EXHIBIT 1
$150,000,000
SYNAGRO TECHNOLOGIES, INC.
9 1/2% SENIOR SUBORDINATED NOTES DUE 2009
PURCHASE AGREEMENT
April 8, 2002
XXXXXX BROTHERS INC.,
BANC OF AMERICA SECURITIES LLC
c/x Xxxxxx Brothers, Inc.
000 0xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Synagro Technologies, Inc, a Delaware corporation (the "Company"),
proposes, upon the terms and considerations set forth herein, to issue and sell
to you, as the initial purchasers (the "Initial Purchasers"), $150,000,000 in
aggregate principal amount of its 9 1/2% Senior Subordinated Notes due 2009 (the
"Notes"). The Notes will (i) have terms and provisions which are summarized in
the Offering Memorandum (as defined below) and (ii) are to be issued pursuant to
an Indenture (the "Indenture") to be entered into among the Company, the
Guarantors (as defined below) and Xxxxx Fargo Bank Minnesota, National
Association 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 (the "Guarantees") by each of the guarantors named on
Schedule I hereto (together the "Guarantors"). As used herein, the term "Notes"
shall include the Guarantees, unless the context otherwise requires. This is to
confirm the agreement concerning the purchase of the Notes and the Guarantees
from the Company and the Guarantors, respectively, by the Initial Purchasers.
1. Preliminary Offering Memorandum and Offering Memorandum. The Notes
will be offered and sold to the Initial Purchasers without registration under
the Securities Act of 1933, as amended (the "Act"), in reliance on an exemption
pursuant to Section 4(2) under the Act. The Company and the Guarantors have
prepared a preliminary offering memorandum, dated March 22, 2002 (the
"Preliminary Offering Memorandum"), and an offering memorandum, dated April 8,
2002 (the "Offering Memorandum"), setting forth information regarding the
Company, the Guarantors, the Notes, the Exchange Notes (as defined herein), the
Guarantees and the Exchange Guarantees (as defined herein). Any references
herein to the Preliminary Offering Memorandum or the Offering Memorandum shall
be deemed to include all amendments and supplements thereto. The Company and the
Guarantors hereby confirm that they have authorized the use of the Preliminary
Offering Memorandum and the Offering Memorandum in connection with the offering
and resale of the Notes by the Initial Purchasers.
It is understood and acknowledged that upon original issuance thereof,
and until such time as the same is no longer required under the applicable
requirements of the Act, the Notes (and all securities issued in exchange
therefor, in substitution thereof) shall bear the following legend (along with
such other legends as the Initial Purchasers and their counsel deem necessary):
"THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE
904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE
144 THEREUNDER (IF AVAILABLE), (4) TO AN INSTITUTIONAL ACCREDITED
INVESTOR IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL
APPLICABLE BLUE SKY LAWS OF THE STATES OF THE UNITED STATES."
You have advised the Company that you will make offers (the "Exempt
Resales") of the Notes purchased by you hereunder on the terms set forth in the
Offering Memorandum, as amended or supplemented, solely (i) to persons whom you
reasonably believe to be "qualified institutional buyers" as defined in Rule
144A under the Act ("QIBs") and (ii) outside the United States to certain
persons in offshore transactions in reliance on Regulation S under the Act.
Those persons specified in clauses (i) and (ii) are referred to herein as the
"Eligible Purchasers." You will offer the Notes to Eligible Purchasers initially
at a price equal to 100% of the principal amount thereof. Such price may be
changed at any time without notice.
Holders (including subsequent transferees) of the Notes will have the
registration rights set forth in the registration rights agreement (the
"Registration Rights Agreement") among the Company, the Guarantors and the
Initial Purchasers to be dated April 17, 2002 (the "Closing Date") for so long
as such Notes constitute "Transfer Restricted Securities" (as defined in the
Registration Rights Agreement). Pursuant to the Registration Rights Agreement,
the Company and the Guarantors will agree to file with the Commission under the
circumstances set forth therein, a registration statement under the Act (the
"Exchange Offer Registration Statement") relating to the Company's 9 1/2%
Exchange Notes due 2009 (the "Exchange Notes") and the Guarantors' Exchange
Guarantees (the "Exchange Guarantees") to be offered in exchange for the Notes
and the Guarantees. Such portion of the offering is referred to as the "Exchange
Offer."
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2. Representations, Warranties and Agreements of the Company and the
Guarantors. The Company and each of the Guarantors, jointly and severally
represents, warrants and agrees that:
(a) When the Notes and Guarantees are issued and delivered pursuant to
this Agreement, such Notes and Guarantees will not be of the same class (within
the meaning of Rule 144A under the Act) as securities of the Company or the
Guarantors that are listed on a national securities exchange registered under
Section 6 of the Exchange Act or that are quoted in a United States automated
inter-dealer quotation system.
(b) Neither the Company nor any of its subsidiaries is, and after
giving effect to the offering and sale of the Notes will be, an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended and the rules and regulations
of the Commission thereunder.
(c) The Company and each Guarantor has all requisite corporate power
and authority to enter into the Registration Rights Agreement. The Registration
Rights Agreement has been duly authorized by the Company and each Guarantor and,
when executed by the Company and each Guarantor in accordance with the terms
hereof and thereof, will be validly executed and delivered and (assuming the due
execution and delivery thereof by you) will be the legally valid and binding
obligation of the Company and each Guarantor in accordance with the terms hereof
and thereof, enforceable against the Company and each Guarantor in accordance
with its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws relating to or
affecting creditor's rights generally, by general equitable principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and, as to rights of indemnification and contribution, by
principles of public policy.
(d) Assuming that your representations and warranties in Section 3(b)
are true, the purchase and resale of the Notes pursuant hereto (including
pursuant to the Exempt Resales) is exempt from the registration requirements of
the Act. No form of general solicitation or general advertising was used by the
Company, the Guarantors or any of their respective representatives (except that
the Company and the Guarantors make no representation as to you) in connection
with the offer and sale of the Notes, including, but not limited to, articles,
notices or other communications published in any newspaper, magazine, or similar
medium or broadcast over television or radio or any seminar or meeting whose
attendees have been invited by any general solicitation or general advertising.
(e) No form of general solicitation or general advertising was used by
the Company, the Guarantors or any of their respective representatives (except
that the Company and the Guarantors make no representation as to you) with
respect to Notes sold outside the United States to non-U.S. persons (as defined
in Rule 902 under the Securities Act), by means of any directed selling efforts
within the meaning of Rule 902 under the Securities Act and the Company, any
affiliate of the Company and any person acting on its or their behalf has
complied with and will implement the "offering restrictions" within the meaning
of such Rule 902.
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(f) Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its date, contains all the information specified in, and
meeting the requirements of Rule 144A(d)(4) under the Act.
(g) The Preliminary Offering Memorandum and Offering Memorandum with
respect to the Notes have been prepared by the Company and the Guarantors for
use by the Initial Purchasers in connection with the Exempt Resales. No order or
decree preventing the use of the Preliminary Offering Memorandum or the Offering
Memorandum, or any order asserting that the transactions contemplated by this
Agreement are subject to the registration requirements of the Act has been
issued and no proceeding for that purpose has commenced or is pending or, to the
knowledge of the Company or any of the Guarantors is contemplated.
(h) The Preliminary Offering Memorandum and the Offering Memorandum as
of their respective dates and the Offering Memorandum as of the Closing Date,
did not or will not 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, in light of the circumstances under which they were made,
not misleading, except that this representation and warranty does not apply to
statements in or omissions from the Preliminary Offering Memorandum and Offering
Memorandum made in reliance upon and in conformity with information relating to
the Initial Purchasers furnished to the Company in writing by or on behalf of
the Initial Purchasers expressly for use therein.
(i) The Registration Rights Agreement will conform to the description
thereof in the Offering Memorandum.
(j) The market-related and customer-related data and estimates included
under the captions "Summary," and "Business" in the Preliminary Offering
Memorandum and the Offering Memorandum are based on or derived from sources
which the Company believes to be reliable and accurate.
(k) The Company and the Guarantors have been duly incorporated or
formed and are validly existing as corporations, limited liability companies or
partnerships, as the case may be, in good standing under the laws of their
respective jurisdictions of incorporation, are duly qualified to do business and
are in good standing as foreign corporations or limited liability companies, as
the case may be, in each jurisdiction in which their respective ownership or
lease of property or the conduct of their respective businesses requires such
qualification except where failure to be so qualified would not have a material
adverse effect on the consolidated financial position, stockholders' equity,
results of operations, business or prospects of the Company and the Guarantors,
and have all power and authority necessary to own or hold their respective
properties and to conduct the businesses in which they are engaged.
(l) The Company has an authorized capitalization as set forth in the
Offering Memorandum, and all of the issued shares of capital stock of or
interests in the Company have been duly and validly authorized and issued, are
fully paid and non-assessable; and all of the issued shares of capital stock of
or interests in each subsidiary of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable and (except for
directors'
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qualifying shares) are owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, equities or claims except as disclosed in the
Offering Memorandum.
(m) The Indenture has been duly and validly authorized by the Company
and the Guarantors, and upon its execution and delivery and, assuming due
authorization, execution and delivery by the Trustee, will constitute the valid
and binding agreement of the Company and the Guarantors, enforceable against the
Company and the Guarantors in accordance with its terms, subject to the
qualification that the enforceability of the Company's and the Guarantors'
obligations thereunder may be limited by bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium, and other laws relating to or affecting
creditors' rights generally and by general equitable principles; no
qualification of the Indenture under the Trust Indenture Act of 1939 (the "1939
Act") is required in connection with the offer and sale of the Notes
contemplated hereby or in connection with the Exempt Resales.
(n) The Indenture will conform to the description thereof in the
Offering Memorandum.
(o) The Notes have been duly and validly authorized by the Company and
when duly executed by the Company in accordance with the terms of the Indenture
and, assuming due authentication of the Notes by the Trustee, upon delivery to
the Initial Purchasers against payment therefor in accordance with the terms
hereof, will have been validly issued and delivered, and will constitute valid
and binding obligations of the Company entitled to the benefits of the
Indenture, enforceable against the Company in accordance with their terms,
subject to the qualification that the enforceability of the Company's
obligations thereunder may be limited by bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium, and other laws relating to or affecting
creditors' rights generally and by general equitable principles.
(p) The Notes will conform to the description thereof in the Offering
Memorandum.
(q) On the Closing Date, the Exchange Notes will have been duly and
validly authorized by the Company and if and when duly issued and authenticated
in accordance with the terms of the Indenture and delivered in accordance with
the Exchange Offer provided for in the Registration Rights Agreement, will
constitute valid and binding obligations of the Company entitled to the benefits
of the Indenture, enforceable against the Company in accordance with their
terms, subject to the qualification that the enforceability of the Company's
obligations thereunder may be limited by bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium, and other laws relating to or affecting
creditors' rights generally and by general equitable principles.
