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 2, 1999
Waste Systems International, Inc.
(formerly "BioSafe International, Inc.")
(Exact name of Registrant as specified in its charter)
Delaware 0-25998 95-4203626
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification No.)
420 Bedford Street, Suite 300
Lexington, Massachusetts 02173
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code:
(781) 862-3000
<PAGE>
6
ITEM 5. OTHER EVENTS.
On March 2, 1999, the Registrant completed a private offering of 10,000
units (the "Units"), each consisting of $10,000 principal amount of 11 1/2%
senior notes due 2006 (the "Notes") and warrants to purchase 150 shares of
common stock of the Registrant, par value $.01 ("Common Stock") at an exercise
price of $6.25 per share (the "Warrants").
First Albany Corporation (the "Initial Purchaser") initially purchased
the Units at a discount of 2.5% of the principal amount of the Notes. The price
to purchasers of Units from the Initial Purchaser was 100% of the principal
amount of the Notes.
The net proceeds to the Registrant from the sale of the Units, after
deducting the discount to the Initial Purchaser and related issuance costs, was
approximately $97.3 million. The Registrant will use the net proceeds to
complete a buyback of 500,000 shares of Common Stock, finance pending and future
acquisitions, repay outstanding debt, as well as for general corporate purposes.
Delivery of the Units was made on March 2, 1999 through the facilities
of the Depository Trust Company, against payment therefor in immediately
available funds.
The Notes, in the aggregate principal amount of $100,000,000, were
issued under an Indenture dated March 2, 1999 between the Registrant and IBJ
Whitehall Bank & Trust Company, as trustee, and mature on January 15, 2006.
The Notes bear interest at a rate of 11 1/2% per annum except as set
forth below. In the event that the Registrant has not achieved an Adjusted
Stockholders' Equity (as defined herein) of at least $40 million by each of
December 31, 1999, June 30, 2000 and December 31, 2000, the interest rate of the
Notes shall be adjusted on the date following such dates to 13%, 14% and 15% per
annum, respectively, except as such rate may be adjusted as otherwise set forth
herein in connection with a default of the Registrant's obligation to file,
cause to be declared effective and keep effective registration statements filed
with the Securities and Exchange Commission. "Adjusted Stockholders' Equity"
means the Registrant's stockholders' equity as shown on its consolidated balance
sheets filed as part of its regular reports with the Securities and Exchange
Commission, less the amount of any increase therein resulting from the issuance
of shares of Common Stock in exchange for outstanding 7% convertible
subordinated notes due 2005 of the Registrant, to the extent, if any, that such
issuance exceeds 2,343,646 shares of Common Stock in the aggregate.
Interest accrues on the Notes from the March 2, 1999 and will be
payable semi-annually in arrears on each January 15 and July 15, commencing July
15, 1999, to holders of record of the Notes on January 1 and July 1,
respectively, subject to prepayment under certain circumstances described
herein.
<PAGE>
Pursuant to a registration rights agreement, the Registrant is
obligated to file a registration statement under the Securities Act of 1933 with
respect to either (i) an exchange offer with respect to the Notes
(the "Exchange Offer") or (ii) resales of the Notes, and, if the Registrant
does not either make such a filing prior to the date that is 180 days after
March 2, 1999, or does not consummate such Exchange Offer or cause a shelf
registration statement with respect to such resales to be declared effective
on or prior to the date that is 240 days after March 2, 1999, the interest
rate on the Notes will increase by 0.5% per annum, in either case for so long as
such failure continues.
Upon a Change of Control (as defined in the Indenture), the Registrant
will be required, subject to certain conditions, to make an offer to repurchase
all of the outstanding Notes at a purchase price equal to 101% of their
principal amount, plus accrued and unpaid interest to the date of such
repurchase.
The Warrants, representing the right to purchase an aggregate of
1,500,000 shares of Common Stock, were issued pursuant to a Warrant Agreement
dated March 2, 1999 between the Registrant and IBJ Whitehall Bank & Trust
Company, as warrant agent.
The Warrants are exercisable from and after September 2, 1999, to and
including March 2, 2004. Each Warrant entitles the holder thereof to purchase
one share of Common Stock at an exercise price of $6.25 per share. The number of
shares for which, and the price per share at which, a Warrant is exercisable,
are subject to adjustment upon the occurrence of certain events as provided in
the Warrant Agreement.
Pursuant to a registration rights agreement, the Registrant is required
within 180 days of March 2, 1999 to file a shelf registration statement with
respect to the resale of the Warrants, the issuance of Common Stock upon the
exercise of the Warrants and, under certain circumstances if required by law,
the resale of Common Stock issuable upon exercise of the Warrants, and to use
its reasonable best efforts to cause such registration statement to be declared
effective, subject to certain exceptions, on or before 240 days after March 2,
1999. If the Registrant does not comply with its obligations under this
registration rights agreement the interest rate on the Notes will be subject to
increase by 0.5% for so long as such failure continues. The Registrant has also
agreed to do all things reasonably required to maintain the quotation of the
Common Stock on the Nasdaq SmallCap Market.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial statements of business acquired:
Not Applicable
(b) Pro forma financial information:
Not Applicable
(c) Exhibits:
Exhibit No.
1.1 Purchase Agreement, dated February 25, 1999, by and among
First Albany Corporation and Waste
Systems International, Inc. and its subsidiaries.
4.1 Indenture, dated as of March 2, 1999, between Waste Systems
International, Inc. and its subsidiaries
and IBJ Whitehall Bank & Trust Company,
including a form of the 11 1/2% Senior Note due 2006.
4.2 Warrant Agreement, dated as of March 2, 1999, between Waste
Systems International, Inc. and IBJ Whitehall Bank & Trust
Company, a New York banking corporation as warrant agent.
4.3 Note Registration Rights Agreement, dated as of March 2, 1999,
by and among Waste Systems International, Inc. and its
subsidiaries and First Albany Corporation.
4.4 Warrant Registration Rights Agreement, dated as of March 2,
1999, by and among Waste Systems International, Inc. and its
subsidiaries and First Albany Corporation.
99 Press Release of Waste Systems International, Inc. dated
March 2, 1999.
<PAGE>
Exhibits
Exhibit No. Description
1.1 Purchase Agreement, dated February 25, 1999, by and among
First Albany Corporation and Waste
Systems International, Inc. and its subsidiaries.
4.1 Indenture, dated as of March 2, 1999, between Waste Systems
International, Inc.and its subsidiaries
and IBJ Whitehall Bank & Trust Company,
including a form of the 11 1/2% Senior Note due 2006.
4.2 Warrant Agreement, dated as of March 2, 1999, between Waste
Systems International, Inc. and IBJ Whitehall Bank & Trust
Company, a New York banking corporation as warrant agent.
4.3 Note Registration Rights Agreement, dated as of March 2, 1999,
by and among Waste Systems International, Inc. and its
subsidiaries and First Albany Corporation.
4.4 Warrant Registration Rights Agreement, dated as of March 2,
1999, by and among Waste Systems International, Inc. and its
subsidiaries and First Albany Corporation.
99 Press Release of Waste Systems International, Inc. dated
March 2, 1999.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WASTE SYSTEMS INTERNATIONAL, INC.
Date: March 12, 1999 By: /s/ Philip Strauss
-----------------
Philip Strauss
Chairman, Chief Executive Officer and
President
(Principal Executive Officer)
Date: March 12, 1999 By: /s/ Robert Rivkin
----------------
Robert Rivkin
Executive Vice President - Acquisitions
Chief Financial Officer and Secretary
(Principal Financial and Accounting Officer)
<PAGE>
EXHIBIT No. 1.1
- ------------------
WASTE SYSTEMS INTERNATIONAL, INC.
(a Delaware corporation)
10,000 Units
Consisting of an aggregate of
$100,000,000 Principal Amount of 11 1/2% Senior Notes due 2005 and
1,500,000 Warrants to Purchase One Share of Common Stock per Warrant
PURCHASE AGREEMENT
Dated: February 25, 1999
<PAGE>
Table of Contents
Page
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE
SUBSIDIARY GUARANTORS.....................2
(a) Representations and Warranties of the Company and the
Subsidiary Guarantors..............................2
(b) Officers' Certificates.......................
...........................................................11
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE UNITS..............11
(a) Units..........................................................11
(b) Payment........................................................11
(c) Denominations; Registration....................................11
SECTION 3. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE
INITIAL PURCHASER.....................................12
(a) Terms and Conditions of Resales................................12
(b) Offers and Sales only to Qualified Institutional Buyers........12
(c) No General Solicitation................................. .....12
(d) No Liability for Subsequent Transfers..........................12
(e) Delivery of Offering Memorandum................................13
SECTION 4. COVENANTS OF THE COMPANY..............................13
(a) Offering Memorandum....................................... ....13
(b) Amendment to Offering Memorandum...............................13
(c) Notice and Effect of Material Events...........................13
(d) Transfer Restrictions............................... .....13
(e) Restriction on Repurchases.....................................14
(f) Investment Company.............................................14
(g) Qualification of Units for Offer and Sale......................14
(h) Payment of Expenses............................................14
(i) Rule 144A(d)(4) Information....................................15
(j) Eligibility of Units, Notes, Warrants and Warrant Shares.......15
(k) Public Filings.................................................15
(l) No Sale Requiring Registration.................................15
(m) Required Legends...............................................15
(n) No Public Offering or Solicitation.............................15
(o) Public Solicitation of Tenders.................................15
(p) Limitation on Public Offering of Debt Securities...............16
(q) Use of Proceeds................................................16
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE INITIAL PURCHASER...16
(a) No Material Misstatements or Omissions.........................16
(b) Corporate Proceedings..........................................16
(c) Opinion of Counsel for the Company.............................16
(d) Opinion of General Counsel of the Company......................17
(e) Opinion of Company's Pennsylvania Counsel......................17
(f) Opinion of Counsel for the Initial Purchaser...................17
(g) Accountant's Consent; Comfort Letter...........................17
(h) Bring-Down Comfort Letter......................................17
(i) Officers' Certificate..........................................18
(j) No Material Adverse Changes....................................18
(k) PORTAL.........................................................19
(l) Note Registration Rights Agreement.............................19
(m) Warrant Registration Rights Agreement..........................19
(n) Additional Documents...........................................19
SECTION 6. INDEMNIFICATION AND CONTRIBUTION......................19
(a) Indemnification of Initial Purchaser...........................19
(b) Indemnification of the Company.................................20
(c) Actions Against Parties; Notification..........................21
(d) Contribution...................................................21
(e) Information Provided by Initial Purchaser......................22
SECTION 7. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND OBLIGATIONS...22
SECTION 8. NOTICES.............................................. 23
SECTION 9. PARTIES...............................................23
SECTION 10. ENTIRE AGREEMENT......................................23
SECTION 11. GOVERNING LAW.........................................23
SECTION 12. COUNTERPARTS..........................................23
SECTION 13. EFFECT OF HEADINGS....................................23
<PAGE>
WASTE SYSTEMS INTERNATIONAL, INC.
(a Delaware corporation)
10,000 Units
Consisting of an aggregate of
$100,000,000 Principal Amount of 11 1/2% Senior Notes due 2005 and
1,500,000 Warrants to Purchase One Share of Common Stock per Warrant
PURCHASE AGREEMENT
February 25, 1999
First Albany Corporation
30 South Pearl Street
Albany, NY 12201
Ladies and Gentlemen:
Waste Systems International, Inc., a Delaware corporation (the
"Company"), and the subsidiaries of the Company set forth in Exhibit D hereto
(the "Subsidiary Guarantors") confirm their agreement with First Albany
Corporation (the "Initial Purchaser") with respect to the issue and sale by the
Company and the purchase by the Initial Purchaser of $100,000,000 aggregate
principal amount of the Company's 11 1/2% Senior Notes due 2005 (the "Notes")
and 1,500,000 Warrants of the Company (the "Warrants"), each Warrant entitling
the holder thereof to purchase one share of common stock, par value $.01 per
share, of the Company (the "Common Stock"). The Notes and Warrants will be sold
in Units (the "Units"), each Unit consisting of $10,000 principal amount of
Notes and 150 Warrants. The Notes are to be issued pursuant to the Indenture
dated as of March 2, 1999 (the "Indenture"), between the Company, the Subsidiary
Guarantors and IBJ Whitehall Bank & Trust Company, as trustee (the "Trustee").
The Company's obligations under the Notes, including the due and punctual
payment of interest on the Notes, will be unconditionally guaranteed by the
Subsidiary Guarantors. The Warrants are to be issued pursuant to the Warrant
Agreement dated as of March 2, 1999 (the "Warrant Agreement"), between the
Company and IBJ Whitehall Bank & Trust Company, as warrant agent (the "Warrant
Agent"). Shares of Common Stock issuable upon exercise of the Warrants are
referred to herein as "Warrant Shares."
The Company understands that the Initial Purchaser proposes to make an
offering of the Units on the terms and in the manner set forth herein and in the
Offering Memorandum (as hereinafter defined) as soon as the Initial Purchaser
deems advisable after this Agreement has been executed and delivered, subject to
the conditions set forth herein and in the Units, Notes and Warrants, to, and
only to, qualified institutional buyers (each, a "Qualified Institutional
Buyer") as defined in Rule 144A ("Rule 144A") under the Securities Act of 1933,
as amended (the "Securities Act"), in transactions exempt from registration
under the Securities Act pursuant to Rule 144A. The Notes and Warrants shall be
separately transferable immediately upon issuance. Holders of the Notes will be
entitled to the benefits of the Note Registration Rights Agreement of even date
herewith (the "Note Registration Rights Agreement") between the Company, the
Subsidiary Guarantors and the Initial Purchaser, pursuant to which the Company
will file a registration statement (the "Registration Statement") with the
Securities and Exchange Commission (the "Commission") under the Securities Act
registering the Notes or the Exchange Notes referred to in the Note Registration
Rights Agreement. Holders of the Warrants will be entitled to the benefits of
the Warrant Registration Rights Agreement of even date herewith (the "Warrant
Registration Rights Agreement") between the Company, the Subsidiary Guarantors
and the Initial Purchaser, pursuant to which the Company will file a shelf
registration statement (the "Warrant Registration Statement") with the
Commission under the Securities Act registering the Warrants and the Warrant
Shares referred to in the Warrant Registration Rights Agreement. As used herein,
this Agreement, the Indenture, the Warrant Agreement, the Note Registration
Rights Agreement and the Warrant Registration Rights Agreement shall be
collectively referred to as the "Transaction Documents." The Units, the Notes,
the Warrants and the Transaction Documents are more fully described in the
Offering Memorandum.
3
<PAGE>
The Units will be offered and sold to the Initial Purchaser without
being registered under the Securities Act, in reliance upon an exemption from
the registration requirements thereunder. The Company has prepared and delivered
to the Initial Purchaser a preliminary offering memorandum dated February 12,
1999 (such preliminary offering memorandum, including the documents incorporated
by reference therein, being hereinafter referred to as the "Preliminary Offering
Memorandum") and has authorized the Initial Purchaser to distribute copies
thereof in connection with the offering and resale of the Units as provided
herein. The Company is also preparing and will deliver to the Initial Purchaser
a final offering memorandum dated the date hereof (such final offering
memorandum, including the documents incorporated or deemed to be incorporated by
reference therein, in the form first furnished to the Initial Purchaser for use
in connection with the offering of the Units being hereinafter referred to as
the "Final Offering Memorandum") and hereby authorizes the Initial Purchaser to
distribute copies thereof in connection with the offering and resale of the
Units as provided herein. All references herein to information that is
"included" or "contained" in the Preliminary Offering Memorandum or the Final
Offering Memorandum, and all references of like import, shall include the
information (including financial statements) incorporated by reference therein,
and all references herein to amendments or supplements to the Preliminary
Offering Memorandum or the Final Offering Memorandum shall include any document
filed by the Company under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), which is incorporated by reference therein. The term "Offering
Memorandum" as used herein means any offering memorandum (whether the
Preliminary Offering Memorandum or the Final Offering Memorandum, or any
amendments or supplements to either such document), that has been prepared and
delivered by the Company to the Initial Purchaser in connection with the
offering and resale of the Units. Capitalized terms used herein and not
otherwise defined herein have the respective meanings specified in the Offering
Memorandum.
SECTION 1Representations and Warranties of the Company and the Subsidiary
Guarantors.
(a) Representations and Warranties of the Company and the Subsidiary Guarantors.
The Company and the Subsidiary Guarantors represent and warrant to, and agree
with, the Initial Purchaser as of the date hereof and the Closing Date referred
to in Section 2(b) hereof, as follows:
(i) Offering Memorandum. The Preliminary Offering Memorandum did not and
the Final Offering Memorandum (and any amendments or supplements
thereto) does not, and on the Closing Date will not, contain any untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The preceding
sentence does not apply to statements in the Preliminary Offering
Memorandum or the Final Offering Memorandum made in reliance upon and
in conformity with written information furnished to the Company by the
Initial Purchaser specifically for use therein.
4
<PAGE>
(ii) Incorporated Documents. The documents incorporated by reference in the
Offering Memorandum at the time they were or hereafter are filed with the
Commission, complied, or when so filed will comply, in all material
respects with the requirements of the Exchange Act and the rules and regulations
thereunder (the "Exchange Act Regulations"), and when read together with the
other information in the Offering Memorandum, at the date hereof and
on the Closing Date, do not and will not contain any untrue statement of a
material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they
were made, not misleading.
(iii) Independent Accountants; Financial Statements. KPMG LLP, whose
reports are incorporated by
reference in the Offering Memorandum, are independent certified public
accountants with respect to the Company as required by the Securities
Act and the rules and regulations thereunder (the "Rules and
Regulations"). The consolidated financial statements, together with the
related notes and supporting schedules, incorporated by reference in
the Offering Memorandum present fairly in all material respects the
financial condition, results of operations and changes in financial
condition of the Company and its consolidated subsidiaries at the dates
and for the periods indicated and have been prepared in accordance with
generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved. The selected
consolidated historical financial data included in the Offering
Memorandum present fairly in all material respects the information
shown therein and have been compiled on a basis consistent with that of
the audited financial statements incorporated by reference in the
Offering Memorandum.
(iv) No Material Adverse Change in Business. Since the respective dates as
of which information is given in the Offering Memorandum, except as
otherwise stated therein, (A) there has been no material
adverse change in the condition, financial or otherwise, or in the
earnings or business affairs of the Company and its subsidiaries,
including the Subsidiary Guarantors, considered as one enterprise,
whether or not arising in the ordinary course of business (a
"Material Adverse Effect"), (B) there have been no
transactions entered into by the Company or any of its subsidiaries,
other than those in the ordinary course of business, which are
material with respect to the Company and its subsidiaries considered
as one enterprise, and (C) there has been no dividend or distribution
of any kind declared, paid or made by the
Company on any class of its capital stock.
(v) Good Standing of the Company. The Company has been duly organized and is
validly existing as a corporation in good standing under the laws of the State
of Delaware, with full corporate power and authority to own, lease and operate
its properties and conduct its business as described in the Offering Memorandum
and the Company is duly qualified as a foreign corporation to do business and is
in good standing in each other jurisdiction in which the character of the
business conducted by it or the location of the properties owned or leased by it
make such qualification necessary, except where the failure to be so qualified
would not reasonably be expected to have a Material Adverse Effect. (vi) Good
Standing of the Subsidiaries. Each subsidiary of the Company, including each
Subsidiary Guarantor, to the extent applicable, has been duly organized and is
validly existing as a corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized, with full corporate power
and authority to own, lease and operate its properties and conduct its business,
and each such subsidiary is duly qualified as a foreign corporation to do
business and is in good standing in each other jurisdiction in which the
character of the business conducted by it or the location of the properties
owned or leased by it requires such qualification, except where the failure to
be so qualified would not reasonably be expected to have an Material Adverse
Effect. Each subsidiary of the Company is set forth on Exhibit D hereto. (vii)
Capitalization of the Company. The authorized, issued and outstanding capital
stock of the Company as of September 30, 1998 is as set forth in the Offering
Memorandum in the column entitled "Actual" under the caption "Capitalization"
and there have been no material changes thereto since such date (except for
subsequent issuances, if any, pursuant to this Agreement, pursuant to
reservations, agreements or employee benefit plans referred to in the Offering
Memorandum or pursuant to the exercise of convertible securities or options
referred to in the Offering Memorandum). All of the issued and outstanding
shares of capital stock of the Company have been duly authorized and validly
issued and are fully paid and nonassessable and none of the outstanding shares
of capital stock of the Company was issued in violation of any preemptive or
other similar rights of any securityholder of the Company. (viii) Capitalization
of the Subsidiaries. All of the outstanding shares of capital stock of each of
the Company's subsidiaries, including the Subsidiary Guarantors, have been duly
authorized and validly issued and are fully paid and nonassessable and are
owned, directly or indirectly, by the Company, free and clear of all liens,
encumbrances, equities or claims other than encumbrances under the Credit
Facility (as defined in the Offering Memorandum). None of the outstanding shares
of capital stock of any of the Company's subsidiaries, including the Subsidiary
Guarantors, was issued in violation of any preemptive or similar rights arising
by operation of law, the charter or bylaws of any such subsidiary or any
agreement or other instrument to which the Company or such subsidiary is a party
or by which it is bound. (ix) No Relationships. No relationship, direct or
indirect, exists between or among the Company or any of its subsidiaries,
including any Subsidiary Guarantor, on the one hand, and any director, officer
or stockholder of the Company or any subsidiary of the Company, on the other
hand, except as is described in the Offering Memorandum other than relationships
that would not be required to be described in the Company's annual and quarterly
reports filed with the Commission on Form 10-K and Form 10-Q, respectively,
under Item 404 of Regulation S-K or that would be required to be described on a
report to the Commission on Form 8-K under the Exchange Act and the rules and
regulations thereunder. (x) Absence of Defaults and Conflicts. Neither the
Company nor any subsidiary of the Company,
including any Subsidiary Guarantor, is, or with the giving of notice or
lapse of time or both would be, (i) in violation of its charter or
bylaws or other governing document or (ii) in violation of, or default
in, the performance or observation of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, lease or other agreement
or instrument, to which the Company or such subsidiary is a party or by
which it may be bound, or to which any of its properties or assets is
subject, except for violations or defaults which would not be
reasonably likely to have a Material Adverse Effect. The execution and
delivery of, and performance under, this Agreement, each of the other
Transaction Documents and each of the Units, the Notes, the Warrants
and the Warrant Shares and any other agreement or instrument entered
into or issued, or to be entered into or issued, by the Company in
connection with the transactions contemplated hereby or thereby, or in
the Offering Memorandum, and the consummation of the transactions
contemplated herein or therein, or in the Offering Memorandum,
including the issuance of the Notes, the Warrants and the Warrant
Shares, the issuance and sale of the Units and the use of the proceeds
therefrom as described in the Offering Memorandum under "Use of
Proceeds," and compliance by the Company with its obligations under the
Transaction Documents and the Units, the Notes, the Warrants and the
Warrant Shares have been duly authorized by all necessary corporate
action and do not and will not (A) result in a material violation of,
or constitute a default under, the certificate of incorporation,
bylaws, or other governing documents of the Company or any subsidiary
of the Company, (B) conflict with or constitute a breach of, or default
or a Repayment Event (as defined below) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any subsidiary of the Company
pursuant to any material contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument,
to which the Company or any subsidiary is a party or by which it or
them may be bound, or to which any of their properties or assets is
subject, or (C) violate any law, rule, administrative regulation or
decree of any arbitrator, court, or any governmental agency or body
having jurisdiction over the Company or any subsidiary of the Company,
or any of its properties. As used herein, a "Repayment Event" means any
event or condition which gives the holder of any note, debenture or
other evidence of indebtedness (or any person acting on such holder's
behalf) the right to require the repurchase, redemption or repayment of
all or a portion of such indebtedness by the Company or any of its
subsidiaries.
5
<PAGE>
(xi) Absence of Defaults and Conflicts by the Subsidiary Guarantors. The
execution and delivery of, and performance under, this Agreement, the
Indenture, the Note Registration Rights Agreement and the Warrant
Registration Rights Agreement and the Notes and any other agreement or
instrument entered into or issued, or to be entered into or issued, by
the Subsidiary Guarantors in connection with the transactions
contemplated hereby or thereby, or in the Offering Memorandum, and the
consummation of the transactions contemplated herein or therein, or
in the Offering Memorandum, including the issuance of the Notes, and
compliance by each of the Subsidiary Guarantors with its obligations
under this Agreement, the Indenture, the Note Registration Rights
Agreement and the Warrant Registration Rights Agreement and the Notes
have been duly authorized by all necessary corporate action and do not
and will not (A) result in a material violation of, or constitute a
default under, the certificate of incorporation, bylaws, or other
governing documents of such Subsidiary Guarantor, (B) conflict with or
constitute a breach of, or default or a Repayment Event under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of such Subsidiary Guarantor pursuant to
any material contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or other agreement or instrument, to
which such Subsidiary Guarantor is a party or by which it may be bound,
or to which any of its properties or assets is subject, or (C) violate
any law, rule, administrative regulation or decree of any arbitrator,
court, or any governmental agency or body having jurisdiction over such
Subsidiary Guarantor, or any of its properties.
(xii) Absence of Further Requirements. No consent, approval, authorization
or order of, or filing or registration with, any court,
governmental agency or body or financial
institution is required in connection with the issuance of the Notes,
the Warrants and the Warrant Shares, the issuance and sale of the
Units, the execution, delivery and performance of the Transaction
Documents or execution and delivery of the Units, the Notes, the
Warrants or the Warrant Shares and the consummation of the transactions
contemplated hereby and thereby (except such as may be required to
comply with securities or Blue Sky laws of various jurisdictions or in
connection with the registration under the Securities Act of the Notes,
the Exchange Notes, the Warrants or the Warrant Shares and
qualification of the Indenture under the Trust Indenture Act of 1939,
as amended (the "Trust Indenture Act") in accordance with the Note
Registration Rights Agreement and the Warrant Registration Rights
Agreement).
(xiii) Authorization of Agreements. The Company has all necessary corporate
power and authority to execute and deliver this Agreement and the other
Transaction Documents and to perform its obligations hereunder and thereunder;
and each of this Agreement and the other Transaction Documents has been duly
authorized, executed and delivered by the Company and constitutes and will
constitute the valid and legally binding agreement of the Company, enforceable
against the Company in accordance with its terms, subject as to enforcement (i)
to bankruptcy, insolvency, reorganization, arrangement moratorium, fraudulent
conveyance and similar laws of general applicability relating to or affecting
creditors' rights, (ii) to general principles of equity, whether such
enforcement is considered in a proceeding in equity or at law, and (iii) to the
limitations imposed by United States federal or state securities laws on any
rights to indemnity and contribution under this Agreement. Each of the
Subsidiary Guarantors has all necessary corporate power and authority to execute
and deliver this Agreement, the Indenture, the Note Registration Rights
Agreement and the Warrant Registration Rights Agreement and to perform its
obligations hereunder and thereunder; and each of this Agreement and the
Indenture, the Note Registration Rights Agreement and the Warrant Registration
Rights Agreement has been duly authorized, executed and delivered by the
Subsidiary Guarantors and constitutes and will constitute the valid and legally
binding agreement of each of the Subsidiary Guarantors, enforceable against each
of the Subsidiary Guarantors in accordance with its terms, subject as to
enforcement (i) to bankruptcy, insolvency, reorganization, arrangement
moratorium, fraudulent conveyance and similar laws of general applicability
relating to or affecting creditors' rights, (ii) to general principles of
equity, whether such enforcement is considered in a proceeding in equity or at
law, and (iii) to the limitations imposed by United States federal or state
securities laws on any rights to indemnity and contribution under this
Agreement. The Note Registration Rights Agreement, the Warrant Registration
Rights Agreement, the Warrant Agreement and the Indenture conform to the
respective statements relating thereto in the Offering Memorandum. (xiv)
Authorization of the Units, Notes and Warrants. The Company has all necessary
corporate power and authority to execute and deliver the Units, Notes and
Warrants and to perform its obligations thereunder. On the Closing Date, the
Units, Notes and Warrants will have been duly authorized, and, when duly
executed, authenticated, issued and delivered in accordance with their terms,
will be duly and validly issued and outstanding, and will constitute the valid
and legally binding obligations of the Company and, in the case of the Notes,
the Subsidiary Guarantors enforceable in accordance with their terms, subject as
to enforcement (i) to bankruptcy, insolvency, reorganization, arrangement,
moratorium, fraudulent conveyance and other laws of general applicability
relating to or affecting creditors' rights, and (ii) to general principles of
equity, whether such enforcement is considered in a proceeding in equity or at
law. The Units, Notes and Warrants conform to the respective descriptions
thereof in the Offering Memorandum. (xv) Authorization of Warrant Shares. The
Company shall at all times reserve and keep available, free from preemptive
rights, out of the aggregate of its authorized but unissued Common Stock or its
authorized and issued Common Stock held in its treasury, for the purpose of
enabling it to satisfy any obligation to issue Warrant Shares upon exercise of
Warrants, the maximum number of shares of Common Stock which may then be
deliverable upon the exercise of all outstanding Warrants. The Warrant Shares to
be issued by Company pursuant to the Warrant Agreement have been duly authorized
for issuance and sale, and, when issued and delivered by the Company pursuant to
the Warrant Agreement, will be validly issued and fully paid and non-assessable
and no holder of the Warrant Shares is or will be subject to personal liability
by reason of being such a holder. The form of certificate used to evidence the
Warrant Shares complies in all material respects with all applicable statutory
requirements, with any applicable requirements of the charter and by-laws of the
Company and the requirements of the Nasdaq SmallCap Market. The Common Stock,
including the Warrant Shares, conforms to the description thereof in the
Offering Memorandum. (xvi) Possession of Intellectual Property. The Company and
each of its subsidiaries, including each of the Subsidiary Guarantors, owns
or possesses, or can acquire on reasonable terms, adequate patents, patent
rights, inventions, trade secrets, licenses, know-how, proprietary
techniques, including processes and substances, trademarks, service marks,
trade names, copyrights and other intellectual property (collectively,
"Intellectual Property") necessary for the business now or proposed to be
conducted by it as described in the Offering Memorandum. Except as disclosed in
the Offering Memorandum, neither of the Company nor any subsidiary of
the Company has received any notice of infringement of or conflict with
(and knows of no such infringement of or conflict with) asserted rights
of others with respect to any Intellectual Property; and the use, in
connection with the business and operations of the Company and its
subsidiaries, of such Intellectual Property does not, to the knowledge
of the Company, infringe or conflict with any Intellectual Property of
any person, firm, corporation or association known to the Company other
than infringements or conflicts which would not reasonably be expected
to have a Material Adverse Effect.
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(xvii) Title to Property. The Company and each of its subsidiaries, including
each of the Subsidiary Guarantors, has good and marketable title to all
material real property and personal property owned by it, in each case free
and clear of all mortgages, pledges, liens, charges, encumbrances,
restrictions, claims and defects of any kind, except such as are described
in the Offering Memorandum, liens under the Credit Facility, or such as do
not, singly or in the aggregate, materially adversely affect the value of
such property and do not materially interfere with the use made and proposed
to be made of such property by the Company or such subsidiary. All real property
and personal property held under lease or sublease by the Company and each of
its subsidiaries, including each Subsidiary Guarantor, is held by it under
valid leases or subleases enforceable against the Company and, to the Company's
knowledge, the other parties thereto, with such exceptions as do not, singly
or in the aggregate, materially adversely affect the value of such
property and do not materially interfere with the use made and proposed to
be made of such real property and personal property by the Company or any
of its subsidiaries. Neither the Company nor any of its
subsidiaries, including any Subsidiary Guarantor, has received notice of
any material claim of any sort that has been asserted by anyone adverse to the
rights of the Company or any of its subsidiaries under any material lease or
sublease of the Company or any of its subsidiaries, or affecting or
questioning the rights of the Company or any of its subsidiaries to the
continued possession of such leased or subleased premises.
(xviii) Insurance. The Company and each of its subsidiaries, including each of
the Subsidiary Guarantors, carries insurance in such amounts and covering such
risks as is reasonably believed by the Company to be adequate for the conduct of
its business and the value of its properties and is customary for entities
engaged in businesses similar to that of the Company. (xix) Absence of
Proceedings. Except as described in the Offering Memorandum, there is no action,
suit, proceeding, inquiry or investigation before or by any court or
governmental agency or body now pending or, to the knowledge of the Company,
threatened against the Company or any of its subsidiaries, including any of the
Subsidiary Guarantors, that would result in any Material Adverse Effect, or that
might reasonably be expected to materially and adversely affect the properties
or assets of the Company or any subsidiary of the Company or the consummation of
this Agreement or the performance by the Company of its obligations hereunder,
or which is required to be disclosed in the Offering Memorandum and is not so
disclosed and adequately summarized therein. To the best of the Company's
knowledge, neither the Company nor any subsidiary of the Company is in violation
in any material respect of any law, ordinance, governmental rule or regulation
or court decree to which it may be subject other than violations which would not
be reasonably likely to have a Material Adverse Effect. (xx) No Unlawful
Payments. None of the Company, any of its subsidiaries, including any Subsidiary
Guarantor, or any director, officer, agent, employee or other person associated
with or acting on behalf of the Company or any of its subsidiaries has used any
corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expense relating to political activity; made any direct or indirect
unlawful payment to any foreign or domestic government official or employee from
corporate funds; or made any bribe, rebate, payoff, influence payment, kickback
or other unlawful payment. (xxi) Possession of Licenses and Permits. The Company
and each of its subsidiaries, including each of the Subsidiary Guarantors,
possesses such permits, licenses, approvals, consents and other authorizations
(collectively, "Governmental Licenses") issued by the appropriate federal,
state, local or foreign regulatory agencies or bodies necessary to conduct the
business now operated by it; the Company and each of its subsidiaries, including
each of the Subsidiary Guarantors, is in compliance in all material respects
with the terms and conditions of all such Governmental Licenses; all of the
Governmental Licenses are valid and in full force and effect; and neither of the
Company nor any subsidiary of the Company has received any notice of proceedings
relating to the revocation or modification of any such Governmental Licenses.
(xxii) Environmental Laws. (i) Neither the Company nor any of its subsidiaries,
including any Subsidiary Guarantor, is in material violation of any federal,
state or local law or regulation relating to pollution or protection of human
health or the environment (including, without limitation, ambient air, surface
water, groundwater, land surface or subsurface strata) or wildlife, including
without limitation, laws and regulations relating to emissions, discharges,
releases or threatened releases of chemicals, pollutants, contaminants, wastes,
toxic substances, hazardous substances, petroleum and petroleum products
(collectively, "Materials of Environmental Concern"), or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environmental Concern (collectively,
"Environmental Laws"), nor has the Company or any of its subsidiaries received
any written communication, whether from a governmental authority, citizens
group, employee or otherwise, that alleges that the Company or any of its
subsidiaries is in material violation of any Environmental Law; (ii) the Company
and each of its subsidiaries, including each of the Subsidiary Guarantors, has
all permits, authorizations, and approvals required in the operation of the
business of the Company and such subsidiary under any applicable Environmental
Laws and is in material compliance with their requirements; (iii) there is no
material claim, action or cause of action filed against the Company or any of
its subsidiaries, including any Subsidiary Guarantor, with a court or
governmental authority, no investigation with respect to which the Company or
any of its subsidiaries has received written notice, and no written notice by
any person or entity to the Company or any of its subsidiaries alleging
potential material liability for investigatory costs, cleanup costs,
governmental responses costs, natural resources damages, property damages,
personal injuries, attorneys' fees or penalties arising out of, based on or
resulting from the presence, or release into the environment of any Materials of
Environmental Concern at any location owned, leased or operated by the Company,
any of its subsidiaries, now or in the past (collectively, "Environmental
Claims"), pending or, to the best of the Company's knowledge, threatened against
the Company or any of its subsidiaries or any person or entity whose liability
for any Environmental Claim the Company or any of its subsidiaries has retained
or assumed either contractually or by operation of law; and (iv) to the best of
the Company's knowledge, there are no past or present actions, activities,
circumstances, conditions, events or incidents, including, without limitation,
the release, emission, discharge, presence or disposal of any Material of
Environmental Concern, that reasonably could result in a material violation of
any Environmental Law or form the basis of a potential Environmental Claim
against the Company or any of its subsidiaries, including any Subsidiary
Guarantor, or against any person or entity whose liability for any Environmental
Claim the Company or any of its subsidiaries has retained or assumed either
contractually or by operation of law. (xxiii) Cost of Environmental Compliance.
In the ordinary course of its business, the Company conducts periodic reviews of
the effect of Environmental Laws on the business, operations and properties of
the Company and its subsidiaries, in the course of which it identifies and
evaluates associated costs and liabilities (including, without limitation, any
capital or operating expenditures required for clean-up, closure of properties
or compliance with Environmental Laws or any permit, license or approval, any
related constraints on operating activities and any potential liabilities to
third parties). On the basis of such reviews and the amount of its established
reserves, the Company has reasonably concluded that such associated costs and
liabilities would not, individually or in the aggregate, result in a Material
Adverse Effect. (xxiv) No Registration Required. Subject to compliance by the
Initial Purchaser with the representations, warranties and agreements set forth
in Section 3 hereof, the Company is not required by applicable law or regulation
in connection with the offer, sale and delivery of the Units to the Initial
Purchaser, or in connection with the initial resale of the Units by the Initial
Purchaser in the manner contemplated by this Agreement, to register the Units
under the Securities Act or to qualify the Indenture under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"). (xxv) No Sale of Shares.
Except as described in the Offering Memorandum and except for 455,922 shares of
Common Stock issued in connection with the acquisition on September 21, 1998 of
Mattei-Flynn Trucking, Incorporated, neither the Company nor any of its
subsidiaries, including any Subsidiary Guarantor, has sold or issued any shares
of Common Stock of the Company during the six-month period preceding the date of
the Offering Memorandum, including any sales pursuant to Rule 144A, Regulation D
or Regulation S under the Securities Act, other than shares issued pursuant to
stock plans of the Company or issued upon conversion of convertible securities.
(xxvi) Investment Company Act. The Company is not, and after giving effect to
the offering and sale of the Units will not be, an "investment company" within
the meaning of such term under the Investment Company Act of 1940 and the rules
and regulations of the Commission thereunder (the "Investment Company Act").
(xxvii) Rule 144A Eligibility. No securities of the same class (within the
meaning of Rule 144A(d)(3) under the Securities Act) as the Units, the Notes or
the Warrants are listed on any national securities exchange registered under
Section 6 of the Exchange Act or quoted on an automated interdealer quotation
system. The Company has been advised that the Notes have been designated as
securities eligible for the Private Offerings, Resales and Trading through
Automated Linkages ("PORTAL") in accordance with the rules and regulations of
the National Association of Securities Dealers, Inc. ("NASD"). (xxviii) No
Stabilization. Neither the Company nor any of its subsidiaries, including any
Subsidiary Guarantor, has taken or will take, directly or indirectly, any action
designed to, or that might be reasonably expected to, cause or result in
stabilization or manipulation of the price of the Units, the Notes, the Warrants
and the Warrant Shares. (xxix) No General Solicitation. None of the Company, its
Affiliates under the Securities Act, or any person acting on its or any of their
behalf has directly, or through any agent (provided that no representation is
made as to the Initial Purchaser or any person acting on its behalf), (i) sold,
offered for sale, solicited offers to buy or otherwise negotiated in respect of,
any security (as defined in the Securities Act) which is or would be integrated
with the offering and sale of the Units in a manner that would require the
registration of the Units under the Securities Act or (ii) engaged in any form
of general solicitation or general advertising (within the meaning of Rule
502(c) of the Securities Act) in connection with the offering of the Units. As
used in this Agreement, the term "Affiliate" shall have the meaning given such
term by Rule 501(b) of Regulation D under the Securities Act. (xxx) Tax Returns.
The Company and each of its subsidiaries, including each of the Subsidiary
Guarantors, have filed all federal, state, local and foreign tax returns that
are required to be filed or have duly requested extensions thereof and have paid
all taxes required to be paid by each of them and any related assessments, fines
or penalties, except for any such tax, assessment, fine or penalty that is being
contested in good faith and by appropriate proceedings. Adequate charges,
accruals and reserves have been provided for in the financial statements
referred to in Section 1(a)(iii) above in respect of all federal, state, local
and foreign taxes for all periods as to which the tax liability of the Company
or any of its subsidiaries has not been finally determined or remains open to
examination by applicable taxing authorities. (xxxi) Absence of Labor Dispute.
No labor dispute with the employees of the Company or any of its subsidiaries,
including any Subsidiary Guarantor, exists or, to the Company's knowledge, is
imminent, and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or any subsidiary's principal
suppliers, customers or contractors, which, in either case, may reasonably be
expected to result in a Material Adverse Effect. (xxxii) Internal Controls. The
Company maintains a system of accounting controls sufficient to provide
reasonable assurances that (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability for
assets is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences. (b) Officers' Certificates. Any
certificate signed by any officer of the Company or any of its subsidiaries,
including any Subsidiary Guarantor, delivered to the Initial Purchaser or to
counsel for the Initial Purchaser shall be deemed a representation and warranty
by the Company to the Initial Purchaser as to the matters covered thereby.
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SECTION 2 Purchase, Sale and Delivery of the Units.
(a) Units. On the basis of the representations, warranties and agreements herein
contained and subject to the terms and conditions herein set forth, the Company
agrees to sell to the Initial Purchaser, and the Initial Purchaser agrees to
purchase from the Company on the Closing Date, at the purchase price of 97.5% of
the principal amount thereof, 10,000 Units consisting of an aggregate of
$100,000,000 principal amount of Notes and 1,500,000 Warrants.
(b) Payment. Payment of the Purchase Price for the Units shall be made against
delivery of the Units at a closing to be held at the offices of Brown & Wood
LLP, One World Trade Center, New York, New York, at 10:00 A.M., New York time,
on March 2, 1999 or at such other time or place on the same or such other date,
as shall be mutually determined by the Initial Purchaser and the Company. The
time and date of such payment are herein referred to as the Closing Date.
(c) Denominations; Registration. On the Closing Date, payment of the Purchase
Price for the Units shall be made by certified or official bank check or checks,
or by wire transfer, payable to the order of the Company, in Federal (same day)
funds. On the Closing Date, payment will be made against delivery of a single
global Unit in registered form to be deposited with, or on behalf of, The
Depository Trust Company ("DTC") and registered in the name of Cede & Co., as
nominee for DTC, in such denominations and registered in such names as the
Initial Purchaser shall request. Time shall be of the essence, and delivery at
the time and place specified pursuant to this Agreement is a further condition
to the obligations of the Initial Purchaser hereunder. The Company shall make
available the certificates representing the Units, the Notes, the Warrants and
the Warrant Shares for inspection by the Initial Purchaser in New York, New York
not later than 2:00 p.m., New York City time, on the business day prior to the
Closing Date. SECTION 3Representations, Warranties and Agreements of the Initial
Purchaser.
(a) Terms and Conditions of Resales. The Initial Purchaser represents and
warrants that it will offer the Units for resale, directly or through one or
more selected dealers, only upon the terms and conditions set forth in this
Agreement and in the Offering Memorandum.
(b) Offers and Sales only to Qualified Institutional Buyers. The Initial
Purchaser acknowledges that none of the Units, the Notes, the Warrants and the
Warrant Shares have been registered under the Securities Act and none of the
Units, the Notes, the Warrants and the Warrant Shares may be offered or sold
within the United States or to, or for the benefit of, U.S. persons except
pursuant to an exemption from the registration requirements of the Securities
Act. The Initial Purchaser represents, warrants and agrees that it has offered
the Units, and will offer and sell the Units, only to persons whom the Initial
Purchaser reasonably believes to be Qualified Institutional Buyers. (c) No
General Solicitation. The Initial Purchaser consents and agrees with the Company
that it will offer the Units purchased hereunder for sale upon the terms and
conditions set forth in this Agreement and in the Offering Memorandum. The
Initial Purchaser represents, warrants to, and agrees with, the Company that (i)
it has not engaged, and will not engage, in connection with the offering of the
Units, in any form of general solicitation or general advertising (as those
terms are defined in Regulation D under the Securities Act), (ii) it has not
solicited offers for, offered or sold, and will not solicit offers for, offer or
sell, the Units by means of any form of general solicitation or general
advertising or in any manner involving a public offering within the meaning of
Section 4(2) of the Securities Act, and (iii) it has solicited and will solicit
offers for the Units only from, and has offered, sold and delivered and will
offer, sell and deliver the Units, as part of its initial offering, only as
contemplated under the caption "Plan of Distribution" in the Offering Memorandum
and only to persons whom it reasonably believes to be Qualified Institutional
Buyers or, if any such person is buying for one or more institutional accounts
for which such person is acting as fiduciary or agent, only when such person has
represented to such Initial Purchaser that each such account is a Qualified
Institutional Buyer over which such person exercises sole investment discretion
to whom notice has been given that such sale or delivery is being made in
reliance on Rule 144A, and, in each case, in a transaction under Rule 144A. (d)
No Liability for Subsequent Transfers. Following the sale of the Units by the
Initial Purchaser to each subsequent purchaser of the Units pursuant to the
terms hereof, the Initial Purchaser shall not be liable or responsible to the
Company for any losses, damages or liabilities suffered or incurred by the
Company, including any losses, damages or liabilities under the Securities Act,
arising from or relating to any resale or transfer of any Unit, Note, Warrant or
Warrant Share, except those arising from or relating to any breach of the
obligations hereunder of the Initial Purchaser. (e) Delivery of Offering
Memorandum. The Initial Purchaser will deliver to each purchaser of the Units
from the Initial Purchaser, in connection with its original distribution of the
Units, a copy of the Offering Memorandum, as amended and supplemented at the
date of such delivery. SECTION 4Covenants of the Company. The Company covenants
with the Initial Purchaser as follows:
(a) Offering Memorandum. The Company will furnish to the Initial Purchaser
copies of the Final Offering Memorandum and all amendments and supplements
thereto, copies of all documents incorporated by reference therein (through the
date of completion of the distribution of the Units by the Initial Purchaser)
and signed copies of all consents and certificates of experts, in each case as
soon as available and in such quantities as the Initial Purchaser may reasonably
request.
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(b) Amendment to Offering Memorandum. During the period beginning the date
hereof and ending the date of completion of the offering of the Units, as
determined by the Initial Purchaser, the Company (i) will advise the Initial
Purchaser promptly of any proposed amendment or supplement to the Offering
Memorandum or any document that would as a result thereof be incorporated by
reference in the Offering Memorandum, (ii) will furnish the Initial Purchaser
with copies of any such amendment, supplement or other document a reasonable
time in advance of making any such amendment, supplement or filing, and (iii)
will not effect such amendment, supplement or filing without the Initial
Purchaser's consent, which consent shall not be unreasonably withheld. Neither
the Initial Purchaser's consent to, nor its delivery of, any such amendment or
supplement shall constitute a waiver of any of the conditions set forth in
Section 5 hereof. (c) Notice and Effect of Material Events. The Company will
promptly notify the Initial Purchaser of (i) any filing made by the Company of
information relating to the offering of the Units, Notes, Warrants or Warrant
Shares with any securities exchange or any other regulatory body in the United
States or any other jurisdiction, and (ii) prior to the completion of the
offering of the Units by the Initial Purchaser, any material change in or
affecting, or any development involving a prospective material change in or
affecting, the earnings or business of the Company or any subsidiary of the
Company that (A) makes any statement in the Offering Memorandum false or
misleading or (B) is not disclosed in the Offering Memorandum. In such event or
if prior to the completion of the offering of the Units any event shall occur as
a result of which it is necessary, in the reasonable opinion of any of the
Company, its counsel, the Initial Purchaser or counsel for the Initial
Purchaser, to amend or supplement the Offering Memorandum in order that the
Offering Memorandum not include any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances then existing, the Company will
forthwith amend or supplement the Offering Memorandum by preparing and
furnishing to the Initial Purchaser an amendment or amendments of, or a
supplement or supplements to, the Offering Memorandum (in form and substance
satisfactory in the reasonable opinion of counsel for the Initial Purchaser) so
that, as so amended or supplemented, the Offering Memorandum will not include an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances
existing at the time it is delivered to a purchaser by the Initial Purchaser in
connection with the initial resale of the Units by the Initial Purchaser, not
misleading. (d) Transfer Restrictions. During the period of two years after the
Closing Date, the Company will, upon request, furnish to the Initial Purchaser
and any holder of any of the Units, the Notes, the Warrants or the Warrant
Shares a copy of the restrictions on transfer applicable to such Unit, Note,
Warrant or Warrant Share. (e) Restriction on Repurchases. The Company will not,
and will cause its Affiliates not to, resell any Units, Notes, Warrants or
Warrant Shares which have been acquired by it or them during the period of two
years after the Closing Date and which constitute "restricted securities" under
Rule 144(a)(3) of the Securities Act, otherwise than pursuant to an effective
registration statement under the Securities Act. (f) Investment Company. During
the period of two years after the Closing Date, the Company will not be or
become an "investment company" within the meaning of, nor be or become subject
to regulation under, the Investment Company Act. (g) Qualification of Units for
Offer and Sale. The Company and the Subsidiary Guarantors will cooperate with
counsel to the Initial Purchaser to arrange for qualification of the Units for
sale under the laws of such jurisdictions as the Initial Purchaser may
reasonably designate and to maintain such qualifications in effect so long as
reasonably required for the distribution of the Units but under no circumstances
for a period of less than one year from the date of the Final Offering
Memorandum; provided, however, that the Company will not be obligated to qualify
to do business as a foreign corporation in any state in which it is not so
qualified or to file a general consent to service of process in any jurisdiction
in which it is not so qualified or to subject itself to taxation in respect of
doing business in any jurisdiction in which it is not otherwise so subject. The
Company will file such statements and reports as may be required by the laws of
each jurisdiction in which the Units have been qualified as above provided.
The Company will also supply the Initial Purchaser with such
information as the Initial Purchaser reasonably believes is necessary for the
determination of the legality of the Units for investment under the laws of such
jurisdictions as the Initial Purchaser may reasonably request.
(h) Payment of Expenses. The Company agrees to pay (i) the fees and expenses of
its counsel and accountants and any transfer agents, conversion agents and
paying agents; (ii) the costs in connection with packaging and initial delivery
of the certificates evidencing the Units, the Notes, the Warrants and the
Warrant Shares and the preparation and printing of the certificates evidencing
the Units, the Notes, the Warrants and the Warrant Shares, this Agreement and
the other Transaction Documents, the Preliminary Offering Memorandum, the Final
Offering Memorandum and any information provided by the Company pursuant to
Sections 4(a) and 4(g) above and any other document relating to the issuance of
the Units; (iii) the cost of obtaining approval for the trading of the Notes
through the PORTAL Market; (iv) any fees charged by rating agencies for rating
the Notes; (v) the fees and expenses of the Trustee, including the legal fees
and expenses of counsel for the Trustee in connection with the Indenture and the
Notes; (vi) the fees and expenses of the Warrant Agent, including the legal fees
and expenses of counsel for the Warrant Agent in connection with the Warrant
Agreement and the Warrants; (vii) any fees and expenses relating to the
eligibility of the Units, Notes, Warrants and Warrant Shares for clearance and
settlement through the facilities of the DTC; (viii) the qualification of the
Units, Notes, Warrants and Warrant Shares under the applicable securities laws
in accordance with Section 4(g) above, including the filing fees and the
reasonable fees and disbursements of counsel for the Initial Purchaser in
connection with the Blue Sky Survey and legal investment memoranda; and (ix) all
other costs, fees and expenses incident to the performance of its obligations
hereunder which are not specifically provided for above. If this Agreement is
terminated by the Initial Purchaser in accordance with the provisions of Section
5 hereof, the Company shall reimburse the Initial Purchaser for all of its
reasonable out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the Initial Purchaser, incurred by the Initial
Purchaser in making preparations for the purchase, sale and delivery of the
Units.
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(i) Rule 144A(d)(4) Information. So long as any of the Units, Notes, Warrants or
Warrant Shares are "restricted securities" within the meaning of Rule 144(a)(3)
under the Securities Act, the Company will either (i) file reports and other
information with the Commission under Section 13(a) or Section 15(d) of the
Exchange Act, or (ii) during any period in which it is not subject to or in
compliance with Sections 13 or 15(d) of the Exchange Act, provide to each holder
of such restricted securities and to each prospective purchaser (as designated
by such holder) upon request of such holder or prospective purchaser, any
information required to be provided by Rule 144A(d)(4) under the Securities Act.
This covenant is intended to be for the benefit of the holders, and the
prospective purchasers designated by such holders, from time to time of such
restricted securities. (j) Eligibility of Units, Notes, Warrants and Warrant
Shares. The Company will use all reasonable efforts to cause the Notes to be
eligible for the PORTAL Market and to cause the Units, Notes, Warrants and
Warrant Shares to be eligible for clearance and settlement through DTC. (k)
Public Filings. For a period of five years following the Closing Date, the
Company shall furnish to the Initial Purchaser, upon request, copies of any
annual reports, current reports and quarterly reports of the Company filed with
the Commission on Forms 10-K, 8-K and 10-Q, or such other similar forms as may
be designated by the Commission, and such other documents, reports and
information as shall be furnished by the Company to the Commission. (l) No Sale
Requiring Registration. Neither the Company nor any of its Affiliates will offer
for sale, sell or solicit offers to buy any other security (as defined in the
Securities Act) the offering of which could be integrated with the sale of the
Units, Notes or Warrants in a manner that would require the registration of any
of the Units, Notes or Warrants under the Securities Act. (m) Required Legends.
Each Unit, Note, Warrant and Warrant Share will bear a legend substantially in
the form set forth in the Offering Memorandum under the caption "Notice to
Investors" until such legend shall no longer be necessary or advisable because
such Unit, Note, Warrant or Warrant Share is no longer subject to the
restrictions on transfer described therein.
(n) No Public Offering or Solicitation. Neither the Company nor any of its
Affiliates will offer or sell the Units, Notes or Warrants in the United States
in any manner involving a public offering within the meaning of Section 4(2) of
the Securities Act or by means of any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Securities Act),
including, but not limited to, (i) any advertisement, article, notice or other
communication published in any newspaper, magazine or similar media or broadcast
over television or radio, or (ii) any seminar or meeting whose attendees have
been invited by any general solicitation or general advertising.
(o) Public Solicitation of Tenders. Except following the effectiveness of the
Registration Statement (as such term is defined in the Warrant Registration
Rights Agreement) and the Exchange Offer Registration Statement or the Shelf
Registration Statement (as each such term is defined in the Note Registration
Rights Agreement), neither the Company nor any of its Affiliates will solicit
any offer to buy or offer to sell the Units, Notes, Warrants or Warrant Shares
by means of any form of general solicitation or general advertising (within the
meaning of Rule 502(c) of Regulation D) or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act.
(p) Limitation on Public Offering of Debt Securities. At or prior to the Closing
Time, the Company will not, without the prior written consent of the Initial
Purchaser, directly or indirectly, offer or sell, or enter into any agreement to
offer or sell, any debt securities issued or guaranteed by the Company with a
maturity of more than one year in any public offering. This limitation is not
applicable to the public offering of tax exempt securities guaranteed by the
Company or to the Exchange Notes referred to in the Note Registration Rights
Agreement. (q) Use of Proceeds. The Company will use the net proceeds received
by it from the sale of the Units in the manner specified in the Offering
Memorandum under the caption "Use of Proceeds".
SECTION 5Conditions of the Obligations of the Initial Purchaser. The obligations
of the Initial Purchaser to purchase and pay for the Units on the Closing Date
will be subject to the accuracy of the representations and warranties on the
part of the Company at and as of such respective dates, to the accuracy of the
statements of officers of the Company made in certificates delivered pursuant to
the provisions hereof, to the performance by the Company of its respective
obligations hereunder and to the following additional conditions precedent:
(a) No Material Misstatements or Omissions. The Initial Purchaser shall not have
been advised by the Company and shall not have discovered and disclosed to the
Company that the Offering Memorandum or any amendment or supplement thereto
contains an untrue statement of fact which, in the opinion of counsel for the
Initial Purchaser, is material, or omits to state a fact which, in the opinion
of counsel for the Initial Purchaser, is material or is necessary to make the
statements therein, in the light of the circumstances under which they were
made, not materially misleading.
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<PAGE>
(b) Corporate Proceedings. All corporate proceedings and other legal matters
incident to the authorization, form and validity of the Transaction Documents,
the Units, the Notes, the Warrants and the Warrant Shares and the Offering
Memorandum, and all other legal matters relating to this Agreement and the
transactions contemplated hereby shall be reasonably satisfactory in all
material respects to counsel for the Initial Purchaser. (c) Opinion of Counsel
for the Company. On the Closing Date there shall have been furnished to you the
opinion of Goodwin, Procter & Hoar LLP, counsel for the Company, dated such
Closing Date and in form and substance reasonably satisfactory to counsel for
the Initial Purchaser, which may be relied upon by counsel for the Initial
Purchaser in giving its opinion, to the effect set forth in Exhibit A hereto. In
giving such opinion, such counsel may rely, as to all matters governed by the
law of jurisdictions other than the law of the Commonwealth of Massachusetts,
the federal laws of the United States and the General Corporation Law of the
State of Delaware upon opinions of counsel satisfactory to the Initial
Purchaser. Such counsel may also state that, insofar as such opinion involves
factual matters, they have relied to the extent they deem proper, upon
certificates of the Company and its subsidiaries and certificates of public
officials. (d) Opinion of General Counsel of the Company. On the Closing Date
there shall have been furnished to you the opinion of Arthur Streeter, Esq.,
General Counsel of the Company, dated such Closing Date and in form and
substance reasonably satisfactory to counsel for the Initial Purchaser, which
may be relied upon by counsel for the Initial Purchaser in giving its opinion,
to the effect set forth in Exhibit C hereto. In giving such opinion, such
counsel may rely, as to all matters governed by the law of jurisdictions other
than the law of the Commonwealth of Massachusetts, the federal laws of the
United States and the General Corporation Law of the State of Delaware upon
opinions of counsel satisfactory to the Initial Purchaser. Such counsel may also
state that, insofar as such opinion involves factual matters, he has relied to
the extent he deems proper, upon certificates of officers of the Company and its
subsidiaries and certificates of public officials. (e) Opinion of Company's
Pennsylvania Counsel. On the Closing Date there shall have been furnished to you
the opinion of Fike, Cascio & Boose, the Company's Pennsylvania counsel, dated
such Closing Date and in form and substance reasonably satisfactory to counsel
for the Initial Purchaser, which may be relied upon by counsel for the Initial
Purchaser in giving its opinion, to the effect set forth in Exhibit B hereto. In
giving such opinion, such counsel may rely, as to all matters governed by the
law of jurisdictions other than the law of the Commonwealth of Pennsylvania, the
federal laws of the United States and the General Corporation Law of the State
of Delaware upon opinions of counsel satisfactory to the Initial Purchaser. Such
counsel may also state that, insofar as such opinion involves factual matters,
he has relied to the extent he deems proper, upon certificates of officers of
the Company and its subsidiaries and certificates of public officials. (f)
Opinion of Counsel for the Initial Purchaser. The Initial Purchaser shall have
received from Brown & Wood LLP, counsel for the Initial Purchaser, such opinion
or opinions, dated such Closing Date, with respect to the issuance of the Units
and such other related matters as the Initial Purchaser may require, and the
Company shall have furnished to such counsel such documents as they reasonably
request for the purpose of enabling them to pass upon such matters. In giving
such opinion such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the law of the State of New York, the federal law of
the United States and the General Corporation Law of the State of Delaware, upon
the opinions of counsel satisfactory to the Initial Purchaser. Such counsel may
also state that, insofar as such opinion involves factual matters, they have
relied, to the extent they deem proper, upon certificates of officers of the
Company and its subsidiaries and certificates of public officials. (g)
Accountant's Consent; Comfort Letter. On the date hereof, the Initial Purchaser
shall have received from KPMG LLP, independent auditors of the Company, a letter
dated such date, in form and substance reasonably satisfactory to the Initial
Purchaser, consenting to the incorporation by reference of the audited financial
statements in the Offering Memorandum and confirming that they are independent
certified public accountants with respect to the Company within the meaning of
the Securities Act and the Rules and Regulations, and containing statements and
information, as of the date of such letter (or, with respect to matters
involving changes or developments since the respective dates as of which
specified financial information is given in the Offering Memorandum, as of a
date not more than five days prior to the date of such letter), of the type
ordinarily included in accountants' "comfort letters" with respect to the
financial statements and certain financial information contained in the Offering
Memorandum. (h) Bring-Down Comfort Letter. On the Closing Date, the Initial
Purchaser shall have received from KPMG LLP, a letter dated such date, in form
and substance reasonably satisfactory to the Initial Purchaser, to the effect
that it reaffirms the statements made in the letter previously furnished by it
pursuant to Section 5(g) above, except that the specified date referred to
therein for the carrying out of procedures shall be no more than three business
days prior to the Closing Date. (i) Officers' Certificate. At the time of
execution of this Agreement, at the time the Offering Memorandum was issued, at
the time any amended or supplemented Offering Memorandum was issued and at the
Closing Time, (i)(A) the Offering Memorandum as so amended or supplemented shall
not include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading and
(B) the documents incorporated by reference in the Offering Memorandum and filed
with the Commission prior to the Closing Time, except to the extent that any
statement therein is modified or superseded in the Offering Memorandum, as of
the dates they were filed with the Commission, did not contain an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; (ii) there shall not
have been, since the respective dates as of which information is given in the
Offering Memorandum, any material adverse change or any prospective material
adverse change, in or affecting particularly the business or financial affairs
of the Company and its subsidiaries, including the Subsidiary Guarantors,
considered as one enterprise, which, in any such case, would, in the opinion of
the Initial Purchaser, make it inadvisable to proceed with the offering of the
Units, (iii) no action, suit or proceeding at law or in equity shall be pending
or, to the knowledge of the Company, threatened against the Company or any of
its subsidiaries, including any Subsidiary Guarantor, other than as set forth in
the Offering Memorandum and no proceedings shall be pending or, to the knowledge
of the Company, threatened against the Company or any of its subsidiaries,
including any Subsidiary Guarantor, before or by any federal, state or other
commission, board or administrative agency wherein an unfavorable decision,
ruling or finding would reasonably be expected to materially adversely affect
the condition (financial or otherwise), earnings or business affairs of the
Company and its subsidiaries, including the Subsidiary Guarantors, considered as
one enterprise, other than as set forth in the Offering Memorandum, (iv) the
Company and the Subsidiary Guarantors shall have complied with all agreements
and satisfied all conditions set forth herein on its part to be performed and
satisfied at or prior to the Closing Time and (v) the other representations and
warranties of the Company and the Subsidiary Guarantors set forth in Section
1(a) hereof shall be accurate as though expressly made at and as of the time of
execution of this Agreement and the Closing Time, as the case may be. At the
Closing Time, the Initial Purchaser shall have received a certificate of the
Chairman, Chief Executive Officer and President of the Company and the Executive
Vice President-Acquisitions, Chief Financial Officer, Treasurer and Secretary of
the Company, dated as of the Closing Time, to such effect. (j) No Material
Adverse Changes. At the time of execution of this Agreement, at the time the
Offering Memorandum was issued, at the time any amended or supplemented Offering
Memorandum was issued and at the Closing Time, there shall not have occurred any
of the following (i) the Company shall have failed, refused or been unable to
perform any agreement on its part to be performed hereunder, (ii) trading in
securities generally on the New York Stock Exchange, the American Stock Exchange
or the over-the-counter market shall have been suspended or minimum prices shall
have been established on either of such exchanges or such market by the
Commission or such exchange or other regulatory body or governmental authority
having jurisdiction, (iii) a banking moratorium is declared by either Federal,
Commonwealth of Massachusetts or New York State authorities, (iv) the United
States becomes engaged in hostilities or there is an escalation of hostilities
involving the United States or there is a declaration of a national emergency or
war by the United States, (v) there shall have been such a material adverse
change in general economic, political or financial conditions, or the effect of
international or national conditions on the financial markets in the United
States shall be such, as to, in the judgment of the Initial Purchaser, make it
inadvisable or impracticable to proceed with the offering of the Units, or (vi)
the Company shall have sustained any loss by fire, flood, accident or other
calamity, or become a party to or the subject of any litigation or proceeding,
which is materially adverse to the Company, or there shall have been a Material
Adverse Effect or other material adverse change in the governmental affairs,
operations, business, key personnel, capitalization, financial condition or net
worth of the Company, whether or not arising in the ordinary course of business,
which in the case of (i) through (vi) above, in the judgment of the Initial
Purchaser, shall render it impracticable or inadvisable to proceed with the
offering of the Units. (k) PORTAL. The Notes shall have been approved by The
National Association of Securities Dealers, Inc. as being eligible for trading
in the PORTAL Market and the Units, Notes and Warrants shall have been declared
eligible for clearance and settlement through The Depository Trust Corporation.
