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EXHIBIT 2.2
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AMENDED AND RESTATED
PURCHASE AGREEMENT
Dated as of August 14, 2000
Among
SYNAGRO TECHNOLOGIES, INC.
and
GTCR FUND VII, L.P.,
GTCR CO-INVEST, L.P.,
TCW/CRESCENT MEZZANINE PARTNERS II, L.P.,
TCW/CRESCENT MEZZANINE TRUST II,
TCW LEVERAGED INCOME TRUST, L.P.,
TCW LEVERAGED INCOME TRUST II, L.P., AND
TCW LEVERAGED INCOME TRUST IV, L.P.
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TABLE OF CONTENTS
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Section 1. Authorizations and Closings...........................................................................2
1A. Authorization of the Stock......................................................................2
1B. August 2000 Closing.............................................................................2
1C. Subsequent Closings.............................................................................3
Section 2. Conditions of Purchasers' Obligation at the August 2000 Closing.......................................4
2A. General Conditions..............................................................................4
2B. Subordinated Loan Agreement.....................................................................4
2C. Registration Agreement..........................................................................4
2D. Stockholders Agreement..........................................................................4
2E. Warrant.........................................................................................5
2F. Fees and Expenses...............................................................................5
Section 3. General Conditions to Purchasers' Obligation to Make Purchases........................................5
3A. Representations and Warranties..................................................................5
3B. No Default......................................................................................5
3C. Approved Use....................................................................................5
3D. Acquisitions....................................................................................5
3E. Certificates of Designation.....................................................................5
3F. Opinion of Counsel to the Company...............................................................6
3G. Opinion of Company General Counsel..............................................................6
3H. Acquisition Opinions............................................................................6
3I. Authorization; Listing..........................................................................6
3J. Closing Documents...............................................................................6
3K. Compliance with Applicable Laws.................................................................7
Section 4. Covenants.............................................................................................7
4A. Financial Statements and Other Information......................................................7
(i) Audit Report...........................................................................7
(ii) Quarterly Reports......................................................................7
(iii) Monthly Reports........................................................................8
(iv) Reports to SEC and to Shareholders.....................................................8
(v) Notice of Default, Litigation and ERISA Matters........................................8
(vi) Management Reports.....................................................................9
(vii) Projections............................................................................9
(viii) Other Information......................................................................9
4B. Inspection of Property..........................................................................9
4C. Listing.........................................................................................9
4D. Section 203 of the DGCL........................................................................10
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4E. [Reserved].....................................................................................10
4F. Restrictions...................................................................................10
4G. Affirmative Covenants..........................................................................14
4H. Current Public Information.....................................................................15
4I. Public Disclosures.............................................................................15
4J. Unrelated Business Taxable Income..............................................................15
4K. Xxxx-Xxxxx-Xxxxxx Compliance...................................................................15
4L. Rights Agreement...............................................................................16
4M. [Reserved].....................................................................................16
4N. [Reserved].....................................................................................16
4O. Board of Director Nominations..................................................................16
Section 5. Transfer of Restricted Securities....................................................................16
Section 6. Representations and Warranties of the Company........................................................17
6A. Shareholders Consent...........................................................................17
6B. Waiver of Vesting Upon Change in Control.......................................................17
6C. Organization, Corporate Power and Licenses.....................................................18
6D. Capital Stock and Related Matters..............................................................18
6E. Subsidiaries; Investments......................................................................19
6F. Authorization; No Breach.......................................................................19
6G. Financial Statements...........................................................................20
6H. Absence of Undisclosed Liabilities.............................................................20
6I. No Material Adverse Change.....................................................................21
6J. Absence of Certain Developments................................................................21
6K. Assets.........................................................................................22
6L. Real Property..................................................................................22
(a) Owned Properties..........................................................................22
(b) Leased Properties.........................................................................23
(c) Real Property Disclosure..................................................................23
6M. Tax Matters....................................................................................23
6N. Contracts and Commitments......................................................................24
6O. Intellectual Property Rights...................................................................26
6P. Litigation, etc................................................................................27
6Q. Brokerage......................................................................................27
6R. Governmental Consent, etc......................................................................27
6S. Insurance......................................................................................27
6T. Employees......................................................................................28
6U. Employee Benefit Plans.........................................................................28
6V. Compliance with Laws...........................................................................29
6W. Environmental and Safety Matters...............................................................29
6X. Affiliated Transactions........................................................................31
6Y. Real Property Holding Corporation Status.......................................................31
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6Z. Customers and Suppliers........................................................................31
6AA. Reports with the Securities and Exchange Commission............................................31
6BB. Investment Company.............................................................................31
6CC. Section 203 of the DGCL; Takeover Statute......................................................32
6DD. Rights Agreement...............................................................................32
6EE. Purchaser Warrants.............................................................................32
6FF. Disclosure.....................................................................................32
Section 7. Definitions..........................................................................................33
Section 8. Miscellaneous........................................................................................45
8A. Expenses.......................................................................................45
8B. Remedies.......................................................................................46
8C. Purchaser's Investment Representations.........................................................46
8D. Funding Letter.................................................................................46
8E. Consent to Amendments..........................................................................47
8F. Survival of Representations and Warranties.....................................................47
8G. Successors and Assigns.........................................................................47
8H. Generally Accepted Accounting Principles.......................................................48
8I. Severability...................................................................................48
8J. Counterparts...................................................................................48
8K. Entire Agreement...............................................................................48
8L. Descriptive Headings; Interpretation...........................................................48
8M. Governing Law..................................................................................48
8N. Notices........................................................................................49
8O. Indemnification................................................................................50
(a) General...............................................................................50
(b) Environmental Liabilities.............................................................51
8P. Standstill.....................................................................................51
8Q. Amendment and Restatement......................................................................52
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AMENDED AND RESTATED
PURCHASE AGREEMENT
THIS AMENDED AND RESTATED PURCHASE AGREEMENT (this
"Agreement") dated as of August 14, 2000, among Synagro Technologies, Inc., a
Delaware corporation (the "Company"), GTCR Fund VII, L.P., a Delaware limited
partnership ("GTCR Fund VII"), GTCR Co-Invest, L.P., a Delaware limited
partnership ("GTCR Co-Invest Fund" and together with GTCR Fund VII, the "GTCR
Purchasers"), and the TCW/Crescent Lenders (as defined herein) (each of the GTCR
Purchasers and the TCW/Crescent Lenders a "Purchaser" and collectively, the
"Purchasers"). Except as otherwise indicated herein, capitalized terms used
herein are defined in Section 7 hereof.
RECITALS
WHEREAS, the Company and GTCR Fund VII are parties to a
Purchase Agreement dated as of January 27, 2000 (the "Original Purchase
Agreement");
WHEREAS, (i) on January 27, 2000, the Company sold to GTCR
Fund VII and, subject to the terms and conditions set forth in the Original
Purchase Agreement, GTCR Fund VII purchased from the Company 17,358.824 shares
of Series C Preferred and 2,641.176 shares of Series D Preferred, at a price of
$1,000 per share; (ii) on February 4, 2000, the Company sold to GTCR Fund VII
and, subject to the terms and conditions set forth in the Original Purchase
Agreement, GTCR Fund VII purchased from the Company 419.4 shares of Series C
Preferred, at a price of $1,000 per share; (iii) on March 24, 2000, the Company
sold to GTCR Fund VII and, subject to the terms and conditions set forth in the
Original Purchase Agreement, GTCR Fund VII purchased from the Company 225 shares
of Series C Preferred at a price of $1,000 per share; (iv) on March 27, 2000,
the Company sold to GTCR Fund VII and, subject to the terms and conditions set
forth in the Original Purchase Agreement, GTCR Fund VII purchased from the
Company 1,260 shares of Series C Preferred at a price of $1,000 per share; and
(v) on June 15, 2000, the Company sold to GTCR Fund VII and, subject to the
terms and conditions set forth in the Original Purchase Agreement, GTCR Fund VII
purchased from the Company 6,840 shares of Series E Preferred;
WHEREAS, the Company and GTCR Fund VII are parties to a
Warrant Agreement, dated June 15, 2000 (the "GTCR Fund VII Warrant Agreement");
WHEREAS, pursuant to the GTCR Fund VII Warrant Agreement, on
June 15, 2000, the Company granted a warrant to GTCR Fund VII for the purchase
of 1,285.5 shares of Series E Preferred, which warrant was immediately exercised
by GTCR Fund VII;
WHEREAS, GTCR Fund VII converted all of the shares of Series C
Preferred held by it into shares of Series D Preferred on April 3, 2000, and, as
of the close of business on the day before the date hereof, GTCR Fund VII is the
record and beneficial owner of 21,904.4 shares of Series D Preferred and 8,125.5
shares of Series E Preferred;
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WHEREAS, the Series D Preferred and the Series E Preferred are
convertible into shares of the Company's Common Stock, par value $0.002 per
share (the "Common Stock") and, pursuant to the Original Purchase Agreement, the
Company has authorized and reserved for issuance upon conversion of the Series D
Preferred and the Series E Preferred at least that number of shares of the
Common Stock as would be issuable upon conversion of the Series D Preferred and
the Series E Preferred held on the date hereof by GTCR Fund VII;
WHEREAS, the Company, the GTCR Purchasers and the TCW/Crescent
Lenders have agreed to enter into this Agreement in order, among other things,
to: (a) amend and restate the Original Purchase Agreement in its entirety and
(b) join GTCR Co-Invest Fund and the TCW/Crescent Lenders as parties hereto; and
WHEREAS, the parties hereto intend that this Agreement and the
documents executed in connection herewith not effect a novation of the
obligations of the Company under the Original Purchase Agreement, but merely a
restatement of and, where applicable, an amendment to the terms governing such
obligations.
NOW, THEREFORE, in consideration of the mutual agreements
contained herein, the Original Purchase Agreement is amended and restated in its
entirety, and the parties hereto agree as follows:
Section 1. Authorizations and Closings.
1A. Authorization of the Stock. The Company shall authorize
the issuance and sale to the Purchasers of an aggregate 29,003 shares of Series
E Preferred for sale to the Purchasers in connection with the August 2000
Closing (as defined below).
1B. August 2000 Closing. At the August 2000 Closing, subject
to the terms and conditions set forth herein, the Company shall sell to each
Purchaser and each Purchaser shall purchase from the Company that number of
shares of Series E Preferred as is set forth opposite such Purchaser's name on
the "Schedule of Purchasers to the August 2000 Closing" attached hereto under
the heading "Shares of Series E Preferred Purchased at August 2000 Closing". In
consideration for such shares and the Purchaser Warrants referred to in Section
2E, each Purchaser shall deliver to the Company the aggregate amount set forth
opposite such Purchaser's name under the heading "Consideration for Series E
Preferred and Warrants." The closing of the purchase and sale of the Series E
Preferred to be purchased pursuant to this Section 1B (the "August 2000
Closing") shall take place at the offices of Xxxxxxxx & Xxxxx, 000 Xxxx Xxxxxxxx
Xxxxx, Xxxxxxx, Xxxxxxxx 00000 at 10:00 a.m. on August 14, 2000 or at such other
place or on such other date as may be mutually agreeable to the Company and the
Purchasers. At the August 2000 Closing, the Company shall deliver to each
Purchaser stock certificates evidencing the Series E Preferred to be purchased
by it, registered in such Purchaser's name or the name of its nominee, upon
payment of the consideration referred to above by a cashier's or certified
check, or by wire transfer of immediately available funds to such account as
designated by the Company.
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1C. Subsequent Closings.
(a) The Company engages in the biosolids management business
and from time to time undertakes acquisitions which are synergistic with or
otherwise complementary to its business. The Purchasers intend to provide up to
an aggregate of $125 million in equity financing to the Company as the equity
portion of the debt and equity financing necessary to fund the acquisitions
which were Approved Uses under the Original Purchase Agreement, to fund the
acquisition taking place on the date of this Agreement and to fund future
acquisitions (each, an "Acquisition") and for certain other uses, in each case
as approved by the Board of Directors of the Company (the "Board") and the GTCR
Purchasers (an "Approved Use"). In order to implement the foregoing, the GTCR
Purchasers may purchase from time to time after the August 2000 Closing, subject
to the terms and conditions set forth herein, upon the written request of the
Board in connection with an Approved Use, up to an additional 63,488 shares of
one or more New Series (as defined below) at a price of $1,000 per share (such
amounts to be adjusted from time to time as a result of stock dividends, stock
splits, recapitalization and similar events) (each, a "Subsequent Closing"). In
connection with each such Subsequent Closing, the Board shall designate a new
series of convertible preferred stock in the form of and with the rights and
preferences of the certificate of designations set forth as Exhibit A hereto and
with an initial Conversion Price specified therein which shall be mutually
agreed upon by the Board and the Majority Holders (a "New Series"), taking into
account, among other things, an assumed equity value for the Company equal to
the result of (i) seven multiplied by the Company's earnings before interest,
taxes and amortization minus (ii) the Company's outstanding indebtedness. Any
additional purchases of Preferred Stock by the GTCR Purchasers pursuant to this
Agreement shall be allocated between the GTCR Purchasers in accordance with the
allocation percentages opposite to each GTCR Purchaser's name under the heading
"GTCR Allocations" on the Schedule of Purchasers to the August 2000 Closing.
(b) Simultaneously with any purchase by the GTCR Purchasers of
Preferred Stock at such Subsequent Closing pursuant to Section 1C(a) above, the
TCW/Crescent Lenders will purchase, and the Company will sell to the
TCW/Crescent Lenders, at a price of $1,000 per share, a number of shares of the
series of Preferred Stock being sold to the GTCR Purchasers at such Subsequent
Closing equal to (i) the number of shares of Preferred Stock to be purchased by
the GTCR Purchasers from the Company at such Subsequent Closing, multiplied by
(ii) 0.059322034; provided, however, that, with respect to a Subsequent Closing,
the TCW/Crescent Lenders shall not have the right to purchase (and the Company
shall not have the right or obligation to sell to the TCW/Crescent Lenders)
Preferred Stock pursuant to this Section 1C(b) in connection with such
Subsequent Closing if the Initial Lender has agreed to make a loan to the
Company pursuant to the Subordinated Loan Agreement at such Subsequent Closing
and the TCW/Crescent Lenders do not make a loan pursuant to the Subordinated
Loan Agreement at such Subsequent Closing. The maximum aggregate amount that the
TCW/Crescent Lenders shall fund pursuant to this Section 1C(b) shall be
$3,766,213. Any purchases of Preferred Stock by the TCW/Crescent Lenders
pursuant to this Agreement shall be allocated among the TCW/Crescent Lenders in
accordance with the allocation percentages opposite to each TCW/Crescent
Lender's name under the heading
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"TCW/Crescent Allocations" on the Schedule of Purchasers to the August 2000
Closing. For the avoidance of doubt, for all purposes hereof, each purchase of
Preferred Stock by the TCW/Lenders pursuant to this Section 1C(b) will be deemed
to be at and a part of each Subsequent Closing.
(c) The closing of the purchase and sale of the Preferred
Stock to be purchased at each Subsequent Closing pursuant to Section 1C(a) and
(b) shall take place at the offices of Xxxxxxxx & Xxxxx, 000 Xxxx Xxxxxxxx
Xxxxx, Xxxxxxx, Xxxxxxxx 00000 or at such other place as may be mutually
agreeable to the Company and the GTCR Purchasers. At each Subsequent Closing,
the Company shall deliver to each Purchaser stock certificates evidencing the
Preferred Stock to be purchased by it, registered in such Purchaser's or the
name of its nominee, upon payment of the purchase price thereof by a cashier's
or certified check, or by wire transfer of immediately available funds to such
account as designated by the Company.
Section 2. Conditions of Purchasers' Obligation at the August
2000 Closing. The obligation of each Purchaser to purchase and pay for the
Series E Preferred to be purchased by it at the August 2000 Closing is subject
to the satisfaction as of the August 2000 Closing of the following conditions:
2A. General Conditions. Each of the conditions set forth in
Section 3 shall have been satisfied with respect to the August 2000 Closing.
2B. Subordinated Loan Agreement. The Company and the
Purchasers shall have entered into the Subordinated Loan Agreement, and the
Subordinated Loan Agreement shall be in full force and effect as of the August
2000 Closing.
2C. Registration Agreement. The Company and the Purchasers
shall have entered into the amended and restated registration agreement, dated
as of the date of this Agreement, (the "Registration Agreement"), and the
Registration Agreement shall be in full force and effect as of the August 2000
Closing.
2D. Stockholders Agreement. The Company and the Purchasers
shall have entered into the Stockholders Agreement, and the Stockholders
Agreement shall be in full force and effect as of the August 2000 Closing.
2E. Warrant. The Company shall have granted to each Purchaser
a Purchaser Warrant, exercisable for the number of shares of Series E Preferred
set forth opposite such Purchaser's name on the Schedule of Purchasers to the
August 2000 Closing under the heading "Shares of Series E Preferred Granted
Under Purchaser Warrant", and the Purchaser Warrants shall be in full force and
effect as of the August 2000 Closing.