(r) The Guarantees have been duly and validly authorized by the
Guarantors and when duly executed and delivered by the Guarantors in accordance
with the terms of the Indenture and upon the due execution, authentication and
delivery of the Notes in accordance with the Indenture and the issuance of the
Notes in the sale to the Initial Purchasers contemplated by this Agreement, will
constitute valid and binding obligations of the Guarantors, enforceable against
the Guarantors in accordance with their terms, subject to the qualification that
the enforceability of the Guarantors' obligations thereunder may be limited by
bankruptcy,
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fraudulent conveyance, insolvency, reorganization, moratorium, and other laws
relating to or affecting creditors' rights generally and by general equitable
principles.
(s) The Guarantees will conform to the description thereof in the
Offering Memorandum.
(t) On the Closing Date, the Exchange Guarantees will have been duly
and validly authorized by the Guarantors and if and when duly executed and
delivered by the Guarantors in accordance with the terms of the Indenture and
upon the due execution and authentication of the Exchange Notes in accordance
with the Indenture and the issuance and delivery of the Exchange Notes in the
Exchange Offer contemplated by the Registration Rights Agreement, will
constitute valid and binding obligations of the Guarantors, entitled to the
benefits of the Indenture, enforceable against the Guarantors in accordance with
their terms, subject to the qualification that the enforceability of the
Guarantors' obligations thereunder may be limited by bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium, and other laws relating to
or affecting creditors' rights generally and by general equitable principles.
(u) This Agreement has been duly authorized, executed and delivered by
the Company and the Guarantors.
(v) The issue and sale of the Notes and the Guarantees and the
compliance by the Company and the Guarantors with all of the provisions of the
Notes, the Guarantees, the Exchange Notes, the Exchange Guarantees, the
Indenture, the Registration Rights Agreement and this Agreement and the
consummation of the transactions contemplated hereby and thereby will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company, the
Guarantors or any of their respective subsidiaries is a party or by which the
Company, the Guarantors or any of their respective subsidiaries is bound or to
which any of the property or assets of the Company, the Guarantors or any of
their respective subsidiaries is subject, provided that as of the date hereof
but not as of the Closing Date, except for the consent of a majority of the
lenders under the Credit Agreement (as defined in the Offering Memorandum) as
required by such Credit Agreement, nor will such actions result in any violation
of the provisions of the Certificate of Incorporation, Certificate of Formation,
partnership agreement charter, by-laws or other organizational documents of the
Company, the Guarantors or any of their respective subsidiaries or any statute
or any order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company, the Guarantors or any of their respective
subsidiaries or any of their properties or assets; and no consent, approval,
authorization, order, registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the Notes and
the Guarantees or the consummation by the Company and the Guarantors of the
transactions contemplated by this Agreement, the Registration Rights Agreement
or the Indenture, except for the filing of a registration statement by the
Company with the Commission pursuant to the Act as required by the Registration
Rights Agreement and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Notes by the Initial
Purchasers.
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(w) Except as described in the Offering Memorandum, there are no
contracts, agreements or understandings between the Company, any Guarantor and
any person granting such person the right to require the Company or any
Guarantor to include such securities in the securities registered pursuant to
the Registration Rights Agreement or in any securities being registered pursuant
to any other registration statement filed by the Company or any Guarantor under
the Act.
(x) During the six-month period preceding the date of the Offering
Memorandum, none of the Company, the Guarantors or any other person acting on
behalf of the Company or any Guarantor has offered or sold to any person any
Notes or Guarantees, or any securities of the same or a similar class as the
Notes or Guarantees, other than Notes or Guarantees offered or sold to the
Initial Purchasers hereunder. The Company and the Guarantors will take
reasonable precautions designed to insure that any offer or sale by the Company
or the Guarantors, direct or indirect, in the United States or to any U.S.
person (as defined in Rule 902 under the Securities Act), of any Notes or
Guarantees or any substantially similar security issued by the Company or any
Guarantor, within six months subsequent to the date on which the distribution of
the Notes and the Guarantees has been completed (as notified to the Company by
the Initial Purchasers), is made under restrictions and other circumstances
reasonably designed not to affect the status of the offer and sale of the Notes
and the Guarantees in the United States and to U.S. persons contemplated by this
Agreement as transactions exempt from the registration provisions of the Act,
including any sales pursuant to Rule 144A under, or Regulations D or S of, the
Act.
(y) Neither the Company, the Guarantors nor any of their respective
subsidiaries has sustained, since the date of the latest audited financial
statements included in the Offering Memorandum, any material loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Offering Memorandum as of the Closing Date; and, since such
date, there has not been any change in the capital stock or long-term debt of
the Company, the Guarantors or any of their respective subsidiaries or any
material adverse change, or any development involving a prospective material
adverse change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company, the
Guarantors or any of their respective subsidiaries, taken as a whole, otherwise
than as set forth or contemplated in the Offering Memorandum.
(z) The financial statements (including the related notes and
supporting schedules) included in the Offering Memorandum present fairly the
consolidated financial condition and results of operations of the entities
purported to be shown thereby, at the dates and for the periods indicated, and
have been prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved.
(aa) Xxxxxx Xxxxxxxx LLP, who have certified certain financial
statements of the Company included in the Offering Memorandum, whose report
appears in the Offering Memorandum and who have delivered the initial letter
referred to in Section 7(e) hereof, are independent public accountants as
required by the Act and the Rules and Regulations.
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(bb) The Company, the Guarantors and each of their respective
subsidiaries has good title to all real property and good title to all personal
property owned by them, in each case free and clear of all liens, encumbrances
and defects except such as are described in the Offering Memorandum or such as
do not materially interfere with the use made and proposed to be made of such
property by the Company, the Guarantors or any of their respective subsidiaries;
and all real property and buildings held under lease by the Company, the
Guarantors or any of their respective subsidiaries are held by them under valid,
subsisting and enforceable leases, with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such property and
buildings by the Company, the Guarantors or any of their respective
subsidiaries.
(cc) Except as described in the Offering Memorandum, the Company, the
Guarantors and each of their respective subsidiaries carry, or are covered by,
insurance with a carrier who the Company believes to be financially responsible
in such amounts and covering such risks as the Company believes is adequate for
the conduct of their respective businesses and the value of their respective
properties.
(dd) The Company, the Guarantors and each of their respective
subsidiaries own or possess adequate rights to use all material patents, patent
applications, trademarks, service marks, trade names, trademark registrations,
service xxxx registrations, copyrights and licenses necessary for the conduct of
their respective businesses and have no reason to believe that the conduct of
their respective businesses will conflict with, and have not received any notice
of any claim of conflict with, any such rights of others.
(ee) Except as described in the Offering Memorandum, there are no legal
or governmental proceedings pending to which the Company, the Guarantors or any
of their respective subsidiaries is a party or of which any property or assets
of the Company, the Guarantors or any of their respective subsidiaries is the
subject which, if determined adversely to the Company, the Guarantors and their
respective subsidiaries, taken as a whole, might have a material adverse effect
on the consolidated financial position, stockholders' equity, results of
operations, business or prospects of the Company, the Guarantors and their
respective subsidiaries, taken as a whole; and to the best of the Company's and
each Guarantors' knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others.
(ff) There are no contracts or other documents which would be required
to be included under Item 601(b)(10) of Regulation S-K, which have not been
described in the Offering Memorandum.
(gg) No relationship, direct or indirect, which would be required to be
described under Item 404 of Regulation S-K, exists between or among the Company,
any Guarantor on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company, or any Guarantor on the other hand, which
is not so described in the Offering Memorandum.
(hh) No labor disturbance by the employees of the Company or any
Guarantor exists or, to the knowledge of the Company or any Guarantor, is
imminent which might be
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expected to have a material adverse effect on the consolidated financial
position, stockholders' equity, results of operations, business or prospects of
the Company, the Guarantors and their respective subsidiaries, taken as a whole.
(ii) The Company is in compliance in all material respects with all
presently applicable provisions of ERISA; no "reportable event" (as defined in
ERISA) has occurred with respect to any "pension plan" (as defined in ERISA) for
which the Company or any Guarantor would have any liability; neither the Company
nor any Guarantor has incurred and does not expect to incur liability under (i)
Title IV of ERISA with respect to termination of, or withdrawal from, any
"pension plan" or (ii) Sections 412 or 4971 of the Internal Revenue Code of
1986, as amended, including the regulations and published interpretations
thereunder (the "Code"); and each "pension plan" for which the Company or any
Guarantor would have any liability that is intended to be qualified under
Section 401(a) of the Code is so qualified in all material respects and nothing
has occurred, whether by action or by failure to act, which would cause the loss
of such qualification.
(jj) The Company and each Guarantor has filed all federal, state and
local income and franchise tax returns required to be filed through the date
hereof and has paid all taxes due thereon, and no tax deficiency has been
determined adversely to the Company, the Guarantors or any of their respective
subsidiaries which has had (nor does the Company or any Guarantor have any
knowledge of any tax deficiency which, if determined adversely to the Company,
the Guarantors and their respective subsidiaries, taken as a whole, might have)
a material adverse effect on the consolidated financial position, stockholders'
equity, results of operations, business or prospects of the Company, the
Guarantors and their respective subsidiaries, taken as a whole.
(kk) Since the date as of which information is given in the Preliminary
Offering Memorandum through the date hereof, and except as may otherwise be
disclosed in the Offering Memorandum as of the Closing Date, neither the Company
nor any Guarantor has (i) issued or granted any securities, (ii) incurred any
material liability or obligation, direct or contingent, other than liabilities
and obligations which were incurred in the ordinary course of business, (iii)
entered into any material transaction not in the ordinary course of business or
(iv) declared or paid any dividend on its capital stock.
(ll) The Company and each Guarantor (i) makes and keeps accurate books
and records and (ii) maintains internal accounting controls which provide
reasonable assurance that (A) transactions are executed in accordance with
management's authorization and (B) transactions recorded as necessary to permit
preparation of its financial statements and to maintain accountability for its
assets.
(mm) Neither the Company, the Guarantors nor any of their respective
subsidiaries (i) is in violation of its Certificate of Incorporation,
Certificate of Formation, partnership agreement, charter, by-laws or other
organizational documents, (ii) is in default and no event has occurred which,
with notice or lapse of time or both, would constitute such a default, in the
due performance or observance of any term, covenant or condition contained in
any material indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which it is a party or by which it is bound or to
which any of its properties or assets is subject
9
or (iii) is in violation of any law, ordinance, governmental rule, regulation or
court decree to which it or its property or assets may be subject or has failed
to obtain any material license, permit, certificate, franchise or other
governmental authorization or permit necessary to the ownership of its property
or to the conduct of its business, except, with regard to (ii) and (iii) of this
paragraph, for such defaults, violations or failures that would not reasonably
be expected to have a material adverse effect on the consolidated financial
position, stockholders' equity, results of operations, business or prospects of
the Company, the Guarantors and their respective subsidiaries, taken as a whole.