(l) Note Registration Rights Agreement. The Note Registration Rights Agreement
shall have been executed and delivered and be in form, scope and substance
reasonably satisfactory to the Initial Purchaser. (m) Warrant Registration
Rights Agreement. The Warrant Registration Rights Agreement shall have been
executed and delivered and be in form, scope and substance reasonably
satisfactory to the Initial Purchaser. (n) Additional Documents. The Company and
each Subsidiary Guarantor shall furnish to the Initial Purchaser and counsel for
the Initial Purchaser conformed copies of any opinions, certificates, letters
and other documents in such number as they shall reasonably request for the
purpose of enabling them to pass upon the issuance and sale of the Units and the
issuance of the Notes and Warrants as contemplated in this Agreement and in
order to evidence the accuracy and completeness of any of the representations,
warranties or statements of the Company or of the Subsidiary Guarantors, or the
fulfillment of any of the conditions, herein contained. All such opinions,
certificates, letters and documents shall be in compliance with the provisions
hereof only if they are reasonably satisfactory in form and substance to counsel
for the Initial Purchaser.
11
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If any of the conditions specified in this Section 5 shall not have
been fulfilled when and as required by this Agreement, this Agreement and all
obligations of the Initial Purchaser hereunder may be canceled at, or at any
time prior to, the Closing Date by the Initial Purchaser, except that the
provisions of Section 4(h), Section 6 and Section 7 shall survive any such
termination and remain in full force and effect. Any such cancellation shall be
without liability of the Initial Purchaser to the Company. Notice of such
cancellation shall be given to the Company in writing, or by telegraph or
telephone and confirmed in writing.
SECTION 6Indemnification and Contribution.
(a) Indemnification of Initial Purchaser. The Company and each of the Subsidiary
Guarantors, jointly and severally, shall indemnify and hold harmless the Initial
Purchaser, its directors, officers and employees and each person, if any, who
controls the Initial Purchaser within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act:
(i) from and against any and all loss, liability, claim, damage, action and
expense whatsoever, as incurred, insofar as such loss, liability, claim,
damage, action or expense arises out of, or is based upon, any untrue
statement or alleged untrue statement of a material fact included in the
Preliminary Offering Memorandum or the Final Offering Memorandum, or any
amendment or supplement thereto, or the omission or alleged omission to
state in the Preliminary Offering Memorandum or the Final Offering
Memorandum, or any amendment or supplement thereto, any material fact
required to be stated therein or necessary to make the statements therein,
in light of the circumstances in which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage, action and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any governmental
agency or body, commenced or threatened, or of any claim whatsoever based upon
any such untrue statement or omission, or any such alleged untrue statement or
omission; provided that (subject to Section 6(d) below) any such settlement is
effected with the written consent of the Company; and
(iii) against any and all expense whatsoever (including
reasonable fees and disbursements of counsel chosen by the Initial
Purchasers) reasonably incurred in investigating, preparing or
defending against any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under subparagraph (i) or (ii) above;
12
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provided, however, that the Company and the Subsidiary Guarantors shall not be
liable in any such case to the extent that any such loss, liability, claim,
damage, action or expense arises out of or is based upon, any untrue statement
or alleged untrue statement or omission or alleged omission made in the
Preliminary Offering Memorandum or the Final Offering Memorandum, or any
amendment or supplement thereto, in reliance upon and in conformity with written
information furnished to the Company by the Initial Purchaser specifically for
inclusion therein. The foregoing indemnification with respect to any Preliminary
Offering Memorandum or Final Offering Memorandum shall not inure to the benefit
of the Initial Purchaser (or to the benefit of any person controlling such
Initial Purchaser) if the person asserting any such losses, claims, damages,
liabilities or expenses was not sent or delivered a copy of the Final Offering
Memorandum (or the Final Offering Memorandum as amended or supplemented) at or
prior to the written confirmation of the sale of Units to such person and if the
untrue statement or omission of a material fact contained in such Preliminary
Offering Memorandum was corrected in the Final Offering Memorandum (or the Final
Offering Memorandum as amended or supplemented) unless such corrected Final
Offering Memorandum was not sent or delivered because the Company failed to
timely provide the Initial Purchaser with sufficient copies of such corrected
Final Offering Memorandum. The foregoing indemnity agreement is in addition to
any liability which the Company and the Subsidiary Guarantors may otherwise have
to the Initial Purchaser or to any officer, employee or controlling person of
the Initial Purchaser.
(b) Indemnification of the Company. The Initial Purchaser shall indemnify and
hold harmless the Company, its directors, officers and employees and each
person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
loss, liability, claim, damage, action and expense described in Section 6(a)
above, as incurred, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission made in
the Preliminary Offering Memorandum or the Final Offering Memorandum (or any
amendment or supplement thereto) was made in reliance upon and in conformity
with written information concerning such Initial Purchaser furnished to the
Company by First Albany Corporation specifically for inclusion therein.
(c) Actions Against Parties; Notification. Promptly after receipt by an
indemnified party under this Section 6 of notice of any claim or the
commencement of any action, the indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under this Section 6,
notify the indemnifying party in writing of the claim or the commencement of
that action; provided, however, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under this
Section 6, except to the extent it has been materially prejudiced by such
failure, or from any liability which it may have to an indemnified party
otherwise than under this Section 6. In the case of parties indemnified pursuant
to Section 6(a) above, counsel to the indemnified parties shall be selected by
the Initial Purchaser, and, in the case of parties indemnified pursuant to
Section 6(b) above, counsel to the indemnified parties shall be selected by the
Company. An indemnifying party may participate at its own expense in the defense
of any such action; provided, however, that counsel to the indemnifying party
shall not (except with the consent of the indemnified party) also be counsel to
the indemnified party. In no event shall the indemnifying parties be liable for
fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall (i) without the prior written consent of the
indemnified parties (which consent shall not be unreasonably withheld) settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent (A) includes an unconditional
release of each indemnified party from all liability arising out of such claim,
action, suit or proceeding and (B) does not include a statement as to or an
admission of fault, culpability or a failure to act by or on account of any
indemnified party, or (ii) be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with the consent of the indemnifying party or if there
be a final judgment of the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment. (d) Contribution. If
the indemnification provided for in this Section 6 is for any reason unavailable
to or insufficient to hold harmless an indemnified party in respect of any loss,
claim, damage or liability, or any action in respect thereof, referred to
therein, then each indemnifying party shall in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Subsidiary Guarantors on the one hand
and the Initial Purchaser on the other from the offering of the Units pursuant
to this Agreement or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company and the Subsidiary Guarantors on the one hand and the
Initial Purchaser on the other with respect to the statements or omissions which
resulted in such loss, claim, damage or liability, or action in respect thereof,
as well as any other relevant equitable considerations. The relative benefits
received by the Company and the Subsidiary Guarantors on the one hand and the
Initial Purchaser on the other with respect to such offering shall be deemed to
be in the same proportion as the total net proceeds from the sale of the Units
to the Initial Purchaser under this Agreement (before deducting expenses)
received by the Company bear to the total discount received by the Initial
Purchaser with respect to the Units purchased under this Agreement, in each case
as set forth on the cover of the Final Offering Memorandum. The relative fault
of the Company and the Subsidiary Guarantors on the one hand and the Initial
13
<PAGE>
Purchaser on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company or the Initial Purchaser, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company, the Subsidiary Guarantors and
the Initial Purchaser agree that it would not be just and equitable if
contributions pursuant to this Section 6(d) were to be determined by pro rata
allocable or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section 6(d) shall be
deemed to include, for purposes of this Section 6(d), any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission. Notwithstanding the provisions of
this Section 6(d), the Initial Purchaser shall not be required to contribute any
amount in excess of the amount by which the total price at which the Units
purchased and resold by it exceeds the amount of any damages which the Initial
Purchaser has otherwise paid or become liable to pay by reason of any untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. Each party entitled to contribution
agrees that upon the service of a summons or other initial legal process upon it
in any action instituted against it in respect to which contribution may be
sought, it shall promptly give written notice of such service to the party or
parties from whom contribution may be sought, but the omission so to notify such
party or parties of any such service shall not relieve the party from whom
contribution may be sought for any obligation it may have hereunder or otherwise
(except as specifically provided in Section 6(c) above). (e) Information
Provided by Initial Purchaser. The Initial Purchaser confirms and the Company
and the Subsidiary Guarantors acknowledge that the statements with respect to
the Units, Notes and Warrants by the Initial Purchaser set forth on the cover
page of, and the text appearing under the caption "Plan of Distribution" in, the
Offering Memorandum constitute the only information concerning such Initial
Purchaser furnished in writing to the Company by or on behalf of the Initial
Purchaser specifically for inclusion in the Offering Memorandum. SECTION
7Survival of Representations, Warranties and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company, the Subsidiary Guarantors or any of their officers and of the Initial
Purchaser set forth in or made in certificates delivered pursuant to this
Agreement will remain in full force and effect, regardless of any investigation
made by or on behalf of the Initial Purchaser, the Company, the Subsidiary
Guarantors or any of their respective representatives, officers or directors or
any person who controls the Company or the Initial Purchaser within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act, and shall
survive delivery of and payment for the Units.
SECTION 8. Notices. All communications hereunder will be in writing and will be
deemed to have been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Initial Purchaser shall be directed to First
Albany Corporation at 30 South Pearl Street, Albany, New York 12201, Attention:
Legal Department (facsimile: (518) 447-8557), with a copy, in the case of any
notice pursuant to Section 6(c), to Stephen Wink, Esquire; notices to the
Company shall be directed to it at Waste Systems International, Inc., Lexington
Office Park, 420 Bedford Street, Lexington, Massachusetts 02173, Attention:
President (facsimile: (781) 862-2929). SECTION 9. Parties. This Agreement is
made solely for the benefit of the Initial Purchaser, the Company and, to the
extent expressed, any person who controls the Company or the Initial Purchaser
within the meaning of Section 15 of the Securities Act, and the directors and
officers of the Company and its respective executors, administrators, successors
and assigns and no other person shall acquire or have any right under or by
virtue of this Agreement. The term "successors and assigns" shall not include
any purchaser, as such purchaser, from the Initial Purchaser of the Units. All
of their obligations hereunder are several and not joint. SECTION 10. Entire
Agreement. This Agreement is complete, reflects the entire agreement of the
parties with respect to its subject matter, and supersedes all previous written
or oral negotiations, commitments and writings between the parties hereto in
respect of the transactions contemplated herein. No promise, representations,
understandings, warranties and agreements have been made by any of the parties
hereto except as referred to herein and all inducements to the making of this
Agreement relied upon by either party hereto have been expressed herein. SECTION
11. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED WHOLLY WITHIN SUCH JURISDICTION. SECTION 12. Counterparts.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original but all of which shall constitute one and the same
instrument. SECTION 13. Effect of Headings. The Section headings herein and the
Table of Contents are for convenience only and shall not affect the construction
hereof.
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us one of the counterparts hereof, whereupon it will
become a binding agreement among the Company and the Initial Purchaser in
accordance with its terms.
WASTE SYSTEMS INTERNATIONAL, INC.
By:
Name:
Title:
WSI MEDICAL WASTE SYSTEMS, INC.
By
Name:
Title:
BIOSAFE SYSTEMS, INC.
By
Name:
Title:
WSI NEW YORK HOLDINGS, INC.
By
Name:
Title:
WSI OF NEW YORK, INC.
By
Name:
Title:
WSI VERMONT HOLDINGS, INC.
By
Name:
Title:
<PAGE>
WSI OF VERMONT, INC.
By
Name:
Title:
WSI MORETOWN LANDFILL, INC.
By
Name:
Title:
WSI BURLINGTON TRANSFER STATION, INC.
By
Name:
Title:
I ST. JOHNSBURY TRANSFER STATION, INC.
By
Name:
Title:
WSI WAITSFIELD TRANSFER STATION, INC.
By
Name:
Title:
WSI MASSACHUSETTS HOLDINGS, INC.
By
Name:
Title:
<PAGE>
WSI OF MASSACHUSETTS HAULING, INC.
By
Name:
Title:
WSI OF SOUTH HADLEY, INC.
By
Name:
Title:
WSI OXFORD TRANSFER STATION, INC.
By
Name:
Title:
MATTEI-FLYNN TRUCKING, INC.
By
Name:
Title:
WSI MARYLAND HOLDINGS, INC.
By
Name:
Title:
WSI PENNSYLVANIA HOLDINGS, INC.
By
Name:
Title:
WSI OF PENNSYLVANIA, INC.
By
Name:
Title:
WSI SANDY RUN LANDFILL, INC.
By
Name:
Title:
WSI ALTOONA TRANSFER STATION, INC.
By
Name:
Title:
MOSTOLLER LANDFILL, INC.
By
Name:
Title:
The foregoing Purchase Agreement is hereby confirmed and accepted as of the date
first above written.
FIRST ALBANY CORPORATION
By:
Name:
Title:
<PAGE>
1
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State
of Delaware.
(ii) The Company has corporate power and authority to own, lease
and operate its properties and to conduct its business as
described in the Offering Memorandum and to enter into and
perform its obligations under the Purchase Agreement, the
Indenture, the Warrant Agreement, the Note Registration Rights
Agreement and the Warrant Registration Rights Agreement.
(iii) The authorized capital stock of the Company is as set forth in
the Offering Memorandum and the shares of issued and
outstanding capital stock of the Company have been duly
authorized.
(iv) The Purchase Agreement, Note Registration Rights Agreement and
Warrant Registration Rights Agreement have been duly
authorized, executed and delivered by the Company and each of
the Subsidiary Guarantors, other than Mostoller Landfill, Inc.
(v) The Indenture has been duly authorized, executed and
delivered by the Company and each of the Subsidiary Guarantors
(other than Mostoller Landfill, Inc. and (assuming the due
authorization, execution and delivery thereof by the Trustee)
constitutes a valid and binding agreement of the
Company and each of the Subsidiary Guarantors, enforceable
against the Company in accordance with
its terms, except as the enforcement thereof may be limited
by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors' rights
generally and except as enforcement thereof
is subject to general principles of equity (regardless of
whether enforcement is considered in a
proceeding in equity or at law).
(vi) The Warrant Agreement has been duly authorized, executed
and delivered by the Company and (assuming the due
authorization, execution and delivery thereof by the Warrant
Agent) constitutes a valid and binding agreement of the
Company, enforceable against the Company in accordance with
its terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors' rights
generally and except as enforcement thereof
is subject to general principles of equity (regardless of
whether enforcement is considered in a
proceeding in equity or at law).
(vii) The Notes are in the form contemplated by the Indenture,
have been duly authorized by the Company and each of the
Subsidiary Guarantors and, assuming that the Notes have been
duly authenticated by the Trustee in the manner described
in its certificate delivered to you today (which fact such
counsel need not determine by an inspection of the Notes),
the Notes have been duly executed, issued and delivered by
the Company and constitute valid and binding obligations
of the Company, entitled to the benefits of the Indenture,
enforceable against the Company in accordance with their
terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof
is subject to general principles of equity (regardless of
whether enforcement is considered in a
proceeding in equity or at law).
(viii) The Warrants are in the form contemplated by the Warrant
Agreement, have been duly authorized by the Company and,
assuming that the Warrants have been duly authenticated
by the Warrant Agent in the manner described in its
certificate delivered to you today (which fact such counsel
need not determine by an inspection of the Warrants), the
Warrants have been duly executed, issued and
delivered by the Company and constitute valid and binding
obligations of the Company entitled to
the benefits of the Warrant Agreement, enforceable against
the Company in accordance with their
terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation,
all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors'
rights generally and except as enforcement thereof
is subject to general principles of equity (regardless of
whether enforcement is considered in a
proceeding in equity or at law).
14
<PAGE>
(ix) The Warrant Shares to be issued by Company pursuant to
the Warrant Agreement have been duly authorized for
issuance and sale, and, when issued and delivered by the
Company pursuant to the Warrant Agreement, will be validly
issued and fully paid and non-assessable. The Company has
reserved and available, out of the aggregate of its
authorized but unissued Common Stock or its authorized and
issued Common Stock held in its treasury, the maximum number
of shares of Warrant Shares which may be deliverable upon
the exercise of all outstanding Warrants (without giving
effect to any future splits, dividends or similar events with
respect to the Common Stock, none of which, to our knowledge
are currently contemplated by the Company). The form of
certificate used to evidence the Warrant Shares complies in
all material respects with all applicable statutory
requirements, with any applicable requirements of the
charter and by-laws of the Company. The issuance of the
Warrant Shares is not subject to the preemptive or other any
statutory preemptive rights or preemptive rights in the
Certificate of Incorporation or By-laws of the Company or, to
our knowledge, similar rights of any securityholder of the
Company.
(x) The Units, Notes, Warrants and Common Stock and the Indenture
and Warrant Agreement conform as to legal matters in all
material respects to the descriptions thereof contained in the
Offering Memorandum.
(xi) All descriptions in the Offering Memorandum (including without
limitation the statements under the captions
"Business-Government Regulation," "Certain Federal Income Tax
Considerations" and "Notice to Investors") insofar as they
contain descriptions of laws, rules or regulations, and
insofar as they describe the contents of certain provisions of
statutes, regulations, or case law or the contents of
agreements or documents are accurate in all material respects
and fairly present in all material respects the information
required to be shown therein.
(xii) All descriptions in the Offering Memorandum of contracts and
other documents to which the Company or its subsidiaries are a
party are accurate in all material respects.
(xiii) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign (other
than as may be required under the securities or blue sky laws
of the various states) is necessary or required in connection
with the due authorization, execution and delivery of the
Purchase Agreement or the due execution, delivery or
performance of the Note Registration Rights Agreement, Warrant
Registration Rights Agreement, Warrant Agreement or Indenture
by the Company or for the offering, issuance, sale or delivery
of the Units, Notes or Warrants.
(xiv) The execution, delivery and performance of the Purchase
Agreement, Note Registration Rights
Agreement, Warrant Registration Rights Agreement, Warrant
Agreement, the Indenture and the Units, the Notes, the
Warrants and the Warrant Shares and the consummation
of the transactions contemplated in the Purchase Agreement
and in the Offering Memorandum (including the issuance and
sale of the Units, Notes and Warrants and the use of the
proceeds from the sale of the Units as described in the
Offering Memorandum under the caption "Use Of Proceeds")
and compliance by the Company with its obligations under th
Purchase Agreement, Note Registration Rights Agreement,
Warrant Registration Rights Agreement, Warrant Agreement,
the Indenture and the Notes and Warrants do not and will not,
whether with or without the giving of notice or lapse
of time or both, constitute a breach of, or default or
Repayment Event (as defined in Section 1(a)(x) of the
Purchase Agreement) under or result in the creation or
imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any
subsidiary pursuant to any contract,
indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or any other agreement or
instrument, listed as an exhibit to any document or report
incorporated by reference in the Offering Memorandum, to
which the Company or any subsidiary is a party or by which
it or any of them may be bound, or to which any of the
property or assets of the Company or any subsidiary is
subject (except for such conflicts, breaches or defaults or
liens, charges or encumbrances that
would not result in a Material Adverse Effect), nor will
such action violate the provisions of the
charter or by-laws of the Company or any subsidiary, the
Delaware General Corporation Law or any
applicable Massachusetts or Federal law, statute, rule,
regulation, judgment, order, writ or
decree, known to us, of any Delaware, Massachusetts or Federal
instrumentality or court.
15
<PAGE>
(xv) The execution, delivery and performance of the Purchase
Agreement, Note Registration Rights Agreement, Warrant
Registration Rights Agreement and Indenture and the Notes and
the consummation of the transactions contemplated in the
Purchase Agreement and in the Offering Memorandum
(including the issuance and sale of the Notes) and complianc
by each of the Subsidiary Guarantors
with its obligations under the Purchase Agreement, Note
Registration Rights Agreement, Warrant Registration Rights
Agreement and Indenture and the Notes do not and will not,
whether with or without the giving of notice or lapse of
time or both, constitute a breach of, or default or
Repayment Event (as defined in Section 1(a)(x) of the
Purchase Agreement) under or result in the
creation or imposition of any lien, charge or encumbrance
upon any property or assets of such
Subsidiary Guarantor pursuant to any contract, indenture,
mortgage, deed of trust, loan or credit
agreement, note, lease or any other agreement or instrument,
listed as an exhibit to any document
or report incorporated by reference in the Offering
Memorandum, to which such Subsidiary Guarantor
is a party or by which it may be bound, or to which any
of the property or assets of such Subsidiary Guarantor is
subject (except for such conflicts, breaches or defaults or
liens, charges or encumbrances that would not result in a
Material Adverse Effect), nor will such action violate
the provisions of the charter or by-laws of such
Subsidiary Guarantor, the Delaware General
Corporation Law or any applicable Massachusetts or
Federal law, statute, rule, regulation,
judgment, order, writ or decree, known to us, of any
Massachusetts or Federal instrumentality or
court.
(xvi) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are
defined in the Investment Company Act.
(xvii) The Units, Notes and Warrants satisfy the eligibility
requirements of Rule 144A(d)(3) under the Securities Act.
(xviii) Assuming (A) the representations and warranties of the
Company and the Subsidiary Guarantors in
Section 1 of the Purchase Agreement and of the Initial
Purchaser in Section 3 of the Purchase
Agreement are true and correct, (B) compliance with the
offering and transfer restrictions described under the
caption "Notice to Investors" in the Offering Memorandum
and (C) compliance by the Company and the Initial Purchaser
with the covenants and agreements contained in the Purchase
Agreement, it is not necessary in connection with the offer,
sale and delivery of the Units to the
Initial Purchaser under the Purchase Agreement or in
connection with the initial resale of such
Units by the Initial Purchaser in accordance with the
Purchase Agreement to register the Units
under the Securities Act or qualify the Units under the Trust
Indenture Act, it being understood
that no opinion is expressed as to any subsequent resale
of any such Units.
16
<PAGE>
We have participated in the preparation of the Offering Memorandum and
have participated in discussions with your representatives, those of counsel for
the Initial Purchaser, and those of the Company and its accountants. We have
also reviewed operating permits for the Company's currently operating facilities
and facilities proposed to commence operations as described in the Offering
Memorandum and a limited number of environmental site assessments for certain of
such facilities, in each case in the form provided to us by the Company, and we
have participated in conversations with the Company's management regarding
overall environmental compliance. On the basis of the information that we gained
in the course of the performance of the services referred to above, considered
in the light of our understanding of the applicable law and the experience we
have gained through our practice in offerings of the type made by the Offering
Memorandum, we confirm to you that nothing that came to our attention in the
course of such review has caused us to believe (A) that the Offering Memorandum
or any amendment or supplement thereto (except for financial statements and
schedules and other financial data included or incorporated by reference therein
or omitted therefrom, as to which we make no statement), as of the date of such
Offering Memorandum or any such amendment or supplement and on the Closing Date,
included or includes an untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading or (B)
that the documents incorporated by reference in the Offering Memorandum and
filed with the Commission prior to the Closing Date (except for financial
statements and schedules and other financial data included or incorporated by
reference therein or omitted therefrom, as to which we make no statement, and
except to the extent that any statement therein is modified or superseded in the
Offering Memorandum or by a subsequent document filed with the Commission and
incorporated by reference in the Offering Memorandum), and as of the date hereof
contained or contain an untrue statement of a material fact or omitted or omit
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading. The limitations inherent in the
independent verification of factual matters and the character of determinations
involved in the offering process are such, however, that we do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Offering Memorandum or the documents incorporated by reference
therein except for those made under the captions "Business--Government
Regulation," "Certain Federal Income Tax Considerations" and "Notice to
Investors" in the Offering Memorandum, insofar as such statements constitute a
summary of documents referred to therein or matters of law.
In rendering such opinion, we have relied, as to matters of fact (but
not as to legal conclusions), to the extent we deem proper, on certificates of
responsible officers of the Company and public officials.
<PAGE>
Exhibit B
FORM OF OPINION OF COMPANY'S PENNSYLVANIA COUNSEL
(i) Mostoller Landfill, Inc. has been duly incorporated
and is validly existing as a corporation in good standing under the
laws of the State of Pennsylvania.
(ii) The Purchase Agreement, Note Registration Rights
Agreement and Warrant Registration Rights Agreement have been duly
authorized, executed and delivered by Mostoller Landfill, Inc.
(iii) The Indenture has been duly authorized, executed and
delivered by Mostoller Landfill, Inc.
<PAGE>
Exhibit C
FORM OF OPINION OF COMPANY'S GENERAL COUNSEL
(i) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction
listed on Appendix I attached hereto, which jurisdictions,
based on a certificate of the Company, constitute all of the
jurisdictions in which the Company owns or leases property or
otherwise conducts its business.
(ii) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Offering Memorandum and the
shares of issued and outstanding capital stock of the Company
have been duly authorized and validly issued and are fully
paid and non-assessable; and none of the outstanding shares of
capital stock of the Company was issued in violation of any
statutory preemptive rights or preemptive rights in the
Certificate of Incorporation or By-laws or, to my knowledge,
similar rights of any securityholder of the Company.
(iii) Each direct and indirect subsidiary of the Company,
including each Subsidiary Guarantor, other
than Mostoller Landfill has been duly incorporated and is
validly existing as a corporation in good
standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority
to own, lease and operate its properties and to conduct
its business as described in the Offering Memorandum and is
duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction listed
opposite such subsidiary's name on Appendix II attached
hereto, which jurisdictions, based on a certificate of
the Company, constitute all of the jurisdictions in which
such subsidiary owns or leases property or otherwise conducts
its business; except as otherwise disclosed in the Offering
Memorandum, all of the issued and outstanding capital
stock of each direct and indirect subsidiary of the Company,
including each Subsidiary Guarantor,
has been duly authorized and validly issued, is fully paid
and non-assessable and, to the best of
my knowledge, is owned by the Company, directly or through
subsidiaries, free and clear of any
security interest, other than security interests granted by
the Company under the Credit Facility; none of the outstanding
shares of capital stock of any subsidiary, including any
Subsidiary Guarantor, was issued in violation of any statutory
preemptive rights or preemptive rights in the
Certificate of Incorporation or By-laws or, to my knowledge,
similar rights of any securityholder of such subsidiary.
(iv) To the best of my knowledge, based upon a certificate of
the Company, and except as would not, individually or in the
aggregate, result in a Material Adverse Effect, neither the
Company nor any subsidiary, including any Subsidiary Guarantor
is in violation of its charter or by-laws and no
default by the Company or any subsidiary exists in the
due performance or observance of any material obligation,
agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note,
lease or other agreement or instrument that is described or
referred to in the Offering Memorandum or filed as an
exhibit to the documents incorporated by
reference in the Offering Memorandum.
(v) To the best of my knowledge and except as would not,
individually or in the aggregate, result in a Material Adverse
Effect there is no Environmental Claim, pending or, threatened
against the Company or any of its subsidiaries, including any
Subsidiary Guarantor, or any person or entity whose liability
for any Environmental Claim the Company or any of its
subsidiaries has retained or assumed either contractually or
by operation of law.
(vi) There is not pending or, to the best of my knowledge,
threatened any action, suit, proceeding, inquiry or
investigation, to which the Company or any subsidiary
is a party, or to which the property of the Company or any
subsidiary is subject, before or brought by any court
or governmental agency or body, domestic or foreign, which
might reasonably be expected to result in a
Material Adverse Effect, or which might reasonably be
expected to materially and adversely affect
the properties or assets thereof or the consummation of
the transactions contemplated in the Purchase Agreement,
Note Registration Rights Agreement, Warrant Registration
Rights Agreement, Warrant Agreement or Indenture, or the
performance by the Company of its obligations thereunder.
(vii) To the best of my knowledge, and except as would not,
individually or in the aggregate, result in a Material Adverse
Effect, neither the Company nor any subsidiary has received
any notice of proceedings relating to the revocation or
modification of any Governmental Licenses.
In rendering such opinion, I have relied, as to matters of fact (but
not as to legal conclusions), to the extent I deem proper, on certificates of
responsible officers of the Company and public officials.
<PAGE>
Exhibit D
Subsidiary Guarantors of the Company
Subsidiary: Formed In:
---------- ---------
WSI Medical Waste Systems, Inc. Delaware
BioSafe Systems, Inc. Delaware
WSI New York Holdings, Inc. Delaware
WSI of New York, Inc. Delaware
WSI Vermont Holdings, Inc. Delaware
WSI of Vermont, Inc. Delaware
WSI Moretown Landfill, Inc. Delaware
WSI Burlington Transfer Station, Inc. Delaware
WSI St. Johnsbury Transfer Station, Inc. Delaware
WSI Waitsfield Transfer Station, Inc. Delaware
WSI Massachusetts Holdings, Inc. Delaware
WSI of Massachusetts Hauling, Inc. Delaware
WSI of South Hadley, Inc. Delaware
WSI Oxford Transfer Station, Inc. Delaware
WSI Maryland Holdings, Inc. Delaware
WSI Pennsylvania Holdings, Inc. Delaware
WSI of Pennsylvania, Inc. Delaware
WSI Sandy Run Landfill, Inc. Delaware
WSI Altoona Transfer Station, Inc. Delaware
Mostoller Landfill, Inc. Pennsylvania
Mattei-Flynn Trucking, Inc. Massachusetts
<PAGE>
EXHIBIT 4.1
- ------------
================================================================================
WASTE SYSTEMS INTERNATIONAL, INC.,
Issuer,
THE SUBSIDIARIES SET FORTH ON SCHEDULE I HERETO
and
IBJ Whitehall Bank & Trust Company,
Trustee
- --------------------------------------------------------------------------------
Indenture
Dated as of March 2, 1999
- --------------------------------------------------------------------------------
$100,000,000
11 1/2% Senior Notes due 2006
<PAGE>
================================================================================
1
Waste Systems International, Inc.
Reconciliation and Tie between Trust Indenture Act
of 1939 and Indenture, dated as of March 2, 1999
Trust Indenture
Act Section Indenture Section
ss. 310(a)(1) ......................................... 607
(a)(2) ........................................... 607
(b) ........................................... 608
ss. 312(c) ......................................... 701
ss. 314(a) ......................................... 703
(a)(4) .......................................... 1008(a)
(c)(1) ........................................... 102
(c)(2) ........................................... 102
(e) ........................................... 102
ss. 315(b) ......................................... 601
ss. 316(a)(last
sentence) .................................101 ("Outstanding")
(a)(1)(A) ...................................... 502, 512
(a)(1)(B) ................................. ......... 513
(b) ........................................... 508
(c) ........................................... 105(d)
ss. 317(a)(1) ......................................... 503
(a)(2) ........................................... 504
(b) ........................................... 1003
ss. 318(a) ......................................... 111
<PAGE>
TABLE OF CONTENTS
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION........2
SECTION 101. Definitions......................................2
-----------
SECTION 102. Compliance Certificates and Opinions.............18
------------------------------------
SECTION 103. Form of Documents Delivered to Trustee...........18
--------------------------------------
SECTION 104. Acts of Holders..................................19
---------------
SECTION 105. Notices, Etc., to Trustee, Company...............20
----------------------------------
SECTION 106. Notice to Holders; Waiver........................20
-------------------------
SECTION 107. Conflict of Any Provision of Indenture with
Trust Indenture Act.......................21
-------------------------------
SECTION 108. Effect of Headings and Table of Contents.........21
-------------------------------
SECTION 109. Successors and Assigns...........................21
----------------------
SECTION 110. Separability Clause...................... ......21
-------------------
SECTION 111. Benefits of Indenture............................21
---------------------
SECTION 112. Governing Law....................................21
-------------
SECTION 113. Legal Holidays............................. .....22
--------------
SECTION 114. Consent to Jurisdiction and Service of Process...22
----------------------------------------------
ARTICLE TWO SECURITY FORMS 24
SECTION 201. Forms Generally..................................24
---------------
SECTION 202. Restrictive Legends..............................24
-------------------
ARTICLE THREE THE SECURITIES 27
SECTION 301. Title and Terms........................... ......27
---------------
SECTION 302. Denominations....................................28
-------------
SECTION 303. Execution, Authentication, Delivery and Dating...28
----------------------------------------------
SECTION 304. Temporary Securities.............................29
--------------------
SECTION 305. Registration, Registration of Transfer
and Exchange..................................30
------------------------------------------
SECTION 306. Book-Entry Provisions for Global Securities......31
-------------------------------------------
SECTION 307. Special Transfer Provisions......................32
---------------------------
SECTION 308. Mutilated, Destroyed, Lost and Stolen Securities..34
------------------------------------------------
SECTION 309. Payment of Interest; Interest Rights Preserved....34
----------------------------------------------
SECTION 310. Persons Deemed Owners........................... .36
---------------------
SECTION 311. Cancellation......................................36
------------
SECTION 312. CUSIP Numbers.....................................36
-------------
SECTION 313. Computation of Interest...........................37
-----------------------
ARTICLE FOUR SATISFACTION AND DISCHARGE.................................... 38
SECTION 401. Satisfaction and Discharge of Indenture...........38
---------------------------------------
SECTION 402. Application of Trust Money........................39
--------------------------
<PAGE>
ARTICLE FIVE REMEDIES 40
SECTION 501. Events of Default.................................40
-----------------
SECTION 502. Acceleration of Maturity; Rescission and
Annulment....................................41
---------------------------
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee.......................43
---------------------------
SECTION 504. Trustee May File Proofs of Claim..................43
--------------------------------
SECTION 505. Trustee May Enforce Claims Without
Possession of Securities.......... ............44
------------------------------
SECTION 506. Application of Money Collected....................44
------------------------------
SECTION 507. Limitation on Suits...............................45
-------------------
SECTION 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest.............45
-------------------------------------
SECTION 509. Restoration of Rights and Remedies...... .........46
----------------------------------
SECTION 510. Rights and Remedies Cumulative....................46
------------------------------
SECTION 511. Delay or Omission Not Waiver............. ........46
----------------------------
SECTION 512. Control by Holders................................46
------------------
SECTION 513. Waiver of Past Defaults...........................47
-----------------------
SECTION 514. Waiver of Stay or Extension Laws..................47
--------------------------------
SECTION 515. Undertaking for Costs.............................47
---------------------
ARTICLE SIX THE TRUSTEE 49
SECTION 601. Notice of Defaults................................49
------------------
SECTION 602. Certain Rights of Trustee................. ......49
-------------------------
SECTION 603. Trustee Not Responsible for Recitals
or Issuance of Securities........................52
-------------------------------------
SECTION 604. May Hold Securities...............................53
-------------------
SECTION 605. Money Held in Trust...............................53
-------------------
SECTION 606. Compensation and Reimbursement...... ............53
------------------------------
SECTION 607. Corporate Trustee Required; Eligibility...........54
---------------------------------------
SECTION 608. Resignation and Removal;
Appointment of Successor.......................54
--------------------------------------
SECTION 609. Acceptance of Appointment by Successor............55
--------------------------------------
SECTION 610. Merger, Conversion, Consolidation or
Succession to Business....................56
--------------------------------------
ARTICLE SEVEN HOLDERS' LISTS AND REPORTS....................................57
SECTION 701. Disclosure of Names and Addresses of Holders......57
--------------------------------------------
SECTION 702. Reports by Trustee........................... ....57
------------------
SECTION 703. Reports by Company................................57
------------------
ARTICLE EIGHT CONSOLIDATION, MERGER, AND SALE OF ASSETS.....................59
SECTION 801. Company May Consolidate, etc.,
Only on Certain Terms.......................59
-------------------------
SECTION 802. Successor Substituted............... ........59
---------------------
ARTICLE NINE SUPPLEMENTS AND AMENDMENTS
TO INDENTURE AND SUBSIDIARY GUARANTEES.............................61
SECTION 901. Without Consent of Holders........................61
--------------------------
SECTION 902. With Consent of Holders.... ......................62
-----------------------
SECTION 903. Execution of Supplemental Indentures..............62
------------------------------------
SECTION 904. Effect of Supplemental Indentures.................63
---------------------------------
SECTION 905. Conformity with Trust Indenture Act...............63
-----------------------------------
SECTION 906. Reference in Securities to
Supplemental Indentures..........................63
---------------------------------
SECTION 907. Notice of Supplemental Indentures.................63
---------------------------------
<PAGE>
ARTICLE TEN COVENANTS 64
SECTION 1001. Payment of Principal, Premium,
if Any, and Interest..........................64
---------------------------------------------------
SECTION 1002. Maintenance of Office or Agency..................64
-------------------------------
SECTION 1003. Money for Security Payments to Be Held in Trust..64
-----------------------------------------------
SECTION 1004. Corporate Existence..............................65
-------------------
SECTION 1005. Payment of Taxes and Other Claims................66
---------------------------------
SECTION 1006. Maintenance of Properties and Insurance..........66
---------------------------------------
SECTION 1007. Statement by Officers as to Default..............66
-----------------------------------
SECTION 1008. Reports..........................................67
--------
SECTION 1009. Limitation on Sale-Leaseback Transactions. ......68
------------------------------------------
SECTION 1010. Limitation on Indebtedness and
Issuance of Preferred Stock...................68
-------------------------------------------
SECTION 1011. Limitation on Restricted Payments................71
----------------------------------
SECTION 1012. Purchase of Securities upon a Change of Control..75
-----------------------------------------------
SECTION 1013. Limitation on Asset Sales...... ...............76
--------------------------
SECTION 1014. Limitation on Transactions With Affiliates.......78
------------------------------------------
SECTION 1015. Limitation on Dividend and Other Payment Restrictions
Affecting Restricted
----------------------------------------------------
Subsidiaries........................... ..79
SECTION 1016. Limitation on the Issuance and Sale of Capital
Stock of Restricted
Subsidiaries.....................................80
SECTION 1017. Limitation on Liens...................... .......80
--------------------
SECTION 1018. Limitation on Designation of
Unrestricted Subsidiaries..... ............81
-----------------------------------------------------
SECTION 1019. Limitations on Issuances of Guarantees of
Indebtedness; Additional Guarantors.........82
----------------------------------------------
SECTION 1020. Waiver of Certain Covenants................... .82
---------------------------
SECTION 1021. Payment for Consent..............................82
-------------------
ARTICLE ELEVEN REDEMPTION OF SECURITIES....................................83
SECTION 1101. Right of Redemption..............................83
-------------------
SECTION 1102. Applicability of Article.........................83
------------------------
SECTION 1103. Election to Redeem; Notice to Trustee........... 83
-------------------------------------
SECTION 1104. Selection by Trustee of Securities to Be Redeemed.83
-------------------------------------------------
SECTION 1105. Notice of Redemption.............................84
--------------------
SECTION 1106. Deposit of Redemption Price......................84
---------------------------
SECTION 1107. Securities Payable on Redemption Date............85
-------------------------------------
SECTION 1108. Securities Redeemed in Part......................85
---------------------------
ARTICLE TWELVE RANKING OF SECURITIES........... ..........................86
SECTION 1201. Ranking..........................................86
-------
ARTICLE THIRTEEN LEGAL DEFEASANCE AND COVENANT DEFEASANCE..................86
SECTION 1301. Company Option to Effect Legal Defeasance
or Covenant Defeasance......................86
-----------------------------------------
SECTION 1302. Legal Defeasance and Discharge..... .............86
------------------------------
SECTION 1303. Covenant Defeasance............ ...............87
-------------------
SECTION 1304. Conditions to Legal Defeasance or
Covenant Defeasance........................87
-----------------------------------------------------
SECTION 1305. Deposited Money and U.S. Government
Obligations to Be Held in Trust; Other
----------------------------------------------------
SECTION 1306. Reinstatement.....................................89
-------------
<PAGE>
ARTICLE FOURTEEN SUBSIDIARY GUARANTEES......................................91
SECTION 1401. Subsidiary Guarantees.............................91
---------------------
SECTION 1402. Guaranty Absolute.................................92
-----------------
SECTION 1403. Waivers...........................................93
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SECTION 1404. Subrogation.......................................94
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SECTION 1405. No Waiver; Remedies...............................94
-------------------
SECTION 1406. Continuing Guaranty; No Right
of Set-Off; Independent Obligation...............94
----------------------------------------------------
SECTION 1407. Subsidiary Guarantors May
Consolidate, etc., on Certain Terms.............95
---------------------------------------------------
SECTION 1408. Additional Subsidiary Guarantors..... ............95
--------------------------------
SECTION 1409. Releases..........................................96
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SECTION 1410. Benefits Acknowledged.............................96
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SECTION 1411. Severability......................................96
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SCHEDULE I. Subsidiary Guarantors of the Company..............Sch-1
Exhibit A: Form of Note....................................................A-1
Exhibit B: Form of Note Registration Rights Agreement......................B-1
Exhibit C: Form of Warrant Registration Rights Agreement...................C-1
<PAGE>
===============================================================================
7
INDENTURE, dated as of March 2, 1999 among Waste Systems
International, Inc., a corporation duly organized and existing under the laws of
the State of Delaware (herein called the "Company"), the Subsidiary Guarantors
set forth on Schedule I hereto and IBJ Whitehall Bank & Trust Company, a New
York banking corporation having its principal corporate trust office at One
State Street, New York, New York 10004, as trustee (herein called the
"Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation and issue of its
11 1/2% Senior Notes due 2006 (herein called the "Initial Securities"), and 11
1/2% Senior Notes due 2006, Series B (the "Exchange Securities" and, together
with the Initial Securities, 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.
Upon the issuance of the Exchange Securities, if any, or the
effectiveness of the Exchange Offer Registration Statement (as defined herein)
or, under certain circumstances, the effectiveness of the Shelf Registration
Statement (as defined herein), this Indenture shall be subject to the provisions
of the Trust Indenture Act of 1939, as amended, that are required to be part of
this Indenture and shall, to the extent applicable, be governed by such
provisions.
All things necessary have been done 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, each in accordance with their
respective terms. The Subsidiary Guarantors have done all things necessary to
make their guarantees, when this Indenture is executed and delivered, the valid
obligations of the Subsidiary Guarantors enforceable in accordance with their
terms, and this Indenture is a valid agreement of each Subsidiary Guarantor in
accordance with its terms.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders (as defined herein) thereof, it is mutually
covenanted and agreed, for the equal and proportionate benefit of all Holders of
the Securities, as follows:
<PAGE>
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
<PAGE>
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, and the terms "cash transaction" and
"self-liquidating paper," as used in TIA Section 311, shall have the
meanings assigned to them in the rules of the Commission adopted under
the Trust Indenture Act;
(c) all accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with generally
accepted accounting principles; 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 principally in Articles Two, Eight, Ten
and Twelve are defined in those Articles.
"Acquired Indebtedness" means Indebtedness of a Person
existing at the time such Person is merged with or into the Company or becomes a
Restricted Subsidiary or assumed by the Company or a Restricted Subsidiary in
connection with the acquisition of assets from such Person and not Incurred in
connection with, or in anticipation of, such Person becoming a Restricted
Subsidiary or such acquisition of assets.
"Act," when used with respect to any Holder, has the meaning
specified in Section 104 hereof.
"Adjusted EBITDA" means, with respect to the Company and the
Restricted Subsidiaries for any period, the EBITDA of the Company and the
Restricted Subsidiaries for such period plus the following: (i) one-time charges
incurred during such period associated with the write-off of landfill
development costs; (ii) costs incurred during such period associated with the
integration of acquired companies and businesses into the Company's operations,
including, without limitation, costs related to termination and retention of
employees, lease termination costs, costs related to the integration of
information systems and costs related to the change of the name of the acquired
company or business; and (iii) restructuring costs incurred during such period.
"Adjusted Stockholders' Equity" means the Company's
stockholders' equity shown on its consolidated balance sheets filed as part of
its regular reports with the Commission, less the amount of any increase therein
resulting from the issuance of any shares of Common Stock in exchange for
outstanding 7% Convertible Subordinated Notes due 2005 of the Company, to the
extent, if any, that such issuance exceeds 2,343,646 shares of Common Stock in
the aggregate.
"Affiliate" means, with respect to any specified Person, any
other Person directly or indirectly controlling or controlled by or under direct
or indirect common control with such specified Person. For purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlling," "controlled by" and "under common control with") of any Person
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Asset Sale" means any sale, issuance, lease, conveyance,
transfer or other disposition (including, without limitation, by way of merger
or consolidation) (collectively, a "transfer") by the Company or any Restricted
Subsidiary (other than to the Company or a Restricted Subsidiary and other than
directors' qualifying shares), directly or indirectly, in one transaction or in
a series of related transactions of (a) any Capital Stock (other than
Disqualified Stock) of any Restricted Subsidiary, (b) all or substantially all
of the properties and assets of the Company and its Restricted Subsidiaries
representing a division or line of business or (c) any other properties or
assets of the Company or any Restricted Subsidiary, other than in the ordinary
course of business; provided, however, the following transactions shall not be
deemed Asset Sales: (i) the transfer of accounts receivable (or participations
therein) in connection with any accounts receivables financing; (ii) the
transfer of Capital Stock or Indebtedness or other securities of an Unrestricted
Subsidiary; (iii) the transfer of assets pursuant to and in accordance with the
limitation on mergers, sales or consolidations provisions in this Indenture;
(iv) the making of Restricted Payments permitted by Section 1011 of this
Indenture; (v) the creation or assumption of (or foreclosure on) a Lien securing
Indebtedness to the extent that such Lien does not violate Section 1017 of this
Indenture; and (vi) the consummation of any sale or series of related sales of
assets or properties of the Company and any Restricted Subsidiary having an
aggregate fair market value for all such sales of less than $1 million in any
fiscal year.
<PAGE>
"Asset Sale Offer" has the meaning set forth in Section 1013
hereof.
"Authenticating Agent" has the meaning set forth in Section
303 hereof.
"Average Life" means, as of the date of determination, with
respect to any Indebtedness or Preferred Stock, the quotient obtained by
dividing (i) the sum of the product of the numbers of years (rounded upwards to
the nearest month) from the date of determination to the dates of each
successive scheduled principal payment of such Indebtedness or redemption or
similar payment with respect to such Preferred Stock multiplied by the amount of
such payment by (ii) the sum of all such payments.
"Bank" means The Howard Bank, N.A. and other financial
institutions that from time to time are lenders under the Credit Facility or any
other credit facility.
"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 any day except Saturday, Sunday and any
day on which banks in The City of New York are required or permitted by law or
executive order to close.
"Capital Lease Obligation" means, with respect to any Person,
an obligation that is required to be classified and accounted for as a capital
lease for financial reporting purposes in accordance with GAAP, and the amount
of Indebtedness represented by such obligation shall be the capitalized amount
of such obligation determined in accordance with GAAP; and the Stated Maturity
thereof shall be the date of the last payment of rent or any other amount due
under such lease prior to the first date upon which such lease may be terminated
by the lessee without payment of a penalty.
"Capital Stock" of any Person means any and all shares,
interests, partnership interests, rights to purchase, warrants, options,
participations or other equivalents of or interests in (however designated) the
equity of such Person, including any Preferred Stock, but excluding debt
securities convertible into such equity.
"Cash Equivalents" means (i) marketable direct obligations
issued by, or unconditionally guaranteed by, the United States Government or
issued by any agency thereof and backed by the full faith and credit of the
United States, (ii) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either Standard & Poor's or Moody's; (iii)
commercial paper maturing no more than one year from the date of creation
thereof and, at the time of acquisition, having a rating of at least A-1 from
Standard & Poor's or at least P-1 from Moody's; (iv) certificates of deposit or
bankers' acceptances (or, with respect to foreign banks, similar instruments)
maturing within one year from the date of acquisition thereof issued by any bank
organized under the laws of the United States of America or any state thereof or
the District of Columbia or any U.S. branch of a foreign bank having at the date
of acquisition thereof combined capital and surplus of not less than $200
million; (v) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (i) above entered into
with any bank meeting the qualifications specified in clause (iv) above; and
(vi) investments in money market funds which invest substantially all their
assets in securities of the types described in clauses (i) through (v) above.
"Change of Control" means the occurrence of any of the
following events: (i) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act), is or becomes the "beneficial
owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that
for purposes of this clause (i) such person or group shall be deemed to have
"beneficial ownership" of all shares that any said person or group has the right
to acquire, whether such right is exercisable immediately or only after the
passage of time), directly or indirectly, of more than 50% of the total voting
power of the outstanding Voting Stock of the Company; or (ii) individuals who on
the Closing Date constitute the Board of Directors (together with any new or
successor directors whose election by the Board of Directors or whose nomination
by the Board of Directors for election by the Company's stockholders was
approved by a vote of at least two-thirds of the members of the Board of
Directors on the date of their election or nomination) cease for any reason to
constitute a majority of the members of the Board of Directors then in office;
or (iii) the sale, lease or other transfer (in one transaction or a series of
related transactions) of all or substantially all of the assets of the Company
and its Restricted Subsidiaries to any person or group (as so defined),
excluding any such sale, lease or other transfer to or among the Company's
Restricted Subsidiaries.
<PAGE>
"Change of Control Offer" has the meaning set forth in Sectio
1012 hereof.
"Change of Control Purchase Price" has the meaning set forth
in Section 1012 hereof.
"Change of Control Purchase Date" has the meaning set forth
in Section 1012 hereof.
"Closing Date" means the date on which the Securities are
originally issued under this Indenture.
"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 Indenture 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.
"Company" means Waste Systems International, Inc., a Delaware
corporation, unless and until a successor replaces it in accordance with this
Indenture and thereafter means such successor.
"Common Stock" means the common stock, par value $.01 per
share, of the Company.
"Company Request" or "Company Order" means a written request
or order signed in the name of the Company by its Chairman, Chief Executive
Officer, President, any Vice President, Chief Financial Officer, Treasurer or an
Assistant Treasurer, and delivered to the Trustee.
"Consolidated Fixed Charge Coverage Ratio" means, with respect
to any Person for any period, the ratio of Adjusted EBITDA of such Person for
such period to the Consolidated Fixed Charges of such Person for such period;
provided, however, that (A) if the Company or any Restricted Subsidiary has
incurred any Indebtedness since the beginning of such period and through the
date of determination of the Consolidated Fixed Charge Coverage Ratio that
remains outstanding or if the transaction giving rise to the need to calculate
the Consolidated Fixed Charge Coverage Ratio is an incurrence of Indebtedness or
both, the Adjusted EBITDA and Consolidated Fixed Charges for such period shall
be calculated after giving effect on a pro forma basis to (1) such Indebtedness
as if such Indebtedness had been incurred on the first day of such period
(provided that if such Indebtedness is incurred under a revolving credit
facility or similar arrangement or under any predecessor revolving credit or
similar arrangement only that portion of such Indebtedness that constitutes the
one year projected average balance of such Indebtedness (as determined in good
faith by the Board of Directors of the Company) shall be deemed outstanding for
purposes of this calculation) and (2) the discharge of any other Indebtedness
repaid, repurchased, defeased or otherwise discharged with the proceeds of such
new Indebtedness as if such discharge had occurred on the first day of such
period, (B) if since the beginning of such period any Indebtedness of the
Company or its Restricted Subsidiaries has been repaid, repurchased, defeased or
otherwise discharged (other than Indebtedness under a revolving credit or
similar arrangement unless such revolving credit Indebtedness has been
permanently repaid and the underlying commitment terminated and not replaced),
Consolidated Fixed Charges for such period shall be calculated after giving pro
forma effect thereto as if such Indebtedness had been repaid, repurchased,
defeased or otherwise discharged on the first day of such period, (C) if since
the beginning of such period the Company or any of its Restricted Subsidiaries
shall have made any Asset Sale, Adjusted EBITDA for such period shall be reduced
by an amount equal to the Adjusted EBITDA (if positive) attributable to the
assets which are the subject of such Asset Sale for such period or increased by
an amount equal to the Adjusted EBITDA (if negative) attributable thereto for
such period, Consolidated Fixed Charges for such period shall be (i) reduced by
an amount equal to the Consolidated Fixed Charges attributable to any
Indebtedness of the Company or any of its Restricted Subsidiaries repaid,
repurchased, defeased or otherwise discharged with respect to the Company and
its continuing Restricted Subsidiaries in connection with such Asset Sale for
such period (or if the Capital Stock of any Restricted Subsidiary is sold, the
Consolidated Interest for such period directly attributable to the Indebtedness
of such Restricted Subsidiary to the extent the Company and its continuing
Restricted Subsidiaries are no longer liable for such Indebtedness after such
sale) and (ii) increased by interest income attributable to the assets which are
the subject of such Asset Sale for such period, (D) if since the beginning of
such period the Company or any of its Restricted Subsidiaries (by merger or
otherwise) shall have made an Investment in any Restricted Subsidiary (or any
Person which becomes a Restricted Subsidiary as a result thereof) or an
acquisition of assets occurring in connection with a transaction causing a
calculation to be made hereunder which constitutes all or substantially all of
an operating unit of a business, Adjusted EBITDA and Consolidated Fixed Charges
for such period shall be calculated after giving pro forma effect thereto
(including the incurrence of any Indebtedness) as if such Investment or
acquisition occurred on the first day of such period, and (E) if since the
beginning of such period any Person (that subsequently became a Restricted
Subsidiary of the Company or was merged with or into the Company or any other
Restricted Subsidiary since the beginning of such period) shall have made any
Asset Sale, Investment or acquisition of assets that would have required an
adjustment pursuant to clause (C) or (D) above if made by the Company or a
Restricted Subsidiary during such period, Adjusted EBITDA and Consolidated Fixed
Charges for such period shall be calculated after giving pro forma effect
thereto as if such Asset Sale, Investment or acquisition had occurred on the
first day of such period. For the purposes of this definition, whenever pro
forma effect is to be given to an acquisition of assets, the amount of income or
earnings relating thereto and the amount of Consolidated Fixed Charges
associated with any Indebtedness incurred in connection therewith, the pro forma
calculations shall be determined in good faith by a responsible financial or
accounting officer of the Company. If any Indebtedness bears a floating rate of
interest and is being given pro forma effect, the interest expense on such
Indebtedness shall be calculated as if the rate in effect on the date of
determination had been the applicable rate for the entire period.
<PAGE>
"Consolidated Fixed Charges" means, with respect to any period
without duplication, the sum of (i) the amount that in conformity with GAAP
would be set forth opposite the caption "interest expense" or any like caption
on the consolidated statement of operations of the Company and its Restricted
Subsidiaries for such period, including, without limitation, (a) amortization of
debt discount, (b) the net cash payments, if any, under interest rate contracts
(including amortization of discounts), (c) the interest portion of any deferred
payment obligation, (d) accrued interest, plus (ii) the interest component of
the Capital Lease Obligations paid, accrued and/or scheduled to be paid or
accrued by the Company and its Restricted Subsidiaries during such period, of
the Company and its Restricted Subsidiaries, plus (iii) all cash dividends paid
during such period by the Company and its Restricted Subsidiaries with respect
to any Preferred Stock and Disqualified Stock, in each case as determined on a
consolidated basis in accordance with GAAP; plus (iv) all interest on any
Indebtedness of any person guaranteed by the Company or any of its Restricted
Subsidiaries; provided, that Consolidated Fixed Charges shall not include (x)
the amortization of debt issuance costs and (y) the fixed charges of a
Restricted Subsidiary to the extent (and in the same proportion) that the net
income of such Restricted Subsidiary was excluded in calculating Consolidated
Net Income pursuant to clause (v) of the definition thereof for such period.
"Consolidated Net Income" means, with respect to any period,
the net income (or loss) of the Company and its Restricted Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP, adjusted to
the extent included in calculating such net income (or loss) by excluding,
without duplication, (i) extraordinary gains and losses, (ii) the portion of net
income (or loss) of the Company and its Restricted Subsidiaries allocable to
interests in unconsolidated Persons or Unrestricted Subsidiaries, except that
the Company's equity in the net income of such Person or Subsidiary shall be
included in Consolidated Net Income to the extent of the amount of dividends or
distributions actually paid to the Company or its Restricted Subsidiaries by
such Person or Subsidiary during such period, (iii) net income (or loss) of any
Person combined with the Company or any of its Restricted Subsidiaries on a
"pooling of interests" basis attributable to any period prior to the date of
combination, (iv) net gain or loss in respect of any sale, transfer or
disposition of assets (including without limitation, pursuant to sale and
leaseback transactions) other than in the ordinary course of business, and (v)
the net income (but not the net loss) of any Restricted Subsidiary to the extent
that the declaration of dividends or similar distributions by that Restricted
Subsidiary of that income to the Company is not at the date of determination
permitted, directly or indirectly, by operation of the terms of its charter or
any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to the Restricted Subsidiary or its
stockholders (other than pursuant to the Securities or this Indenture).
"Consolidated Net Worth" means, at any date of determination,
stockholders' equity of the Company and its Restricted Subsidiaries as set forth
on the most recently available quarterly or annual consolidated balance sheet of
the Company and its Restricted Subsidiaries, less any amounts attributable to
Disqualified Stock or any equity security convertible into or exchangeable for
Indebtedness, the cost of treasury stock and the principal amount of any
promissory notes receivable from the sale of the Capital Stock of the Company or
any of its Restricted Subsidiaries and less, to the extent included in
calculating such stockholders' equity of the Company and its Restricted
Subsidiaries, the stockholders' equity attributable to Unrestricted
Subsidiaries, each item to be determined in conformity with GAAP (excluding the
effects of foreign currency adjustments under Financial Accounting Standards
Board Statement of Financial Accounting Standards No. 52).
"Corporate Trust Office" means the principal corporate trust
office of the Trustee, at which at any particular time its corporate trust
business shall be administered, which office at the date of execution of this
Indenture is located at One State Street, New York, New York 10004, except that
with respect to presentation of Securities for payment or for registration of
transfer or exchange, such term shall mean the office or agency of the Trustee
at which, at any particular time, its corporate trust and agency business shall
be conducted in The City of New York.
"Credit Facility" means the Credit Facility established under
the Business Loan Agreement dated September 11, 1998, with respect to which the
Company is a guarantor, by and among WSI Vermont Holdings, Inc. and WSI
Pennsylvania Holdings, Inc. and The Howard Bank, N.A., including collateral
documents, instruments and agreements executed in connection therewith and any
amendments, supplements, substitutions, qualifications, extensions, renewals,
restatements, replacements, refinancings or refunding thereof.
"Currency Agreement Obligations" means the obligations of any
Person under a foreign exchange contract, currency swap agreement or other
similar agreement or arrangement to protect such Person against fluctuations in
currency values.
"Default" means any event that is, or after the giving of
notice or passage of time or both would be, an Event of Default.
"Defaulted Interest" has the meaning specified in Section 309
hereof.
"Depositary" means The Depository Trust Company, its nominees
and successors.
<PAGE>
"Disinterested Director" means, with respect to any
transaction or series of transactions in respect of which the Board of Directors
is required to deliver a resolution of the Board of Directors, to make a finding
or otherwise take action under the Indenture, a member of the Board of Directors
who does not have any material direct or indirect financial interest in or with
respect to such transaction or series of transactions (other than as the holder
of Voting Stock of the Company).
"Disqualified Stock" means (a) any Preferred Stock of any
Restricted Subsidiary and (b) any class or series of Capital Stock of the
Company that, either by its terms, or by the terms of any security into which it
is convertible or exchangeable or by contract or otherwise (i) is, or upon the
happening of an event or passage of time would be, required to be redeemed prior
to one year after the final Stated Maturity of the Securities, (ii) is
redeemable at the option of the holder thereof at any time prior to one year
after such final Stated Maturity, or (iii) at the option of the holder thereof,
is convertible into or exchangeable for debt securities at any time prior to one
year after such final Stated Maturity; provided that any Capital Stock that
would not constitute Disqualified Stock but for provisions therein giving
holders thereof the right to cause the issuer thereof to repurchase or redeem
such Capital Stock upon the occurrence of an "asset sale" or "change of control"
occurring prior to the Stated Maturity of the Securities will not constitute
Disqualified Stock if the "asset sale" or "change of control" provisions
applicable to such Capital Stock are not more favorable to the holders of such
Capital Stock than the provisions contained in Sections 1012 and 1013 and such
Capital Stock specifically provides that the issuer will not repurchase or
redeem any such stock pursuant to such provision prior to the Company's
repurchase of such Securities as are required to be repurchased pursuant to
Sections 1012 and 1013.
"Dollars" and "$" means lawful money of the United
States of America.
"EBITDA" means, with respect to any Person for any period, the
sum of Consolidated Net Income of such Person for such period plus the following
to the extent deducted in calculating such Consolidated Net Income: (a)
provision for taxes based on the net income or profits of such Person, (b)
Consolidated Fixed Charges (including for this purpose the amortization of debt
issuance costs), (c) consolidated depreciation and amortization, calculated in
accordance with GAAP, and (d) any other non-cash charges (excluding any non-cash
items that represent an accrual of or reserve for cash charges reasonably
expected to be disbursed in any subsequent period prior to the Stated Maturity
of the Securities) deducted in computing Consolidated Net Income, less (e)
non-cash items increasing Consolidated Net Income (excluding any items which
represent an accrual for cash receipts or the reduction of required future cash
disbursements reasonably expected to be received or disbursed in a subsequent
period prior to the Stated Maturity of the Securities).
"Equity Offering" means an offer and sale by the Company of
its Common Stock (which is Qualified Stock) for cash to a Person or Persons
other than a Subsidiary.
"Event of Default" has the meaning specified in
Section 501 hereof.
"Exchange Act" means the Securities Exchange Act of 1934,
as amended.
"Exchange Offer" means the exchange offer that may be effected
pursuant to the Note Registration Rights Agreement.
"Exchange Offer Registration Statement" means the Exchange
Offer Registration Statement as
defined in the Note Registration Rights Agreement.
"Exchange Securities" has the meaning stated in the first
recital of this Indenture and refers to any Exchange Securities containing terms
substantially identical to the Initial Securities (except that such Exchange
Securities shall not contain terms with respect to the interest rate step-up
provisions in Section 309 hereof and the transfer restrictions in Section 307
hereof) that are issued and exchanged for the Initial Securities pursuant to the
Note Registration Rights Agreement and this Indenture.
"Existing Indebtedness" means Indebtedness of the Company or
its Restricted Subsidiaries in existence on the Closing Date plus any premium or
interest accrued thereon.
"Fair Market Value" means, with respect to any asset, the
price which could be negotiated in an arm's-length free market transaction, for
cash, between an informed and willing seller and an informed and willing buyer,
neither of which is under pressure or compulsion to complete the transaction.