2F. Fees and Expenses. The Company shall have reimbursed each
Purchaser for its fees and expenses as provided in Section 8A hereof.
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Any condition specified in this Section 2 may be waived only if such waiver is
set forth in a writing executed by each of the Purchasers.
Section 3. General Conditions to Purchasers' Obligation to
Make Purchases. The obligation of each Purchaser to purchase the Preferred Stock
at each Closing is subject to the satisfaction of the following conditions, each
as of the date of each such Closing:
3A. Representations and Warranties. All representations and
warranties of the Company contained in this Agreement shall be true and correct
in all material respects (other than representations and warranties qualified by
a materiality standard including, without limitation, a Material Adverse Effect
qualifier, which shall be true and correct in all respects) as of the making of
such purchase, before and after giving effect to such purchase and to the
application of the proceeds therefrom, with the same effect as though such
representations and warranties had been made on and as of such date, except that
(a) references to financial statements and the Latest Balance Sheet in such
representations and warranties shall be deemed to refer for this purpose to the
financial statements required to be provided to the Purchasers pursuant to
Section 4A hereof and the latest consolidated balance sheet of the Company
required to be provided to the Purchasers pursuant to Section 4A hereof,
respectively, and (b) references to the date of this Agreement, the August 2000
Closing Date and the like shall be deemed to refer to the date of the making of
such purchase.
3B. No Default. No Default or Event of Default (as such terms
are defined in the Subordinated Loan Agreement) shall exist as of the date of
such purchase or would result from the consummation of the borrowings by the
Company under the Subordinated Loan Agreement made concurrently with such
purchase of Preferred Stock.
3C. Approved Use. The GTCR Purchasers shall have approved the
acquisition or other Approved Use being financed therewith and the Purchasers
shall have received such documents and deliveries in connection therewith as
reasonably requested by them. The Purchasers shall have received evidence
satisfactory to them that the proceeds of such purchase will be used for the
Approved Use.
3D. Acquisitions. No default or material breach of performance
shall have occurred under the agreements related to the Acquisition, if any, for
which the Preferred Stock is being purchased, and all of the buyers' material
conditions to closing thereunder shall have been satisfied and not waived
(except with the GTCR Purchasers' consent).
3E. Certificates of Designation. With respect to the August
2000 Closing, the Company shall not have adopted or filed any other document
designating terms, relative rights or preferences of its preferred stock, other
than the certificates of designation establishing the terms of the Series A,
Series B, Series C, Series D, and Series E Preferred. With respect to any
Subsequent Closing, the Company shall have duly adopted, executed and filed with
the Secretary of State of Delaware a Certificate of Designation of Rights and
Preferences establishing the terms and the relative rights and preferences of
the New Series, which shall be identical in all respects to the form
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of certificate of designation attached hereto as Exhibit A except that the
Conversion Price set forth therein shall be as agreed to by the Board and the
Majority Holders pursuant to Section 1C(a) hereof (the "New Series Certificate
of Designations"), and the Company shall not have adopted or filed any other
document designating terms, relative rights or preferences of its preferred
stock, other than the certificates of designation establishing the terms of the
Series A, Series B, Series C, Series D and Series E Preferred and any other
previously issued New Series. Each of the Series E Certificate of Designations
and any New Series Certificate of Designations shall be in full force and effect
as of such Closing under the laws of Delaware and shall not have been amended or
modified.
3F. Opinion of Counsel to the Company. The Purchasers shall
have received an opinion from the special counsel for the Company, which shall
be addressed to the Purchasers, dated the date of the Closing and in form and
substance reasonably satisfactory to the Purchasers.
3G. Opinion of Company General Counsel. The Purchasers shall
have received an opinion from Xxxxx X. Xxxxxx XX, general counsel for the
Company, or his successor, if any, which shall be addressed to the Purchasers,
dated as of the date of such Closing, and in form and substance reasonably
satisfactory to the Purchasers.
3H. Acquisition Opinions. To the extent the Company or any of
its Subsidiaries receives (or is otherwise entitled to rely on) an opinion of
counsel in connection with any Acquisition, such opinion shall also be addressed
to the Purchasers or the Purchasers shall otherwise be entitled to rely thereon.
3I. Authorization; Listing. The Common Stock issuable upon
conversion of (i) all outstanding shares of Preferred Stock and (ii) the
Preferred Stock to be issued in connection with such Closing shall have been
duly authorized and reserved for issuance and such Common Stock shall have been
approved for listing on the NASDAQ SmallCap Market ("Nasdaq"), subject to
official notice of issuance.
3J. Closing Documents. The Company shall have delivered to the
Purchasers all of the following documents:
(a) an Officer's Certificate, dated the date of the
Closing, stating that the conditions specified in Sections 3A through
3I, inclusive, have been fully satisfied;
(b) certified copies of the resolutions duly adopted
by the Board authorizing the issuance and sale of the Preferred Stock
at such Closing and the filing of the certificate of designations filed
in connection with such sale of Preferred Stock;
(c) certified copies of the Company's certificate of
incorporation and all of its certificates of designation and the
Company's bylaws, each as in effect at the Closing; and
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(d) copies of all third party and governmental
consents, approvals and filings required in connection with the
consummation of the transactions hereunder (including, without
limitation, all blue sky law filings and waivers of all preemptive
rights and rights of first refusal).
3K. Compliance with Applicable Laws. The purchase of Preferred
Stock by each Purchaser hereunder shall not be prohibited by any applicable law
or governmental regulation, shall not subject any Purchaser to any penalty or
liability under or pursuant to any applicable law or governmental regulation,
and shall be permitted by laws and regulations of the jurisdictions to which any
such Purchaser is subject.
Any condition specified in this Section 3 may be waived in whole or in part by
the Majority Holders, in their sole discretion, only if such waiver is set forth
in a writing executed by the Majority Holders. Upon the waiver of any condition
specified in this Section 3 by the Majority Holders, the Majority Holders shall
give notice thereof to the other Purchasers in accordance with Section 8M
hereof.
Section 4A Covenants.
4A. Financial Statements and Other Information. The Company
shall deliver to each Purchaser (so long as such Purchaser holds any Preferred
Stock) and to each holder of at least 15% of the Investor Preferred:
(i) Audit Report. Promptly when available and in any
event within 90 days after the close of each Fiscal Year: (a) a copy of the
annual audit report of the Company and its Subsidiaries for such Fiscal Year,
including therein consolidated balance sheets of the Company and its
Subsidiaries as of the end of such Fiscal Year and consolidated statements of
earnings and cash flow of the Company and its Subsidiaries for such Fiscal Year
certified without qualification by Xxxxxx Xxxxxxxx LLP or other independent
auditors of recognized standing selected by the Company and reasonably
acceptable to the Majority Holders, together with a written statement from such
accountants to the effect that in making the examination necessary for the
signing of such annual audit report by such accountants, they have not become
aware of any Event of Default or Default that has occurred and is continuing or,
if they have become aware of any such event, describing it in reasonable detail
and (b) consolidating balance sheets of the Company and its Subsidiaries as of
the end of such Fiscal Year and consolidating statements of earnings for the
Company and its Subsidiaries for such Fiscal Year, certified by the chief
financial officer of the Company.
(ii) Quarterly Reports. Promptly when available and
in any event within 45 days after the end of each Fiscal Quarter (except the
last Fiscal Quarter) of each Fiscal Year, consolidated and consolidating balance
sheets of the Company and its Subsidiaries as of the end of such Fiscal Quarter,
together with consolidated and consolidating statements of earnings and
consolidated statements of cash flow for such Fiscal Quarter and for the period
beginning with the
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first day of such Fiscal Year and ending on the last day of such Fiscal Quarter,
certified by the chief financial officer of the Company.
(iii) Monthly Reports. Promptly when available and in
any event within 30 days after the end of each of the first two months of each
Fiscal Quarter, consolidated and consolidating balance sheets of the Company and
its Subsidiaries as of the end of such month, together with consolidated and
consolidating statements of earnings for such month and for the period beginning
with the first day of the applicable Fiscal Year and ending on the last day of
such month, certified by the chief financial officer of the Company.
(iv) Reports to SEC and to Shareholders. Promptly
upon the filing or sending thereof, copies of all regular, periodic or special
reports of the Company or any Subsidiary filed with the SEC (excluding exhibits
thereto, provided that the Company shall promptly deliver any such exhibit to
the Purchasers upon request therefor); copies of all registration statements of
the Company or any Subsidiary filed with the SEC (other than on Form S-8); and
copies of all proxy statements or other communications made to shareholders
generally concerning material developments in the business of the Company or any
of its Subsidiaries.
(v) Notice of Default, Litigation and ERISA Matters.
Promptly upon becoming aware of any of the following, written notice describing
the same and the steps being taken by the Company or the Subsidiary affected
thereby with respect thereto:
(a) the occurrence of an Event of Default or a
Default under the Subordinated Loan Agreement or an Event of Noncompliance;
(b) any litigation, arbitration or governmental
investigation or proceeding not previously disclosed by the Company to the
Purchasers which has been instituted or, to the knowledge of the Company, is
threatened against the Company or any of its Subsidiaries or to which any of the
properties of any thereof is subject which, if adversely determined, might
reasonably be expected to have a Material Adverse Effect;
(c) the institution of any steps by any member of the
Controlled Group or any other Person to terminate any Pension Plan, or the
failure of any member of the Controlled Group to make a required contribution to
any Pension Plan (if such failure is sufficient to give rise to a lien under
Section 302(f) of ERISA) or to any Multiemployer Pension Plan, or the taking of
any action with respect to a Pension Plan which could result in the requirement
that the Company furnish a bond or other security to the PBGC or such Pension
Plan, or the occurrence of any event with respect to any Pension Plan or
Multiemployer Pension Plan which could result in the incurrence by any member of
the Controlled Group of any material liability, fine or penalty (including any
claim or demand for withdrawal liability or partial withdrawal from any
Multiemployer Pension Plan), or any notice that any Multiemployer Pension Plan
is in reorganization, that increased contributions may be required to avoid a
reduction in plan benefits or the imposition of an excise tax, that any such
plan is or has been funded at a rate less than that required under Section 412
of the Code, that any such plan is or may be terminated, or that any such
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plan is or may become insolvent; provided that such matter would reasonably be
expected to have a Material Adverse Effect.
(d) any cancellation (without replacement) or
material change in any insurance maintained by the Company or any Subsidiary
thereof, which would reasonably be expected to have a Material Adverse Effect;
(e) any event (including any violation of any
Environmental Law or the assertion of any Environmental Claim) which would
reasonably be expected to have a Material Adverse Effect;
(f) any event or circumstance which requires the
Company to give notice to the Senior Lenders under the Credit Documents; or
(g) any notice of default received by it under any
Credit Document.
(vi) Management Reports. Promptly upon the request of
any Purchaser, copies of all detailed financial and management reports submitted
to the Company by independent auditors in connection with each annual or interim
audit made by such auditors of the books of the Company.
(vii) Projections. As soon as practicable and in any
event within 60 days after the commencement of each Fiscal Year, financial
projections for the Company and its Subsidiaries for such Fiscal Year prepared
in a manner consistent with those projections delivered by the Company to GTCR
Fund VII prior to the August 2000 Closing Date.
(viii) Other Information. From time to time such
other information concerning the Company and its Subsidiaries as any Purchaser
may reasonably request.
4B. Inspection of Property. The Company shall permit any
representatives designated by any Purchaser (so long as any Purchaser holds any
Preferred Stock) or any holder of at least 15% of the outstanding Investor
Preferred, upon reasonable notice and during normal business hours and such
other times as any such holder may reasonably request, to (i) visit and inspect
any of the properties of the Company and its Subsidiaries, (ii) examine the
corporate and financial records of the Company and its Subsidiaries and make
copies thereof or extracts therefrom and (iii) discuss the affairs, finances and
accounts of any such corporations with the directors, officers, key employees
and independent accountants of the Company and its Subsidiaries; provided that
the Company shall have the right to have its chief financial officer present at
any meetings with the Company's independent accountants.
4C. Listing. The Company shall use its reasonable best efforts
to continue to have its Common Stock listed on Nasdaq or a national securities
exchange for so long as any Preferred Shares are outstanding. Prior to the
August 2000 Closing, the Company shall prepare and submit
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14
to Nasdaq a listing application covering the shares of Common Stock issuable
upon conversion of the Series E Preferred being issued at the August 2000
Closing and shall obtain approval for the listing of such shares, subject to
official notice of issuance. Prior to each Subsequent Closing, the Company shall
prepare and submit to Nasdaq a listing application covering the shares of Common
Stock issuable upon conversion of the New Series to be purchased in connection
with such Subsequent Closing and shall obtain approval for the listing of such
shares, subject to official notice of issuance.
4D. Section 203 of the DGCL. The Board shall not adopt any
resolution containing any provisions, relating to the exemption from Section 203
of the DGCL granted to the GTCR Purchasers or their Affiliates which would
adversely affect or otherwise impair the rights of the GTCR Purchasers or their
Affiliates thereunder.
4E. [Reserved].