(nn) Neither the Company, the Guarantors nor any of their respective
subsidiaries, nor any director, officer, agent, employee or other person
associated with or acting on behalf of the Company, the Guarantors or any of
their respective 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; violated or is
in violation of any provision of the Foreign Corrupt Practices Act of 1977; or
made any bribe, rebate, payoff, influence payment, kickback or other unlawful
payment.
(oo) Except as disclosed in the Offering Memorandum and except for
possible violations which, individually or in the aggregate, would not have a
material adverse effect on the general affairs, management, financial position,
stockholders' equity or results of operations of the Company, the Guarantors and
their respective subsidiaries, taken as a whole, the Company, the Guarantors and
their respective subsidiaries (1) are conducting and have conducted the
business, operations and facilities in compliance with all applicable federal,
state, local, and foreign laws, ordinances, rules, regulations, licenses,
permits, approvals, plans, authorizations, orders, judgments, directives,
decrees, requirements and common law relating to occupational safety and health,
or pollution, or protection of health or the environment as now or previously in
effect (including, without limitation, those relating to, regulating, or
imposing liability or standards of conduct concerning (i) noise or odor, (ii)
the use or disposal of sewage sludge or biosolids, (iii) emissions, discharges,
releases or threatened releases of pollutants, contaminants or hazardous,
dangerous, toxic, biohazardous or infectious substances, materials, constituents
or wastes or toxins, viruses, infectious disease agents, or pathogens,
petroleum, petroleum products and their breakdown constituents, or any other
chemical substance regulated under Environmental Laws (as defined below) or
exhibiting a hazardous waste characteristic including but not limited to
corrosivity, ignitability, toxicity, or reactivity, whether solid, gaseous or
liquid in nature ("Hazardous Substances"), into ambient air, surface water,
groundwater or land, (iv) relating to the generation, manufacture, processing,
distribution, use, treatment, storage, disposal, release, transport or handling
of Hazardous Substances or (v) otherwise relating to remediating real property
or concerning protection of the outdoor or indoor environment) ("Environmental
Laws"); (2) possess and maintain in full force and effect any and all permits,
licenses or registrations required under Environmental Laws ("Environmental
Permits"); (3) will not require material expenditures to maintain such
Environmental Permits or such compliance with Environmental Laws or to
remediate, clean up, xxxxx or remove any Hazardous Substance on any real
property currently or formerly owned, operated or leased by the Company or its
subsidiaries; and (4) have not received any notice from a governmental
instrumentality or any other third party alleging any violation thereof or
liability thereunder
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(including, without limitation, liability for costs of investigating or
remediating sites containing Hazardous Substances and/or damages to natural
resources).
(pp) Except as disclosed in the Offering Memorandum, there is no claim
pending or, to the best knowledge of the Company, the Guarantors or any of their
respective subsidiaries, threatened or contemplated under any Environmental Laws
against the Company, the Guarantors or any of their respective subsidiaries
which, if adversely determined, individually or in the aggregate, would have a
material adverse effect on the general affairs, management, financial position,
stockholders' equity or results of operations of the Company, the Guarantors and
their respective subsidiaries, taken as a whole; and except as disclosed in the
Offering Memorandum, there are no past or present actions or conditions,
including, without limitation, (i) the release or threatened release of any
Hazardous Substance or (ii) any legal proceeding or any unsatisfied condition in
an Environmental Permit that would reasonably be expected to allow material
modification or revocation thereof, that are reasonably likely to form the basis
of any such claim against the Company, the Guarantors or any of their respective
subsidiaries which, if adversely determined, individually or in the aggregate
would have a material adverse effect on the general affairs, management,
financial position, stockholders' equity or results of operations of the
Company, the Guarantors and their respective subsidiaries, taken as a whole.
(qq) None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale of the
Notes), will violate or result in a violation of Section 7 of the Exchange Act,
or any regulation promulgated thereunder, including, without limitation,
Regulations T, U, and X of the Board of Governors of the Federal Reserve System.
(rr) The statements set forth in the Offering Memorandum under the
caption "Description of the Notes," insofar as they purport to constitute a
summary of the terms of the Notes and the Guarantees and under the captions
"Risk Factors -- Risk Relating to us and Our Business -- Federal wastewater
treatment and biosolid regulations may restrict our operations or increase our
costs of operations," "Risk Factors -- We are subject to extensive federal,
state and local environmental regulation and permitting" Risk Factors -- If we
lose the pending lawsuits we are currently involved in, we could be liable for
significant damages and legal expenses," Risk Factors -- We may become subject
to the Comprehensive Environmental Response Compensation and Liability Act, or
"CERCLA", "Business -- Industry Overview -- History," "Business -- Industry
Overview -- Classes of Biosolids," "Business -- Federal, State and Local
Government Regulations," "Business -- Legal and Other Proceedings" "Certain U.S.
Federal Income Considerations," "Certain Relationships and Related
Transactions," "Description of Other Indebtedness and Preferred Stock,"
"Management--Employment Agreements" and "Plan of Distribution," insofar as they
purport to describe the provisions of the laws and documents referred to
therein, are accurate in all material respects.
(ss) Prior to the date hereof, neither the Company, the Guarantors nor
any of their respective affiliates has taken any action which is designed to or
which has constituted or which might have been expected to cause or result in
stabilization or manipulation of the price of any security of the Company or the
Guarantors in connection with the offering of the Notes.
11
(tt) Neither the Company nor any of its affiliates does business with
the government of Cuba or with any person or affiliate located in Cuba within
the meaning of Section 517.075, Florida Statutes.
(uu) The Company is subject to Section 13 or 15(d) of the Exchange Act.
Each of the Company and Guarantors understands that the Initial
Purchasers and, for purposes of the opinions to be delivered to the Initial
Purchasers pursuant to Sections 7(c) and 7(d) hereof, counsel to the Company and
counsel to the Initial Purchasers, will rely upon the accuracy and truth of the
foregoing representations, warranties and agreements of the Company, and the
Guarantors, and the Company and the Guarantors hereby consent to such reliance.
3. Purchase of the Notes by the Initial Purchasers, Agreements to Sell,
Purchase and Resell.
(a) The Company and the Guarantors, jointly and severally hereby agree,
on the basis of the representations, warranties and agreements of the Initial
Purchasers contained herein and subject to all the terms and conditions set
forth herein, to issue and sell to the Initial Purchasers and, upon the basis of
the representations, warranties and agreements of the Company and the Guarantors
herein contained and subject to all the terms and conditions set forth herein,
each Initial Purchaser agrees, severally and not jointly, to purchase from the
Company, at a purchase price of 97.25% of the principal amount thereof, the
principal amount of Notes set forth opposite the name of such Initial Purchaser
in Schedule II hereto. The Company and the Guarantors shall not be obligated to
deliver any of the securities to be delivered hereunder except upon payment for
all of the securities to be purchased as provided herein.
(b) Each of the Initial Purchasers, severally and not jointly hereby
represents and warrants to the Company that it will offer the Notes for sale
upon the terms and conditions set forth in this Agreement and in the Offering
Memorandum. Each of the Initial Purchasers, severally and not jointly, hereby
represents and warrants to, and agrees with, the Company that such Initial
Purchaser: (i) is a QIB with such knowledge and experience in financial and
business matters as are necessary in order to evaluate the merits and risks of
an investment in the Notes; (ii) is purchasing the Notes pursuant to a private
sale exempt from registration under the Act; (iii) in connection with the Exempt
Resales, will solicit offers to buy the Notes only from, and will offer to sell
the Notes only to, the Eligible Purchasers in accordance with this Agreement and
on the terms contemplated by the Offering Memorandum; and (iv) will not offer or
sell the Notes, nor has it offered or sold the Notes by, or otherwise engaged
in, any form of general solicitation or general advertising (within the meaning
of Regulation D; including, but not limited to, advertisements, articles,
notices or other communications published in any newspaper, magazine, or similar
medium or broadcast over television or radio, or any seminar or meeting whose
attendees have been invited by any general solicitation or general advertising)
in connection with the offering of the Notes. The Initial Purchasers have
advised the Company that they will offer the Notes to Eligible Purchasers at a
price initially equal to 100% of the principal amount thereof, plus accrued
interest, if any, from the date of issuance of the Notes. Such price may be
changed by the Initial Purchasers at any time thereafter without notice.
12
Each of the Initial Purchasers understands that the Company and, for
purposes of the opinions to be delivered to the Initial Purchasers pursuant to
Sections 7(c) and 7(d) hereof, counsel to the Company and counsel to the Initial
Purchasers, will rely upon the accuracy and truth of the foregoing
representations, warranties and agreements of the Initial Purchasers, and the
Initial Purchasers hereby consent to such reliance.
4. Delivery of the Notes and Payment Therefor. Delivery to the Initial
Purchasers of and payment for the Notes shall be made at the office of Xxxxxx &
Xxxxxxx, 53rd at Third, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 9:00
A.M., New York City time, on the Closing Date. The place of closing for the
Notes and the Closing Date may be varied by agreement between the Initial
Purchasers and the Company.
The Notes will be delivered to the Initial Purchasers against payment
by or on behalf of the Initial Purchasers of the purchase price therefor by wire
transfer in immediately available funds, by causing The Depository Trust Company
("DTC") to credit the Notes to the account of the Initial Purchasers at DTC. The
Notes will be evidenced by one or more global securities in definitive form (the
"Global Notes") and/or by additional definitive securities, and will be
registered, in the case of the Global Notes, in the name of Cede & Co. as
nominee of DTC, and in the other cases, in such names and in such denominations
as the Initial Purchasers shall request prior to 9:30 A.M., New York City time,
on the second business day preceding the Closing Date. The Notes to be delivered
to the Initial Purchasers shall be made available to the Initial Purchasers in
New York City for inspection and packaging not later than 9:30 A.M., New York
City time, on the business day next preceding the Closing Date.
5. Agreements of the Company and the Guarantors. The Company and each
of the Guarantors, jointly and severally, agrees with each Initial Purchaser as
follows:
(a) The Company and the Guarantors will furnish to the Initial
Purchasers, without charge, as of the date of the Offering Memorandum, such
number of copies of the Offering Memorandum as may then be amended or
supplemented as they may reasonably request.