"Federal Bankruptcy Code" means the Bankruptcy Act of
Title 11 of the United States Code, as amended from time to time.
"GAAP" means generally accepted accounting principles in the
United States set forth in the Statements of Financial Accounting Standards and
the Interpretations, Accounting Principles Board Opinions and AICPA Accounting
Research Bulletins which are applicable as of December 31, 1998 except as
otherwise specified herein.
<PAGE>
"Global Security" has the meaning set forth in Section
201 hereof.
"Guarantee" means any obligation, contingent or otherwise, of
any Person guaranteeing Indebtedness of another Person (including, without
limitation, obligations, agreements to purchase assets, securities or services,
to take-or-pay, or to maintain financial statement conditions, or similar
arrangements or agreements entered into for the purpose of assuring the obligee
of such Indebtedness of the payment thereof or to protect such obligee against
loss in respect thereof, in whole or in part), but excluding (i) endorsements of
negotiable instruments for collection or deposit in the ordinary course of
business, and (ii) contingent obligations in connection with the sale or
discount of accounts receivable and similar paper.
"Holder" means the Person in whose name a Security is, at the
time of determination, registered on the Security Register.
"Incur" means, with respect to any Indebtedness, to incur,
create, issue, assume, Guarantee or otherwise become liable for or with respect
to, or become responsible for, the payment of, contingently or otherwise, such
Indebtedness, including an "Incurrence" of Acquired Indebtedness; provided that
neither the accrual of interest nor the accretion of original issue discount
shall be considered an Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person, without
duplication, (i) the principal of and the premium (if any) on all indebtedness
of such Person for money borrowed or which is evidenced by a note, bond,
debenture or similar instrument for payment, (ii) all obligations of such Person
under any conditional sale, title retention or similar agreement in respect of
the deferred or unpaid purchase price of property or services acquired by such
Person, (iii) all Capital Lease Obligations of such Person, (iv) all
reimbursement obligations of such Person in respect of letters of credit,
bankers' acceptances or similar facilities issued or created for the account of
such Person, (v) all net obligations of such Person under Interest Rate
Agreement Obligations or Currency Agreement Obligations of such Person, (vi) all
liabilities of others of the kind described in the preceding clauses (i), (ii)
or (iii) secured by any Lien on any property owned by such Person even though
such Person has not assumed or become liable for the payment of such
liabilities; provided, however, the amount of such Indebtedness for purposes of
this definition shall be limited to the lesser of the amount of Indebtedness
secured by such Lien or the value of the property subject to such Lien, (vii)
all Disqualified Stock issued by such Person and all Preferred Stock issued by a
Restricted Subsidiary of such Person, (viii) the amount of every Capital Lease
Obligation of such Person, and (ix) to the extent not otherwise included, any
Guarantee by such Person of any other Person's Indebtedness or other obligations
described in clauses (i) through (viii) above. For purposes of this definition,
the maximum fixed repurchase price of any Disqualified Stock that does not have
a fixed repurchase price will be calculated in accordance with the terms of such
Disqualified Stock as if such Disqualified Stock were repurchased on any date on
which Indebtedness is required to be determined pursuant to this Indenture, and
if such price is based upon, or measured by, the fair market value of such
Disqualified Stock, such fair market value will be determined in good faith by
the board of directors of the issuer of such Disqualified Stock. "Indebtedness"
of the Company and the Restricted Subsidiaries shall not include (i) trade
payables incurred in the ordinary course of business, and (ii) contingent
obligations incurred in connection with the sale or discount of accounts
receivable and similar paper in the ordinary course of business. The principal
amount outstanding of any Indebtedness issued with original issue discount is
the accreted value of such Indebtedness and Indebtedness shall not include any
liability for federal, state, local or other taxes. Accrued liabilities arising
in the ordinary course of business and any liability for federal, state or local
taxes or other taxes owed by such person will not be considered Indebtedness for
purposes of this definition.
"Indenture" means this instrument as originally executed and
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.
"Indenture Obligations" means the obligations of the Company
and any other obligor hereunder or under the Securities to pay principal of (and
premium, if any) and interest on the Securities when due and payable at
Maturity, and all other amounts due or to become due under or in connection with
this Indenture, the Securities and the performance of all other obligations to
the Trustee (including all amounts due to the Trustee under Section 606 hereof)
and the Holders under this Indenture and the Securities, according to the terms
hereof and thereof.
"Initial Securities" has the meaning stated in the first
recital of this Indenture.
"Interest Payment Date" means the Stated Maturity of
an installment of interest on the Securities.
"Interest Rate Agreement Obligations" means, with respect to
any Person, the Obligations of such Person under (i) interest rate swap
agreements, interest rate cap agreements and interest rate collar agreements,
and (ii) other agreements or arrangements designed to protect such Person
against fluctuations in interest rates.
<PAGE>
"Investment" in any Person means any direct or indirect
advance, loan or other extension of credit (including, without limitation, by
way of Guarantee or similar arrangement but excluding advances to customers and
employees in the ordinary course of business) to, capital contribution (by means
of any transfer of cash or other property to others or any payment for property
or services for the account or use of others) to, or any purchase or acquisition
of capital stock, bonds, notes, debentures or other similar instruments issued
by, such Person and shall include the designation of a Restricted Subsidiary as
an Unrestricted Subsidiary. For purposes of the definition of "Unrestricted
Subsidiary" and Section 1011 of this Indenture, (i) "Investment" shall include
the fair market value of the assets (net of liabilities) of any Restricted
Subsidiary of the Company at the time that such Restricted Subsidiary of the
Company is designated an Unrestricted Subsidiary and shall exclude the fair
market value of the assets (net of liabilities) of any Unrestricted Subsidiary
at the time that such Unrestricted Subsidiary is designated a Restricted
Subsidiary of the Company and (ii) any property transferred to or from an
Unrestricted Subsidiary shall be valued at its fair market value at the time of
such transfer, in each case as determined by the Board of Directors in good
faith.
"Lien" means any mortgage, lien (statutory or otherwise),
pledge, charge, security interest or encumbrance of any kind upon or with
respect to any property of any kind, real or personal, movable or immovable, now
owned or hereafter acquired, whether or not filed, recorded or otherwise
perfected under applicable law (including any conditional sale or other title
retention agreement, any lease in the nature thereof, any option or other
agreement to sell or give a security interest in any asset and any filing of, or
agreement to give, any financing statement under the Uniform Commercial Code (or
equivalent statutes) of any jurisdiction). A Person will be deemed to own
subject to a Lien any property that such person has acquired or holds subject to
the interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement.
"Maturity," when used with respect to any Security, means the
date on which the principal of such Security (or premium, if any) or any
installment of interest becomes due and payable as therein or herein provided,
whether at the Stated Maturity or by declaration of acceleration, notice of
redemption or otherwise.
"Moody's" means Moody's Investors Service, Inc. and its
successors.
"Net Cash Proceeds" means, with respect to any Asset Sale by
any Person, the aggregate cash or Cash Equivalent proceeds thereof, including
payments in respect of deferred payment obligations when received in the form
of, or stock or other assets when disposed for, cash or Cash Equivalents (except
to the extent that such obligations are financed or sold with recourse to the
Company or any Restricted Subsidiary), pursuant to, or monetization of, a note
or installment receivable or otherwise, net of (i) the amount of any
Indebtedness (including Disqualified Stock or Preferred Stock of a Subsidiary)
which is required to be repaid by such Person or its Affiliates in connection
with such Asset Sale, plus (ii) all fees, Commissions and other expenses
incurred (including without limitation, the fees and expenses of legal counsel
and investment banking, accounting, underwriting and brokerage fees and
expenses) by such Person in connection with such Asset Sale, plus (iii)
provision for taxes, including income taxes, attributable to the Asset Sale or
attributable to required prepayments or repayments of Indebtedness with the
proceeds of such Asset Sale, plus (iv) any amounts reasonably to be provided by
the Company or any Restricted Subsidiary, as the case may be, as a reserve in
accordance with GAAP against any liabilities associated with such Asset Sale and
retained by the Seller after such Asset Sale, including, without limitation,
pension and other post-employment benefit liabilities, liabilities related to
environmental matters and liabilities under any indemnification obligations
associated with such Asset Sale, plus (v) amounts required to be paid to Persons
(other than the Company or a Restricted Subsidiary) holding a beneficial
interest in the assets sold in such Asset Sale or to holders of minority
interests in a Restricted Subsidiary or other entity as a result of such Asset
Sale.
"Net Proceeds," with respect to any issuance or sale of
Capital Stock, means the proceeds, in cash, securities or property (with any
securities or property valued at fair market value), of the issuance or the sale
net of attorneys' fees, accountants' fees, underwriters' or placement agents'
fees, discounts or Commissions and brokerage, consultant and other fees and
expenses incurred in connection with such issuance or sale and net of taxes paid
or payable as a result of such issuance or sale.
"Note Registration Rights Agreement" means the Note
Registration Rights Agreement between the Company, the Subsidiary Guarantors and
the Initial Purchaser, dated as of March 2, 1999, relating to the Securities and
attached hereto as Exhibit B.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursement obligations, damages and other liabilities
payable under the documentation governing any Indebtedness.
"Offering" means the offering by the Company of 10,000 Units,
each Unit consisting of $10,000 principal amount of 11 1/2% Senior Notes due
2006 and 150 Warrants to purchase one share of Common Stock per Warrant.
"Officers' Certificate" means a certificate signed by the
Chairman, Chief Executive Officer, the President, the Chief Financial Officer or
any Vice President, and by the Treasurer, an Assistant Treasurer, the Secretary
or an Assistant Secretary of the Company, and delivered to the Trustee.
<PAGE>
"Opinion of Counsel" means a written opinion of counsel, who
may be counsel for the Company, including 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 whose payment,
redemption or purchase money in the necessary amount has 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 are to be
redeemed, irrevocable notice of such redemption has been duly given
pursuant to this Indenture to Holders or provision therefor
satisfactory to the Trustee has been made;
(c) Securities, except to the extent provided in Sections 1302
and 1303 hereof, with respect to which the Company has effected legal
defeasance and/or covenant defeasance as provided in Article Thirteen
hereof; and
(d) Securities which have been paid pursuant to Section 308
hereof 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 Company proof satisfactory to it that such Securities are held
by a bona fide purchaser in whose hands the Securities are valid
obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, consent, notice or waiver hereunder, and for the
purpose of making the calculations required by TIA Section 313, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in making such calculation or in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which the
Trustee knows to be so owned, as evidenced by registration on the Securities
Register or reflected on the records of the Depositary as furnished to the
Trustee in writing, or as indicated to the Trustee in writing by the Company,
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 pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or such other obligor.
"Paying Agent" means IBJ Whitehall Bank & Trust Company and
any successor (including the Company acting as Paying Agent) authorized by the
Company to pay the principal of (and premium, if any) or interest on any
Securities on behalf of the Company.
"Permitted Investment" means (i) an Investment in the Company
or a Restricted Subsidiary or a Person which will, upon the making of such
Investment, become a Restricted Subsidiary or be merged or consolidated with or
into or transfer or convey all or substantially all its assets to, the Company
or a Restricted Subsidiary; provided that such Person's primary business is
related, ancillary or complementary to the businesses of the Company and its
Restricted Subsidiaries on the date of such Investment; (ii) Cash Equivalents;
(iii) payroll, travel and similar advances to cover matters that are expected at
the time of such advances ultimately to be treated as expenses in accordance
with GAAP; (iv) stock, obligations or securities received in satisfaction of
judgments; (v) an Investment in any Person consisting solely of the transfer to
such Person of an Investment in another Person that is not a Restricted
Subsidiary; (vi) Investment Grade Securities; (vii) Interest Rate Agreements and
Currency Agreements designed solely to protect the Company or its Restricted
Subsidiaries against fluctuations in interest rates or foreign currency exchange
rates; (viii) Investments, not to exceed $10.0 million at any one time
outstanding (and for purposes of this clause (viii) an Investment shall be
deemed to be outstanding in the amount of the excess (but not, in any event,
less than zero) of the amount of such Investment on the date or dates made, less
the return of capital to the Company and its Restricted Subsidiaries with
respect to such Investment); and (ix) Investments, to the extent the
consideration therefor consists of Capital Stock (other than Disqualified Stock)
of the Company or net cash proceeds from the sale of such Capital Stock, if such
Capital Stock was issued or sold within 90 days of the making of such
Investment.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, limited liability company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Physical Security" shall have the meaning set forth in
<PAGE>
Section 201.
"Preferred Stock" as applied to the Capital Stock of any
Person means Capital Stock of any class or classes (however designated), whether
now outstanding or issued after the Closing Date, which is preferred as to the
payment of dividends or distributions, or as to the distribution of assets upon
any voluntary or involuntary liquidation or dissolution of such Person, over
Capital Stock of any other class of such Person.
"Private Placement Legend" has the meaning set forth in
Section 202 hereof.
"Purchase Money Obligation" means any Indebtedness secured by
a Lien on assets related to the business of the Company or the Restricted
Subsidiaries, and any additions and accessions thereto, which are purchased or
constructed by the Company or any Restricted Subsidiary at any time after the
Closing Date; provided that (i) any security agreement or conditional sales or
other title retention contract pursuant to which the Lien on such assets is
created (collectively a "Security Agreement") shall be entered into within 180
days after the purchase or substantial completion of the construction of such
assets and shall at all times be confined solely to the assets so purchased or
acquired, any additions and accessions thereto and any proceeds therefrom, (ii)
at no time shall the aggregate principal amount of the outstanding Indebtedness
secured thereby be increased, except in connection with the purchase of
additions and accessions thereto and except in respect of fees and other
obligations in respect of such Indebtedness and (iii)(A) the aggregate
outstanding principal amount of Indebtedness secured thereby (determined on a
per asset basis in the case of any additions and accessions) shall not at the
time such Security Agreement is entered into exceed 100% of the purchase price
to the Company or any Restricted Subsidiary of the assets subject thereto or (B)
the Indebtedness secured thereby shall be with recourse solely to the assets so
purchased or acquired, any additions and accessions thereto and any proceeds
therefrom.
"QIB" means a "qualified institutional buyer" as defined
in Rule 144A.
"Qualified Stock" of any Person means any and all Capital
Stock of such Person, other than Disqualified Stock.
"Redemption Date," when used with respect to any Security to
be redeemed, in whole or in part, 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.
"Registrar" means IBJ Whitehall Bank & Trust Company and any
successor authorized by the Company to act as Registrar.
"Registration Statement" means the Registration Statement
as defined in the Note Registration Rights Agreement and Warrant
Registration Rights Agreement.
"Regular Record Date" for the interest payable on any Interest
Payment Date means the January 1 or July 1 (whether or not a Business Day), as
the case may be, next preceding such Interest Payment Date.
"Restricted Investment" means an Investment by the Company or
a Restricted Subsidiary in any Person other than a Restricted Subsidiary.
"Restricted Payment" has the meaning set forth in Section
1011 hereof.
"Restricted Subsidiary" means each direct or indirect
Subsidiary of the Company other than an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act.
"Securities" has the meaning stated in the first recital of
this Indenture and more particularly means any Securities authenticated and
delivered under this Indenture. For all purposes of this Indenture, the term
"Securities" shall include the Initial Securities and any Exchange Securities to
be issued and exchanged for any Initial Securities in accordance with the
Exchange Offer as provided for in the Note Registration Rights Agreement and
this Indenture. All Initial Securities and Exchange Securities shall vote
together as one series of Securities under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, and the rules and regulations thereunder.
"Security Register" has the meaning set forth in
Section 305 hereof.
"Shelf Registration Statement" means the Shelf Registration
Statement as defined in the Note Registration Rights Agreement.
"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 309 hereof.
"Standard & Poor's" means Standard & Poor's Ratings
Services, a division of McGraw Hill, Inc. and its successors.
<PAGE>
"Stated Maturity" means, when used with respect to any
Security or any installment of interest thereon, 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 and, when used with respect to any
other Indebtedness, means the date specified in the instrument governing such
Indebtedness as the fixed date on which the principal of such Indebtedness or
any installment of interest thereon is due and payable.
"Subordinated Indebtedness" means Indebtedness (including,
without limitation, secured Indebtedness) of the Company or a Subsidiary
Guarantor which by its express terms is subordinated or junior in right of
payment to the Securities or the Subsidiary Guarantee issued by such Subsidiary
Guarantor, as the case may be.
"Subsidiary" of a Person means any Person a majority of the
voting power of the Voting Stock of which is owned or controlled, directly or
indirectly, by such Person or by one or more other Subsidiaries of such Person,
or by such Person and one or more other Subsidiaries thereof.
"Subsidiary Guarantee" means a guarantee of the Securities by
a Restricted Subsidiary in accordance with the provisions of this Indenture.
"Subsidiary Guarantor" means those Restricted Subsidiaries set
forth on Schedule I to this Indenture and any other Restricted Subsidiary that
from time to time issues a Subsidiary Guarantee pursuant to the terms hereof
(subject to the release of any such Restricted Subsidiary from its obligations
as a Subsidiary Guarantor pursuant to the provisions hereof).
"Trust Indenture Act" or "TIA" means the Trust Indenture Act
of 1939, as amended, as in force at the date as of which this Indenture was
executed, except as provided in Section 905 hereof.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Unrestricted Subsidiary" means any Subsidiary of the Company
designated as such by the Board of Directors of the Company pursuant to and in
compliance with Section 1018 of this Indenture, and any Subsidiary of an
Unrestricted Subsidiary. Any such Designation may be revoked by a Board of
Resolution of the Company delivered to the Trustee, subject to the provisions of
Section 1018.
"U.S. Government Obligations" has the meaning set forth in
Section 1304 hereof.
"Voting Stock" of a Person means any class or classes of
Capital Stock of such Person then outstanding as to which the holders thereof
are entitled under ordinary circumstances (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees of
such Person.
"Warrants" means the warrants of the Company to purchase up
to an aggregate of 1,500,000 shares of Common Stock.
"Warrant Registration Rights Agreement" means the Warrant
Registration Rights Agreement between the Company, its subsidiaries and the
Initial Purchaser, dated as of March 2, 1999, relating to the Warrants and
Warrant Shares and attached hereto as Exhibit C.
"Warrant Shares" means the shares of Common Stock issued or
issuable upon the exercise of the Warrants.
"Wholly Owned Restricted Subsidiary" means any Restricted
Subsidiary with respect to which all of the outstanding Voting Stock (other than
directors' qualifying shares) is owned, directly or indirectly, by the Company.
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 an Officers' Certificate stating that all conditions
precedent, if any, provided for in this Indenture (including any covenant
compliance with which constitutes a condition precedent) relating to the
proposed action have been complied with and an Opinion of Counsel stating that
in the opinion of such counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or request, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than pursuant to
Section 1007(a) hereof) 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;
<PAGE>
(c) a statement that, in the opinion of each such individual,
he or she 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 of the Company may be
based, insofar as it relates to legal matters, upon a certificate 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 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 that the information with respect to such
factual matters is in the possession of the Company, unless such counsel knows
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.
(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 (including but not limited to an electronic
transmission of an agent's message or other consent pursuant to the Depositary's
Automated Tender Offer Program or any similar procedure); 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 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 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 that the Trustee deems sufficient.
(c)......The principal amount and serial numbers of
Securities held by any Person, and the date of holding the same shall be proved
by the Security Register.
(d)......If the Company shall solicit from the Holders of
Securities any request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may, at its option, by or pursuant to a Board
Resolution, fix in advance a record date for the determination of Holders
entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Company shall have no obligation to do so.
Notwithstanding TIA Section 316(c), such record date shall be the record date
specified in or pursuant to such Board Resolution, which shall be a date not
earlier than the date 30 days prior to the first solicitation of Holders
generally in connection therewith and not later than the date such solicitation
is completed. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other Act may be given
before or after such record date, but only the Holders of record at the close of
business on such record date shall be deemed to be Holders for the purposes of
determining whether Holders of the requisite proportion of Outstanding
Securities have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and for that
purpose the Outstanding Securities shall be computed as of such record date;
provided that no such authorization, agreement or consent by the Holders on such
record date shall be deemed effective unless it shall become effective pursuant
to the provisions of this Indenture not later than eleven months after the
record date.
<PAGE>
(e)......Any request, demand, authorization, direction,
notice, consent, waiver or other 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 thereof 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)......For all purposes of this Indenture, all Initial
Securities and Exchange Securities shall vote together as one series of
Securities under this Indenture.
SECTION 105. Notices, Etc., to Trustee, Company.
Any request, application, demand, authorization, direction,
notice, consent, waiver or Act of Holders or other document 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 and hand delivered or mailed, first-class postage
prepaid, to or with the Trustee at its Corporate Trust Office,
Attention: Corporate Trust Department, or sent by facsimile to the
Trustee at (212) 858-2952 (with receipt confirmed by telephone at (212)
858-2000); 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 Waste Systems International,
Inc., Lexington Office Park, 420 Bedford Street, Lexington,
Massachusetts 02173 Attention: President, or sent by facsimile to the
Company at (781) 862-2929 (with receipt confirmed by telephone at (781)
862-3000), or at any other address or facsimile number previously
furnished in writing to the Trustee by the Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice of any event to
Holders by the Company or the Trustee, 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 last
address as it appears in the Security Register, not later than the latest date,
and not earlier than the earliest date, prescribed for the giving of such
notice. In any case where notice to Holders is given by mail, neither the
failure to mail such 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. Any notice mailed to a Holder in the manner herein prescribed
shall be conclusively deemed to have been received by such Holder, whether or
not such Holder actually receives such notice. 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 or irregularities in
regular mail service or by reason of any other cause, it shall be impracticable
to mail notice of any event to Holders when such notice is required to be given
pursuant to any provision of this Indenture, then any manner of giving such
notice shall be deemed to be a sufficient giving of such notice for every
purpose hereunder.
SECTION 107. Conflict of Any Provision of Indenture with
Trust Indenture Act.
If and to the extent that any provision of this Indenture
limits, qualifies or conflicts with the duties imposed by Sections 310 to 318,
inclusive, of the Trust Indenture Act, or conflicts with any provision (an
"incorporated provision") required by or deemed to be included in this Indenture
by operation of such Trust Indenture Act sections, such imposed duties or
incorporated provision shall control.
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.
Articles and Sections referred to herein shall refer to such Articles and
Sections as set forth herein, unless otherwise specified.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company
and any Subsidiary Guarantor shall bind its respective 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.
<PAGE>
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, any Paying
Agent, any Registrar and their successors hereunder, and the Holders, 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 NEW YORK WITHOUT REGARD TO
CONFLICT OF LAWS PROVISIONS TO THE EXTENT THAT THE APPLICATION OF THE LAW OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. Upon the issuance of the
Exchange Securities, if any, or the effectiveness of the Exchange Offer
Registration Statement (as defined herein) or, under certain circumstances, the
effectiveness of the Shelf Registration Statement (as defined herein), this
Indenture shall be subject to the provisions of the Trust Indenture Act, that
are required to be part of this Indenture and shall, to the extent applicable,
be governed by such provisions.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date,
date established for payment of Defaulted Interest pursuant to Section 309
hereof, Stated Maturity or Maturity, Change of Control Purchase Date or Asset
Sale Purchase Date with respect to any Security or other date on which
principal, premium or interest in respect or the Securities is due, shall not be
a Business Day, then (notwithstanding any other provision of this Indenture or
of the Securities) payment of principal (or premium, if any) or interest 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,
Redemption Date, date established for payment of Defaulted Interest pursuant to
Section 309 hereof, Stated Maturity or Maturity, Change of Control Purchase
Date, Asset Sale Purchase Date or such other date; provided that no interest
shall accrue for the period from and after such Interest Payment Date or other
such day, Redemption Date, date established for payment of Defaulted Interest
pursuant to Section 309 hereof, Stated Maturity or Maturity, Change of Control
Purchase Date, Asset Sale Purchase Date or such other date, as the case may be,
to the next succeeding Business Day.
SECTION 114. Consent to Jurisdiction and Service of Process.
The Company and each of the Subsidiary Guarantors agrees that
any legal suit, action or proceeding brought by any party to enforce any rights
under or with respect to this Indenture or the Securities may be instituted in
any state or federal court in The City of New York and waives to the fullest
extent permitted by law any objection which it may now or hereafter have to the
laying of venue of any such suit, action or proceeding and irrevocably submits
to the non-exclusive jurisdiction of any such court in any such suit, action or
proceeding. The Company and each of the Subsidiary Guarantors hereby irrevocably
designates and appoints CT Corporation System as the Company's and such
Subsidiary Guarantor's authorized agent to receive and forward on its behalf
service of any and all process which may be served in any such suit, action or
proceeding in any such court and agrees that service of process upon CT
Corporation System at its office at 1633 Broadway, New York, New York 10019, (or
such other address in the State of New York as the Company may designate by
written notice to the Trustee) and written notice of such service to the Company
and any Subsidiary Guarantor marked or delivered to CT Corporation System at its
address set forth herein shall be deemed in every respect effective service of
process upon the Company and such Subsidiary Guarantor in any such suit, action
or proceeding and shall be taken and held to be valid personal service upon the
Company. Nothing in this Section 114 shall affect the right of any party hereto
to serve process in any manner permitted by law or limit the right of any party
hereto to bring proceedings against the Company or any Subsidiary Guarantor in
the courts of any jurisdiction or jurisdictions. The Company and each of the
Subsidiary Guarantors further agrees to take any and all action, including the
execution and filing of any and all such documents and instruments as may be
necessary to continue such designation and appointment of CT Corporation System
in full force and effect so long as this Indenture or any of the Securities
shall be outstanding. To the extent that the Company or any Subsidiary Guarantor
has or hereafter may acquire any immunity from jurisdiction of any court or from
any legal process (whether through service of notice, attachment prior to
judgment, attachment in aid of execution, executor or otherwise) with respect to
itself or its property, the Company and such Subsidiary Guarantor hereby
irrevocably waive such immunity in respect of its obligations under this
Indenture, the Securities and the applicable Subsidiary Guarantee, to the extent
permitted by law.
ARTICLE TWO
<PAGE>
SECURITY FORMS
SECTION 201. Forms Generally.
The Securities and the Trustee's certificate of authentication
shall be in substantially the form annexed hereto as Exhibit A, 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 the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution of the Securities. Any portion of the text of
any Security may be set forth on the reverse thereof, with an appropriate
reference thereto on the face of the Security.
The definitive Securities shall be printed, lithographed or
engraved on steel-engraved borders or may be produced in any other manner, all
as determined by the officers of the Company executing such Securities, as
evidenced by their execution of such Securities.
The terms and provisions contained in the form of the
Securities annexed hereto as Exhibit A shall constitute, and are hereby
expressly made, a part of this Indenture. To the extent applicable, the Company
and the Trustee, by their execution and delivery of this Indenture, expressly
agree to such terms and provisions and to be bound thereby.
Securities shall be issued initially in the form of one
permanent global Note in registered form substantially in the form set forth in
Exhibit A (the "Global Security"), registered in the name of the nominee of the
Depositary, deposited with the Trustee, as custodian for the Depositary, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount of the Global Security may from time to
time be increased or decreased by adjustments made on the records of the
Trustee, as custodian for the Depositary or its nominee, as hereinafter
provided.
Securities offered and sold in the form of permanent
certificated Securities in registered form shall be in substantially the form
set forth in Exhibit A (the "Physical Securities"), except that the legends of
such Securities shall not contain language which pertains to the Global
Security.
SECTION 202. Restrictive Legends.
Unless and until an Initial Security is sold under an
effective Shelf Registration Statement or an Initial Security is exchanged for
an Exchange Security in connection with an effective Exchange Offer Registration
Statement, in each case pursuant to the Note Registration Rights Agreement, the
Global Security and any Physical Securities shall bear the legend, set forth
below on the face thereof (the "Private Placement Legend"):
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY
EVIDENCED HEREBY (1) BY ITS ACQUISITION HEREOF REPRESENTS THAT IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) AND (2) IS HEREBY NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER OR ANOTHER EXEMPTION
UNDER THE SECURITIES ACT. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE ISSUER THAT (X) SUCH SECURITY MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (i)(a) TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, OR (c) IN
ACCORDANCE WITH ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL IF THE COMPANY SO REQUESTS), (ii) TO THE COMPANY OR (iii)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (Y) THE HOLDER
WILL, AND WILL REQUIRE EACH SUBSEQUENT HOLDER TO, NOTIFY ANY PURCHASER
FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET
FORTH IN (X) ABOVE."
Each Global Security, whether or not an Initial Security,
shall also bear the following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH
THE RESTRICTIONS SET FORTH IN SECTIONS 306 AND 307 OF THE INDENTURE.
<PAGE>
ARTICLE THREE
<PAGE>
THE SECURITIES
SECTION 301. Title and Terms.
The Initial Securities shall be known and designated as the
"11 1/2% Senior Notes due 2006" and the Exchange Securities shall be known and
designated as the "11 1/2% Senior Notes due 2006, Series B." The Stated Maturity
of the Securities shall be January 15, 2006, and they shall bear interest at the
rate of 11 1/2% per annum (subject to adjustments as set forth below) from March
2, 1999, or from the most recent Interest Payment Date to which interest has
been paid or duly provided for, payable semiannually on January 15 and July 15
in each year, commencing July 15, 1999, until the principal thereof is paid or
duly provided for, to the Person in whose name the Security (or any predecessor
Security) is registered at the close of business on the January 1 or July 1 next
preceding such Interest Payment Date.
In the event that the Adjusted Stockholders' Equity is not at
least $40,000,000 on each of December 31, 1999, June 30, 2000 and December 31,
2000, the rate at which the Securities bear interest shall be adjusted on the
date following each such date to 13%, 14% and 15% per annum, respectively,
except as such rate may be adjusted pursuant to the Note Registration Rights
Agreement and Warrant Registration Rights Agreement in connection with a default
of the Company's obligations thereunder to file, cause to be declared effective
and keep effective registration statements filed with the Commission.
Pursuant the terms of the Note Registration Rights Agreement
attached hereto as Exhibit B and the Warrant Registration Rights Agreement
attached hereto as Exhibit C, the rate at which the Securities bear interest is
subject to an additional increase based upon the terms and conditions specified
in the form of Security attached hereto as Exhibit A.
The principal of (and premium, if any), and interest on the
Securities shall be payable, and the Securities shall be exchangeable and
transferable, at the office or agency of the Company in The City of New York
maintained for such purposes, (which initially shall be the office of the
Trustee located at One State Street, New York, New York 10004 or, at the option
of the Company, interest may be paid by check mailed to the address of the
Person entitled thereto as such address shall appear on the Security Register;
provided that all payments with respect to each Global Security, as well as
Physical Securities the Holders of which have given wire transfer instructions
to the Trustee (or other Paying Agent) by the Regular Record Date for such
payment, shall be required to be made by wire transfer of immediately available
funds to the accounts specified by the Holders thereof.
Initial Securities that remain outstanding after the
consummation of the Exchange Offer and Exchange Securities issued in connection
with the Exchange Offer will be treated as a single class of securities under
this Indenture.
The Securities shall be redeemable as provided in Article
Eleven.
SECTION 302. Denominations.
The Securities shall be issuable only in registered form,
without coupons, and only in denominations of $10,000 and integral multiples
thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is $100,000,000. The Securities
shall be executed on behalf of the Company by its Chairman, Chief Executive
Officer and President, its Chief Financial Officer or any Vice President. The
signature of any of these officers on the Securities may be manual or facsimile
signatures of the present or any future such authorized officer and may be
imprinted or otherwise reproduced on the Securities.
Securities bearing the manual 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.
<PAGE>
On the date hereof, after the execution and delivery of this
Indenture, the Company shall deliver Initial Securities in the aggregate
principal amount of $100,000,000 executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Initial Securities directing the Trustee to authenticate the
Initial Securities and certifying that all conditions precedent to the issuance
of Securities contained herein have been fully complied with, and the Trustee in
accordance with such Company Order shall authenticate and deliver such Initial
Securities. On Company Order, the Trustee shall authenticate for original issue
Exchange Securities in an aggregate principal amount not to exceed $100,000,000;
provided that such Exchange Securities shall be issuable only upon the valid
surrender for cancellation of Initial Securities of a like aggregate principal
amount in accordance with an Exchange Offer pursuant to the Note Registration
Rights Agreement and a Company Order delivered to the Trustee for the
authentication and delivery of such Exchange Securities and certifying that all
conditions precedent to the issuance of such Securities have been complied with
(including the effectiveness of the Exchange Offer Registration Statement
related thereto). In each case, the Trustee shall be entitled to receive an
Officers' Certificate and an Opinion of Counsel of the Company to the effect
that the form of the securities being delivered to the Trustee for
authentication comply with the terms and provisions of this Indenture, that all
terms and provisions of this Indenture have been complied with for the issuance
of Exchange Securities or such other matters as the Trustee may reasonably
request in connection with such authentication of Securities. Each Company Order
shall specify the amount of Securities to be authenticated and the date on which
the original issue of Securities is to be authenticated.
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
in Exhibit A hereto duly executed by the Trustee by manual signature of an
authorized officer, 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 this Indenture.
In case the Company, pursuant to Article Eight, shall be
consolidated or merged with or into any other Person or shall convey, transfer,
lease or otherwise dispose of its properties and assets substantially as an
entirety to any Person, and the successor Person resulting from such
consolidation, or surviving such merger, or into which the Company shall have
been merged, or the Person which shall have received a conveyance, transfer,
lease or other disposition as aforesaid, shall have executed an indenture
supplemental hereto with the Trustee pursuant to Article Eight, any of the
Securities authenticated or delivered prior to such consolidation, merger,
conveyance, transfer, lease or other disposition may, from time to time, at the
request of the successor Person, be exchanged for other Securities executed in
the name of the successor Person with such changes in phraseology and form as
may be appropriate as determined by the Company or the successor Person, but
otherwise in substance of like tenor as the Securities surrendered for such
exchange and of like principal amount; and the Trustee, upon Company Request or
the successor Person, shall authenticate and deliver Securities as specified in
such request for the purpose of such exchange. If Securities shall at any time
be authenticated and delivered in any new name of a successor Person pursuant to
this Section in exchange or substitution for or upon registration of transfer of
any Securities, such successor Person, at the option of the Holders but without
expense to them or the Trustee, shall provide for the exchange of all Securities
at the time Outstanding for Securities authenticated and delivered in such new
name.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate the Securities (an "Authenticating
Agent"). Unless limited by the terms of such appointment, an Authenticating
Agent may authenticate Securities whenever the Trustee may do so. Each reference
in this Indenture to authentication by the Trustee includes authentication by
such agent. An Authenticating Agent has the same rights as any Registrar, Paying
Agent or agent for service of notices and demands.
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 Company's officers executing such Securities may determine, as conclusively
evidenced by their execution of such Securities.
If temporary Securities are issued, the Company shall 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 the office or agency of the Company designated for such purpose
pursuant to Section 1002 hereof, 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 a
like principal amount of definitive Securities 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.
<PAGE>
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 hereof being
herein sometimes 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 Security
Register shall be in written form or any other form capable of being converted
into written form within a reasonable time. At all reasonable times, the
Security Register shall be open to inspection by the Trustee. The Trustee is
hereby initially appointed as "Registrar" for the purpose of registering
Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security at
the office or agency of the Company designated pursuant to Section 1002 hereof,
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 denomination or denominations of a like aggregate principal
amount.
At the option of the Holder, Securities may be exchanged for
other Securities of any authorized denomination and of a like aggregate
principal amount, upon surrender of the Securities to be exchanged at such
office or agency. Whenever any Securities are so surrendered for exchange
(including an exchange of Initial Securities for Exchange Securities), the
Company shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive; provided
that no exchange of Initial Securities for Exchange Securities shall occur until
an Exchange Offer Registration Statement shall have been declared effective by
the Commission, the Trustee shall have received an Officers' Certificate and an
Opinion of Counsel confirming that the Exchange Offer Registration Statement has
been declared effective by the Commission and an Opinion of Counsel stating that
the Exchange Securities are entitled to the benefits of this Indenture
(including the Subsidiary Guarantees hereunder), and the Initial Securities to
be exchanged for the Exchange Securities shall be canceled by the Trustee.
All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company, evidencing
the same indebtedness, 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 Registrar)
be duly endorsed, or be accompanied by a written instrument of transfer, in form
satisfactory to the Company and the 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 or redemption of Securities, but the Company or the
Registrar 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 Sections
304, 906, 1012, 1013 or 1108 hereof not involving any transfer.
Neither the Company nor the Registrar shall be required to
issue, register the transfer of or exchange any Security during a period
beginning at the opening of business 15 days before the selection of Securities
to be redeemed under Section 1104 hereof and ending at the close of business on
the day of such mailing of the relevant notice of redemption.
Notwithstanding anything to the contrary contained herein, the
Trustee shall have no duty whatsoever and no liability whatsoever with respect
to compliance with federal or state securities laws, rules or regulations.
SECTION 306. Book-Entry Provisions for Global Securities.
(a)......The Global Security initially shall (i) be registered
in the name of the Depositary or the nominee of the Depositary, (ii) be
deposited with, or on behalf of, the Depositary or with the Trustee, as
custodian for such Depositary, and (iii) bear legends as set forth in Section
202 hereof. Except as set forth below, owners of beneficial interests in a
Global Security will not be entitled to receive physical delivery of Physical
Securities in registered form without interest coupons.
Members of, or participants in, the Depositary ("Agent
Members") shall have no rights under this Indenture with respect to any Global
Security held on their behalf by the Depositary, or the Trustee as its
custodian, or under the Global Security, and the Depositary shall be treated by
the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depositary
(or shall impair, as between the Depositary and its Agent Members, the operation
of customary practices governing the exercise of the rights of a holder of any
Security), and the Company, the Trustee or any agent of the Company or the
Trustee shall be entitled to rely thereon in accordance with such certification,
proxy or other authorization in accordance with its terms.
<PAGE>
(b)......Transfers of a Global Security shall be limited to
transfers of such Global Security in whole, but not in part, to the Depositary,
its successors or their respective nominees. Interests of beneficial owners in a
Global Security may be transferred in accordance with the rules and procedures
of the Depositary and the provisions of Section 307 hereof. In addition,
Physical Securities shall be transferred to all beneficial owners in exchange
for their beneficial interests in the Global Security respectively, in
accordance with instructions from the Depositary, if (i) the Depositary notifies
the Company and the Trustee that it is unwilling or unable to continue as
Depositary for the Global Security or has ceased to be a clearing agency
registered under the Exchange Act and, in either case, a successor depositary is
not appointed by the Company within 90 days of such notice, (ii) the Company, in
its sole discretion, notifies the Trustee in writing that it elects to cause the
issuance of the Physical Securities, or (iii) an Event of Default has occurred
and is continuing and is known to the Trustee and the Registrar has received a
request from the Depositary.
(c)......In connection with any transfer of a portion of the
beneficial interests in a Global Security to beneficial owners pursuant to
subsection (b) of this Section, the Registrar shall reflect on its books and
records the date and a decrease in the principal amount of the Global Security
in an amount equal to the principal amount of the beneficial interest in such
Global Security to be transferred, and the Company shall execute, and the
Trustee shall authenticate and deliver, one or more Physical Securities of like
tenor and amount.
(d)......In connection with the transfer of the entire Global
Security to beneficial owners pursuant to subsection (b) of this Section, the
Global Security shall be deemed to be surrendered to the Trustee for
cancellation, and the Company shall execute, and the Trustee shall authenticate
and deliver, to each beneficial owner identified by the Depositary in exchange
for its beneficial interest in the Global Security identified by the Depositary
an equal aggregate principal amount of Physical Securities of authorized
denominations.
(e)......Any Physical Security delivered in exchange for an
interest in the Global Security pursuant to subsection (b) of this Section
shall, except as otherwise provided by paragraph (c) of Section 307 hereof, bear
the applicable legend regarding transfer restrictions applicable to the Physical
Security set forth in Section 202 hereof.
(f)......The registered Holder of a Global Security may grant
proxies and otherwise authorize any Person, including Agent Members and Persons
that may hold interests through Agent Members, to take any action which a Holder
is entitled to take under this Indenture or the Securities.
SECTION 307. Special Transfer Provisions.
The Trustee is entitled to rely upon the certificates
delivered pursuant to this Section 307 and is irrevocably authorized to produce
such certificates or copies thereof to any interested party in any
administrative or legal proceeding or official inquiry with respect to the
matters covered thereby.
Unless and until the Trustee has received a certification from
the Company that (i) an Initial Security is sold under an effective Shelf
Registration Statement or (ii) an Initial Security is exchanged for an Exchange
Security in connection with an effective Registration Statement, in each case
pursuant to the Note Registration Rights Agreement, the following provisions
shall apply:
(a)......Transfers to QIBs. The following provisions shall
apply with respect to the registration of any proposed transfer of a Physical
Security or an interest in the Global Security to a QIB:
(i) If the Security to be transferred consists of (x) Physical
Securities, the Registrar shall register the transfer if such transfer
is being made by a proposed transferor who has checked the box provided
for on the form of Initial Security stating, or has otherwise advised
the Company and the Registrar in writing, that the sale has been made
in compliance with the provisions of Rule 144A to a transferee who has
signed the certification provided for on the form of Initial Security
stating, or has otherwise advised the Company and the Registrar in
writing, that it is purchasing the Initial Security for its own account
or an account with respect to which it exercises sole investment
discretion and that it, or the Person on whose behalf it is acting with
respect to any such account, is a QIB within the meaning of Rule 144A,
and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the
Company as it has requested pursuant to Rule 144A or has determined not
to request such information and that it is aware that the transferor is
relying upon its foregoing representations in order to claim the
exemption from registration provided by Rule 144A or (y) an interest in
the Global Security, the transfer of such interest may be effected only
through the book-entry system maintained by the Depositary.
(ii) If the proposed transferee is an Agent Member, and the
Initial Security to be transferred consists of Physical Securities,
upon receipt by the Registrar of the documents referred to in clause
(i) and instructions given by the Depositary in accordance with the
Depositary's and the Registrar's procedures therefor, the Registrar
shall reflect on its books and records the date and an increase in the
principal amount of the Global Security in an amount equal to the
principal amount of the Physical Securities to be transferred, and the
Trustee shall cancel the Physical Security so transferred.
<PAGE>
(b)......Other Transfers of Physical Securities or Interests
in the Global Security. The following provisions shall apply with respect to any
other transfer of interests in the Global Security or Physical Securities:
(i) prior to the removal of the Private Placement Legend from
the Global Security or a Physical Security pursuant to Section 202
hereof, the Registrar shall refuse to register such transfer unless
such transfer complies with Section 306(b); and
(ii) after such removal, the Registrar shall register the
transfer of any such Security without requiring any additional
certification.
(c)......Private Placement Legend. Upon the transfer, exchange
or replacement of Securities not bearing the Private Placement Legend, the
Registrar shall deliver Securities that do not bear the Private Placement
Legend. Upon the transfer, exchange or replacement of Securities bearing the
Private Placement Legend, the Registrar shall deliver only Securities that bear
the Private Placement Legend unless either (i) the Company directs the Trustee
pursuant to a Company Order to remove such legend or (ii) there is delivered to
the Registrar an Opinion of Counsel reasonably satisfactory to the Company to
the effect that neither such legend nor the related restrictions on transfer are
required in order to maintain compliance with the provisions of the Securities
Act.
(d)......General. By its acceptance of any Security bearing
the Private Placement Legend, each Holder of such a Security acknowledges the
restrictions on transfer of such Security set forth in this Indenture and in the
Private Placement Legend and agrees that it will transfer such Security only as
provided in this Indenture.
The Registrar shall retain as required by law copies of all
letters, notices and other written communications received pursuant to Section
306 hereof or this Section 307. The Company shall have the right to inspect and
make copies of all such letters, notices or other written communications at any
reasonable time upon the giving of reasonable written notice to the Registrar.
SECTION 308. Mutilated, Destroyed, Lost and
Stolen Securities.
If (i) any mutilated Security is surrendered to the Trustee or
the Registrar, or (ii) the Company and the Trustee receive evidence to their
satisfaction of the destruction, loss or theft of any Security, and there is
delivered to the Company and the Trustee such security or indemnity as may be
required by them to save each 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 upon Company Order the Trustee
shall authenticate and deliver, in exchange for any such mutilated Security or
in lieu of any such destroyed, lost or stolen Security, a new Security of like
tenor and principal amount, 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 mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated,
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all 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 309. 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 such Security is registered at the close of business on the
Regular Record Date for such interest at the office or agency of the Company in
The City of New York maintained for such purposes (which initially shall be the
office of the Trustee located at One State Street, New York, New York 10004)
pursuant to Section 1002 hereof) or, at the option of the Company, interest may
be paid by check mailed to the address of the Person entitled thereto pursuant
to 310 hereof as such address appears in the Security Register; provided that
all payments with respect to a Global Security and Physical Securities the
Holders of which have given wire transfer instructions to the Trustee (or other
Paying Agent) by the Regular Record Date shall be required to be made by wire
transfer of immediately available funds to the accounts specified by the Holders
thereof.
<PAGE>
Any interest on the Securities shall be considered punctually
paid or duly provided for if the Paying Agent holds immediately available funds
no later than 11:00 A.M. New York City time on the applicable Interest Payment
Date. Any interest on any Security which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date shall forthwith cease to be
payable to the Holder on the Regular Record Date by virtue of having been such
Holder, and such defaulted interest and (to the extent lawful) interest on such
defaulted interest at the rate borne by the Securities (such defaulted interest
and interest thereon herein collectively called "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 payment, 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
given in the manner provided for in Section 106 hereof, 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 given, 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.
If the Company shall be required to pay any additional
interest pursuant to Section 301 hereof or pursuant to the terms of the Note
Registration Rights Agreement or Warrant Registration Rights Agreement, it shall
deliver an Officers' Certificate to the Trustee setting forth the new interest
rate and the period for which such rate is applicable.
SECTION 310. Persons Deemed Owners.
Prior to the 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 in the Security
Register as the owner of such Security for the purpose of receiving payment of
principal of (and premium, if any) and (subject to Sections 305 and 309 hereof)
interest on such Security and for all other purposes whatsoever, whether or not
such Security be overdue, and none of the Company, any Subsidiary Guarantor or
the Trustee or any agent of the Company, any Subsidiary Guarantor or the Trustee
shall be affected by notice to the contrary.
SECTION 311. Cancellation.
All Securities surrendered for payment, redemption,
registration of transfer or exchange 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 may deliver to the Trustee (or
to any other Person for delivery to the Trustee) for cancellation any Securities
previously authenticated hereunder which the Company has not issued and sold,
and all Securities so delivered shall be promptly cancelled by the Trustee. If
the Company shall so acquire any of the Securities, however, such acquisition
shall not operate as a redemption or satisfaction of the indebtedness
represented by such Securities unless and until the same are surrendered to the
Trustee for cancellation. 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 by the Trustee in accordance with its customary
procedures and certification of their disposal delivered to the Company unless
by Company Order the Company shall direct that cancelled Securities be returned
to it.
<PAGE>
SECTION 312. CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers
(if then generally in use) and, if so, the Trustee shall use such "CUSIP"
numbers in notices of redemption as a convenience to Holders; provided that any
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Securities or as contained in any notice
of a redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers.
SECTION 313. Computation of Interest.
Interest on the Securities shall be computed on the basis of a
360-day year comprised of twelve 30-day months.
<PAGE>
ARTICLE FOUR
<PAGE>
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 surviving rights of registration of transfer or exchange of the
Securities and as expressly provided for herein or pursuant hereto) 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 the Securities theretofore authenticated and
delivered (other than mutilated, destroyed, lost or stolen
Securities that have been replaced or paid as provided in
Section 308 and Securities that have been subject to
defeasance under Article Thirteen) have been delivered to the
Trustee for cancellation; or
(ii) all Securities not theretofore delivered t
the Trustee for cancellation have become due and payable, whether
(A) at Stated Maturity, or
(B) the Company has irrevocably notified the
Trustee to call such Securities for redemption under
arrangements for the giving of notice of redemption
by the Trustee in the name, and at the expense, of
the Company,
and the Company or any Subsidiary Guarantor, as the case may be, in the case of
(A) or (B) above, has irrevocably deposited or caused to be deposited with the
Trustee funds in trust for the purpose in 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, on) and
interest on the Securities to the date of such deposit (in the case of
Securities that have become due and payable) or to the Stated Maturity or
Redemption Date, as the case may be; and
(b) the Company or any Subsidiary Guarantor, as the
case may be, has paid or caused to be paid all sums payable hereunder by the
Company.
The Trustee is required to acknowledge satisfaction and discharge of
this Indenture, and the obligations of the Company hereunder and under the
Securities, upon demand of the Company or any Subsidiary Guarantor, as the case
may be, upon delivery to the Trustee of an Officers' Certificate and an Opinion
of Counsel each at the expense of the Company or such Subsidiary Guarantor and
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 606 and, if money shall
have been deposited with the Trustee pursuant to subclause (ii) of clause (a) of
this Section 401, 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 Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee; but such money need not be segregated from other funds except to the
extent required by law.
<PAGE>
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 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 for 30 days in the payment when due of
interest on any Security;
(b) Default in the payment when due of principal of or
premium, if any, with respect to any Security at its Stated Maturity,
upon optional redemption, upon required repurchase, upon declaration or
otherwise;
(c) failure by the Company or any of its Restricted
Subsidiaries to comply with Sections 801, 1010, 1011, 1012 or 1013
hereof;
(d) failure by the Company to observe or perform any of its
non-payment covenants or agreements contained herein (other than a
default in the performance, or breach, of a covenant or agreement
specifically described in (c) above) and such default continues for 30
days after notice;
(e) Default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced
any Indebtedness for money borrowed by the Company or any of its
Restricted Subsidiaries (or the payment of which is Guaranteed by the
Company or any of its Restricted Subsidiaries) whether such
Indebtedness or Guarantee now exists, or is created after the date of
this Indenture, if that default:
(i) is caused by a failure to pay principal of or
premium, if any, or interest on such Indebtedness prior to the
expiration of the grace period provided in such Indebtedness
on the date of such default (a "Payment Default"); or
(ii) results in the acceleration of such Indebtedness
prior to its express maturity,
and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the
maturity of which has been so accelerated, aggregates $5.0 million or
more;
(f) any judgment or decree for the payment of money in excess
of $5.0 million (to the extent not covered by insurance) is entered
against the Company or a Restricted Subsidiary, remains outstanding for
a period of 60 days after such judgment or decree becomes final and
non-appealable, and is not discharged, waived or the execution thereof
stayed for a period of 10 days after notice (the "judgment default
provision");
(g) except as permitted under this Indenture, any Subsidiary
Guarantee shall be held in any judicial proceeding to be unenforceable
or invalid or shall cease for any reason to be in full force and effect
or any Subsidiary Guarantor, or any Person acting on behalf of any
Subsidiary Guarantor, shall deny or disaffirm its obligations under its
Subsidiary Guarantee;
(h) entry of a decree or order by a court having jurisdiction
in the premises adjudging the Company or any Subsidiary Guarantor a
bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustments or composition of or
in respect of the Company or any Subsidiary Guarantor under the Federal
Bankruptcy Code or any other applicable federal or state law, or
appointing a receiver, liquidator, assignee, trustee, sequestrator (or
other similar official) of the Company or any Subsidiary Guarantor 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 unstayed and in effect for a period of 90 consecutive days; and
(i) institution by the Company or any Subsidiary Guarantor of
proceedings to be adjudicated a bankrupt or insolvent, or the consent
by it to the institution of bankruptcy or insolvency proceedings
against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under the Federal Bankruptcy Code or
any other applicable federal or state law, or the consent by it to the
filing of any such petition or to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator (or other similar official)
of the Company or any Subsidiary Guarantor 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.
<PAGE>
However, a default under clause (d), (e) or (f) above will not
constitute an Event of Default until the Trustee or the Holders of 25%
in principal amount of the Outstanding Securities notify the Company of
the Default and the Company does not cure such Default within the time
specified after receipt of such notice.
SECTION 502. Acceleration of Maturity; Rescission and
Annulment.
(a)......If an Event of Default (other than as specified in
clauses (h) and (i) of Section 501 hereof) occurs and is continuing, the Trustee
by notice to the Company may, and the Trustee at the request of the Holders of
not less than 25% in aggregate principal amount of the Securities then
outstanding shall, declare the principal of and accrued and unpaid interest, if
any, on all of the outstanding Securities immediately due and payable. Upon such
a declaration, such principal and accrued and unpaid interest shall become due
and payable immediately. If an Event of Default specified in clause (h) or (i)
of Section 501 hereof occurs and is continuing, then the principal of and
accrued and unpaid interest, if any, on all of the outstanding Securities shall
ipso facto become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Holder.
In the case of any Event of Default occurring by reason of any
willful action or inaction taken or not taken by or on behalf of the Company
with the intention of avoiding payment of the premium that the Company would
have had to pay if the Company then had elected to redeem the Securities
pursuant to Section 1101, an equivalent premium shall also become and be
immediately due and payable to the extent permitted by law upon the acceleration
of the Securities. If an Event of Default occurs prior to March 2, 2003 by
reason of any willful action (or inaction) taken (or not taken) by or on behalf
of the Company with the intention of avoiding the prohibition on redemption of
the Securities prior to March 2, 2003, then the premium payable pursuant to
Section 1101 shall also become immediately due and payable to the extent
permitted by law upon the acceleration of the Securities.
(b)......At any time after a declaration of acceleration under
this Indenture, but before a judgment or decree for payment of the money due has
been obtained by the Trustee, the Holders of a majority in aggregate principal
amount of the outstanding Securities, by written notice to the Company and the
Trustee, may (i) rescind such declaration and its consequences and (ii) on
behalf of the Holders of all of the Securities, waive any existing Event of
Default and its consequences, except a continuing Event of Default specified in
clause (b) of Section 501, if
(A) the Company has paid or deposited with the Trustee a
sum sufficient to pay
(1) all Defaulted Interest on all Securities,
(2) all unpaid principal of (and premium, if any, on)
any outstanding Securities that has become due
otherwise than by such declaration of acceleration
and interest thereon at the rate borne by the
Securities,
(3) to the extent that payment of such interest
is lawful, interest upon overdue
interest and overdue principal at the rate borne by
the Securities, and
(4) all sums paid or advanced by the Trustee
under this Indenture 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
amounts of principal of (or premium, if any, on) or interest
on the Securities that have become due solely by such
declaration of acceleration, have been cured or waived.
No such rescission or waiver shall affect any subsequent
default or impair any right consequent thereon.
Notwithstanding the preceding paragraph, in the event of a
declaration of acceleration in respect of the Securities because of an Event of
Default specified in Section 501(e) shall have occurred and be continuing, such
declaration of acceleration shall be automatically annulled if the indebtedness
that is the subject of such Event of Default has been discharged or the holders
thereof have rescinded their declaration of acceleration in respect of such
indebtedness, and written notice of such discharge or rescission, as the case
may be, shall have been given to the Trustee by the Company and countersigned by
the holders of the requisite percentage of such indebtedness or a trustee,
fiduciary or agent for such holders, within 30 days after such declaration of
acceleration in respect of the Securities, and no other Event of Default has
occurred during such 30-day period which has not been cured or waived during
such period.
<PAGE>
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee.
The Company and each Subsidiary Guarantor covenants that if
(a) default is made in the payment of any installment of
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 Stated Maturity thereof,
the Company and each Subsidiary Guarantor shall, upon demand of the Trustee, pay
to the Trustee 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 interest on any overdue principal (and premium, if any)
and, to the extent that payment of such interest shall be legally enforceable,
upon any overdue installment of 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 or any Subsidiary Guarantor, as the case may
be, fails to pay such amounts forthwith upon such demand, the Trustee, in its
own name 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, any such
Subsidiary Guarantor or any other obligor upon the Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company, any such Subsidiary Guarantor 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 the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to the Company or any other obligor upon the
Securities (including any Subsidiary Guarantor) or the property of the Company
or of such other obligor or their creditors, the Trustee (irrespective of
whether the principal of the Securities shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand on the Company for the payment of overdue principal,
premium, if any, or interest) shall be entitled and empowered, by intervention
in such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of
principal (and premium, if any) and interest owing and unpaid in
respect of the Securities and to file such other papers or documents as
may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and
of the Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other securities or
property payable or deliverable upon the conversion or exchange of such
securities or upon any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
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 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 606 hereof.
Nothing herein contained 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.
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 and 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 of 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.
<PAGE>
SECTION 506. 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 of 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 the payment of all amounts due the Trustee under
Section 606 hereof;
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; and
THIRD: The balance, if any, to the Company or as a court of
competent jurisdiction may direct.
SECTION 507. Limitation on Suits.
Except to enforce the right to receive payment of principal,
premium (if any) or interest when due, no Holder of any Securities 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
(including fees and expenses of its agents and counsel) 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 or more 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.
Notwithstanding any other provision in this Indenture, the
Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment, as provided herein (including, if applicable,
Article Thirteen) and in such Security of the principal of (and premium, if any)
and (subject to Section 309 hereof) 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 or affected 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 the last
paragraph of Section 308 hereof, 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.
<PAGE>
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 Five 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 not less than 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) the Trustee need not take any action which might involve
it in personal liability or be unjustly prejudicial to the Holders not
consenting.
Prior to taking any action hereunder, the Trustee shall be
entitled to indemnification satisfactory to it in its sole discretion against
all losses and expenses caused by taking or not taking such action.
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 of the
Securities, waive any past defaults hereunder, 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 Security Outstanding.
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 Event of Default or impair any right consequent
thereon.
SECTION 514. Waiver of Stay or Extension Laws.
The Company and each Subsidiary Guarantor covenant (to the
extent that they may lawfully do so) that they shall 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 and each Subsidiary Guarantor (to the extent that
they may lawfully do so) hereby expressly waive all benefit or advantage of any
such law and covenants so that they shall not hinder, delay or impede the
execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law had been enacted.
SECTION 515. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any
Security by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, 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, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorney's fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section shall not apply to 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 (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).
<PAGE>
ARTICLE SIX
THE TRUSTEE
SECTION 601. Notice of Defaults.
The Company shall deliver to the Trustee, within 60 days after
the end of each fiscal year, an Officer's Certificate indicating whether the
signers thereof know of any Default that occurred during the previous year. The
Company shall also deliver to the Trustee, within 30 days after the occurrence
thereof, written notice of any events which constitute an Event of Default.
If a Default or an Event of Default occurs and is continuing
and is known to the Trustee, the Trustee shall mail to each Holder of the
Securities in the manner and to the extent provided in TIA Section 313(c) notice
of the Default or Event of Default within 90 days after the occurrence thereof;
provided, however, that, except in the case of a Default or an Event of Default
in the payment of principal of (and premium, if any, on) or interest on any
Securities, the Trustee may withhold the notice to the Holders of the Securities
if its board of directors, a committee of its board of directors or a committee
of its trust officers in good faith determines that withholding such notice is
in the interests of the Holders of the Securities.
SECTION 602. Certain Rights of Trustee.
(a)......Prior to the occurrence of a Default or an Event of
Default of which the Trustee has been notified as provided in clause (c)(x) of
this Section below, or of which by that paragraph the Trustee is deemed to have
notice, and after the cure or waiver of all Defaults or Events of Default which
may have occurred and, as applicable, subject to the provisions of TIA Sections
315(a) through 315(d):
(i) the Trustee undertakes to perform only those duties and
obligations which are set forth specifically in this Indenture
and no other duties or obligations shall be implied to the
Trustee;
(ii) in the absence of bad faith on its part, the Trustee may
rely conclusively as to the truth of the statements and the
correctness of the opinions expressed therein upon
certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but in the
case of any such certificates or opinions which by any
provision hereof are required specifically to be furnished to
the Trustee, the Trustee shall be under a duty to examine the
same to determine whether they conform to the requirements of
this Indenture.
In case a Default or an Event of Default has occurred and is
continuing hereunder of which the Trustee has been notified, or is deemed to
have notice as provided in clause (c)(x) of this Section below, the Trustee
shall exercise those rights and powers vested in it by this Indenture and shall
use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of his own affairs.
(b)......No provisions of this Indenture shall be construed to
release the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) this paragraph shall not be construed to affect the
limitation of the Trustee's duties and obligations provided in
clause (a) of this Section 602 or the Trustee's right to rely
on the truth of statements and the correctness of opinions as
provided in clause (a)(ii) of this Section 602;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by any one of its officers, unless it shall
be established that the Trustee was negligent in ascertaining
the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than
a majority in principal amount of the Securities at the time
Outstanding relating to the time, method and place of
conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the
Trustee, under this Indenture.
c) Except as otherwise provided in subsections (a) and (b) above:
(i) the Trustee may conclusively rely and shall be protected
in acting or refraining from acting, pursuant to the terms of
this Indenture or otherwise, 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 Person or Persons;
(ii) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or
Company Order with sufficient detail as may be requested by
the Trustee and any resolution of the Board of Directors may
be sufficiently evidenced by a Board Resolution;
<PAGE>
(iii) 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 or an Opinion of
Counsel;
(iv) 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;
(v) 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 (including fees and expenses of its
agents and counsel) which might be incurred by it in
compliance with such request or direction;
(vi) the Trustee shall not be bound to make any investigation
into, and may conclusively rely upon, 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 and the Subsidiary Guarantors, personally or by agent
or attorney;
(vii) 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;
(viii) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and believed by it to
be authorized or within the discretion or rights or powers
conferred upon it by this Indenture; and
(ix) except for its certificate of authentication of the
Securities, the Trustee shall not be responsible for:
(A) any recital in this Indenture or in the
Securities,
(B) the validity, priority, recording, filing
or refiling of this Indenture or of
any supplemental indenture or financing
statement,
(C) any instrument or document of further
assurance or collateral assignment,
(D) the validity of the execution by the Company
and the Subsidiary Guarantors of
this Indenture, any supplemental indenture
or instruments or documents of
further assurance,
(E) the sufficiency of the security for the
Securities issued hereunder or
intended to be secured hereby,
(F) losses as the result of any investments
in any fund made at the direction of
the Company, or
(G) any disclosure in any offering memorandum or
similar document related to the Securities,
or compliance with any federal or state
securities laws, rules or regulations.
(x) except for those Events of Default specified in Sections
501(a) and (b) hereof, the Trustee shall not be required to
take notice, and shall not be deemed to have notice, of any
Default or Event of Default hereunder, unless the Trustee
shall be notified specifically of the Default or Event of
Default in a written instrument or document delivered to it by
the Company or by the Holders of at least 25% of the aggregate
principal amount of Securities then Outstanding. In the
absence of delivery of a notice satisfying those requirements,
the Trustee may assume conclusively that there is no Default
or Event of Default, except for those Events of Default
specified in Sections 501(a) and (b) hereof.
<PAGE>
(xi) the Trustee shall not be required to give any bond or
surety with respect to the execution of these trusts and
powers or otherwise in respect of the Securities.
(xii) the Registrar, Paying Agent and Authenticating Agent
shall be entitled to all of the protections to which the
Trustee is entitled hereunder.
(xiii) notwithstanding anything to the contrary herein, the
Trustee shall not be responsible or liable for the
appropriateness or compliance of the form of securities issued
representing any of the Securities with the terms and
provisions of this Indenture or any applicable federal or
state securities law, rule or regulation and the Trustee shall
solely rely on the Company to deliver to the Trustee
certificates for authentication which comply with the terms
and provisions of this Indenture and any applicable federal or
state securities law, rule or regulation, such delivery which
shall conclusively evidence such compliance.
The Trustee shall not be required 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.