4F. Restrictions. For so long as the Purchasers collectively
hold shares of Investor Preferred convertible into at least 15% of the
outstanding shares of Common Stock (after giving effect to such conversion), the
Company shall not, without the prior written consent of the Majority Holders:
(a) directly or indirectly declare or pay any
dividends or make any distributions upon any of its equity securities,
other than payments of dividends on, or redemption payments in respect
of, the Preferred Stock pursuant to the Certificates of Designation;
(b) directly or indirectly redeem, purchase or
otherwise acquire, or permit any Subsidiary to redeem, purchase or
otherwise acquire, any of the Company's equity securities (including,
without limitation, warrants, options and other rights to acquire
equity securities) other than redemptions of Preferred Stock pursuant
to the Certificates of Designation;
(c) except as expressly contemplated by this
Agreement or pursuant to obligations currently in effect, authorize,
issue, sell or enter into any agreement providing for the issuance
(contingent or otherwise), or permit any Subsidiary to authorize,
issue, sell or enter into any agreement providing for the issuance
(contingent or otherwise) of, (i) any notes or debt securities
containing equity features (including, without limitation, any notes or
debt securities convertible into or exchangeable for equity securities,
issued in connection with the issuance of equity securities or
containing profit participation features) or (ii) any equity securities
(or any securities convertible into or exchangeable for any equity
securities) or rights to acquire any equity securities, other than the
issuance of equity securities by a Subsidiary to the Company or another
Subsidiary; provided, that, this Section 4F(c) shall not prevent the
Company from (x) authorizing or issuing options to its employees and
directors in an amount representing not more than 15% of the
then-outstanding Common Stock
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(assuming exercise of the Warrants and conversion of all Preferred
Stock) or (y) issuing equity securities in connection with an
acquisition approved by the GTCR Purchasers;
(d) make, or permit any Subsidiary to, make,
incur, assume or suffer to exist any Investment in any other Person,
except (without duplication) the following:
(i) equity Investments existing on the August 2000
Closing Date in wholly-owned Subsidiaries identified
on the "Subsidiary Schedule" attached hereto;
(ii) equity Investments in Subsidiaries acquired
after the August 2000 Closing Date in transactions
approved by the GTCR Purchasers including approved
Acquisitions (unless not required to be approved
pursuant to Section 4F(e));
(iii) in the ordinary course of business,
contributions by the Company to the capital of any of
its Subsidiaries, or by any such Subsidiary to the
capital of any of its Subsidiaries;
(iv) in the ordinary course of business, Investments
by the Company in any Subsidiary or by any of the
Subsidiaries in the Company, by way of intercompany
loans, advances or guaranties, all to the extent
permitted by Section 6.9 of the Subordinated Loan
Agreement;
(v) Suretyship Liabilities permitted by Section 6.9
of the Subordinated Loan Agreement;
(vi) loans to officers and employees not exceeding
(i) $287,500 in the aggregate to any single
individual or (ii) $575,500 in the aggregate for all
such individuals;
(vii) good faith deposits and escrow accounts in
connection with prospective acquisitions of stock or
assets for Acquisitions approved by the GTCR
Purchasers;
(viii) Cash Equivalent Investments; and
(ix) bank deposits in the ordinary course of
business; provided that the aggregate amount of all
such deposits (excluding (x) amounts in payroll
accounts or for accounts payable, in each case to the
extent that checks have been issued to third parties,
and (y) amounts maintained (in the ordinary course of
business consistent with past practice) in accounts
of any Person which is acquired by the Company or a
Subsidiary in accordance with the
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terms hereof during the 45 days following the date of
such acquisition) which are maintained with any bank
other than a Senior Lender shall not at any time
exceed (x) in the case of such deposits with any
single bank, $115,000 for three consecutive Business
Days and (y) in the case of all such deposits,
$1,115,000 for three consecutive Business Days;
provided that no Investment otherwise permitted by clause (ii), (iii), (iv),
(v), (vi) or (vii) shall be permitted to be made if, immediately before or after
giving effect thereto, any Event of Default or Default or any Event of
Noncompliance shall have occurred and be continuing;
(e) be a party to, or permit any Subsidiary to
be a party to, any merger or consolidation, or purchase or otherwise
acquire all or substantially all of the assets or any stock of any
class of, or any partnership or joint venture interest in, any other
Person, or sell, transfer, convey or lease all or any substantial part
of its assets, or sell or assign with or without recourse any
receivables, except for (a) any such merger or consolidation, sale,
transfer, conveyance, lease or assignment of or by any Wholly-Owned
Subsidiary into the Company or into, with or to any other Wholly-Owned
Subsidiary; (b) any such purchase or other acquisition by the Company
or any Wholly-Owned Subsidiary of the assets or stock of any
Wholly-Owned Subsidiary; and (c) any such purchase or other acquisition
by the Company or any wholly-owned Subsidiary of the assets or stock of
any other Person where (1) such assets (in the case of an asset
purchase) are for use, or such Person (in the case of a stock purchase)
is engaged, or after the acquisition will be, in the business
activities permitted by Section 4F(f); (2) immediately before or after
giving effect to such purchase or acquisition, no Event of Default or
Default s under the Subordinated Loan Agreement shall have occurred and
be continuing; (3) the aggregate consideration to be paid by the
Company and its Subsidiaries (including any Debt assumed or issued in
connection therewith, the amount thereof to be calculated in accordance
with GAAP) in connection with such purchase or other acquisition after
the date hereof (or any series of related acquisitions) is less than
$10,000,000 for any single transaction or series of related
transactions and less than $50,000,000 in the aggregate for all such
transactions; (4) the Company is in pro forma compliance with all the
financial ratios and restrictions set forth in Section 6.8 of the
Subordinated Loan Agreement; and (5) the proceeds of any of the
Preferred Stock hereunder are not used to finance such transactions;
(f) enter into, or permit any Subsidiary to
enter into, the ownership, active management or operation of any
business other than the management, processing, collection, handling
and disposal of non-hazardous bio-solid waste, animal manures, and
green and other organic waste or similar non-hazardous waste-related
business activities;
(g) enter into, or permit any Subsidiary to,
enter into, or cause, suffer or permit to exist any transaction,
arrangement or contract with any of its other Affiliates (other than
the Company and its Subsidiaries and the Purchasers and their
respective Affiliates)
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which is on terms which are less favorable than are obtainable from any
Person which is not one of its Affiliates;
(h) become subject to, or permit any of its
Subsidiaries to become subject to, any agreement or instrument which by
its terms would (under any circumstances) restrict (A) the right of any
Subsidiary to make loans or advances or pay dividends to, transfer
property to, or repay any Debt owed to, the Company or any Subsidiary
or (B) the Company's right to perform the provisions of this Agreement,
the Certificates of Designation, the Bylaws or the other Documents;
(i) except as expressly contemplated by this
Agreement, make any amendment to the Certificates of Designation or the
Bylaws, or file any resolution of the Board with the Secretary of the
State of Delaware, in each case containing any provisions which would
increase the number of authorized shares of capital stock or adversely
affect or otherwise impair the rights or the relative preferences and
priorities of the holders of the Preferred Stock under this Agreement,
the Certificates of Designation, the Bylaws or the other Documents; or
(j) create, incur, assume or suffer to exist or
permit any Subsidiary to, create, incur, assume or suffer to exist any
Debt, except:
(i) Debt under the Credit Agreement or Permitted
Refinancing Debt with respect thereto in an aggregate
principal amount at any one time outstanding
(including loans, the nominal amount of outstanding
letters of credit and all unused commitments) not to
exceed (as determined from time to time, the "Maximum
Senior Indebtedness") (A) $30,000,000 of revolving
Senior Indebtedness, (B) $150,000,000 of term Senior
Indebtedness, (C) $50,000,000 of Acquisition Loans
and (D) $30,000,000 of additional Senior Indebtedness
(whether revolving or term) in each case with respect
to this Section 4F(j)(i) less the aggregate principal
amount of any permanent reductions of commitments for
revolving Senior Indebtedness or the Acquisition
Loans or repayments of term Senior Indebtedness under
the instruments governing such Senior Indebtedness
(including, without limitation, payments actually
applied to the Senior Indebtedness pursuant to
Section 3.5 of the Subordinated Loan Agreement) and
(D) guaranties in respect of Debt described in the
foregoing clauses (A), (B), (C) and (D);
(ii) unsecured seller Debt which represents all or
part of the purchase price payable in connection with
Acquisitions approved by the GTCR Purchasers and the
Debt listed on the attached "Unsecured Seller Debt
Schedule"; provided that the aggregate principal
amount of all such Debt (other than (i) the Debt
designated with an asterisk on the Unsecured Seller
Debt Schedule, and (ii) an unsecured seller note
payable in connection with the acquisition
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of EPIC not in excess of $6,000,000, the payment of
which is contingent upon the performance of EPIC)
shall not at any time exceed $7,500,000;
(iii) Debt arising under Capital Leases, Debt secured
by Liens permitted by subsection 6.10(c) or (d) of
the Subordinated Loan Agreement, Rhode Island
Non-Recourse Debt in an aggregate amount not to
exceed $13,000,000 and other Debt outstanding on the
date hereof and listed on the attached "Capital Lease
Debt Schedule", and refinancings of any such Debt so
long as the terms applicable to such refinanced Debt
are no less favorable to the Company or the
applicable Subsidiary than the terms in effect
immediately prior to such refinancing, provided that
the aggregate amount of all such Debt at any time
outstanding shall not exceed $25,000,000;
(iv) Debt of Subsidiaries owed to the Company;
(v) Hedging Obligations of the Company for the
hedging of interest payments on the Senior
Indebtedness to the extent required by the Credit
Agreement;
(vi) unsecured Debt of the Company to Subsidiaries;
(vii) the Loans made pursuant to the Subordinated
Loan Agreement;
(viii) subordinated Debt issued to former employees
to repurchase stock from such former employees in an
aggregate principal amount at any time outstanding
not to exceed $2,500,000;
(ix) the Baltimore Bonds; and
(x) Suretyship Liabilities with respect to
performance and payment bonds issued for the benefit
of customers of the Company or its Subsidiaries in
the ordinary course of business.
4G. Affirmative Covenants. For so long as any Purchaser holds
shares of Investor Preferred convertible into at least 15% of the outstanding
shares of Common Stock (after giving effect to such conversion), the Company
shall, and shall cause each Subsidiary to:
(a) comply with all applicable laws, rules and
regulations of all governmental authorities, the violation of which
would reasonably be expected to have a material adverse effect upon the
financial condition, operating results, assets, operations or business
prospects of the Company and its Subsidiaries taken as a whole, and pay
and discharge when payable all taxes, assessments and governmental
charges (except to the
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extent the same are being contested in good faith and adequate reserves
therefor have been established); and
(b) enter into and maintain appropriate nondisclosure
and noncompete agreements with its key employees.
4H. Current Public Information. At all times after the Company
has filed a registration statement with the Securities and Exchange Commission
pursuant to the requirements of either the Securities Act or the Securities
Exchange Act, the Company shall file all reports required to be filed by it
under the Securities Act and the Securities Exchange Act and the rules and
regulations adopted by the Securities and Exchange Commission thereunder and
shall take such further action as any holder or holders of Restricted Securities
may reasonably request, all to the extent required to enable such holders to
sell Restricted Securities pursuant to (i) Rule 144 adopted by the Securities
and Exchange Commission under the Securities Act (as such rule may be amended
from time to time) or any similar rule or regulation hereafter adopted by the
Securities and Exchange Commission or (ii) a registration statement on Form S-2
or S-3 or any similar registration form hereafter adopted by the Securities and
Exchange Commission. Upon request, the Company shall deliver to any holder of
Restricted Securities a written statement as to whether it has complied with
such requirements.
4I. Public Disclosures. The Company shall not, nor shall it
permit any Subsidiary to, disclose the Purchasers' name or identity as an
investor in the Company in any press release or other public announcement or in
any document or material filed with any governmental entity, without the prior
written consent of the Purchasers, unless such disclosure is required by
applicable law or governmental regulations or by order of a court of competent
jurisdiction, in which case prior to making such disclosure the Company shall
give written notice to the Purchasers describing in reasonable detail the
proposed content of such disclosure and shall permit the Purchasers to review
and comment upon the form and substance of such disclosure.
4J. Unrelated Business Taxable Income. The Company shall not
engage in any transaction which is reasonably likely to cause the Purchasers or
any of their limited partners which are exempt from income taxation under
Section 501(a) of the IRC and, if applicable, any pension plan that any such
trust may be a part of, to recognize unrelated business taxable income as
defined in Section 512 and Section 514 of the IRC.
4K. Xxxx-Xxxxx-Xxxxxx Compliance. In connection with any
transaction in which the Company is involved (an "HSR Transaction") which is
required to be reported under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended from time to time (the "HSR Act"), the Company and the
Purchasers shall prepare and file all documents with the Federal Trade
Commission and the United States Department of Justice which may be required to
comply with the HSR Act, and shall promptly furnish all materials thereafter
requested by any of the regulatory agencies having jurisdiction over such
filings, in connection with an HSR Transaction. The Company and the Purchasers
shall take all reasonable actions and shall file and use reasonable best
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efforts to have declared effective or approved all documents and notifications
with any governmental or regulatory bodies, as may be necessary or may
reasonably be requested under federal antitrust laws for the consummation of the
HSR Transaction; provided that in no event shall the Company or the Purchasers
or any of their Affiliates be required to divest any of their assets or
Subsidiaries. If the Purchasers are required to make a filing under the HSR Act
in connection with an HSR Transaction, the Company will provide to the
Purchasers all necessary information relating to the Company for such filing and
will pay all fees associated with such filing.
4L. Rights Agreement. The Company will not further amend the
Rights Agreement, or adopt any similar rights plan or rights agreement, in a
manner that conflicts with, or restricts the GTCR Purchasers or any of its
Affiliates to a greater extent than the amendment to the Rights Agreement as set
forth in the representation in Section 6DD.
4M. [Reserved].
4N. [Reserved].
4O. Board of Director Nominations. For so long as the GTCR
Purchasers hold shares of Investor Preferred convertible into at least 15% of
the outstanding shares of Common Stock (after giving effect to such conversion),
the GTCR Purchasers and the Nominating Committee of the Board shall have the
right to mutually approve all nominations to elect or appoint persons to serve
as members of the Board, other than directors elected pursuant to the
Certificates of Designation.
Section 5. Transfer of Restricted Securities.
(a) Restricted Securities are transferable only
pursuant to (i) public offerings registered under the Securities Act, (ii) Rule
144 of the Securities and Exchange Commission (or any similar rule or rules then
in force) if such rule or rules are available and (iii) subject to the
conditions specified in clause (b) below, any other legally available means of
transfer; provided that the conditions specified in clause (b) shall be deemed
to have been satisfied without any further action or evidence if the holder of
any Restricted Securities shall deliver to the Company a written notice stating
that the holder is transferring Restricted Securities to an Affiliate of a
Purchaser, provided that the holder thereof shall not transfer the same until
the prospective transferee has confirmed to the Company in writing its agreement
to be bound by the provisions contained in this Section 5; provided further,
that this Section 5 shall not limit the right of each TCW/Crescent Lender to
pledge Restricted Securities held by it to a trustee for the benefit of secured
noteholders pursuant to documents relating to the financing of such TCW/Crescent
Lender.
(b) In connection with the transfer of any Restricted
Securities (other than a transfer described in Sections 5(a)(i) or (ii) above),
the holder thereof shall deliver written notice to the Company describing in
reasonable detail the transfer or proposed transfer, together with an opinion of
Xxxxxxxx & Xxxxx or other counsel which (to the Company's reasonable
satisfaction) is knowledgeable in securities law matters to the effect that such
transfer of Restricted Securities may
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be effected without registration of such Restricted Securities under the
Securities Act. In addition, if the holder of the Restricted Securities delivers
to the Company an opinion of Xxxxxxxx & Xxxxx or such other counsel that no
subsequent transfer of such Restricted Securities shall require registration
under the Securities Act, the Company shall promptly upon such contemplated
transfer deliver new certificates for such Restricted Securities which do not
bear the Securities Act legend set forth in Section 8C. If the Company is not
required to deliver new certificates for such Restricted Securities not bearing
such legend, the holder thereof shall not transfer the same until the
prospective transferee has confirmed to the Company in writing its agreement to
be bound by the conditions contained in this Section and Section 8C.
(c) Upon the request of any Purchaser, the Company
shall promptly supply to such Purchaser or its prospective transferees all
information regarding the Company required to be delivered in connection with a
transfer pursuant to Rule 144A of the Securities and Exchange Commission.
Section 6. Representations and Warranties of the Company. As a
material inducement to the Purchasers to enter into this Agreement and purchase
the Preferred Stock, the Company hereby represents and warrants to the
Purchasers that:
6A. Shareholders Consent. The Shareholders Consent was
executed by the stockholders of the Company set forth on the attached
"Shareholders Consent Schedule", each of whom owns the number of shares of
Common Stock indicated next to such person's name on the Shareholders Consent
Schedule (the "Consenting Stockholders"), before January 27, 2000. The
Consenting Stockholders collectively own a majority of the outstanding Common
Stock. The disclosure provided to the Consenting Stockholders in connection with
the solicitation of the Shareholders Consent did not contain a material
misstatement of fact or an omission of a material fact necessary to make the
statements made, in light of the circumstances in which they were made, not
misleading.
6B. Waiver of Vesting Upon Change in Control. Each employee
and director of the Company who has the right (whether granted in an agreement,
by action of the Board or otherwise) to have his or her options to purchase the
Company's stock vest upon a "change in control" has executed a waiver providing
that GTCR Fund VII's and the Initial Lender's investment in the Company pursuant
to the this Agreement, the Subordinated Loan Agreement and the GTCR Warrant
Agreement, whether on or prior to the date hereof or in the future, shall not be
considered a "change in control" and shall not trigger vesting of such person's
options. In addition, each employee who has an agreement with the Company that
contains provisions allowing such agreement to be terminated upon a "change in
control" or requiring the payment of severance upon a "change in control" has
executed a waiver providing that GTCR Fund VII's and the Initial Lender's
investment in the Company pursuant to this Agreement, the Subordinated Loan
Agreement and the GTCR Warrant Agreement, whether on the date hereof or in the
future, shall not be considered a "change in control" for purposes of such
agreement.
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6C. Organization, Corporate Power and Licenses. The Company is
a corporation duly organized, validly existing and in good standing under the
laws of Delaware and is qualified to do business in every jurisdiction in which
its ownership of property or conduct of business requires it to qualify (except
in those instances in which the failure to be so qualified or to be validly
existing and in good standing has not and would not reasonably be expected to
have a Material Adverse Effect). The Company possesses all requisite corporate
power and authority and all material licenses, permits and authorizations
necessary to own and operate its properties, to carry on its businesses as now
conducted and presently proposed to be conducted and to carry out the
transactions contemplated by this Agreement. The copies of the Company's and
each Subsidiary's charter documents and bylaws which have been furnished to the
GTCR Purchasers' special counsel reflect all amendments made thereto at any time
prior to the date of this Agreement and are correct and complete.
6D. Capital Stock and Related Matters.
(a) As of the Closing and immediately thereafter, the
authorized, issued and outstanding and reserved capital stock of the Company
shall be as set forth on the attached "Capitalization Schedule."
(b) As of the Closing, neither the Company nor any
Subsidiary shall have outstanding any stock or securities convertible or
exchangeable for any shares of its capital stock or containing any profit
participation features, nor shall it have outstanding any rights or options to
subscribe for or to purchase its capital stock or any stock or securities
convertible into or exchangeable for its capital stock or any stock appreciation
rights or phantom stock plans, except for the Preferred Stock, the Warrants and
except as set forth on the Capitalization Schedule. The Capitalization Schedule
accurately sets forth the following information with respect to all outstanding
options and rights to acquire the Company's capital stock: the holder, the type
of security, the number of shares covered, the exercise price, the expiration
date and whether such security vests upon a "change in control". As of the
Closing, neither the Company nor any Subsidiary shall be subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of its capital stock or any warrants, options or other rights
to acquire its capital stock, except as set forth on the Capitalization Schedule
and except pursuant to the Certificates of Designation. As of the Closing, all
of the outstanding shares of the Company's capital stock shall be validly
issued, fully paid and nonassessable.
(c) There are no statutory or, to the best of the
Company's knowledge, contractual stockholders preemptive rights or rights of
refusal with respect to the issuance of the Warrant Shares, the Warrants, or the
Preferred Stock or the issuance of the Common Stock issuable upon conversion of
the Warrant Shares or the Preferred Stock or upon exercise of the Warrants. The
Company has not violated any applicable federal or state securities laws in
connection with the offer, sale or issuance of any of its capital stock, and the
offer, sale and issuance of the Warrants and the Preferred Stock do not require
registration under the Securities Act or any applicable state securities laws.