(b) The Company and the Guarantors will not make any amendment or
supplement to the Preliminary Offering Memorandum or to the Offering Memorandum
of which the Initial Purchasers shall not previously have been advised or to
which they shall reasonably object after being so advised.
(c) Prior to the execution and delivery of this Agreement, the Company
and the Guarantors shall have delivered or will deliver to the Initial
Purchasers, without charge, in such quantities as the Initial Purchasers shall
have requested or may hereafter reasonably request, copies of the Preliminary
Offering Memorandum. The Company and each of the Guarantors consent to the use,
in accordance with the securities or Blue Sky laws of the jurisdictions in which
the Notes are offered by the Initial Purchasers and by dealers, prior to the
date of the Offering Memorandum, of each Preliminary Offering Memorandum so
furnished by the Company and the Guarantors. The Company and each of the
Guarantors consent to the use of the Offering Memorandum in accordance with the
securities or Blue Sky laws of the jurisdictions
13
in which the Notes are offered by the Initial Purchasers and by all dealers to
whom Notes may be sold, in connection with the offering and sale of the Notes.
(d) If, at any time prior to completion of the distribution of the
Notes by the Initial Purchasers to Eligible Purchasers, any event shall occur
that in the judgment of the Company, any of the Guarantors or in the opinion of
counsel for the Initial Purchasers should be set forth in the Offering
Memorandum in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is necessary
to supplement or amend the Offering Memorandum in order to comply with any law,
the Company and the Guarantors will forthwith prepare an appropriate supplement
or amendment thereto or such document, and will expeditiously furnish to the
Initial Purchasers and dealers a reasonable number of copies thereof.
(e) The Company and each of the Guarantors will cooperate with the
Initial Purchasers and with their counsel in connection with the qualification
of the Notes for offering and sale by the Initial Purchasers and by dealers
under the securities or Blue Sky laws of such jurisdictions as the Initial
Purchasers may designate and will file such consents to service of process or
other documents necessary or appropriate in order to effect such qualification;
provided, that in no event shall the Company or any of the Guarantors be
obligated to qualify to do business in any jurisdiction where it is not now so
qualified or to take any action which would subject it to service of process in
suits, other than those arising out of the offering or sale of the Notes, in any
jurisdiction where it is not now so subject.
(f) For a period of 180 days from the date of the Offering Memorandum,
the Company and the Guarantors will not, directly or indirectly, sell, offer to
sell, contract to sell, grant any option to purchase, issue any instrument
convertible into or exchangeable for, or otherwise transfer or dispose of (or
enter into any transaction or device which is designed to, or could be expected
to, result in the disposition in the future of), any debt securities of the
Company or the Guarantors in the high-yield capital markets, except (i) in
exchange for the Exchange Notes and Exchange Guarantees in connection with the
Exchange Offer or (ii) with the prior consent of Xxxxxx Brothers Inc., which
consent will not be unreasonably withheld.
(g) To make available to the record holders of the Notes as soon as
practicable after the end of each fiscal year a financial report (including a
balance sheet and statements of income, stockholders' equity and cash flows of
the Company and its consolidated subsidiaries certified by independent public
accountants) and, as soon as practicable after the end of each of the first
three quarters of each fiscal year (beginning with the fiscal quarter ending
after the date of the Offering Memorandum), to make available to its
stockholders consolidated summary financial information of the Company and its
consolidated subsidiaries for such quarter in reasonable detail.
(h) So long as any of the Notes are outstanding, the Company and the
Guarantors will make available to the Initial Purchasers (i) as soon as
available, a copy of each financial report of the Company or any Guarantor
mailed to stockholders generally or filed with any stock exchange or the
Commission and (ii) from time to time such other publicly available information
concerning the Company and/or the Guarantors as the Initial Purchasers may
reasonably request.
14
(i) If this Agreement shall terminate or shall be terminated after
execution and delivery pursuant to any provisions hereof (otherwise than
pursuant to a breach by an Initial Purchaser or by notice given by the Initial
Purchasers terminating this Agreement pursuant to Section 10 hereof) or if this
Agreement shall be terminated by the Initial Purchasers because of any failure
or refusal on the part of the Company or any of the Guarantors to comply with
the terms or fulfill any of the conditions of this Agreement, the Company and
the Guarantors agree to reimburse the Initial Purchasers for all out-of-pocket
expenses (including reasonable fees and expenses of its counsel) reasonably
incurred by it in connection herewith, but without any further obligation on the
part of the Company or any of the Guarantors for loss of profits or other
damages.
(j) The Company and the Guarantors will apply the net proceeds from the
sale of the Notes to be sold by it hereunder substantially in accordance with
the description set forth in the Offering Memorandum under the caption "Use of
Proceeds."
(k) Except as stated in this Agreement and in the Preliminary Offering
Memorandum and Offering Memorandum, neither the Company, the Guarantors nor any
of their respective affiliates has taken, nor will any of them take, directly or
indirectly, any action designed to or that might reasonably be expected to cause
or result in stabilization or manipulation of the price of any security of the
Company or any of the Guarantors to facilitate the sale or resale of the Notes
and the Guarantees. Except as permitted by the Act, the Company and the
Guarantors will not distribute any offering material in connection with the
Exempt Resales.
(l) The Company and the Guarantors will use their best efforts to
permit the Notes to be designated Private Offerings, Resales and Trading through
Automated Linkages (PORTAL) Market(SM) (the "PORTAL Market(SM)") securities in
accordance with the rules and regulations adopted by the National Association of
Securities Dealers, Inc. relating to trading in the PORTAL Market(SM) and to
permit the Notes to be eligible for clearance and settlement through DTC.
(m) From and after the Closing Date, so long as any of the Notes are
outstanding and are "restricted securities" within the meaning of the Rule
144(a)(3) under the Act or, if earlier, until three years after the Closing
Date, and during any period in which the Company is not subject to Section 13 or
15(d) of the Exchange Act, the Company and the Guarantors will satisfy the
information delivery requirements pursuant to Rule 144A(d)(4) under the Act to
permit compliance with Rule 144A in connection with resale of the Notes.
(n) The Company and the Guarantors have complied and will comply with
all provisions of Florida Statutes Section 517.075 relating to issuers doing
business with Cuba.
(o) During the period of two years after the Closing Date, the Company
and the Guarantors will not, and will not permit any of their "affiliates" (as
defined in Rule 144 under the Securities Act), to, resell any of the Notes which
constitute "restricted securities" under Rule 144 that have been reacquired by
any of them.
15
(p) The Company and the Guarantors agree not to sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any security (as
defined in the Act) that would be integrated with the sale of the Notes in a
manner that would require the registration under the Act of the sale to the
Initial Purchasers or the Eligible Purchasers of the Notes.
(q) The Company and the Guarantors agree to comply with all the terms
and conditions of the Registration Rights Agreement and all agreements set forth
in the representation letter of the Company and the Guarantors to DTC relating
to the approval of the Notes by DTC for "book entry" transfer.
(r) The Company and the Guarantors agree that prior to any registration
of the Notes and the Guarantees pursuant to the Registration Rights Agreement,
or at such earlier time as may be required, the Indenture shall be qualified
under the 1939 Act and any necessary supplemental indentures will be entered
into in connection therewith.
(s) The Company and the Guarantors will not voluntarily claim, and will
resist actively all attempts to claim, the benefit of any usury laws against
holders of the Notes.
(t) To take such steps as shall be necessary to ensure that neither the
Company nor any subsidiary shall become 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.
(u) The Company and the Guarantors will do and perform all things
required or necessary to be done and performed under this Agreement by them
prior to the Closing Date, and to satisfy all conditions precedent to the
Initial Purchasers' obligations hereunder to purchase the Notes.
(v) The Company will use its reasonable best efforts to obtain the
consent of a majority of the lenders to the Credit Agreement (as defined in the
Offering Memorandum) to the extent required by the Credit Agreement.
6. Expenses. Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement becomes effective or is terminated,
the Company and the Guarantors, jointly and severally agree, to pay all costs,
expenses, fees and taxes incident to and in connection with: (i) the
preparation, printing, filing and distribution of the Preliminary Offering
Memorandum and the Offering Memorandum (including, without limitation, financial
statements and exhibits) and all amendments and supplements thereto (including
the fees, disbursements and expenses of the Company's accountants and counsel,
but not, however, legal fees and expenses of the Initial Purchasers' counsel
incurred in connection therewith); (ii) the preparation, printing (including,
without limitation, word processing and duplication costs) and delivery of this
Agreement, the Indenture, the Registration Rights Agreement, all Blue Sky
Memoranda and all other agreements, memoranda, correspondence and other
documents printed and delivered in connection therewith and with the Exempt
Resales (but not, however, legal fees and expenses of your counsel incurred
connection with any of the foregoing other than fees of such counsel plus
reasonable disbursements incurred in connection with the preparation, printing
and delivery of such Blue Sky Memoranda); (iii) the issuance and delivery by the
Company of
16
the Notes and by the Guarantors of the Guarantees and any taxes payable in
connection therewith; (iv) the qualification of the Notes and Exchange Notes for
offer and sale under the securities or Blue Sky laws of the several states
(including, without limitation, the reasonable fees and disbursements of your
counsel relating to such registration or qualification); (v) furnishing such
copies of the Preliminary Offering Memorandum and the Offering Memorandum, and
all amendments and supplements thereto, as may be reasonably requested for use
in connection with the Exempt Resales; (vi) the preparation of certificates for
the Notes (including, without limitation, printing and engraving thereof); (vii)
the application for quotation of the Notes in the PORTAL Market(SM) (including
all disbursements and listing fees); (viii) the approval of the Notes by DTC for
"book-entry" transfer; (ix) rating the Notes and the Exchange Notes; (x) the
Trustee, any agent of the Trustee and the counsel for the Trustee in connection
with the Indenture, the Notes, the Guarantees, the Exchange Notes, and the
Exchange Guarantees; and (xi) the performance by the Company and the Guarantors
of their other obligations under this Agreement.
7. Conditions to Initial Purchasers' Obligations. The respective
obligations of the Initial Purchasers hereunder are subject to the accuracy,
when made and on the Closing Date, of the representations and warranties of the
Company and the Guarantors contained herein, to the performance by the Company
and the Guarantors of their respective obligations hereunder, and to each of the
following additional terms and conditions:
(a) The Initial Purchasers shall not have discovered and disclosed to
the Company on or prior to the Closing Date that the Offering Memorandum or any
amendment or supplement thereto contains an untrue statement of a fact which, in
the opinion of Xxxxxx & Xxxxxxx, is material or omits to state a fact which, in
the opinion of such counsel, is material and is required to be stated therein or
is necessary to make the statements therein not misleading.