SECTION 603. Trustee Not Responsible for Recitals or
Issuance of Securities.
The recitals contained herein and in the Securities, except
for the Trustee's certificates of authentication, shall be taken as the
statements of the Company and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture, any Subsidiary Guarantee or the Securities except
that the Trustee represents that it is duly authorized to execute and deliver
this Indenture, authenticate the Securities and perform its obligations
hereunder and, upon the effectiveness of the Registration Statement, that the
statements made by it in a Statement of Eligibility on Form T-1 supplied to the
Company are true and accurate, subject to the qualifications set forth therein.
The Trustee shall not be accountable for the use or application by the Company
of Securities or the proceeds thereof or any money paid to the Company or upon
the Company's direction under any provision of this Indenture. The Trustee shall
not be responsible for the use or application of any money received by any
Paying Agent other than the Trustee.
SECTION 604. May Hold Securities.
The Trustee, any Paying Agent, any Registrar or any other
agent of the Company or of the Trustee, in its individual or any other capacity,
may become the owner or pledgee of Securities and, subject to TIA Sections
310(b) and 311, may otherwise deal with the Company with the same rights it
would have if it were not Trustee, Paying Agent, Registrar or such other agent.
SECTION 605. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed with the Company.
SECTION 606. Compensation and Reimbursement.
The Company agrees:
(a) to pay to the Trustee (in its capacity as Trustee, Paying
Agent and Registrar) from time to time reasonable compensation for all
services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a
trustee of an express trust), including in connection with the
investment by the Trustee (and/or its affiliate) of trust assets in
certain Permitted Investments as provided in this Indenture;
(b) except as otherwise expressly provided herein, to
reimburse the Trustee (in its capacity as Trustee, Paying Agent and
Registrar) promptly 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 securities
transaction charges and the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith but, with respect to securities transaction charges, only to the
extent any such securities transaction charges have not been waived by
the Trustee (and/or its affiliate); 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 (including the reasonable expenses and disbursements of
counsel) of enforcing this Indenture (including this Section 606)
against the Company or any Subsidiary Guarantor and of defending itself
against any claim (whether asserted by any Holder or the Company or any
other Person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
<PAGE>
The obligations of the Company under this Section to
compensate the Trustee, to pay or reimburse the Trustee for expenses,
disbursements and advances and to indemnify and hold harmless the
Trustee shall constitute additional Indebtedness hereunder and shall
survive the satisfaction and discharge of this Indenture and any
termination under any bankruptcy law. As security for the performance
of such obligations of the Company, 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 payment of
principal of (and premium, if any) or interest on particular
Securities.
If the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 501(h) or (i) hereof,
the expenses (including the reasonable charges and expenses of its counsel) of
and the compensation for such services are intended to constitute expenses of
administration under any applicable bankruptcy, insolvency or other similar law.
The provisions of this Section 606 shall survive the
termination of this Indenture.
SECTION 607. Corporate Trustee Required; Eligibility.
There shall be at all times a Trustee hereunder which shall be
eligible to act as Trustee under TIA Section 310(a)(1) and shall have a combined
capital and surplus of at least $50,000,000. If such corporation publishes
reports of condition at least annually, pursuant to law or to the requirements
of federal, state, territorial or District of Columbia supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation 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 Six.
SECTION 608.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 609 hereof.
(b)......The Trustee may resign at any time by giving written
notice thereof to the Company. If the instrument of acceptance by a successor
Trustee required by Section 609 hereof shall not have been delivered to the
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 Act of the
Holders of not less than 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 the provisions of
TIA Section 310(b) 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, except when the Trustee's
duty to resign is stayed in accordance with the provisions of
TIA Section 310(b), or
(ii) the Trustee shall cease to be eligible under Section 607
hereof and shall fail to resign 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
(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 TIA Section 315(e), 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. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee shall be
appointed by 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,
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 hereinafter provided
subject to TIA Section 315(e), 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.
<PAGE>
(f)......The Company shall give notice of each resignation and
each removal of the Trustee and each appointment of a successor Trustee to the
Holders of Securities in the manner provided for in Section 106 hereof. Each
notice shall include the name of the successor Trustee and the address of its
Corporate Trust Office.
SECTION 609. 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 subject to the retiring Trustee's rights
as provided under the last sentence of Section 606 hereof. 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 Six.
SECTION 610. 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 of 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. In case at that time any of the Securities shall not have been
authenticated, any successor Trustee may authenticate such Securities either in
the name of any predecessor hereunder or in the name of the successor Trustee.
In all such cases such certificates shall have the full force and effect which
this Indenture provides that the certificate of authentication of the Trustee
shall have; provided, however, that the right to adopt the certificate of
authentication of any predecessor Trustee or to authenticate Securities in the
name of any predecessor Trustee shall apply only to its successor or successors
by merger, conversion or consolidation.
<PAGE>
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS
SECTION 701. Disclosure of Names and Addresses of Holders.
Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that none of the Company or the Trustee
or any agent of either of them shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the Holders
in accordance with TIA Section 312, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under TIA Section
312(b).
SECTION 702. Reports by Trustee.
Within 60 days after May 15 of each year commencing with the
first January 1 after the first issuance of Securities, the Trustee shall
transmit to the Holders, in the manner and to the extent provided in TIA Section
313(c), a brief report dated as of such January 1 if required by TIA Section
313(a).
SECTION 703. Reports by Company.
The Company shall:
(a) file with the Trustee, within 15 days after the Company is
required to file the same 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 from
time to time by rules and regulations prescribe) which the Company may
be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Exchange Act of 1934; or, if the Company is not
required to file information, documents or reports pursuant to either
of said Sections, then it shall file with the Trustee and the
Commission, in accordance with rules and regulations prescribed from
time to time by the Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant to
Section 13 of the Exchange Act of 1934 in respect of a security listed
and registered on a national securities exchange as may be prescribed
from time to time in such rules and regulations;
(b) file with the Trustee and the Commission, in accordance
with the rules and regulations prescribed from time to time by the
Commission, such additional information, documents and reports with
respect to compliance by the Company with the conditions and covenants
of this Indenture as may be required from time to time by such rules
and regulations;
(c) transmit by mail to all Holders, in the manner and to the
extent provided in TIA Section 313(c), within 30 days after the filing
thereof with the Trustee, such summaries of any information, documents
and reports required to be filed by the Company pursuant to paragraphs
(a) and (b) of this Section as may be required by rules and regulations
prescribed from time to time by the Commission.
Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
The Trustee shall not be obligated to take or have knowledge
of and shall not be liable for knowledge of any information contained in any
reports, information or documents delivered to the Trustee hereunder and shall
solely be responsible to forward such reports, information or documents to
Holders or other persons as may be and to the extent expressly required under
this Indenture.
<PAGE>
ARTICLE EIGHT
CONSOLIDATION, MERGER, AND SALE OF ASSETS
SECTION 801. Company May Consolidate, etc., Only on
Certain Terms.
The Company shall not consolidate with or merge with or into,
or convey or transfer or lease in one transaction or a series of related
transactions, all or substantially all of its assets to, another Person unless
each of the following conditions is satisfied:
(a) the resulting, surviving or transferred Person (the
"Successor Corporation") is a corporation organized and existing under
the laws of the United States or any state thereof or the District of
Columbia and (if other than the Company) assumes, by a supplemental
indenture in form satisfactory to the Trustee, all the obligations of
the Company under the Securities and this Indenture;
(b) immediately after giving effect to such
transaction, no Default or Event of Default exists;
(c) immediately after giving pro forma effect to such
transaction and any related financing transactions, the Successor
Corporation would be permitted to incur at least $1.00 of Indebtedness
pursuant to the Consolidated Fixed Charge Coverage Ratio test set forth
in Section 1010(a);
(d) the Company delivers, or causes to be delivered, to the
Trustee, in form and substance reasonably satisfactory to the Trustee,
an Officers' Certificate and an Opinion of Counsel, each stating that
such transaction complies with the requirements of this Indenture and
all conditions precedent have been satisfied; and
(e) if the Company is not the continuing obligor under this
Indenture, each Subsidiary Guarantor, unless it is the other party to
the transaction described above, has by supplemental indenture
confirmed that its Subsidiary Guarantee applies to the Successor
Corporation's obligations under this Indenture and the Securities.
Notwithstanding the foregoing, this Section 801 will not apply
to a conveyance, sale, assignment, transfer, conveyance or other disposition of
assets between or among the Company and any of its Wholly-Owned Restricted
Subsidiaries or any of the Subsidiary Guarantors. For purposes of the foregoing,
the transfer (by lease, assignment, sale or otherwise, in a single transaction
or series of transactions) of all or substantially all of the properties or
assets of one or more Restricted Subsidiaries that constitutes all or
substantially all of the properties and assets of the Company on a consolidated
basis, shall be deemed to be the transfer of all or substantially all of the
properties and assets of the Company.
SECTION 802. Successor Substituted.
In the event of any transaction described in and complying
with the conditions listed in Section 801 hereof in which the Company is not the
continuing obligor under this Indenture, the Successor Corporation shall be the
successor 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
Corporation had been named as the Company herein, and thereafter the Company
shall be released from its obligations under the Securities and this Indenture.
<PAGE>
ARTICLE NINE
SUPPLEMENTS AND AMENDMENTS TO INDENTURE
AND SUBSIDIARY GUARANTEES
SECTION 901. Without Consent of Holders.
The Company, the Subsidiary Guarantors and the Trustee may
amend or supplement this Indenture or the Securities without the consent of any
Holder of the Securities:
(i) to cure any ambiguity, defect or inconsistency;
provided that such actions do not adversely affect the
interests of Holders of the Securities in any material respect;
(ii) to provide for uncertificated Securities in addition
to or in place of certificated Securities;
(iii) to provide for the assumption by a Successor Corporation
of the Company's obligations to Holders of Securities in the
case of a merger or consolidation or sale of all or
substantially all of the Company's assets;
(iv) to make any change that would provide any additional
rights or benefits to the Holders of Securities or that does
not adversely affect the legal rights hereunder of any such
Holder;
(v) to comply with any requirement of the Commission in
order to effect or maintain the
qualification of this Indenture under the Trust Indenture Act;
(vi) to add additional Events of Default;
(vii) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee;
(viii) to secure the Securities; or
(ix) to add new Subsidiary Guarantors or release
Subsidiary Guarantors in accordance with the terms of this
Indenture.
Upon the request of the Company accompanied by a Board
Resolution authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
903 hereof, the Trustee shall join with the Company in the execution of any
amended or supplemental Indenture, authorized or permitted by the terms of this
Indenture and to make any further appropriate agreements and stipulations that
may be therein contained, but the Trustee shall not be obligated to enter into
such amended or supplemental Indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.
SECTION 902. With Consent of Holders.
(a)......Except as set forth herein, this Indenture may be
modified and amended by the Company, each Subsidiary Guarantor and the Trustee
with the consent of the Holders of a majority in aggregate principal amount of
the Outstanding Securities and any past Default or Event of Default or
compliance with any provisions may be waived with the consent of the Holders of
a majority in principal amount of the Outstanding Securities. However, without
the consent of each Holder of an Outstanding Security affected, no such
amendment or waiver may, (i) reduce the principal amount of Securities the
Holders of which must consent to an amendment, supplement or waiver, (ii) reduce
the rate of or extend the time for payment of interest on any Security, (iii)
reduce the principal of or extend the Stated Maturity of any Security, (iv)
reduce the premium payable upon the redemption or repurchase of any Security or
change the time at which any Security may be redeemed as described under Article
Eleven, (v) make any Security payable in money other than that stated in the
Security, (vi) impair the right of any Holder to receive payment of principal of
and interest on such Holder's Securities on or after the due dates therefor or
to institute suit for the enforcement of any payment on or with respect to such
Holder's Securities, (vii) make any change in the provisions of this Indenture
relating to waivers of past Defaults or Events of Default or the rights of
Holders of Securities to receive payments of principal of or premium, if any, or
interest on the Securities, (viii) waive a redemption payment with respect to
any Security, or (ix) make any change in the preceding amendment and waiver
provisions.
(b)......Any amendment or waiver relating to the provisions of
Section 1012 of this Indenture that adversely affects the rights of the Holders
of the Securities shall require the consent of the Holders of at least 75% in
aggregate principal amount of Outstanding Securities (including consents
obtained in connection with a tender offer or exchange offer for such
Securities).
(c)......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.
<PAGE>
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 shall be fully protected in relying upon, an Officers'
Certificate and Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture and that
such supplemental indenture constitutes the legal, valid and binding obligation
of the Company and each Subsidiary Guarantor subject to the customary exceptions
and such other matters as the Trustee may reasonably request. The Trustee may,
but shall not be obligated to, enter into any such supplemental indenture which
affects 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 Nine, 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 as then in effect.
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 Indentures.
Promptly after the execution by the Company, each Subsidiary
Guarantor and the Trustee of any supplemental indenture pursuant to the
provisions of Section 902 hereof, the Company shall give notice thereof to the
Holders of each Outstanding Security affected, in the manner provided for in
Section 106 hereof, setting forth in general terms the substance of such
supplemental indenture.
<PAGE>
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium, if Any, and
Interest.
The Company covenants and agrees for the benefit of the
Holders that it 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 shall maintain in The City of New York, an office
or agency where Securities may be presented or surrendered for payment, where
Securities may be surrendered for registration of transfer or exchange and where
notices and demands to or upon the Company in respect of the Securities and this
Indenture may be served. The Trustee's office located at One State Street, New
York, New York 10004 shall be such office or agency of the Company, unless the
Company shall designate and maintain some other office or agency for one or more
of such purposes. The Company shall give prompt written notice to the Trustee of
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 (in or outside of The City of New York) where the
Securities may be presented or surrendered for any or all such purposes and may
from time to time rescind any such designation; 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 The City of New York for such
purposes. The Company shall give prompt written notice to the Trustee of any
such designation or rescission and 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 (or 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 of (or
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 shall promptly
notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for
the Securities, it shall, on or before each due date of the principal of (or
premium, if any) or interest on any Securities, deposit with a Paying Agent a
sum sufficient to pay the principal (and premium, if any) or interest so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal, premium or interest, and (unless such Paying Agent
is the Trustee) the Company shall promptly notify the Trustee of such action or
any failure so to act.
The Company shall 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 shall:
(i) hold all sums held by it for the payment of the principal
of (and premium, if any) or interest on 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;
(ii) give the Trustee notice of any default by the Company (or
any other obligor upon the Securities) in the making of any
payment of principal (and premium, if any) or interest; and
(iii) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by such Paying Agent.
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 sums.
<PAGE>
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 (or
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 the Borough of Manhattan, The City of 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 shall be repaid to the Company.
SECTION 1004. Corporate Existence.
Subject to Article Eight, the Company shall do or cause to be
done all things necessary to preserve and keep in full force and effect its
existence and the existence of each of its Restricted Subsidiaries in accordance
with the respective organizational documents of the Company and each such
Restricted Subsidiary and the rights (whether pursuant to charter, partnership
certificate, agreement, statute or otherwise), material licenses and franchises
of the Company and each such Restricted Subsidiary; provided, however, that the
Company shall not be required to preserve any such right, license or franchise
or the existence of any Restricted Subsidiary, if the Board of Directors shall
determine that the maintenance or preservation thereof is no longer desirable in
the conduct of the business of the Company and its Restricted Subsidiaries taken
as a whole and that the loss thereof is not disadvantageous in any material
respect to the Holders.
SECTION 1005. Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (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 material 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 whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings and for which adequate reserves have been established.
SECTION 1006. Maintenance of Properties and Insurance.
The Company shall cause all properties owned by the Company or
any Subsidiary of the Company or used or held for use in the conduct of its
business or the business of any Subsidiary to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and shall cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that
nothing in this Section 1006 shall prevent the Company or any Subsidiary from
discontinuing the maintenance of any of such properties or disposing of any of
them if such discontinuance or disposal is, in the judgment of the Company,
desirable in the conduct of its business or the business of any Subsidiary.
The Company will provide or cause to be provided, for itself
and its Restricted Subsidiaries, insurance against loss or damage of the kinds
customarily insured against by corporations similarly situated and owning like
properties, including, but not limited to, environmental damage liability
insurance and public liability insurance, with reputable insurers in such
amounts, with such deductibles and by such methods as shall be customary for
corporations similarly situated in the industry in which the Company or any such
Restricted Subsidiary, as the case may be, is then conducting business.
SECTION 1007. Statement by Officers as to Default.
(a)......The Company shall deliver to the Trustee, within 60
days after the end of each fiscal year, an Officers' Certificate as to
compliance by the Company and the Restricted Subsidiaries with all conditions
and covenants under this Indenture. For purposes of this Section 1007(a), such
compliance shall be determined without regard to any period of grace or
requirement of notice under this Indenture.
(b)......If any Default has occurred and is continuing under
this Indenture, the Company shall deliver to the Trustee by registered or
certified mail, telex or facsimile transmission an Officers' Certificate
specifying such event, notice or other action within five Business Days of its
occurrence.
(c)......If any Registration Default (as defined in the Note
Registration Rights Agreement and Warrant Registration Rights Agreement) occurs,
the Company shall deliver to the Trustee by registered or certified mail or by
facsimile transmission an Officers' Certificate specifying the nature of such
Registration Default within 10 Business Days of its occurrence. In addition, the
Company shall deliver to the Trustee on each Interest Payment Date during the
continuance of a Registration Default and on the Interest Payment Date following
the cure of a Registration Default, an Officers' Certificate specifying the
amount of additional interest which has accrued and which is then owing on the
Securities in accordance with this Indenture, the Note Registration Rights
Agreement and Warrant Registration Rights Agreement, as the case may be.
<PAGE>
SECTION 1008. Reports.
Whether or not required by the Commission, so long as any Securities
are outstanding, the Company will furnish to the Trustee and the Holders of
Securities, within the time periods specified in the Commission's rules and
regulations for filings with the Commission:
(i) all quarterly and annual financial information that would
be required to be contained in a filing with the Commission on
Forms 10-Q and 10-K if the Company were required to file such
forms, including a "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and, with
respect to the annual information only, a report on the annual
financial statements by the Company's certified independent
accountants; and
(ii) all current reports that would be required to be filed
with the Commission on Form 8-K if the Company were required
to file such reports.
If the Company has designated any of its Subsidiaries as
Unrestricted Subsidiaries, then the quarterly and annual financial information
required by the preceding paragraph shall include a reasonably detailed
presentation, either on the face of the financial statements or in the footnotes
thereto, and in "Management's Discussion and Analysis of Financial Condition and
Results of Operations," of the financial condition and results of operations of
the Company and its Restricted Subsidiaries separate from the financial
condition and results of operations of the Unrestricted Subsidiaries of the
Company.
In addition, whether or not required by the Commission, the
Company will file a copy of all of the information and reports referred to in
clauses (i) and (ii) above with the Commission for public availability within
the time periods specified in the Commission's rules and regulations (unless the
Commission will not accept such a filing) and make such information available to
securities analysts and prospective investors upon request.
SECTION 1009. Limitation on Sale-Leaseback Transactions.
The Company will not, and will not permit any Restricted
Subsidiary to, enter into any sale-leaseback transaction involving any of its
assets or properties whether now owned or hereafter acquired, whereby the
Company or a Restricted Subsidiary sells or transfers such assets or properties
and then or thereafter leases such assets or properties or any part thereof or
any other assets or properties which the Company or such Restricted Subsidiary,
as the case may be, intends to use for substantially the same purpose or
purposes as the assets or properties sold or transferred.
The foregoing restriction does not apply to any sale-leaseback
transaction if:
(i) the Company or such Restricted Subsidiary, as applicable,
could have (A) Incurred Indebtedness in an amount equal to the
attributable Indebtedness relating to such sale and leaseback
transaction under the Consolidated Fixed Charge Coverage Ratio
test in Section 1010(a) and (B) Incurred a Lien to secure such
Indebtedness pursuant to Section 1017;
(ii) the gross cash proceeds of that sale and leaseback
transaction are at least equal to the fair market value, as
determined in good faith by the Board of Directors and set
forth in an Officers' Certificate delivered to the Trustee, of
the property that is the subject of such sale and leaseback
transaction; and
(iii) the transfer of assets in that sale and leaseback
transaction is permitted by, and the Company applies the
proceeds of such transaction in compliance with, Section 1013
of this Indenture.
SECTION 1010. Limitation on Indebtedness and Issuance of
Preferred Stock.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, Incur any Indebtedness (including Acquired Indebtedness) and
the Company will not issue any Disqualified Stock and will not permit any of its
Restricted Subsidiaries to issue any shares of Preferred Stock or Disqualified
Stock; provided, however, that: (i) the Company may Incur Indebtedness which is
expressly subordinate and junior in right of payment to the Securities, and (ii)
the Company and its Restricted Subsidiaries may Incur Indebtedness (including
Acquired Indebtedness) or issue Disqualified Stock if:
(A) the Consolidated Fixed Charge Coverage Ratio for
the Company's most recently ended full fiscal quarter
for which financial statements are available
immediately preceding the date on which such
Indebtedness is Incurred or such Disqualified Stock
is issued would have been (1) if the last day of such
fiscal quarter is on or before December 31, 1999, at
least 1.5 to 1, and (2) if the last day of such
fiscal quarter is on or after January 1, 2000, at
least 2.0 to 1, in each case determined on a pro
forma basis as set forth in this Section 1010(a); and
(B) no Default or Event of Default has occurred
and is continuing.
<PAGE>
In making the foregoing calculation, pro forma effect will be given to:
(i) the Incurrence of such Indebtedness or the issuance of such Disqualified
Stock and (if applicable) the application of the net proceeds therefrom,
including to refinance other Indebtedness, as if such Indebtedness or
Disqualified Stock, as the case may be, was Incurred or issued, as the case may
be, and the application of such proceeds occurred at the beginning of such
quarter, (ii) the Incurrence, issuance, repayment or retirement of any other
Indebtedness or Disqualified Stock by the Company or its Restricted Subsidiaries
since the first day of such quarter as if such Indebtedness or Disqualified
Stock was Incurred, issued, repaid or retired at the beginning of such quarter
and (iii) the acquisition (whether by purchase, merger or otherwise) or
disposition (whether by sale, merger or otherwise) of any company, entity or
business acquired or disposed of by the Company or its Restricted Subsidiaries,
as the case may be, since the first day of such quarter, as if such acquisition
or disposition occurred at the beginning of such quarter. In making a
computation under the foregoing clause (i) or (ii), (A) interest on Indebtedness
bearing a floating interest rate will be computed as if the rate in effect on
the date of computation had been the applicable rate for the entire quarter, (B)
if such Indebtedness bears, at the option of the Company, a fixed or floating
rate of interest, interest thereon will be computed by applying, at the option
of the Company, either the fixed or floating rate and (C) the amount of
Indebtedness under a revolving credit facility will be computed based upon the
average daily balance of such Indebtedness during such quarter.
(b) Notwithstanding the foregoing paragraph (a), the Company and any of
its Restricted Subsidiaries may Incur each and all of the following Indebtedness
("Permitted Indebtedness"):
(i) Indebtedness under the Credit Facility and one or more
other loan or credit agreements with one or more banks or
financial institutions; provided, that the aggregate principal
amount of all Indebtedness of the Company and its Restricted
Subsidiaries outstanding under all such credit facilities
after giving effect to such Incurrence does not exceed an
amount equal to the greater of (A) $25 million and (B) such
amount as, when added to all other Indebtedness then
outstanding, would result in total Indebtedness equal to
twenty (20) times the Adjusted EBITDA of the Company for the
most recently ended fiscal quarter for which financial
statements are available immediately preceding the date on
which such Indebtedness was incurred, calculated on a pro
forma basis in the manner described in the penultimate
paragraph of subsection (a) above, less in either case (1) the
aggregate amount of all repayments, optional or mandatory, of
the principal of any Indebtedness under a credit facility that
have been made by the Company or any of its Restricted
Subsidiaries after the second anniversary of the date of this
Indenture, except for repayments in connection with
Refinancing Indebtedness (as herein defined) permitted under
clause (vii) below, and (2), without duplication, the
aggregate amount of all Net Cash Proceeds of Asset Sales
applied by the Company or any of its Restricted Subsidiaries
to permanently reduce the Indebtedness or commitments under
the credit facilities pursuant to Section 1013;
(ii) Indebtedness of the Company and its Subsidiary
Guarantors represented by the Securities and the Subsidiary
Guarantees;
(iii) Existing Indebtedness;
(iv) Indebtedness owed by the Company to any Wholly-Owned
Restricted Subsidiary or owed by a Subsidiary Guarantor to the
Company or any Wholly-Owned Restricted Subsidiary (provided
that such Indebtedness is held by the Company or such
Restricted Subsidiary and constitutes Subordinated
Indebtedness); provided, that the Incurrence of such
Indebtedness does not violate Section 1011.
(v) Indebtedness of the Company or any Restricted Subsidiary
arising with respect of Interest Rate Agreement Obligations
and Currency Agreement Obligations Incurred for the purpose of
fixing or hedging interest rate risk or currency risk;
(vi) Indebtedness Incurred by the Company or any of its
Restricted Subsidiaries with respect to letters of credit,
bankers' acceptances, surety or performance bonds or other
instruments issued in the ordinary course of business in
amounts and for purposes customary in the Company's industry;
(vii) Indebtedness Incurred by the Company or any of the
Restricted Subsidiaries in connection with or given in
exchange for the renewal, extension, modification, amendment,
refunding, defeasance, refinancing or replacement (a
"Refinancing") of any of the Securities or any Existing
Indebtedness or any Indebtedness issued after the Closing Date
and not Incurred in violation of this Indenture ("Refinancing
Indebtedness"); provided, however, that (a) the principal
amount of such Refinancing Indebtedness shall not exceed the
principal amount (or accreted amount, if less) of the
Indebtedness so refinanced at the time outstanding (or
obtainable under any outstanding credit agreement) (plus the
premiums paid in connection therewith and the reasonable
expenses incurred in connection therewith); (b) with respect
to Subordinated Indebtedness being refinanced, the Stated
Maturity of the Refinancing Indebtedness shall be not earlier
than the Stated Maturity of the Indebtedness being refinanced,
and such Refinancing Indebtedness shall have an Average Life
at the time such Refinancing Indebtedness is incurred that is
equal to or greater than the remaining Average Life of the
Indebtedness being Refinanced; (c) with respect to
Subordinated Indebtedness of the Company being refinanced,
such Refinancing Indebtedness shall rank no more senior than,
and shall be at least as subordinated in right of payment to
the Securities as the Indebtedness being refinanced; and (d)
the obligor of such Refinancing Indebtedness shall be the
obligor on the Indebtedness being refinanced of the Company or
a Restricted Subsidiary;
<PAGE>
(viii) The Incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease
Obligations, mortgage financings or Purchase Money
Obligations, in each case Incurred for the purpose of
financing all or any part of the purchase price or cost of
construction or improvement of property, plant or equipment
used in the business of the Company or such Restricted
Subsidiary, in an aggregate principal amount not to exceed
$5.0 million at any time outstanding;
(ix) Guarantees by the Company or any Restricted Subsidiary of
Indebtedness of the Company or any Restricted Subsidiary that
were permitted to be Incurred pursuant to another provision of
this Section 1010;
(x) Guarantees by any Restricted Subsidiary made in
accordance with the provisions of
Section 1019;
(xi) Incurrence by the Company's Unrestricted Subsidiaries, if
any, of non-recourse Indebtedness; provided, however, that if
any such Indebtedness ceases to be Non-Recourse Indebtedness
of an Unrestricted Subsidiary, such event shall be deemed to
constitute an Incurrence of Indebtedness by a Restricted
Subsidiary of the Company that was not permitted by this
clause;
(xii) The accrual of interest, accretion or amortization of
original issue discount, the payment of interest on any
Indebtedness in the form of additional Indebtedness with the
same terms, and the payment of dividends on Disqualified Stock
in the form of additional shares of the same class of
Disqualified Stock; provided, in each such case, that the
amount thereof is included in Fixed Charges of the Company as
accrued; and
(xiii) Indebtedness of the Company or any Restricted
Subsidiary in addition to that described in clauses (i)
through (xii) above, and any refinancings of such
Indebtedness, so long as the aggregate principal amount of all
such Indebtedness Incurred pursuant to this clause (xiii) does
not exceed $5.0 million at any one time outstanding.
Any Indebtedness of a Person existing at the time such Person becomes a
Restricted Subsidiary (whether by merger, consolidation, acquisition or
otherwise, an "Acquired Person") shall be deemed to be Incurred by such
Restricted Subsidiary at the time it becomes a Restricted Subsidiary.
For purposes of determining compliance with this Section 1010, in the
event that an item of proposed Indebtedness meets the criteria of more than one
of the categories of Permitted Indebtedness described above, or is entitled to
be Incurred pursuant to subsection (a) of this Section 1010, the Company will be
permitted to classify (or reclassify) such item of Indebtedness on the date of
its Incurrence in any manner that complies with this Section 1010.
SECTION 1011. Limitation on Restricted Payments.
(a) The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly:
(i) declare or pay any dividend on, or make any other payment
or distribution on account of the Company's or any of its
Restricted Subsidiaries' Capital Stock (including, without
limitation, any payment in connection with any merger or
consolidation involving the Company or any of its Restricted
Subsidiaries) or to the direct or indirect holders of the
Company's or any of its Restricted Subsidiaries' Capital Stock
in their capacity as such, other than (A) dividends or
distributions payable in Capital Stock (other than
Disqualified Stock) of the Company, or (B) dividends or
distributions by a Restricted Subsidiary payable to the
Company or another Restricted Subsidiary;
(ii) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger
or consolidation involving the Company or any Subsidiary of
the Company) any shares of Capital Stock or any options,
warrants or other rights to acquire shares of Capital Stock of
the Company or any Subsidiary of the Company (other than any
such Capital Stock owned by the Company or any Restricted
Subsidiary of the Company);
(iii) make any payment on or with respect to, or purchase,
redeem, defease or otherwise acquire or retire for value, any
Indebtedness that is subordinated to the Securities or the
Subsidiary Guarantees, except a payment of interest or
principal at the Stated Maturity thereof; or
(iv) make any Investment (other than a Permitted Investment);
(all such payments and other actions set forth in clauses (i) through (iv) above
being collectively referred to as "Restricted Payments") unless, at the time of
and immediately after giving effect to such Restricted Payment:
<PAGE>
(A) no Default or Event of Default has occurred
and is continuing;
(B) the Company could Incur at least $1.00 of
additional Indebtedness (other than Permitted
Indebtedness) pursuant to Section 1010(a); and
(C) the aggregate amount of all Restricted Payments
declared or made by the Company and its Restricted
Subsidiaries after the date of this Indenture does
not exceed the sum of:
(1) 50% of the Consolidated Net Income of the
Company for the period (taken as one
accounting period) from the beginning of the
Company's first fiscal quarter commencing
after the date of this Indenture to the end
of the Company's most recently ended fiscal
quarter for which internal financial
statements are available at the time of such
Restricted Payment (or, if such Consolidated
Net Income for such period is a loss, less
100% of such loss), plus
(2) 100% of the aggregate Net Proceeds received
by the Company since the date of this
Indenture from the issuance or sale (other
than to a Subsidiary) of Capital Stock of
the Company (other than Disqualified Stock)
or from the issue or sale of convertible or
exchangeable Disqualified Stock or
convertible or exchangeable debt securities
of the Company that have been converted into
or exchanged for such Equity Interests
(other than Capital Stock (or Disqualified
Stock or debt securities) sold to a
Subsidiary of the Company), plus
(3) to the extent that any Restricted Payment
that was made after the date of this
Indenture is sold for cash (other than to a
Subsidiary) or otherwise liquidated or
repaid for cash, the lesser of (x) the cash
return of capital with respect to such
Restricted Payment (less the cost of
disposition, if any) and (y) the initial
amount of such Restricted Payment.
(b) In addition, so long as no Default or Event of Default has occurred
and is continuing or would be caused thereby, the following payments and other
actions shall be expressly permitted notwithstanding anything contained in this
Section 1011 (collectively, "Permitted Payments"):
(i) the payment of any dividend within 60 days after the date
of declaration thereof, if at said declaration date such
payment would have been permitted under this Indenture and
such payment shall be deemed to have been paid on such date of
declaration for purposes of clause (a)(iv) of this Section
1011;
(ii) the redemption, repurchase, retirement, defeasance or
other acquisition of any Capital Stock or any Indebtedness of
the Company or any Restricted Subsidiary that is subordinated
in right of payment to the Securities in exchange for, or out
of the Net Proceeds of, the substantially concurrent sale
(other than to a Subsidiary) of Capital Stock of the Company
(other than any Disqualified Stock); provided that the amount
of any such Net Proceeds that are utilized for any such
redemption, repurchase, retirement, defeasance or other
acquisition shall be excluded from clause (C)(2) of the
preceding paragraph;
(iii) the defeasance, redemption, repurchase or other
acquisition of Subordinated Indebtedness of the Company or any
Subsidiary Guarantor with the net cash proceeds from an
Incurrence of permitted Refinancing Indebtedness;
(iv) any purchase or defeasance of Subordinated Indebtedness
of the Company or any Subsidiary Guarantor to the extent
required upon a Change of Control or Asset Sale by this
Indenture or other agreement or instrument pursuant to which
such Subordinated Indebtedness was issued, but only if the
Company (x) in the case of a Change of Control, has complied
with its obligations under the provisions described under
Section 1012 or (y) in the case of an Asset Sale has applied
the Net Cash Proceeds from such Asset Sale in accordance with
Section 1013;
(v) any Restricted Payments made with the proceeds of
the substantially concurrent sale of
Capital Stock (other than Disqualified Stock);
<PAGE>
(vi) the repurchase of Capital Stock of the Company or any
Restricted Subsidiary (including options, warrants or other
rights to acquire such Capital Stock) from directors, officers
or employees (or their nominees) of the Company or its
Restricted Subsidiaries pursuant to the terms of an employee
benefit plan or employment agreement or similar arrangement;
provided that an aggregate amount of all such repurchases, net
of repayments or cancellations of indebtedness as a result of
such repurchases, shall not exceed $0.5 million in any
twelve-month period;
(vii) the repurchase by the Company of 500,000 shares of
Common Stock from the Federal Deposit Insurance Corporation
for an aggregate purchase price not to exceed $2.8 million out
of the net proceeds of the sale of the Securities;
(viii) the payment by the Company out of the net proceeds of
the sale of the Securities of $20.0 million, representing the
entire principal amount outstanding of the Company's 13% Short
Term Notes due June 30, 1999;
(ix) the repayment by the Company out of the net proceeds of
the sale of the Securities of capital leases and equipment
notes payable outstanding on the Closing Date in an aggregate
amount not to exceed $4.0 million existing on the Closing
Date;
(x) the redemption out of the net proceeds of the sale of the
Securities of certain of the Company's 10% Convertible
Subordinated Debentures due October 6, 2000 in an aggregate
principal amount not to exceed $1.85 million; and
(xi) Restricted Payments (other than a dividend or other
distribution declared on any Capital Stock of the Company or a
payment to purchase, redeem or otherwise acquire or retire for
value any Capital Stock of the Company) not to exceed $5.0
million in the aggregate.
The amount of all Restricted Payments (other than cash) shall be the
fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any assets or securities that are required to be valued
by this Section 1011 shall be determined by the Board of Directors whose
resolution with respect thereto shall be delivered to the Trustee. The Board of
Directors' determination must be based upon an opinion or appraisal issued by an
accounting, appraisal or investment banking firm of national standing if the
fair market value exceeds $10.0 million. Not later than the date of making any
Restricted Payment, the Company shall deliver to the Trustee an Officers'
Certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the calculations required by this Section 1011 were
computed, together with a copy of any fairness opinion or appraisal required
hereby.
SECTION 1012. urchase of Securities upon a Change of Control.
If a Change of Control occurs at any time, then each Holder
shall have the right to require that the Company purchase such Holder's
Securities, in whole or in part in integral multiples of $10,000, at a purchase
price in cash equal to 101% of the principal amount of such Securities, plus
accrued and unpaid interest, if any, to the date of purchase (the "Change of
Control Purchase Price"), pursuant to the offer described below (the "Change of
Control Offer") and the other procedures set forth in this Indenture.
Within 30 days following any Change of Control, the Company
shall notify the Trustee thereof and give written notice of such Change of
Control to each Holder by first-class mail, postage prepaid, at its address
appearing in the Security Register, stating, among other things: (i) that a
Change of Control has occurred and that such Holder has the right to require the
Company to purchase such Holder's Securities at the Change of Control Purchase
Price in cash (subject to the right of Holders of record on a Regular Record
Date to receive interest on the relevant Interest Payment Date); (ii) the
repurchase date (which shall be a Business Day no earlier than 30 days nor later
than 60 days from the date such notice is mailed or such later date as is
necessary to comply with requirements under the Exchange Act); (iii) that any
Security not tendered shall continue to accrue interest; (iv) that, unless the
Company defaults in the payment of the Change of Control Purchase Price, any
Security accepted for payment pursuant to the Change of Control Offer shall
cease to accrue interest after the Change of Control purchase date (the "Change
of Control Purchase Date"); (v) that, in order to tender Securities pursuant to
the Change of Control Offer, a Holder shall be required to surrender the
Securities, with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Securities completed, to the Paying Agent at the address
specified in the notice prior to the close of business on the third Business Day
preceding the Change of Control Purchase Date; (vi) that Holders shall be
entitled to withdraw their election if the Paying Agent receives, not later than
the close of business on the second Business Day preceding the Change of Control
Purchase Date, a telex, facsimile transmission or letter setting forth the name
of the Holder, the principal amount of Securities delivered for purchase, and a
statement that such Holder is withdrawing his election to have such Securities
purchased; (vii) that Holders whose Securities are being purchased only in part
shall be issued new Securities equal in principal amount to the unpurchased
portion of the Securities surrendered, which unpurchased portion must be equal
to $10,000 in principal amount or an integral multiple thereof; and (viii) other
procedures, if any, that the Holders of Securities must follow in order to
tender their Securities.
<PAGE>
If the Change of Control Purchase Date is on or after a
Regular Record Date and on or before the related Interest Payment Date, any
accrued interest will be paid to the Person in whose name a Security is
registered at the close of business on such Regular Record Date, and no
additional interest will be payable to Holders who tender Securities pursuant to
the Change in Control Offer.
On the Change of Control Purchase Date, the Company shall, to
the extent lawful, (i) accept for payment Securities or portions thereof that
are timely tendered pursuant to the Change of Control Offer, (ii) deposit with
the Paying Agent an amount equal to the Change of Control Purchase Price in
respect of all Securities or portions thereof so tendered and (iii) deliver or
cause to be delivered to the Trustee the Securities so accepted together with an
Officers' Certificate that states the aggregate principal amount of Securities
or portions thereof tendered to the Company.
The Paying Agent shall promptly mail to each Holder of
Securities so accepted payment in an amount equal to the Change of Control
Purchase Price for such Securities, and the Trustee shall promptly authenticate
and mail to each Holder a new Security equal in principal amount to any
unpurchased portion of the Securities surrendered, if any; provided that each
such new Security shall be in a principal amount of U.S.
$10,000 or an integral multiple thereof.
The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to a
Change of Control Offer. To the extent that the provisions of any securities
laws or regulations conflict herewith, the Company will comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations described herein by virtue thereof.
The Company will not, and will not permit any Restricted
Subsidiary to, create any restriction (other than restrictions existing under
Indebtedness as in effect on the Closing Date or in refinancings of such
Indebtedness) that would materially impair the ability of the Company to make a
Change of Control Offer to purchase the Securities or, if such Change of Control
Offer is made, to pay for the Securities tendered for purchase.
SECTION 1013. Limitation on Asset Sales.
(a)......The Company shall not, and shall not permit any
Restricted Subsidiary to, consummate any Asset Sale unless (i) the Company or
such Restricted Subsidiary, as the case may be, receives consideration at the
time of such Asset Sale at least equal to the fair market value of the assets or
other property sold or disposed of in the Asset Sale and (ii) at least 75% of
such consideration consists of either cash or Cash Equivalents.
(b)......Within 365 days after any Asset Sale, the Company may
elect to apply the Net Cash Proceeds from such Asset Sale to (i) permanently
reduce or redeem amounts outstanding under the Credit Facility or any other
credit facility referred to in Section 1010(b)(i) or to the repayment of other
senior indebtedness of the Company or a Restricted Subsidiary and/or (ii) make
(or enter into a legally binding agreement to make) an Investment, in, or
acquire assets and properties that will be used in the business of the Company
and its Restricted Subsidiaries at the Closing Date. Any balance of such Net
Cash Proceeds exceeding $10.0 million and not applied or invested as provided in
clauses (i) and (ii) within 365 days of such Asset Sale, will be deemed to
constitute "Excess Proceeds" and will be applied to make an offer to purchase
Securities (an "Asset Sale Offer") to the Holders of the Securities. Pending the
final application of any such Net Cash Proceeds, the Company may temporarily
invest such Net Cash Proceeds in cash or Cash Equivalents.
For the purposes of this Section 1013, the following will be
deemed to be cash: (x) the assumption by the transferee of Indebtedness of the
Company or Indebtedness of any Restricted Subsidiary of the Company and the
release of the Company or such Restricted Subsidiary from all liability on such
Indebtedness in connection with such Asset Sale (in which case the Company
shall, without further action, be deemed to have applied such assumed
Indebtedness in accordance with clause (i) above of this subsection (b)) and (y)
securities received by the Company or any Restricted Subsidiary of the Company
from the transferee that are promptly (and in any event within 120 days)
converted by the Company or such Restricted Subsidiary into cash.
(c)......In the event of an Asset Sale that requires the
Company to make an Asset Sale Offer pursuant to subsection (b) above, the
Company shall make an Asset Sale Offer to all Holders of Securities, on a pro
rata basis, in accordance with the procedures set forth in this Indenture
(including prorating in the event of oversubscription), of the maximum principal
amount (expressed as a multiple of $10,000) of Securities that may be purchased
with the Excess Proceeds, at a purchase price in cash equal to 100% of the
principal amount thereof, plus accrued and unpaid interest, if any, to the date
such offer to purchase is consummated . To the extent that the aggregate
purchase price of Securities tendered pursuant to such Asset Sale Offer is less
than the Net Cash Proceeds allotted to the purchase of the Securities, the
Company shall apply the remaining Net Cash Proceeds to general corporate
purposes that are not prohibited under this Indenture. If the aggregate
principal amount of Securities validly tendered and not withdrawn by Holders
thereof exceeds the Excess Proceeds, the Securities to be purchased shall be
selected on a pro rata basis. Upon the consummation of any Asset Sale Offer, the
amount of Excess Proceeds will be reset to zero.
<PAGE>
(d)......Within 30 days of the date upon which the Company
becomes required to make an Asset Sale Offer, the Company shall mail a notice to
the Trustee and to each Holder in the manner provided in Section 106 hereof
stating: (1) that the Asset Sale Offer is being made pursuant to the provisions
of Section 1013 of this Indenture and that all Securities duly and timely
tendered shall be accepted for payment (except, as provided above, if the
aggregate principal amount as the case may be, of the Securities surrendered
exceeds the amount of Excess Proceeds); (2) the purchase price and the purchase
date (the "Asset Sale Purchase Date"), which date shall be no earlier than 30
days nor later than 60 days from the date such notice is mailed; (3) that any
Securities not tendered shall continue to accrue interest; (4) that, unless the
Company defaults in the payment of the purchase price, all Securities accepted
for payment pursuant to the Asset Sale Offer shall cease to accrue interest
after the Asset Sale Purchase Date; (5) that Holders electing to have any
Securities purchased pursuant to an Asset Sale Offer shall be required to
surrender the Securities, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Securities completed, to the Paying Agent at the
address specified in the notice prior to the close of business on the third
Business Day preceding the Asset Sale Purchase Date; (6) that Holders shall be
entitled to withdraw their election if the Paying Agent receives, not later than
the close of business on the second Business Day preceding the Asset Sale
Purchase Date, a telex, facsimile transmission or letter setting forth the name
of the Holder, the principal amount of Securities delivered for purchase, and a
statement that such Holder is withdrawing his election to have such Securities
purchased; (7) that Holders whose Securities are being purchased only in part
shall be issued new Securities equal in principal amount to the unpurchased
portion of the Securities surrendered, which unpurchased portion must be equal
to $10,000 in principal amount or an integral multiple thereof; (8) any other
procedures that the Holders of Securities must follow in order to tender their
Securities; and (9) the circumstances and relevant facts regarding such Asset
Sale.
If the Asset Sale Purchase Date is on or after a Regular
Record Date and on or before the related Interest Payment Date, any accrued
interest will be paid to the Person in whose name a Security is registered at
the close of business on such Regular Record Date, and no additional interest
will be payable to Holders who tender Securities pursuant to the Asset Sale
Offer.
The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other applicable
securities laws or regulations in connection with the repurchase of Securities
pursuant to this Section 1013 and shall not be deemed to have breached its
obligations under this Section 1013 by virtue thereof.
SECTION 1014. Limitation on Transactions With Affiliates.
(a)......The Company will not, and will not permit any
Restricted Subsidiary to, directly or indirectly, enter into any transaction or
series of related transactions (including, without limitation, the sale,
purchase, exchange or lease of assets, property or services) with any Affiliate
(other than the Company or a Restricted Subsidiary of the Company) unless (i)
such transaction or series of transactions is on terms that are no less
favorable to the Company or such Restricted Subsidiary, as the case may be, than
would be available in a comparable transaction in arm's-length dealings with an
unrelated third party, and (ii) the Company delivers to the Trustee, (A) with
respect to any transaction or series of related transactions involving aggregate
consideration in excess of $1.0 million, a Board Resolution set forth in an
Officers' Certificate certifying that such transaction or series of related
transactions complies with this Section 1014 and has been approved by a majority
of the disinterested members of the Board of Directors of the Company; and (B)
with respect to any transaction or series of transactions involving aggregate
consideration in excess of $10.0 million, an opinion as to the fairness of such
transaction to the Company or such Restricted Subsidiary, as the case may be,
from a financial point of view, issued by an accounting, appraisal or investment
banking firm of national standing.
(b)......The provisions of subsection (a) above will not
restrict any of the following:
(i) employment agreements, compensation or employee benefit
arrangements, stock options or stock purchase plans or
agreements with or for the benefit of any officer, director or
employee of the Company entered into in the ordinary course of
business and approved by the Board of Directors of the Company
(including customary fringe benefits and reimbursement or
advancement of out of pocket expenses, loans to employees in
the ordinary course of business, and director's and officer's
liability insurance and indemnification arrangements);
(ii) any transaction solely between or among the
Company and any of its Restricted
Subsidiaries or solely between Restricted Subsidiaries;
(iii) the payment of reasonable and customary regular fees to
directors of the Company or any Restricted Subsidiary who are
not employees of the Company or any Restricted Subsidiary; and
(iv) any Restricted Payment not prohibited by Section 1011
of this Indenture.
SECTION 1015. Limitation on Dividend and Other Payment
Restrictions Affecting Restricted Subsidiaries.
<PAGE>
(a) The Company will not, and will not permit any Restricted Subsidiary
to, directly or indirectly, create or otherwise cause or suffer to exist, or
become effective, any consensual encumbrance or restriction of any kind on the
ability of any Restricted Subsidiary to (i) pay dividends, in cash or otherwise,
or make any other distributions permitted by applicable law on or in respect of
its Capital Stock, (ii) pay any Indebtedness owed to the Company or any other
Restricted Subsidiary, (iii) make loans or advances to the Company or any other
Restricted Subsidiary, (iv) transfer any of its property or assets to the
Company or any other Restricted Subsidiary or (v) Guarantee Indebtedness of the
Company or any other Restricted Subsidiary.
(b) The provisions of subsection (a) above shall not restrict any
encumbrances or restrictions ("Permitted Liens") under or by reason of any of
the following: (i) any agreement in effect on the Closing Date, and any
extensions, refinancings, renewals or replacement of such agreement; provided
that the encumbrances and restrictions in any such extensions, refinancings,
renewals or replacements are no less favorable to the Company or any Restricted
Subsidiary than those encumbrances or restrictions in the original agreement;
(ii) existing under or by reason of applicable law; (iii) this Indenture, the
Securities and the Subsidiary Guarantees; (iv) with respect to any Person or the
property or assets of such Person acquired by the Company or any Restricted
Subsidiary, existing at the time of such acquisition and not incurred in
contemplation thereof, which encumbrances or restrictions are not applicable to
any Person or the property or assets of any Person other than such Person or the
property or assets of such Person so acquired; (v) in the case of clause (a)(iv)
of this Section 1015, (A) that restrict in a customary manner the subletting,
assignment or transfer of any property or asset that is a lease, license,
conveyance or contract or similar property or asset, (B) existing by virtue of
any transfer of, agreement to transfer, option or right with respect to, or Lien
on any property or assets of the Company or any Restricted Subsidiary not
otherwise prohibited by this Indenture or (C) arising or agreed to in the
ordinary course of business, not relating to any Indebtedness, and that do not,
individually or in the aggregate, detract from the value of property or assets
of the Company or any Restricted Subsidiary in any manner material to the
Company or any Restricted Subsidiary; (vi) with respect to a Restricted
Subsidiary and imposed pursuant to an agreement that has been entered into for
the sale or disposition of all or substantially all of the Capital Stock of, or
property and assets of, such Restricted Subsidiary; (vii) permitted Refinancing
Indebtedness; provided that the restrictions contained in the agreements
governing such permitted Refinancing Indebtedness are no more restrictive, taken
as a whole, than those contained in the agreements governing the Indebtedness
being refinanced; (viii) provisions with respect to the disposition or
distribution of assets or property in joint venture agreements and other similar
agreements entered into in the ordinary course of business; (ix) restrictions on
cash or other deposits or net worth imposed by customers under contracts entered
into in the ordinary course of business; and (x) restrictions imposed with
respect to a Subsidiary of the Company imposed pursuant to a binding agreement
which has been entered into for the sale or disposition of all or substantially
all of the Capital Stock or assets of such Subsidiary, provided that such
disposition will comply with Section 1013 of this Indenture. Nothing contained
in this Section 1015 shall prevent the Company or any Restricted Subsidiary from
(1) creating, incurring, assuming or suffering to exist any Liens otherwise
permitted in Section 1017 of this Indenture or (2) restricting the sale or other
disposition of property or assets of the Company or any of its Restricted
Subsidiaries that secure Indebtedness of the Company or any of its Restricted
Subsidiaries.
SECTION 1016. Limitation on the Issuance and Sale of
Capital Stock of Restricted Subsidiaries.
The Company will not sell, and will not permit any Restricted
Subsidiary, directly or indirectly, to issue or sell, any shares of Capital
Stock of a Restricted Subsidiary (including options, warrants or other rights to
purchase shares of such Capital Stock) except: (i) to the Company or a Wholly
Owned Restricted Subsidiary; (ii) issuances of director's qualifying shares or
sales to foreign nationals of shares of Capital Stock of foreign Restricted
Subsidiaries, to the extent required by applicable law; (iii) if, immediately
after giving effect to such issuance or sale, such Restricted Subsidiary would
no longer constitute a Restricted Subsidiary and any Investment in such Person
remaining after giving effect to such issuance or sale would have been permitted
to be made under Section 1011 of this Indenture if made on the date of such
issuance or sale; or (iv) the issuance or sale of Common Stock of any Restricted
Subsidiaries if the proceeds thereof are applied in accordance with Section 1013
of this Indenture.
SECTION 1017. Limitation on Liens.
The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, Incur or suffer to exist any Lien on any
of its assets or properties of any character, or any shares of Capital Stock or
Indebtedness of any Restricted Subsidiary, without making effective provision
for all of the Securities and all other amounts due under this Indenture to be
directly secured equally and ratably with (or, if the obligation or liability to
be secured by such Lien is subordinated in right of payment to the Securities,
prior to) the obligation or liability secured by such Lien.
<PAGE>
The foregoing limitation does not apply to (i) Liens existing
on the Closing Date, including Liens securing obligations under the Credit
Facility or any other credit facility outstanding on the date hereof or
permitted to be incurred under clause (b)(i) of Section 1010; (ii) Liens granted
after the Closing Date on any assets or Capital Stock of the Company or its
Restricted Subsidiaries created in favor of the Holders; (iii) Liens with
respect to the assets of a Restricted Subsidiary granted by such Restricted
Subsidiary to the Company or a Wholly Owned Restricted Subsidiary to secure
Indebtedness owing to the Company or such other Restricted Subsidiary; (iv)
Liens securing Indebtedness which is Incurred owing to the Company or such other
Restricted Subsidiary; (v) Liens securing Indebtedness which is Incurred to
refinance secured Indebtedness which is permitted to be Incurred under Section
1010(b) of this Indenture; provided that such Liens do not extend to or cover
any property or assets of the Company or any Restricted Subsidiary other than
the property or assets securing the Indebtedness being refinanced; (vi) Liens on
any property or assets of the Company or any Restricted Subsidiary securing
Indebtedness of the Company or such Restricted Subsidiary permitted to be
incurred under Section 1010(b); (vii) Liens with respect to real property to
secure Indebtedness Incurred pursuant to Section 1010(b)(viii) of this
Indenture; or (viii) Permitted Liens.
SECTION 1018. Limitation on Designation of Unrestricted
Subsidiaries.
(a)......The Company will not designate any Subsidiary of the
Company (other than a newly created Subsidiary in which no Investment in excess
of $1,000 has previously been made) as an "Unrestricted Subsidiary" under this
Indenture (a "Designation") after the Closing Date unless:
(i) no Default shall have occurred and be continuing at
the time of or after giving effect to such Designation; and
(ii) the Company would not be prohibited under this Indenture
from making an Investment at the time of Designation in an
amount (the "Designation Amount") equal to the fair market
value of such Restricted Subsidiary on such date.
If a Restricted Subsidiary is designated as an Unrestricted
Subsidiary, all outstanding Investments owned by the Company and its Restricted
Subsidiaries in the Subsidiary so designated will be deemed to be an Investment
made as of the time of such Designation and will reduce the amount available for
Restricted Payments under Section 1011 for all purposes of this Indenture in the
Designation Amount. Neither the Company nor any Restricted Subsidiary shall at
any time (x) provide a Guarantee of or similar undertaking (including any
undertaking, agreement or instrument evidencing such Indebtedness ) with respect
to any Indebtedness of an Unrestricted Subsidiary; provided that the Company and
its Restricted Subsidiaries may pledge Capital Stock or Indebtedness of any
Unrestricted Subsidiary on a nonrecourse basis such that the pledgee has no
claim whatsoever against the Company other than to obtain such pledged property;
or (y) be directly or indirectly liable for any Indebtedness of any Unrestricted
Subsidiary, except to the extent permitted under Section 1011 of this Indenture.
(b)......The Company will not revoke any Designation of
a Subsidiary as an Unrestricted Subsidiary (a "Revocation"), unless:
(i) no Default shall have occurred and be continuing at
the time of and after giving effect to such Revocation; and
(ii) all Liens and Indebtedness of such Unrestricted
Subsidiary outstanding immediately following such Revocation
shall be deemed to have been incurred at such time and shall
have been permitted to be incurred for all purposes of this
Indenture.
All Designations and Revocations must be evidenced by
resolutions of the Board of Directors of the Company delivered to the Trustee
certifying compliance with the foregoing provisions.
SECTION 1019. Limitations on Issuances of Guarantees of
Indebtedness; Additional Guarantors.
The Company will not permit any of its Restricted
Subsidiaries, directly or indirectly, to Guarantee or pledge any assets to
secure the payment of any Indebtedness of the Company under any credit facility
unless such Restricted Subsidiary simultaneously executes and delivers a
supplemental indenture providing for the Guarantee of the payment of the
Securities by such Restricted Subsidiary on a senior unsecured basis.
Notwithstanding the preceding paragraph, any Subsidiary
Guarantee of the Securities will provide by its terms that it will be
automatically and unconditionally released and discharged under the
circumstances described in Article Fourteen of this Indenture.
SECTION 1020. Waiver of Certain Covenants.
The Company or any Restricted Subsidiary may omit in any
particular instance to comply with any term, provision or condition set forth in
Sections 1005 through 1011 and Sections 1013 through 1019, inclusive, if before
or after the time for such compliance the Holders of at least a majority in
principal amount of the Outstanding Securities, by Act of such Holders, waive
such compliance in such instance with such term, provision or condition, but no
such waiver shall extend to or affect such term, provision 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 term, provision or condition shall remain in full force and
effect.
<PAGE>
SECTION 1021. Payment for Consent.
Neither the Company nor any of its Restricted Subsidiaries
shall, directly or indirectly, pay or cause to be paid any consideration,
whether by way of interest, fee or otherwise, to any Holder for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture or the Securities unless such consideration is offered to be
paid or is paid to all Holders that consent, waive or agree to amend in the time
frame set forth in the solicitation documents relating to such consent, waiver
or agreement.
<PAGE>
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Right of Redemption.
The Securities may be redeemed at the option of the Company,
in whole or from time to time in part, at any time on or after March 2, 2003,
subject to the conditions and at the Redemption Prices specified in the form of
Security attached hereto as Exhibit A, together with accrued interest to the
Redemption Date. The Securities will not be subject to any mandatory sinking
fund redemption prior to maturity.
SECTION 1102. Applicability of Article.
Redemption of Securities at the election of the Company or
otherwise, as permitted or required 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 hereof shall be evidenced by a Board Resolution. In case of any
redemption at the election of the Company, the Company shall, at least 60 days
prior to the Redemption Date fixed by the Company (unless a shorter notice shall
be satisfactory to the Trustee), notify the Trustee of such Redemption Date and
of the principal amount of Securities to be redeemed and shall deliver to the
Trustee such documentation and records as shall enable the Trustee to select the
Securities to be redeemed pursuant to Section 1104 hereof.
SECTION 1104. 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, in compliance with the requirements of the
principal national securities exchange or automated quotation system, if any, on
which the Securities are listed or, if the Securities are not listed on a
national securities exchange or automated system, by lot or by such other method
as the Trustee in its sole discretion shall deem to be fair and appropriate;
provided, however, that no such partial redemption shall reduce the portion of
the principal amount of a Security not redeemed to less than $10,000.
The Trustee shall promptly notify the Company 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 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 which has been or is to be
redeemed.
SECTION 1105. Notice of Redemption.
Notice of redemption shall be given in the manner provided for
in Section 106 hereof not less than 30 nor more than 60 days prior to the
Redemption Date, to each Holder of Securities to be redeemed.
All notices of redemption shall state:
(i) the Redemption Date,
(ii) the Redemption Price and the amount of accrued
interest to the Redemption Date payable
as provided in Section 1107 hereof, if any,
(iii) if less than all Outstanding Securities are to be
redeemed, the identification (and, in the case of a partial
redemption, the principal amounts) of the particular
Securities to be redeemed,
(iv) in case any Security is to be redeemed in part only, the
notice which relates to such Security shall state that on and
after the Redemption Date, upon surrender of such Security,
the Holder shall receive, without charge, a new Security or
Securities of authorized denominations for the principal
amount thereof remaining unredeemed,
(v) that on the Redemption Date the Redemption Price (and
accrued interest, if any, to the Redemption Date payable as
provided in Section 1107 hereof) shall become due and payable
upon each such Security, or the portion thereof, to be
redeemed, and that interest thereon shall cease to accrue on
and after said date,
(vi) the place or places where such Securities are to
be surrendered for payment of the
Redemption Price and accrued interest, if any,
(vii) the CUSIP number and
(viii) the Section of the Securities or this Indenture
pursuant to which the Securities are being redeemed.
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.
<PAGE>
SECTION 1106. Deposit of Redemption Price.
On or prior to 10:00 a.m. (New York City time) 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 1003 hereof) an amount of money in Dollars
sufficient to pay the Redemption Price of, and accrued interest on, all the
Securities which are to be redeemed on that date.
SECTION 1107. 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 (together with accrued
interest, if any, to the Redemption Date), 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,
if any, to the Redemption Date. If the Redemption Date is on or after a Regular
Record Date and on or before the related Interest Payment Date, any accrued
interest will be paid to the Person in whose name a Security is registered at
the close of business on such Regular Record Date, and no additional interest
will be payable to Holders whose Securities are redeemed.
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 Securities.
SECTION 1108. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be
surrendered at the office or agency of the Company maintained for such purpose
pursuant to Section 1002 hereof (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 such Holder's 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.
<PAGE>
ARTICLE TWELVE
RANKING OF SECURITIES
SECTION 1201. Ranking.
The Securities and the Subsidiary Guarantees will be senior
unsecured obligations of the respective obligors and will rank pari passu in
right of payment with all other existing and future senior obligations of the
Company and the Subsidiary Guarantors, respectively. The Securities and the
Subsidiary Guarantees will be effectively subordinated to all of the Company's
and the Subsidiary Guarantors' secured debt, including amounts outstanding under
the Credit Facility and Capital Lease Obligations, to the extent of the value of
the assets securing such loans. The Securities will also be structurally
subordinated to all liabilities, including trade payables, of any Subsidiary of
the Company that is not a Subsidiary Guarantor, if any.
ARTICLE THIRTEEN
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301. Company Option to Effect Legal Defeasance or
Covenant Defeasance.
The Company by Board Resolution may, at its option and at any
time, elect to have either Section 1302 or 1303 hereof be applied to all
outstanding Securities upon compliance with the conditions set forth below in
this Article Thirteen.
SECTION 1302. Legal Defeasance and Discharge.
Upon the Company's exercise under Section 1301 hereof of the
option applicable to this Section 1302, the Company and the Subsidiary
Guarantors shall be deemed to have been discharged from their obligations with
respect to all Outstanding Securities and Subsidiary Guarantees on the date the
conditions set forth in Section 1304 hereof are satisfied (hereinafter, "legal
defeasance"). For this purpose, such defeasance means that the Company shall be
deemed to have paid and discharged the entire Indebtedness represented by the
Outstanding Securities, which shall thereafter be deemed to be "Outstanding"
only for the purposes of Section 1305 hereof and the other Sections of this
Indenture referred to in (i) and (ii) below, and to have satisfied all its other
obligations under such Securities and this Indenture insofar as such Securities
are concerned (and the Trustee, at the expense of the Company, shall execute
proper instruments acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder:
(i) the rights of Holders of outstanding Securities to receive
payments in respect of the principal of, premium, if any, and
interest on such Securities when such payments are due,
(ii) the Company's obligations with respect to such
Securities under Sections 304, 305, 308, 1002 and 1003,
(iii) the rights, powers, trusts, duties and immunities
of the Trustee hereunder and the Company's obligations in connection therewith,
and
(iv) this Article Thirteen.
Subject to compliance with this Article Thirteen, the Company may
exercise its option under this Section 1302 notwithstanding the prior exercise
of its option under Section 1303 hereof with respect to the Securities.
SECTION 1303. Covenant Defeasance.
Upon the Company's exercise under Section 1301 hereof of the
option applicable to this Section 1303, each of the Company and the Subsidiary
Guarantors shall be released from its obligations under any covenant contained
in clauses (b) and (c) of Section 801 and in Sections 1005 through 1019 with
respect to the Outstanding Securities on and after the date the conditions set
forth in Section 1304 below are satisfied (hereinafter, "covenant defeasance"),
and the Securities shall thereafter be deemed not to be "Outstanding" for the
purposes of any direction, waiver, consent or declaration or Act of Holders (and
the consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "Outstanding" for all other purposes hereunder. For this
purpose, such covenant defeasance means that, with respect to the Outstanding
Securities, the Company and any Subsidiary Guarantor may omit to comply with and
shall have no liability in respect of any term, condition or limitation set
forth in any such covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason of any reference in
any such covenant to any other provision herein or in any other document and
such omission to comply shall not constitute a Default or an Event of Default
under Section 501 (other than Section 501(i)) but, except as specified above,
the remainder of this Indenture and such Securities shall be unaffected thereby.