To the best of the Company's knowledge, there are no agreements between the
Company's
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stockholders with respect to the voting or transfer of the Company's capital
stock or with respect to any other aspect of the Company's affairs, except as
set forth on the Capitalization Schedule.
6E. Subsidiaries; Investments. The Subsidiary Schedule
correctly sets forth the name of each Subsidiary, the jurisdiction of its
incorporation and the Persons owning the outstanding capital stock of such
Subsidiary. Each Subsidiary is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, possesses all
requisite corporate power and authority and all material licenses, permits and
authorizations necessary to own its properties and to carry on its businesses as
now being conducted and as presently proposed to be conducted and is qualified
to do business in every jurisdiction in which its ownership of property or the
conduct of business requires it to qualify (except in those instances in which
the failure to be so qualified or to be validly existing and in good standing
has not and would not reasonably be expected to have a Material Adverse Effect).
All of the outstanding shares of capital stock of each Subsidiary are validly
issued, full paid and nonassessable, and all such shares are owned by the
Company or another Subsidiary free and clear of any Lien, except for Liens under
the Credit Documents, and not subject to any option or right to purchase any
such shares. Except as set forth on the Subsidiary Schedule, neither the Company
nor any Subsidiary owns or holds the right to acquire any shares of stock or any
other security or interest in any other Person.
6F. Authorization; No Breach. The execution, delivery and
performance of this Agreement and the other Documents, the filing of the
Certificates of Designation and the amendment of the Company's bylaws have been
duly authorized by the Company. This Agreement, the other Documents and the
Certificates of Designation each constitutes a valid and binding obligation of
the Company, enforceable in accordance with its terms (except as limited by
bankruptcy, insolvency or other laws affecting the enforcement of creditors'
rights. Except as set forth on the attached "Restrictions Schedule," the
execution and delivery by the Company of this Agreement and the other Documents,
the offering, sale and issuance of the Preferred Stock, the issuance of the
Common Stock upon conversion of the Preferred Stock, the issuance of Warrants
pursuant to the Warrant Agreements, the issuance of the Warrant Shares upon
exercise of Warrants, the filing of the Certificates of Designation, and the
amendment of the Company's bylaws and the fulfillment of and compliance with the
respective terms hereof and thereof by the Company, do not and shall not (i)
conflict with or result in a breach of the terms, conditions or provisions of,
(ii) constitute a default under, (iii) result in the creation of any lien,
security interest, charge or encumbrance upon the Company's or any Subsidiary's
capital stock or assets pursuant to, (iv) give any third party the right to
modify, terminate or accelerate any obligation under, (v) result in a violation
of, or (vi) require any authorization, consent, approval, exemption or other
action by or notice or declaration to, or filing with, any court or
administrative or governmental body or agency pursuant to, the Certificates of
Designation or the charter or bylaws of the Company or any Subsidiary, or any
law, statute, rule or regulation to which the Company or any Subsidiary is
subject, or any agreement, instrument, order, judgment or decree to which the
Company or any Subsidiary is subject. Except as set forth on the Restrictions
Schedule, none of the Subsidiaries are subject to any restrictions upon making
loans or advances or paying dividends to, transferring property to, or repaying
any Debt owed to, the Company or another Subsidiary.
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6G. Financial Statements. Attached hereto as the "Financial
Statements Schedule" are the following financial statements:
(a) the audited consolidated balance sheets of the
Company and its Subsidiaries as of December 31, 1997, 1998, and 1999, and the
related statements of income and cash flows (or the equivalent) for the
respective twelve-month periods ended December 31, 1997, 1998 and 1999; and
(b) the unaudited consolidated balance sheet of the
Company and its Subsidiaries as of June 30, 2000 (the "Latest Balance Sheet"),
and the related statements of income and cash flows (or the equivalent) for the
six-month period then ended.
Each of the foregoing financial statements (including in all cases the notes
thereto, if any) is accurate and complete in all material respects, is
consistent with the books and records of the Company (which, in turn, are
accurate and complete in all material respects) and has been prepared in
accordance with GAAP, consistently applied, subject in the case of the unaudited
financial statements to the absence of footnote disclosure and changes resulting
from normal year-end adjustments for recurring accruals (none of which would,
alone or in the aggregate, be materially adverse to the financial condition,
operating results, assets, operations or business prospects of the Company and
its Subsidiaries taken as a whole).
The pro forma consolidated balance sheet of the Company and its Subsidiaries as
of August 14, 2000, which gives effect to the Transactions and the acquisition
of Bio Gro, is also attached hereto in the Financial Statement Schedule and is
complete and correct in all material respects and presents fairly in all
material respects the consolidated financial condition of the Company and its
Subsidiaries as of such date as if the transactions contemplated by this
Agreement had occurred immediately prior to such date, and such balance sheet
contains all pro forma adjustments necessary in order to fairly reflect such
assumption.
6H. Absence of Undisclosed Liabilities. Except as set forth on
the attached "Liabilities Schedule," the Company and its Subsidiaries do not
have any material obligation or liability (whether accrued, absolute,
contingent, unliquidated or otherwise, whether or not known to the Company or
any Subsidiary, whether due or to become due and regardless of when asserted)
arising out of transactions entered into at or prior to the Closing, or any
action or inaction at or prior to the Closing, or any state of facts existing at
or prior to the Closing other than: (i) liabilities set forth on the Latest
Balance Sheet (including any notes thereto), (ii) liabilities and obligations
which have arisen after the date of the Latest Balance Sheet in the ordinary
course of business consistent with past practice (none of which is a liability
resulting from breach of contract, breach of warranty, tort, infringement, claim
or lawsuit), (iii) other liabilities and obligations expressly disclosed in the
other Schedules to this Agreement and (iv) obligations under contract not
required to be disclosed on the Xxxxxxxxx Xxxxxxxx.
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0X. No Material Adverse Change. Except as set forth on the
attached "Adverse Change Schedule," since June 30, 2000, there has been no
material adverse change in the financial condition, operating results, assets,
operations, business prospects, employee relations or customer or supplier
relations of the Company and its Subsidiaries taken as a whole.
6J. Absence of Certain Developments.
(i) Except as expressly contemplated by this
Agreement or as set forth on the attached "Developments Schedule," since the
date of the Latest Balance Sheet, neither the Company nor any Subsidiary has
(a) issued any notes, bonds or other debt securities
or any capital stock or other equity securities or any securities convertible,
exchangeable or exercisable into any capital stock or other equity securities;
(b) borrowed any amount or incurred or become subject
to any liabilities, except current liabilities incurred in the ordinary course
of business and liabilities under contracts entered into in the ordinary course
of business;
(c) discharged or satisfied any Lien or paid any
obligation or liability, other than current liabilities paid in the ordinary
course of business;
(d) declared or made any payment or distribution of
cash or other property to its stockholders with respect to its capital stock or
other equity securities or purchased or redeemed any shares of its capital stock
or other equity securities (including, without limitation, any warrants, options
or other rights to acquire its capital stock or other equity securities);
(e) mortgaged or pledged any of its properties or
assets or subjected them to any Lien, except for Permitted Encumbrances;
(f) sold, assigned or transferred any of its tangible
assets, except in the ordinary course of business, or canceled any debts or
claims;
(g) sold, assigned or transferred any patents or
patent applications, trademarks, service marks, trade names, corporate names,
copyrights or copyright registrations, trade secrets or other intangible assets,
or disclosed any proprietary confidential information to any Person;
(h) suffered any extraordinary losses or waived any
rights of value, whether or not in the ordinary course of business or consistent
with past practice;
(i) made capital expenditures or commitments therefor
that aggregate in excess of $250,000;
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(j) made any loans or advances to, guarantees for the
benefit of, or any Investments in, any Persons in excess of $50,000 in the
aggregate;
(k) made any charitable contributions or pledges in
excess of $10,000 in the aggregate;
(l) suffered any damage, destruction or casualty loss
exceeding in the aggregate $100,000, whether or not covered by insurance;
(m) made any Investment in or taken steps to
incorporate any Subsidiary except for the incorporation of Wholly-Owned
Subsidiaries in connection with Acquisitions approved by the Board and the GTCR
Purchasers; or
(n) entered into any other transaction other than in
the ordinary course of business or entered into any other material transaction,
whether or not in the ordinary course of business consistent with past practice.
(ii) No officer, director, employee or agent of the
Company or any of its Subsidiaries has been or is authorized to make or receive,
and the Company does not know of any such person making or receiving, any bribe,
kickback or other illegal payment.
6K. Assets. Except as set forth on the attached "Assets
Schedule," the Company and each Subsidiary have good and marketable title to, or
a valid leasehold interest in, the properties and assets used by them, located
on their premises or shown on the Latest Balance Sheet or acquired thereafter,
free and clear of all Liens, except for properties and assets disposed of in the
ordinary course of business since the date of the Latest Balance Sheet and
except for Liens disclosed on the Latest Balance Sheet (including any notes
thereto) and Permitted Encumbrances. Except as described on the Assets Schedule,
the Company's and each Subsidiary's buildings, equipment and other tangible
assets are in good operating condition in all material respects and are fit for
use in the ordinary course of business. The Company and each Subsidiary own, or
have a valid leasehold interest in, all assets necessary for the conduct of
their respective businesses as presently conducted and as presently proposed to
be conducted.
6L. Real Property.
(a) Owned Properties. The "Owned Real Property Schedule"
attached hereto sets forth a list of all owned real property (the "Owned Real
Property") used by the Company or any of it Subsidiaries in the operation of the
Company's or any of it Subsidiaries' business. With respect to each such parcel
of Owned Real Property and except for Liens in favor of the Senior Lenders: (i)
such parcel is free and clear of all covenants, conditions, restrictions,
easements, liens or other encumbrances, except Permitted Encumbrances; (ii)
there are no leases, subleases, licenses, concessions, or other agreements,
written or oral, granting to any person the right of use or
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occupance of any portion of such parcel; and (iii) there are no outstanding
actions or rights of first refusal to purchase such parcel, or any portion
thereof or interest therein.
(b) Leased Properties. The "Leased Property Schedule" attached
hereto sets forth a list of all of the leases and subleases ("Leases") and each
leased and subleased parcel of real property in which the Company or any of it
Subsidiaries have a leasehold and subleasehold interest (the "Leased Real
Property"). With respect to each Lease listed on the Leased Property Schedule:
(i) the Lease is legal, valid, binding, enforceable and in full force and
effect; (ii) the Lease will continue to be legal, valid, binding, enforceable
and in full force and effect on identical terms following the Closing; (iii)
neither the Company nor any of its Subsidiaries nor, to the best of the
Company's knowledge, any other party to the Lease is in breach or default, and
no event has occurred which, with notice or lapse of time, would constitute such
a breach or default or permit termination, modification or acceleration under
the Lease; (iv) to the best of the Company's knowledge, no party to the Lease
has repudiated any provision thereof; (v) to the best of the Company's
knowledge, there are no disputes, oral agreements, or forbearance programs in
effect as to the Lease; (vi) the Lease has not been modified in any respect,
except to the extent that such modifications are disclosed in the Leased
Property Schedule; and (vii) neither the Company nor any of its Subsidiaries has
assigned, transferred, conveyed, mortgaged, deeded in trust or encumbered any
interest in the Lease.
(c) Real Property Disclosure. Except as disclosed in the Owned
Real Property Schedule and the Leased Property Schedule, there is no Real
Property leased or owned by the Company or any of it Subsidiaries used in the
Company's or any of it Subsidiaries' business.
6M. Tax Matters.
(a) Except as set forth on the attached "Taxes
Schedule": the Company, each Subsidiary and each Affiliated Group have filed all
Tax Returns which they are required to file under applicable laws and
regulations; all such Tax Returns are complete and correct in all material
respects and have been prepared in compliance with all applicable laws and
regulations in all material respects; the Company, each Subsidiary and each
Affiliated Group in all material respects have paid all Taxes due and owing by
them (whether or not such Taxes are required to be shown on a Tax Return) and
have withheld and paid over to the appropriate taxing authority all Taxes which
they are required to withhold from amounts paid or owing to any employee,
stockholder, creditor or other third party; neither the Company, any Subsidiary
nor any Affiliated Group has waived any statute of limitations with respect to
any Taxes or agreed to any extension of time with respect to any Tax assessment
or deficiency; the accrual for Taxes on the Latest Balance Sheet would be
adequate to pay all Tax liabilities of the Company and its Subsidiaries if their
current tax year were treated as ending on the date of the Latest Balance Sheet
(excluding any amount recorded which is attributable solely to timing
differences between book and Tax income); since the date of the Latest Balance
Sheet, the Company and its Subsidiaries have not incurred any liability for
Taxes other than in the ordinary course of business; the assessment of any
additional Taxes for periods for which Tax Returns have been filed by the
Company, each Subsidiary and each Affiliated Group shall not exceed the recorded
liability therefor on the Latest Balance Sheet (excluding any amount recorded
which
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is attributable solely to timing differences between book and Tax income); the
federal income Tax Returns of the Company and its Subsidiaries have been audited
and closed for all tax years through 1998; to the best of the Company's
knowledge, no foreign, federal, state or local tax audits or administrative or
judicial proceedings are pending or being conducted with respect to the Company,
any Subsidiary or any Affiliated Group; no information related to Tax matters
has been requested by any foreign, federal, state or local taxing authority; no
written notice indicating an intent to open an audit or other review has been
received by the Company from any foreign, federal, state or local taxing
authority; and there are no material unresolved questions or claims concerning
the Company's, any Subsidiary's or any Affiliated Group Tax liability.
(b) Neither the Company nor any of its Subsidiaries
has made an election under Section 341(f) of the Internal Revenue Code of 1986,
as amended. Neither the Company nor any Subsidiary is liable for the Taxes of
another Person that is not a Subsidiary in a material amount under (a) Treas.
Reg. Section 1.1502-6 (or comparable provisions of state, local or foreign law),
(b) as a transferee or successor, (c) by contract or indemnity or (d) otherwise.
Neither the Company nor any Subsidiary is a party to any tax sharing agreement.
The Company, each Subsidiary and each Affiliated Group have disclosed on their
federal income Tax Returns any position taken for which substantial authority
(within the meaning of IRC Section 6662(d)(2)(B)(i)) did not exist at the time
the return was filed. Neither the Company nor any Subsidiary has made any
payments, is obligated to make payments or is a party to an agreement that could
obligate it to make any payments that would not be deductible under IRC Section
280G.
6N. Contracts and Commitments.
(i) Except as expressly contemplated by this
Agreement or as set forth on the attached "Contracts Schedule" or the attached
"Employee Benefits Schedule," neither the Company nor any Subsidiary is a party
to or bound by any written or oral:
(a) pension, profit sharing, stock option, employee
stock purchase or other plan or arrangement providing for deferred or other
compensation to employees or any other employee benefit plan or arrangement, or
any collective bargaining agreement or any other contract with any labor union,
or severance agreements, programs, policies or arrangements;
(b) contract for the employment of any officer,
individual employee or other Person on a full-time, part-time, consulting or
other basis providing annual compensation in excess of $75,000 or contract
relating to loans to officers, directors or Affiliates;
(c) contract under which the Company or Subsidiary
has advanced or loaned any other Person amounts in the aggregate exceeding
$100,000;
(d) agreement or indenture relating to borrowed money
or other Debt or the mortgaging, pledging or otherwise placing a Lien on any
material asset or material group of assets of the Company and its Subsidiaries;
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(e) guarantee of any obligation in excess of $100,000
(other than by the Company of a Wholly-Owned Subsidiary's debts or a guarantee
by a Subsidiary of the Company's debts or another Subsidiary's debts);
(f) lease or agreement under which the Company or any
Subsidiary is lessee of or holds or operates any property, real or personal,
owned by any other party, except for any lease of real or personal property
under which the aggregate annual rental payments do not exceed $100,000;
(g) lease or agreement under which the Company or any
Subsidiary is lessor of or permits any third party to hold or operate any
property, real or personal, owned or controlled by the Company or any
Subsidiary;
(h) assignment, license, indemnification or agreement
with respect to any intangible property (including, without limitation, any
Intellectual Property);
(i) warranty agreement with respect to its services
rendered or its products sold or leased;
(j) agreement under which it has granted any Person
any registration rights (including, without limitation, demand and piggyback
registration rights);
(k) sales, distribution or franchise agreement;
(l) contract, agreement or other arrangement with any
officer, director, stockholder, employee or Affiliate, or any Affiliate of any
officer, director, stockholder or employee;
(m) contract or agreement prohibiting it from freely
engaging in any business or competing anywhere in the world; or
(n) contract or group of related contracts with the
same party or group of affiliated parties the performance of which involves
consideration in excess of $200,000; or agreement with a term of more than six
months which is not terminable by the Company or any Subsidiary upon less than
30 days notice without penalty.