(b) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Notes, the Guarantees,
the Exchange Notes, the Exchange Guarantees, the Registration Rights Agreement,
the Indenture 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 Purchasers, and
the Company and the Guarantors shall have furnished to such counsel all
documents and information that they may reasonably request to enable them to
pass upon such matters.
(c) Xxxxx Liddell & Xxxx LLP and Xxxxx X. Xxxxxx XX shall have
furnished to the Initial Purchasers their respective written opinions, as
counsel to the Company and the Guarantors, addressed to the Initial Purchasers
and dated the Closing Date, substantially in the form of Exhibits A and B,
respectively, hereto.
(d) The Initial Purchasers shall have received from Xxxxxx & Xxxxxxx,
counsel for the Initial Purchasers, such opinion or opinions, dated such Closing
Date, with respect to the issuance and sale of the Notes, the Offering
Memorandum and other related matters as the Initial Purchasers may reasonably
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.
17
(e) At the time of execution of this Agreement, the Initial Purchasers
shall have received from Xxxxxx Xxxxxxxx LLP a letter, in form and substance
satisfactory to the Initial Purchasers, addressed to the Initial Purchasers and
dated the date hereof (i) confirming that they are independent public
accountants within the meaning of the Act and are in compliance with the
applicable requirements relating to the qualification of accountants under Rule
2-01 of Regulation S-X of the Commission and (ii) stating, as of the date hereof
(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 two days prior to the date
hereof), the conclusions and findings of such firm with respect to the financial
information and other matters ordinarily covered by accountants' "comfort
letters" to initial purchasers in connection with registered public offerings.
(f) With respect to the letter of Xxxxxx Xxxxxxxx LLP referred to in
the preceding paragraph and delivered to the Initial Purchasers concurrently
with the execution of this Agreement (the "initial letter"), the Company shall
have furnished to the Initial Purchasers a letter (the "bring-down letter") of
such accountants, addressed to the Initial Purchasers and dated the Closing Date
(i) confirming that they are independent public accountants within the meaning
of the Act and are in compliance with the applicable requirements relating to
the qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, (ii) stating, as of the date of the bring-down 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 the bring-down
letter), the conclusions and findings of such firm with respect to the financial
information and other matters covered by the initial letter and (iii) confirming
in all material respects the conclusions and findings set forth in the initial
letter.
(g) Neither the Company, any Guarantor nor any of their respective
subsidiaries shall have sustained, since the date of the latest audited
financial statements included in the Offering Memorandum, any material loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Offering Memorandum; and, since such date, there shall not
have been any change in the capital stock or long-term debt of the Company, any
Guarantor or any of their respective subsidiaries or any material adverse
change, or any development involving a prospective material adverse change, in
or affecting the general affairs, management, financial position, stockholders'
equity or results of operations of the Company, any Guarantors and their
respective subsidiaries, taken as a whole, otherwise than as set forth or
contemplated in the Offering Memorandum.
(h) The Company and each Guarantor shall have furnished or caused to be
furnished to the Initial Purchasers on the Closing Date certificates of officers
of the Company and each Guarantor satisfactory to the Initial Purchasers as to
the accuracy of the representations and warranties of the Company and each
Guarantor herein at and as of the Closing Date, as to the performance by the
Company and each Guarantor of all of their obligations hereunder to be performed
at or prior to the Closing Date and as to such other customary matters as the
Initial Purchasers may reasonably request.
18
(i) Subsequent to the execution and delivery of this Agreement (i) no
downgrading shall have occurred in the rating accorded the Company's debt
securities or preferred stock by any "nationally recognized statistical rating
organization," as that term is defined by the Commission for purposes of Rule
436(g)(2) of the Rules and Regulations and (ii) no such organization shall have
publicly announced that it has under surveillance or review, with possible
negative implications, its rating of any of the Company's debt securities or
preferred stock.
(j) The Notes have been designated for trading on the PORTAL
Market(SM).
(k) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange, the Nasdaq National Market or the
Nasdaq Small Cap Market or in the over-the-counter market, or trading in any
securities of the Company on any exchange or in the over-the-counter market,
shall have been suspended or the settlement of such trading generally shall have
been materially disrupted or minimum prices shall have been established on any
such exchange or such market by the Commission, by such exchange or by any other
regulatory body or governmental authority having jurisdiction, (ii) a banking
moratorium shall have been declared by Federal or state authorities, (iii) the
United States shall have become engaged in hostilities, there shall have been an
escalation in hostilities involving the United States or there shall have been a
declaration of a national emergency or war by the United States or (iv) there
shall have occurred such a material adverse change in general economic,
political or financial conditions (or the effect of international conditions on
the financial markets in the United States shall be such), including, without
limitation, as a result of terrorist activities after the date hereof, as to
make it, in the judgment of Xxxxxx Brothers Inc., impracticable or inadvisable
to proceed with the offering or delivery of the Notes being delivered on the
Closing Date on the terms and in the manner contemplated in the Offering
Memorandum.
(l) The Company will have received consents from a majority of lenders
under the Credit Agreement (as defined in the Offering Memorandum) to the extent
required under the Credit Agreement.
(m) The Initial Purchasers shall have received from counsel for the
states of New Jersey, New York, Arizona and Maryland, such opinion or opinions,
dated such Closing Date, with respect to the issuance and sale of the Notes, the
Offering Memorandum and other related matters as the Initial Purchasers may
reasonably require as such relate to those Guarantors identified by the Initial
Purchasers and specified in such opinion, 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.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Initial Purchasers.
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8. Indemnification and Contribution.
(a) The Company and each Guarantor, jointly and severally, shall
indemnify and hold harmless each Initial Purchaser, its directors, officers and
employees and each person, if any, who controls any Initial Purchaser within the
meaning of the Act, from and against any loss, claim, damage or liability, joint
or several, or any action in respect thereof (including, but not limited to, any
loss, claim, damage, liability or action relating to purchases and sales of
Notes), to which that Initial Purchaser, director, officer, employee or
controlling person may become subject, under the Act or otherwise, insofar as
such loss, claim, damage, liability or action arises out of, or is based upon,
(i) any untrue statement or alleged untrue statement of a material fact
contained (A) in any Preliminary Offering Memorandum or the Offering Memorandum
or in any amendment or supplement thereto or (B) in any Blue Sky application or
other document prepared or executed by the Company or any Guarantor (or based
upon any written information furnished by the Company or any Guarantor)
specifically for the purpose of qualifying any or all of the Notes under the
securities laws of any state or other jurisdiction (any such application,
document or information being hereinafter called a "Blue Sky Application"), (ii)
the omission or alleged omission to state in any Preliminary Offering Memorandum
or the Offering Memorandum, or in any amendment or supplement thereto, or in any
Blue Sky Application any material fact required to be stated therein or
necessary to make the statements therein not misleading or (iii) any act or
failure to act or any alleged act or failure to act by any Initial Purchaser in
connection with, or relating in any manner to, the Notes or the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, damage, liability or action arising out of or based upon matters
covered by clause (i) or (ii) above (provided that the Company and the
Guarantors shall not be liable under this clause (iii) to the extent that it is
determined in a final judgment by a court of competent jurisdiction that such
loss, claim, damage, liability or action resulted directly from any such acts or
failures to act undertaken or omitted to be taken by such Initial Purchaser
through its gross negligence or willful misconduct), and shall reimburse each
Initial Purchaser and each such director, officer, employee or controlling
person promptly upon demand for any legal or other expenses reasonably incurred
by that Initial Purchaser, director, officer, employee or controlling person in
connection with investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Company and the Guarantors shall not be liable in
any such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary Offering
Memorandum or Offering Memorandum, or in any such amendment or supplement, or in
any Blue Sky Application, in reliance upon and in conformity with written
information concerning such Initial Purchaser furnished to the Company through
the Initial Purchasers or by such Initial Purchaser or on behalf of such Initial
Purchaser through Xxxxxx Brothers Inc. specifically for inclusion therein. The
foregoing indemnity agreement is in addition to any liability which the Company
or the Guarantors may otherwise have to any Initial Purchaser or to any
director, officer, employee or controlling person of that Initial Purchaser.
(b) Each Initial Purchaser, severally and not jointly, shall indemnify
and hold harmless the Company, each Guarantor, their respective officers and
employees, each of their respective directors, and each person, if any, who
controls the Company or any Guarantor within the meaning of the Act, from and
against any loss, claim, damage or liability, joint or several, or any action in
respect thereof, to which the Company, any Guarantor or any such director,
officer,
20
employee or controlling person may become subject, under the Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained (A) in the Preliminary Offering Memorandum or the Offering
Memorandum or in any amendment or supplement thereto, or (B) in any Blue Sky
Application or (ii) the omission or alleged omission to state in the Preliminary
Offering Memorandum or the Offering Memorandum, or in any amendment or
supplement thereto, or in any Blue Sky Application any material fact required to
be stated therein or necessary to make the statements therein not misleading,
but in each case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information concerning such Initial Purchaser furnished
to the Company by or on behalf of that Initial Purchaser specifically for
inclusion therein, and shall reimburse the Company, any Guarantor and any such
director, officer, employee or controlling person for any legal or other
expenses reasonably incurred by the Company, any Guarantor or any such director,
officer, employee or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred. The foregoing indemnity agreement is in
addition to any liability which any Initial Purchaser may otherwise have to the
Company, any Guarantor or any such director, officer, employee or controlling
person.