SECTION 1304. Conditions to Legal Defeasance or Covenant
Defeasance.
<PAGE>
The following shall be the conditions to application of
either Section 1302 or 1303 hereof to the Outstanding Securities:
(a) The Company shall irrevocably have deposited or caused to
be deposited with the Trustee (or another trustee satisfying the
requirements of Section 607 hereof who shall agree to comply with the
provisions of this Article Thirteen applicable to it) as trust funds in
trust, specifically pledged as security for, and dedicated solely to,
the benefit of the Holders of such Securities, (i) cash in U.S.
Dollars, or (ii) noncallable U.S. Government Obligations (as defined
herein), or (iii) a combination thereof, sufficient, in the opinion of
a nationally recognized firm of independent public accountants, to pay
and discharge the principal of, premium, if any, and interest on the
Outstanding Securities on the Stated Maturity (or upon Redemption Date,
if applicable) of such principal, premium, if any, or installment of
interest; provided that the Trustee shall have been irrevocably
instructed to apply such money or the proceeds of such U.S. Government
Obligations to said payments with respect to the Securities. Before
such a deposit, the Company must give to the Trustee, notice as to
whether the Securities are being defeased to maturity or to a
particular redemption date. For this purpose, "U.S. Government
Obligations" means securities that are (A) direct obligations of the
United States of America for the timely payment of which its full faith
and credit is pledged or (B) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United
States of America the timely payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States
of America, which, in either case, are not callable or redeemable at
the option of the issuer thereof, and shall also include a depository
receipt issued by a bank (as defined in Section 3(a)(2) of the
Securities Act), as custodian with respect to any such U.S. Government
Obligation or a specific payment of principal of or interest on any
such U.S. Government Obligation held by such custodian for the account
of the holder of such depository receipt, provided that (except as
required by law) such custodian is not authorized to make any deduction
from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of principal of or interest on the
U.S. Government Obligation evidenced by such depository receipt.
(b) No Default or Event of Default with respect to the
Securities shall have occurred and be continuing either: (i) on the
date of such deposit (other than a Default or Event of Default
resulting from the borrowing of funds to be applied to such deposit);
or (ii), insofar as Section 501(i) hereof is concerned, at any time
during the period ending on the 91st day after the date of such deposit
(it being understood that this condition shall not be deemed satisfied
until the expiration of such period).
(c) Such legal defeasance or covenant defeasance shall not
result in a breach or violation of, or constitute a default under, any
other material agreement or instrument (other than this Indenture) to
which the Company or any Subsidiary Guarantor is a party or by which it
is bound.
(d) In the case of an election under Section 1302 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel
reasonably acceptable to the Trustee confirming that (i) the Company
has received from, or there has been published by, the Internal Revenue
Service a ruling, or (ii) since the date of this Indenture, there has
been a change in the applicable federal income tax law, in either case
to the effect that, and based thereon such opinion shall confirm that,
the Holders of the Outstanding Securities shall not recognize income,
gain or loss for federal income tax purposes as a result of such legal
defeasance and shall be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such legal defeasance had not occurred.
(e) In the case of an election under Section 1303 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel
reasonably acceptable to the Trustee confirming that the Holders of the
Outstanding Securities shall not recognize income, gain or loss for
federal income tax purposes as a result of such covenant defeasance and
shall be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
covenant defeasance had not occurred.
(f) The Company shall have delivered to the Trustee an Opinion
of Counsel to the effect that after the 91st day following the deposit,
the trust funds will not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally.
(g) The Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by the
Company with the intent of preferring the Holders of Securities over
the other creditors of the Company with the intent of defeating,
hindering, delaying or defrauding creditors of the Company or others.
(h) The Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent relating to the legal defeasance or the covenant
defeasance have been complied with.
<PAGE>
SECTION 1305. Deposited Money and U.S. Government
Obligations to Be Held in Trust; Other Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section
1003 hereof, all money and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee (or other qualifying trustee, collectively
for purposes of this Section 1305, the "Trustee") pursuant to Section 1304
hereof in respect of the Outstanding Securities shall be held in trust and
applied by the Trustee, in accordance with the provisions of such 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 Holders of such Securities of all sums due and to become due
thereon in respect of principal (and premium, if any) and interest, but such
money need not be segregated from other funds except to the extent required by
law.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the U.S. Governmental
Obligations deposited pursuant to Section 1304 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the Outstanding
Securities.
Anything in this Article Thirteen to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company from time to
time upon Company Request any money or U.S. Government Obligations held by it as
provided in Section 1304 hereof which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, are in excess of the amount thereof which
would then be required to be deposited to effect an equivalent defeasance or
covenant defeasance, as applicable, in accordance with this Article.
SECTION 1306. Reinstatement.
If the Trustee or any Paying Agent is unable to apply any
money in accordance with Section 1305 hereof by reason of any order or judgment
of any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, then the Company obligations under this Indenture
and the Securities shall be revived and reinstated as though no deposit had
occurred pursuant to Section 1302 or 1303 hereof, as the case may be, until such
time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 1305 hereof; 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 such Securities to receive such
payment from the money held by the Trustee or Paying Agent.
<PAGE>
ARTICLE FOURTEEN
SUBSIDIARY GUARANTEES
SECTION 1401. Subsidiary Guarantees.
The Company will cause each Person that currently is a
Restricted Subsidiary, or that becomes a Restricted Subsidiary, to become a
Subsidiary Guarantor as provided in Section 1408 hereof.
(a)......Subject to clause (b) of this Section 1401, each
Subsidiary Guarantor hereby, jointly and severally, on a senior unsecured basis,
guarantees to each Holder of a Security authenticated and delivered by the
Trustee, and to the Trustee on behalf of each Holder, the punctual payment when
due of all Indenture Obligations which, for purposes of its Subsidiary
Guarantee, shall also be deemed to include all commissions, fees, charges, costs
and other expenses (including reasonable legal fees and disbursements of
counsel) arising out of or incurred by the Trustee or the Holders in connection
with the enforcement of any Subsidiary Guarantee. Without limiting the
generality of the foregoing, each Subsidiary Guarantor's liability shall extend
to all amounts that constitute part of the Indenture Obligations and would be
owed by the Company to such Holder or the Trustee under the Securities or this
Indenture but for the fact that they are unenforceable, reduced, limited,
suspended or not allowable due to the existence of a bankruptcy, reorganization
or similar proceeding involving the Company.
(b)......Each Subsidiary Guarantor and by its acceptance of a
Security each Holder hereby confirms that it is the intention of all such
parties that the Guarantee by such Subsidiary Guarantor pursuant to its
Subsidiary Guarantee not constitute a fraudulent transfer or conveyance for
purposes of the Federal Bankruptcy Code, the Uniform Fraudulent Conveyance Act,
the Uniform Fraudulent Transfer Act or any similar federal or state law or the
provisions of its local law relating to fraudulent transfer or conveyance. To
effectuate the foregoing intention, the Holders and each Subsidiary Guarantor
hereby irrevocably agree that the obligations of such Subsidiary Guarantor under
its Subsidiary Guarantee shall be limited to the maximum amount as shall, after
giving effect to all other contingent and fixed liabilities of such Subsidiary
Guarantor and after giving effect to any collections from or payments made by or
on behalf of any other Subsidiary Guarantor in respect of the obligations of
such other Subsidiary Guarantor under its Subsidiary Guarantee or pursuant to
paragraph (c) of this Section 1401, result in the obligations of such Subsidiary
Guarantor under its Subsidiary Guarantee not constituting a fraudulent
conveyance or fraudulent transfer under federal or state law.
(c)......In order to provide for just and equitable
contribution among the Subsidiary Guarantors, the Subsidiary Guarantors agree,
inter se, that in the event any payment or distribution is made by any
Subsidiary Guarantor (a "Funding Guarantor") under its Subsidiary Guarantee,
such Funding Guarantor shall be entitled to a contribution from each other
Subsidiary Guarantor in a pro rata amount based on the Adjusted Net Assets (as
defined below) of each Subsidiary Guarantor (including the Funding Guarantor)
for all payments, damages and expenses incurred by the Funding Guarantor in
discharging the Indenture Obligations of the Company or any other Subsidiary
Guarantor's obligations with respect to its Subsidiary Guarantee. "Adjusted Net
Assets" of such Subsidiary Guarantor at any date shall mean the lesser of (x)
the amount by which the fair value of the property of such Subsidiary Guarantor
exceeds the total amount of liabilities, including, without limitation,
contingent liabilities (after giving effect to all other fixed and contingent
liabilities incurred or assumed on such date), but excluding liabilities under
the Subsidiary Guarantee of such Subsidiary Guarantor at such date and (y) the
amount by which the present fair salable value of the assets of such Subsidiary
Guarantor at such date exceeds the amount that shall be required to pay the
probable liability of such Subsidiary Guarantor on its debts (after giving
effect to all other fixed and contingent liabilities incurred or assumed on such
date), excluding debt in respect of the Subsidiary Guarantee, as they become
absolute and matured.
SECTION 1402. Guaranty Absolute.
Subject to the limitations in Section 1401 hereof, each
Subsidiary Guarantor guarantees that the Securities shall be paid or performed
strictly in accordance with the terms of the Securities and this Indenture,
regardless of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of any Holder with
respect thereto. The obligations of each Subsidiary Guarantor under its
Subsidiary Guarantee are independent of the obligations of the Company under the
Securities and this Indenture, and a separate action or actions may be brought
and prosecuted against such Subsidiary Guarantor to enforce its Subsidiary
Guarantee, irrespective of whether any action is brought against the Company or
any other Subsidiary Guarantor or whether the Company or any other Subsidiary
Guarantor is joined in any such action or actions. The liability of each
Subsidiary Guarantor under its Subsidiary Guarantee shall be absolute and
unconditional and the liability and obligations of such Subsidiary Guarantor
hereunder shall not be released, discharged, mitigated, waived, impaired or
affected in whole or in part by:
<PAGE>
(i) any lack of validity or enforceability of this
Indenture or the Securities with respect to the Company or
any Subsidiary Guarantor or any agreement or instrument
relating thereto;
(ii) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Indenture Obligations,
or any other amendment or waiver of or any consent to
departure from this Indenture, including any increase in the
Indenture Obligations resulting from the extension of
additional credit to the Company or otherwise;
(iii) the failure to give notice to the Subsidiary
Guarantor of the occurrence of a Default
under the provisions of this Indenture or the Securities;
(iv) any taking, release or amendment or waiver of or
consent to departure from any other
guarantee, for all or any of the Indenture Obligations;
(v) any failure, omission, delay by or inability on the part
of the Trustee or the Holders to assert or exercise any right,
power or remedy conferred on the Trustee or the Holders in
this Indenture or the Securities;
(vi) any change in the corporate structure, or termination,
dissolution, consolidation or merger of the Company or any
Subsidiary Guarantor with or into any other Person, the
voluntary or involuntary liquidation, dissolution, sale or
other disposition of all or substantially all the assets of
the Company or any Subsidiary Guarantor, the marshalling of
the assets and liabilities of the Company or any Subsidiary
Guarantor, the receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization,
arrangement, composition with the creditors, or readjustment
of, or other similar proceedings affecting the Company or any
Subsidiary Guarantor, or any of the assets of any of them;
(vii) the assignment of any right, title or interest
of the Trustee or any Holder in this Indenture or the
Securities to any other Person; or
(viii) any other event or circumstance (including any statute
of limitations), whether foreseen or unforeseen and whether
similar or dissimilar to any of the foregoing, that might
otherwise constitute a defense available to, or a discharge
of, the Company or a Subsidiary Guarantor, other than payment
in full of the Indenture Obligations; it being the intent of
each Subsidiary Guarantor that its obligations hereunder shall
not be discharged except by payment of all amounts owing
pursuant to this Indenture or the Securities.
The Subsidiary Guarantee of each Subsidiary Guarantor shall
continue to be effective or be reinstated, as the case may be, if at any time
any payment of any of the Indenture Obligations is rescinded or must otherwise
be returned by any Holder or the Trustee upon the insolvency, bankruptcy or
reorganization of the Company or otherwise, all as though such payment had not
been made. Each Subsidiary Guarantor further agrees, to the fullest extent that
it may lawfully do so, that, as between such Subsidiary Guarantor, on the one
hand, and the Holders and the Trustee, on the other hand, (A) the maturity of
the obligations guaranteed hereby may be accelerated as provided in Article Five
of this Indenture for the purposes of this Subsidiary Guarantee, notwithstanding
any stay, injunction or other prohibition preventing such acceleration in
respect of the obligations guaranteed hereby, and (B) in the event of any
acceleration of such obligations as provided in Article Five of this Indenture,
such obligations (whether or not due and payable) shall forthwith become due and
payable by the Subsidiary Guarantor for the purpose of this Subsidiary
Guarantee.
SECTION 1403. Waivers.
(a)......Each Subsidiary Guarantor hereby expressly waives (to
the extent permitted by law) notice of the acceptance of its Subsidiary
Guarantee and notice of the existence, renewal, extension or the
non-performance, non-payment, or non-observance on the part of the Company of
any of the terms, covenants, conditions and provisions of this Indenture or the
Securities or any other notice whatsoever to or upon the Company or such
Subsidiary Guarantor with respect to the Indenture Obligations. Each Subsidiary
Guarantor hereby acknowledges communication to it of the terms of this Indenture
and the Securities and all of the provisions herein contained and consents to
and approves the same. Each Subsidiary Guarantor hereby expressly waives (to the
extent permitted by law) diligence, presentment and protest.
(b)......Without prejudice to any of the rights or recourse
which the Trustee or the Holders may have against the Company, each Subsidiary
Guarantor hereby expressly waives (to the extent permitted by law) any right to
require the Trustee or the Holders to:
<PAGE>
(i) initiate or exhaust any rights, remedies or
recourse against the Company, any Subsidiary Guarantor or
any other Person;
(ii) value, realize upon, or dispose of any security
of the Company or any other Person held by the Trustee or
the Holders; or
(iii) initiate or exhaust any other remedy which the
Trustee or the Holders may have in law or equity;
before requiring, becoming entitled to or demanding payment from such Subsidiary
Guarantor under this Subsidiary Guarantee.
SECTION 1404. Subrogation.
Each Subsidiary Guarantor shall not exercise any rights that
it may acquire by way of subrogation under this Subsidiary Guarantee, by any
payment made hereunder or otherwise, until all the Indenture Obligations shall
have been paid in full. If any amount shall be paid to any Subsidiary Guarantor
on account of any such subrogation rights at any time when all the Indenture
Obligations shall not have been paid in full, such amount shall be held in trust
for the benefit of the Holders and the Trustee and shall forthwith be paid to
the Trustee, on behalf of the Holders, to be credited and applied to the
Indenture Obligations, whether matured or unmatured.
SECTION 1405. No Waiver; Remedies.
No failure on the part of any Holder or the Trustee to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
SECTION 1406. Continuing Guaranty; No Right of Set-Off;
Independent Obligation.
(a)......This Subsidiary Guarantee is a continuing guarantee
of the payment of all Indenture Obligations and shall remain in full force and
effect until the payment in full (subject to Section 1401 hereof) of all of the
Indenture Obligations and all other amounts payable under this Subsidiary
Guarantee and shall apply to and secure any ultimate balance due or remaining
unpaid to the Trustee or the Holders under this Indenture or the Securities; and
this Subsidiary Guarantee shall not be considered as wholly or partially
satisfied by the payment or liquidation at any time or from time to time of any
sum of money for the time being due or remaining unpaid to the Trustee or the
Holders.
(b)......Subject to Section 1401 hereof, each Subsidiary
Guarantor hereby guarantees that the Indenture Obligations shall be paid to the
Trustee without set-off or counterclaim or other reduction whatsoever (whether
for taxes, withholding or otherwise) in lawful currency of the United States of
America.
(c)......Subject to Section 1401 hereof, each Subsidiary
Guarantor guarantees that the Indenture Obligations shall be paid strictly in
accordance with their terms regardless of any lack of validity or enforceability
of any of such terms or the rights of the Holders with respect thereto.
(d)......Each Subsidiary Guarantor's liability to pay or
perform or cause the performance of the Indenture Obligations under this
Subsidiary Guarantee shall arise forthwith after demand for payment by the
Trustee has been given to such Subsidiary Guarantor in the manner prescribed in
this Indenture.
SECTION 1407. Subsidiary Guarantors May Consolidate, etc.,
on Certain Terms.
(a)......Nothing contained in this Indenture or in any of the
Securities shall prevent any consolidation or merger of a Subsidiary Guarantor
with or into the Company or a Wholly-Owned Restricted Subsidiary or shall
prevent any sale or conveyance of the property of a Subsidiary Guarantor as an
entirety or substantially as an entirety to the Company or a Wholly-Owned
Restricted Subsidiary, which consolidation, merger, sale or conveyance is
otherwise in accordance with the terms of this Indenture.
(b)......Other than as set forth in paragraph (a) of this
Section 1407, no Subsidiary Guarantor may merge with or into or consolidate with
any other Person (whether or not such Subsidiary Guarantor is the surviving
Person) or convey, sell, assign, transfer, lease or otherwise dispose of all or
substantially all its properties and assets to any other Person unless (i)
immediately after such transaction, and giving effect thereto, no Default or
Event of Default has occurred and is continuing; (ii) such transaction was
subject to, and consummated in compliance with, as appropriate, either Sections
801 and 802 or Section 1013 hereof; and (iii) the Company shall have delivered
to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating
that such transaction complies with the above provisions and that all conditions
precedent relating to such transaction have been complied with.
<PAGE>
SECTION 1408. Additional Subsidiary Guarantors.
The Company will cause each Person that becomes a Restricted
Subsidiary after the date of this Indenture to become a Subsidiary Guarantor
with respect to the Indenture Obligations by executing and delivering a
supplemental indenture to this Indenture providing for a Subsidiary Guarantee by
such Subsidiary under this Article Fourteen (or under a separate guarantee
agreement consistent in all material respects with this Article Fourteen). The
Company shall deliver to the Trustee, together with the supplemental indenture
referred to above, an Opinion of Counsel that such Subsidiary Guarantee is a
legal, valid, binding and enforceable obligation of such Subsidiary Guarantor,
subject to customary local law exceptions and customary exceptions for
bankruptcy and equitable principles.
SECTION 1409. Releases.
(a)......In the event of (i) the conveyance, sale, assignment,
transfer or other disposition (by way of merger, consolidation or otherwise) of
all of the Capital Stock of a Subsidiary Guarantor to a Person other than the
Company or a Wholly-Owned Restricted Subsidiary of the Company in compliance
with this Section 1409 and the terms of this Indenture, the net proceeds of
which are applied by the Company in accordance with the applicable provisions of
this Indenture; (ii) a conveyance, sale, assignment, transfer or other
disposition of all or substantially all of the assets of a Subsidiary Guarantor
(by way of merger, consolidation or otherwise) to a Person other than the
Company or a Wholly-Owned Restricted Subsidiary of the Company in compliance
with this Section 1409 and the terms of this Indenture, the Net Cash Proceeds of
which are applied by the Company in accordance with Section 1013 hereof; or
(iii) the designation of a Subsidiary Guarantor as an Unrestricted Subsidiary by
the Board of Directors of the Company, in compliance with Section 1018 and the
terms of this Indenture, then such Subsidiary Guarantor (or Person acquiring
such assets in the event of a sale or other disposition of all of the assets of
such Subsidiary Guarantor) shall be deemed automatically and unconditionally
released from and discharged from all of its obligations under this Article
Fourteen and its Subsidiary Guarantee without any further action required on the
part of the Trustee or any Holder.
(b)......Concurrently with the defeasance of the Securities
under Section 1302 hereof, or the covenant defeasance of the Securities under
Section 1303 hereof, the Subsidiary Guarantors shall be released from all their
obligations under their Subsidiary Guarantees under this Article Fourteen.
(c)......The Trustee shall deliver an appropriate instrument
evidencing such release upon receipt of a Company Request accompanied by an
Officers' Certificate certifying as to the compliance with this Section 1409.
Any Subsidiary Guarantor not so released shall remain liable for the full amount
of principal of and interest on the Securities as provided in its Subsidiary
Guarantee.
SECTION 1410. Benefits Acknowledged.
Each Subsidiary Guarantor acknowledges that it will receive
direct and indirect benefits from the financing arrangements contemplated by
this Indenture and that its guarantee and waivers pursuant to its Subsidiary
Guarantee are knowingly made in contemplation of such benefits.
SECTION 1411. Severability.
In case any provision of this Subsidiary Guarantee 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.
<PAGE>
================================================================================
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed as of the day and year first above written.
WASTE SYSTEMS INTERNATIONAL, INC.
By
Name:
Title:
IBJ WHITEHALL BANK & TRUST COMPANY
as Trustee
By
Name:
Title:
WSI MEDICAL WASTE SYSTEMS, INC.
By
Name:
Title:
BIOSAFE SYSTEMS, INC.
By
Name:
Title:
WSI NEW YORK HOLDINGS, INC.
By
Name:
Title:
<PAGE>
WSI OF NEW YORK, INC.
By
Name:
Title:
WSI VERMONT HOLDINGS, INC.
By
Name:
Title:
WSI OF VERMONT, INC.
By
Name:
Title:
WSI MORETOWN LANDFILL, INC.
By
Name:
Title:
WSI BURLINGTON TRANSFER STATION, INC.
By
Name:
Title:
WSI ST. JOHNSBURY TRANSFER STATION, INC.
By
Name:
Title:
WSI WAITSFIELD TRANSFER STATION, INC.
By
Name:
Title:
WSI MASSACHUSETTS HOLDINGS, INC.
By
Name:
Title:
WSI OF MASSACHUSETTS HAULING, INC.
By
Name:
Title:
WSI OF SOUTH HADLEY, INC.
By
Name:
Title:
WSI OXFORD TRANSFER STATION, INC.
By
Name:
Title:
WSI MARYLAND HOLDINGS, INC.
By
Name:
Title:
<PAGE>
WSI PENNSYLVANIA HOLDINGS, INC.
By
Name:
Title:
WSI OF PENNSYLVANIA, INC.
By
Name:
Title:
WSI SANDY RUN LANDFILL, INC.
By
Name:
Title:
WSI ALTOONA TRANSFER STATION, INC.
By
Name:
Title:
MOSTOLLER LANDFILL, INC.
By
Name:
Title:
<PAGE>
===============================================================================
Sch-1
SCHEDULE I
Subsidiary Guarantors of the Company
Subsidiary: Formed In:
---------- ---------
WSI Medical Waste Systems, Inc. Delaware
BioSafe Systems, Inc. Delaware
WSI New York Holdings, Inc. Delaware
WSI of New York, Inc. Delaware
WSI Vermont Holdings, Inc. Delaware
WSI of Vermont, Inc. Delaware
WSI Moretown Landfill, Inc. Delaware
WSI Burlington Transfer Station, Inc. Delaware
WSI St. Johnsbury Transfer Station, Inc. Delaware
WSI Waitsfield Transfer Station, Inc. Delaware
WSI Massachusetts Holdings, Inc. Delaware
WSI of Massachusetts Hauling, Inc. Delaware
WSI of South Hadley, Inc. Delaware
WSI Oxford Transfer Station, Inc. Delaware
WSI Maryland Holdings, Inc. Delaware
WSI Pennsylvania Holdings, Inc. Delaware
WSI of Pennsylvania, Inc. Delaware
WSI Sandy Run Landfill, Inc. Delaware
WSI Altoona Transfer Station, Inc. Delaware
Mostoller Landfill, Inc. Pennsylvania
<PAGE>
==============================================================================
A-14
Exhibit A
[FACE OF SECURITY]
WASTE SYSTEMS INTERNATIONAL, INC.
11 1/2% Senior Note due 2006
[CUSIP] ______________
No. _______ $_________________
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTIONS 306 AND 307 OF THE INDENTURE.
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY (1) BY ITS ACQUISITION HEREOF
REPRESENTS THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) AND (2) IS HEREBY NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER OR ANOTHER EXEMPTION UNDER THE SECURITIES ACT.
THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUER
THAT (X) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY
(i)(a) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, OR (c) IN ACCORDANCE
WITH ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (ii) TO THE COMPANY OR (iii) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (Y)
THE HOLDER WILL, AND WILL REQUIRE EACH SUBSEQUENT HOLDER TO, NOTIFY ANY
PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS
SET FORTH IN (X) ABOVE.
WASTE SYSTEMS INTERNATIONAL, INC., a Delaware corporation (the
"Company," which term includes any successor under the Indenture hereinafter
referred to), for value received, promises to pay to ___________, or its
registered assigns, the principal sum of ____________________________________
($___________), on January 15, 2006.
Interest Payment Dates: January 15 and July 15 of each year
commencing July 15, 1999.
Regular Record Dates: January 1 and July 1 of each year.
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.
IN WITNESS WHEREOF, the Company has caused this Security to be
signed manually or by facsimile by its duly authorized officer.
Date: ______________ WASTE SYSTEMS INTERNATIONAL, INC.
By:
Name:
Title:
<PAGE>
(Form of Trustee's Certificate of Authentication)
This is one of the 11 1/2% Senior Notes due 2006 referred to in the
within-mentioned Indenture.
IBJ WHITEHALL BANK & TRUST COMPANY,
as Trustee
By:
Authorized Signatory
<PAGE>
================================================================================
A-4
[REVERSE SIDE OF SECURITY]
WASTE SYSTEMS INTERNATIONAL, INC.
11 1/2% Senior Note due 2006
1. Principal and Interest.
The Company will pay the principal of this Security on January
15, 2006.
The Company promises to pay interest on the principal amount
of this Security on each Interest Payment Date, as set forth below, at the rate
per annum shown above.
Interest will be payable semiannually in arrears (to the
holders of record of the Securities at the close of business on the January 1 or
July 1 immediately preceding the Interest Payment Date) on each Interest Payment
Date, commencing July 15, 1999.
In the event that the Adjusted Stockholders' Equity (as
defined in the Indenture) is not at least $40,000,000 on each of December 31,
1999, June 30, 2000 and December 31, 2000, the interest rate payable on the
Securities shall be adjusted on the date following each such date to 13%, 14%
and 15% per annum, respectively, except as such rate may be adjusted pursuant to
the Note Registration Rights Agreement (as defined below) or the Warrant
Registration Rights Agreement (as defined below) in connection with a default of
the Company's obligations thereunder to file, cause to be declared effective and
keep effective registration statements filed with the Commission .
[The Holder of this Security is entitled to the benefits of a
note registration rights agreement, dated as of March 2, 1999, among the
Company, the Subsidiary Guarantors signatory thereto and the Initial Purchaser
named therein (the "Note Registration Rights Agreement"). The Note Registration
Rights Agreement provides that, in the event that either (i) the Exchange Offer
Registration Statement (as defined in the Note Registration Rights Agreement) is
not filed with the Commission on or prior to the 180th calendar day following
the date of original issue of the Securities (the "Closing Date"), or (ii) the
Exchange Offer Registration Statement is not declared effective on or prior to
the 210th calendar day following the Closing Date, or (iii) the Exchange Offer
(as defined in the Note Registration Rights Agreement) is not consummated on or
prior to the 240th calendar day following the Closing Date or a Shelf
Registration Statement (as defined in the Note Registration Rights Agreement)
with respect to the Registrable Notes is not declared effective on or prior to
the 240th calendar day following the Closing Date, or (iv) either (A) the
Exchange Offer Registration Statement ceases to be effective at any time prior
to the time that the Exchange Offer is consummated or (B) if applicable, the
Shelf Registration Statement has been declared effective and such Shelf
Registration Statement ceases to be effective at any time prior to the second
anniversary of the Closing Date, the interest rate borne by this Security shall
be increased by an amount equal to 0.50% per annum following such 180-day period
in the case of clause (i) above, following such 210-day period in the case of
clause (ii) above, following such 240-day period in the case of clause (iii)
above, or immediately in the case of clause (iv) above. Such additional interest
will be payable at the same time and in the same manner as interest is payable
on the Securities. Upon (w) the filing of the Exchange Offer Registration
Statement after the 180-day period described in clause (i) above, (x) the
consummation of the Exchange Offer or the effectiveness of a Shelf Registration
Statement, as the case may be, after the 240-day period described in clause
(iii) above, (y) the effectiveness of the Exchange Offer Registration Statement
after the 210-day period described in clause (ii) above or (z) the effectiveness
of the Exchange Offer Registration Statement or the Shelf Registration Statement
following an event described in clause (iv) above, the interest rate borne by
this Security from the date of such filing, effectiveness or consummation, as
the case may be, will be reduced to the original interest rate if the Company is
otherwise in compliance with this paragraph; provided, however, that, if after
any such reduction in interest rate, an event specified in clauses (i), (ii),
(iii) or (iv) above occurs, the interest rate will again be increased by an
amount equal to 0.50% per annum and thereafter reduced pursuant to the foregoing
conditions.
If the Company issues a notice that the Shelf Registration Statement is
unusable pending the announcement of a material corporate transaction or
otherwise pursuant to Section 3(k) of the Note Registration Rights Agreement, or
such a notice is required under applicable securities laws to be issued by the
Company, and the aggregate number of days in any consecutive twelve-month period
for which all such notices are issued or required to be issued exceeds 30 days
in the aggregate, then the interest rate borne by this Security will be
increased by 0.50% per annum following the date that such Shelf Registration
Statement ceases to be usable beyond the 30-day period permitted above. Upon the
Company declaring that the Shelf Registration Statement is usable after the
interest rate has been increased pursuant to the preceding sentence, the
interest rate borne by this Security will be reduced to the original interest
rate if the Company is otherwise in compliance with Section 2(e) of the Note
Registration Rights Agreement, provided, however, that if after any such
reduction in interest rate the Shelf Registration Statement again ceases to be
usable beyond the period permitted above, the interest rate will again be
increased and thereafter reduced pursuant to the foregoing provisions.
<PAGE>
In addition, pursuant to a warrant registration rights
agreement, dated as of March 2, 1999, among the Company, the Subsidiary
Guarantors signatory thereto and the Initial Purchaser named therein (the
"Warrant Registration Rights Agreement"), in the event that either (i) the
Registration Statement (as defined in the Warrant Registration Rights Agreement)
is not filed with the Commission on or prior to the 180th calendar day following
the Closing Date, (ii) such Registration Statement is not declared effective on
or prior to the 240th calendar day following the Closing Date or (iii) the
Registration Statement ceases to be effective at any time prior to the earlier
of (A) the time when the Registrable Securities (as defined in the Warrant
Registration Rights Agreement) covered by the Registration Statement can be sold
pursuant to Rule 144 under the Securities Act without any limitations under
clauses (c), (e), (f) and (h) of Rule 144 and (ii) two years from the Closing
Date (each such event a "Registration Default"), then the per annum interest
rate borne by the Securities shall be increased by 0.50% immediately following
such Registration Default. Upon the filing of the Registration Statement or the
effectiveness of the Registration Statement, as the case may be, the interest
rate borne by the Securities from the date of such filing or effectiveness, as
the case may be, will be reduced to the otherwise applicable interest rate set
forth above; provided, however, that, if after such reduction in interest rate,
a different event specified in clause (i), (ii), or (iii) above occurs, the
interest rate may again be increased pursuant to the foregoing provisions. If an
event has occurred and is continuing as a result of which the Registration
Statement would be required to be amended or supplemented or which would
otherwise cause the Registration Statement not to be effective and usable for
resale of Registrable Securities during the period required by the Warrant
Registration Rights Agreement, pursuant to which the Company has issued a
Blackout Notice (as defined in the Warrant Registration Rights Agreement), and
the aggregate number of days in any consecutive twelve-month period for which
all such Blackout Notices are issued or required to be issued exceeds 30 days,
then the interest rate borne by the Securities will be increased by 0.50% per
annum following the date that such Registration Statement ceases to be usable
beyond such 30 day period permitted above. Upon the Company declaring that the
Registration Statement is usable after the interest rate has been increased
pursuant to the preceding sentence, the interest rate borne by the Securities
will be reduced to the otherwise applicable interest rate if the Company is
otherwise in compliance with the Warrant Registration Rights Agreement,
provided, however, that if after any such reduction in interest rate the
Registration Statement again ceases to be usable beyond the period permitted
above, the interest rate will again be increased and thereafter reduced pursuant
to the foregoing provisions.
Notwithstanding the foregoing, in no event shall the interest
rate borne by this Security be increased pursuant to the Note Registration
Rights Agreement or the Warrant Registration Rights Agreement by an amount which
exceeds an aggregate of 0.50% per annum above the otherwise applicable per annum
interest rate.]*
Interest on this Security will accrue from the most recent
date to which interest has been paid on this Security [or the Security
surrendered in exchange hereof]** or, if no interest has been paid, from March
2, 1999; provided that, if there is no existing default in the payment of
interest and if this Security is authenticated between a Regular Record Date
referred to on the face hereof and the next succeeding Interest Payment Date,
interest shall accrue from such Interest Payment Date. Interest will be computed
on the basis of a 360-day year of twelve 30-day months.
The Company shall pay interest on overdue principal and
premium, if any, and interest on overdue installments of interest, to the extent
lawful, at the rate borne by the Securities.
2. Method of Payment.
The Company will pay interest (except defaulted interest) on
the principal amount of the Securities on each January 15 and July 15 to the
Persons who are Holders (as reflected in the Security Register at the close of
business on the January 1 and July 1 (each a "Regular Record Date") immediately
preceding the Interest Payment Date), in each case, even if the Security is
canceled on registration of transfer or registration of exchange, redemption or
repurchase after such record date; provided that, with respect to the payment of
principal, the Company will make payment to the Holder that surrenders this
Security to any Paying Agent on or after January 15, 2006.
The Company will pay principal, premium, if any, and interest
in money of the United States that at the time of payment is legal tender for
payment of public and private debts. At the option of the Company, interest may
be paid by check mailed to the address of the Holder entitled thereto as such
address appears in the Security Register; provided that all payments to the
Holders who have given wire transfer instructions to the Trustee (or other
Paying Agent) by the Regular Record Date immediately preceding such Interest
Payment Date shall be required to be made by wire transfer of immediately
available funds to the accounts specified by such Holders. If a payment date is
a date other than a Business Day at a place of payment, payment may be made on
the next succeeding day that is a Business Day and no interest shall accrue for
the intervening period.
Payment of the principal, premium, if any, and interest on
this Security, when and as the same become due and payable, is guaranteed,
jointly and severally, on a senior unsecured basis, by the Subsidiary Guarantors
referred to below.
3. Paying Agent and Registrar.
Initially, the Trustee will act as Authenticating Agent,
Paying Agent and Registrar. The Company may change any Authenticating Agent,
Paying Agent or Registrar upon written notice. The Company, any Subsidiary or
any Affiliate of any of them may act as Paying Agent, Registrar or co-registrar.
<PAGE>
4. Indenture; Limitations.
The Company issued the Securities under an Indenture dated as
of March 2, 1999 (the "Indenture"), among the Company, the Subsidiary Guarantors
signatory thereto and IBJ Whitehall Bank & Trust Company as trustee (the
"Trustee"). Capitalized terms herein are used as defined in the Indenture unless
otherwise indicated. The terms of the Securities include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act. The Securities are subject to all such terms, and Holders are
referred to the Indenture and the Trust Indenture Act for a statement of all
such terms. To the extent permitted by applicable law, in the event of any
inconsistency between the terms of this Security and the terms of the Indenture,
the terms of the Indenture shall control. [The Company and the Subsidiary
Guarantors acknowledge that Holders of the Securities shall have the
registration rights set forth in the Note Registration Rights Agreement. The
Securities are also subject to certain terms contained in the Warrant
Registration Rights Agreement.]*
The Securities are general obligations of the Company.
5. Ranking.
The Indebtedness represented by the Securities ranks in the manner and
to the extent set forth in the Indenture. Each Holder of a Security by his
acceptance hereof agrees and accepts to be bound by such provisions.
6. Redemption.
Mandatory Redemption. The Securities will not be subject
to any mandatory sinking fund redemption prior to maturity.
Optional Redemption. The Securities will be redeemable at the
option of the Company, in whole or from time to time in part, at any time on or
after March 2, 2003, upon not less than 30 nor more than 60 days prior notice
mailed by first class mail to each Holder's last address as it appears in the
Security Register at the redemption prices (expressed as percentages of the
principal amount of the Securities) set forth below plus in each case accrued
and unpaid interest, if any, to the date of redemption, if redeemed during the
periods set forth below (subject to the right of holders of record on the
relevant record date to receive interest due on an Interest Payment Date):
Applicable Period Percentage
From March 2, 2003 to March 1, 2004............................. 106 7/8%
--------------------------------------------------------------------
From March 2, 2004 to March 1, 2005............................. 103 7/16%
--------------------------------------------------------------------
From March 2, 2005 to January 14, 2006............ ............. 101 23/32%
--------------------------------------------------------------------
January 15, 2006 (Maturity) 100 % In the
case of any partial redemption, selection of the Securities
for redemption will be made
by the Trustee in compliance with the requirements of the principal national
securities exchange or automated quotation system, if any, on which the
Securities are listed or, if the Securities are not listed on a national
securities exchange or automated system, by lot or by such other method as the
Trustee in its sole discretion shall deem to be fair and appropriate; provided
that no Security of $10,000 in principal amount or less shall be redeemed in
part. If any Security is to be redeemed in part only, the notice of redemption
relating to such Security shall state the portion of the principal amount
thereof to be redeemed. A new Security in principal amount equal to the
unredeemed portion thereof will be issued in the name of the Holder thereof upon
cancellation of the original Security. Such new Securities can be obtained at
the offices of the paying agents and transfer agents.
7. Repurchase upon a Change in Control and Asset Sales.
(a) Upon the occurrence of a Change of Control, the Company is
obligated to make an offer to purchase all outstanding Securities at a
redemption price of 101% of the principal amount thereof, plus accrued interest,
if any, to the date of purchase and (b) upon Asset Sales, the Company may be
obligated to make offers to purchase Securities with the Net Cash Proceeds of
such Asset Sales at a redemption price of 100% of the principal amount thereof
plus accrued interest, if any, to the date of purchase.
8. Denominations; Transfer; Exchange.
The Securities are in registered form without coupons, in
denominations of $10,000 and multiples of $10,000 in excess thereof. A Holder
may register the transfer or exchange of Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar need not register
the transfer or exchange of any Securities selected for redemption (except the
unredeemed portion of any Security being redeemed in part). Also, it need not
register the transfer or exchange of any Securities for a period of 15 days
before a selection of Securities to be redeemed is made.
9. Persons Deemed Owners.
A Holder may be treated as the owner of a Security for all
purposes.
<PAGE>
10. Unclaimed Money.
If money for the payment of principal, premium, if any, or
interest remains unclaimed for two years, the Trustee and the Paying Agent will
pay the money back to the Company at its request. After that, Holders entitled
to the money must look to the Company for payment, unless an abandoned property
law designates another Person, and all liability of the Trustee and such Paying
Agent with respect to such money shall cease.
11. Discharge Prior to Redemption or Maturity.
If the Company irrevocably deposits, or causes to be
deposited, with the Trustee money or U.S. Government Obligations sufficient to
pay the then outstanding principal of, premium, if any, and accrued interest on
the Securities to redemption or maturity, the Company will be discharged from
the Indenture and the Securities, except in certain circumstances for certain
sections thereof.
12. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Securities
may be amended or supplemented with the consent of the Holders of at least a
majority in aggregate principal amount of the Securities then Outstanding, and
any existing default or compliance with any provision may be waived with the
consent of the Holders of a majority in aggregate principal amount of the
Securities then Outstanding. Without notice to or the consent of any Holder, the
parties thereto may amend or supplement the Indenture or the Securities to,
among other things, cure any ambiguity, defect or inconsistency and make any
change that does not materially adversely affect the rights of any Holder.
13. Restrictive Covenants.
The Indenture contains certain covenants, including, without
limitation, covenants with respect to the following matters: (i) additional
Indebtedness; (ii) Restricted Payments; (iii) the purchase of Securities upon a
Change of Control; (iv) certain Asset Sales; (v) transactions with Affiliates;
(vi) restrictions on dividends and other payments affecting Restricted
Subsidiaries; (vii) issuances and sale of Capital Stock of Restricted
Subsidiaries; (viii) Guarantees of Indebtedness by Restricted Subsidiaries; (ix)
designation of Unrestricted Subsidiaries; (x) limitations on Liens; and (xi)
merger, consolidation and certain transfers of assets. Within 60 days after the
end of each fiscal year, the Company must report to the Trustee on compliance
with such limitations.
14. Successor Persons.
When a successor Person or other entity assumes all the
obligations of its predecessor under the Securities and the Indenture, the
predecessor Person will be released from those obligations.
15. Remedies for Events of Default.
If an Event of Default, as defined in the Indenture, occurs
and is continuing, the Trustee or the Holders of not less than 25% in principal
amount of the Securities then Outstanding may declare all the Securities to be
immediately due and payable. If a bankruptcy or insolvency default with respect
to the Company or any of the Subsidiary Guarantors occurs and is continuing, the
Securities automatically become immediately due and payable. Holders may not
enforce the Indenture or the Securities except as provided in the Indenture. The
Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Securities. Subject to certain limitations, Holders of at least
a majority in principal amount of the Securities then Outstanding may direct the
Trustee in its exercise of any trust or power.
16. Subsidiary Guarantees.
This Security is guaranteed (as to payment of the principal,
premium, if any, and interest) by the Subsidiary Guarantors (as defined in the
Indenture) pursuant to the Subsidiary Guarantees. The Indenture requires that
each of the Company's current and future Restricted Subsidiaries (as defined in
the Indenture) be a Subsidiary Guarantor. The Indenture also contains certain
covenants restricting the ability of the Subsidiary Guarantors to merge,
consolidate or conduct certain asset sales.
17. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any
other capacity, may become the owner or pledgee of Securities and may make loans
to, accept deposits from, perform services for, and otherwise deal with, the
Company and its Affiliates as if it were not the Trustee.
18. Authentication.
This Security shall not be valid until the Trustee signs the
certificate of authentication on the other side of this Security.
19. Abbreviations.
Customary abbreviations may be used in the name of a Holder or
an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors
Act).
<PAGE>
20. Governing Law.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF
LAWS PROVISIONS.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to Waste Systems
International, Inc., Lexington Office Park, 420 Bedford Street, Lexington,
Massachusetts 02173 Attention: President.
<PAGE>
[FORM OF TRANSFER NOTICE]
Waste Systems International, Inc.
11 1/2% Senior Notes due 2006
FOR VALUE RECEIVED the undersigned registered holder hereby
sell(s), assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
(Please print or typewrite name and address including zip code of assignee)
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing
attorney to transfer such Security on the books of the Company with full power
of substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL SECURITIES OTHER THAN EXCHANGE SECURITIES]
In connection with any transfer of this Security occurring
prior to the date which is the earlier of (i) the date the Shelf Registration
Statement is declared effective or (ii) the end of the period referred to in
Rule 144(k) under the Securities Act, the undersigned confirms that without
utilizing any general solicitation or general advertising that:
[Check One]
[ ] (a) this Security is being transferred in compliance with
the exemption from registration under the Securities Act of
1933, as amended, provided by Rule 144A thereunder.
or
[ ] (b) this Security is being transferred other than in
accordance with (a) above and documents are being furnished
which comply with the conditions of transfer set forth in this
Security and the Indenture.
<PAGE>
If none of the foregoing boxes is checked, the Trustee or other Registrar shall
not be obligated to register this Security in the name of any Person other than
the Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 307 of the Indenture shall have
been satisfied.
Date: ____________________. _________________________
NOTICE: The
signature to this
assignment must
correspond with
the name as
written upon the
face of the
within-mentioned
instrument in
every particular,
without alteration
or any change
whatsoever.
Signature Guarantee:
Signature must be guaranteed by a participant in a recognized signature
guarantee medallion program or other signature guarantor acceptable to
the Trustee.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing
this Security for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, as amended, and is aware that the sale to it is being
made in reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as the undersigned has requested pursuant to
Rule 144A or has determined not to request such information and that it is aware
that the transferor is relying upon the undersigned's foregoing representations
in order to claim the exemption from registration provided by Rule 144A.
Date: ____________________. _________________________
NOTICE: To be
executed by an
executive officer,
general partner,
trustee or similar
representative.
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Security purchased by the Company
pursuant to Section 1012 or 1013 of the Indenture, check the Box: [ ].
If you wish to have a portion of this Security purchased by
the Company pursuant to Section 1012 or 1013 of the Indenture, state the amount
(in original principal amount) below:
Date:
Your Signature: .........
(Sign exactly as your name appears on the other side of this Security)
Signature Guarantee: ......
Signature must be guaranteed by a participant in a recognized
signature guarantee medallion program or other signature
guarantor acceptable to the Trustee.
* Include only for Initial Securities.
** Include only for Exchange Securities.
<PAGE>
EXHIBIT 4.2
- ------------
================================================================================
----------------------------------
WARRANT AGREEMENT
Dated as of March 2, 1999
by and among
WASTE SYSTEMS INTERNATIONAL, INC.
and
IBJ WHITEHALL BANK & TRUST COMPANY
as Warrant Agent
----------------------------------
===============================================================================
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1. Certain Definitions....................................1
SECTION 2. Appointment of Warrant Agent...........................6
SECTION 3. Issuance of Warrants; Warrant Certificates.............6
SECTION 4. Separation of Warrants................................19
SECTION 5. Registration and Countersignature.....................19
SECTION 6. Terms of Warrants; Exercise of Warrants...............19
SECTION 7. Payment of Taxes......................................21
SECTION 8. Reservation of Warrant Shares.........................21
SECTION 9. Obtaining Stock Exchange Listings.....................22
SECTION 10. Adjustment of Exercise Price and Number of
Warrant Shares Issuable.........................22
SECTION 11. Statement on Warrants.................................28
SECTION 12. No Dilution or Impairment; Capital
and Ownership Structure...........................28
SECTION 13. Fractional Interest.... ..............................29
SECTION 14. Notices to Warrant Holders; No Rights as
Shareholders......................................30
SECTION 15. Merger, Consolidation or Change of
Name of Warrant Agent...........................31
SECTION 16. Warrant Agent.........................................32
SECTION 17. Resignation and Removal of Warrant Agent;
Appointment of Successor.........................35
SECTION 18. Registration..........................................36
SECTION 19. Reports...............................................36
SECTION 20. Rule 144A and Rule 144................................36
SECTION 21. Notices to Company and Warrant Agent..................36
SECTION 22. Supplements and Amendments............................37
SECTION 23. Successors............................................37
SECTION 24. Termination...........................................37
SECTION 25. Governing Law....................... .................38
SECTION 26. Benefits of This Agreement........... ................38
SECTION 27. Counterparts..........................................38
<PAGE>
================================================================================
WARRANT AGREEMENT, dated as of
March 2, 1999 (the "Agreement"), between Waste Systems
International, Inc., a Delaware corporation (the "Company"), and IBJ Whitehall
Bank & Trust Company, a New York banking corporation as warrant agent (the
"Warrant Agent").
===============================================================================
WHEREAS, the Company proposes to issue warrants, as
hereinafter described (the "Warrants"), to purchase up to an aggregate of
1,500,000 shares of Common Stock (as defined below), in connection with the
offering by Waste Systems International, Inc., a Delaware corporation of an
aggregate of $100 million principal amount of the Company's 11 1/2% Senior Notes
due 2006 (the "Notes") and 1,500,000 Warrants of the Company, each Warrant
entitling the holder thereof to purchase one share of Common Stock of the
Company. The Notes and Warrants will be sold in Units (the "Units"), each Unit
consisting of $10,000 principal amount of Notes and 150 Warrants.
WHEREAS, the Company desires the Warrant Agent to act on
behalf of the Company, and the Warrant Agent is willing so to act, in connection
with the issuance of Warrant Certificates (as defined below) and other matters
as provided herein.
NOW, THEREFORE, in consideration of the promises and the
mutual agreements herein set forth, and for the purpose of defining the
respective rights and obligations of the Company, the Warrant Agent and the
Holders (as defined below), the parties hereto agree as follows:
SECTION 1.........Certain Definitions. As used in this Agreement, the
following terms shall have the following respective meanings:
"Affiliate" of any Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such Person. For purposes of this definition, "control" (including,
with correlative meanings, the terms "controlling," "controlled by" and "under
common control with"), as used with respect to any Person shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such specified Person, whether
through the ownership of voting securities, by agreement or otherwise; provided
that beneficial ownership of 10% or more of the voting securities of a Person
shall be deemed to be control.
"Applicable Procedures" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Warrant, the rules and
procedures of the Depositary that apply to such transfer or exchange.
"Business Day" means any day other than a Legal Holiday.
"Cashless Exercise" means the exercise of a Warrant without
the payment of cash, by reducing the number of Warrant Shares that would
otherwise have been obtainable upon the exercise of such Warrant and payment of
the Exercise Price in cash so as to yield a number of Warrant Shares to be
issued upon such Cashless Exercise equal to the product of (A) the number of
shares of Common Stock for which the Warrant is exercisable as of the Exercise
Date (if the Exercise Price were being paid in cash) or such lower number of
shares for which it is exercised and (B) the Cashless Exercise Ratio.
"Cashless Exercise Ratio" means a fraction, the numerator of
which is the excess of the then Current Market Price per share of the Common
Stock on the Exercise Date over the Exercise Price per share as of the Exercise
Date and the denominator of which is the then Current Market Price per share of
the Common Stock on the Exercise Date.
"Closing Date" means the date hereof.
"Commission" means the Securities and Exchange Commission.
"Common Equity Securities" means Common Stock and securities
convertible into, or exercisable or exchangeable for, Common Stock or rights or
options to acquire Common Stock or such other securities, excluding the
Warrants.
"Common Stock" means the common stock, par value $.01
per share, of the Company.
"Company" means Waste Systems International, Inc., a Delaware
corporation, its subsidiaries and its successors and assigns.
"Current Market Price" means, for the purpose of any
computation of Current Market Price per share of Common Stock at any date, (i)
for purposes of Section 6 and Section 13 hereof, the closing price of the Common
Stock on the business day immediately prior to the exercise of the applicable
Warrant pursuant to Section 6 and (ii) in all other cases, the average of the
daily closing prices for the shorter of (A) the 20 consecutive trading days
ending on the last full trading day on the exchange or market specified in the
next succeeding sentence prior to the Time of Determination and (B) the period
commencing on the first full trading day after the first public announcement of
the issuance, sale, distribution or granting in question through such last full
trading day prior to the Time of Determination. The closing price for any day
shall be the last reported sale price of the Common Stock or, in case no such
reported sale takes place on such day, the average of the closing bid and asked
prices of the Common Stock for such day, in each case (1) on the principal
national securities exchange on which the shares of Common Stock are listed or
to which such shares are admitted to trading or (2) if the Common Stock is not
listed or admitted to trading on a national securities exchange, on the
over-the-counter market as reported by Nasdaq SmallCap Market, the Nasdaq
National Market or any comparable system or (3) if the Common Stock is not
listed on Nasdaq SmallCap Market, the Nasdaq National Market or a comparable
system, as furnished by two members of the NASD selected from time to time in
good faith by the Board of Directors of the Company for that purpose. In the
absence of all of the foregoing, or if for any other reason the Current Market
Price per share cannot be determined pursuant to the foregoing provisions, the
Current Market Price per share shall be the fair market value thereof as
determined in good faith by the Board of Directors of the Company.
<PAGE>
"Debt Registration Rights Agreement" means the registration
rights agreement, dated as of the date hereof, by and among the Company, the
Subsidiary Guarantors (as defined in the Indenture) and the Initial Purchaser
relating to the Notes.
"Definitive Warrant" means, individually and collectively,
each of the Restricted Definitive Warrants and the Unrestricted Definitive
Warrants in the form of a certificated Warrant registered in the name of the
Holder thereof and issued in accordance with Section 3.5 hereof, substantially
in the form of Exhibit A hereto except that such Warrant shall not bear the
Global Warrant Legend and shall not have the "Schedule of Exchanges of Interests
in the Global Warrants" attached thereto.
"Depositary" means, with respect to the Warrants issuable or
issued, in whole or in part, in global form, the Person specified in Section 3.3
hereof as the Depositary with respect to the Warrants, and any and all
successors thereto appointed as Depositary hereunder and having become such
pursuant to the applicable provision of this Agreement.
"DTC" means The Depository Trust Company.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exercise Date" means any time on or after September 2, 1999,
to and including March 2, 2004.
"Exercise Price" means the purchase price per share of Common
Stock to be paid upon the exercise of each Warrant in accordance with the terms
hereof, which price shall initially be equal to $6.25 per share, subject to
adjustment from time to time pursuant to Sections 10 and 12 hereof.
"Expiration Date" means March 2, 2004.
"Global Warrant" means, individually and collectively, each of
the Restricted Global Warrant and the Unrestricted Global Warrant, substantially
in the form of Exhibit A hereto issued in accordance with Section 3.1(b) and 3.5
hereof.
"Global Warrant Legend" means the legend set forth in Section
3.5(g)(ii), which is required to be placed on all Global Warrants issued under
this Warrant Agreement.
"Holder" means a person who owns of record any Warrants.
"Indenture" means the indenture, dated the date hereof, among
the Company, the Subsidiary Guarantors (as defined in the Indenture) and IBJ
Whitehall Bank & Trust Company, as Trustee, relating to the Notes.
"Indirect Participant" means a Person who holds a beneficial
interest in a Global Warrant through a Participant.
"Initial Purchaser" means First Albany Corporation.
"Legal Holiday" means a Saturday, a Sunday or a day on which
banking institutions in the City of New York are authorized by law, regulation
or executive order to remain closed. If a payment date is a Legal Holiday,
payment may be made on the next succeeding day that is not a Legal Holiday, and
no interest shall accrue on such payment for the intervening period.
"Letter of Transmittal" means the letter of transmittal to be
prepared by the Company and sent to all Holders for use by such Holders in
connection with the Shelf Registration Statement.
"Notes" means the 11 1/2% Senior Notes due 2006 of the
Company, being sold and issued pursuant to the Purchase Agreement and the
Indenture, or any Notes exchanged therefor as contemplated by the Indenture and
the Debt Registration Rights Agreement.
"Officer" means, with respect to any Person, the Chairman of
the Board, the Chief Executive Officer, the President, the Chief Operating
Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer,
the Controller, the Secretary or any Vice-President of such Person.
"Opinion of Counsel" means an opinion from legal counsel who
is reasonably acceptable to the Warrant Agent in form and substance reasonably
acceptable to the Warrant Agent. The counsel may be an employee of or counsel to
the Company, any subsidiary of the Company or the Warrant Agent.
"Participant" means, with respect to the Depositary, a
Person who has an account with the Depositary.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof, including any
subdivision or ongoing business of any such entity or substantially all of the
assets of any such entity, subdivision or business.
"Private Placement Legend" means the legend set forth in
Section 3.5(g)(i) to be placed on all Warrants issued under this Warrant
Agreement except where otherwise permitted by the provisions of this Warrant
Agreement.
<PAGE>
"Prospectus" means the prospectus included in a Shelf
Registration Statement at the time such Shelf Registration Statement is declared
effective, as amended or supplemented by any prospectus supplement and by all
other amendments thereto, including post-effective amendments, and all material
incorporated by reference into such Prospectus.
"Purchase Agreement" means the Purchase Agreement, dated as of
February 25, 1999, by and among the Company, the Subsidiary Guarantors (as
defined therein) and the Initial Purchaser relating to the Units.
"QIB" means a "qualified institutional buyer" as defined
in Rule 144A.
"Registrable Securities" shall have the meaning ascribed to
such term in the Warrant Registration Rights Agreement, of even date herewith,
between the Company and the Initial Purchaser.
"Responsible Officer" when used with respect to the Warrant
Agent, any officer within the corporate trust department of the Warrant Agent,
including any vice president, assistant vice president, assistant secretary,
assistant treasurer, trust officer or any other officer of the Warrant Agent who
customarily performs functions similar to those performed by the Persons who at
the time shall be such officers, respectively, or to whom any corporate trust
matter is referred because of such person's knowledge of and familiarity with
the particular subject and who shall have direct responsibility for the
administration of this Agreement.
"Restricted Definitive Warrant" means a Definitive Warrant
bearing the Private Placement Legend.
"Restricted Global Warrant" means a Global Warrant bearing the
Private Placement Legend.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities
Act.
"Securities Act" means the Securities Act of 1933, as amended.
"Shelf Registration Statement" means any registration
statement of the Company relating to the registration for resale of Warrants or
Warrant Shares that is filed pursuant to the provisions of the Warrant
Registration Rights Agreement and including the Prospectus included therein, all
amendments and supplements thereto (including post-effective amendments) and all
exhibits and material incorporated by reference therein.
"Time of Determination" means the time and date of the earlier
to occur of (i) the date as of which the Current Market Price is to be computed
and (ii) the last full trading day on such exchange or market before the
commencement of "ex-dividend" trading in the Common Stock relating to the event
giving rise to the adjustment required by paragraph (a), (b), (c), (d), (e) or
(f) of Section 10 hereof.
"Trustee" means IBJ Whitehall Bank & Trust Company, the
trustee under the Indenture.
"Unrestricted Global Warrant" means a Global Warrant
substantially in the form of Exhibit A attached hereto that bears the Global
Warrant Legend and that has the "Schedule of Exchanges of Interests in the
Global Warrant" attached thereto, and that is deposited with or on behalf of and
registered in the name of the Depositary, representing a series of Warrants that
do not bear the Private Placement Legend.
"Unrestricted Definitive Warrant" means one or more Definitive
Warrants that do not bear and are not required to bear the Private Placement
Legend.
"Warrant Agent" means IBJ Whitehall Bank & Trust Company or
the successor or successors of such Warrant Agent appointed in accordance with
the terms hereof.
"Warrant Certificate" has the meaning assigned to such term
in Section 3.1(a) hereof.
"Warrant Countersignature Order" has the meaning assigned to
such term in Section 3.2 hereof.
"Warrant Register" has the meaning assigned to such term in
Section 3.3 hereof.
"Warrant Registration Rights Agreement" means the registration
rights agreement, dated as of the date hereof, by and among the Company, its
subsidiaries and the Initial Purchaser, attached hereto as Exhibit D, relating
to the Warrants and the Warrant Shares.
"Warrant Shares" means the shares of Common Stock issued or
issuable upon the exercise of the Warrants.
SECTION 2.........Appointment of Warrant Agent. The Company hereby appoints the
Warrant Agent to act as agent for the Company in accordance with the
instructions set forth hereinafter in this Agreement, and the Warrant Agent
hereby accepts such appointment.
<PAGE>
SECTION 3.........Issuance of Warrants; Warrant Certificates.
3.1. Form and Dating.
(a) General.
The Warrants shall be substantially in the form of Exhibit A
hereto (the "Warrant Certificates"). The Warrants may have notations, legends or
endorsements required by law, stock exchange rule or usage. Each Warrant shall
be dated the date of the countersignature.
The terms and provisions contained in the Warrants shall
constitute, and are hereby expressly made, a part of this Warrant Agreement. The
Company and the Warrant Agent, by their execution and delivery of this Warrant
Agreement, expressly agree to such terms and provisions and to be bound thereby.
However, to the extent any provision of any Warrant conflicts with the express
provisions of this Warrant Agreement, the provisions of this Warrant Agreement
shall govern and be controlling.
(b) Global Warrants.
Warrants issued in global form shall be substantially in the
form of Exhibit A attached hereto (including the Global Warrant Legend thereon
and the "Schedule of Exchanges of Interests in the Global Warrant" attached
thereto). Warrants issued in definitive form shall be substantially in the form
of Exhibit A attached hereto (but without the Global Warrant Legend thereon and
without the "Schedule of Exchanges of Interests in the Global Warrant" attached
thereto). Each Global Warrant shall represent such of the outstanding Warrants
as shall be specified therein and each shall provide that it shall represent the
number of outstanding Warrants from time to time endorsed thereon and that the
number of outstanding Warrants represented thereby may from time to time be
reduced or increased, as appropriate, to reflect exchanges and redemptions. Any
endorsement of a Global Warrant to reflect the amount of any increase or
decrease in the number of outstanding Warrants represented thereby shall be made
by the Warrant Agent in accordance with instructions given by the Holder thereof
as required by Section 3.5 hereof.
3.2. Execution.
An Officer shall sign the Warrants for the Company by manual
or facsimile signature.
If the Officer whose signature is on a Warrant no longer holds
that office at the time a Warrant is countersigned, the Warrant shall
nevertheless be valid.
A Warrant shall not be valid until countersigned by the manual
signature of the Warrant Agent. The signature shall be conclusive evidence that
the Warrant has been properly issued under this Warrant Agreement.
The Warrant Agent shall, upon a written order of the Company
signed by an Officer (a "Warrant Countersignature Order"), countersign Warrants
for original issue up to the number stated in the preamble hereto.
The Warrant Agent may appoint an agent acceptable to the
Company to countersign Warrants. Such an agent may countersign Warrants whenever
the Warrant Agent may do so. Each reference in this Warrant Agreement to a
countersignature by the Warrant Agent includes a countersignature by such agent.
Such an agent has the same rights as the Warrant Agent to deal with the Company
or an Affiliate of the Company.
3.3. Warrant Registrar.
The Company shall maintain an office or agency where Warrants
may be presented for registration of transfer or for exchange (the "Warrant
Registrar"). The Warrant Registrar shall keep a register of the Warrants and of
their transfer and exchange. The Company may appoint one or more co-Warrant
Registrars. The term "Warrant Registrar" includes any co-Warrant Registrar. The
Company may change any Warrant Registrar without notice to any holder. The
Company shall notify the Warrant Agent in writing of the name and address of any
Warrant Registrar not a party to this Warrant Agreement. If the Company fails to
appoint or maintain another entity as Warrant Registrar, the Warrant Agent shall
act as such. The Company or any of its subsidiaries may act as Warrant
Registrar.
The Company initially appoints DTC to act as Depositary with
respect to the Global Warrants and any Definitive Warrants.
The Company initially appoints the Warrant Agent to act as the
Warrant Registrar with respect to the Global Warrants and any Definitive
Warrants.
3.4. Holder Lists.
The Warrant Agent shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of all Holders. If the Warrant Agent is not the Warrant Registrar, the
Company shall promptly furnish to the Warrant Agent at such times as the Warrant
Agent may request in writing, a list in such form and as of such date as the
Warrant Agent may reasonably require of the names and addresses of the Holders.
<PAGE>
3.5. Transfer and Exchange.
(a) Transfer and Exchange of Global Warrants.
A Global Warrant may not be transferred as a whole except by the
Depositary to a nominee of the Depositary, by a nominee of the Depositary to the
Depositary or to another nominee of the Depositary, or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. The Global Warrants will be exchanged by the Company for Definitive
Warrants if (i) the Company delivers to the Warrant Agent notice from the
Depositary that it is unwilling or unable to continue to act as Depositary or
that it is no longer a clearing agency registered under the Exchange Act and, in
either case, a successor Depositary is not appointed by the Company within 90
days after the date of such notice from the Depositary or (ii) the Company in
its sole discretion determines that the Global Warrants (in whole but not in
part) should be exchanged for Definitive Warrants and delivers a written notice
to such effect to the Warrant Agent. Upon the occurrence of either of the
preceding events in (i) or (ii) above, Definitive Warrants shall be issued in
such names, and issued in any denominations, as the Depositary shall instruct
the Warrant Agent. The Global Warrants also may be exchanged or replaced, in
whole or in part, as provided in Sections 3.6 and 3.7 hereof. Every Warrant
countersigned and delivered in exchange for, or in lieu of, a Global Warrant or
any portion thereof, pursuant to this Section 3.5 or Sections 3.6 or 3.7 hereof,
shall be countersigned and delivered in the form of, and shall be, a Global
Warrant. A Global Warrant may not be exchanged for another Warrant other than as
provided in this Section 3.5(a). However, beneficial interests in a Global
Warrant may be transferred and exchanged as provided in Section 3.5(b), (c) or
(f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global Warrants.