(ii) All of the contracts, agreements and instruments
set forth on the Contracts Schedule are valid, binding and enforceable in
accordance with their respective terms in all material respects. The Company and
each Subsidiary have performed all material obligations required to be performed
by them and are not in default under or in breach of nor in receipt of any claim
of default or breach under any material contract, agreement or instrument to
which the Company or any Subsidiary is subject; no event has occurred which with
the passage of time or the giving of notice or both would result in a default,
breach or event of noncompliance by the Company or any Subsidiary under any
material contract, agreement or instrument to which the Company or
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any Subsidiary is subject and; neither the Company nor any Subsidiary has any
present expectation or intention of not fully performing all such obligations;
neither the Company nor any Subsidiary has knowledge of any breach or
anticipated breach by the other parties to any material contract, agreement,
instrument or commitment to which it is a party.
6O. Intellectual Property Rights.
(a) The attached "Intellectual Property Schedule"
contains a complete and accurate list of all (i) patented or registered
Intellectual Property Rights owned or used by the Company or any Subsidiary,
(ii) pending patent applications and applications for registrations of other
Intellectual Property Rights filed by the Company or any Subsidiary, (iii)
unregistered trade names and corporate names owned or used by the Company or any
Subsidiary and (iv) unregistered trademarks, service marks, copyrights, mask
works and computer software owned or used by the Company or any Subsidiary, in
each case which are material to the financial condition, operating results,
assets, operations or business prospects of the Company and its Subsidiaries
taken as a whole. The Intellectual Property Schedule also contains a complete
and accurate list of all licenses and other rights granted by the Company or any
Subsidiary to any third party with respect to any Intellectual Property Rights
and all licenses and other rights granted by any third party to the Company or
any Subsidiary with respect to any Intellectual Property Rights, in each case
identifying the subject Intellectual Property Rights. Except as set forth on the
Intellectual Property Schedule, the Company or one of its Subsidiaries owns all
right, title and interest to, or has the right to use pursuant to a valid
license, all Intellectual Property Rights necessary for the operation of the
businesses of the Company and its Subsidiaries as presently conducted and as
presently proposed to be conducted, free and clear of all Liens. The loss or
expiration of any Intellectual Property Right or related group of Intellectual
Property Rights owned or used by the Company or any Subsidiary has not had and
would not reasonably be expected to have a Material Adverse Effect, and no such
loss or expiration is, to the best of the Company's knowledge, threatened,
pending or reasonably foreseeable. The Company and its Subsidiaries have taken
all reasonably necessary and desirable actions to maintain and protect the
Intellectual Property Rights which they own. To the best of the Company's
knowledge, the owners of any Intellectual Property Rights licensed to the
Company or any Subsidiary have taken all reasonably necessary and desirable
actions to maintain and protect the Intellectual Property Rights which are
subject to such licenses.
(b) (i) The Company and its Subsidiaries own all
right, title and interest in and to all of the Intellectual Property Rights
listed on such schedule, free and clear of all Liens, (ii) there have been no
claims made against the Company or any Subsidiary asserting the invalidity,
misuse or unenforceability of any of such Intellectual Property Rights, and, to
the best of the Company's knowledge, there are no grounds for the same, (iii)
neither the Company nor any Subsidiary has received any notices of, and is not
aware of any facts which indicate a likelihood of, any infringement or
misappropriation by, or conflict with, any third party with respect to such
Intellectual Property Rights (including, without limitation, any demand or
request that the Company or any Subsidiary license any rights from a third
party), (iv) the conduct of the Company's and each Subsidiary's business has not
infringed, misappropriated or conflicted with and does not infringe,
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misappropriate or conflict with any Intellectual Property Rights of other
Persons, nor would any future conduct as presently contemplated infringe,
misappropriate or conflict with any Intellectual Property Rights of other
Persons and (v) to the best of the Company's knowledge, the Intellectual
Property Rights owned by or licensed to the Company or any Subsidiary have not
been infringed, misappropriated or conflicted by other Persons. The transactions
contemplated by this Agreement shall have no material adverse effect on the
Company's or any Subsidiary's right, title and interest in and to the
Intellectual Property Rights listed on the Intellectual Property Schedule.
6P. Litigation, etc. Except as set forth on the attached
"Litigation Schedule," there are no actions, suits, proceedings, orders,
investigations or claims pending or, to the best of the Company's knowledge,
threatened against or affecting the Company or any Subsidiary (or to the best of
the Company's knowledge, pending or threatened against or affecting any of the
officers, directors or employees of the Company and its Subsidiaries with
respect to their businesses or proposed business activities), or pending or
threatened by the Company or any Subsidiary against any third party, at law or
in equity, or before or by any governmental department, commission, board,
bureau, agency or instrumentality (including, without limitation, any actions,
suit, proceedings or investigations with respect to the transactions
contemplated by this Agreement); neither the Company nor any Subsidiary is
subject to any arbitration proceedings under collective bargaining agreements or
otherwise or, to the best of the Company's knowledge, any governmental
investigations or inquiries (including, without limitation, inquiries as to the
qualification to hold or receive any license or permit); and, to the best of the
Company's knowledge, there is no basis for any of the foregoing. Neither the
Company nor any Subsidiary is subject to any judgment, order or decree of any
court or other governmental agency, and neither the Company nor any Subsidiary
has received any opinion or memorandum or legal advice from legal counsel to the
effect that it is exposed, from a legal standpoint, to any liability or
disadvantage which may be material to its business.
6Q. Brokerage. There are no claims for brokerage commissions,
finders' fees or similar compensation in connection with the transactions
contemplated by this Agreement based on any arrangement or agreement binding
upon the Company or any Subsidiary. The Company shall pay, and hold the
Purchasers harmless against, any liability, loss or expense (including, without
limitation, reasonable attorneys' fees and out-of-pocket expenses) arising in
connection with any such claim.
6R. Governmental Consent, etc. No permit, consent, approval or
authorization of, or declaration to or filing with, any governmental authority
is required in connection with the execution, delivery and performance by the
Company of this Agreement or the other agreements contemplated hereby, or the
consummation by the Company of any other transactions contemplated hereby or
thereby, except as set forth on the attached "Consents Schedule" and except as
expressly contemplated herein or in the exhibits hereto.
6S. Insurance. The attached "Insurance Schedule" contains a
description of each insurance policy maintained by the Company and its
Subsidiaries with respect to its properties, assets
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and businesses, and each such policy is in full force and effect as of the
Closing. Neither the Company nor any Subsidiary is in default with respect to
its obligations under any insurance policy maintained by it, and neither the
Company nor any Subsidiary has been denied insurance coverage. Except as set
forth on the Insurance Schedule, the Company and its Subsidiaries do not have
any self-insurance or co-insurance programs, and the reserves set forth on the
Latest Balance Sheet are adequate to cover all anticipated liabilities with
respect to any such self-insurance or co-insurance programs.
6T. Employees. The Company is not aware that any of the
persons set forth in the "Key Employees Schedule" hereto has any plans to
terminate employment with the Company or any Subsidiary. The Company and each
Subsidiary have complied in all material respects with all laws relating to the
employment of labor (including, without limitation, provisions thereof relating
to wages, hours, equal opportunity, collective bargaining and the payment of
social security and other taxes), and the Company is not aware that it or any
Subsidiary has any material labor relations problems (including, without
limitation, any union organization activities, threatened or actual strikes or
work stoppages or material grievances). Neither the Company, its Subsidiaries
nor, to the best of the Company's knowledge, any of their employees is subject
to any noncompete, nondisclosure, confidentiality, employment, consulting or
similar agreements relating to, affecting or in conflict with the present or
proposed business activities of the Company and its Subsidiaries, except for
agreements between the Company and its present and former employees.
6U. Employee Benefit Plans.
(a) The attached Employee Benefits Schedule sets forth an
accurate and complete list of each employee benefit plan (as such term is
defined in Section 3(3) of ERISA), and any other bonus, deferred compensation,
incentive compensation, stock, severance or other plan or arrangement, other
than a non-material fringe benefit plan (each of the foregoing, a "Benefit
Plan"), currently maintained or contributed to by the Company and its
Subsidiaries or with respect to which the Company and its Subsidiaries have or
may have any material liability.
(b) None of the Benefit Plans is subject to Title IV of ERISA
or the minimum funding requirements of Section 412 of the Code or Section 302 of
ERISA. No underfunded defined benefit plan has been, during the five years
preceding the August 2000 Closing Date, transferred out of the Company's
Controlled Group.
(c) None of the Benefits Plans is a multiemployer plan (as
defined in Section 3(37) of ERISA).
(d) None of the Benefit Plans provides for medical or life
insurance benefits to current or future retired or former employees of the
Company or any Subsidiary beyond their retirement or other termination of
service (other than as required under Section 4980B of the Code or applicable
state law).
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(e) None of the Benefit Plans obligates the Company or any
Subsidiary to pay any severance or similar benefit solely as a result of a
change in control or ownership within the meaning of Section 280G of the Code.
(f) All required contributions to date by the Company or any
Subsidiary under the terms of any Benefit Plan or applicable law have been made
within the time prescribed by any such plan or applicable law or properly
accrued on the appropriate balance sheet. All contributions, premiums and
expenses payable to or in respect of any Benefit Plan or the operation or
administration thereof relating to any period on or prior to the date hereof
have been paid or properly accrued on the appropriate balance sheet. No material
liability has been assessed or is expected to be incurred by the Company or any
Subsidiary or any trade or business, whether or not incorporated, which is or
would have been at any date of determination occurring within the preceding six
years treated as a single employer under Section 414 of the Code together with
the Company or the Subsidiaries (each such person, a "Related Person") (either
directly or indirectly, including as a result of an indemnification obligation
or any joint and several liability obligations) under or pursuant to Title I or
IV of ERISA or the penalty, excise tax or joint and several liability provisions
of the Code relating to employee benefit plans, and no event, transaction or
condition has occurred or exists that could result in any material liability to
the Purchasers, the Company, any Subsidiary or any Related Person or any
employee benefit plan of the Company, any Subsidiary or any Related Person. No
actions, suits, investigations or claims with respect to any Benefit Plan (other
than routine claims for benefits) are pending or, to the knowledge of the
Company, threatened, which could reasonably be expected to result in liability
to the Company or any Subsidiary.
(g) Each of the Benefit Plans has been administered in
accordance with its terms in all material respects and is in compliance in all
material respects with applicable laws and regulations including, without
limitation, ERISA and the Code.
(h) Each of the Benefit Plans which is intended to be a
qualified plan within the meaning of Section 401(a) of the Code and the trust
forming a part thereof has received a favorable determination letter from the
IRS to be so qualified and to the extent that each such trust is exempt from
taxation under section 501(a) of the Code, and, to the knowledge of the Company,
nothing has occurred since the date of such determination that could adversely
affect such qualification or tax-exempt status.
6V. Compliance with Laws. Neither the Company nor any
Subsidiary has violated any law or any governmental regulation or requirement
which violation has had or would reasonably be expected to have a Material
Adverse Effect, and neither the Company nor any Subsidiary has received notice
of any such violation.
6W. Environmental and Safety Matters.
Except as set forth on the attached "Environmental Schedule":
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(a) The Company and its Subsidiaries have complied
with and are currently in compliance with all Environmental and Safety
Requirements, and neither the Company nor its Subsidiaries have received any
oral or written notice, report or information regarding any liabilities (whether
accrued, absolute, contingent, unliquidated or otherwise) or any corrective,
investigatory or remedial obligations arising under Environmental and Safety
Requirements which relate to the Company or its Subsidiaries or any of their
properties or facilities that has not been complied with.
(b) Without limiting the generality of the foregoing,
the Company and its Subsidiaries have obtained and complied with, and are
currently in compliance with, all material, permits, licenses and other
authorizations that may be required pursuant to any Environmental and Safety
Requirements for the occupancy of their properties or facilities or the
operation of their businesses. A list of all such permits, licenses and other
authorizations is set forth on the attached Environmental Schedule.
(c) Neither this Agreement nor the consummation of
the transactions contemplated by this Agreement shall impose any obligations on
the Company and its Subsidiaries or otherwise for site investigation or cleanup,
or notification to or consent of any government agencies or third parties under
any Environmental and Safety Requirements (including, without limitation, any so
called "transaction-triggered" or "responsible property transfer" laws and
regulations).
(d) To the best of the Company's knowledge, none of
the following exists at any property or facility owned, occupied or operated by
the Company or any of its Subsidiaries if the existence of same would violate
Environmental Laws:
(i) underground storage tanks or
surface impoundments;
(ii) asbestos-containing materials in
any form or condition; or
(iii) materials or equipment containing
polychlorinated biphenyls.
(e) Neither the Company nor any of its Subsidiaries
has treated, stored, disposed of, arranged for or permitted the disposal of,
transported, handled or Released any substance (including, without limitation,
any hazardous substance) or owned, occupied or operated any facility or
property, so as to give rise to liabilities of the Company or its Subsidiaries
pursuant to Environmental and Safety Requirements (including, without
limitation, any liability for response costs, natural resource damages or
attorneys fees pursuant to CERCLA).
(f) Neither the Company nor any of its Subsidiaries
has, either expressly or by operation of law, assumed or undertaken any
liability or corrective, investigatory or remedial obligation of any other
Person relating to any Environmental and Safety Requirements.
(g) No Environmental Lien has attached to any
property owned, leased or operated by the Company or any of its Subsidiaries.
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6X. Affiliated Transactions. Other than each Purchaser and its
Affiliates, except as set forth on the attached "Affiliated Transactions
Schedule," no officer, director, employee, or Affiliate of the Company or any
Subsidiary or any individual related by blood, marriage or adoption to any such
individual or any entity in which any such Person or individual owns any
beneficial interest, is a party to any agreement, contract, commitment or
transaction with the Company or any Subsidiary or has any material interest in
any material property used by the Company or any Subsidiary.
6Y. Real Property Holding Corporation Status. Since its date
of incorporation, the Company has not been, and as of the date of the Closing
shall not be, a "United States real property holding corporation", as defined in
Section 897(c)(2) of the Code, and in Section 1.897-2(b) of the Treasury
Regulations issued thereunder. The Company has no current plans or intentions
which would cause the Company to become a "United States real property holding
company," and the Company has filed with the Internal Revenue Service all
statements, if any, with its United States income tax returns which are required
under Section 1.897-2(h) of the Treasury Regulations.
6Z. Customers and Suppliers.
(a) The attached "Customer Schedule" lists the 10 largest
customers of the Company (on a consolidated basis) for each of the two most
recent Fiscal Years and sets forth opposite the name of each such customer the
percentage of consolidated net sales attributable to such customer. The Customer
Schedule also lists any additional current customers which the Company
anticipates shall be among the 10 largest customers for the current Fiscal Year.
(b) Since the date of the Latest Balance Sheet, no
material supplier of the Company or any Subsidiary has indicated that it shall
stop, or materially decrease the rate of, supplying materials, products or
services to the Company or any Subsidiary, and no customer listed on the
Customer Schedule has indicated that it shall stop, or materially decrease the
rate of, buying materials, products or services from the Company or any
Subsidiary.
6AA. Reports with the Securities and Exchange Commission. The
Company's annual report on Form 10-K for its three most recent Fiscal Years, all
other reports or documents required to be filed by the Company pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act since the filing of the
most recent annual report on Form 10-K and its most recent annual report to its
stockholders do not contain any material false statements or any misstatement of
any material fact and do not omit to state any fact necessary to make the
statements set forth therein not misleading. The Company has made all filings
with the Securities and Exchange Commission which it is required to make, and
the Company has not received any request from the Securities and Exchange
Commission to file any amendment or supplement to any of the reports described
in this paragraph.
6BB. Investment Company. The Company is not an "investment
company" as defined under the Investment Company Act of 1940.
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6CC. Section 203 of the DGCL; Takeover Statute. The Board of
Directors has taken all actions necessary or advisable so that the restrictions
contained in Section 203 of the Delaware General Corporate Law ("DGCL")
applicable to a "business combination" (as defined in such Section) will not
apply to the execution, delivery or performance of this Agreement or any of the
other Documents or the consummation of the transactions contemplated hereby or
thereby, including the issuance of the Series C Preferred, the Series D
Preferred, the Series E Preferred, the Warrants and all New Series of Preferred
Stock. The execution, delivery and performance of this Agreement or any of the
other Documents and the consummation of the transactions contemplated hereby or
thereby will not cause to be applicable to the Company any "fair price,"
"moratorium," "control share acquisition" or other similar antitakeover statute
or regulation enacted under state or federal laws.
6DD. Rights Agreement. The Rights Agreement has been amended
to provide that the GTCR Purchasers and GTCR Capital Partners, L.P. and their
respective Affiliates shall be an "Exempt Person" (and therefore not an
"Acquiring Person") under such plan and that the Rights Agreement is otherwise
inapplicable to the execution and delivery of this Agreement, the other
Documents and the transactions contemplated hereby and thereby, including the
issuance of the Series C Preferred, the Series D Preferred, the Series E
Preferred, the Warrants and all issuances of New Series of Preferred Stock. No
"Distribution Date" has occurred within the meaning of the Rights Agreement, and
the consummation of the transactions contemplated hereby and by the other
Documents will not result in the occurrence of a Distribution Date. The Company
has taken all action required to render the Rights Agreement (and the "Rights"
thereunder) inapplicable to this Agreement, the other Documents and the
transactions contemplated hereby and thereby.