(c) Promptly after receipt by an indemnified party under this Section 8
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 8, 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 8 except to the extent it has been materially
prejudiced by such failure and; provided, further, that the failure to notify
the indemnifying party shall not relieve it from any liability which it may have
to an indemnified party otherwise than under this Section 8. If any such claim
or action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Initial Purchasers shall have the right to employ counsel to represent
jointly the Initial Purchasers and those Initial Purchasers and their respective
officers, employees and controlling persons who may be subject to liability
arising out of any claim in respect of which indemnity may be sought by the
Initial Purchasers against the Company or any Guarantor under this Section 8 if,
in the reasonable judgment of the Initial Purchasers, it is advisable for the
Initial Purchasers and those officers, employees and controlling persons to be
jointly represented by separate counsel due to the existence of separate
defenses available to the Initial Purchasers, and in that event the reasonable
fees and expenses of such separate counsel shall be paid by the Company or any
Guarantor. 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
21
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 includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding, 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 written 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 indemnifiable loss or liability by reason of such
settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall for any
reason be unavailable to or insufficient to hold harmless an indemnified party
under Section 8(a) or 8(b) 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 shall be appropriate to reflect the relative benefits received by the Company
and the Guarantors on the one hand and the Initial Purchasers on the other from
the offering of the Notes 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 Guarantors, on the one hand and the
Initial Purchasers 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 Guarantors, on the one hand and the
Initial Purchasers on the other with respect to such offering shall be deemed to
be in the same proportion as the total net proceeds from the offering of the
Notes purchased under this Agreement (before deducting expenses) received by the
Company and the Guarantors on the one hand, and the total underwriting discounts
and commissions received by the Initial Purchasers with respect to the Notes
purchased under this Agreement, on the other hand, bear to the total gross
proceeds from the offering of the Notes under this Agreement, in each case as
set forth on the cover page of the Offering Memorandum. The relative fault shall
be determined by reference to whether the 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, the Guarantors or the Initial
Purchasers, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
For purposes of the preceding two sentences, the net proceeds deemed to be
received by the Company shall be deemed to be also for the benefit of the
Guarantors and information supplied by the Company shall also be deemed to have
been supplied by the Guarantors. The Company, the Guarantors, and the Initial
Purchasers agree that it would not be just and equitable if contributions
pursuant to this Section 8(d) were to be determined by pro rata allocation (even
if the Initial Purchasers were treated as one entity for such purpose) 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 8(d) shall be deemed to include, for
purposes of this Section 8(d), any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8(d), no Initial
Purchaser shall be required to contribute any amount in excess of the
22
amount by which the total price at which the Notes underwritten by it and
distributed to the public was offered to the public exceeds the amount of any
damages which such 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 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Initial Purchasers'
obligations to contribute as provided in this Section 8(d) are several in
proportion to their respective underwriting obligations and not joint.
(e) The Initial Purchasers severally confirm and the Company and the
Guarantors acknowledge that the statements with respect to the public offering
of the Notes by the Initial Purchasers set forth in the fifth, sixth, ninth,
tenth and twelfth paragraphs of the section entitled "Plan of Distribution" in
the Offering Memorandum are correct and constitute the only information
concerning such Initial Purchasers furnished in writing to the Company by or on
behalf of the Initial Purchasers specifically for inclusion in the Offering
Memorandum.
9. Defaulting Initial Purchaser. If, on the Closing Date, any Initial
Purchaser defaults in the performance of its obligations under this Agreement,
the remaining non-defaulting Initial Purchaser shall be obligated to purchase
the Notes which the defaulting Initial Purchaser agreed but failed to purchase
on the Closing Date; provided, however, that the remaining non-defaulting
Initial Purchaser shall not be obligated to purchase any of the Notes on the
Closing Date if the total number of Notes which the defaulting Initial Purchaser
agreed but failed to purchase on such date exceeds 9.09% of the total number of
Notes to be purchased on the Closing Date, and any remaining non-defaulting
Initial Purchaser shall not be obligated to purchase more than 110% of the
number of Notes which it agreed to purchase on the Closing Date pursuant to the
terms of Section 3. If the foregoing maximums are exceeded, the remaining
non-defaulting Initial Purchaser, or those other Initial Purchasers satisfactory
to the Initial Purchaser who so agrees, shall have the right, but shall not be
obligated, to purchase, in such proportion as may be agreed upon among them, all
the Notes to be purchased on the Closing Date. If the remaining Initial
Purchasers or other Initial Purchasers satisfactory to the remaining Initial
Purchasers do not elect to purchase the Notes which the defaulting Initial
Purchaser or Initial Purchasers agreed but failed to purchase on the Closing
Date, this Agreement shall terminate without liability on the part of any
non-defaulting Initial Purchaser or the Company or the Guarantors, except that
the Company and the Guarantors will continue to be liable for the payment of
expenses to the extent set forth in Sections 6 and 11 (but not expenses of the
defaulting Initial Purchaser).
Nothing contained herein shall relieve a defaulting Initial Purchaser
of any liability it may have to the Company or any Guarantor for damages caused
by its default. If other Initial Purchasers are obligated or agree to purchase
the Notes of a defaulting or withdrawing Initial Purchaser, the Company may
postpone the Closing Date for up to seven full business days in order to effect
any changes that in the opinion of counsel for the Company or counsel for the
Initial Purchasers may be necessary in the Offering Memorandum or in any other
document or arrangement.
10. Termination. The obligations of the Initial Purchasers hereunder
may be terminated by the Initial Purchasers by notice given to and received by
the Company prior to
23
delivery of and payment for the Notes if, prior to that time, any of the events
described in Sections 7(h), (i), (j) or (k), shall have occurred or if the
Initial Purchasers shall decline to purchase the Notes for any reason permitted
under this Agreement.
11. Reimbursement of Initial Purchasers' Expenses. If the Company shall
fail to tender the Notes for delivery to the Initial Purchasers by reason of any
failure, refusal or inability on the part of the Company or any Guarantor to
perform any agreement on their part to be performed, or because any other
condition of the obligations hereunder required to be fulfilled by the Company
or any Guarantor is not fulfilled, the Company and the Guarantors will reimburse
the Initial Purchasers for all reasonable out-of-pocket expenses (including fees
and disbursements of counsel) incurred by the Initial Purchasers in connection
with this Agreement and the proposed purchase of the Notes, and upon demand the
Company and the Guarantors shall pay the full amount thereof to the Initial
Purchasers. If this Agreement is terminated pursuant to Section 9 by reason of
the default of one or more Initial Purchasers, the Company and the Guarantors
shall not be obligated to reimburse any defaulting Initial Purchaser of any
expenses.
12. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Initial Purchasers, shall be delivered or sent by mail,
telex or facsimile transmission to Xxxxxx Brothers Inc., 000 0xx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xxx Xxxx Xxxxxx (Fax: (000) 000-0000), with a
copy, in the case of any notice pursuant to Section 8(c), to the Director of
Litigation, Office of the General Counsel, Xxxxxx Brothers Inc., 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and to Banc of America Securities LLC, 000
Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: Xxx Xxxxxxxx (Fax
(000) 000-0000);
(b) if to the Company or any Guarantor, shall be delivered or sent by
mail, telex or facsimile transmission to the address of the Company set forth in
the Offering Memorandum, Attention: Xxxxx X. Xxxxxx XX, Esq., General Counsel
(Fax: (000) 000-0000);
provided, however, that any notice to an Initial Purchaser pursuant to
Section 8(c) shall be delivered or sent by mail, telex or facsimile transmission
to such Initial Purchaser at its address set forth in its acceptance telex to
Xxxxxx Brothers Inc., which address will be supplied to any other party hereto
by Xxxxxx Brothers Inc. upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Initial Purchasers by Xxxxxx Brothers Inc.
13. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Initial Purchasers, the Company,
the Guarantors and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
(A) the representations, warranties, indemnities and agreements of the Company
and the Guarantors contained in this Agreement shall also be deemed to be for
the benefit of directors of the Initial Purchasers, officers of the Initial
Purchasers and the person or persons, if any, who control any Initial Purchaser
within the meaning of Section 15 of the Act and (B) the indemnity agreement of
the Initial Purchasers
24
contained in Section 8(b) of this Agreement shall be deemed to be for the
benefit of directors of the Company and the Guarantors, officers of the Company
and the Guarantors, employees of the Company and the Guarantors and any person
controlling the Company or the Guarantors within the meaning of Section 15 of
the Act. Nothing in this Agreement is intended or shall be construed to give any
person, other than the persons referred to in this Section 13, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision contained herein.
14. Survival. The respective indemnities, representations, warranties
and agreements of the Company, the Guarantors and the Initial Purchasers
contained in this Agreement or made by or on behalf on them, respectively,
pursuant to this Agreement, shall survive the delivery of and payment for the
Notes and shall remain in full force and effect, regardless of any investigation
made by or on behalf of any of them or any person controlling any of them.
15. Definition of the Terms "Business Day" and "Subsidiary". For
purposes of this Agreement, (a) "business day" means any day on which the New
York Stock Exchange, Inc. is open for trading and (b) "subsidiary" has the
meaning set forth in Rule 405 of the Rules and Regulations.
16. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
17. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
18. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
25
If the foregoing correctly sets forth the agreement among the Company,
the Guarantors, and the Initial Purchasers, please indicate your acceptance in
the space provided for that purpose below.
Very truly yours,
SYNAGRO TECHNOLOGIES, INC.
By /s/ Xxxxx X. Xxxxxx XX
-----------------------------------------
Xxxxx X. Xxxxxx XX, Secretary
SYNAGRO MIDWEST, INC.,
SYNAGRO OF MICHIGAN, INC.,
SYNAGRO OF WISCONSIN, INC.,
SYNAGRO OF MINNESOTA - XXXXXXX, INC.,
SYNAGRO MIDWEST - ENVIROLAND, INC.,
SYNAGRO SOUTHWEST, INC.,
SYNAGRO OF TEXAS-CDR, INC.,
SYNAGRO OF TEXAS-VITAL-CYCLE, INC.,
SYNAGRO SOUTHEAST, INC.,
SYNAGRO OF NORTH CAROLINA-EWR, INC.,
SYNAGRO OF NORTH CAROLINA-AMSCO, INC.,
SYNAGRO OF FLORIDA - A&J, INC.,
SYNAGRO OF FLORIDA - ANTI-POLLUTION, INC.,
SYNAGRO OF FLORIDA - XXXXX WATER, INC.,
SYNAGRO OF FLORIDA - ECOSYSTEMS, INC.,
SYNAGRO NORTHEAST, INC.,
COMPOSTING CORPORATION OF AMERICA,
ORGANI-GRO, INC.,
ST INTERCO, INC.,
ENVIRONMENTAL PROTECTION & IMPROVEMENT COMPANY, INC.,
SYNAGRO MID-ATLANTIC, INC.,
SYNAGRO WEST, INC.,
SYNAGRO COMPOSTING COMPANY OF CALIFORNIA, INC.,
SYNAGRO OF CALIFORNIA, INC.,
NEW ENGLAND TREATMENT COMPANY, INC.,
FAIRHAVEN RESIDUAL SYSTEMS, INC.,
NETCO-CONNECTICUT, INC.,
NETCO-RESIDUALS MANAGEMENT SYSTEMS, INC.,
NETCO-WATERBURY SYSTEMS, INC., F/K/A NETCO-WATERBURY, INC.,
NEW HAVEN RESIDUALS SYSTEMS, INC.,
RESIDUAL TECHNOLOGIES SYSTEMS, INC.,
RESIDUALS PROCESSING, INC.,
FUTURE - TECH ENVIRONMENTAL SERVICES, INC.,
SYNAGRO - WWT, INC.,
SOARING VISTA PROPERTIES, INC.,
NYOFCO HOLDINGS, INC.,
SYNAGRO - WCWNJ, INC.,
SYNAGRO - BALTIMORE, L.L.C.,
SYNAGRO DIGESTION, INC.,
SYNAGRO TEXAS, INC., AND
SYNAGRO DELAWARE, INC
By /s/ Xxxxx X. Xxxxxx XX
-----------------------------------------
Xxxxx X. Xxxxxx XX, Secretary
RESIDUAL TECHNOLOGIES, LIMITED PARTNERSHIP
By Residuals Technologies Systems, Inc., its general partner
By /s/ Xxxxx X. Xxxxxx XX
-----------------------------------------
Xxxxx X. Xxxxxx XX, Secretary
FAIRHAVEN RESIDUALS, LIMITED PARTNERSHIP
By Fairhaven Residuals Systems, Inc., its general partner
By /s/ Xxxxx X. Xxxxxx XX
--------------------------------
Xxxxx X. Xxxxxx XX, Secretary
NETCO-WATERBURY, LIMITED PARTNERSHIP
By NETCO-Waterbury Systems, Inc., its general partner
By /s/ Xxxxx X. Xxxxxx XX
-----------------------------------------
Xxxxx X. Xxxxxx XX, Secretary
NETCO-RESIDUALS MANAGEMENT, LIMITED PARTNERSHIP
By NETCO-Residuals Management Systems, Inc, its general partner
By /s/ Xxxxx X. Xxxxxx XX
-----------------------------------------
Xxxxx X. Xxxxxx XX, Secretary
NEW HAVEN RESIDUALS, LIMITED PARTNERSHIP
By New Haven Residuals Systems, Inc., its general partner
By /s/ Xxxxx X. Xxxxxx XX
-----------------------------------------
Xxxxx X. Xxxxxx XX, Secretary
PROVIDENCE SOILS, LLC
By /s/ Xxxxx X. Xxxxxx XX
-----------------------------------------
Xxxxx X. Xxxxxx XX, Manager
SYNAGRO MANAGEMENT, L.P.