The transfer and exchange of beneficial interests in the
Global Warrants shall be effected through the Depositary, in accordance with the
provisions of this Warrant Agreement and the Applicable Procedures. Beneficial
interests in the Restricted Global Warrant shall be subject to restrictions on
transfer comparable to those set forth herein to the extent required by the
Securities Act. Transfers of beneficial interests in the Global Warrants also
shall require compliance with either subparagraph (i) or (ii) below, as
applicable, as well as one or more of the other following subparagraphs, as
applicable:
(i) Transfer of Beneficial Interests in the Same Global Warrant. Beneficial
interests in the Restricted Global Warrant may be transferred to
Persons who take delivery thereof in the form of a beneficial interest
in the Restricted Global Warrant in accordance with the transfer
restrictions set forth in the Private Placement Legend. Beneficial
interests in the Unrestricted Global Warrant may be transferred to
Persons who take delivery thereof in the form of a beneficial interest
in the Unrestricted Global Warrant. No written orders or instructions
shall be required to be delivered to the Warrant Registrar to effect
the transfers described in this Section 3.5(b)(i).
(ii) Transfer and Exchange of Beneficial Interests in the Restricted Global
Warrant for Beneficial Interests in the Unrestricted Global Warrant. In
connection with all transfers and exchanges of beneficial interests that are not
subject to Section 3.5(b)(i) above, the transferor of such beneficial interest
must deliver to the Warrant Registrar either (A)(1) a written order from a
Participant given to the Depositary in accordance with the Applicable Procedures
directing the Depositary to credit or cause to be credited a beneficial interest
in another Global Warrant in an amount equal to the beneficial interest to be
transferred or exchanged and (2) instructions given in accordance with the
Applicable Procedures containing information regarding the Participant account
to be credited with such increase or (B)(1) a written order from a Participant
given to the Depositary in accordance with the Applicable Procedures directing
the Depositary to cause to be issued a Definitive Warrant in an amount equal to
the beneficial interest to be transferred or exchanged and (2) instructions
given by the Depositary to the Warrant Registrar containing information
regarding the Person in whose name such Definitive Warrant shall be registered.
Upon effectiveness of the Shelf Registration Statement by the Company in
accordance with Section 3.5(f) hereof, the requirements of this Section
3.5(b)(ii) shall be deemed to have been satisfied upon receipt by the Warrant
Registrar of the instructions contained in the Letter of Transmittal delivered
by the Holder of such beneficial interests in the Restricted Global Warrant.
Upon satisfaction of all of the requirements for transfer or exchange of
beneficial interests in the Global Warrants contained in this Agreement and the
Warrants or otherwise applicable under the Securities Act, the Warrant Agent
shall adjust the principal amount of the relevant Global Warrant(s) pursuant to
Section 3.5(h) hereof.
A beneficial interest in the Restricted Global Warrant may be
exchanged by any holder thereof for a beneficial interest in the
Unrestricted Global Warrant or transferred to a Person who takes
delivery thereof in the form of a beneficial interest in the
Unrestricted Global Warrant if the exchange or transfer complies with
the requirements of the first paragraph of this Section 3.5(b)(ii) and:
(A) such transfer is effected pursuant to the Shelf
Registration Statement in accordance
with the Warrant Registration Rights Agreement; or
(B) the Warrant Registrar receives the following:
(1) if the holder of such beneficial interest in the
Restricted Global Warrant proposes to exchange such
beneficial interest for a beneficial interest in the
Unrestricted Global Warrant, a certificate from such
holder in the form of Exhibit C hereto, including the
certifications in item (1)(a) thereof; or
<PAGE>
(2) if the holder of such beneficial interest in the Restricted Global Warrant
proposes to transfer such beneficial interest to a Person who shall take
delivery thereof in the form of a beneficial interest in the Unrestricted Global
Warrant, a certificate from such holder in the form of Exhibit B hereto,
including the certifications in item (3) thereof;
and, in each such case set forth in this subparagraph (B), if the
Warrant Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable to the
Warrant Registrar to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the Securities
Act.
If any such transfer is effected pursuant to subparagraph (B)
above at a time when the Unrestricted Global Warrant has not yet been issued,
the Company shall issue and, upon receipt of a Warrant Countersignature Order in
accordance with Section 3.2 hereof, the Warrant Agent shall countersign the
Unrestricted Global Warrant in the number equal to the number of beneficial
interests transferred pursuant to subparagraph (B) above.
(c) Transfer and Exchange of Beneficial Interests for Definitive Warrants.
(i) Beneficial Interests in the Restricted Global Warrant to Restricted
Definitive Warrants. If any holder of a beneficial interest in the
Restricted Global Warrant proposes to exchange such beneficial interest
for a Restricted Definitive Warrant or to transfer such beneficial
interest to a Person who takes delivery thereof in the form of a
Restricted Definitive Warrant, then, upon receipt by the Warrant
Registrar of the following documentation:
(A) if the holder of such beneficial interest in the Restricted
Global Warrant proposes to exchange such beneficial interest
for a Restricted Definitive Warrant, a certificate from such
holder in the form of Exhibit C hereto, including the
certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred to a QIB in accordance with
Rule 144A under the Securities Act, a certificate from such holder to the effect
set forth in Exhibit B hereto, including the certifications in item (1) thereof;
or (C) if such beneficial interest is being transferred pursuant to another
applicable exemption from the registration requirements of the Securities Act, a
certificate from such holder to the effect set forth in Exhibit B hereto,
including the certifications in item (2) thereof; the Warrant Agent shall cause,
in accordance with the standing instructions and procedures existing between the
Depositary and the Warrant Agent, the number of Warrants represented by the
Global Warrant to be reduced by the number of Warrants to be represented by the
Definitive Warrant pursuant to Section 3.5(h) hereof, and the Company shall
execute and the Warrant Agent shall countersign and deliver to the Person
designated in the instructions provided by the Holder a Definitive Warrant in
the appropriate amount. Any Restricted Definitive Warrant issued in exchange for
a beneficial interest in a Restricted Global Warrant pursuant to this Section
3.5(c) shall be registered in such name or names as the holder of such
beneficial interest shall instruct the Warrant Registrar through instructions
from the Depositary and the Participant. The Warrant Agent shall deliver such
Restricted Definitive Warrants to the Persons in whose names such Warrants are
so registered. Any Restricted Definitive Warrant issued in exchange for a
beneficial interest in a Restricted Global Warrant pursuant to this Section
3.5(c)(i) shall bear the Private Placement Legend and shall be subject to all
restrictions on transfer contained therein.
(ii) Beneficial Interests in the Restricted Global Warrant to Unrestricted
Definitive Warrants. A holder of a beneficial interest in the
Restricted Global Warrant may exchange such beneficial interest for an
Unrestricted Definitive Warrant or may transfer such beneficial
interest to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Warrant only if:
(A) such transfer is effected pursuant to the Shelf
Registration Statement in accordance
with the Warrant Registration Rights Agreement; or
(B) the Warrant Registrar receives the following:
(1) if the holder of such beneficial interest in a Restricted
Global Warrant proposes to exchange such beneficial interest for
a Definitive Warrant that does not bear the Private Placement
Legend, a certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (1)(b) thereof; or
(2) if the holder of such beneficial interest in a Restricted Global Warrant
proposes to transfer such beneficial interest to a Person who shall take
delivery thereof in the form of a Definitive Warrant that does not bear the
Private Placement Legend, a certificate from such holder in the form of Exhibit
B hereto, including the certifications in item (3) thereof;
and, in each such case set forth in this subparagraph (B), if the
Warrant Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable to the
Warrant Registrar to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the Securities
Act.
<PAGE>
(iii) Beneficial Interests in the Unrestricted Global Warrant to
Unrestricted Definitive Warrants. If any holder of a beneficial
interest in an Unrestricted Global Warrant proposes to exchange
such beneficial interest for an Unrestricted Definitive Warrant or to
transfer such beneficial interest to a Person who takes delivery
thereof in the form of an Unrestricted Definitive Warrant, then,
upon satisfaction of the conditions set forth in the first paragraph
of Section 3.5(b)(ii) hereof, the Warrant Agent shall cause the
amount of the applicable Global Warrant to be reduced accordingly
pursuant to Section 3.5(h) hereof, and the Company shall execute
and the Warrant Agent shall countersign and
deliver to the Person designated in the instructions provided by the
Holder an Unrestricted Definitive Warrant in the appropriate amount.
Any Definitive Warrant issued in exchange for a beneficial interest
pursuant to this Section 3.5(c)(iii) shall be registered in such
name or names and in such authorized denomination or denominations
as the holder of such beneficial interest shall instruct the
Warrant Registrar through instructions from the Depositary and the
Participant. The Warrant Agent shall deliver
such Definitive Warrants to the Persons in whose names such Warrants
are so registered. Any Definitive Warrant issued in exchange for a
beneficial interest pursuant to this Section 3.5(c)(iii) shall not bear
the Private Placement Legend.
(d) Transfer and Exchange of Definitive Warrants for Beneficial Interests.
(i) Restricted Definitive Warrants to Beneficial Interests in the
Restricted Global Warrant. If any Holder of a Restricted Definitive
Warrant proposes to exchange such Warrant for a beneficial interest in
the Restricted Global Warrant or to transfer such Restricted Definitive
Warrants to a Person who takes delivery thereof in the form of a
beneficial interest in the Restricted Global Warrant, then, upon
receipt by the Warrant Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Warrant proposes
to exchange such Warrant for a beneficial interest in the
Restricted Global Warrant, a certificate from such Holder in
the form of Exhibit C hereto, including the certifications in
item (2)(b) thereof;
(B) if such Restricted Definitive Warrant is being transferred to a QIB in
accordance with Rule 144A under the Securities Act, a certificate from such
Holder to the effect set forth in Exhibit B hereto, including the certifications
in item (1) thereof; (C) if such Restricted Definitive Warrant is being
transferred pursuant to another applicable exemption from the registration
requirements of the Securities Act, a certificate from such Holder to the effect
set forth in Exhibit B hereto, including the certifications in item (2) thereof;
the Warrant Agent shall cancel the Restricted Definitive Warrant, increase or
cause to be increased the amount of, in the case of clauses (A) or (B) above,
the Restricted Global Warrant.
(ii) Restricted Definitive Warrants to Beneficial Interests in the
Unrestricted Global Warrant. A Holder of a Restricted Definitive
Warrant may exchange such Warrant for a beneficial interest in the
Unrestricted Global Warrant or transfer such Restricted Definitive
Warrant to a Person who takes delivery thereof in the form of a
beneficial interest in the Unrestricted Global Warrant only if:
(A) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Warrant Registration Rights Agreement;
or
(B) the Warrant Registrar receives the following:
(1) if the Holder of such Definitive Warrants proposes to
exchange such Warrants for a beneficial interest in
the Unrestricted Global Warrant, a certificate from
such Holder in the form of Exhibit C hereto,
including the certifications in item (1)(c) thereof;
or
(2) if the Holder of such Definitive Warrants proposes to transfer such Warrants
to a Person who shall take delivery thereof in the form of a beneficial interest
in the Unrestricted Global Warrant, a certificate from such Holder in the form
of Exhibit B hereto, including the certifications in item (3) thereof;
and, in each such case set forth in this subparagraph (B), if the
Warrant Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable to the
Warrant Registrar to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the Securities
Act.
Upon satisfaction of the conditions of any of the subparagraphs in this Section
3.5(d)(ii), the Warrant Agent shall cancel the Restricted Definitive Warrants
and increase or cause to be increased the aggregate principal amount of the
Unrestricted Global Warrant.
(iii) Unrestricted Definitive Warrants to Beneficial Interests in the
Unrestricted Global Warrant. A Holder of an Unrestricted Definitive
Warrant may exchange such Warrant for a beneficial interest in the
Unrestricted Global Warrant or transfer such Definitive Warrants to a
Person who takes delivery thereof in the form of a beneficial interest
in the Unrestricted Global Warrant at any time. Upon receipt of a
request for such an exchange or transfer, the Warrant Agent shall
cancel the applicable Unrestricted Definitive Warrant and increase or
cause to be increased the amount of the Unrestricted Global Warrant.
<PAGE>
If any such exchange or transfer from a Definitive Warrant to a beneficial
interest is effected pursuant to subparagraphs (ii)(B) or (iii) above at a time
when the Unrestricted Global Warrant has not yet been issued, the Company shall
issue and, upon receipt of a Warrant Countersignature Order in accordance with
Section 3.2 hereof, the Warrant Agent shall countersign the Unrestricted Global
Warrant in the number equal to the number of beneficial interests of Definitive
Warrants so transferred.
(e) Transfer and Exchange of Definitive Warrants for Definitive Warrants. Upon
request by a Holder of Definitive Warrants and such Holder's compliance with the
provisions of this Section 3.5(e), the Warrant Registrar shall register the
transfer or exchange of Definitive Warrants. Prior to such registration of
transfer or exchange, the requesting Holder shall present or surrender to the
Warrant Registrar the Definitive Warrants duly endorsed or accompanied by a
written instruction of transfer in form satisfactory to the Warrant Registrar
duly executed by such Holder or by its attorney, duly authorized in writing. In
addition, the requesting Holder shall provide any additional certifications,
documents and information, as applicable, required pursuant to the following
provisions of this Section 3.5(e).
(i) Restricted Definitive Warrants to Restricted Definitive Warrants. Any
Restricted Definitive Warrant may be transferred to and registered in
the name of Persons who take delivery thereof in the form of a
Restricted Definitive Warrant if the Warrant Registrar receives the
following:
(A) if the transfer will be made pursuant to Rule 144A under the
Securities Act, then the transferor must deliver a certificate
in the form of Exhibit B hereto, including the certifications
in item (1) thereof; or
(B) if the transfer will be made pursuant to any other exemption from the
registration requirements of the Securities Act, then the transfer
or must deliver a certificate in the form of Exhibit B hereto,
including the certifications required by item (2) thereof;
and, in the case of subparagraph (B), if the Warrant Registrar so
requests, an Opinion of Counsel in form reasonably acceptable to the
Company and the Warrant Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private Placement
Legend are no longer required in order to maintain compliance with the
Securities Act.
(ii) Restricted Definitive Warrants to Unrestricted Definitive Warrants. Any
Restricted Definitive Warrant may be exchanged by the Holder thereof
for an Unrestricted Definitive Warrant or transferred to a Person or
Persons who take delivery thereof in the form of an Unrestricted
Definitive Warrant if:
(A) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Warrant Registration
Rights Agreement; or
(B) the Warrant Registrar receives the following:
(1) if the Holder of such Restricted Definitive Warrants proposes to
exchange such Warrants for an Unrestricted Definitive Warrant, a
certificate from such Holder in the form of Exhibit C hereto,
including the certifications in item (1)(d) thereof; or
(2) if the Holder of such Restricted Definitive Warrants proposes to
transfer such Warrants to a Person who shall take delivery
thereof in the form of an Unrestricted Definitive Warrant, a
certificate from such Holder in the form of Exhibit B hereto,
including the certifications in item (3) thereof;
and, in each such case set forth in this subparagraph (B), if the
Warrant Registrar so requests, an Opinion of Counsel in form reasonably
acceptable to the Company and the Warrant Registrar to the effect that
such exchange or transfer is in compliance with the Securities Act and
that the restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain compliance
with the Securities Act.
(iii) Unrestricted Definitive Warrants to Unrestricted Definitive Warrants. A
Holder of Unrestricted Definitive Warrants may transfer such Warrants
to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Warrant. Upon receipt of a request to register such a
transfer, the Warrant Registrar shall register the Unrestricted
Definitive Warrants pursuant to the instructions from the Holder
thereof.
(f) Shelf Registration Statement. Upon the effectiveness of the Shelf
Registration Statement in accordance with the Warrant Registration Rights
Agreement, the Company shall issue and, upon receipt of a Warrant
Countersignature Order in accordance with Section 3.2, the Warrant Agent shall
countersign the Unrestricted Global Warrant for an amount equal to zero (0)
Warrants. From time to time thereafter, (i) the Warrant Agent shall increase the
aggregate principal amount of the Unrestricted Global Warrant in an amount equal
to the amount of the beneficial interests in the Restricted Global Warrant
covered by a Prospectus filed with the Commission as part of such Shelf
Registration Statement and (ii) the Company shall execute and the Warrant Agent
shall countersign Definitive Warrants in an amount equal to the amount of the
Restricted Definitive Warrants covered by such Prospectus as amended or
supplemented from time to time, in each case in accordance with the applicable
provisions of this Section 3.5. Concurrently with the issuance of such Warrants,
the Warrant Agent shall cause the amount of the Restricted Global Warrant to be
reduced accordingly and, in the case of Restricted Definitive Warrants, deliver
to the Persons designated by the Holders of Definitive Warrants such accepted
Definitive Warrants in the appropriate amount. The Company shall deliver to the
Warrant Agent a copy of the Shelf Registration Statement, upon effectiveness,
and any Prospectus or amendment or supplement thereto as may be filed from time
to time thereunder.
<PAGE>
(g) Legends.
The following legends shall appear on the face of the Global
Warrants and Definitive Warrants issued under this Warrant Agreement unless
specifically stated otherwise in the applicable provisions of this Warrant
Agreement.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each Global
Warrant and each Definitive Warrant (and all Warrants issued
in exchange therefor or substitution thereof) shall bear the
legend in substantially the following form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY
WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER
SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF
THE SECURITY EVIDENCED HEREBY (1) BY ITS ACQUISITION HEREOF REPRESENTS
THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) AND (2) IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER OR ANOTHER EXEMPTION
UNDER THE SECURITIES ACT. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE ISSUER THAT (X) SUCH SECURITY MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (i)(a) TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, OR (c) IN
ACCORDANCE WITH ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL IF THE COMPANY SO REQUESTS), (ii) TO THE COMPANY OR (iii)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (Y) THE HOLDER
WILL, AND WILL REQUIRE EACH SUBSEQUENT HOLDER TO, NOTIFY ANY PURCHASER
FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET
FORTH IN (X) ABOVE."
(B) Notwithstanding the foregoing, any Global Warrant or
Definitive Warrant issued pursuant to subparagraphs (b)(ii),
(c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f)
to this Section 3.5 (and all Warrants issued in exchange
therefor or substitution thereof) shall not bear the Private
Placement Legend.
(ii) Global Warrant Legend. Each Global Warrant shall bear a legend in
substantially the following form:
"THIS GLOBAL WARRANT IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
WARRANT AGREEMENT GOVERNING THIS WARRANT) OR ITS NOMINEE IN CUSTODY FOR
THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO
ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT(I) THE WARRANT AGENT MAY
MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 3.5
OF THE WARRANT AGREEMENT, (II) THIS GLOBAL WARRANT MAY BE EXCHANGED OR
TRANSFERRED PURSUANT TO SECTIONS 3.5(a), 3.6 AND 3.7 OF THE WARRANT
AGREEMENT AND (III) THIS GLOBAL WARRANT MAY BE DELIVERED TO THE WARRANT
AGENT FOR CANCELLATION PURSUANT TO SECTION 3.8 OF THE WARRANT
AGREEMENT."
"UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."
(h) Cancellation and/or Adjustment of the Global Warrant.
At such time as all beneficial interests in a particular
Global Warrant have been exercised or exchanged for Definitive Warrants or a
particular Global Warrant has been exercised, redeemed, repurchased or canceled
in whole and not in part, each such Global Warrant shall be returned to or
retained and canceled by the Warrant Agent in accordance with Section 3.8
hereof. At any time prior to such cancellation, if any beneficial interest in a
Global Warrant is exercised or exchanged for or transferred to a Person who will
take delivery thereof in the form of a beneficial interest in another Global
Warrant or for Definitive Warrants, the amount of Warrants represented by such
Global Warrant shall be reduced accordingly and an endorsement shall be made on
such Global Warrant by the Warrant Agent or by the Depositary at the direction
of the Warrant Agent to reflect such reduction; and if the beneficial interest
is being exchanged for or transferred to a Person who will take delivery thereof
in the form of a beneficial interest in another Global Warrant, such other
Global Warrant shall be increased accordingly and an endorsement shall be made
on such Global Warrant by the Warrant Agent or by the Depositary at the
direction of the Warrant Agent to reflect such increase.
<PAGE>
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the Company shall
execute the Global Warrants and Definitive Warrants at the Warrant
Registrar's request. The Warrant Agent shall countersign the Global
Warrants and Definitive Warrants in accordance with the provisions of
Section 3.2 hereof.
(ii) No service charge shall be made to a holder of a beneficial interest in a
Global Warrant or to a holder of a Definitive Warrant for any registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any transfer tax or similar governmental charge payable in connection
therewith (other than any such transfer taxes or similar governmental charge
payable upon exchange or transfer pursuant to Section 7 hereof). (iii) The
Global Warrants and Definitive Warrants issued upon any registration of transfer
or exchange of the Global Warrants or Definitive Warrants shall be the duly
authorized, executed and issued warrants for Common Stock of the Company, not
subject to any preemptive rights, and entitled to the same benefits under this
Warrant Agreement, as the Global Warrants or Definitive Warrants surrendered
upon such registration of transfer or exchange. (iv) Prior to due presentment
for the registration of a transfer of any Warrant, the Warrant Agent, the
Warrant Registrar and the Company may deem and treat the Person in whose name
any Warrant is registered as the absolute owner of such Warrant for all purposes
and none of the Warrant Agent, the Warrant Registrar or the Company shall be
affected by notice to the contrary. (j) Facsimile Submissions to Warrant Agent.
All certifications, certificates and Opinions of Counsel
required to be submitted to the Warrant Registrar pursuant to this Section 3.5
to effect a registration of transfer or exchange may be submitted by facsimile.
Notwithstanding anything herein to the contrary, as to any
orders, instructions, certificates and/or certifications delivered to the
Warrant Registrar pursuant to this Section 3.5, the Warrant Registrar's duties
shall be limited to confirming that any such orders, instructions, certificates
and/or certifications delivered to it are in the form required hereby, and as to
the certificates in the form of Exhibits B and C attached hereto. The Warrant
Registrar shall not be responsible for confirming the truth or accuracy of
representations made in any such certifications or certificates or any matter in
such orders or instructions. As to any Opinions of Counsel delivered pursuant to
this Section 3.5, the Warrant Registrar may exclusively rely upon, and be fully
protected in relying upon, such Opinions.
3.6. Replacement Warrants.
In case any of the Warrant Certificates shall be mutilated,
lost, stolen or destroyed, the Company may in its discretion issue and the
Warrant Agent may, countersign, in exchange and substitution for and upon
cancellation of the mutilated Warrant Certificate, or in lieu of and
substitution for the Warrant Certificate lost, stolen or destroyed, a new
Warrant Certificate of like tenor and representing an equivalent number of
Warrants, but only upon receipt of evidence reasonably satisfactory to the
Company and the Warrant Agent of such loss, theft or destruction of such Warrant
Certificate. If required by the Warrant Agent or the Company, an indemnity bond
must be supplied by the Holder that is sufficient in the judgment of the Warrant
Agent and the Company to protect the Company, the Warrant Agent, and any other
agent for purposes of the countersignature from any loss that any of them may
suffer if a Warrant is replaced. Applicants for such substitute Warrant
Certificates shall also comply with such other reasonable regulations and pay
such other reasonable charges as the Company and the Warrant Agent may
prescribe. The Company may charge for its expenses in replacing a Warrant.
Every replacement Warrant is an additional warrant of the
Company and shall be entitled to all of the benefits of this Warrant Agreement
equally and proportionately with all other Warrants duly issued hereunder.
3.7. Temporary Warrants.
Until certificates representing Warrants are ready for
delivery, the Company may prepare and the Warrant Agent, upon receipt of a
Warrant Countersignature Order, shall issue temporary Warrants. Temporary
Warrants shall be substantially in the form of certificated Warrants but may
have variations that the Company considers appropriate for temporary Warrants
and as shall be reasonably acceptable to the Warrant Agent. Without unreasonable
delay, the Company shall prepare and the Warrant Agent shall countersign
definitive Warrants in exchange for temporary Warrants.
Holders of temporary Warrants shall be entitled to all of the
benefits of this Warrant Agreement.
3.8. Cancellation.
Subject to Section 3.5(h) hereof, the Company at any time may
deliver Warrants to the Warrant Agent for cancellation. The Warrant Registrar
shall forward to the Warrant Agent any Warrants surrendered to them for
registration of transfer, exchange or exercise. The Warrant Agent and no one
else shall cancel all Warrants surrendered for registration of transfer,
exchange, exercise, replacement or cancellation and shall return such canceled
Warrants to the Company (subject to the record retention requirement of the
Exchange Act). The Company may not issue new Warrants to replace Warrants that
have been exercised or that have been delivered to the Warrant Agent for
cancellation.
<PAGE>
SECTION 4. Separation of Warrants. The Notes and Warrants shall be
separately transferable immediately
upon issuance.
SECTION 5. Registration and Countersignature.
(a) The Warrant Agent,
on behalf of the Company, shall number and register the
Warrant Certificates in a register as they are issued
by the Company.
(b) Warrant Certificates shall be manually countersigned
by the Warrant Agent and shall not be valid for any purpose unless so
countersigned.
(c) The Company and the Warrant Agent may deem and treat the
Holder(s) of the Warrant Certificates as the absolute owner(s) thereof
(notwithstanding any notation of ownership or other writing thereon made by
anyone), for all purposes, and neither the Company nor the Warrant Agent shall
be affected by any notice to the contrary.
SECTION 6. Terms of Warrants; Exercise of Warrants. Subject to the terms of this
Agreement, each Warrant Holder shall have the right, which may be exercised
commencing at the opening of business on any Exercise Date and until 5:00 p.m.,
New York City time on the Expiration Date to receive from the Company the number
of fully paid and nonassessable Warrant Shares which the Holder may at the time
be entitled to receive on exercise of such Warrants and payment of the Exercise
Price then in effect for such Warrant Shares; provided that no Warrant Holder
shall be entitled to exercise such Holder's Warrants at any time, unless, at the
time of exercise (A) (i) a registration statement under the Securities Act
relating to the Warrant Shares has been filed with, and declared effective by,
the Commission, and no stop order suspending the effectiveness of such
registration statement has been issued by the Commission or (ii) the issuance of
the Warrant Shares is permitted pursuant to an exemption from the registration
requirements of the Securities Act and (B) such Warrant Shares are qualified for
sale or exempt from qualification under the applicable securities laws of the
states in which the various holders of the Warrants or other Persons to whom it
is proposed that the Warrant Shares be issued on exercise of the Warrants
reside. Each Warrant not exercised prior to 5:00 p.m., New York City time, on
the Expiration Date shall become void and all rights thereunder and all rights
in respect thereof under this Agreement shall cease as of such time. No
adjustments as to dividends will be made upon exercise of the Warrants.
The Company shall give notice not less than 90, and not more
than 120, days prior to the Expiration Date to the Holders of all then
outstanding Warrants to the effect that the Warrants will terminate and become
void as of 5:00 p.m., New York City time, on the Expiration Date. If the Company
fails to give such notice, the Warrants will not expire until 90 days after the
Company gives such notice, provided in no event will Holders be entitled to any
damages or other remedy for the Company's failure to give such notice other than
any such extension.
In order to exercise all or any of the Warrants represented by
a Warrant Certificate, (i)(A) in the case of Definitive Warrants, the Holder
thereof must surrender for exercise the Warrant Certificate to the Company at
the office of the Warrant Agent at its New York corporate trust office, (B) in
the case of a beneficial interest in a Global Warrant, the exercising
Participant whose name appears on a securities position listing of the
Depositary as the holder of such beneficial interest must comply with the
Applicable Procedures relating to the exercise of such beneficial interest in
such Global Warrant and (C) in the case of both the Global Warrant and
Definitive Warrants, the Holder thereof or the Participant, as applicable, must
deliver to the Company at the office of the Warrant Agent the form of election
to purchase on the reverse thereof duly filled in and signed, which signature
shall be medallion guaranteed by an institution which is a member of a
Securities Transfer Association recognized signature guarantee program, and (ii)
present payment to the Warrant Agent for the account of the Company of the
Exercise Price, which is set forth in the form of Warrant Certificate as
adjusted as herein provided, for the number of Warrant Shares in respect of
which such Warrants are then exercised. For purposes of the foregoing, the
Warrant Agent is entitled to conclusively rely on written instructions received
from the Depositary regarding any exercise of Warrants represented by a Global
Warrant.
Payment of the aggregate Exercise Price shall be made (i) in
cash by wire transfer or by certified or official bank check, payable to the
order of the Company in United States dollars or (ii) by a Cashless Exercise for
any or all of the shares of Common Stock.
When a Holder surrenders a Warrant Certificate in connection
with an option to elect a Cashless Exercise, the number of shares of Common
Stock deliverable upon such Cashless Exercise shall be equal to the number of
shares of Common Stock issuable upon the exercise of Warrants that the Holder
specifies are to be exercised pursuant to a Cashless Exercise multiplied by the
Cashless Exercise Ratio. The exercise of Warrants by Holders of beneficial
interest in the Global Warrant shall be effected in accordance with this
Agreement and the procedures of the Depositary therefor.
<PAGE>
Subject to the provisions of Section 7 hereof, upon surrender
of Warrants and payment of the Exercise Price as provided above, the Warrant
Agent shall thereupon promptly notify the Company, and the Company shall
promptly transfer to the Holder of such Warrant Certificate a certificate or
certificates for the appropriate number of Warrant Shares or other securities or
property (including any money) to which the Holder is entitled, registered or
otherwise placed in, or payable to the order of, such name or names as may be
directed in writing by the Holder, and shall deliver such certificate or
certificates representing the Warrant Shares and any other securities or
property (including any money) to the person or persons entitled to receive the
same, together with an amount in cash in lieu of any fraction of a share as
provided in Section 13 hereof. Any such certificate or certificates representing
the Warrant Shares shall be deemed to have been issued and any person so
designated to be named therein shall be deemed to have become a Holder of record
of such Warrant Shares as of the date of the surrender of such Warrants and
payment of the Exercise Price.
The Warrants shall be exercisable commencing on the Exercise
Date, at the election of the Holders thereof, either in full or from time to
time in part. If less than all the Warrants represented by a Definitive Warrant
are exercised, such Definitive Warrant shall be surrendered and a new Definitive
Warrant of the same tenor and for the number of Warrants which were not
exercised shall be executed by the Company and delivered to the Warrant Agent
and the Warrant Agent shall countersign the new Definitive Warrant, registered
in such name or names as may be directed in writing by the Holder, and shall
deliver the new Definitive Warrant to the Person or Persons entitled to receive
the same. The Warrant Agent shall make such notations on the "Schedule of
Exchanges of Interests on the Global Warrant" to each Global Warrant as are
required to reflect any change in the number of Warrants represented by such
Global Warrant resulting from any exercise in accordance with the terms hereof.
All Warrant Certificates surrendered upon exercise of Warrants shall be canceled
by the Warrant Agent. Such canceled Warrant Certificates shall then be disposed
of by the Warrant Agent in a manner satisfactory to the Company. The Warrant
Agent shall account promptly to the Company with respect to Warrants exercised
and concurrently pay to the Company all monies received by the Warrant Agent for
the purchase of the Warrant Shares through the exercise of such Warrants. The
Warrant Agent shall keep copies of this Agreement and any notices given or
received hereunder by or from the Company available for inspection by the
Holders during normal business hours at its office. The Company shall supply the
Warrant Agent from time to time with such numbers of copies of this Agreement as
the Warrant Agent may reasonably request.
All certificates representing Warrant Shares issued in a
transaction exempt from registration under the Securities Act shall bear the
legend in substantially the form set forth in Section 3.5(g)(i)(A) hereof
(provided that if no legend is required none shall be placed on the Warrant
Shares).
SECTION 7. Payment of Taxes. The Company shall pay all documentary stamp taxes
attributable to the initial issuance of Warrant Shares upon the exercise of
Warrants; provided that the Company shall not be required to pay any tax or
taxes which may be payable in respect of any transfer involved in the issue of
any Warrant Certificates or any certificates for Warrant Shares in a name other
than that of the Holder of a Warrant Certificate surrendered upon the exercise
of a Warrant, and the Company shall not be required to issue or deliver such
Warrant Certificates unless or until the person or persons requesting the
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
SECTION 8. Reservation of Warrant Shares.
(a) The Company shall at all times reserve and keep available, free from
preemptive rights, out of the aggregate of its authorized but unissued Common
Stock or its authorized and issued Common Stock held in its treasury, for the
purpose of enabling it to satisfy any obligation to issue Warrant Shares upon
exercise of Warrants, the maximum number of shares of Common Stock which may
then be deliverable upon the exercise of all outstanding Warrants.
(b) The Company or, if appointed by the Company, the transfer agent for the
Common Stock (the "Transfer Agent") and every subsequent transfer agent for any
shares of the Company's capital stock issuable upon the exercise of any of the
rights of purchase aforesaid will be irrevocably authorized and directed at all
times to reserve such number of authorized shares as shall be required for such
purpose. The Company shall keep a copy of this Agreement on file with the
Transfer Agent and with every subsequent transfer agent for any shares of the
Company's capital stock issuable upon the exercise of the rights of purchase
represented by the Warrants. The Company shall supply such Transfer Agent with
duly executed certificates for such purposes and shall provide or otherwise make
available any cash which may be payable as provided in Section 13 hereof. The
Company shall furnish such Transfer Agent a copy of all notices of adjustments
and certificates related thereto, transmitted to each Holder of the Warrants
pursuant to Section 14 hereof. (c) Before taking any action which would cause an
adjustment pursuant to Sections 10 or 12 hereof to reduce the Exercise Price
below the then par value (if any) of the Warrant Shares, the Company will take
any corporate action which may, in the opinion of its counsel (which may be
counsel employed by the Company), be necessary in order that the Company may
validly and legally issue fully paid and nonassessable Warrant Shares at the
Exercise Price as so adjusted. (d) The Company covenants that all Warrant Shares
which may be issued upon exercise of Warrants in accordance with the terms of
this Agreement (including the terms of the Exercise Price) will, upon issue, be
duly and validly issued, fully paid and nonassessable, free of preemptive rights
and free from all taxes, liens, charges and security interests with respect to
the issue thereof (other than those created by the Holders). SECTION 9.
Obtaining Stock Exchange Listings. The Company will from time to time take all
action which may be necessary so that the Warrant Shares, immediately upon their
issuance upon the exercise of Warrants, will be listed on the principal
securities exchanges and markets (including, without limitation, the Nasdaq
SmallCap Market) within the United States of America, if any, on which other
shares of Common Stock are then listed. The Company will obtain and keep all
required permits and records in connection with such listing.
<PAGE>
SECTION 10. Adjustment of Exercise Price and Number of Warrant Shares Issuable.
The number and kind of shares purchasable upon the exercise of Warrants and the
Exercise Price shall be subject to adjustment from time to time as follows: (a)
Stock Splits, Combinations, etc. In case the Company shall hereafter (A) pay a
dividend or make a distribution on its Common Stock in shares of its capital
stock (whether shares of Common Stock or of capital stock of any other class),
(B) subdivide its outstanding shares of Common Stock, (C) combine its
outstanding shares of Common Stock into a smaller number of shares or (D) issue
by reclassification of its shares of Common Stock any shares of capital stock of
the Company, the Exercise Price in effect immediately prior to such action and,
if applicable, the type of security issuable upon any exercise of a Warrant
shall be adjusted so that the Holder of any Warrant thereafter exercised shall
be entitled to receive upon payment of the Exercise Price the kind and amount of
shares of capital stock of the Company which such Holder would have owned
immediately following such action had such Warrant been exercised immediately
prior thereto. An adjustment made pursuant to this paragraph shall become
effective immediately after the record date in the case of a dividend and shall
become effective immediately after the effective date in the case of a
subdivision, combination or reclassification. If, as a result of an adjustment
made pursuant to this paragraph, the Holder of any Warrant thereafter exercised
shall become entitled to receive shares of two or more classes of capital stock
of the Company, the Board of Directors of the Company (whose determination shall
be conclusive) shall determine the allocation of the adjusted Exercise Price
between or among shares of such classes of capital stock.
(b) Reclassification, Combinations, Mergers, etc. In case of any
reclassification or change of outstanding shares of Common Stock issuable upon
exercise of the Warrants (other than as set forth in paragraph (a) above and
other than a change in par value, or from par value to no par value, or from no
par value to par value or as a result of a subdivision or combination), or in
case of any consolidation or merger of the Company with or into another
corporation (other than a merger in which the Company is the continuing
corporation and which does not result in any reclassification or change of the
then outstanding shares of Common Stock or other capital stock issuable upon
exercise of the Warrants) or in case of any sale or conveyance to another
corporation of the property of the Company as an entirety or substantially as an
entirety, except any such transactions covered by paragraph (e) below then, as a
condition of such reclassification, change, consolidation, merger, sale or
conveyance, the Company or such a successor or purchasing corporation, as the
case may be, shall forthwith make lawful and adequate provision whereby the
Holder of such Warrant then outstanding shall have the right thereafter to
receive on exercise of such Warrant the kind and amount of shares of stock or
other securities or property receivable upon such reclassification, change,
consolidation, merger, sale or conveyance by a Holder of the number of shares of
Common Stock issuable upon exercise of such Warrant immediately prior to such
reclassification, change, consolidation, merger, sale or conveyance and enter
into a supplemental warrant agreement so providing. Such provisions shall
include provision for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 10. If the issuer of
securities deliverable upon exercise of Warrants under the supplemental warrant
agreement is an Affiliate of the formed, surviving or transferee corporation,
that issuer shall join in the supplemental warrant agreement. The above
provisions of this paragraph (b) shall similarly apply to successive
reclassifications and changes of shares of Common Stock and to successive
consolidations, mergers, sales or conveyances. (c) Distribution of Options or
Convertible Securities. In the event that both (x) the Company shall, at any
time or from time to time after the date hereof, issue, sell, distribute or
otherwise grant in any manner (including by assumption) to all holders of the
Common Stock any rights to subscribe for or to purchase, or any warrants or
options for the purchase of, Common Stock or any stock or securities convertible
into or exchangeable for Common Stock (any such rights, warrants or options
being herein called "Options" and any such convertible or exchangeable stock or
securities being herein called "Convertible Securities") or any Convertible
Securities (other than upon exercise of any Option and other than a dividend or
distribution subject to paragraph (a) above), whether or not such Options or the
rights to convert or exchange such Convertible Securities are immediately
exercisable, and (y) the price per share at which Common Stock is issuable upon
the exercise of such Options or upon the conversion or exchange of such
Convertible Securities (determined by dividing (i) the aggregate amount, if any,
received or receivable by the Company as consideration for the issuance, sale,
distribution or granting of such Options or any such Convertible Security, plus
the minimum aggregate amount (determined without regard to possible adjustments
that are contingent upon future events) of additional consideration, if any,
payable to the Company upon the exercise of all such Options or upon conversion
or exchange of all such Convertible Securities, plus, in the case of Options to
acquire Convertible Securities, the minimum aggregate amount of additional
consideration, if any, payable upon the conversion or exchange of all such
Convertible Securities, by (ii) the total maximum number of shares (determined
without regard to possible adjustments that are contingent upon future events)
of Common Stock issuable upon the exercise of all such Options or upon the
conversion or exchange of all such Convertible Securities or upon the conversion
<PAGE>
or exchange of all Convertible Securities issuable upon the exercise of all such
Options) shall be less than the Current Market Price per share of Common Stock
on the record date for the issuance, sale, distribution or granting of such
Options or Convertible Securities (any such event being herein called a
"Distribution"), then, effective upon such Distribution, (I) the Exercise Price
shall be reduced to the price (calculated to the nearest 1/1,000 of one cent)
determined by multiplying the Exercise Price in effect immediately prior to such
Distribution by a fraction, the numerator of which shall be the sum of (1) the
number of shares of Common Stock outstanding (exclusive of any treasury shares)
immediately prior to such Distribution multiplied by the Current Market Price
per share of Common Stock on the date of such Distribution plus (2) the
consideration, if any, received by the Company upon such Distribution, and the
denominator of which shall be the product of (A) the total number of shares of
Common Stock outstanding (exclusive of any treasury shares) immediately after
such Distribution multiplied by (B) the Current Market Price per share of Common
Stock on the record date for such Distribution and (II) the number of shares of
Common Stock purchasable upon the exercise of each Warrant shall be increased to
a number determined by multiplying the number of shares of Common Stock so
purchasable immediately prior to the record date for such Distribution by a
fraction, the numerator of which shall be the Exercise Price in effect
immediately prior to the adjustment required by clause (I) of this sentence and
the denominator of which shall be the Exercise Price in effect immediately after
such adjustment (for the purposes of this clause (ii) without giving effect to
the provisions of Section 10(i)). For purposes of the foregoing, the total
maximum number of shares of Common Stock issuable upon exercise of all such
Options or upon conversion or exchange of all such Convertible Securities or
upon the conversion or exchange of the total maximum amount of the Convertible
Securities issuable upon the exercise of all such Options shall be deemed to
have been issued as of the date of such Distribution and thereafter shall be
deemed to be outstanding and the Company shall be deemed to have received as
consideration therefor such price per share, determined as provided above, which
shall constitute consideration received by the Company upon such Distribution
for purposes of the foregoing calculations. For purposes of the foregoing, the
total number of shares of Common Stock issuable upon exercise or conversion of
outstanding Options or Convertible Securities shall be deemed outstanding before
and after such Distribution if the exercise or conversion price with respect
thereto is less than the Current Market Value. No adjustment to the number of
Warrant Shares issuable upon the exercise of the Warrants or to the Exercise
Price shall be made, however, as a result of (i) the issuance of shares of
Common Stock under any Options existing on the date hereof or issued pursuant
hereto, (ii) the issuance of shares of Common Stock in bona fide public or
private offerings that are underwritten or in which a placement agent is
retained by the Company or (iii) the issuance of Options or shares of Common
Stock pursuant to any Option, under any employee benefit plans approved by the
Board of Directors. Such adjustments shall be made whenever such rights, options
or warrants or convertible securities are issued. Except as provided in
paragraphs (k) and (l) below, no additional adjustment of the Exercise Price
shall be made upon the actual exercise of such Options or upon conversion or
exchange of the Convertible Securities or upon the conversion or exchange of the
Convertible Securities issuable upon the exercise of such Options. (d) Other
Issuances of Common Stock, Options or Convertible Securities. Upon any issuance
of Common Stock, Options or Convertible Securities as to which paragraphs (a),
(b) and (c) above are not applicable, in the event that at any time or from time
to time the Company shall issue (i) shares of Common Stock (subject to the
provisions below), (ii) Options (provided, however, that no adjustment shall be
made upon the exercise of such Options) or (iii) Convertible Securities
(provided, however, that no adjustment shall be made upon the conversion,
exchange or exercise of such securities (other than issuances specified in (i),
(ii) or (iii) which are made as the result of antidilution adjustments in such
securities)), at a price per share (determined, in the case of Options and
Convertible Securities, as provided in clause (y) of paragraph (c) above) at the
record date of such issuance that is less than the then Current Market Price per
share of Common Stock, then the number of shares of Common Stock issuable upon
the exercise of each Warrant shall be increased to a number determined by
multiplying the number of shares of Common Stock theretofore issuable upon
exercise of each Warrant by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding immediately after such sale or
issuance (including shares deemed outstanding as provided in paragraph (c)
above) plus the number of additional shares of Common Stock into or for which
such securities that are issued are convertible, exchangeable or exercisable,
and the denominator of which shall be the number of shares of Common Stock
outstanding immediately prior to such sale or issuance (including shares deemed
outstanding as provided in paragraph (c) above) plus the total number of shares
of Common Stock which the aggregate consideration expected to be received by the
Company (assuming the exercise or conversion of all such Options or Convertible
Securities, if any) would purchase at the then Current Market Price per share of
Common Stock, and subject to paragraph (i) below, the Exercise Price shall be
adjusted to a number determined by dividing the Exercise Price immediately prior
to such date of issuance by the aforementioned fraction; provided, however, that
no adjustment to the number of Warrant Shares issuable upon the exercise of the
Warrants or to the Exercise Price shall be made as a result of (i) the issuance
of shares of Common Stock under any Options or Convertible Securities existing
on the date hereof or issued pursuant hereto, (ii) the issuance of shares of
Common Stock and/or Options and/or Convertible Securities in bona fide public or
private offerings that are underwritten or in which a placement agent is
retained by the Company or (iii) the issuance of Options or shares of Common
Stock pursuant to any Option, under any employee benefit plans approved by the
Board of Directors. Such adjustments shall be made whenever such rights, options
or warrants or convertible securities are issued. No adjustment shall be made
pursuant to this paragraph (d) which shall have the effect of decreasing the
number of shares of Common Stock issuable upon exercise of each warrant or of
increasing the Exercise Price, except by operation of paragraph (k) below. For
<PAGE>
purposes of paragraph (c) hereof and this paragraph (d) only, any issuance of
Common Stock, Options or Convertible Securities, which issuance (or agreement to
issue) (A) is in exchange for or otherwise in connection with the bona fide
acquisition of property or assets of any kind (excluding any such exchange
exclusively for cash) of any Person and (B) is at a price per share determined
by the Board of Directors to be equal to the fair market value thereof at the
time an agreement in principle is reached or at the time a definitive agreement
is entered into, shall be deemed to have been made at a price per share equal to
the Current Market Price per share at the record date with respect to such
issuance (the time of closing or consummation of such exchange or acquisition)
if such definitive agreement is entered into within 90 days of the date of such
agreement in principle. (e) Combination; Liquidation. In the event of (A) a
combination where consideration to the holders of Common Stock in exchange for
their shares is payable solely in cash or (B) the dissolution, liquidation or
winding-up of the Company, Holders shall be entitled to receive, upon surrender
of their Warrant Certificates, distributions on an equal basis with the holders
of Common Stock or other securities, issuable upon exercise of the Warrants, as
if the Warrants had been exercised immediately prior to such event, less the
Exercise Price. Upon receipt of such payment, if any, the Warrants will expire
and the rights of the Holders will cease. In case of any combination described
in this paragraph (e), the surviving or acquiring Person and, in the event of
any dissolution, liquidation or winding-up of the Company, the Company shall
deposit promptly with the Warrant Agent the funds, if any, necessary to pay to
the holders of the Warrant the amounts to which they are entitled as described
above. After such funds and the surrendered Warrant Certificates are received,
the Warrant Agent is required to deliver a check in such amount as is
appropriate, as instructed by the Company (or, in the case of consideration
other than cash, such other consideration as is appropriate), to such Person or
Persons as it may be directed in writing by the Holders surrendering such
Warrants. (f) Dividends and Distributions. In the event the Company shall, at
any time or from time to time after the date thereof, distribute to all the
holders of Common Stock any dividend or other distribution of cash, evidences of
its indebtedness, other securities or other properties or assets (in each case
other than (i) dividends payable in Common Stock, Options or Convertible
Securities or rights to acquire the same and (ii) any cash dividend that, when
added to all other cash dividends paid in the same fiscal year prior to the
declaration date of such dividend (excluding any such other dividend included in
a previous adjustment of the Exercise Price pursuant to this paragraph (f)),
does not exceed the greater of (x) the Company's retained earnings as of the end
of the prior fiscal year and (y) the Company's net earnings for the prior fiscal
year on such declaration date), or any options, warrants or other rights to
subscribe for or purchase any of the foregoing, then (A) the Exercise Price
shall be decreased to a price determined by multiplying the Exercise Price then
in effect by a fraction, the numerator of which shall be the Current Market
Price per share of Common Stock on the record date for such distribution less
the sum of (X) the cash portion, if any, of such distribution per share of
Common Stock outstanding (exclusive of any treasury shares) on the record date
for such distribution plus (Y) the then fair market value (as determined in good
faith by the Board of Directors of the Company) per share of Common Stock
outstanding (exclusive of any treasury shares) on the record date for such
distribution of that portion, if any, of such distribution consisting of
evidences of indebtedness, other securities, properties, assets, options,
warrants or subscription or purchase rights, and the denominator of which shall
be such Current Market Price per share of Common Stock and (B) the number of
shares of Common Stock purchasable upon the exercise of each Warrant shall be
increased to a number determined by multiplying the number of shares of Common
Stock so purchasable immediately prior to the record date for such distribution
by a fraction, the numerator of which shall be the Exercise Price in effect
immediately prior to the adjustment required by clause (A) of this sentence and
the denominator of which shall be the Exercise Price in effect immediately after
such adjustment (for the purposes of this clause (B) without giving effect to
the provisions of Section 10(i)). The adjustments required by this paragraph (f)
shall be made whenever any such distribution occurs retroactive to the record
date for the determination of stockholders entitled to receive such
distribution. (g) Certain Distributions. If the Company shall pay a dividend
payable in Options or Convertible Securities or make any other distribution
payable in Options or Convertible Securities, then, for purposes of paragraph
(c) above, such Options or Convertible Securities shall be deemed to have been
issued or sold without consideration. (h) Consideration Received. If any shares
of Common Stock, Options or Convertible Securities shall be issued, sold or
distributed for consideration other than cash, the amount of the consideration
other than cash received by the Company in respect thereof shall be deemed to be
the then fair market value of such consideration (as determined in good faith by
the Board of Directors of the Company). If any Options shall be issued in
connection with the issuance and sale of other securities of the Company,
together comprising one integral transaction in which no specific consideration
is allocated to such Options by the parties thereto, such Options shall be
deemed to have been issued for such consideration as is established in good
faith by the Board of Directors of the Company. (i) Deferral of Certain
Adjustments. No adjustment to the Exercise Price (including the related
adjustment to the number of shares of Common Stock purchasable upon the exercise
of each Warrant) shall be required hereunder unless such adjustment, together
with other adjustments carried forward as provided below, would result in an
increase or decrease of at least one percent of the Exercise Price; provided
that any adjustments which by reason of this paragraph (i) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. No adjustment need be made for a change in the par value of the
Common Stock. All calculations under this Section shall be made to the nearest
1/1,000 of one cent or to the nearest 1/1,000 of a share, as the case may be.
(j) Changes in Options and Convertible Securities. If the exercise price
provided for in any Options referred to in paragraphs (c) and (d) above, the
additional consideration, if any, payable upon the conversion or exchange of any
Convertible Securities referred to in paragraphs (c) and (d) above, or the rate
<PAGE>
at which any Convertible Securities referred to in paragraphs (c) and (d) above
are convertible into or exchangeable for Common Stock shall change at any time
(other than under or by reason of provisions designed to protect against
dilution upon an event which results in a related adjustment pursuant to this
Section 10), the Exercise Price then in effect and the number of shares of
Common Stock purchasable upon the exercise of each Warrant shall forthwith be
readjusted (effective only with respect to any exercise of any Warrant after
such readjustment) to the Exercise Price and number of shares of Common Stock so
purchasable that would then be in effect had the adjustment made upon the
issuance, sale, distribution or granting of such Options or Convertible
Securities been made based upon such changed purchase price, additional
consideration or conversion rate, as the case may be, but only with respect to
such Options and Convertible Securities as then remain outstanding. (k)
Expiration of Options and Convertible Securities. If, at any time after any
adjustment to the number of shares of Common Stock purchasable upon the exercise
of each Warrant shall have been made pursuant to paragraph (c), (d) or (j) above
or this paragraph (k), any Options or conversion rights of Convertible
Securities shall have expired unexercised, the number of such shares purchasable
upon the exercise of each Warrant shall, upon such expiration, be readjusted and
shall thereafter be such as they would have been had they been originally
adjusted (or had the original adjustment not been required, as the case may be)
as if (i) the only shares of Common Stock deemed to have been issued in
connection with such Options or Convertible Securities were the shares of Common
Stock, if any, actually issued or sold upon the exercise of such Options or
Convertible Securities and (ii) such shares of Common Stock, if any, were issued
or sold for the consideration actually received by the Company upon such
exercise plus the aggregate consideration, if any, actually received by the
Company for the issuance, sale, distribution or granting of all such Options or
Convertible Securities, whether or not exercised; provided that no such
readjustment shall have the effect of decreasing the number of such shares so
purchasable by an amount (calculated by adjusting such decrease to account for
all other adjustments made pursuant to this Section 10 following the date of the
original adjustment referred to above) in excess of the amount of the adjustment
initially made in respect of the issuance, sale, distribution or granting of
such Options or Convertible Securities. (l) Other Adjustments. The Company may
at any time reduce the Exercise Price for any period of time (but not less than
20 Business Days) when deemed appropriate by the Board of Directors of the
Company, provided that the Exercise Price may not be reduced to an amount that
is less than the par value of the Common Stock. In the event that at any time,
as a result of an adjustment made pursuant to any provision of this Section 10,
the Holders shall become entitled to receive any securities of the Company other
than shares of Common Stock, thereafter the number of such other securities so
receivable upon exercise of the Warrants and the Exercise Price applicable to
such exercise shall be subject to adjustment from time to time in a manner and
on terms as nearly equivalent as practicable to the provisions with respect to
the shares of Common Stock contained in this Section 10. SECTION 11. Statement
on Warrants. Irrespective of any adjustment in the number or kind of shares
issuable upon the exercise of the Warrants, Warrants theretofore or thereafter
issued may continue to express the same price and number and kind of shares as
are stated in the Warrants initially issuable pursuant to this Agreement.
SECTION 12. No Dilution or Impairment; Capital and Ownership Structure. If any
event shall occur as to which the provisions of Section 10 are not strictly
applicable but the failure to make any adjustment would adversely affect the
purchase rights represented by the Warrants so as to be contrary to the
essential intent and principles of such Section, then, in each such case, the
Company shall appoint an investment banking firm of recognized national standing
that does not have a direct or material indirect financial interest in the
Company or any of its subsidiaries, who has not been, and, at the time it is
called upon to give independent financial advice to the Company, is not (and
none of its directors, officers, employees, affiliates or stockholders are) a
promoter, director or officer of the Company or any of its subsidiaries, which
shall give their opinion upon the adjustment, if any, on a basis consistent with
the essential intent and principles established in Section 10, necessary to
preserve, on a basis consistent with the essential intent and principles
established in Section 10, the purchase rights represented by the Warrants. Upon
receipt of such opinion, the Company will promptly mail a copy thereof to the
holders of the Warrants and shall make the adjustments described therein.
The Company will not, by amendment of its certificate of
incorporation or through any consolidation, merger, reorganization, transfer of
assets, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of the
Warrants, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the holder of the Warrants against
dilution or other impairment. Without limiting the generality of the foregoing,
the Company (a) will take all such action as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock on the exercise of the Warrants from time
to time outstanding and (b) will not take any action which results in any
adjustment of the Exercise Price if the total number of Warrant Shares issuable
after the action upon the exercise of all of the Warrants would exceed the total
number of shares of Common Stock then authorized by the Company's certificate of
incorporation and available for the purposes of issue upon such exercise. A
consolidation, merger, reorganization or transfer of assets involving the
Company covered by Sections 10(b) or 10(e) shall not be prohibited by or require
any adjustment under this Section 12.
It is the intent of this Agreement to provide that, on and as
of the Closing Date, the number of Warrant Shares into which the Warrants are
exercisable represent approximately 8.7% of the issued and outstanding shares of
Common Stock as adjusted pro forma on a fully diluted basis. For purposes of
this paragraph, the phrase "on a fully diluted basis" shall include any and all
<PAGE>
options, warrants or other rights to acquire Common Stock of the Company,
whether or not exercisable on the Closing Date but excluding all such options,
warrants (other than the Warrants) or other rights to acquire Common Stock at an
exercise or conversion price greater than the exercise price of the Warrants as
of the Closing Date, as adjusted. If, after the Closing Date the exercise price
of the Company's then outstanding warrants, options or convertible securities is
reduced to an exercise price equal to or less than the Exercise Price of the
Warrants (as it may be adjusted as a result of the same event or circumstance),
then the shares of Common Stock issuable upon the exercise or conversion of such
warrants, options or convertible securities, as the case may be, will be
included in the calculation of the Common Stock on a fully-diluted basis, and
the number of Warrant Shares issuable upon exercise of each Warrant
automatically shall be adjusted upward by multiplying such number by a fraction
, the numerator of which shall be the number of shares of Common Stock
outstanding on a fully-diluted basis after such inclusion and the numerator of
which shall be the number of shares of Common Stock outstanding on a
fully-diluted basis prior to such inclusion; provided, however, that no
adjustment shall be made pursuant to this sentence as a result of the completion
of the exchange of the Company' s 7% Convertible Subordinated Notes due 2005.
SECTION 13. Fractional Interest. The Company shall not be required to issue
fractional shares of Common Stock on the exercise of Warrants. If more than one
Warrant shall be presented for exercise in full at the same time by the same
Holder, the number of full shares of Common Stock which shall be issuable upon
such exercise shall be computed on the basis of the aggregate number of shares
of Common Stock acquirable on exercise of the Warrants so presented. If any
fraction of a share of Common Stock would, except for the provisions of this
Section, be issuable on the exercise of any Warrant (or specified portion
thereof), the Company shall direct the Transfer Agent to pay an amount in cash
calculated by it to equal the then Current Market Price per share multiplied by
such fraction computed to the nearest whole cent less such fraction of the
Exercise Price. The Holders, by their acceptance of the Warrant Certificates,
expressly waive any and all rights to receive any fraction of a share of Common
Stock or a stock certificate representing a fraction of a share of Common Stock.
SECTION 14. Notices to Warrant Holders; No Rights as Shareholders. Upon any
adjustment of the Exercise Price pursuant to Sections 10 or 12, the Company
shall promptly thereafter (i) cause to be filed with the Warrant Agent a
certificate of a firm of independent public accountants of nationally recognized
standing selected by the Board of Directors of the Company (who may be the
regular auditors of the Company) setting forth the Exercise Price after such
adjustment and setting forth in reasonable detail the method of calculation and
the facts upon which such calculations are based and setting forth the number of
Warrant Shares (or portion thereof) issuable after such adjustment in the
Exercise Price, upon exercise of a Warrant and payment of the adjusted Exercise
Price, which certificate shall be conclusive evidence of the correctness of the
matters set forth therein, and (ii) cause to be given to each of the registered
Holders of the Warrant Certificates or the DTC Participants with interests in
the Global Warrant at his/her address appearing on the Warrant register written
notice of such adjustments by first-class mail, postage prepaid. The Warrant
Agent shall be entitled to rely on the above-referenced accountant's certificate
and shall be under no duty or responsibility with respect to any such
certificate, except to exhibit the same from time to time to any Holder desiring
an inspection thereof during reasonable business hours. The Warrant Agent shall
not at any time be under any duty or responsibility to any Holder to determine
whether any facts exist that may require any adjustment of the number of shares
of Common Stock or other stock or property issuable on exercise of the Warrants
or the Exercise Price, or with respect to the nature or extent of any such
adjustment when made, or with respect to the method employed in making such
adjustment or the validity or value (or the kind or amount) of any shares of
Common Stock or other stock or property which may be issuable on exercise of the
Warrants. The Warrant Agent shall not be responsible for any failure of the
Company to make any cash payment or to issue, transfer or deliver any shares of
Common Stock or stock certificates or other common stock or property upon the
exercise of any Warrant.
In case:
(a) the Company shall authorize the issuance to all holders of
shares of Common Stock of rights, options or warrants to subscribe for
or purchase shares of Common Stock or of any other subscription rights
or warrants; or
(b) the Company shall authorize the distribution to all
holders of shares of Common Stock of evidences of its indebtedness or
assets (other than cash dividends or cash distributions payable out of
consolidated earnings or earned surplus or dividends payable in shares
of Common Stock or distributions referred to in Section 10 hereof); or
(c) of any consolidation or merger to which the Company is a
party and for which approval of any shareholders of the Company is
required, or of the conveyance or transfer of the properties and assets
of the Company substantially as an entirety, or of any reclassification
or change of Common Stock issuable upon exercise of the Warrants (other
than a change in par value, or from par value to no par value, or from
no par value to par value, or as a result of a subdivision or
combination), or a tender offer or exchange offer for shares of Common
Stock; or
(d) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company; or
(e) the Company proposes to take any other action that would
require an adjustment of the Exercise Price or the number of Warrant
Shares pursuant to Sections 10 or 12;
<PAGE>
then the Company shall cause to be filed with the Warrant Agent and shall cause
to be given to each of the registered Holders of the Warrant Certificates at
such Holder's address appearing on the Warrant register, at least 20 days (or 10
days in any case specified in clauses (a) or (b) above) prior to the applicable
record date hereinafter specified, or promptly in the case of events for which
there is no record date, by first class mail, postage prepaid, a written notice
stating (i) the date as of which the holders of record of shares of Common Stock
to be entitled to receive any such rights, options, warrants or distribution are
to be determined, or (ii) the initial expiration date set forth in any tender
offer or exchange offer for shares of Common Stock, or (iii) the date on which
any such consolidation, merger, conveyance, transfer, dissolution, liquidation
or winding up or Change of Control (as defined in the Indenture) is expected to
become effective or consummated, and the date as of which it is expected that
holders of record of shares of Common Stock shall be entitled to exchange such
shares for securities or other property, if any, deliverable upon such
reclassification, consolidation, merger, conveyance, transfer, dissolution,
liquidation or winding up or Change of Control. The failure to give the notice
required by this Section 14 or any defect therein shall not affect the legality
or validity of any distribution, right, option, warrant, consolidation, merger,
conveyance, transfer, dissolution, liquidation or winding up, or Change of
Control or the vote upon any action.
Nothing contained in this Agreement or in any of the Warrant
Certificates shall be construed as conferring upon the Holders thereof the right
to vote or to consent or to receive notice as shareholders in respect of the
meetings of shareholders or the election of Directors of the Company or any
other matter, or any rights whatsoever as shareholders of the Company.
SECTION 15. Merger, Consolidation or Change of Name of Warrant Agent. Any
corporation into which the Warrant Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which the Warrant Agent shall be a party, or any corporation succeeding to the
business of the Warrant Agent, shall be the successor to the Warrant Agent
hereunder 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 warrant agent under the provisions of
Section 17. Any such successor Warrant Agent shall promptly cause notice of its
succession as Warrant Agent to be mailed (by first class mail, postage prepaid)
to each Holder at such Holder's last address as shown on the register maintained
by the Warrant Agent pursuant to this Agreement. In case at the time such
successor to the Warrant Agent shall succeed to the agency created by this
Agreement, and in case at that time any of the Warrant Certificates shall have
been countersigned but not delivered, any such successor to the Warrant Agent
may adopt the countersignature of the original Warrant Agent; and in case at
that time any of the Warrant Certificates shall not have been countersigned, any
successor to the Warrant Agent may countersign such Warrant Certificates either
in the name of the predecessor Warrant Agent or in the name of the successor to
the Warrant Agent; and in all such cases such Warrant Certificates shall have
the full force and effect provided in the Warrant Certificates and in this
Agreement.
