protecting, enhancing or clarifying the rights of, and/or the benefits
to, the holders of Rights as such (other than any Acquiring Person who
became such other than pursuant to a Permitted Tender Offer or has
participated in a Section 11(a)(ii) or an Affiliate or Associate of
such an Acquiring Person). Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed
supplement or amendment is in compliance with the terms of this Section
26, the Rights Agent shall execute such supplement or amendment.
Notwithstanding anything contained in this Rights Agreement to the
contrary, no supplement or amendment shall be made which changes the
Redemption Price, the Final Expiration Date or the number of shares of
Common Stock for which a Right is exercisable. Prior to the
Distribution Date, the interests of the holders of Rights shall be
deemed coincident with the interests of the holders of Common Stock.
Section 27. Successors. All of the covenants and provisions
of this Rights Agreement by or for the benefit of the Company or the
Rights Agent shall bind and inure to the benefit of their respective
successors and assigns hereunder.
Section 28. Benefits of this Rights Agreement. Nothing in this
Rights Agreement shall be construed to give to any person or
corporation other than the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date,
the Common Stock) any legal or equitable right, remedy or claim under
this Rights Agreement; but this Rights Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and the holders
of record of the Right Certificates (and, prior to the Distribution
Date, the Common Stock).
Section 29. Delaware Contract. This Rights Agreement and each
Right Certificate issued hereunder shall be deemed to be a contract
made under the laws of the State of Delaware and for all purposes shall
be governed by and construed in accordance with the laws of such state
applicable to contracts to be made and performed entirely within such
state.
Section 30. Counterparts. This Rights Agreement may be executed
in any number of counterparts and each of such counterparts shall for
all purposes be deemed to be an original, and all such counterparts
shall together constitute but one and the same instrument.
Section 31. Descriptive Headings. Descriptive headings of the
several sections of this Rights Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of any
of the provisions hereof.
Section 32. Severability. If any term, provision, covenant or
restriction of this Rights Agreement is held by a court of competent
jurisdiction or other authority to be invalid, illegal, or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Rights Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed, all as of the day and year first above
written.
Attest: Rollins Environmental Services, Inc.
By:__________________________ By:_______________________
Attest: REGISTRAR AND TRANSFER COMPANY
By:__________________________ By:__________________________
PAGE
<PAGE>
EXHIBIT A
[Form of Right Certificate]
Certificate No. _______________________ Rights
NOT EXERCISABLE AFTER JUNE 30, 1999 OR EARLIER IF
REDEEMED. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT
THE OPTION OF THE COMPANY, AT $0.01 PER RIGHT (SUBJECT
TO ADJUSTMENT) ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. IN THE EVENT THAT THE RIGHTS REPRESENTED
BY THIS CERTIFICATE ARE ISSUED TO A PERSON WHO IS AN
ACQUIRING PERSON OR AN ASSOCIATE OR AFFILIATE OF AN
ACQUIRING PERSON OR A TRANSFEREE OF THE RIGHTS
PREVIOUSLY OWNED BY SUCH PERSONS, THIS RIGHT
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY
BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 11(a)(ii) OF THE RIGHTS AGREEMENT.
Right Certificate
Rollins Environmental Services, Inc.
This certifies that , or
registered assigns, is the registered owner of the number of Rights set
forth above, each of which entitles the owner thereof, subject to the
terms, provisions and conditions of the Rights Agreement dated as of
June 14, 1989 ("Rights Agreement") between Rollins Environmental
Services, Inc., a Delaware corporation ("Company"), and Registrar and
Transfer Company ("Rights Agent"), to purchase from the Company at any
time after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 P.M. (New York City time) on June 30, 1999
at the principal office of the Rights Agent, or its successors as
Rights Agent, in New York, New York, one fully paid and nonassessable
share of Common Stock, par value $1.00 per share ("Common stock"), of
the Company at a purchase price of $200.00 as the same may from time
to time be adjusted in accordance with the Rights Agreement ("Purchase
Price"), upon presentation and surrender of this Right Certificate with
the Form of Election to Purchase duly executed.