By Synagro Texas, Inc., its general partner
By /s/ Xxxxx X. Xxxxxx XX
-----------------------------------------
Xxxxx X. Xxxxxx XX, Secretary
NEW YORK ORGANIC FERTILIZER COMPANY
By Synagro - WWT, Inc., its general partner
By /s/ Xxxxx X. Xxxxxx XX
-----------------------------------------
Xxxxx X. Xxxxxx XX, Secretary
ATLANTA RESIDUALS MANAGEMENT, LLC
By /s/ Xxxx X. Rome
-----------------------------------------
Xxxx X. Rome, Vice President
SYNAGRO DELAWARE, INC
By /s/ Xxxx X. XxXxxxxxx
-----------------------------------------
Xxxx X. XxXxxxxxx, Secretary
Accepted:
XXXXXX BROTHERS INC.
BANC OF AMERICA SECURITIES LLC
XXXXXX BROTHERS INC.
By /s/ Xxx Xxxxxx
-----------------------------------------
Xxx Xxxxxx
Senior Vice President
BANC OF AMERICA SECURITIES LLC
By /s/ Kaj Alhburg
-----------------------------------------
Kaj Alhburg
Managing Director
SCHEDULE I
GUARANTORS
SYNAGRO MIDWEST, INC.,
SYNAGRO OF MICHIGAN, INC.,
SYNAGRO OF WISCONSIN, INC.,
SYNAGRO OF MINNESOTA - XXXXXXX, INC.,
SYNAGRO MIDWEST - ENVIROLAND, INC.,
SYNAGRO SOUTHWEST, INC.,
SYNAGRO OF TEXAS-CDR, INC.,
SYNAGRO OF TEXAS-VITAL-CYCLE, INC.,
SYNAGRO SOUTHEAST, INC.,
SYNAGRO OF NORTH CAROLINA-EWR, INC.,
SYNAGRO OF NORTH CAROLINA-AMSCO, INC.,
SYNAGRO OF FLORIDA - A&J, INC.,
SYNAGRO OF FLORIDA - ANTI-POLLUTION, INC.,
SYNAGRO OF FLORIDA - XXXXX WATER, INC.,
SYNAGRO OF FLORIDA - ECOSYSTEMS, INC.,
SYNAGRO NORTHEAST, INC.,
COMPOSTING CORPORATION OF AMERICA,
ORGANI-GRO, INC.,
ST INTERCO, INC.,
ENVIRONMENTAL PROTECTION & IMPROVEMENT COMPANY, INC.,
SYNAGRO MID-ATLANTIC, INC.,
SYNAGRO WEST, INC.,
SYNAGRO COMPOSTING COMPANY OF CALIFORNIA, INC.,
SYNAGRO OF CALIFORNIA, INC.,
RESIDUAL TECHNOLOGIES, LIMITED PARTNERSHIP,
FAIRHAVEN RESIDUALS, LIMITED PARTNERSHIP,
NETCO-WATERBURY, LIMITED PARTNERSHIP,
NETCO-RESIDUALS MANAGEMENT, LIMITED PARTNERSHIP,
NEW HAVEN RESIDUALS, LIMITED PARTNERSHIP,
NEW ENGLAND TREATMENT COMPANY, INC.,
FAIRHAVEN RESIDUAL SYSTEMS, INC.,
NETCO-CONNECTICUT, INC.,
NETCO-RESIDUALS MANAGEMENT SYSTEMS, INC.,
NETCO-WATERBURY SYSTEMS, INC., F/K/A NETCO-WATERBURY, INC.,
NEW HAVEN RESIDUALS SYSTEMS, INC.,
RESIDUAL TECHNOLOGIES SYSTEMS, INC.,
PROVIDENCE SOILS, LLC,
RESIDUALS PROCESSING, INC.,
FUTURE - TECH ENVIRONMENTAL SERVICES, INC.,
SYNAGRO - WWT, INC.,
SOARING VISTA PROPERTIES, INC.,
NYOFCO HOLDINGS, INC.,
NEW YORK ORGANIC FERTILIZER COMPANY,
SYNAGRO - WCWNJ, INC.,
SYNAGRO - BALTIMORE, L.L.C.,
SYNAGRO DIGESTION, INC.,
ATLANTA RESIDUALS MANAGEMENT, LLC,
SYNAGRO TEXAS, INC.,
SYNAGRO DELAWARE, INC., AND
SYNAGRO MANAGEMENT, L.P.
SCHEDULE II
PRINCIPAL
AMOUNT OF
NOTES
TO BE
INITIAL PURCHASERS PURCHASED
------------
Xxxxxx Brothers Inc................................................... $ 97,500,000
Banc of America Securities LLC........................................ 52,500,000
------------
Total............................................................... $150,000,000
============
EXHIBIT A
COMPANY COUNSEL OPINION
Xxxxx Xxxxxxx & Xxxx LLC shall have furnished to the Initial Purchasers
its written opinion, as counsel to the Company and the Guarantors, addressed to
the Initial Purchasers and dated the Closing Date, in form and substance
reasonably satisfactory to the Initial Purchasers, to the effect that:
1. The Company and the Designated Guarantors have been duly
incorporated, are validly existing as corporations in good standing under the
laws of their respective jurisdictions of incorporation, and have all corporate
power and authority necessary to own or hold their respective properties and
conduct the businesses in which they are engaged.
2. All of the issued shares of capital stock of each of the Designated
Guarantors have been duly and validly authorized and issued, are fully paid and
non-assessable, and are owned directly or indirectly by the Company, free and
clear (to our Actual Knowledge) of all liens, encumbrances, equities or claims,
other than and except for the pledge of all such shares to the Bank of America,
N. A., as administrative agent under the Second Amended and Restated Credit
Agreement dated as of August 14, 2000, by and among the Company, various
financial institutions, and Bank of America, N. A., as administrative agent, as
amended by First Amendment to Second Amended and Restated Credit Agreement dated
February 25, 2002.
3. Except as described in the Offering Memorandum, there are no
preemptive or other rights to subscribe for or to purchase, nor any restriction
upon the voting or transfer of, any securities pursuant to the Restated
Certificate of Incorporation or by-laws of the Company, the certificate of
incorporation or by-laws of any of the Designated Guarantors, or any agreement
or other instrument known to us.
4. The Purchase Agreement has been duly authorized and delivered by the
Company and each of the Designated Guarantors and constitutes a valid and
binding agreement of the Company and each of the Designated Guarantors,
enforceable against the Company and each of the Designated Guarantors in
accordance with its terms.
5. The Indenture and the Registration Rights Agreement have each been
duly authorized and delivered by the Company and each of the Designated
Guarantors, and (assuming due execution and delivery of the Indenture by the
Trustee) each constitutes a valid and binding agreement of the Company and each
of the Designated Guarantors, enforceable against the Company and each of the
Designated Guarantors in accordance with its terms.
6. The Notes and the Guarantees have each been duly authorized by the
Company and the Designated Guarantors respectively; the Notes have been duly
executed, issued and delivered by the Company; the Guarantees have been duly
executed, issued and endorsed on the Notes; and the Notes and the Guarantees
constitute valid and binding obligations
A-1
of the Company and the Designated Guarantors, as the case may be, entitled to
the benefits of the Indenture and enforceable in accordance with their terms.
7. The Exchange Notes have been authorized by the Company.
8. The Exchange Guarantees have been duly authorized by the Designated
Guarantors.
9. The issue and sale of the Notes being delivered on this date by the
Company, and the compliance by the Company and the Designated Guarantors with
all of the provisions of the Purchase Agreement, the Notes, the Guarantees, the
Indenture and the Registration Rights Agreement, and the consummation of the
transactions described therein, (1) do not result in any violation of the
provisions of the Restated Certificate of Incorporation or by-laws of the
Company or the certificate of incorporation or by-laws of any of the Designated
Guarantors, and (2) do not violate any statute or, to our Actual Knowledge, any
order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of the Designated Guarantors or any of
their respective properties or assets; and, except for the registration of the
Exchange Notes and the Exchange Guarantee under the Act and such filings,
consents, approvals, authorizations, registrations or qualifications as may be
required under the Exchange Act and applicable state securities laws in
connection with the purchase and distribution of the Notes by the Initial
Purchasers, no consent, approval, authorization or order of, or filing or
registration with, any governmental authority is required for the execution and
delivery of the Purchase Agreement, the Indenture, the Registration Rights
Agreement, the Guarantees or the Exchange Guarantees by the Company or the
Designated Guarantors.
10. The Notes are not of the same class (within the meaning of Rule
144A under the Act) as securities of the Company or the Guarantors that are
listed on a national securities exchange registered under Section 6 of the
Exchange Act or that are quoted in a United States automated inter-dealer
quotation system.
11. Assuming the truth of your representations and warranties in the
Purchase Agreement and your compliance with your agreements set forth in the
Purchase Agreement, and assuming the truth of the representations and warranties
made by the Company in the Purchase Agreement and compliance by the Company with
its agreements made in the Purchase Agreement, no registration under the Act of
the Notes is required for the sale of the Notes to you as described in the
Purchase Agreement or for the Exempt Resales in accordance with the Purchase
Agreement.
12. Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its date (except for the financial statements and the notes
thereto and schedules and other financial and accounting data included therein
or omitted therefrom, as to which we express no opinion) contained all
information required by Rule 144A(d)(iv) of the Securities and Exchange
Commission.
13. The Indenture, the Registration Rights Agreements, the Notes and
the Guarantees conform, as to legal matters, to the descriptions thereof
contained in the Offering Memorandum.
A-2
14. The statements contained in the Offering Memorandum under the
caption "Description of Notes", insofar as they purport to constitute a summary
of the terms of the Notes, are accurate in all material respects. The statements
contained in the Offering Memorandum under the captions "Certain Relationships
and Related Transactions," "Certain U.S. Federal Income Tax Considerations,"
"Management--Employment Agreements," "Description of Other Indebtedness and
Preferred Stock" and "Plan of Distribution", insofar as they describe the laws
and documents referred therein, are accurate in all material respects.
15. The statements and conclusions of law contained in the Offering
Memorandum relating to Environmental Laws (as defined below), insofar as they
pertain to legal matters, are accurate in all material respects and fairly
present the information set forth therein.
16. To our Actual Knowledge, and other than as set forth in the
Offering Memorandum, there are no legal or governmental proceedings pending to
which the Company or any of the Designated Guarantors is a party or of which any
of the property or assets of the Company or any of the Designated Guarantors is
the subject which, if determined adversely to the Company or such Designated
Guarantor, would have a material adverse effect on the consolidated financial
position, stockholders' equity, results of operations, or business of the
Company and the Guarantors, taken as a whole.
17. To our Actual Knowledge, and except as set forth in the Offering
Memorandum, there are no contracts, agreements or understandings (other than the
Registration Rights Agreement) between the Company or any Designated Guarantor
and any person granting such person the right to require the Company or any
Designated Guarantor to file a registration statement under the Act with respect
to any securities of the Company or any Designated Guarantor owned or to be
owned by such person or to require the Company or any Designated Guarantor to
include such securities in the securities registered pursuant to the
Registration Rights Agreement or in any securities being registered pursuant to
any other registration statement filed by the Company or any Designated
Guarantor under the Act.
18. The Company is not an "investment company", as such term is defined
in the Investment Company Act of 1940.
We have acted as corporate counsel to the Company on a regular basis
(although the Company is also represented by its General Counsel) since 1998,
and have acted as counsel to the Company in connection with the preparation of
the Offering Memorandum. In the course of the preparation by the Company of the
Offering Memorandum, we have participated in conferences with officers of the
Company and the Designated Guarantors, and with you and your counsel.
Based on the foregoing, but without independent check or verification,
we advise you that no facts have come to our attention which cause us to believe
that the Offering Memorandum, as of its date and as of the date of this opinion,
contained or contains any untrue statement of a material fact or omitted or
omits to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. Except as to the extent set forth in paragraphs
13, 14 and 15 of this opinion, insofar as such statements relate to the Notes
and concern legal matters we are
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not passing upon, and do not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the Offering Memorandum
or for the financial statements and the notes thereto and schedules and other
financial and accounting data included therein or omitted therefrom.
A-4
EXHIBIT B
GENERAL COUNSEL OPINION
Xxxxx X. Xxxxxx XX shall have furnished to the Initial Purchasers his
written opinion, as general counsel to the Company and the Guarantors, addressed
to the Initial Purchasers and dated the Closing Date, in form and substance
reasonably satisfactory to the Initial Purchasers, to the effect that:
1. The Company and the Designated Guarantors have been duly
incorporated or formed and are validly existing as corporations, limited
liability companies, or partnerships in good standing under the laws of their
respective jurisdictions of incorporation or formation. The Company and the
Designated Guarantors are duly qualified to do business and are in good standing
as foreign corporations or foreign limited liability companies in each
jurisdiction in which their failure to be so qualified and in good standing
would have a material adverse effect on the consolidated financial position,
stockholders' equity, results of operations, or business of the Company and the
Guarantors, taken as a whole, and have all corporate or other organizational
power and authority necessary to own or hold their respective properties and
conduct the businesses in which they are engaged.
2. The Company has an authorized capitalization as set forth in the
Offering Memorandum. All of the issued shares of capital stock of each of the
Designated Guarantors that is a corporation have been duly and validly
authorized and issued, are fully paid and non-assessable, and are owned directly
or indirectly by the Company, free and clear (to my knowledge) of all liens,
encumbrances, equities or claims, other than and except for the pledge of all
such shares to the Company's senior lender.
3. To my knowledge, neither the Company nor any of the Designated
Guarantors is in violation of its Certificate of Incorporation, Certificate of
Formation, limited liability company agreement, partnership agreement, by-laws
or other organizational documents, or in default in the performance or
observance of any material obligation, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which it is a party or by which it or any of its properties may be
bound.
4. The Purchase Agreement has been duly authorized and delivered by the
Company and the Designated Guarantors.
5. The Indenture and the Registration Rights Agreement have each been
duly authorized and delivered by the Company and the Designated Guarantors.
6. The Notes and the Guarantees have each been duly authorized by the
Company and the Designated Guarantors, the Notes have been duly executed, issued
and delivered by the Company, and the Guarantees have been duly executed, issued
and endorsed on the Notes by the Designated Guarantors.
7. The Exchange Notes have been duly authorized by the Company.
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8. The Exchange Guarantees have been duly authorized by each of the
Designated Guarantors.
9. The issuance and sale of the Notes being delivered on this date by
the Company, and the compliance by the Company and the Designated Guarantors
with all of the provisions of the Purchase Agreement, the Notes, the Guarantees,
the Indenture and the Registration Rights Agreement, and the consummation of the
transactions described therein, (1) do not violate and will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to me to which the Company or
any of the Designated Guarantors is a party or by which the Company or any of
the Designated Guarantors is bound or to which any material part of the property
or assets of the Company or any of the Designated Guarantors is subject, (2) do
not result in any violation of the provisions of the Certificate of
Incorporation, Certificate of Formation, limited liability company agreement,
partnership agreement, charter, by-laws or other organizational documents of the
Company or any of the Designated Guarantors, and (3) do not violate any statute
or any order, rule or regulation known to me of any court or governmental agency
or body having jurisdiction over the Company or any of the Designated Guarantors
or any material part of their respective properties or assets.
10. The Notes are not of the same class (within the meaning of Rule
144A under the Act) as securities of the Company or the Guarantors that are
listed on a national securities exchange registered under Section 6 of the
Exchange Act or that are quoted in a United States automated inter-dealer
quotation system.
11. To my knowledge, and other than as set forth in the Offering
Memorandum, there are no legal or governmental proceedings pending to which the
Company or any of the Designated Guarantors is a party or of which any material
part of the property or assets of the Company or any of the Designated
Guarantors is the subject which, if determined adversely to the Company or such
Designated Guarantor, would have a material adverse effect on the consolidated
financial position, stockholders' equity, results of operations, or business of
the Company and the Guarantors, taken as a whole.
12. The statements and conclusions of law contained in the Offering
Memorandum relating to Environmental Laws (as defined below) have been reviewed
by me and, insofar as they pertain to legal matters, are accurate in all
material respects and fairly present the information set forth therein.
13. To my knowledge, and except as disclosed in the Offering Memorandum
and except for possible violations which, individually or in the aggregate,
would not have a material adverse effect on the general affairs, management,
financial position, stockholders' equity or results of operations of the Company
or the Guarantors, taken as a whole, the Company and the Designated Guarantors
(1) are conducting and have conducted the business, operations and facilities in
material compliance with all applicable federal, state, local, and foreign laws,
ordinances, rules, regulations, licenses, permits, approvals, plans,
authorizations, orders, judgments, directives, decrees, requirements and common
law relating to occupational safety and health, or pollution, or protection of
health or the environment as now or
B-2
previously in effect [including, without limitation, those relating to,
regulating, or imposing liability or standards of conduct concerning (i) noise
or odor, (ii) the use or disposal of sewage sludge or biosolids, (iii)
emissions, discharges, releases or threatened releases of pollutants,
contaminants or hazardous, dangerous, toxic, biohazardous or infectious
substances, materials, constituents or wastes or toxins, viruses, infectious
disease agents, or pathogens, petroleum, petroleum products and their breakdown
constituents, or any other chemical substance regulated under Environmental Laws
(as defined below) or exhibiting a hazardous waste characteristic including but
not limited to corrosivity, ignitability, toxicity, or reactivity, whether
solid, gaseous or liquid in nature ("Hazardous Substances"), into ambient air,
surface water, groundwater or land, (iv) relating to the generation,
manufacture, processing, distribution, use, treatment, storage, disposal,
release, transport or handling of Hazardous Substances, or (v) otherwise
relating to remediating real property or concerning protection of the outdoor or
indoor environment] ("Environmental Laws"), in each case where the failure to be
in such compliance would have a material adverse effect on the consolidated
financial position, stockholders' equity, results of operations, or business of
the Company and the Guarantors, taken as a whole; (2) possess and maintain in
full force and effect any and all permits, licenses or registrations required
under Environmental Law ("Environmental Permits") failure to possess which would
have a material adverse effect on the consolidated financial position,
stockholders' equity, results of operations, or business of the Company and the
Guarantors, taken as a whole; (3) will not require material expenditures to
maintain such Environmental Permits or such compliance with Environmental Law or
to remediate, clean up, xxxxx or remove any Hazardous Substance on any real
property currently or formerly owned, operated or leased by the Company or its
subsidiaries; and (4) have not received any notice from a governmental
instrumentality or any other third party alleging any violation thereof or
liability thereunder (including, without limitation, liability for costs of
investigating or remediating sites containing Hazardous Substances and/or
damages to natural resources).
14. To my knowledge, and except as disclosed in the Offering
Memorandum, there is no claim pending or threatened under any Environmental Laws
against the Company or any of the Designated Guarantors which, if adversely
determined, individually or in the aggregate, would have a material adverse
effect on the general affairs, management, financial position, stockholders'
equity or results of operations of the Company and the Guarantors, taken as a
whole; and, to my knowledge and except as disclosed in the Offering Memorandum,
there are no past or present actions or conditions, including, without
limitation, (i) the release or threatened release of any Hazardous Substance or
(ii) any legal proceeding or any unsatisfied condition in an Environmental
Permit that would reasonably be expected to allow material modification or
revocation thereof, that are reasonably likely to form the basis of any such
claim against the Company or any of the Designated Guarantors which, if
adversely determined, individually or in the aggregate would have a material
adverse effect on the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and the Guarantors,
taken as a whole.
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