In case at any time the name of the Warrant Agent shall be
changed and at such time any of the Warrant Certificates shall have been
countersigned but not delivered, the Warrant Agent whose name has been changed
may adopt the countersignature under its prior name, and in case at that time
any of the Warrant Certificates shall not have been countersigned, the Warrant
Agent may countersign such Warrant Certificates either in its prior name or in
its changed name, and in all such cases such Warrant Certificates shall have the
full force and effect provided in the Warrant Certificates and in this
Agreement.
SECTION 16. Warrant Agent. The Warrant Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and conditions,
by all of which the Company and the Holders of Warrants, by their acceptance
thereof, shall be bound:
(a) The statements contained herein and in the Warrant
Certificates shall be taken as statements of the Company and the Warrant Agent
assumes no responsibility for the correctness of any of the same except such as
describe the Warrant Agent or action taken or to be taken by it. The Warrant
Agent assumes no responsibility with respect to the distribution of the Warrant
Certificates except as otherwise provided by the express terms of this
Agreement.
(b) The Warrant Agent shall not be responsible for any failure
of the Company to comply with any of the covenants contained in this Agreement
or in the Warrant Certificates to be complied with by the Company.
(c) The Warrant Agent may consult at any time with counsel of
its own selection (who may be counsel for the Company) and the Warrant Agent
shall incur no liability or responsibility to the Company or to any Holder of
any Warrant Certificate in respect of any action taken, suffered or omitted by
it hereunder in good faith and in accordance with the opinion or the advice of
such counsel.
<PAGE>
(d) Before the Warrant Agent acts or refrains from acting, it
may require an officer's certificate or an opinion of counsel, or both. The
Warrant Agent may conclusively rely and shall incur no liability or
responsibility to the Company or to any Holder of any Warrant Certificate for
any action taken in reliance on any Warrant Certificate, certificate of shares,
notice, resolution, waiver, consent, order, certificate, or other paper,
document or instrument (whether in its original or facsimile form) believed by
it to be genuine and to have been signed, sent or presented by the proper party
or parties.
(e) The Company agrees to pay to the Warrant Agent such
compensation as shall be agreed upon from time to time in writing for all
services rendered by the Warrant Agent in the execution of this Agreement, to
reimburse the Warrant Agent for all expenses, taxes and governmental charges and
other charges of any kind and nature reasonably incurred by the Warrant Agent in
the execution of this Agreement and to indemnify the Warrant Agent and any
predecessor Warrant Agent and save it harmless against any and all liabilities,
claims, damages, losses and expenses (including taxes other than taxes based on
the income of the Warrant Agent) including judgments, reasonable costs and
counsel fees and expenses, for anything done or omitted by the Warrant Agent in
the execution of this Agreement or arising out of or in connection with its
performance of its obligations or duties under this Agreement, except to the
extent such liabilities are attributable to its gross negligence or willful
misconduct. The Warrant Agent shall notify the Company promptly of any claim for
which it may seek indemnity; provided that the failure by the Warrant Agent to
so notify the Company shall not relieve its obligations hereunder. The Company
shall defend the claim and the Warrant Agent shall cooperate in the defense. The
Warrant Agent may have separate counsel and the Company shall pay the reasonable
fees and expenses of such counsel. The Company need not pay for any settlement
made without its consent, which consent shall not be unreasonably withheld.
(f) The Warrant Agent shall be under no obligation to
institute any action, suit or legal proceeding or to take any other action
likely to involve expense unless the Company or one or more Holders of Warrant
Certificates shall furnish the Warrant Agent with security and indemnity
reasonably satisfactory to it for any costs and expenses which may be incurred,
but this provision shall not affect the power of the Warrant Agent to take such
action as is necessary, whether with or without any such security or indemnity.
All rights of action under this Agreement or under any of the Warrants may be
enforced by the Warrant Agent without the possession of any of the Warrant
Certificates or the production thereof at any trial or other proceeding relative
thereto, and any such action, suit or proceeding instituted by the Warrant Agent
shall be brought in its name as Warrant Agent and any recovery of judgment shall
be for the ratable benefit of the Holders of the Warrants, as their respective
rights or interests may appear.
(g) The Warrant Agent, and any stockholder, director, officer
or employee of it, may buy, sell or deal in any of the Warrants or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Warrant Agent
under this Agreement. Nothing herein shall preclude the Warrant Agent from
acting in any other capacity for the Company or for any other legal entity.
(h) The Warrant Agent shall act hereunder solely as agent for
the Company, and its duties shall be determined solely by the provisions hereof.
The Warrant Agent shall not be liable for anything which it may do or refrain
from doing in connection with this Agreement except for its own gross negligence
or willful misconduct.
(i) The Warrant Agent shall not at any time be under any duty
or responsibility to any Holder of any Warrant Certificate to make or cause to
be made any adjustment of the Exercise Price or number of the Warrant Shares or
other securities or property deliverable as provided in this Agreement, or to
determine whether any facts exist which may require any of such adjustments, or
with respect to the nature or extent of any such adjustments, when made, or with
respect to the method employed in making the same. The Warrant Agent shall not
be accountable with respect to the validity or value or the kind or amount of
any Warrant Shares or of any securities or property which may at any time be
issued or delivered upon the exercise of any Warrant or with respect to whether
any such Warrant Shares or other securities will when issued be validly issued
and fully paid and nonassessable, and makes no representation with respect
thereto.
(j) The Warrant Agent undertakes to perform such duties and
only such duties as are specifically set forth in this Agreement, and no implied
covenants or obligations shall be read into this Agreement against the Warrant
Agent.
(k) The Warrant Agent may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Warrant Agent and conforming to the
requirements of this Agreement; but in the case of any such certificates or
opinions which by any provision hereof are specifically required to be furnished
to the Warrant Agent, the Warrant Agent shall be under a duty to examine the
same to determine whether or not they conform to the requirements of this
Agreement (but need not confirm or investigate the accuracy of mathematical
calculations or other facts stated therein).
<PAGE>
(l) The Warrant Agent shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority of the Warrants relating to the time,
method and place of conducting any proceeding for any remedy available to the
Warrant Agent, or exercising any trust or power conferred upon the Warrant
Agent, under this Agreement with respect to the Warrants.
(m) No provision of this Agreement shall require the Warrant
Agent 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.
(n) Whether or not therein expressly so provided, every
provision of this Agreement relating to the conduct or affecting the liability
of or affording protection to the Warrant Agent shall be subject to the
provisions of this Section.
(o) The Warrant Agent 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 Warrant Agent, in its discretion, may make such further
inquiry or investigation into such facts or maters as it may see fit, and, if
the Warrant Agent 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 at the sole cost of the Company and shall
incur no liability or additional liability of any kind by any reason of such
inquiry or investigation.
(p) The Warrant Agent 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 Warrant Agent shall not be responsible for any
willful misconduct or gross negligence on the part of any agent or attorney
appointed with due care by it hereunder.
(q) The Warrant Agent shall not be liable for any action
taken, suffered or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or powers
conferred upon it by this Agreement.
(r) The Warrant Agent shall not be deemed to have notice of
any Default or Event of Default unless a Responsible Officer of the Warrant
Agent has actual knowledge thereof or unless written notice of any event which
is in fact such a default is received by the Warrant Agent at the office of the
Warrant Agent, and such notice references the Securities and this Agreement.
(s) The rights, privileges, protections, immunities and
benefits given to the Warrant Agent, including, without limitation, its right to
be indemnified, are extended to, and shall be enforceable by, the Warrant Agent
in each of its capacities hereunder, and to each agent, custodian and other
Person employed to act hereunder.
SECTION 17. Resignation and Removal of Warrant Agent; Appointment of Successor.
No resignation or removal of the Warrant Agent and no appointment of a successor
warrant agent shall become effective until the acceptance of appointment by the
successor warrant agent as provided herein. The Warrant Agent may resign its
duties and be discharged from all further duties and liability hereunder (except
liability arising as a result of the Warrant Agent's own gross negligence or
willful misconduct) after giving written notice to the Company. The Company may
remove the Warrant Agent upon written notice, and the Warrant Agent shall
thereupon in like manner be discharged from all further duties and liabilities
hereunder, except as aforesaid. The Warrant Agent shall, at the Company's
expense, cause to be mailed (by first class mail, postage prepaid) to each
Holder of a Warrant at his last address as shown on the register of the Company
maintained by the Warrant Registrar a copy of said notice of resignation or
notice of removal, as the case may be. Upon such resignation or removal, the
Company shall appoint in writing a new warrant agent. If the Company shall fail
to make such appointment within a period of 30 days after it has been notified
in writing of such resignation by the resigning Warrant Agent or after such
removal, then the resigning Warrant Agent or the Holder of any Warrant may at
the expense of the Company apply to any court of competent jurisdiction for the
appointment of a new warrant agent. Any new warrant agent, whether appointed by
the Company or by such a court, shall be a corporation doing business under the
laws of the United States or any state thereof, in good standing and having a
combined capital and surplus of not less than $50,000,000. The combined capital
and surplus of any such new warrant agent shall be deemed to be the combined
capital and surplus as set forth in the most recent annual report of its
condition published by such warrant agent prior to its appointment, provided
that such reports are published at least annually pursuant to law or to the
requirements of a federal or state supervising or examining authority. After
acceptance in writing of such appointment by the new warrant agent, it shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named herein as the Warrant Agent, without any further
assurance, conveyance, act or deed; but if for any reason it shall be necessary
or expedient to execute and deliver any further assurance, conveyance, act or
deed, the same shall be done at the expense of the Company and shall be legally
and validly executed and delivered by the resigning or removed Warrant Agent.
Not later than the effective date of any such appointment, the Company shall
give notice thereof to the resigning or removed Warrant Agent. Failure to give
any notice provided for in this Section, however, or any defect therein, shall
not affect the legality or validity of the resignation of the Warrant Agent or
the appointment of a new warrant agent, as the case may be.
<PAGE>
SECTION 18. Registration. The Company acknowledges that Holders shall have the
registration rights set forth in the Warrant Registration Rights Agreement, a
copy of which is attached hereto as Exhibit D. SECTION 19. Reports. (a) So long
as any of the Warrants remain outstanding, but only to the extent the Company is
required to send such documents to the holders of its outstanding Common Stock,
whether or not required by the rules and regulations of the Commission, the
Company shall furnish to the registered Holders of the Warrants (and to the
beneficial Holders, upon request) (i) all quarterly and annual financial
information that would be required to be contained in a filing with the
Commission on Forms 10-Q and 10-K if the Company were required to file such
Forms, including a "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and, with respect to the annual information only, a
report thereon by the Company's certified independent accountants; and (ii) all
current reports that would be required to be filed with the Commission on Form
8-K if the Company were required to file such reports. In addition, whether or
not required by the rules and regulations of the Commission, the Company will
file a copy of all such information and reports with the Commission for public
availability (unless the Commission will not accept such a filing) and make such
information available to securities analysts and prospective investors upon
request.
Delivery of such reports, information and documents to the
Warrant Agent is for informational purposes only and the receipt of such shall
not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Warrant Agent is
entitled to rely exclusively on officers' certificates).
(b) The Company shall provide the Warrant Agent with a
sufficient number of copies of all reports filed with the Commission pursuant to
clause (a) above that the Warrant Agent may be required to deliver to the
Holders of the Warrants under this Section 19.
SECTION 20. Rule 144A and Rule 144. The Company hereby agrees with each Holder,
for so long as any Registrable Securities remain outstanding, and during any
period in which the Company (i) is not subject to Section 13 or 15(d) of the
Exchange Act, to make available, upon request of any Holder of Registrable
Securities, to such Holder or beneficial owner of Registrable Securities, the
information required by Rule 144A(d)(4) under the Securities Act in order to
permit resales of such Registrable Securities pursuant to Rule 144A, and (ii) is
subject to Section 13 or 15(d) of the Exchange Act, to make all filings required
thereby in a timely manner in order to permit resales of such Registrable
Securities pursuant to Rule 144.
SECTION 21. Notices to Company and Warrant Agent. Any notice or demand
authorized by this Agreement to be given or made by the Warrant Agent or by the
Holder of any Warrant Certificate to or on the Company shall be sufficiently
given or made when and if deposited in the mail, first class or registered,
postage prepaid, addressed (until another address is filed in writing by the
Company with the Warrant Agent), as follows:
Waste Systems International, Inc.
420 Bedford Street, Suite 300
Lexington, MA 02173
Telecopier No.: (781) 862-2929
Attention: Chief Financial Officer
In case the Company shall fail to maintain such office or
agency or shall fail to give such notice of the location or of any change in the
location thereof, presentations may be made and notices and demands may be
served at the principal office of the Warrant Agent.
Any notice pursuant to this Agreement to be given by the
Company or by the Holder(s) of any Warrant Certificate to the Warrant Agent
shall be sufficiently given when and if deposited in the mail, first-class or
registered, postage prepaid, addressed (until another address is filed in
writing by the Warrant Agent with the Company) to the Warrant Agent as follows:
IBJ Whitehall Bank & Trust Company
One State Street
New York, NY 10004
Telecopier No.: (212) 858-2952
Attention: Corporate Trust Department
SECTION 22. Supplements and Amendments. The Company and the Warrant Agent may
from time to time supplement or amend this Agreement without the approval of any
Holders of Warrant Certificates in order to cure any ambiguity or to correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provision herein, or to make any other provisions in regard to
matters or questions arising hereunder which the Company and the Warrant Agent
may deem necessary or desirable and which shall not in any way materially
adversely affect the interests of any Holder of Warrant Certificates. Any
amendment or supplement to this Agreement that has an adverse effect on the
interests of Holders shall require the written consent of Holders representing a
majority of the then outstanding Warrants (excluding Warrants held by the
Company or any of its Affiliates). The consent of each Holder of a Warrant
affected shall be required for any amendment pursuant to which the Exercise
Price would be increased or the number of Warrant Shares purchasable upon
exercise of Warrants would be decreased (other than pursuant to adjustments
provided by this Agreement) or the exercise period with respect to the Warrants
would be shortened. The Warrant Agent shall be entitled to receive and, subject
to Section 16, shall be fully protected in relying upon, an officers'
certificate and opinion of counsel as conclusive evidence that any such
amendment or supplement is authorized or permitted hereunder, that it is not
inconsistent herewith, and that it will be valid and binding upon the Company in
accordance with its terms.
<PAGE>
SECTION 23. Successors. All the covenants and provisions of this Agreement by or
for the benefit of the Company or the Warrant Agent shall bind and inure to the
benefit of their respective successors and assigns hereunder. SECTION 24.
Termination. This Agreement (other than the Company's obligations with respect
to Warrants previously exercised, with respect to Section 16(e) hereof and with
respect to indemnification under Section 17) shall terminate at 5:00 p.m., New
York City time on the Expiration Date. SECTION 25. Governing Law. THIS AGREEMENT
AND EACH WARRANT CERTIFICATE ISSUED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO CONFLICTS OF LAWS PRINCIPLES. SECTION 26. Benefits of This Agreement.
(a) Nothing in this Agreement shall be construed to give to any person or
corporation other than the Company, the Warrant Agent and the Holders of the
Warrant Certificates any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Company, the Warrant Agent and the Holders of the Warrant Certificates.
(b) Prior to the exercise of the Warrants, no Holder of a
Warrant Certificate, as such, shall be entitled to any rights of a stockholder
of the Company, including, without limitation, the right to receive dividends or
subscription rights, the right to vote, to consent, to exercise any preemptive
right, to receive any notice of meetings of stockholders for the election of
directors of the Company or any other matter or to receive any notice of any
proceedings of the Company, except as may be specifically provided for herein.
The Holders of the Warrants are not entitled to share in the assets of the
Company in the event of the liquidation, dissolution or winding up of the
Company's affairs.
(c) All rights of action in respect of this Agreement are
vested in the Holders of the Warrants, and any Holder of any Warrant, without
the consent of the Warrant Agent or the Holder of any other Warrant, may, on
such Holder's own behalf and for such Holder's own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company
suitable to enforce, or otherwise in respect of, such Holder's rights hereunder,
including the right to exercise, exchange or surrender for purchase such
Holder's Warrants in the manner provided in this Agreement.
SECTION 27. Counterparts. This 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.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first above written.
WASTE SYSTEMS INTERNATIONAL, INC.
By:
Name:
Title:
IBJ WHITEHALL BANK & TRUST COMPANY, as Warrant Agent
By:
(Authorized Signature)
<PAGE>
Warrant Agreement Signature Pages
<PAGE>
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A-7
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A-1
EXHIBIT A
[Form of Warrant Certificate]
[Face]
No. ______ ____ Warrants
CUSIP No. _______
Warrant Certificate
Waste Systems International, Inc.
This Warrant Certificate certifies that Cede & Co., or its
registered assigns, is the registered holder of Warrants expiring March 2, 2004
(the "Warrants") to purchase Common Stock, par value $0.01 (the "Common Stock"),
of Waste Systems International, Inc. a Delaware corporation (the "Company").
Each Warrant entitles the registered holder upon exercise at any time from 9:00
a.m. New York City Time on September 2, 1999 (the "Exercise Date") until 5:00
p.m. New York City Time on March 2, 2004, to receive from the Company _________
fully paid and nonassessable shares of Common Stock (the "Warrant Shares") at
the initial exercise price (the "Exercise Price") of $6.25 per share payable
upon surrender of this Warrant Certificate and payment of the Exercise Price at
the office or agency of the Warrant Agent, but only subject to the conditions
set forth herein and in the Warrant Agreement referred to on the reverse hereof.
The Exercise Price and number of Warrant Shares issuable upon exercise of the
Warrants are subject to adjustment upon the occurrence of certain events set
forth in the Warrant Agreement.
No Warrant may be exercised after 5:00 p.m., New York City
Time on March 2, 2004, and to the extent not exercised by such time such
Warrants shall become void.
Reference is hereby made to the further provisions of this
Warrant Certificate set forth on the reverse hereof and such further provisions
shall for all purposes have the same effect as though fully set forth at this
place.
This Warrant Certificate shall not be valid unless
countersigned by the Warrant Agent, as such term is used in the Warrant
Agreement.
This Warrant Certificate shall be governed by and construed in
accordance with the internal laws of the State of New York.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be signed by its duly authorized officer, each by a signature or
a facsimile thereof.
Dated: March 2, 1999
WASTE SYSTEMS INTERNATIONAL, INC.
By: ____________________________________
Name:
Title:
Countersigned:
IBJ WHITEHALL BANK & TRUST COMPANY
as Warrant Agent
Dated:
By:
Authorized Signature
<PAGE>
[Form of Warrant]
[Reverse]
THIS GLOBAL WARRANT IS HELD BY THE DEPOSITARY (AS DEFINED IN THE WARRANT
AGREEMENT GOVERNING THIS WARRANT) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF
THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT(I) THE WARRANT AGENT MAY MAKE SUCH NOTATIONS HEREON AS
MAY BE REQUIRED PURSUANT TO SECTION 3.5 OF THE WARRANT AGREEMENT, (II) THIS
GLOBAL WARRANT MAY BE EXCHANGED OR TRANSFERRED PURSUANT TO SECTIONS 3.5(a), 3.6
AND 3.7 OF THE WARRANT AGREEMENT AND (III) THIS GLOBAL WARRANT MAY BE DELIVERED
TO THE WARRANT AGENT FOR CANCELLATION PURSUANT TO SECTION 3.8 OF THE WARRANT
AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY (1) BY ITS ACQUISITION HEREOF
REPRESENTS THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) AND (2) IS HEREBY NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER OR ANOTHER EXEMPTION UNDER THE SECURITIES ACT.
THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUER
THAT (X) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY
(i)(a) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, OR (c) IN ACCORDANCE
WITH ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (ii) TO THE COMPANY OR (iii) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (Y)
THE HOLDER WILL, AND WILL REQUIRE EACH SUBSEQUENT HOLDER TO, NOTIFY ANY
PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS
SET FORTH IN (X) ABOVE.
THE WARRANT AGREEMENT CONTAINS A PROVISION REQUIRING THE WARRANT AGENT TO REFUSE
TO REGISTER ANY TRANSFER OF THIS SECURITY IN VIOLATION OF THE FOREGOING.
Unless and until it is exchanged in whole or in part for Warrants in
certificated form, this Warrant may not be transferred except as a whole by the
depositary to a nominee of the depositary or by a nominee of the depositary to
the depositary or another nominee of the depositary or by the depositary or any
such nominee to a successor depositary or a nominee of such successor
depositary. The Depository Trust Company ("DTC"), (55 Water Street, New York,
New York) shall act as the Depositary until a successor shall be appointed by
the Company and the Warrant Agent.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants expiring March 2, 2004 entitling the holder on
exercise to receive shares of Common Stock, par value $0.01, of the Company (the
"Common Stock"), and are issued or to be issued pursuant to a Warrant Agreement
dated as of March 2, 1999 (the "Warrant Agreement"), duly executed and delivered
by the Company to IBJ Whitehall Bank & Trust Company as warrant agent (the
"Warrant Agent"), which Warrant Agreement is hereby incorporated by reference in
and made a part of this instrument and is hereby referred to for a description
of the rights, limitation of rights, obligations, duties and immunities
thereunder of the Warrant Agent, the Company and the holders (the words
"holders" or "holder" meaning the registered holders or registered holder) of
the Warrants. A copy of the Warrant Agreement may be obtained by the holder
hereof upon written request to the Company. Capitalized terms used herein
without definition shall have the meanings ascribed to them in the Warrant
Agreement.
Warrants may be exercised at any time from 9:00 a.m. New York City Time
on September 2, 1999 and until 5:00 p.m. New York City Time on March 2, 2004.
The holder of Warrants evidenced by this Warrant Certificate may exercise them
by surrendering this Warrant Certificate, with the form of election to purchase
set forth hereon properly completed and executed, together with payment of the
Exercise Price at the office of the Warrant Agent, all in accordance with the
Warrant Agreement. In the event that upon any exercise of Warrants evidenced
hereby the number of Warrants exercised shall be less than the total number of
Warrants evidenced hereby, there shall be issued to the holder hereof or his
assignee a new Warrant Certificate evidencing the number of Warrants not
exercised. No adjustment shall be made for any dividends on any Common Stock
issuable upon exercise of this Warrant.
<PAGE>
The Warrant Agreement provides that upon the occurrence of certain
events the Exercise Price set forth on the face hereof and/or the number of
shares of Common Stock issuable upon the exercise of each Warrant shall, subject
to certain conditions, be adjusted. No fractions of a share of Common Stock will
be issued upon the exercise of any Warrant, but the Company will pay the cash
value thereof determined as provided in the Warrant Agreement.
The Warrant Agreement, together with the Warrant Registration Rights
Agreement referred to therein, provides that the Company shall be bound by
certain registration obligations with respect to the Common Stock issuable upon
exercise of the Warrants.
Warrant Certificates, when surrendered at the office of the Warrant
Agent by the registered holder thereof in person or by legal representative or
attorney duly authorized in writing, may be exchanged, in the manner and subject
to the limitations provided in the Warrant Agreement, but without payment of any
service charge, for another Warrant Certificate or Warrant Certificates of like
tenor evidencing in the aggregate a like number of Warrants.
The Company and the Warrant Agent may deem and treat the registered
holder(s) thereof as the absolute owner(s) of this Warrant Certificate
(notwithstanding any notation of ownership or other writing hereon made by
anyone), for the purpose of any exercise hereof, of any distribution to the
holder(s) hereof, and for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary. Neither the
Warrants nor this Warrant Certificate entitles any holder hereof to any rights
of a stockholder of the Company.
<PAGE>
Form of Election to Purchase]
(To Be Executed Upon Exercise Of Warrant)
The undersigned hereby irrevocably elects to exercise the
right, represented by this Warrant Certificate, to receive __________ shares of
Common Stock and herewith tenders payment for such shares to the order of Waste
Systems International, Inc., in the amount of $_____ in accordance with the
terms hereof. The undersigned requests that a certificate for such shares be
registered in the name of ______________, whose address is _________ and that
such shares be delivered to ______________, whose address is _________. If said
number of shares is less than all of the shares of Common Stock purchasable
hereunder, the undersigned requests that a new Warrant Certificate representing
the remaining balance of such shares be registered in the name of
______________, whose address is ___________, and that such Warrant Certificate
be delivered to whose address is
- -----------.
-------------------------------------
Signature
Date:
--------------------------------------
Signature Guaranteed
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Warrant Agent, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Warrant Agent in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
<PAGE>
SCHEDULE OF EXCHANGES OF INTERESTS OF GLOBAL WARRANT
The following exchanges of a part of this Global Warrant have been made:
<TABLE>
<C> <C> <C> <C> <C>
Date of Exchange Amount of decrease in Amount of increase in Number of Warrants in Signature of
Number of warrants in Number of Warrants in this this Global Warrant authorized signatory
this Global Warrant Global Warrant following such decrease of Warrant Agent
or increase
- -------------------- ------------------------ ---------------------------- -------------------------- ------------------------
</TABLE>
<PAGE>
B-1
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Waste Systems International, Inc.
420 Bedford Street, Suite 300
Lexington, MA 02173
[Warrant Registrar address block]
Re: Warrants
Reference is hereby made to the Warrant Agreement, dated as of
March 2, 1999 (the "Warrant Agreement"), between Waste Systems International,
Inc., as issuer (the "Company"), and IBJ Whitehall Bank & Trust Company, as
warrant agent. Capitalized terms used but not defined herein shall have the
meanings given to them in the Warrant Agreement.
_____________________, (the "Transferor") owns and proposes to
transfer the Warrant[s] or interest in such Warrant[s] specified in Annex A
hereto, in the amount of _________ shares in such Warrant[s] (the "Transfer"),
to _________________ (the "Transferee"), as further specified in Annex A hereto.
In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. Check if Transferee will take delivery of a beneficial
interest in the Restricted Global Warrant or a Restricted Definitive Warrant
Pursuant to Rule 144A. The Transfer is being effected pursuant to and in
accordance with Rule 144A under the United States Securities Act of 1933, as
amended (the "Securities Act"), and, accordingly, the Transferor hereby further
certifies that the beneficial interest or Definitive Warrant is being
transferred to a Person that the Transferor reasonably believed and believes is
purchasing the beneficial interest or Definitive Warrant for its own account, or
for one or more accounts with respect to which such Person exercises sole
investment discretion, and such Person and each such account is a "qualified
institutional buyer" within the meaning of Rule 144A in a transaction meeting
the requirements of Rule 144A and such Transfer is in compliance with any
applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Transfer in accordance with the terms of the
Warrant Agreement, the transferred beneficial interest or Definitive Warrant
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Global Warrant and/or the Restricted
Definitive Warrant and in the Warrant Agreement and the Securities Act.
2. Check and complete if Transferee will take delivery of a beneficial
interest in a Restricted Definitive Warrant pursuant to any provision of the
Securities Act or any Rule thereunder other than Rule 144A. The Transfer is
being effected in compliance with the transfer restrictions applicable to
beneficial interests in the Restricted Global Warrant and Restricted Definitive
Warrants and pursuant to and in accordance with the Securities Act and the Rules
and Regulations promulgated thereunder, and any applicable blue sky securities
laws of any state of the United States. Upon consummation of the proposed
Transfer in accordance with the terms of the Warrant Agreement, the transferred
beneficial interest or Definitive Warrant will be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Global Warrant and/or the Restricted Definitive Warrant and in the Warrant
Agreement and the Securities Act.
3. Check if Transferee will take delivery of a beneficial
interest in an Unrestricted Global Warrant or of an Unrestricted Definitive
Warrant.
(a) Check if Transfer is pursuant to Rule 144. (i) The
Transfer is being effected pursuant to and in accordance with Rule 144 under the
Securities Act and in compliance with the transfer restrictions contained in the
Warrant Agreement and any applicable blue sky securities laws of any state of
the United States and (ii) the restrictions on transfer contained in the Warrant
Agreement and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer,
in accordance with the terms of the Warrant Agreement, the transferred
beneficial interest or Definitive Warrant will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Warrant, on Restricted Definitive Warrants and in the
Warrant Agreement.
(b) Check if Transfer is Pursuant to Other Exemption. (i) The
Transfer is being effected pursuant to and in compliance with an exemption from
the registration requirements of the Securities Act other than Rule 144 and in
compliance with the transfer restrictions contained in the Warrant Agreement and
any applicable blue sky securities laws of any State of the United States and
(ii) the restrictions on transfer contained in the Warrant Agreement and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Warrant Agreement, the transferred beneficial interest or
Definitive Warrant will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Warrant or Restricted Definitive Warrants and in the Warrant Agreement.
<PAGE>
(c) Check if Transfer is Pursuant to a Registration Statement.
(i) The Transfer is being effected pursuant to an effective registration
statement under the Securities Act and in compliance with the prospectus
delivery requirements of the Securities Act and any applicable blue sky
securities laws of any State of the United States and (ii) the restrictions on
transfer contained in the Warrant Agreement and the Private Placement Legend are
not required in order to maintain compliance with the Securities Act. Upon
consummation of the proposed Transfer in accordance with the terms of the
Warrant Agreement, the transferred beneficial interest or Definitive Warrant
will not be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Global Warrant or Restricted
Definitive Warrants and in the Warrant Agreement.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company.
------------------------------------------
[Insert Name of Transferor]
By: _____________________________________
Name:
Title:
Dated: _______________________
Signature Guaranteed
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Warrant Agent, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Warrant Agent in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
<PAGE>
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) a beneficial interest in the Restricted Global Warrant.
(b) a Restricted Definitive Warrant.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) a beneficial interest in the:
(i) Restricted Global Warrant, or
(ii) Unrestricted Global Warrant, or
(b) a Restricted Definitive Warrant; or
(c) an Unrestricted Definitive Warrant,
in accordance with the terms of the Warrant Agreement.
<PAGE>
- -------------------------------------------------------------------------------
EXHIBIT C
- -------------------------------------------------------------------------------
FORM OF CERTIFICATE OF EXCHANGE
Waste Systems International, Inc.
420 Bedford Street, Suite 300
Lexington, MA 02173
[Warrant Registrar address block]
Re: Warrants
Reference is hereby made to the Warrant Agreement, dated as of
March 2, 1999 (the "Warrant Agreement"), between Waste Systems International,
Inc., as issuer (the "Company"), and IBJ Whitehall Bank & Trust Company, as
warrant agent. Capitalized terms used but not defined herein shall have the
meanings given to them in the Warrant Agreement.
________________, (the "Owner") owns and proposes to
exchange the Warrant[s] or interest in
such Warrant[s] specified herein, in the amount of ______ shares in such
Warrant[s] (the "Exchange"). In
connection with the Exchange, the Owner hereby certifies that:
1. Exchange of Restricted Definitive Warrants or
Beneficial Interests in the Restricted Global Warrant for Unrestricted
Definitive Warrants or Beneficial Interests in the Unrestricted Global Warrant.
(a) Check if Exchange is from beneficial interest in the
Restricted Global Warrant to beneficial interest in the Unrestricted Global
Warrant. In connection with the Exchange of the Owner's beneficial interest in
the Restricted Global Warrant for a beneficial interest in the Unrestricted
Global Warrant in an equal amount, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner's own account without transfer, (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to the Global Warrants and pursuant to and in accordance with the
United States Securities Act of 1933, as amended (the "Securities Act"), (iii)
the restrictions on transfer contained in the Warrant Agreement and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act and (iv) the beneficial interest in the Unrestricted Global
Warrant is being acquired in compliance with any applicable blue sky securities
laws of any state of the United States.
(b) Check if Exchange is from beneficial interest in the
Restricted Global Warrant to Unrestricted Definitive Warrant. In connection with
the Exchange of the Owner's beneficial interest in the Restricted Global Warrant
for an Unrestricted Definitive Warrant, the Owner hereby certifies (i) the
Definitive Warrant is being acquired for the Owner's own account without
transfer, (ii) such Exchange has been effected in compliance with the transfer
restrictions applicable to the Restricted Global Warrant and pursuant to and in
accordance with the Securities Act, (iii) the restrictions on transfer contained
in the Warrant Agreement and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the Definitive
Warrant is being acquired in compliance with any applicable blue sky securities
laws of any state of the United States.
(c) Check if Exchange is from Restricted Definitive Warrant to
beneficial interest in the Unrestricted Global Warrant. In connection with the
Owner's Exchange of a Restricted Definitive Warrant for a beneficial interest in
the Unrestricted Global Warrant, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner's own account without transfer, (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Warrants and pursuant to and in accordance
with the Securities Act, (iii) the restrictions on transfer contained in the
Warrant Agreement and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the beneficial interest is
being acquired in compliance with any applicable blue sky securities laws of any
state of the United States.
(d) Check if Exchange is from Restricted Definitive Warrant to
Unrestricted Definitive Warrant. In connection with the Owner's Exchange of a
Restricted Definitive Warrant for an Unrestricted Definitive Warrant, the Owner
hereby certifies (i) the Unrestricted Definitive Warrant is being acquired for
the Owner's own account without transfer, (ii) such Exchange has been effected
in compliance with the transfer restrictions applicable to Restricted Definitive
Warrants and pursuant to and in accordance with the Securities Act, (iii) the
restrictions on transfer contained in the Warrant Agreement and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act and (iv) the Unrestricted Definitive Warrant is being acquired in
compliance with any applicable blue sky securities laws of any state of the
United States.
2. Exchange of Restricted Definitive Warrants or
Beneficial Interests in the Restricted Global Warrant for Restricted Definitiv
Warrants or Beneficial Interests in the Restricted Global Warrant.
(a) Check if Exchange is from beneficial interest in the
Restricted Global Warrant to Restricted Definitive Warrant. In connection with
the Exchange of the Owner's beneficial interest in the Restricted Global Warrant
for a Restricted Definitive Warrant in a number equal to the number of
beneficial interests exchanged, the Owner hereby certifies that the Restricted
Definitive Warrant is being acquired for the Owner's own account without
transfer. Upon consummation of the proposed Exchange in accordance with the
terms of the Warrant Agreement, the Restricted Definitive Warrant issued will
continue to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Warrant and in the Warrant
Agreement and the Securities Act.
<PAGE>
(b) Check if Exchange is from Restricted Definitive Warrant to
beneficial interest in the Restricted Global Warrant. In connection with the
Exchange of the Owner's Restricted Definitive Warrant for a beneficial interest
in the Restricted Global Warrant, in a number equal to the number of beneficial
interests exchanged, the Owner hereby certifies (i) the beneficial interest is
being acquired for the Owner's own account without transfer and (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Warrant and pursuant to and in accordance
with the Securities Act, and in compliance with any applicable blue sky
securities laws of any state of the United States. Upon consummation of the
proposed Exchange in accordance with the terms of the Warrant Agreement, the
beneficial interest issued will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the relevant Restricted
Global Warrant and in the Warrant Agreement and the Securities Act.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company.
---------------------------------------
[Insert Name of Transferor]
By: __________________________________
Name:
Title:
Dated: _______________________
--------------------------------------
Signature Guaranteed
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Warrant Agent, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Warrant Agent in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
D-9
D-1
EXHIBIT D
FORM OF WARRANT REGISTRATION RIGHTS AGREEMENT
<PAGE>
EXHIBIT 4.3
- ------------
NOTE REGISTRATION RIGHTS AGREEMENT
THIS NOTE REGISTRATION RIGHTS AGREEMENT (the "Agreement") is
made and entered into as of March 2, 1999, among Waste Systems International,
Inc., a Delaware corporation (the "Company") and the subsidiaries of the Company
set forth in Schedule I hereto and as defined in the Indenture (the "Subsidiary
Guarantors") on the one hand, and First Albany Corporation (the "Initial
Purchaser") on the other hand.
This Agreement is made pursuant to the Purchase Agreement
dated March 2, 1999 among the Company, the Subsidiary Guarantors and the Initial
Purchaser (the "Purchase Agreement"), which provides for the sale by the Company
to the Initial Purchaser of 10,000 Units, each consisting of $10,000 principal
amount of the Company's 11 1/2% Senior Notes due 2005 (the "Notes") and 150
Warrants to purchase one share of the Company's common stock, par value $.01 per
share, per warrant. In order to induce the Initial Purchaser to enter into the
Purchase Agreement, the Company has agreed to provide to the Initial Purchaser
and its direct and indirect transferees and assigns the registration rights set
forth in this Agreement. The execution and delivery of this Agreement is a
condition to closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. Definitions. As used in this Agreement, the following capitalized defined
terms shall have the following meanings:
"Closing Date" shall mean the Closing Date as defined in the
Purchase Agreement.
"Commission" shall mean the Securities and Exchange Commission.
"Company" shall have the meaning set forth in the preamble of this
Agreement and also includes the Company's successors.
"Depositary" shall mean The Depository Trust Company, or any other
depositary appointed by the Company, provided, however, that any such
depositary must have an address in the Borough of Manhattan, in the
City of New York.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations of the
Commission promulgated thereunder.
"Exchange Notes" shall mean 11 1/2% Series B Senior Notes due 2005
issued by the Company under the Indenture containing terms identical to
the Notes (except that (i) interest thereon shall accrue from the last
date on which interest was paid on the Notes or, if no such interest
has been paid, from March 2, 1999, (ii) the transfer restrictions
thereon shall be eliminated and (iii) certain provisions relating to an
increase in the stated rate of interest thereon shall be eliminated) to
be offered to Holders of Notes in exchange for Notes pursuant to the
Exchange Offer.
"Exchange Offer" shall mean the exchange offer by the Company of
Exchange Notes for Registrable Notes pursuant to Section 2(a) hereof.
"Exchange Offer Registration" shall mean a registration under the
Securities Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another
appropriate form), and all amendments and supplements to such
registration statement, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by
reference therein.
"Holders" shall mean the Initial Purchaser, for so long as it owns any
Registrable Notes, and each of its successors, assigns and direct and
indirect transferees who become registered owners of Registrable Notes
under the Indenture.
"Indenture" shall mean the Indenture relating to the Notes dated as of
March 2, 1999 among the Company, the Subsidiary Guarantors of the
Company and IBJ Whitehall Bank & Trust Company, a New York banking
corporation, as trustee, as the same may be amended from time to time
in accordance with the terms thereof.
"Initial Purchaser" shall have the meaning set forth in the preamble of
this Agreement.
"Majority Holders" shall mean the Holders of a majority of the
aggregate principal amount of outstanding Registrable Notes; provided
that whenever the consent or approval of Holders of a specified
percentage of Registrable Notes is required hereunder, Registrable
Notes held by the Company or any of its affiliates (as such term is
defined in Rule 405 under the Securities Act) (other than the Initial
Purchaser or subsequent holders of Registrable Notes if such subsequent
holders are deemed to be such affiliates solely by reason of their
holding of such Registrable Notes) shall be disregarded in determining
whether such consent or approval was given by the Holders of such
required percentage or amount.
<PAGE>
"Offering Memorandum" shall mean any offering memorandum (whether the
preliminary offering memorandum or the final offering memorandum, or
any amendments or supplements to either such document), that has been
prepared and delivered by the Company to the Initial Purchaser in
connection with the offering and resale of the Units consisting of the
Notes and the Warrants to purchase shares of the Company's common
stock.
"Person" shall mean an individual, partnership, limited liability
company, corporation, trust or unincorporated organization, or a
government or agency or political subdivision thereof.
"Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such
prospectus as amended or supplemented by any prospectus supplement,
including a prospectus supplement with respect to the terms of the
offering of any portion of the Registrable Notes covered by a Shelf
Registration Statement, and by all other amendments and supplements to
a prospectus, including post-effective amendments, and in each case
including all material incorporated by reference therein.
"Purchase Agreement" shall have the meaning set forth in the preamble
of this Agreement.
"Registrable Notes" shall mean the Notes; provided, however, that the
Notes shall cease to be Registrable Notes when (i) a Registration
Statement with respect to such Notes shall have been declared effective
under the Securities Act and such Notes shall have been disposed of
pursuant to such Registration Statement, (ii) such Notes shall have
been sold to the public pursuant to Rule 144 (or any similar provision
then in force, but not Rule 144A) under the Securities Act, (iii) such
Notes shall have ceased to be outstanding or (iv) such Notes have been
exchanged for Exchange Notes upon consummation of the Exchange Offer.
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance by the Company with this Agreement,
including without limitation: (i) all Commission, stock exchange or
National Association of Securities Dealers, Inc. ("NASD") registration
and filing fees, (ii) all fees and expenses incurred in connection with
compliance with state or other securities or blue sky laws and
compliance with the rules of the NASD (including reasonable fees and
disbursements of counsel for any underwriters or Holders in connection
with state or other securities or blue sky qualification of any of the
Exchange Notes or Registrable Notes), (iii) all expenses of any Persons
in preparing or assisting in preparing, word processing, printing and
distributing any Registration Statement, any Prospectus, any amendments
or supplements thereto, certificates representing the Exchange Notes
and other documents relating to the performance of and compliance with
this Agreement, (iv) all rating agency fees, (v) all fees and expenses
incurred in connection with the listing, if any, of any of the
Registrable Notes on any securities exchange or exchanges, (vi) all
fees and disbursements relating to the qualification of the Indenture
under applicable securities laws, (vii) the reasonable fees and
disbursements of counsel for the Company and the reasonable fees and
disbursements (including the expenses of preparing and distributing any
underwriting or securities sales agreement) of one counsel (in addition
to appropriate local counsel) for the Holders (which counsel shall be
selected in writing by the Majority Holders), (viii) the fees and
expenses of the independent public accountants of the Company,
including the expenses of any special audits or "cold comfort" letters
required by or incident to such performance and compliance, (ix) the
fees and expenses of a "qualified independent underwriter" as defined
by Conduct Rule 2720 of the NASD (if required by the NASD rules) in
connection with the offering of the Registrable Securities, (x) the
fees and expenses of the trustee, including its counsel, and any escrow
agent or custodian, and (xi) any fees and disbursements of the
underwriters customarily required to be paid by issuers or sellers of
securities and the reasonable fees and expenses of any special experts
retained by the Company in connection with any Registration Statement,
but excluding underwriting discounts and commissions and transfer
taxes, if any, relating to the sale or disposition of Registrable Notes
by a Holder.
"Registration Statement" shall mean any registration statement of the
Company which covers any of the Exchange Notes or Registrable Notes
pursuant to the provisions of this Agreement, and all amendments and
supplements to any such Registration Statement, including
post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated
by reference therein.
"Securities Act" shall mean the Securities Act of 1933, as amended from
time to time, and the rules and regulations of the Commission
promulgated thereunder.
"Shelf Registration" shall mean a registration effected pursuant to
Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration
statement of the Company pursuant to the provisions of Section 2(b) of
this Agreement which covers all of the then Registrable Notes on an
appropriate form under Rule 415 under the Securities Act, or any
similar rule that may be adopted by the Commission, and all amendments
and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated
by reference therein.
<PAGE>
"Trustee" shall mean the trustee with respect to the Notes and the
Exchange Notes under the Indenture.
"Warrant Registration Rights Agreement" shall mean the registration
rights agreement, dated as of March 2, 1999, by and among the Company,
the Subsidiary Guarantors and the Initial Purchaser.
2. Registration Under the Securities Act.
(a) Exchange Offer Registration. To the extent not prohibited by any applicable
law or applicable interpretation of the staff of the Commission, the Company
shall (A) file on or prior to the 180th calendar day following the Closing Date
an Exchange Offer Registration Statement covering the offer by the Company to
the Holders of Exchange Notes with terms identical to the Notes (except that
such Exchange Notes will not bear legends or contain terms with respect to
transfer restrictions) in exchange for all of the Registrable Notes, (B) use its
best efforts to cause such Exchange Offer Registration Statement to be declared
effective by the Commission on or prior to the 210th calendar day following the
Closing Date, (C) use its best efforts to cause such Exchange Offer Registration
Statement to remain effective until the closing of the Exchange Offer and (D)
use its best efforts to consummate the Exchange Offer on or prior to the 240th
calendar day following the Closing Date. Upon the effectiveness of the Exchange
Offer Registration Statement, the Company shall promptly commence the Exchange
Offer, it being the objective of such Exchange Offer to enable each Holder
(other than Participating Broker-Dealers (as defined in Section 3(f) hereof)
eligible and electing to exchange Registrable Notes for Exchange Notes (assuming
that such Holder is not an affiliate of the Company within the meaning of Rule
405 under the Securities Act, acquires the Exchange Notes in the ordinary course
of such Holder's business and has no arrangements or understandings with any
person to participate in the Exchange Offer for the purpose of distributing the
Exchange Notes) to trade such Exchange Notes from and after their receipt
without any limitations or restrictions under the Securities Act and without
material restrictions under the securities laws of a substantial proportion of
the several states of the United States. For each Note surrendered to the
Company pursuant to the Registered Exchange Offer, the Holder of such Note will
receive an Exchange Note having a principal amount equal to that of the
surrendered Note. The Exchange Notes will be issued under the Indenture.
In connection with the Exchange Offer, the Company shall:
(i) mail to each Holder a copy of the Prospectus forming part of the
Exchange Offer Registration Statement, together with an appropriate
letter of transmittal and related documents;
(ii) keep the Exchange Offer open for not less than 20 business days after
the date notice thereof is mailed to the Holders (or longer if required
by applicable law);
(iii) use the services of the Depositary for the Exchange Offer
with respect to Notes evidenced by global certificates;
(iv) permit Holders to withdraw tendered Registrable Notes at any time prior to
the close of business, New York City time, on the last business day on which the
Exchange Offer shall remain open, by sending to the institution specified in the
notice a telegram, telex, facsimile transmission or letter setting forth the
name of such Holder, the principal amount of Registrable Notes delivered for
exchange, and a statement that such Holder is withdrawing his election to have
such Notes exchanged; and (v) otherwise comply in all respects with all
applicable laws relating to the Exchange Offer.
As soon as practicable after the close of the Exchange Offer,
the Company shall:
(i) accept for exchange Registrable Notes duly tendered and not validly
withdrawn pursuant to the Exchange Offer in accordance with the terms
of the Exchange Offer Registration Statement and the letter of
transmittal which is an exhibit thereto;
(ii) deliver, or cause to be delivered, to the Trustee for cancellation
all Registrable Notes so accepted for exchange by the Company; and
(iii) cause the Trustee promptly to authenticate and deliver Exchange Notes to
each Holder of Registrable Notes equal in amount to the Registrable Notes of
such Holder so accepted for exchange.
Interest on each Exchange Note will accrue from the last date
on which interest was paid on the Registrable Notes surrendered in exchange
therefor or, if no interest has been paid on the Registrable Notes, from March
2, 1999. The Exchange Offer shall not be subject to any conditions, other than
that the Exchange Offer, or the making of any exchange by a Holder, does not
violate applicable law or any applicable interpretation of the staff of the
Commission. Each Holder of Registrable Notes (other than Participating
Broker-Dealers) who wishes to exchange such Registrable Notes for Exchange Notes
in the Exchange Offer shall have represented that (i) any Exchange Notes to be
received by it will be acquired in the ordinary course of business, (ii) at the
time of the commencement of the Exchange Offer it has no arrangement or
understanding with any person to participate in the distribution (within the
meaning of the Securities Act) of the Exchange Notes, (iii) it is not an
affiliate (as defined in Rule 405 under the Securities Act) of the Company, or
if it is an affiliate, it will comply with the registration and prospectus
delivery requirements of the Securities Act to the extent applicable and (iv) it
is not acting on behalf of any person who could not make the representations in
clauses (i) through (iii). The Company shall inform the Initial Purchaser of the
names and addresses of the Holders to whom the Exchange Offer is made, and the
Initial Purchaser shall have the right to contact such Holders and otherwise
facilitate the tender of Registrable Notes in the Exchange Offer.
<PAGE>
If the Company effects the Registered Exchange Offer, it will
be entitled to close such offer at the close of business 20 business days after
commencement thereof provided that it has accepted all Notes theretofore validly
tendered in accordance with the terms of the Registered Exchange Offer. Notes
not tendered in the Exchange Offer shall bear interest at the rate specified in
the Offering Memorandum and be subject to all of the terms and conditions
specified in the Indenture and to the transfer restrictions described therein.
(b) Shelf Registration. (i) If, because of any change in law or applicable
interpretations thereof by the staff of the Commission, the Company is not
permitted to effect the Exchange Offer as contemplated by Section 2(a) hereof,
or (ii) if for any other reason the Exchange Offer cannot be consummated within
240 calendar days following the Closing Date, or (iii) if any Holder (other than
the Initial Purchaser) is not eligible to participate in the Exchange Offer or
does not receive freely tradable Exchange Notes in the Exchange Offer or (iv)
upon the request of the Initial Purchaser (with respect to any Registrable Notes
which it acquired directly from the Company) following the consummation of the
Exchange Offer if the Initial Purchaser shall hold Registrable Notes which it
acquired directly from the Company and if the Initial Purchaser is not
permitted, in the opinion of counsel to the Initial Purchaser, pursuant to
applicable law or applicable interpretation of the staff of the Commission to
participate in the Exchange Offer, the Company shall, at its cost:
(A) as promptly as practicable, file with the Commission a Shelf
Registration Statement relating to the offer and sale of the then
outstanding Registrable Notes by the Holders from time to time in
accordance with the methods of distribution elected by the Majority
Holders of such Registrable Notes and set forth in such Shelf
Registration Statement;
(B) use its best efforts to cause such Shelf Registration Statement to be
declared effective by the Commission under the Securities Act; (C) use its best
efforts to keep the Shelf Registration Statement continuously effective in order
to permit the Prospectus forming part thereof to be usable by Holders until the
earlier of (i) the time when the Notes covered by the Shelf Registration
Statement can be sold pursuant to Rule 144 under the Securities Act without any
limitations under clauses (c), (e), (f) and (h) of Rule 144 and (ii) two years
from the Closing Date; and (D) notwithstanding any other provisions hereof, use
its best efforts to ensure that (i) any Shelf Registration Statement and any
amendment thereto and any Prospectus forming a part thereof and any supplement
thereto complies in all material respects with the Securities Act and the rules
and regulations thereunder, (ii) any Shelf Registration Statement and any
amendment thereto does not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading and
(iii) any Prospectus forming part of any Shelf Registration Statement, and any
supplement to such Prospectus (as amended or supplemented from time to time),
does not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
The Company further agrees, if necessary, to supplement or
amend the Shelf Registration Statement if reasonably requested by the Majority
Holders with respect to information relating to the Holders and otherwise as
required by Section 3(b) below, to use all reasonable efforts to cause any such
supplement or amendment to become effective and such Shelf Registration to
become usable as soon as practicable thereafter and to furnish to the Holders of
Registrable Notes copies of any such supplement or amendment promptly after its
being used or filed with the Commission.
(c) Expenses. The Company shall pay all Registration Expenses in connection with
the registration pursuant to Section 2(a) and 2(b). Each Holder shall pay all
expenses of its counsel other than as set forth in the preceding sentence,
underwriting discounts and commissions (prior to the reduction thereof with
respect to selling concessions, if any) and transfer taxes, if any, relating to
the sale or disposition of such Holder's Registrable Notes pursuant to the Shelf
Registration Statement.
(d) Effective Registration Statement. (i) The Company will be deemed not to have
used its best efforts to cause a Registration Statement to become, or to remain,
effective during the requisite period if the Company voluntarily takes any
action that would result in any such Registration Statement not being declared
effective or in the Holders of Registrable Notes covered thereby not being able
to exchange or offer and sell such Registrable Notes during that period unless
(A) such action is required by applicable law or (B) such action is taken by the
Company in good faith and for valid business reasons (but not including
avoidance of the Company's obligations hereunder), including a material
corporate transaction, so long as the Company promptly complies with the
requirements of Section 3(k) hereof, if applicable. (ii) An Exchange Offer
Registration Statement pursuant to Section 2(a) hereof or a Shelf
Registration Statement pursuant to Section 2(b) hereof will not be
deemed to have become effective unless it has been declared effective
by the Commission; provided, however, that if, after it has been
declared effective, the offering of Registrable Notes pursuant to a
Registration Statement is interfered with by any stop order, injunction
or other order or requirement of the Commission or any other
governmental agency or court, such Registration Statement will be
deemed not to have been effective during the period of such
interference, until the offering of Registrable Notes pursuant to such
Registration Statement may legally resume.
<PAGE>
(e) Increase in Interest Rate. In the event that either (i) the Exchange Offer
Registration Statement is not filed with the Commission on or prior to the 180th
calendar day following the Closing Date, or (ii) the Exchange Offer Registration
Statement is not declared effective on or prior to the 210th calendar day
following the Closing Date, or (iii) the Exchange Offer is not consummated on or
prior to the 240th calendar day following the Closing Date or a Shelf
Registration Statement with respect to the Registrable Notes is not declared
effective on or prior to the 240th calendar day following the Closing Date, or
(iv) either (A) the Exchange Offer Registration Statement ceases to be effective
at any time prior to the time that the Exchange Offer is consummated or (B) if
applicable, the Shelf Registration Statement has been declared effective and
such Shelf Registration Statement ceases to be effective at any time prior to
the second anniversary of the Closing Date, the interest rate borne by the Notes
shall be increased on the outstanding principle amount of the Notes by an amount
equal to 0.50% per annum following such 180-day period in the case of clause (i)
above, following such 210-day period in the case of clause (ii) above, following
such 240-day period in the case of clause (iii) above, or immediately in the
case of clause (iv) above. Such additional interest will be payable at the same
time and in the same manner as interest is payable on the Notes. Upon (w) the
filing of the Exchange Offer Registration Statement after the 180-day period
described in clause (i) above, (x) the consummation of the Exchange Offer or the
effectiveness of a Shelf Registration Statement, as the case may be, after the
240-day period described in clause (iii) above, (y) the effectiveness of the
Exchange Offer Registration Statement after the 210-day period described in
clause (ii) above or (z) the effectiveness of the Exchange Offer Registration
Statement or the Shelf Registration Statement following an event described in
clause (iv) above, the interest rate borne by the Notes from the date of such
filing, effectiveness or consummation, as the case may be, will be reduced to
the original interest rate if the Company is otherwise in compliance with this
paragraph; provided, however, that, if after any such reduction in interest
rate, an event specified in clauses (i), (ii), (iii) or (iv) above occurs, the
interest rate will again be increased by an amount equal to 0.50% per annum and
thereafter reduced pursuant to the foregoing conditions.
If the Company issues a notice that the Shelf Registration Statement is
unusable pending the announcement of a material corporate transaction or
otherwise pursuant to Section 3(k) of this Agreement, or such a notice is
required under applicable securities laws to be issued by the Company, and the
aggregate number of days in any consecutive twelve-month period for which all
such notices are issued or required to be issued exceeds 30 days in the
aggregate, then the interest rate borne by the Notes will be increased by 0.50%
per annum following the date that such Shelf Registration Statement ceases to be
usable beyond the 30-day period permitted above. Upon the Company declaring that
the Shelf Registration Statement is usable after the interest rate has been
increased pursuant to the preceding sentence, the interest rate borne by the
Notes will be reduced to the original interest rate if the Company is otherwise
in compliance with Section 2(e) of this Agreement, provided, however, that if
after any such reduction in interest rate the Shelf Registration Statement again
ceases to be usable beyond the period permitted above, the interest rate will
again be increased and thereafter reduced pursuant to the foregoing provisions.
Notwithstanding the foregoing, in no event shall the interest rate
borne by the Notes be increased pursuant to this Section 2(e) or Section 3(b) of
the Warrant Registration Rights Agreement by an amount which exceeds an
aggregate of 0.50% per annum above the otherwise applicable per annum interest
rate.
(f) Specific Enforcement. Without limiting the remedies available to the Initial
Purchaser and the Holders, the Company acknowledges that any failure by the
Company to comply with its respective obligations under Sections 2(a) and 2(b)
hereof may result in material irreparable injury to the Initial Purchaser or the
Holders for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the event
of any such failure, the Initial Purchaser or any Holder may obtain such relief
as may be required to specifically enforce the Company's obligations under
Sections 2(a) and 2(b) hereof.
3. Registration Procedures. In connection with the obligations
of the Company with respect to the Registration Statements pursuant to Sections
2(a) and 2(b) hereof, the Company shall:
(a) (i) prepare and file with the Commission a Registration Statement, within
the time period specified in Section 2, on the appropriate form under the
Securities Act, which form (A) shall be selected by the Company, (B) shall, in
the case of a Shelf Registration, be available for the sale of the Registrable
Notes by the selling Holders thereof and (C) shall comply as to form in all
material respects with the requirements of the applicable form and include or
incorporate by reference all financial statements required by the Commission to
be filed therewith, and (ii) use its best efforts to cause such Registration
Statement to become effective and remain effective in accordance with Section 2
hereof;
<PAGE>
(b) (i) prepare and file with the Commission such amendments and post-effective
amendments to (A) the Exchange Offer Registration Statement as may be necessary
under applicable law to keep such Exchange Offer Registration Statement
effective for the period required to comply with Section 2(a) (except to the
extent the Company is unable to consummate the Exchange Offer and the Company
complies with Section 2(b), subject in all respects to Section 3(f) hereof), and
(B) the Shelf Registration Statement as may be necessary under applicable law to
keep such Shelf Registration Statement effective for the period required
pursuant to Section 2(b) hereof; (ii) cause each Prospectus to be supplemented
by any required prospectus supplement, and as so supplemented to be filed
pursuant to Rule 424 under the Securities Act; and (iii) comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by each Registration Statement during the applicable period
in accordance with the intended method or methods of distribution by the selling
Holders thereof; (c) in the case of a Shelf Registration, (i) notify each Holder
of Registrable Notes, at least ten days prior to filing, that a Shelf
Registration Statement with respect to the Registrable Notes is being filed and
advising such Holders that the distribution of Registrable Notes will be made in
accordance with the method elected by the Majority Holders; (ii) furnish to each
Holder of Registrable Notes, to counsel for the Initial Purchaser, to counsel
for the Holders and to each underwriter of an underwritten offering of
Registrable Notes, if any, without charge, as many copies of each Prospectus,
including each preliminary Prospectus, and any amendment or supplement thereto
and such other documents as such Holder or underwriter may reasonably request,
including financial statements and schedules and, if the Holder so requests, all
exhibits (including those incorporated by reference) in order to facilitate the
public sale or other disposition of the Registrable Notes; and (iii) subject to
the last paragraph of Section 3, hereby consented to the use of the Prospectus,
including each preliminary Prospectus, or any amendment or supplement thereto by
each of the selling Holders of Registrable Notes in connection with the offering
and sale of the Registrable Notes covered by the Prospectus or any amendment or
supplement thereto; (d) use its best efforts to register or qualify the
Registrable Notes under all applicable state securities or "blue sky" laws of
such jurisdictions as any Holder of Registrable Notes covered by a Registration
Statement and each underwriter of an underwritten offering of Registrable Notes
shall reasonably request by the time the applicable Registration Statement is
declared effective by the Commission, keep each such registration or
qualification effective during the period such Registration Statement is
required to be effective and do any and all other acts and things which may be
reasonably necessary or advisable to enable such Holder to consummate the
disposition in each such jurisdiction of such Registrable Notes owned by such
Holder, and to cooperate with the Holders in connection with any filings
required to be made with the NASD; provided, however, that the Company shall not
be required to (i) qualify as a foreign corporation or as a dealer in securities
in any jurisdiction where it would not otherwise be required to qualify but for
this Section 3(d) or (ii) take any action which would subject it to general
service of process or taxation in any such jurisdiction if it is not then so
subject; (e) in the case of a Shelf Registration, notify each Holder of
Registrable Notes and counsel for such Holders promptly and, if requested by
such Holder or counsel, confirm such notice in writing promptly (i) when a
Registration Statement has become effective and when any post-effective
amendments and supplements thereto become effective, (ii) of any request by the
Commission or any state securities authority for post-effective amendments and
supplements to a Registration Statement and Prospectus or for additional
information after the Registration Statement has become effective, (iii) of the
issuance by the Commission or any state securities authority of any stop order
suspending the effectiveness of a Registration Statement or the initiation of
any proceedings for that purpose, (iv) if, between the effective date of a
Registration Statement and the closing of any sale of Registrable Notes covered
thereby, the representations and warranties of the Company contained in any
underwriting agreement, securities sales agreement or other similar agreement,
if any, relating to such offering cease to be true and correct in all material
respects, (v) of the receipt by the Company of any notification with respect to
the suspension of the qualification of the Registrable Notes for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose, (vi) of the happening of any event or the discovery of any facts during
the period a Shelf Registration Statement is effective which makes any statement
made in such Shelf Registration Statement or the related Prospectus untrue in
any material respect or which requires the making of any changes in such Shelf
Registration Statement or Prospectus in order to make the statements in the
Shelf Registration Statement, at the time it became effective, not misleading or
to make the statements in the Prospectus in the light of the circumstances under
which they were made, at the date thereof, not misleading, and (vii) of any
determination by the Company that a post-effective amendment to a Registration
Statement would be appropriate; (f) (i) in the case of the Exchange Offer, (A)
include in the Exchange Offer Registration Statement a "Plan of Distribution"
section covering the use of the Prospectus included in the Exchange Offer
Registration Statement by broker-dealers who have exchanged their Registrable
Notes for Exchange Notes for the resale of such Exchange Notes, (B) furnish to
each broker-dealer who desires to participate in the Exchange Offer, without
charge, as many copies of each Prospectus included in the Exchange Offer
Registration Statement, including any preliminary prospectus, and any amendment
or supplement thereto, as such broker-dealer may reasonably request, (C) include
in the Exchange Offer Registration Statement a statement that any broker-dealer
who holds Registrable Notes acquired for its own account as a result of
market-making activities or other trading activities (a "Participating
Broker-Dealer"), and who receives Exchange Notes for Registrable Notes pursuant
to the Exchange Offer, may be a statutory underwriter and must deliver a
prospectus meeting the requirements of the Securities Act in connection with any
resale of such Exchange Notes, (D) subject to the last paragraph of Section 3,
hereby consent to the use of the Prospectus forming part of the Exchange Offer
Registration Statement or any amendment or supplement thereto, by any
broker-dealer in connection with the sale or transfer of the Exchange Notes
covered by the Prospectus or any amendment or supplement thereto, and (E)
include in the transmittal letter or similar documentation to be executed by an
exchange offeree in order to participate in the Exchange Offer (1) the following
provision: "If the undersigned is not a broker-dealer, the undersigned
represents that it is not engaged in, and does not intend to engage in, a
distribution of Exchange Notes. If the undersigned is a broker-dealer that will
receive Exchange Notes for its own account in exchange for Registrable Notes, it
represents that the Registrable Notes to be exchanged for Exchange Notes were
acquired by it as a result of market-making activities or other trading
activities and acknowledges that it will deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of such
Exchange Notes pursuant to the Exchange Offer; however, by so acknowledging and
by delivering a prospectus, the undersigned will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act"; and (2) a
statement to the effect that by a broker-dealer making the acknowledgment
described in subclause (1) and by delivering a Prospectus in connection with the
exchange of Registrable Securities, the broker-dealer will not be deemed to have
admitted that it is an underwriter within the meaning of the Securities Act; and
(ii) to the extent any Participating Broker-Dealer participates in the Exchange
Offer, the Company
shall use its best efforts to cause to be delivered at the request of
an entity representing the Participating Broker-Dealers (which entity
shall be the Initial Purchaser, unless it elects not to act as such
representative) only one, if any, "cold comfort" letter with respect to
the Prospectus in the form existing on the last date for which
exchanges are accepted pursuant to the Exchange Offer and with respect
to each subsequent amendment or supplement, if any, effected during the
period specified in clause (iii) below; and
<PAGE>
(iii) to the extent any Participating Broker-Dealer participates in the Exchange
Offer, the Company shall use its best efforts to maintain the effectiveness of
the Exchange Offer Registration Statement for a period of 180 days following the
closing of the Exchange Offer and make available the Prospectus to any
Participating Broker-Dealer; and (iv) the Company shall not be required to amend
or supplement the Prospectus contained in the Exchange Offer Registration
Statement as would otherwise be contemplated by Section 3(b), or take any other
action as a result of this Section 3(f), for a period exceeding 180 days after
the last date for which exchanges are accepted pursuant to the Exchange Offer
(as such period may be extended by the Company) and Participating Broker-Dealers
shall not be authorized by the Company to, and shall not, deliver such
Prospectus after such period in connection with resales contemplated by this
Section 3. (g) (i) in the case of an Exchange Offer, furnish to counsel for the
Initial Purchaser and (ii) in the case of a Shelf Registration, furnish to
counsel for the Holders of Registrable Notes copies of any request by the
Commission or any state securities authority for amendments or supplements to a
Registration Statement and Prospectus or for additional information;
(h) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement as soon as practicable
and provide immediate notice to each Holder of the withdrawal of any such order;
(i) in the case of a Shelf Registration, furnish to each Holder of Registrable
Notes, without charge, at least one conformed copy of each Registration
Statement and any post-effective amendment thereto (without documents
incorporated therein by reference or exhibits thereto, unless requested); (j) in
the case of a Shelf Registration, cooperate with the selling Holders of
Registrable Notes to facilitate the timely preparation and delivery of
certificates representing Registrable Notes to be sold and not bearing any
restrictive legends; and cause such Registrable Notes to be in such
denominations (consistent with the provisions of the Indenture) and registered
in such names as the selling Holders or the underwriters, if any, may reasonably
request at least one business day prior to the closing of any sale of
Registrable Notes; (k) in the case of a Shelf Registration, upon the occurrence
of any event or the discovery of any facts, each as contemplated by Section
3(e)(vi) hereof, use its best efforts to prepare a supplement or post-effective
amendment to a Registration Statement or 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 Notes, such
Prospectus will not contain at the time of such delivery any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The Company agrees to notify each Holder to suspend use of the
Prospectus as promptly as practicable after the occurrence of such an event, and
each Holder hereby agrees to suspend use of the Prospectus until the Company has
amended or supplemented the Prospectus to correct such misstatement or omission.