As provided in the Rights Agreement, the Purchase Price and the
number of shares of Common Stock which may be purchased upon the
exercise of the Rights evidenced by this Right Certificate are subject
to modification and adjustment upon the happening of certain events
and, upon the happening of certain events, securities other than shares
of Common Stock, or other property, may be acquired upon exercise of
the Rights evidenced by this Right Certificate, as provided by the
Rights Agreement.
This Right Certificate is subject to all of the terms, provisions
and conditions of the Rights Agreement, which terms, provisions and
conditions are incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties
and immunities of the Rights Agent, the Company and the holders of
record of this Right Certificate. Copies of the Rights Agreement are
on file at the principal executive office of the Company.
This Right Certificate, with or without other Right Certificates,
upon surrender at the shareholder services office of the Rights Agent,
may be exchanged for another Right Certificate or Right Certificates
of like tenor and date evidencing Rights entitling the holder of record
to purchase a like aggregate number of shares of Common Stock as the
Rights evidenced by the Right Certificate or Right Certificates
surrendered shall have entitled such holder to purchase. If this Right
Certificate shall be exercised in part, the holder shall be entitled
to receive, upon surrender hereof, another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company by the
action of the Board of Directors at its option at a redemption price
of $0.01 per Right at any time prior to the earlier of the close of
business on (i) the tenth day following the Stock Acquisition date (as
such time period may be extended pursuant to the Rights Agreement) and
(ii) the Final Expiration Date.
No fractional shares of Common Stock or other securities of the
Company are required to be issued upon the exercise of any Right or
Rights evidenced hereby, and in lieu thereof, as provided in the Rights
Agreement, a cash payment will be made.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Common
Stock or of any other securities of the Company which may at any time
be issuable on the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the holder
hereof, as such, any of the rights of a shareholder of the Company or
any right to vote for the election of directors or upon any matter
submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action or to receive notice of
meetings or other actions affecting shareholders or to receive
dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by this Right Certificate shall have been exercised
as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facimile signature of the proper officers of the
Company and its corporate seal. Dated as of ______________________,
19____.
ATTEST: Rollins Environmental Services, Inc.
_______________________ By:____________________________
Secretary Title:
Countersigned:
REGISTRAR AND TRANSFER COMPANY,
as Rights Agent
By:___________________________________
Authorized signature
PAGE
<PAGE>
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to
transfer this Right Certificate.)
FOR VALUE RECEIVED
____________________________________________
hereby sells, assigns and transfers unto
________________________________________________
____________________________________________________________________
(Please print name and address of transferee)
____________________________________________________________________
Rights evidenced by this Right Certificate, together with
all right, title and interest therein, and does hereby irrevocably
constitute and appoint _______________________________________ Attorney
to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution.
Dated:__________________________, 19____.
______________________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are
[ ] are not being sold, assigned and transferred by or on behalf of
a Person who is or was an Acquiring Person or an Affiliate or Associate
of any such Acquiring Person (as such terms are defined pursuant to the
Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, I, we or it [ ] did [ ] did not acquire the Rights
evidenced by this Right Certificate from any Person who is or was an
Acquiring Person or an Affiliate or Associate of an Acquiring Person
or any transferee of such Persons.
Dated:_________________________, 19
______________________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment must correspond
to the name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if registered holder desires to
exercise the Right Certificate.)
TO: Rollins Environmental Services, Inc.