6EE. Purchaser Warrants. The Company has granted to each
Purchaser, on the date hereof, a Purchaser Warrant.
6FF. Disclosure. All information heretofore or
contemporaneously herewith furnished in writing by the Company or any Subsidiary
to any Purchaser for purposes of or in connection with this Agreement and the
transactions contemplated hereby is, and all written information hereafter
furnished by or on behalf of the Company or any Subsidiary to any Purchaser
pursuant hereto or in connection herewith will be, true and accurate in every
material respect on the date as of which such information is dated or certified,
and none of such information is or will be incomplete by omitting to state any
material fact necessary to make such information not misleading in light of the
circumstances under which made (it being recognized by the Purchasers that (a)
any projections and forecasts provided by the Company are based on good faith
estimates and assumptions believed by the Company to be reasonable as of the
date of the applicable projections or assumptions and that actual results during
the period or periods covered by any such projections and forecasts will likely
differ from projected or forecasted results and (b) any information provided by
the Company or any Subsidiary with respect to any Person or assets acquired or
to be acquired by the Company or any Subsidiary shall, for all periods prior to
the date of such acquisition, be limited to the knowledge of the Company or the
acquiring Subsidiary after reasonable inquiry). There is no fact known to the
Company which the Company has not disclosed to the Purchasers in writing and of
which any of its officers, directors or executive employees is aware (other than
general
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economic and industry conditions) and which has had or would reasonably be
expected to have a Material Adverse Effect.
On the August 2000 Closing Date and the date of each Subsequent Closing, or at
any other time at which the Company or its Subsidiaries is required to make
representations and warranties hereunder, each representation and warranty shall
be made after giving effect to each purchase of Preferred Stock hereunder, each
borrowing under the Subordinated Loan Agreement and under the Credit Agreement
and the application of the proceeds therefrom including the acquisition of Bio
Gro or any other Acquisition as if such acquisition had at that time been made.
Without limiting the foregoing, to the extent representations and warranties are
being made in connection with a purchase of Preferred Stock the proceeds of
which will be used to consummate an Acquisition, the Company's "Subsidiaries" in
such representations and warranties shall include the entities and businesses
being acquired pursuant to such Acquisition.
The Company shall have the right to supplement and amend the Schedules to this
Agreement with respect to events occurring after the date of this Agreement,
which such new event, when scheduled, shall not constitute a breach hereof;
provided that any such amendment or supplement shall be approved by the Majority
Holders and shall be in a form satisfactory to the Majority Holders; and further
provided that no such amendment or supplement shall cure a breach hereunder.
Section 7. Definitions. For the purposes of this Agreement,
the following terms have the meanings set forth below:
"Acquisition Loans" has the meaning set forth in the Credit
Agreement.
"Affiliate," as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For the purposes of this definition, "control" (including with
correlative meanings, the terms "controlling," "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly,
indirectly or beneficially, of the power to direct or cause the direction of the
management and policies of that Person, whether through the ownership of voting
securities or by contract or otherwise. For purposes of this Agreement, all
holdings of Preferred Stock by Persons who are Affiliates of each other shall be
aggregated for purposes of meeting any threshold tests under this Agreement.
"Affiliated Group" means any affiliated group as defined in
IRC Section 1504 that has filed a consolidated return for federal income tax
purposes (or any similar group under state, local or foreign law) for a period
during which the Company or any of its Subsidiaries was a member.
"August 2000 Closing Date" means the date of the August 2000
Closing.
"Baltimore Bonds" means the $58,550,000 Limited Obligation
Solid Waste Disposal Revenue Bonds (Wheelabrator Water Technologies Baltimore
L.L.C. Projects), 1996 Series.
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"Bio Gro" means Wheelabrator Water Technologies, Inc., a
Maryland corporation, and Residuals Processing, Inc., a California corporation,
and each of their respective Subsidiaries.
"Bio Gro Acquisition Agreement" means the Stock Purchase
Agreement, dated as of April 28, 2000, by and among Resco Holdings, Inc., a
Delaware corporation, Waste Management Holdings, Inc., a Delaware corporation,
Waste Management, Inc., a Delaware corporation, and the Company, as amended from
time to time.
"Business Day" means any day excluding Saturday, Sunday and
any day which is a legal holiday under the laws of the States of Illinois or
Texas or is a day on which banking institutions located in Chicago, Illinois or
Houston, Texas are authorized or required by law or other governmental action to
close.
"Capital Lease" means, with respect to any Person, any lease
of (or other agreement conveying the right to use) any real or personal property
by such Person that, in conformity with GAAP, is accounted for as a capital
lease on the balance sheet of such Person.
"Cash Equivalent Investment" means, at any time, (a) any
evidence of Debt, maturing not more than one year after such time, issued or
guaranteed by the United States Government or any agency thereof, (b) commercial
paper, maturing not more than one year from the date of issue, or corporate
demand notes, in each case (unless issued by a Bank or its holding company)
rated at least A-l by Standard & Poor's Ratings Group or P-l by Xxxxx'x
Investors Service, Inc., (c) any certificate of deposit (or time deposits
represented by such certificates of deposit) or bankers acceptance, maturing not
more than one year after such time, or overnight Federal Funds transactions that
are issued or sold by a commercial banking institution that is a member of the
Federal Reserve System and has a combined capital and surplus and undivided
profits of not less than $500,000,000, (d) any repurchase agreement entered into
with any Bank (or other commercial banking institution of the stature referred
to in clause (c)) which (i) is secured by a fully perfected security interest in
any obligation of the type described in any of clauses (a) through (c) and (ii)
has a market value at the time such repurchase agreement is entered into of not
less than 100% of the repurchase obligation of such Bank (or other commercial
banking institution) thereunder and (e) investments in short-term asset
management accounts offered by any Bank for the purpose of investing in loans to
any corporation (other than the Company or an Affiliate of the Company), state
or municipality, in each case organized under the laws of any state of the
United States or of the District of Columbia.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, or any other Environmental
and Safety Requirements.
"Certificates of Designation" means, collectively, the Series
C Certificate of Designations, the Series D Certificate of Designations, the
Series E Certificate of Designation and, once they have been filed with the
Delaware Secretary of State, all New Series Certificates of Designation.
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"Closing" means, collectively, the August 2000 Closing and
each Subsequent Closing.
"Controlled Group" means all members of a controlled group of
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with the
Company, are treated as a single employer under Section 414 of the Code or
Section 4001 of ERISA.
"Credit Agreement" means the Second Amended and Restated
Credit Agreement, dated as of the date hereof, by and among the Company, various
financial institutions (together with their respective successors and assigns
(the "Senior Lenders") and Bank of America, N.A., individually and as
administrative agent for the Senior Lenders, and related documents pursuant to
which the Senior Lenders have extended term and revolving loans to the Company
and its Subsidiaries on a senior secured basis, together with any schedules,
exhibits, appendices or other attachments thereto, as such agreement may be
amended, restated, extended, renewed, supplemented, refinanced, replaced or
otherwise modified from time to time (including, without limitation, by
increasing the amount of available borrowings thereunder or adding any direct or
indirect Subsidiaries of the Company as additional borrowers or guarantors
thereunder) and whether by the same or any other agent, lender or group of
lenders.
"Credit Documents" means, collectively, the Credit Agreement,
the related security agreements, guarantees, pledge agreements, notes and the
other documents executed in connection therewith, the Intercreditor Agreement,
and each other document or instrument executed by the Company, any Subsidiary of
the Company or any other obligor under any such documents, including any
schedules, exhibits, appendices or other attachments thereto.
"Debt" of any Person means, without duplication, (a) all
indebtedness of such Person for borrowed money, whether or not evidenced by
bonds, debentures, notes or similar instruments, (b) all obligations of such
Person as lessee under Capital Leases which have been or should be recorded as
liabilities on a balance sheet of such Person, (c) all obligations of such
Person to pay the deferred purchase price of property or services (excluding
trade accounts payable in the ordinary course of business), (d) all indebtedness
secured by a Lien on the property of such Person, whether or not such
indebtedness shall have been assumed by such Person (it being understood that if
such Person has not assumed or otherwise become personally liable for any such
indebtedness, the amount of the Debt of such Person in connection therewith
shall be limited to the lesser of the face amount of such indebtedness or the
fair market value of all property of such Person securing such indebtedness),
(e) all obligations, contingent or otherwise, with respect to the face amount of
all letters of credit (whether or not drawn) and banker's acceptances issued for
the account of such Person (including the letters of credit), (f) all Hedging
Obligations of such Person, (g) all Suretyship Liabilities of such Person, (h)
all Debt of any partnership in which such Person is a general partner, and (i)
all Disqualified Stock. The amount of any Person's Debt in respect of any
obligation to pay the deferred purchase price of property or services where such
obligation (including any such obligation evidenced by a note or similar
instrument) is contingent upon sales, revenues, the
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achievement of a particular business goal or any similar test shall be the
maximum amount which (at any date of determination) is reasonably expected to be
paid in respect of such obligation as estimated by the Company (subject to the
approval of the GTCR Purchasers, which shall not be unreasonably withheld).
"Default" means any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"Disqualified Stock" means any preferred capital stock issued
by the Company and its Subsidiaries which, by the terms thereof, could be (at
the request of the holders thereof or otherwise) subject to mandatory sinking
fund payments, redemption or other acceleration prior to the Maturity Date,
other than preferred capital stock (a) which is issued in connection with a
Public Offering or Sale of the Company, (b) which by its terms does not require
mandatory sinking fund payments, redemption or other acceleration prior to the
Maturity Date unless the loans under the Subordinated Loan Agreement have been
paid in full or (c) which is issued pursuant to or in connection with the
Documents.
"Documents" means this Agreement, the Credit Documents, the
Subordinated Loan Documents, the GTCR Fund VII Warrant Agreement, the Bio Gro
Acquisition Agreement, the GTCR Warrant Agreement, the TCW Warrant Agreement,
the Warrants, the Registration Agreement, the Stockholders Agreement, the
Monitoring Agreement, the Professional Services Agreement and all documents,
certificates and agreements delivered with respect thereto, in each case,
together with any schedules, exhibits, appendices or other attachments thereto.
"Environmental Claims" means all claims, however asserted, by
any governmental, regulatory or judicial authority or other Person alleging
potential liability or responsibility for violation of any Environmental Law, or
for release of Hazardous Substances or injury to the environment.
"Environmental Laws" means all federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes, together
with all administrative orders, directed and enforceable duties, licenses,
authorizations and permits of, and agreements with, any governmental authority,
in each case relating to environmental matters.
"Environmental Lien" shall mean any Lien, whether recorded or
unrecorded, in favor of any governmental entity, relating to any liability of
the Company or any Subsidiary arising under any Environmental and Safety
Requirements.
"Environmental and Safety Requirements" shall mean all
federal, state, local and foreign statutes, regulations, ordinances and other
provisions having the force or effect of law, all judicial and administrative
orders and determinations, all contractual obligations and all common law, in
each case concerning public health and safety, worker health and safety and
pollution or protection of the environment (including, without limitation, all
those relating to the presence, use,
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production, generation, handling, transport, treatment, storage, disposal,
distribution, labeling, testing, processing, discharge, Release, threatened
Release, control or cleanup of any hazardous or otherwise regulated materials,
substances or wastes, chemical substances or mixtures, pesticides, pollutants,
contaminants, toxic chemicals, petroleum products or byproducts, asbestos,
polychlorinated biphenyls, noise or radiation).
"EPIC" means Environmental Protection & Improvement Co., a New
Jersey corporation.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, or any successor statute.
"Event of Default" has the meaning set forth in Section 7 of
the Subordinated Loan Agreement.
"Event of Noncompliance" has the meaning set forth in the
Series D Certificate of Designations.
"Fiscal Quarter" means a fiscal quarter of a Fiscal Year.
"Fiscal Year" means the fiscal year of the Company and its
Subsidiaries, which period shall be the 12-month period ending on December 31 of
each year. References to a Fiscal Year with a number corresponding to any
calendar year (e.g., "Fiscal Year 1999") refer to the Fiscal Year ending on
December 31 of such calendar year.
"Funding Letter" means the letter agreement, dated as of
August 11, 2000, by and among GTCR Fund VII and Bank of America, N.A., as agent,
entered into in connection with the Credit Agreement.
"GAAP" means generally accepted accounting principles set
forth from time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board (or
agencies with similar functions of comparable stature and authority within the
U.S. accounting profession), which are applicable to the circumstances as of the
date of determination.
"GTCR Warrant Agreement" means the Amended and Restated GTCR
Warrant Agreement, dated as of the date of this Agreement, by and between the
Initial Lender and the Company, as amended from time to time.
"Hazardous Substances" means any hazardous waste, as defined
by 42 U.S.C. Section 6903(5), any hazardous substance as defined by 42 U.S.C.
Section 9601(14), any pollutant or contaminant
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as defined by 42 U.S.C. Section 9601(33) or any toxic substance, oil or
hazardous material or other chemical or substance regulated by any Environmental
Law, excluding household hazardous waste.
"Hedging Obligations" means, with respect to any Person, all
liabilities of such Person under interest rate, currency and commodity swap
agreements, cap agreements and collar agreements, and all other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates, currency exchange rates or commodity prices.
"Intercreditor Agreement" has the meaning set forth in the
Subordinated Loan Agreement.
"Intellectual Property Rights" means all (i) patents, patent
applications, patent disclosures and inventions, (ii) trademarks, service marks,
trade dress, trade names, logos and corporate names and registrations and
applications for registration thereof together with all of the goodwill
associated therewith, (iii) copyrights (registered or unregistered) and
copyrightable works and registrations and applications for registration thereof,
(iv) mask works and registrations and applications for registration thereof, (v)
computer software, data, data bases and documentation thereof, (vi) trade
secrets and other confidential information (including, without limitation,
ideas, formulas, compositions, inventions (whether patentable or unpatentable
and whether or not reduced to practice), know-how, manufacturing and production
processes and techniques, research and development information, drawings,
specifications, designs, plans, proposals, technical data, copyrightable works,
financial and marketing plans and customer and supplier lists and information),
(vii) other intellectual property rights and (viii) copies and tangible
embodiments thereof (in whatever form or medium).
"Lien" means, with respect to any Person, any interest granted
by such Person in any real or personal property, asset or other right owned or
being purchased or acquired by such Person which secures payment or performance
of any obligation and shall include any mortgage, lien, encumbrance, charge or
other security interest of any kind, whether arising by contract, as a matter of
law, by judicial process or otherwise.
"Initial Lender" means GTCR Capital Partners, L.P., a Delaware
limited partnership.
"Investor Preferred" means (i) the Preferred Stock issued
hereunder (including, without limitation, pursuant to Section 1C, the GTCR Fund
VII Warrant Agreement and the Purchaser Warrants) and (ii) any Preferred Stock
issued or issuable with respect to the Preferred Stock referred to in clause (i)
above by way of stock dividends or stock splits or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization. As to any particular shares of Investor Preferred, such shares
shall cease to be Investor Preferred when they have been (a) effectively
registered under the Securities Act and disposed of in accordance with the
registration statement covering them or (b) distributed to the public through a
broker, dealer or market maker pursuant to Rule 144 under the Securities Act (or
any similar rule then in force).
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"Investment" means, relative to any Person, (a) any loan or
advance made by such Person to any other Person (excluding any commission,
travel or similar advances made to directors, officers and employees of the
Company or any of its Subsidiaries), (b) any Suretyship Liability of such
Person, (c) any ownership or similar interest held by such Person in any other
Person and (d) deposits and the like relating to prospective acquisitions of
businesses.
"IRC" means the Internal Revenue Code of 1986, as amended, and
any reference to any particular IRC Section shall be interpreted to include any
revision of or successor to that Section regardless of how numbered or
classified.
"Lenders" means, collectively, GTCR Capital Partners, L.P. and
the TCW/Crescent Lenders.
"Majority Holders" means the holders of a majority of the
Investor Preferred.
"Material Adverse Effect" means a material adverse change in,
or a material adverse effect on, (a) the business, assets, property, operations,
results, prospects or condition (financial or otherwise) of the Company and its
Subsidiaries taken as a whole or (b) the validity or enforceability of this
Agreement or any of the other Documents or the rights or remedies, taken as a
whole, of the Purchasers thereunder.
"Maturity Date" has the meaning set forth in the Subordinated
Loan Agreement.
"Monitoring Agreement" means that certain Amended and Restated
Monitoring Agreement, dated as of the date hereof, between the Company, the
TCW/Crescent Lenders and GTCR Xxxxxx Xxxxxx, L.L.C., as amended from time to
time.
"Multiemployer Pension Plan" means a multiemployer plan, as
such term is defined in Section 4001(a)(3) of ERISA, and to which the Company or
any member of the Controlled Group may have any liability.