At such time as such public disclosure is otherwise made or the Company
determines that such disclosure is not necessary, in each case to correct any
misstatement of a material fact or to include any omitted material fact, the
Company agrees promptly to notify each Holder of such determination and to
furnish each Holder such numbers of copies of the Prospectus, as amended or
supplemented, as such Holder may reasonably request; (l) obtain a CUSIP number
for all Exchange Notes, or Registrable Notes, as the case may be, not later than
the effective date of a Registration Statement, and provide the Trustee with
printed certificates for the Exchange Notes or the Registrable Notes, as the
case may be, in a form eligible for deposit with the Depositary; (m) (i) cause
the Indenture to be qualified under the Trust Indenture Act of 1939, as amended
(the "TIA"), in connection with the registration of the Exchange Notes, or
Registrable Notes, as the case may be, (ii) cooperate with the Trustee and the
Holders to effect such changes to the Indenture as may be required for the
Indenture to be so qualified in accordance with the terms of the TIA and (iii)
execute, and use its best efforts to cause the Trustee to execute, all documents
as may be required to effect such changes, and all other forms and documents
required to be filed with the Commission to enable the Indenture to be so
qualified in a timely manner; (n) in the case of a Shelf Registration, enter
into agreements (including underwriting agreements) and take all other customary
and appropriate actions (including those reasonably requested by the Majority
Holders) in order to expedite or facilitate the disposition of such Registrable
Notes and in such connection whether or not an underwriting agreement is entered
into and whether or not the registration is an underwritten registration: (i)
make such representations and warranties to the Holders of such Registrable
Notes and the
underwriters, if any, in form, substance and scope as are customarily
made by issuers to underwriters in similar underwritten offerings as
may be reasonably requested by them;
(ii) obtain opinions of counsel to the Company and updates thereof (which
counsel and opinions (in form, scope and substance) shall be reasonably
satisfactory to the managing underwriters, if any, and the holders of a majority
in principal amount of the Registrable Notes being sold) addressed to each
selling Holder and the underwriters, if any, covering the matters customarily
covered in opinions requested in sales of securities or underwritten offerings;
(iii) obtain "cold comfort" letters and updates thereof from the Company's
independent certified public accountants addressed to the underwriters, if any,
and use best efforts to have such letters addressed to the selling Holders of
Registrable Notes, such letters to be in customary form and covering matters of
the type customarily covered in "cold comfort" letters to underwriters in
connection with similar underwritten offerings; (iv) enter into a securities
sales agreement with the Holders and an agent of the Holders providing for,
among other things, the appointment of such agent for the selling Holders for
the purpose of soliciting purchases of Registrable Notes, which agreement shall
be in form, substance and scope customary for similar offerings; and (v) deliver
such documents and certificates as may be reasonably requested and as are
<PAGE>
customarily delivered in similar offerings. The above shall be done at (i) the
effectiveness of such Shelf Registration Statement (and, if appropriate, each
post-effective amendment thereto) and (ii) each closing under any underwriting
or similar agreement as and to the extent required thereunder. In the case of
any underwritten offering, the Company shall provide written notice to the
Holders of all Registrable Notes of such underwritten offering at least 30 days
(or such shorter, reasonable time period as is practicable) prior to the filing
of a prospectus supplement for such underwritten offering. Such notice shall (x)
if satisfactory to the investment banker or manager of such underwritten
offering, offer each such Holder the right to participate in such underwritten
offering, (y) specify a date, which shall be no earlier than 10 days following
the date of such notice, by which such Holder must inform the Company of its
intent to participate in such underwritten offering and (z) include the
instructions such Holder must follow in order to participate in such
underwritten offering;
(o) in the case of a Shelf Registration, make available for inspection by
representatives of the Holders of the Registrable Notes and any underwriters
participating in any disposition pursuant to a Shelf Registration Statement and
any counsel or accountant retained by such Holders or underwriters, at
reasonable times and in a reasonable manner, all financial and other records,
pertinent corporate documents and properties of the Company reasonably requested
by any such persons, and cause the respective officers, directors, employees,
and any other agents of the Company to supply all information reasonably
requested by any such representative, underwriter, special counsel or accountant
in connection with such Shelf Registration Statement; provided, however, that
such Persons shall first agree in writing with the Company that any information
that is reasonably and in good faith designated by the Company in writing as
confidential at the time of delivery of such information shall be kept
confidential by such Persons, unless (i) disclosure of such information is
required by court or administrative order or is necessary to respond to
inquiries of regulatory authorities, (ii) disclosure of such information is
required by law (including any disclosure requirements pursuant to Federal
securities laws in connection with the filing of such Shelf Registration
Statement or the use of any Prospectus), (iii) such information becomes
generally available to the public other than as a result of a disclosure or
failure to safeguard such information by such Person or (iv) such information
becomes available to such Person from a source other than the Company and its
Subsidiary Guarantors and such source is not bound by a confidentiality
agreement; and provided, further, that the foregoing investigation shall be
coordinated on behalf of the Holders by one representative designated by and on
behalf of such Holders and any such confidential information shall be available
from such representative to such Holders so long as any Holder agrees to be
bound by such confidentiality agreement;
(p) (i) a reasonable time prior to the filing of any Exchange Offer Registration
Statement, any Prospectus forming a part thereof, any amendment to an Exchange
Offer Registration Statement or amendment or supplement to a Prospectus, provide
copies of such document to the Initial Purchaser, and, subject to the rights of
the Company to issue the notice contemplated contemplated by Section 3(k) hereof
and suspend the use of the Registration Statement and Prospectus under Section
2(e) hereof, make such changes in any such document prior to the filing thereof
as the Initial Purchaser or its counsel may reasonably request; (ii) in the case
of a Shelf Registration, a reasonable time prior to filing any Shelf
Registration Statement, any Prospectus forming a part thereof, any amendment to
such Shelf Registration Statement or amendment or supplement to such Prospectus,
provide copies of such document to the Holders of Registrable Notes, to the
Initial Purchaser, to counsel on behalf of the Holders and to the underwriter or
underwriters of an underwritten offering of Registrable Notes, if any, and,
subject to the rights of the Company to issue the notice contemplated
contemplated by Section 3(k) hereof and suspend the use of the Registration
Statement and Prospectus under Section 2(e) hereof, make such changes in any
such document prior to the filing thereof as the Holders of Registrable Notes,
the Initial Purchaser on behalf of such Holders, their counsel or any
underwriter may reasonably request; and (iii) cause the representatives of the
Company to be available for discussion of such document as shall be reasonably
requested by the Holders of Registrable Notes, the Initial Purchaser on behalf
of such Holders, their counsel or any underwriter and shall not at any time make
any filing of any such document of which such Holders, the Initial Purchaser on
behalf of such Holders, their counsel or any underwriter shall not have
previously been advised and furnished a copy or to which such Holders, the
Initial Purchaser on behalf of such Holders, their counsel or any underwriter
shall reasonably object, each of which actions in this clause (iii) by the
Holders shall be coordinated by one representative for all the Holders at
reasonable times and in a reasonable manner; (q) in the case of a Shelf
Registration, use its best efforts to cause all Registrable Securities to be
listed on any securities exchange on which similar debt securities issued by the
Company are then listed if requested by the Majority Holders or by the
underwriter or underwriters of an underwritten offering of Registrable
Securities, if any; (r) in the case of a Shelf Registration, unless the rating
in effect for the Notes applies to the Exchange Notes and the Notes to be sold
pursuant to a Shelf Registration, use its best efforts to cause the Registrable
Notes to be rated with the appropriate rating agencies, if so requested by the
Majority Holders or by the underwriter or underwriters of an underwritten
offering of Registrable Notes, if any, unless the Registrable Notes are already
so rated; (s) otherwise use its best efforts to comply with all applicable rules
and regulations of the Commission and make available to its security holders, as
soon as reasonably practicable, an earnings statement covering at least 12
months which shall satisfy the provisions of Section 11(a) of the Securities Act
and Rule 158 thereunder; and (t) cooperate and assist in any filings required to
be made with the NASD.
<PAGE>
In the case of a Shelf Registration Statement, the Company may
(as a condition to such Holder's participation in the Shelf Registration)
require each Holder of Registrable Notes to furnish to the Company such
information regarding such Holder and the proposed distribution by such Holder
of such Registrable Notes and make such representations, in each case, as the
Company may from time to time reasonably request in writing.
In the case of a Shelf Registration Statement, each Holder
agrees that, upon receipt of any notice from the Company of the happening of any
event or the discovery of any facts, each of the kind described in Section
3(e)(ii)-(vii) hereof, such Holder will forthwith discontinue disposition of
Registrable Notes pursuant to a Registration Statement until such Holder's
receipt of the copies of the supplemented or amended Prospectus contemplated by
Section 3(k) hereof, and, if so directed by the Company, such Holder will
deliver to the Company (at the Company's expense) all copies in its possession,
other than permanent file copies then in such Holder's possession, of the
Prospectus covering such Registrable Notes current at the time of receipt of
such notice. If the Company shall give any such notice to suspend the
disposition of Registrable Notes pursuant to a Shelf Registration Statement as a
result of the happening of any event or the discovery of any facts, each of the
kind described in Section 3(e)(vi) hereof, the Company shall be deemed to have
used its best efforts to keep the Shelf Registration Statement effective during
such period of suspension provided that the Company shall use its best efforts
to file and have declared effective (if an amendment) as soon as practicable an
amendment or supplement to the Shelf Registration Statement and shall extend the
period during which the Registration Statement shall be maintained effective
pursuant to this Agreement by the number of days during the period from and
including the date of the giving of such notice to and including the date when
the Holders shall have received copies of the supplemented or amended Prospectus
necessary to resume such dispositions.
4. Underwritten Registrations. If any of the Registrable Notes covered by any
Shelf Registration are to be sold in an underwritten offering, the investment
banker or investment bankers and manager or managers that will manage the
offering will be selected by the Majority Holders of such Registrable Notes
included in such offering and shall be reasonably acceptable to the Company.
No Holder of Registrable Notes may participate in any
underwritten registration hereunder unless such Holder (a) agrees to sell such
Holder's Registrable Notes on the basis provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.
5. Indemnification and Contribution. (a) The Company and each Subsidiary
Guarantor, jointly and severally, agree to indemnify and hold harmless each
Holder and each person, if any, who controls any Holder within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act against any
losses, claims, damages or liabilities, joint or several, to which such Holder
or such controlling person may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement made by
the Company or any of the Subsidiary
Guarantors of any material fact contained in the Offering Memorandum,
(ii) any untrue statement or alleged untrue statement of any material fact
contained in (A) any Registration Statement or Prospectus or any amendment or
supplement thereto or (B) any application or other document, or any amendment or
supplement thereto, executed by the Company or based upon written information
furnished by or on behalf of the Company filed in any jurisdiction in order to
qualify the Registrable Notes or Exchange Notes under the securities or blue sky
laws thereof or filed with the Commission or any securities association or
securities exchange (each an "Application"), or (iii) the omission or alleged
omission to state in any Registration Statement or Prospectus or any
amendment or supplement thereto, or any Application a material fact
required to be stated in such Registration Statement or necessary to
make the statements in such Registration Statement, at the time it
became effective, not misleading, or required to be stated in such
Prospectus or any supplement or amendment thereto or necessary to make
the statements in such Prospectus, at the date thereof, in the light of
the circumstances under which they were made, not misleading,
and will reimburse, as incurred, each Holder and each such controlling person
for any legal or other expenses reasonably incurred by such Holder or such
controlling person in connection with investigating, defending against or
appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that the Company and each
Subsidiary Guarantor, jointly and severally, will not be liable in any such case
to the extent that any such loss, claim, damage or liability arises out of or is
based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in any Registration Statement or Prospectus or any
amendment or supplement thereto or any Application in reliance upon and in
conformity with written information relating to any Holder furnished to the
Company by such Holder specifically for use therein. The foregoing
indemnification with respect to any preliminary Prospectus or final Prospectus
shall not inure to the benefit of any Holder (or to the benefit of any person
controlling such Holder) if the person asserting any such losses, claims,
damages, liabilities or expenses was not sent or delivered a copy of the final
Prospectus (or the final Prospectus as amended or supplemented) at or prior to
the written confirmation of the sale of Notes to such person and if the untrue
statement or omission of a material fact contained in such preliminary
Prospectus was corrected in the final Prospectus (or the final Prospectus as
amended or supplemented) unless such corrected final Prospectus was not sent or
delivered because the Company failed to timely provide such Holder with
sufficient copies of such corrected final Prospectus. This indemnity agreement
will be in addition to any liability which the Company and each Subsidiary
Guarantor, jointly and severally, may otherwise have to any Holder or to any
person who controls such Holder within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act.
<PAGE>
(b) Each Holder, severally and not jointly, agrees, by acquiring any Notes, to
indemnify and hold harmless the Company, each of its directors, each of its
executive officers and each person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
against any losses, claims, damages or liabilities to which the Company, any
such director, officer or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material fact contained
in any Registration Statement or Prospectus or any amendment or supplement
thereto or any Application or (ii) the omission or alleged omission to state in
any Registration Statement or Prospectus or any amendment or supplement thereto,
or any Application a material fact required to be stated in such Registration
Statement or necessary to make the statements in such Registration Statement, at
the time it became effective, not misleading, or required to be stated in such
Prospectus or any supplement or amendment thereto or necessary to make the
statements in such Prospectus, at the date thereof, in the light of the
circumstances under which they were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information relating to any Holder furnished to the
Company by such Holder specifically for use therein; and, subject to the
limitation set forth immediately preceding this clause, will reimburse, as
incurred, any legal or other expenses reasonably incurred by the Company or any
such director, officer or controlling person in connection with investigating or
defending any such loss, claim, damage, liability or any action in respect
thereof. In no event shall any Holder, its directors, officers or any person who
controls such Holder be liable or responsible for any amount in excess of the
amount by which the total amount received by such Holder with respect to its
sale of Registrable Notes pursuant to a Registration Statement exceeds (i) the
amount paid by such Holder for such Registrable Notes and (ii) the amount of any
damages that such Holder, its directors, officers or any person who controls
such Holder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. This indemnity
agreement will be in addition to any liability which such Holder may otherwise
have.
(c) Promptly after receipt by an indemnified party under this Section 5 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 5, notify the indemnifying party of the commencement thereof in writing;
but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than under
this Section 5. In case any such action is brought against any indemnified
party, and it notifies the 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 and control the defense thereof, with counsel satisfactory to such
indemnified party; provided, however, that if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be one or more
legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnifying party shall not have the right to direct the defense of such action
on behalf of such indemnified party or parties and such indemnified party or
parties shall have the right to select separate counsel to defend such action on
behalf of such indemnified party or parties. After notice from the indemnifying
party to such indemnified party of its election to assume the defense thereof
and approval by such indemnified party of counsel appointed to defend such
action, the indemnifying party will not be liable to such indemnified party
under this Section 5 for any legal or other expenses, other than reasonable
costs of investigation, subsequently incurred by such indemnified party in
connection with the defense thereof, unless (i) the indemnified party shall have
employed separate counsel in accordance with the proviso to the next preceding
sentence (it being understood, however, that in connection with such action the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (in addition to local counsel) in any one action or separate
but substantially similar actions in the same jurisdiction arising out of the
same general allegations or circumstances, designated by such Holder in the case
of paragraph (a) of this Section 5, representing the indemnified parties under
such paragraph (a) who are parties to such action or actions) or (ii) the
indemnifying party does not promptly retain counsel satisfactory to the
indemnified party or (iii) the indemnifying party has authorized the employment
of counsel for the indemnified party at the expense of the indemnifying party.
After such notice from the indemnifying party to such indemnified party, the
indemnifying party will not be liable for the costs and expenses of any
settlement of such action effected by such indemnified party without the consent
of the indemnifying party. No indemnifying party shall (A) without the prior
written consent of the indemnified parties (which consent shall not be
unreasonably withheld) settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
(1) includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding and (2) does not
include a statement as to or an admission of fault, culpability or a failure to
act by or on account of any indemnified party, or (B) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with the consent of
the indemnifying party or if there be a final judgment of the plaintiff in any
<PAGE>
such action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment. (d) In circumstances in which the indemnity agreement
provided for in the preceding paragraphs of this Section 5 is unavailable or
insufficient, for any reason, to hold harmless an indemnified party in respect
of any losses, claims, damages or liabilities (or actions in respect thereof),
each indemnifying party, in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect (i) the
relative benefits received by the indemnifying party or parties on the one hand
and the indemnified party on the other from the offering of the Securities or
(ii) if the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions or alleged statements
or omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative fault of the parties shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or such Holder, the parties'
relative intents, knowledge, access to information and opportunity to correct or
prevent such statement or omission, and any other equitable considerations
appropriate in the circumstances. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, liabilities or judgments
referred to above shall be deemed to include, subject to the limitations set
forth in Section 5(b), any legal or other fees or expenses reasonably incurred
by such indemnified party in connection with investigating or defending any
matter, including any action that could have given rise to such losses, claims,
damages, liabilities or judgments.
The Company, each Subsidiary Guarantor and each Holder agree that it
would not be just and equitable if the amount of such contribution were
determined by pro rata or per capita allocation (even if the Holders were
treated as one entity for such purpose) or by any other method of allocation
that does not take into account the equitable considerations referred to above
in this paragraph (d). Notwithstanding any other provision of this paragraph
(d), no Holder shall be obligated to make contributions hereunder that in the
aggregate exceed the total public offering price of the Registrable Notes
purchased by such Holder under this Agreement, less the aggregate amount of any
damages that such Holder has otherwise been required to pay in respect of the
same or any substantially similar claim, and no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Holders' obligations to contribute pursuant to
this Section are several in proportion to the respective principal amount of
Registrable Notes held by each Holder hereunder and not joint. For purposes of
this paragraph (d), each person, if any, who controls a Holder within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
shall have the same rights to contribution as such Holder, and each director of
the Company, each officer of the Company who signed the Registration Statement
and each person, if any, who controls the Company within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act, shall have the same
rights to contribution as the Company.
(e) The Issuer and each of the Subsidiary Guarantors agree that the indemnity
and contribution provisions of this Section 5 shall apply to the Initial
Purchaser to the same extent, on the same conditions, as they apply to the
Holders.
(f) The parties to this Agreement hereby acknowledge that they are sophisticated
business persons who were represented by counsel during the negotiations
regarding the provisions of this Agreement, including, without limitation, the
provisions of this Section 5, and are fully informed regarding said provisions.
They further acknowledge that the provisions of this Section 5 fairly allocate
the risks in light of the ability of the parties to investigate the Company and
its business in order to assure that adequate disclosure is made in the
Registration Statement as required by the Securities Act. The parties are
advised that federal or state policy, as interpreted by the courts in certain
jurisdictions, may be contrary to certain provisions of this Section 5, and the
parties hereto hereby expressly waive and relinquish any right or ability to
assert such public policy as a defense to a claim under this Section 5 and
further agree not to attempt to assert any such defense. 6. Miscellaneous. (a)
Rule 144 and Rule 144A. For so long as the Company is subject to the reporting
requirements of Sections 13 or 15 of the Exchange Act, the Company covenants
that it will file the reports required to be filed by it under Sections 13(a) or
15(d) of the Exchange Act and the rules and regulations adopted by the
Commission thereunder. The Company further covenants that if it ceases to be so
required to file such reports, it will upon the request of any Holder of
Registrable Notes (i) make publicly available such information as is necessary
to permit sales pursuant to Rule 144 under the Securities Act, (ii) deliver such
information to a prospective purchaser as is necessary to permit sales pursuant
to Rule 144A under the Securities Act and it will take such further action as
any Holder of Registrable Notes may reasonably request, and (iii) take such
further action that is reasonable in the circumstances, in each case, to the
extent required from time to time to enable such Holder to sell its Registrable
Notes without registration under the Securities Act within the limitation of the
exemptions provided by (x) Rule 144 under the Securities Act, as such Rule may
be amended from time to time, (y) Rule 144A under the Securities Act, as such
Rule may be amended from time to time, or (z) any similar rules or regulations
hereafter adopted by the Commission. Upon the request of any Holder of
Registrable Notes, the Company will deliver to such Holder a written statement
as to whether it has complied with such requirements.
<PAGE>
(b) No Inconsistent Agreements. The Company has not entered into nor will the
Company on or after the date of this Agreement enter into any agreement which is
inconsistent with the rights granted to the Holders of Registrable Notes in this
Agreement or otherwise conflicts with the provisions hereof. The rights granted
to the Holders hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of the Company's other
issued and outstanding securities under any such agreements.
(c) Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given
unless the Company has obtained the written consent of Holders of at least a
majority in aggregate principal amount of the outstanding Registrable Notes
affected by such amendment, modification, supplement, waiver or departure;
provided, however, that no amendment, modification, supplement or waiver or
consent to any departure from the provisions of Section 5 hereof shall be
effective as against any Holder of Registrable Notes unless consented to in
writing by such Holder. (d) Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing by hand-delivery,
registered first-class mail, telecopier, or any courier guaranteeing overnight
delivery (i) if to a Holder (other than the Initial Purchaser), at the most
current address set forth on the records of the Registrar under the Indenture,
(ii) if to the Initial Purchaser, at the most current address given by such
Initial Purchaser to the Company by means of a notice given in accordance with
the provisions of this Section 6(d), which address initially is the address set
forth in the Purchase Agreement; and (iii) if to the Company, initially at the
Company's address set forth in the Purchase Agreement and thereafter at such
other address, notice of which is given in accordance with the provisions of
this Section 6(d).
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when receipt is acknowledged, if telecopied; and on the next business day if
timely delivered to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands, or other communications
shall be concurrently delivered by the Person giving the same to the Trustee, at
the address specified in the Indenture.
(e) Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors, assigns and transferees of each of the parties,
including, without limitation and without the need for an express assignment,
subsequent Holders; provided that nothing herein shall be deemed to permit any
assignment, transfer or other disposition of Registrable Securities in violation
of the terms hereof or of the Purchase Agreement or the Indenture. If any
transferee of any Holder shall acquire Registrable Notes, in any manner, whether
by operation of law or otherwise, such Registrable Notes shall be held subject
to all of the terms of this Agreement, and by taking and holding such
Registrable Notes, such Person shall be conclusively deemed to have agreed to be
bound by and to perform all of the terms and provisions of this Agreement,
including the restrictions on resale set forth in this Agreement and, if
applicable, the Purchase Agreement, and such Person shall be entitled to receive
the benefits hereof.
(f) Third Party Beneficiary. Each of the Holders shall be third party
beneficiaries to the agreements made hereunder between the Company on the one
hand, and the Initial Purchaser, on the other hand, and shall have the right to
enforce such agreements directly to the extent it deems such enforcement
necessary or advisable to protect its rights or the rights of Holders hereunder.
(g) Counterparts. This Agreement may be executed in any number of counterparts
and by the parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. (h) Headings. The headings in this
Agreement are for convenience of reference only and shall not limit or otherwise
affect the meaning hereof. (i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO CONFLICT OF LAWS PROVISIONS. (j) Severability. In the event that any
one or more of the provisions contained herein, or the application thereof in
any circumstance, is held invalid, illegal or unenforceable, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be affected or impaired
thereby.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
WASTE SYSTEMS INTERNATIONAL, INC.
By:
Name:
Title:
WSI MEDICAL WASTE SYSTEMS, INC.
By:
Name:
Title:
BIOSAFE SYSTEMS, INC.
By:
Name:
Title:
WSI NEW YORK HOLDINGS, INC.
By:
Name:
Title:
WSI OF NEW YORK, INC.
By:
Name:
Title:
WSI VERMONT HOLDINGS, INC.
By:
Name:
Title:
<PAGE>
WSI OF VERMONT, INC.
By:
Name:
Title:
WSI MORETOWN LANDFILL, INC.
By:
Name:
Title:
WSI BURLINGTON TRANSFER STATION, INC.
By:
Name:
Title:
WSI ST. JOHNSBURY TRANSFER STATION, INC.
By:
Name:
Title:
WSI WAITSFIELD TRANSFER STATION, INC.
By:
Name:
Title:
WSI MASSACHUSETTS HOLDINGS, INC.
By:
Name:
Title:
WSI OF MASSACHUSETTS HAULING, INC.
By:
Name:
Title:
WSI OF SOUTH HADLEY, INC.
By:
Name:
Title:
WSI OXFORD TRANSFER STATION, INC.
By:
Name:
Title:
WSI MARYLAND HOLDINGS, INC.
By:
Name:
Title:
WSI PENNSYLVANIA HOLDINGS, INC.
By:
Name:
Title:
WSI OF PENNSYLVANIA, INC.
By:
Name:
Title:
WSI SANDY RUN LANDFILL, INC.
By:
Name:
Title:
WSI ALTOONA TRANSFER STATION, INC.
By:
Name:
Title:
<PAGE>
MOSTOLLER LANDFILL, INC.
By:
Name:
Title:
<PAGE>
Confirmed and accepted as of the date first above written:
FIRST ALBANY CORPORATION
By:
Authorized Signatory
<PAGE>
SCHEDULE I
Subsidiary Guarantors of the Company
Subsidiary: Formed In:
---------- ---------
WSI Medical Waste Systems, Inc. Delaware
BioSafe Systems, Inc. Delaware
WSI New York Holdings, Inc. Delaware
WSI of New York, Inc. Delaware
WSI Vermont Holdings, Inc. Delaware
WSI of Vermont, Inc. Delaware
WSI Moretown Landfill, Inc. Delaware
WSI Burlington Transfer Station, Inc. Delaware
WSI St. Johnsbury Transfer Station, Inc. Delaware
WSI Waitsfield Transfer Station, Inc. Delaware
WSI Massachusetts Holdings, Inc. Delaware
WSI of Massachusetts Hauling, Inc. Delaware
WSI of South Hadley, Inc. Delaware
WSI Oxford Transfer Station, Inc. Delaware
WSI Maryland Holdings, Inc. Delaware
WSI Pennsylvania Holdings, Inc. Delaware
WSI of Pennsylvania, Inc. Delaware
WSI Sandy Run Landfill, Inc. Delaware
WSI Altoona Transfer Station, Inc. Delaware
Mostoller Landfill, Inc. Pennsylvania
<PAGE>
EXHIBIT 4.4
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WARRANT
REGISTRATION RIGHTS AGREEMENT
WASTE SYSTEMS INTERNATIONAL, INC.
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Warrants to Purchase 1,500,000 Shares of Common Stock
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Dated as of March 2, 1999
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FIRST ALBANY CORPORATION
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<PAGE>
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This Warrant Registration Rights Agreement (the "Agreement") is made
and entered into as of March 2, 1999, by and among Waste Systems International,
Inc., a Delaware corporation (the "Issuer"), the subsidiaries of the Issuer and
First Albany Corporation (the "Initial Purchaser"), which have agreed to
purchase the Warrants of the Issuer issued pursuant to the Warrant Agreement
(the "Warrant Agreement") between the Issuer and IBJ Whitehall Bank & Trust
Company, a New York banking corporation, as warrant agent (the "Warrant Agent").
The Warrants are being issued and sold in connection with the offering
by the Issuer of 10,000 Units, each consisting of (i) $10,000 principal amount
at maturity of 11 1/2% Senior Notes due 2006 (the "Notes") of the Issuer and
(ii) 150 Warrants to purchase one share of Common Stock each at an exercise
price equal to $6.25 per share.
This Agreement is made pursuant to the Purchase Agreement, dated
February 25, 1999 (the "Purchase Agreement"), by and between the Issuer, the
Subsidiary Guarantors (as defined in the Indenture) and the Initial Purchaser.
In order to induce the Initial Purchaser to purchase the Warrants, the Issuer
has agreed to provide the registration rights set forth in this Agreement. The
execution and delivery of this Agreement is a condition to the obligations of
the Initial Purchaser set forth in Section 5(k) of the Purchase Agreement.
Capitalized terms used herein and not otherwise defined shall have the meaning
assigned to them in the Warrant Agreement.
The parties hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
Affiliate: As defined in Rule 144.
Black Out Notice: As defined in Section 4(b) hereof.
Black Out Period: As defined in Section 3(a) hereof.
Closing Date: The date hereof.
Commission: The Securities and Exchange Commission.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Expiration Date: 5:00 p.m. New York City time on March 2, 2004.
Holder: As defined in Section 2 hereof.
Offering Memorandum: Any offering memorandum (whether the preliminary
offering memorandum or the final offering memorandum, or any amendments or
supplements to either such document), that has been prepared and delivered by
the Company to the Initial Purchaser in connection with the offering and resale
of the Units consisting of the Notes and the Warrants to purchase shares of the
Company's common stock.
Prospectus: The prospectus included in a Registration Statement at the
time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by reference
into such Prospectus.
Registrable Securities: The Registrable Warrants and the Registrable
Warrant Shares; provided that a security ceases to be a Registrable Security
when it is no longer a Transfer Restricted Security.
Registrable Warrant Shares: All Warrant Shares issuable to the
holders of Registrable Warrants upon exercise of such Registrable Warrants.
Registrable Warrants: All Warrants originally issued pursuant to the
Warrant Agreement.
Registration Statement: Any registration statement of the Issuer
relating to the registration for resale of Registrable Securities that is filed
pursuant to the provisions of this Agreement and including the Prospectus
included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.
Rule 144: Rule 144 promulgated under the Securities Act.
Securities Act: The Securities Act of 1933, as amended.
Transfer Restricted Securities: The Registrable Securities upon
original issuance thereof; provided that a Registrable Security is no longer a
Transfer Restricted Security when such Registrable Security is sold to the
public pursuant to Rule 144 or an effective Registration Statement.
<PAGE>
2. HOLDERS
A Person is deemed to be a holder of Registrable Securities (a
"Holder") whenever such Person is the holder of record of Registrable
Securities.
3. SHELF REGISTRATION
(a) Shelf Registration. The Issuer shall prepare and cause to be filed with the
Commission on or before the date 180 days after the Closing Date pursuant to
Rule 415 under the Securities Act a Registration Statement on the appropriate
form relating to resales of Registrable Securities by the Holders thereof and
the registration of the issuance of the Warrant Shares upon exercise of the
Warrants. The Issuer shall use its reasonable best efforts to cause the
Registration Statement to be declared effective by the Commission on or before
240 days after the Closing Date.
To the extent necessary to ensure that the Registration Statement is
available for sales of Registrable Securities by the Holders thereof entitled to
the benefit of this Section 3(a), the Issuer shall use its reasonable best
efforts to keep any Registration Statement required by this Section 3(a)
continuously effective, supplemented, amended and current as required by and
subject to the provisions of Section 4(a) hereof and in conformity with the
requirements of this Agreement, the Securities Act and the policies, rules and
regulations of the Commission as announced from time to time, until the earlier
of (i) the time when the Registrable Securities covered by the Registration
Statement can be sold pursuant to Rule 144 under the Securities Act without any
limitations under clauses (c), (e), (f) and (h) of Rule 144 and (ii) two years
from the Closing Date. Notwithstanding the foregoing, the Issuer shall not be
required to amend or supplement the Registration Statement, any related
prospectus or any document incorporated therein by reference, for a period (a
"Black Out Period") not to exceed, for so long as this Agreement is in effect,
an aggregate of 30 days in any calendar year, in the event that (i) an event
occurs and is continuing as a result of which the Registration Statement, any
related prospectus or any document incorporated therein by reference as then
amended or supplemented would, in the Issuer's good faith judgment, contain an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, and (ii)(A) the Issuer determines in its
good faith judgment that the disclosure of such event at such time would have a
material adverse effect on the business, operations or prospects of the Issuer
or (B) the disclosure otherwise relates to a material business transaction which
has not yet been publicly disclosed.
(b) Liquidated Damages. In the event that either (i) the Registration Statement
referred to in subsection (a) above is not filed with the Commission on or prior
to the 180th calendar day following the Closing Date, (ii) such Registration
Statement is not declared effective on or prior to the 240th calendar day
following the Closing Date or (iii) the Registration Statement ceases to be
effective at any time prior to the earlier of (A) the time when the Registrable
Securities covered by the Registration Statement can be sold pursuant to Rule
144 under the Securities Act without any limitations under clauses (c), (e), (f)
and (h) of Rule 144 and (B) two years from the Closing Date (each such event a
"Registration Default"), then the per annum interest rate borne by the Notes
shall be increased by 0.50% immediately following such Registration Default.
Upon the filing of the Registration Statement or the effectiveness of the
Registration Statement, as the case may be, the interest rate borne by the Notes
from the date of such filing or effectiveness, as the case may be, will be
reduced to the otherwise applicable interest rate set forth above; provided,
however, that, if after such reduction in interest rate, a different event
specified in clause (i), (ii), or (iii) above occurs, the interest rate may
again be increased pursuant to the foregoing provisions. If an event has
occurred and is continuing as a result of which the Registration Statement would
be required to be amended or supplemented or which would otherwise cause the
Registration Statement not to be effective and usable for resale of Registrable
Securities during the period required by this Agreement, pursuant to which the
Issuer has issued a Blackout Notice as provided in Section 4(b) hereof, and the
aggregate number of days in any calendar year for which all such Blackout
Notices are issued or required to be issued exceeds 30 days, then the interest
rate borne by the Notes will be increased by 0.50% per annum following the date
that such Registration Statement ceases to be usable beyond the Blackout Period
permitted above. Upon the Issuer declaring that the Registration Statement is
usable after the interest rate has been increased pursuant to the preceding
sentence, the interest rate borne by the Notes will be reduced to the otherwise
applicable interest rate if the Issuer is otherwise in compliance with this
Section 3(b), provided, however, that if after any such reduction in interest
rate the Registration Statement again ceases to be usable beyond the period
permitted above within the same calendar year, the interest rate will again be
increased and thereafter reduced pursuant to the foregoing provisions.
Notwithstanding the foregoing, in no event shall the interest rate
borne by the Notes be increased pursuant to this Section 3(b) or Section 2(e) of
the Note Registration Rights Agreement by an amount which exceeds an aggregate
of 0.50% per annum above the otherwise applicable per annum interest rate
determined without regard to both such provisions.
(c) Provision by Holders of Certain Information in Connection with the
Registration Statement. No Holder of Registrable Securities may include any of
its Registrable Securities for resale in any Registration Statement pursuant to
this Agreement unless and until such Holder furnishes to the Issuer in writing,
within 20 days after receipt of a request therefor, the information specified in
Item 507 or 508 of Regulation S-K, as applicable, of the Securities Act for use
in connection with any Registration Statement or Prospectus or preliminary
Prospectus included therein. Each selling Holder agrees to promptly furnish
additional information required to be disclosed in order to make the information
previously furnished to the Issuer by such Holder not materially misleading. No
such information shall be required with respect to the registration of the
issuance of the Warrant Shares upon exercise of the Warrants.
<PAGE>
4. REGISTRATION PROCEDURES
(a) Procedures. In connection with the Registration Statement
and any related Prospectus required by this Agreement, the Issuer shall:
(i) use its reasonable best efforts to effect such
registration to permit the sale of the Registrable Securities being
sold in accordance with the intended method or methods of distribution
thereof (as indicated in the information furnished to the Issuer
pursuant to Section 3(c) hereof), and pursuant thereto the Issuer will
prepare and file with the Commission a Registration Statement relating
to the registration on any appropriate form under the Securities Act,
which form shall be available for the sale of the Registrable
Securities in accordance with the intended method or methods of
distribution thereof within the time periods and otherwise in
accordance with the provisions hereof;
(ii) use its reasonable best efforts to keep such Registration
Statement continuously effective and provide all requisite financial
statements for the period specified in Section 3 of this Agreement.
Upon the occurrence of any event that would cause any such Registration
Statement or the Prospectus contained therein (A) to contain an untrue
statement of material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading or (B) not to be effective and
usable for resale of Registrable Securities during the period required
by this Agreement, the Issuer shall, subject to Section 3(a), file
promptly an appropriate amendment to such Registration Statement or a
supplement to the Prospectus, as applicable, curing such defect, and,
in the case of an amendment, use its reasonable best efforts to cause
such amendment to be declared effective as soon as practicable;
(iii) prepare and file with the Commission such amendments and
post-effective amendments to the applicable Registration Statement as
may be necessary to keep such Registration Statement effective for the
applicable period set forth in Section 3; cause the Prospectus to be
supplemented by any required Prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 under the Securities Act,
and to comply fully with Rules 424, 430A and 462, as applicable, under
the Securities Act in a timely manner; and comply with the provisions
of the Securities Act with respect to the disposition of all securities
covered by such Registration Statement during the applicable period in
accordance with the intended method or methods of distribution by the
sellers thereof set forth in such Registration Statement or supplement
to the Prospectus;
(iv) advise the Initial Purchaser promptly and, if requested
by the Initial Purchaser, confirm such advice in writing, (A) when the
Prospectus or any Prospectus supplement or post-effective amendment has
been filed, and, with respect to any applicable Registration Statement
or any post-effective amendment thereto, when the same has become
effective, (B) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Prospectus
or for additional information relating thereto, (C) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement under the Securities Act or of the suspension by
any state securities commission of the qualification of the Registrable
Securities for offering or sale in any jurisdiction, or the initiation
of any proceeding for any of the preceding purposes, and (D) of the
existence of any fact or the happening of any event that makes any
statement of a material fact made in the Registration Statement, the
Prospectus, any amendment or supplement thereto or any document
incorporated by reference therein untrue, or that requires the making
of any additions to or changes in the Registration Statement in order
to make the statements therein not misleading, or that requires the
making of any additions to or changes in the Prospectus in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading. If at any time the Commission
shall issue any stop order suspending the effectiveness of the
Registration Statement, or any state securities commission or other
regulatory authority shall issue an order suspending the qualification
or exemption from qualification of the Registrable Securities under
state securities or Blue Sky laws, the Issuer shall use its reasonable
best efforts to obtain the withdrawal or lifting of such order at the
earliest possible time;
(v) subject to Section 4(a)(ii) and Section 3(b) hereof, if
any fact or event contemplated by Section 4(a)(iv)(D) hereof shall
exist or have occurred, prepare a supplement or post-effective
amendment to the Registration Statement or related Prospectus or any
document incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of
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, in the light of the
circumstances under which they were made, not misleading;
<PAGE>
(vi) furnish to the Initial Purchaser, before filing with the
Commission, copies of any Registration Statement or any Prospectus
included therein or any amendments or supplements to any such
Registration Statement or Prospectus (including all documents
incorporated by reference after the initial filing of such Registration
Statement), which documents will be subject to the review and comment
of such Persons, if any, for a period of at least five Business Days,
and the Issuer will not file any such Registration Statement or
Prospectus or any amendment or supplement to any such Registration
Statement or Prospectus (including all such documents incorporated by
reference) to which the Initial Purchaser shall reasonably object
within five Business Days after the receipt thereof. The Initial
Purchaser shall be deemed to have reasonably objected to such filing if
such Registration Statement, amendment, Prospectus or supplement, as
applicable, as proposed to be filed, contains an untrue statement of a
material fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading or fails to comply with the applicable
requirements of the Securities Act;
(vii) promptly prior to the filing of any document that is to
be incorporated by reference into a Registration Statement or
Prospectus, provide copies of such document to the Initial Purchaser,
make the Issuer's representatives available for discussion of such
document and other customary due diligence matters, and include such
information in such document prior to the filing thereof as the Initial
Purchaser may reasonably request;
(viii) make available, at reasonable times, for inspection by
the Initial Purchaser and any attorney or accountant retained by the
Initial Purchaser, all financial and other records, pertinent corporate
documents of the Issuer and cause the Issuer's officers, directors and
employees to supply all information reasonably requested by the Initial
Purchaser, attorney or accountant in connection with such Registration
Statement or any post-effective amendment thereto subsequent to the
filing thereof and prior to its effectiveness;
(ix) if requested by the Initial Purchaser, promptly include
in the Registration Statement or Prospectus, pursuant to a supplement
or post-effective amendment if necessary, such information as the
Initial Purchaser may reasonably request to have included therein,
including, without limitation, information relating to the "Plan of
Distribution" of the Registrable Securities and the use of the
Registration Statement or Prospectus for market-making activities; and
make all required filings of such Prospectus supplement or
post-effective amendment as soon as practicable after the Issuer is
notified of the matters to be included in such Prospectus supplement or
post-effective amendment;
(x) furnish to the Initial Purchaser and each Holder upon
request, without charge, at least one copy of the Registration
Statement, as first filed with the Commission, and of each amendment
thereto, including all documents incorporated by reference therein and
all exhibits (including exhibits incorporated therein by reference);
(xi) deliver to the Initial Purchaser and each Holder, without
charge, as many copies of the Prospectus (including each preliminary
prospectus) and any amendment or supplement thereto as the Initial
Purchaser or such Holder reasonably may request; the Issuer hereby
consents to the use (in accordance with law and subject to Section 4(b)
hereof) of the Prospectus and any amendment or supplement thereto by
each selling Person in connection with the offering and the sale of the
Registrable Securities covered by the Prospectus or any amendment or
supplement thereto and all market-making activities of the Initial
Purchaser, as the case may be;
(xii) prior to any public offering of Registrable Securities,
cooperate with the selling Holders and their counsel in connection with
the registration and qualification of the Registrable Securities under
the securities or Blue Sky laws of such jurisdictions as the selling
Holders may request and do any and all other acts or things necessary
or advisable to enable the disposition in such jurisdictions of the
Registrable Securities covered by the applicable Registration
Statement; provided that the Issuer shall not be required to register
or qualify as a foreign corporation where it is not now so qualified or
to take any action that would subject it to the service of process in
suits or to taxation, other than as to matters and transactions
relating to the Registration Statement, in any jurisdiction where it is
not now so subject;
(xiii) in connection with any sale of Registrable Securities
that will result in such securities no longer being Registrable
Securities, cooperate with the Holders to facilitate the timely
preparation and delivery of certificates representing Registrable
Securities to be sold and not bearing any restrictive legends; and to
register such Registrable Securities in such denominations and such
names as the selling Holders may request at least two Business Days
prior to such sale of Registrable Securities;
(xiv) use its reasonable best efforts to cause the disposition
of the Registrable Securities covered by the Registration Statement to
be registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the seller or sellers thereof
to consummate the disposition of such Registrable Securities, subject
to the proviso contained in clause (xiii) above;
<PAGE>
(xv) provide a CUSIP number for all Registrable Securities not
later than the effective date of a Registration Statement covering such
Registrable Securities and provide the Warrant Agent with printed
certificates for the Registrable Securities which are in a form
eligible for deposit with The Depository Trust Company;
(xvi) otherwise use its reasonable best efforts to comply with
all applicable rules and regulations of the Commission, and make
generally available to its security holders with regard to any
applicable Registration Statement, as soon as practicable (but not
sooner than the filing deadline of the last quarterly report included
therein), a consolidated earnings statement meeting the requirements of
Rule 158 (which need not be audited) covering a twelve-month period
beginning after the effective date of the Registration Statement (as
such term is defined in Rule 158(c) under the Securities Act); and
(xvii) provide promptly to the Initial Purchaser, upon
request, each document filed with the Commission pursuant to the
requirements of Section 13 or Section 15(d) of the Exchange Act.
(b) Restrictions on Holders. Each Holder agrees by acquisition of a
Registrable Security and the Initial Purchaser agree that, upon receipt of the
notice from the Issuer of the commencement of a Black Out Period (in each case,
a "Black Out Notice"), such Person will forthwith discontinue disposition of
Registrable Securities pursuant to the applicable Registration Statement until
such Person is advised in writing by the Issuer of the termination of the Black
Out Period. Each Person receiving a Black Out Notice hereby agrees that it will
either (i) destroy any Prospectuses, other than permanent file copies, then in
such Person's possession which have been replaced by the Issuer with more
recently dated Prospectuses or (ii) deliver to the Issuer (at the Issuer's
expense) all copies, other than permanent file copies, then in such Person's
possession of the Prospectus covering such Registrable Securities that was
current at the time of receipt of the Black Out Notice.
5. REGISTRATION EXPENSES
All expenses incident to the Issuer's performance of or compliance with
this Agreement will be borne by the Issuer, regardless of whether a Registration
Statement becomes effective, including, without limitation: (i) all registration
and filing fees and expenses; (ii) all fees and expenses of compliance with
federal securities and state Blue Sky or securities laws; (iii) all expenses of
printing (including printing Prospectuses (whether for sales, market-making or
otherwise), messenger and delivery services and telephone; (iv) all fees and
disbursements of counsel for the Issuer; (v) all application and filing fees in
connection with listing the Warrant Shares on a national securities exchange or
automated quotation system pursuant to the requirements hereof; and (vi) all
fees and disbursements of independent certified public accountants of the Issuer
(including the expenses of any special audit and comfort letters required by or
incident to such performance).
The Issuer will, in any event, bear its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expenses of any annual audit and the
fees and expenses of any Person, including special experts, retained by the
Issuer.
6. INDEMNIFICATION AND CONTRIBUTION
(a) The Issuer and each of its subsidiaries, jointly and severally,
agree to indemnify and hold harmless each Holder and each person, if any, who
controls any Holder within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act against any losses, claims, damages or
liabilities, joint or several, to which such Holder or such controlling person
may become subject under the Securities Act, the Exchange Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue
statement made by the Issuer or any of its subsidiaries of any material
fact contained in the Offering Memorandum,
(ii) any untrue statement or alleged untrue statement
of any material fact contained in (A) any Registration Statement or
Prospectus or any amendment or supplement thereto or (B) any
application or other document, or any amendment or supplement thereto,
executed by the Issuer or based upon written information furnished by
or on behalf of the Issuer filed in any jurisdiction in order to
qualify the Registrable Securities under the securities or blue sky
laws thereof or filed with the Commission or any securities association
or securities exchange (each an "Application"),
(iii) the omission or alleged omission to state in
any Registration Statement or Prospectus or any amendment or supplement
thereto, or any Application a material fact required to be stated in
such Registration Statement or necessary to make the statements in such
Registration Statement, at the time it became effective, not
misleading, or required to be stated in such Prospectus or any
supplement or amendment thereto or necessary to make the statements in
such Prospectus, at the date thereof, in the light of the circumstances
under which they were made, not misleading,
<PAGE>
and will reimburse, as incurred, each Holder and each such controlling person
for any legal or other expenses reasonably incurred by such Holder or such
controlling person in connection with investigating, defending against or
appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that the Issuer and each of its
subsidiaries, jointly and severally, will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any untrue statement or alleged untrue statement or omission or alleged
omission made in any Registration Statement or Prospectus or any amendment or
supplement thereto or any Application in reliance upon and in conformity with
written information relating to any Holder furnished to the Issuer by such
Holder specifically for use therein. The foregoing indemnification with respect
to any preliminary Prospectus or final Prospectus shall not inure to the benefit
of any Holder (or to the benefit of any person controlling such Holder) if the
person asserting any such losses, claims, damages, liabilities or expenses was
not sent or delivered a copy of the final Prospectus (or the final Prospectus as
amended or supplemented) at or prior to the written confirmation of the sale of
Registrable Securities to such person and if the untrue statement or omission of
a material fact contained in such preliminary Prospectus was corrected in the
final Prospectus (or the final Prospectus as amended or supplemented) unless
such corrected final Prospectus was not sent or delivered because the Company
failed to timely provide such Holder with sufficient copies of such corrected
final Prospectus. This indemnity agreement will be in addition to any liability
which the Issuer and each of its subsidiaries, jointly and severally, may
otherwise have to any Holder or to any person who controls such Holder within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act.
(b) Each Holder, severally and not jointly, agrees, by acquiring any
Registrable Securities, to indemnify and hold harmless the Issuer, each of its
directors, each of its executive officers and each person, if any, who controls
the Issuer within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act against any losses, claims, damages or liabilities to which
the Issuer, any such director, officer or controlling person may become subject
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained in any Registration Statement or Prospectus or any amendment or
supplement thereto or any Application or (ii) the omission or alleged omission
to state in any Registration Statement or Prospectus or any amendment or
supplement thereto, or any Application a material fact required to be stated in
such Registration Statement or necessary to make the statements in such
Registration Statement, at the time it became effective, not misleading, or
required to be stated in such Prospectus or any supplement or amendment thereto
or necessary to make the statements in such Prospectus, at the date thereof, in
the light of the circumstances under which they were made, not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information relating to any Holder furnished
to the Issuer by such Holder specifically for use therein; and, subject to the
limitation set forth immediately preceding this clause, will reimburse, as
incurred, any legal or other expenses reasonably incurred by the Issuer or any
such director, officer or controlling person in connection with investigating or
defending any such loss, claim, damage, liability or any action in respect
thereof. In no event shall any Holder, its directors, officers or any person who
controls such Holder be liable or responsible for any amount in excess of the
amount by which the total amount received by such Holder with respect to its
sale of Registrable Securities pursuant to a Registration Statement exceeds (i)
the amount paid by such Holder for such Registrable Securities and (ii) the
amount of any damages that such Holder, its directors, officers or any Person
who controls such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. This
indemnity agreement will be in addition to any liability which such Holder may
otherwise have.
(c) Promptly after receipt by an indemnified party under this Section 6
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 6, notify the indemnifying party of the commencement thereof in writing;
but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than under
this Section 6. In case any such action is brought against any indemnified
party, and it notifies the 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 and control the defense thereof, with counsel satisfactory to such
indemnified party; provided, however, that if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be one or more
legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnifying party shall not have the right to direct the defense of such action
on behalf of such indemnified party or parties and such indemnified party or
parties shall have the right to select separate counsel to defend such action on
behalf of such indemnified party or parties. After notice from the indemnifying
party to such indemnified party of its election to assume the defense thereof
and approval by such indemnified party of counsel appointed to defend such
action, the indemnifying party will not be liable to such indemnified party
under this Section 6 for any legal or other expenses, other than reasonable
costs of investigation, subsequently incurred by such indemnified party in
connection with the defense thereof, unless (i) the indemnified party shall have
<PAGE>
employed separate counsel in accordance with the proviso to the next preceding
sentence (it being understood, however, that in connection with such action the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (in addition to local counsel) in any one action or separate
but substantially similar actions in the same jurisdiction arising out of the
same general allegations or circumstances, designated by such Holder in the case
of paragraph (a) of this Section 6, representing the indemnified parties under
such paragraph (a) who are parties to such action or actions) or (ii) the
indemnifying party does not promptly retain counsel satisfactory to the
indemnified party or (iii) the indemnifying party has authorized the employment
of counsel for the indemnified party at the expense of the indemnifying party.
After such notice from the indemnifying party to such indemnified party, the
indemnifying party will not be liable for the costs and expenses of any
settlement of such action effected by such indemnified party without the consent
of the indemnifying party. No indemnifying party shall (A) without the prior
written consent of the indemnified parties (which consent shall not be
unreasonably withheld) settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
(1) includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding and (2) does not
include a statement as to or an admission of fault, culpability or a failure to
act by or on account of any indemnified party, or (B) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with the consent of
the indemnifying party or if there be a final judgment of the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
(d) In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 6 is unavailable or insufficient, for
any reason, to hold harmless an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof), each
indemnifying party, in order to provide for just and equitable contribution,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect (i) the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party on the other from the offering of the Securities or (ii) if
the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions or alleged statements
or omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative fault of the parties shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Issuer or such Holder, the parties'
relative intents, knowledge, access to information and opportunity to correct or
prevent such statement or omission, and any other equitable considerations
appropriate in the circumstances. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, liabilities or judgments
referred to above shall be deemed to include, subject to the limitations set
forth in Section 6(b), any legal or other fees or expenses reasonably incurred
by such indemnified party in connection with investigating or defending any
matter, including any action that could have given rise to such losses, claims,
damages, liabilities or judgments.
The Issuer, each of its subsidiaries and each Holder agree that it
would not be just and equitable if the amount of such contribution were
determined by pro rata or per capita allocation (even if the Holders were
treated as one entity for such purpose) or by any other method of allocation
that does not take into account the equitable considerations referred to above
in this paragraph (d). Notwithstanding any other provision of this paragraph
(d), no Holder shall be obligated to make contributions hereunder that in the
aggregate exceed the total public offering price of the Registrable Securities
purchased by such Holder under this Agreement, less the aggregate amount of any
damages that such Holder has otherwise been required to pay in respect of the
same or any substantially similar claim, and no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Holders' obligations to contribute pursuant to
this Section are several in proportion to the respective principal amount of
Registrable Securities held by each Holder hereunder and not joint. For purposes
of this paragraph (d), each person, if any, who controls a Holder within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
shall have the same rights to contribution as such Holder, and each director of
the Issuer, each officer of the Issuer who signed the Registration Statement and
each person, if any, who controls the Issuer within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act, shall have the same rights
to contribution as the Issuer.
(e) The Issuer and each of its subsidiaries agree that the indemnity
and contribution provisions of this Section 6 shall apply to the Initial
Purchaser to the same extent, on the same conditions, as they apply to the
Holders.
<PAGE>
(f) The parties to this Agreement hereby acknowledge that they are
sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions of this Agreement, including, without
limitation, the provisions of this Section 6, and are fully informed regarding
said provisions. They further acknowledge that the provisions of this Section 6
fairly allocate the risks in light of the ability of the parties to investigate
the Issuer and its business in order to assure that adequate disclosure is made
in the Registration Statement as required by the Securities Act. The parties are
advised that federal or state policy, as interpreted by the courts in certain
jurisdictions, may be contrary to certain provisions of this Section 6, and the
parties hereto hereby expressly waive and relinquish any right or ability to
assert such public policy as a defense to a claim under this Section 6 and
further agree not to attempt to assert any such defense.
7. RULE 144
The Issuer agrees with each Holder, so long as any Registrable
Securities remain outstanding and during any period in which the Issuer is
subject to Section 13 or 15(d) of the Exchange Act, to make all filings required
thereby in a timely manner in order to permit resales of such Registrable
Securities pursuant to Rule 144.
8. MISCELLANEOUS
(a) Remedies. The Issuer acknowledges and agrees that any failure by
the Issuer to comply with its obligations under Section 3 hereof may result in
material irreparable injury to the Initial Purchaser or the Holders for which
there is no adequate remedy at law, that it will not be possible to measure
damages for such injuries precisely and that, in the event of any such failure,
the Initial Purchaser or any Holder may obtain such relief as may be required to
specifically enforce the Issuer's obligations under Section 3 hereof. The Issuer
further agrees to waive the defense in any action for specific performance that
a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Issuer will not, on or after the
date of this Agreement, enter into any agreement with respect to its securities
that is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with
the rights granted to the holders of the Issuer's securities under any agreement
in effect on the date hereof.
(c) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given unless (i) in the case of this Section
8(c), the Issuer has obtained the written consent of Holders of all outstanding
Registrable Securities, and (ii) in the case of all other provisions hereof, the
Issuer has obtained the written consent of Holders of a majority of the
outstanding principal amount of Registrable Securities (excluding Registrable
Securities held by the Issuer, any Subsidiary Guarantor, or any of their
respective Affiliates); provided that this Agreement may be amended without the
consent of any Holder pursuant to Section 22 of the Warrant Agreement.
(d) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements granting rights to Holders made hereunder
between the Issuer, on the one hand, and the Initial Purchaser, on the other
hand, and shall have the right to enforce such agreements directly to the extent
they may deem such enforcement necessary or advisable to protect its rights or
the rights of Holders hereunder.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(iv) if to a Holder, at the address set forth
on the records of the Warrant Agent,
with a copy to the Warrant Agent; and
(v) if to the Issuer:
Waste Systems International
420 Bedford Street, Suite 300
Lexington, MA 02173
Telecopier: (781) 862-2929
Attention: Chief Financial Officer
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and on the next Business Day, if timely delivered
to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Warrant Agent at the
address specified in the Warrant Agreement.
<PAGE>
(f) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties,
including, without limitation, and without the need for an express assignment,
subsequent Holders; provided that nothing herein shall be deemed to permit any
assignment, transfer or other disposition of Registrable Securities in violation
of the terms hereof or of the Purchase Agreement or the Warrant Agreement. If
any transferee of any Holder shall acquire Registrable Securities in any manner,
whether by operation of law or otherwise, such Registrable Securities shall be
held subject to all of the terms of this Agreement, and by taking and holding
such Registrable Securities such Person shall be conclusively deemed to have
agreed to be bound by and to perform all of the terms and provisions of this
Agreement, including the restrictions on resale set forth in this Agreement and,
if applicable, the Purchase Agreement, and such Person shall be entitled to
receive the benefits hereof.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE CONFLICT OF LAW RULES THEREOF.
(j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(k) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Registrable
Securities. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
WASTE SYSTEMS INTERNATIONAL, INC.
By
Name:
Title:
WSI MEDICAL WASTE SYSTEMS, INC.
By
Name:
Title:
BIOSAFE SYSTEMS, INC.
By
Name:
Title:
WSI NEW YORK HOLDINGS, INC.
By
Name:
Title:
WSI OF NEW YORK, INC.
By
Name:
Title:
WSI VERMONT HOLDINGS, INC.
By
Name:
Title:
WSI OF VERMONT, INC.
By
Name:
Title:
WSI MORETOWN LANDFILL, INC.
By
Name:
Title:
WSI BURLINGTON TRANSFER STATION, INC.
By
Name:
Title:
WSI ST. JOHNSBURY TRANSFER STATION, INC.
By
Name:
Title:
WSI WAITSFIELD TRANSFER STATION, INC.
By
Name:
Title:
WSI MASSACHUSETTS HOLDINGS, INC.
By
Name:
Title:
<PAGE>
WSI OF MASSACHUSETTS HAULING, INC.
By
Name:
Title:
WSI OF SOUTH HADLEY, INC.
By
Name:
Title:
WSI OXFORD TRANSFER STATION, INC.
By
Name:
Title:
WSI MARYLAND HOLDINGS, INC.
By
Name:
Title:
WSI PENNSYLVANIA HOLDINGS, INC.
By
Name:
Title:
WSI OF PENNSYLVANIA, INC.
By
Name:
Title:
<PAGE>
WSI SANDY RUN LANDFILL, INC.
By
Name:
Title:
WSI ALTOONA TRANSFER STATION, INC.
By
Name:
Title:
MOSTOLLER LANDFILL, INC.
By
Name:
Title:
Confirmed and accepted as of
the date first above written
FIRST ALBANY CORPORATION
By:
Name:
Title:
<PAGE>
EXHIBIT 99
- ----------
Waste Systems International, Inc.
Lexington Office Park, 420 Bedford Street, Suite 300, Lexington, MA 02173
Tel: 781-862-3000; Fax: 781-862-2929
FOR IMMEDIATE RELEASE:
Contact: Waste Systems International, Inc.
Bob Rivkin, Executive Vice President -
Acquisitions and CFO
- -------------------------------------------------------------------------------
WASTE SYSTEMS INTERNATIONAL, INC. ANNOUNCES CLOSING OF $100 MILLION SENIOR
UNSECURED NOTES OFFERING, 500,000
SHARE BUYBACK
AND
TWELVE TUCK-IN ACQUISITIONS
Lexington, Massachusetts, March 2, 1999 - Waste Systems International, Inc.
("WSI") (NASDAQ: WSII), an integrated non-hazardous solid waste management
company, announced today that it has completed the sale of $100 million in
principal amount of seven-year 11.5% Senior Unsecured Notes through a private
placement with institutional investors. The issuance of the Senior Unsecured
Notes has been structured to allow secondary market trading under Rule 144A of
the Act of 1933. The net proceeds of the offering will be used to complete a
buyback of 500,000 shares of Common Stock, finance pending and future
acquisitions, repayment of outstanding debt, as well as for general working
capital purposes.
"This financing allows WSI to continue pursuing its aggressive acquisition
strategy," commented Philip Strauss, WSI's Chairman and Chief Executive Officer.
"Over the last year, WSI has demonstrated its ability to effectively pursue its
strategy of acquiring solid waste assets at prices the Company believes will
provide opportunities for increased growth, profits and cash flow," Strauss
added.
The Company also announced that it has closed or signed definitive agreements to
acquire 12 tuck-in collection companies in its Central Pennsylvania, Central New
York and Central Massachusetts markets. The combined aggregate annual revenues
of the acquisitions are approximately $7.5 million.
"These tuck-ins strengthen our presence in each of the respective markets and
will help us to continue to increase our operating margins and cash flow in
these regions," commented Philip W. Strauss, Chairman and Chief Executive
Officer. "We are very pleased with the results of our acquisitions to date. Our
pipeline of potential acquisitions remains strong," Strauss added.
<PAGE>
WSI is an innovative solid waste management company. The Company currently has
operations in Vermont, Central Pennsylvania, Central Massachusetts and Central
New York which serve approximately 67,000 commercial, industrial and residential
customers. The Company is also evaluating other acquisitions and opportunities
primarily in Northeastern and Mid-Atlantic markets.
Certain matters discussed in the press release, including statements with regard
to acquisition and growth plans, and prospects, are "forward-looking statements"
intended to qualify for the safe harbors from liability established by the
Private Securities Litigation Reform Act of 1995. Forward-looking statements are
inherently uncertain and subject to risks. Such statements should be viewed with
caution. Among the important factors that could cause actual results to differ
materially from those indicated by such forward-looking statements are the
Company's ability to manage growth, a history of losses, the ability to
identify, acquire and integrate acquisition targets, dependence on management,
the uncertain ability to finance the Company's growth, limitations on landfill
permitting and expansion, geographic concentration, and the other risk factors
detailed from time to time in the Company's periodic reports and registration
statements filed with the Securities and Exchange Commission. The Company makes
no commitment to disclose any revisions to forward-looking statements, or any
facts, events or circumstances after the date hereof that may bear upon
forward-looking statements.
<PAGE>