The undersigned hereby irrevocably elects to exercise
________________________
Rights represented by this Right Certificate to purchase the shares of
Common Stock issuable upon the exercise of such Rights and requests
that certificates for such share(s) be issued in the name:
____________________________________________________________________
(Please print name and address)
Please insert social security
or other identifying number
___________________________________
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance remaining
of such Rights shall be registered in the name of and delivered to:
____________________________________________________________________
(Please print name and address)
Please insert social security
or other identifying number
___________________________________
Dated: ___________________, 19_____
___________________________________________
Signature
(Signature must conform in all respects to
name/s of holder/s as specified on the face of
this Right Certificate)
Signature Guaranteed:
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are
[ ] are not being exercised by or on behalf of a Person who is or was
an Acquiring Person or an Affiliate or Associate of any such Acquiring
Person (as such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, I, we or it [ ] did [ ] did not acquire the Rights
evidenced by this Right Certificate from any Person who is or was an
Acquiring Person or an Affiliate or Associate of an Acquiring Person
or any transferee of such Persons.
Dated:___________________, 19___ _____________________________
Signature
Signature Guaranteed:
EXHIBIT 4(f)
AMENDMENT NO. 1
TO
RIGHTS AGREEMENT
BETWEEN
ROLLINS ENVIRONMENTAL SERVICES, INC.
AND
REGISTRAR AND TRANSFER COMPANY
This Amendment No. 1 dated as of the 31st day of March, 1995 amending
that certain Rights Agreement (the "Rights Agreement") dated as of
June 14, 1989 between Rollins Environmental Services, Inc. (the "Company")
and Registrar and Transfer Company (the "Rights Agent").
WHEREAS, Section 26 to the Rights Agreement provides that as long
as the Rights defined in and created by the Rights Agreement (the "Rights")
are redeemable, the Company may in its sole and absolute discretion, and
the Rights Agent shall if the Company so directs, supplement and amend
any provision of the Rights Agreement without the approval of any holders
of the Rights of the Common Stock of the Company (the "Common Stock"),
provided that no such supplement or amendment shall be made which changes
the Redemption Price (as defined in the Rights Agreement), the Final
Expiration Date (as defined in the Rights Agreement) or the number of
shares of Common Stock for which a Right is exercisable; and
WHEREAS, the Company and Westinghouse Electric Corporation, a
Pennsylvania corporation ("Westinghouse"), have entered into a Debenture
Purchase Agreement dated as of March 31, 1995 pursuant to which the Company
agrees to issue and Westinghouse agrees to accept the Company's 7.25%
Convertible Subordinated Debentures Due 2005 (the "Convertible Debentures");
and
WHEREAS, the Convertible Debentures are convertible into a maximum
of 11,000,000 shares of Common Stock; and
WHEREAS, unless the Rights Agreement is amended, issuance of the
Convertible Debentures would result in Westinghouse being an Acquiring
Person (as defined in the Rights Agreement) and result in a Triggering Event
(as defined in the Rights Agreement); and
WHEREAS, the Company and the Rights Agent desire to amend the Rights
Agreement as provided herein in order to avoid a Triggering Event;
NOW THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
1. Amendment.
Effective at 12:01 A.M. on the 31st day of March, 1995, the
following shall be added to the end of the definition of Acquiring Person
in Section 1(a) to the Rights Agreement:
"Notwithstanding the foregoing, Westinghouse Electric Corporation,
a Pennsylvania corporation, shall not be deemed to be the Beneficial
Owner of Common Stock of the Company due to (i) its ownership of the
Company's 7.25% Convertible Subordinated Debentures Due 2005, or
(ii) its ownership of Common Stock acquired upon the conversion of such
Convertible Debentures."
2. Representations and Warranties of the Company.
The Company represents and warrants to the Rights Agent that
(i) this Amendment No. 1 is permitted under the terms of the Rights
Agreement, and (ii) this Amendment No. 1 does not change the Redemption
Price, the Final Expiration Date or the number of shares of Common Stock
for which a Right is exercisable under the Rights Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1
to the Rights Agreement to be duly executed, all as of the day and year first
above written.
Rollins Environmental Services, Inc.
By: /s/ Nicholas Pappas
President and
Chief Operating Officer
Registrar and Transfer Company
By: /s/ William P. Tatler
Vice President