"Officer's Certificate" means a certificate signed by the
Company's president or its chief financial officer on behalf of the Company,
stating that (i) the Company has made or has caused to be made such
investigations as are necessary in order to verify the accuracy of the
information set forth in such certificate and (ii) to the best of the Company's
knowledge, such certificate does not misstate any material fact and does not
omit to state any fact necessary to make the certificate not misleading.
"PBGC" means the Pension Benefit Guaranty Corporation and any
entity succeeding to any or all of its functions under ERISA.
"Pension Plan" means a "pension plan", as such term is defined
in Section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a
Multiemployer Pension Plan), and to
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which the Company or any member of the Controlled Group may have any liability,
including any liability by reason of having been a substantial employer within
the meaning of Section 4063 of ERISA at any time during the preceding five
years, or by reason of being deemed to be a contributing sponsor under Section
4069 of ERISA.
"Permitted Encumbrances" means (a) statutory liens for current
taxes or other governmental charges with respect to the Real Property not yet
due and payable or the amount or validity of which is being contested in good
faith by appropriate proceedings by the Company and for which appropriate
reserves have been established in accordance with GAAP; (b) mechanics, carriers
workers, repairers and similar statutory liens arising or incurred in the
ordinary course of business for amounts which are not delinquent and which are
not, individually or in the aggregate, material to the operation of the
Company's or its Subsidiaries' business; (c) zoning, entitlement, building and
other land use regulations imposed by governmental agencies having jurisdiction
over the Real Property which are not violated by the current use and operation
of the Real Property; and (d) covenants, conditions, restrictions, easements and
other similar matters of record affecting title to the Real Property which do
not materially impair the occupancy or use of the Real Property for the purposes
for which it is currently used in connection with the Company's or its
Subsidiaries' business.
"Permitted Refinancing Debt" means any Debt issued in exchange
for, or the net proceeds of which are used to refinance, renew, replace, defease
or refund the Senior Indebtedness (including, without limitation, the stated
amounts of letters of credit and all unused commitments); provided that: (1) the
principal amount of such Debt does not exceed the Maximum Senior Indebtedness
(including, without limitation, the stated amounts of letters of credit and all
unused commitments) at the time of such refinancing renewal, replacement,
defeasance or refunding (plus the amount of reasonable fees and expenses
incurred in connection therewith); (2) such Debt has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of the
Senior Indebtedness being refinanced, renewed, replaced, defeased or refunded
and such Debt has a final maturity equal to or greater than the Senior
Indebtedness being refinanced, renewed, replaced, defeased or refunded; (3) such
Debt is ranked superior in right of payment to the Loans on terms at least as
favorable to the holders of the Loans as those, if any, contained in the
documentation governing the Senior Indebtedness (including the Intercreditor
Agreement); (4) the annual interest rate with respect to such Debt (x) if it is
a fixed rate, it is not more than 2% per annum more than, and such interest is
payable no more frequently than, that of the Senior Indebtedness as in effect on
the date hereof and (y) if it is a variable rate, the index used for the
calculation of the annual interest rate is substantially similar to and the
margins applied to such index are not more than 2% per annum more than, and such
interest is payable no more frequently than, that of the Senior Indebtedness as
in effect on the date hereof; (5) such Debt is incurred by the Company; and (6)
such Debt satisfies the provisions of the subsection of Section 6.9(a) of the
Subordinated Loan Agreement pursuant to which the Debt being refinanced was
incurred.
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"Person" means an individual, a partnership, a limited
liability company, a corporation, an association, a joint stock company, a
trust, a joint venture, an unincorporated organization and a governmental entity
or any department, agency or political subdivision thereof.
"Preferred Stock" means, collectively, the Series D Preferred,
the Series E Preferred and each New Series.
"Professional Services Agreement" means that certain
Professional Services Agreement, dated as of January 27, 2000, between the
Company and GTCR Xxxxxx Xxxxxx, L.L.C., as amended from time to time.
"Public Offering" means any offering by the Company of its
capital stock or equity securities to the public pursuant to an effective
registration statement under the Securities Act of 1933, as then in effect, or
any comparable statement under any similar federal statute then in force.
"Purchaser Warrant" means each Warrant granted by the Company
pursuant to Section 2E hereof to each Purchaser in the form of Exhibit C
attached hereto.
"Real Property" means the Owned Real Property and Leased Real
Property.
"Release" shall have the meaning set forth in CERCLA.
"Restricted Securities" means (i) the Preferred Stock issued
hereunder and the Purchaser Warrants issued in connection herewith, (ii) the
shares of Preferred Stock issuable upon exercise of the Purchaser Warrants and
shares of Common Stock issuable upon conversion of the Preferred Stock and (iii)
any securities issued with respect to the securities referred to in clause (i)
or (ii) above by way of a stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization. As to any particular Restricted Securities, such securities
shall cease to be Restricted Securities when they have (a) been effectively
registered under the Securities Act and disposed of in accordance with the
registration statement covering them, (b) become eligible for sale pursuant to
Rule 144(k) (or any similar provision then in force) under the Securities Act or
(c) been otherwise transferred and new certificates for them not bearing the
Securities Act legend set forth in Section 8C have been delivered by the Company
in accordance with Section 5(ii). Whenever any particular securities cease to be
Restricted Securities, the holder thereof shall be entitled to receive from the
Company, without expense, new securities of like tenor not bearing a Securities
Act legend of the character set forth in Section 8C.
"Rhode Island Facility" means the facility and related
equipment constructed and/or purchased for the Rhode Island Project.
"Rhode Island Non-Recourse Debt" means Debt incurred for the
purpose of constructing or purchasing equipment for the Rhode Island Project
which is non-recourse to the
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Company and its Subsidiaries (except for customary warranties given in
connection with non-recourse Debt).
"Rhode Island Project" means the proposed project pursuant to
which Providence Soils, LLC would develop a soil manufacturing facility for the
processing of biosolids to be located in Johnstown, Rhode Island for which a
proposal was submitted in respect to a request for proposals by the Rhode Island
Resource Recovery Corporation.
"Rights Agreement" means the Rights Agreement, dated as of
December 20, 1996, between the Corporation and Intercontinental Registrar &
Transfer Agency, Inc., as Rights Agent.
"Sale of the Company" means any transaction or series of
transactions pursuant to which any Person or group of related Persons, other
than GTCR Fund VII and its Affiliates, in the aggregate acquires (i) capital
stock of the Company possessing the voting power (other than voting rights
accruing only in the event of a default or breach) to elect a majority of the
Company's board of directors (whether by merger, consolidation, reorganization,
combination, sale or transfer of the Company's capital stock, shareholder or
voting agreement, proxy, power of attorney or otherwise) or (ii) all or
substantially all of the Company's assets determined on a consolidated basis.
"Securities Act" means the Securities Act of 1933, as amended,
or any similar federal law then in force.
"Securities Exchange Act" means the Securities Exchange Act of
1934, as amended, or any similar federal law then in force.
"Securities and Exchange Commission" includes any governmental
body or agency succeeding to the functions thereof.
"Senior Indebtedness" means all obligations of the Company now
or hereafter incurred pursuant to the Credit Documents, including any increase,
refinancing, refunding, renewal, extension or replacement thereof permitted
hereunder, whether for principal, premium (if any), interest, fees or expenses
payable thereon or pursuant thereto.
"Senior Lenders" is defined in the definition of Credit
Agreement.
"Series A Preferred" means the Company's Series A Junior
Participating Preferred Stock, par value $.002 per share.
"Series B Preferred" means the Company's Series B Redeemable
Preferred Stock, par value $.002 per share.
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"Series C Preferred" means the Company's Series C Convertible
Preferred Stock, par value $.002 per share, having the rights and preferences
set forth in the Series C Certificate of Designations.
"Series D Preferred" means the Company's Series D Convertible
Preferred Stock, par value $.002 per share, having the rights and preferences
set forth in the Series D Certificate of Designations.
"Series E Preferred" means the Company's Series E Convertible
Preferred Stock, par value $.002 per share, having the rights and preferences
set forth in the Series E Certificate of Designations.
"Series C Certificate of Designations" means the Certificate
of Designations, Preferences and Rights of Series C Convertible Preferred Stock
of Synagro Technologies, Inc., approved by the Board and filed with the
Secretary of State of Delaware on January 26, 2000.
"Series D Certificate of Designations" means the Certificate
of Designations, Preferences and Rights of Series D Convertible Preferred Stock
of Synagro Technologies, Inc., approved by the Board and filed with the
Secretary of State of Delaware on January 26, 2000.
"Series E Certificate of Designations" means the Certificate
of Designations, Preferences and Rights of Series E Convertible Preferred Stock
of Synagro Technologies, Inc., approved by the Board and filed with the
Secretary of State of Delaware on June 14, 2000.
"Shareholders Consent" means the action on written consent
approved by a majority of the Company's shareholders on or about January 17,
2000 approving (a) the conversion of Series C Preferred to Series D Preferred,
(b) the issuance of the Common Stock issuable upon conversion of all of the
shares of Preferred Stock and all of the Warrant Shares, in each case whether
issued on or prior to the date hereof or in the future and (c) the amendment to
Company's Restated Certificate of Incorporation as set forth in Exhibit E to the
Original Purchase Agreement.
"Subordinated Loan Agreement" means the Amended and Restated
Senior Subordinated Loan Agreement, dated as of the date of this Agreement, by
and among the Company, certain Subsidiary guarantors, GTCR Capital Partners,
L.P. and the TCW/Crescent Lenders, as amended from time to time.
"Subordinated Loan Documents" means, collectively, the
Subordinated Loan Agreement, any related notes and guaranties, including all
exhibits, schedules and other attachments thereto.
"Subsidiary" means any corporation of which the securities
having a majority of the ordinary voting power in electing the board of
directors are, at the time as of which any determination is being made, owned by
the Company either directly or through one or more Subsidiaries.
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48
"Suretyship Liability" means any agreement, undertaking or
arrangement by which any Person guarantees, endorses or otherwise becomes or is
contingently liable upon (by direct or indirect agreement, contingent or
otherwise, to provide funds for payment, to supply funds to or otherwise to
invest in a debtor, or otherwise to assure a creditor against loss) any
indebtedness, obligation or other liability of any other Person (other than by
endorsements of instruments in the course of collection), or guarantees the
payment of dividends or other distributions upon the shares of any other Person.
The amount of any Person's obligation in respect of any Suretyship Liability
shall (subject to any limitation set forth therein) be deemed to be the
principal amount of the debt, obligation or other liability supported thereby.
"Tax" or "Taxes" means federal, state, county, local, foreign
or other income, gross receipts, ad valorem, franchise, profits, sales or use,
transfer, registration, excise, utility, environmental, communications, real or
personal property, capital stock, license, payroll, wage or other withholding,
employment, social security, severance, stamp, occupation, alternative or add-on
minimum, estimated and other taxes of any kind whatsoever (including, without
limitation, deficiencies, penalties, additions to tax, and interest attributable
thereto) whether disputed or not.
"Tax Return" means any return, information report or filing
with respect to Taxes, including any schedules attached thereto and including
any amendment thereof.
"TCW/Crescent Lenders" means, collectively, (i) TCW/Crescent
Mezzanine Partners II, L.P., a Delaware limited partnership, (ii) TCW/Crescent
Mezzanine Trust II, a Delaware business trust, (iii) TCW Leveraged Income Trust,
L.P., a Delaware limited partnership, (iv) TCW Leveraged Income Trust II, L.P.,
a Delaware limited partnership and TCW Leveraged Income Trust IV, L.P., a
Delaware limited partnership.
"TCW Warrant Agreement" means the TCW Warrant Agreement, dated
as of the date of this Agreement, by and between the Company and the
TCW/Crescent Lenders, as amended from time to time.
"Transactions" means those transactions contemplated by the
Documents.
"Treasury Regulations" means the United States Treasury
Regulations promulgated under the Code, and any reference to any particular
Treasury Regulation section shall be interpreted to include any final or
temporary revision of or successor to that section regardless of how numbered or
classified.
"Warrant Agreements" means the GTCR Warrant Agreement, the TCW
Warrant Agreement and the GTCR Fund VII Warrant Agreement.
"Warrants" means the warrants to purchase shares of Preferred
Stock (the "Warrant Shares") issued by the Company to the Initial Lender and the
TCW Crescent Lenders in connection
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49
with the making of loans under the Subordinated Loan Agreement and the Purchaser
Warrants, in each case pursuant to the applicable Warrant Agreement.
"Warrant Shares" is defined in the definition of Warrants.
"Weighted Average Life to Maturity" means, when applied to any
Debt at any date, the number of years obtained by dividing (a) the sum of the
products obtained by multiplying (x) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (y) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (b) the then outstanding principal
amount of such Debt.
"Wholly-Owned Subsidiary" means, with respect to any Person, a
Subsidiary of which all of the outstanding capital stock or other ownership
interests are owned by such Person or another Wholly-Owned Subsidiary of such
Person.
Section 8. Miscellaneous.
8A. Expenses. The Company agrees to pay, and hold each
Purchaser and all holders of Investor Preferred harmless against liability for
the payment of, (i) the reasonable fees and expenses of their counsels arising
in connection with the negotiation and execution of this Agreement and the
consummation of the transactions contemplated by this Agreement (including,
without limitation, fees and expenses arising with respect to any subsequent
purchase of Preferred Stock pursuant to Section 1C hereof and the fees and
expenses of counsel in connection with any required filings by a Purchaser under
state and federal securities laws), (ii) the reasonable fees and expenses
incurred with respect to any amendments or waivers (whether or not the same
become effective) under or in respect of this Agreement, the Registration
Agreement, the Stockholders Agreement, the Professional Services Agreement, the
Monitoring Agreement, the other agreements contemplated hereby and the
Certificates of Designation, (iii) stamp and other taxes which may be payable in
respect of the execution and delivery of this Agreement or the issuance,
delivery or acquisition of any shares of Preferred Stock purchased hereunder or
in accordance with Section 1C hereof, (iv) the fees and expenses incurred with
respect to the interpretation or enforcement of the rights granted under this
Agreement, the Registration Agreement, the Stockholders Agreement, the
Professional Services Agreement, the Monitoring Agreement, the other agreements
contemplated hereby, the Certificates of Designation and the Company's bylaws
and (v) such reasonable travel expenses, rating agency fees, legal fees and
other out-of-pocket fees and expenses as have been or may be incurred by each
Purchaser, its Affiliates and its Affiliates' directors, officers and employees
in connection with any Company-related financing and in connection with the
rendering of any other services by a Purchaser or its Affiliates (including, but
not limited to, fees and expenses incurred in attending board of directors or
other Company-related meetings).
-45-
50
8B. Remedies. Each holder of Investor Preferred shall have all
rights and remedies set forth in this Agreement and the Certificates of
Designation and all rights and remedies which such holders have been granted at
any time under any other agreement or contract and all of the rights which such
holders have under any law. Any Person having any rights under any provision of
this Agreement shall be entitled to enforce such rights specifically (without
posting a bond or other security), to recover damages by reason of any breach of
any provision of this Agreement and to exercise all other rights granted by law.
8C. Purchaser's Investment Representations. Each of the GTCR
Purchasers and the TCW/Crescent Lenders hereby represents as to itself (i) that
it is acquiring the Restricted Securities purchased hereunder or acquired
pursuant hereto for its own account with the present intention of holding such
securities for purposes of investment, and that it has no intention of selling
such securities in a public distribution in violation of the federal securities
laws or any applicable state securities laws, (ii) that it is an "accredited
investor" and a sophisticated investor for purposes of applicable U.S. federal
and state securities laws and regulations, (iii) that this Agreement and each of
the other agreements contemplated hereby constitutes (or will constitute) the
legal, valid and binding obligation of such Purchaser, enforceable in accordance
with its terms, and (iv) that the execution, delivery and performance of this
Agreement and such other agreements by such Purchaser does not and will not
violate any laws, and does not and will not conflict with, violate or cause a
breach of any agreement, contract or instrument to which such Purchaser is
subject. Notwithstanding the foregoing, nothing contained herein shall prevent
the Purchasers and subsequent holders of Restricted Securities from transferring
such securities in compliance with the provisions of Section 5 hereof. Each
certificate for Restricted Securities shall be imprinted with a legend in
substantially the following form:
"The securities represented by this certificate were
originally issued on [date of issuance] and have not been
registered under the Securities Act of 1933, as amended. The
transfer of the securities represented by this certificate is
subject to the conditions specified in the Amended and
Restated Purchase Agreement, dated as of August 14, 2000 by
and among the issuer (the "Company") and certain investors,
and the Company reserves the right to refuse the transfer of
such securities until such conditions have been fulfilled with
respect to such transfer. A copy of such conditions shall be
furnished by the Company to the holder hereof upon written
request and without charge."
8D. Funding Letter.
(a) If GTCR Fund VII or GTCR CI are required to contribute
cash to the Company to fund a Shortfall pursuant to the Funding Letter, the
TCW/Crescent Lenders shall be obligated to contribute an amount of cash to the
Company to fund such Shortfall on a pro rata basis with GTCR Fund VII and GTCR
CI based on the proportion of Preferred Stock purchased by or issued to
(including, without limitation, issued upon exercise of a Purchaser Warrant) the
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51
TCW/Crescent Lenders pursuant to this Agreement in relation to the aggregate
Preferred Stock purchased by or issued to (including, without limitation, issued
upon exercise of Purchaser Warrants) all of the Purchasers pursuant to this
Agreement.
(b) If a Purchaser is required to contribute cash to the
Company in connection with a Shortfall (as defined in the Funding Letter)
pursuant to the Funding Letter or Section 8D(a) hereof (in either case, a
"Funding Obligation"), the Company hereby agrees to provide a written request
for such investment from the Board to such Purchaser and such investment shall
be made at a Subsequent Closing subject to the terms and conditions set forth in
this Agreement. In addition, with respect to a Subsequent Closing in connection
with a Funding Obligation, the Company hereby agrees to use reasonable best
efforts to satisfy the conditions precedent to such Subsequent Closing. Any
funds received by the Company from the Purchasers pursuant to a contribution by
them in connection with a Funding Obligation shall be applied by the Company to
repay outstanding debt under the Credit Agreement. In connection with any
Subsequent Closing in connection with a Funding Obligation, each Purchaser
purchasing Preferred Stock at such Subsequent Closing shall be entitled to
receive from the Company a Purchaser Warrant exercisable for a number of shares
of the series of Preferred Stock to be purchased at such Subsequent Closing
equal to the number of shares of Preferred Stock to be purchased by such
Purchaser at such Subsequent Closing multiplied by 0.111.
8E. Consent to Amendments. Except as otherwise expressly
provided herein, the provisions of this Agreement may be amended and the Company
may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Company has obtained the written
consent of the Majority Holders and, if any such amendment or action would
materially and adversely affect the TCW/Crescent Lenders in a manner different
from the GTCR Purchasers, the TCW/Crescent Lenders. No other course of dealing
between the Company and the holder of any Preferred Stock or any delay in
exercising any rights hereunder or under the Certificates of Designation shall
operate as a waiver of any rights of any such holders. For purposes of this
Agreement, shares of Preferred Stock held by the Company or any Subsidiaries
shall not be deemed to be outstanding.
8F. Survival of Representations and Warranties. All
representations and warranties contained herein or made in writing by any party
in connection herewith shall survive until the earlier of (i) the redemption of
the Preferred Stock and (2) a period of four (4) years from the Closing or from
any subsequent closing of additional issuances of Preferred Stock hereunder, as
applicable, regardless of any investigation made by any Purchaser or on its
behalf (the "Survivability Period").
8G. Successors and Assigns. Except as otherwise expressly
provided herein, all covenants and agreements contained in this Agreement by or
on behalf of any of the parties hereto shall bind and inure to the benefit of
the respective successors and assigns of the parties hereto whether so expressed
or not. In addition, and whether or not any express assignment has been made,
the provisions of this Agreement which are for the Purchasers' benefit as a
purchaser or holder of
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52
Preferred Stock are also for the benefit of, and enforceable by, any subsequent
holder of such Preferred Stock. The rights and obligations of the GTCR
Purchasers under this Agreement and the agreements contemplated hereby may be
assigned by the GTCR Purchasers at any time, in whole or in part, to any
investment fund managed by GTCR Xxxxxx Xxxxxx, L.L.C., or any successor thereto.
The rights and obligations of the TCW/Crescent Lenders under this Agreement and
the agreements contemplated hereby may not be assigned, except to their
Affiliates, without the prior written consent of the GTCR Purchasers.
8H. Generally Accepted Accounting Principles. Where any
accounting determination or calculation is required to be made under this
Agreement or the exhibits hereto, such determination or calculation (unless
otherwise provided) shall be made in accordance with GAAP, consistently applied,
except that if because of a change in GAAP the Company would have to alter a
previously utilized accounting method or policy in order to remain in compliance
with GAAP, such determination or calculation shall continue to be made in
accordance with the Company's previous accounting methods and policies.
8I. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
8J. Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, any one of which need not contain
the signatures of more than one party, but all such counterparts taken together
shall constitute one and the same Agreement.
8K. Entire Agreement. This Agreement, those documents
expressly referred to herein and other documents of even date herewith embody
the complete agreement among the parties and supersede and preempt any prior
understandings, agreements or representations by or among the parties, written
or oral, which may have related to the subject matter hereof in any way.
8L. Descriptive Headings; Interpretation. The descriptive
headings of this Agreement are inserted for convenience only and do not
constitute a Section of this Agreement. The use of the word "including" in this
Agreement shall be by way of example rather than by limitation.
8M. Governing Law. The corporate law of Delaware shall govern
all issues concerning the relative rights of the Company and its stockholders.
All other questions concerning the construction, validity and interpretation of
this Agreement and the exhibits and schedules hereto shall be governed by and
construed in accordance with the internal laws of the State of Illinois, without
giving effect to any choice of law or conflict of law provision or rule (whether
of the State of Illinois or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Illinois.
-48-
53
8N. Notices. All notices, demands or other communications to
be given or delivered under or by reason of the provisions of this Agreement
shall be in writing and delivered personally, mailed by certified or registered
mail, return receipt requested and postage prepaid, sent via a nationally
recognized overnight courier, or via facsimile. Such notices, demands and other
communications will be sent to the address indicated below:
If to the Company:
Synagro Technologies, Inc.
0000 Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Chief Financial Officer
Telecopier No.: (000) 000-0000
With a copy to:
Xxxxx Liddell & Xxxx LLP
3400 Chase Tower
000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxx
Telecopier No.: (000) 000-0000
If to the Purchasers:
GTCR Fund VII, L.P.
c/o GTCR Xxxxxx Xxxxxx, L.L.C.
0000 Xxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx
Telecopier No.: (000) 000-0000
and
TCW/Crescent Mezzanine Partners II, L.P.
TCW/Crescent Mezzanine Trust II
TCW Leveraged Income Trust, L.P.
TCW Leveraged Income Trust II, L.P.
TCW Leveraged Income Trust IV, L.P.
x/x XXX/Xxxxxxxx Xxxxxxxxx, X.X.X.
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Telecopier: (000) 000-0000
-49-
54
With a copy to:
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
Telecopier No.: (000) 000-0000
and
Gardere & Xxxxx, L.L.P.
3000 Thanksgiving Tower
0000 Xxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxx
Telecopier No.: (000) 000-0000
or such other address or to the attention of such other Person as the recipient
party shall have specified by prior written notice to the sending party;
provided, that, the failure to deliver copies of notices as indicated above
shall not affect the validity of any notice. Any such communication shall be
deemed to have been received (i) when delivered, if personally delivered or sent
by nationally recognized overnight courier or sent via facsimile or (ii) on the
third Business Day following the date on which the piece of mail containing such
communication is posted if sent by certified or registered mail.
8O. Indemnification.
(a) General. In consideration of each Purchaser's
execution and delivery of this Agreement and acquiring the Preferred Stock
hereunder and in addition to all of the Company's other obligations under this
Agreement, the Company shall defend, protect, indemnify and hold harmless each
Purchaser and each other holder of Preferred Stock and all of their officers,
directors, employees and agents (including, without limitation, those retained
in connection with the transactions contemplated by this Agreement)
(collectively, the "Indemnitees") from and against any and all actions, causes
of action, suits, claims, losses, costs, penalties, fees, liabilities and
damages, and expenses in connection therewith (irrespective of whether any such
Indemnitee is a party to the action for which indemnification hereunder is
sought), and including reasonable attorneys' fees and disbursements (the
"Indemnified Liabilities"), incurred by the Indemnitees or any of them as a
result of, or arising out of, or relating to (i) third parties claims relating
to (x) any transaction financed or to be financed in whole or in part, directly
or indirectly, with the proceeds of the issuance of the Preferred Stock or (y)
the execution, delivery, performance or enforcement of this Agreement and any
other instrument, document or agreement executed pursuant hereto by any of the
Indemnitee,
-50-
55
(ii) a breach of a representation or warranty by the Company of any Subsidiary
hereunder in any respect, in the case of representations or warranties qualified
by a materiality standard, including, without limitation, a "material adverse
effect" qualifier, or in any respect which is material to the business, assets,
property, operations, results or condition (financial or otherwise) of the
Company and its Subsidiaries taken as a whole, in the case of all other
representations and warranties or (iii) a breach of a covenant by the Company or
any Subsidiary under this Agreement or any instrument or other document executed
in connection with the transactions contemplated hereby. Notwithstanding the
foregoing, Indemnified Liabilities shall not include costs and expenses incurred
by any Indemnitee in connection with (i) any violations of law or governmental
regulations by such Indemnitee, (ii) any acts of willful misconduct or gross
negligence by such Indemnitee or (iii) any actions against such Indemnitee by
creditors of such Indemnitee or shareholders or creditors of such Indemnitee's
parent companies. THIS INDEMNITY INDEMNIFIES THE INDEMNITEES AGAINST THEIR OWN
NEGLIGENCE. To the extent that the foregoing undertaking by the Company may be
unenforceable for any reason, the Company shall make the maximum contribution to
the payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law.
(b) Environmental Liabilities. Without limiting the
generality of the indemnity set out in Section 8O(a) above, the Company shall
defend, protect, indemnify and hold harmless each Purchaser and all other
Indemnitees from and against any and all actions, causes of action, suits,
losses, liabilities, damages, injuries, penalties, fees, costs, expenses and
claims of any and every kind whatsoever paid, incurred or suffered by, or
asserted against, each Purchaser or any other Indemnitee for, with respect to,
or as a direct or indirect result of, the past, present or future environmental
condition of any property owned, operated or used by the Company, any
Subsidiary, their predecessors or successors or of any offsite treatment,
storage or disposal location associated therewith, including, without
limitation, the presence on or under, or the escape, seepage, leakage, spillage,
discharge, emission, release, or threatened release into, onto or from, any such
property or location of any toxic, chemical or hazardous substance, material or
waste (including, without limitation, any losses, liabilities, damages,
injuries, penalties, fees, costs, expenses or claims asserted or arising under
CERCLA, any so-called "Superfund" or "Superlien" law, or any other federal,
state, local or foreign statute, law, ordinance, code, rule, regulation, order
or decree regulating, relating to or imposing liability or standards on conduct
concerning, any toxic, chemical or hazardous substance, material or waste),
regardless of whether caused by, or within the control of, the Company or any
Subsidiary.
8P. Standstill. During the term of this Agreement, each
Purchaser, together with any 13d Group (as hereinafter defined) of which it is a
part, shall not at any time (i) purchase, offer or agree to purchase, announce
an intention to purchase, or otherwise beneficially own, directly or indirectly,
any securities or material assets of the Company or any of its Subsidiaries
other than the Investor Preferred or shares of Common Stock to be issued upon
conversion of such shares or the exercise of the Warrants, (ii) publicly
disclose any intention, plan or arrangement inconsistent with the foregoing or
(iii) form, join or in any way participate in a 13d Group in connection with any
of
-51-
56
the foregoing. The term "13d Group" means a group within the meaning of Section
13(d)(3) of the Securities Exchange Act, but not including any person entitled
to file a statement on Schedule 13G.
8Q. Amendment and Restatement. Effective as of the date hereof,
the Original Purchase Agreement is hereby amended and restated in its entirety
and, from and after the date hereof, all references herein to "hereunder,"
"hereof," "herein" or words of like import shall mean and be a reference to the
Original Purchase Agreement, as amended hereby.
* * * * *
-52-
57
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Purchase Agreement on the date first written above.
SYNAGRO TECHNOLOGIES, INC.
By: /s/ XXXX X. XXXXXX
--------------------------------------
Name: Xxxx X. Xxxxxx
--------------------------------------
Its: Chairman/CEO
--------------------------------------
GTCR FUND VII, L.P.
By: GTCR Partners VII, L.P.
Its: General Partner
By: GTCR Xxxxxx Xxxxxx, L.L.C.
Its: General Partner
By: /s/ XXXXX X. XXXXXXX
--------------------------------------
Name: Xxxxx X. Xxxxxxx
Its: Principal
GTCR CO-INVEST, L.P.
By: GTCR Xxxxxx Xxxxxx, L.L.C.
Its: General Partner
By: /s/ XXXXX X. XXXXXXX
--------------------------------------
Name: Xxxxx X. Xxxxxxx
Its: Principal
SIGNATURE PAGE TO THE AMENDED AND RESTATED PURCHASE AGREEMENT
58
TCW/CRESCENT MEZZANINE PARTNERS II, L.P.
TCW/CRESCENT MEZZANINE TRUST II
By: TCW/Crescent Mezzanine II, L.P.
as general partner or managing owner
By: TCW/Crescent Mezzanine, L.L.C.,
its general partner
By: /s/ XXXXXXX X. XXXXXXXX
-------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Managing Director
TCW LEVERAGED INCOME TRUST, L.P.
By: TCW Advisors (Bermuda), Limited
as general partner
By: /s/ XXXXXX X. XXXXXX
-------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
By: TCW Investment Management Company,
as Investment Advisor
By: /s/ XXXXXXX X. XXXXXXXX
-------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Managing Director
SIGNATURE PAGE TO THE AMENDED AND RESTATED PURCHASE AGREEMENT
59
TCW LEVERAGED INCOME TRUST II, L.P.
By: TCW (XXXX XX), L.P.
as general partner
By: TCW Advisors (Bermuda), Ltd.,
as general partner
By: /s/ XXXXXX X. XXXXXX
-------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
By: TCW Investment Management Company,
as Investment Advisor
By: /s/ XXXXXXX X. XXXXXXXX
-------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Managing Director
SIGNATURE PAGE TO THE AMENDED AND RESTATED PURCHASE AGREEMENT
60
TCW LEVERAGED INCOME TRUST IV, L.P.
By: TCW Asset Management Company,
as investment advisor
By: /s/ XXXXXX X. XXXXXX
-------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
By: /s/ XXXXXXX X. XXXXXXXX
-------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Managing Director
By: TCW (XXXX XX), L.L.C., as general partner
By: TCW Asset Management Company,
as its managing member
By: /s/ XXXXXX X. XXXXXX
-------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
By: /s/ XXXXXXX X. XXXXXXXX
-------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Managing Director
SIGNATURE PAGE TO THE AMENDED AND RESTATED PURCHASE AGREEMENT
61
LIST OF EXHIBITS
Exhibit A - Form of Certificate of Designations
Exhibit B - Form of Stockholders Agreement
Exhibit C - Form of Purchaser Warrant
LIST OF SCHEDULES
Schedule of Purchasers to the August 2000 Closing
Subsidiary Schedule
Unsecured Seller Debt Schedule
Capital Lease Debt Schedule
Shareholders Consent Schedule
Capitalization Schedule
Restrictions Schedule
Financial Statements Schedule
Liabilities Schedule
Adverse Change Schedule
Developments Schedule
Assets Schedule
Owned Real Property Schedule
Leased Property Schedule
Taxes Schedule
Contracts Schedule
Employee Benefits Schedule
Intellectual Property Schedule
Litigation Schedule
Consents Schedule
Insurance Schedule
Key Employees Schedule
Environmental Schedule
Affiliated Transactions Schedule
Customer Schedule
62
Schedule of Purchasers to the August 2000 Closing
SHARES OF SHARES OF
SERIES E PREFERRED CONSIDERATION FOR SERIES E PREFERRED SUBSEQUENT
PURCHASED AT SERIES E PREFERRED GRANTED UNDER CLOSINGS
NAME OF PURCHASER AUGUST 2000 CLOSING AND WARRANTS PURCHASER WARRANT ALLOCATIONS
----------------- ------------------- ------------------ ------------------ --------------
GTCR
Allocations
-----------
GTCR FUND VII, L.P. 25,768.744 $25,768,744.07 2,589.635 99.092800%
GTCR CO-INVEST, L.P. 0.000 $ 0.00 0.000 0.907200%
-------------- -------------- -------------- --------------
Total for GTCR Purchasers 25,768.744 $25,768,744.07 2,589.635 100.000000%
TCW/Crescent
Allocations
------------
TCW/CRESCENT MEZZANINE PARTNERS II, L.P. 2,082.284 $ 2,082,283.46 148.024 64.391497%
TCW/CRESCENT MEZZANINE TRUST II 504.746 $ 504,745.87 35.881 15.608503%
TCW LEVERAGED INCOME TRUST, L.P. 215.586 $ 215,585.95 15.325 6.666667%
TCW LEVERAGED INCOME TRUST II, L.P. 215.586 $ 215,585.95 15.325 6.666667%
TCW LEVERAGED INCOME TRUST IV, L.P. 215.586 $ 215,585.95 15.325 6.666667%
-------------- -------------- -------------- --------------
Total for TCW/Crescent Lenders 3,233.788 $ 3,233,787.18 229.880 100.00000%
-------------- -------------- --------------
Total for all Purchasers 29,002.532 $29,002,531.25 2,819.515
