WASTE HOLDINGS, INC. AMENDED AND RESTATED NOTE PURCHASE AGREEMENT

Exhibit 10.15

 

[EXECUTION COPY]

 

 

WASTE HOLDINGS, INC.

 

AMENDED AND RESTATED

NOTE PURCHASE AGREEMENT

 

$25,000,000

 

SENIOR NOTES DUE APRIL 3, 2006

 

as of March 31, 2001

 

 

TABLE OF CONTENTS

 

 

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Purchaser Schedule

Information Schedule

 

 

W ASTE H OLDINGS , I NC .

3301 Benson Drive

Suite 601

Raleigh, North Carolina 27609

 

As of March 31, 2001

 

The Prudential Insurance Company

of America (“ Prudential ”)

Each Prudential Affiliate (as hereinafter defined)

which becomes bound by certain provisions of this

Agreement as hereinafter provided (together with

Prudential, the “ Purchasers ”)

 

c/o Prudential Capital Group

Two Ravinia Drive

Suite 1400

Atlanta, Georgia 30346

 

Ladies and Gentlemen:

 

The undersigned, Waste Holdings, Inc. (herein called the “ Company ”), hereby agrees with you as follows:

 

1. PRELIMINARY STATEMENTS

 

1A. Authorization of Issue of Notes. The Company’s predecessor, Waste Industries, Inc. (the “ Predecessor ”), has authorized the issue of its senior unsecured promissory notes (the “ Notes ”) in the aggregate principal amount of $25,000,000, originally dated April 3, 1996 and exchanged for amended and restated notes dated March 31, 2000, maturing April 3, 2006, bearing interest on the unpaid balance thereof from the date thereof until the principal thereof shall have become due and payable at the Applicable Rate, and on overdue principal, Yield-Maintenance Amount and interest at the rate specified therein, and in the form of Exhibit A attached hereto. The terms “ Note ” and “ Notes ” as used herein shall include each Note delivered pursuant to any provision of this Agreement and each Note delivered in substitution or exchange for any such Note pursuant to any such provision.

 

1B. Purpose of Agreement. The Predecessor had previously entered into the 1996 Agreement with the Purchasers, pursuant to which the Predecessor has issued the 1996 Notes, and into the 1998 Agreement with the noteholders party thereto (the “ Noteholders ”), pursuant to which the Predecessor has issued the 1998 Notes. The 1996 Notes were originally issued on April 3, 1996, and then were exchanged for new 1996 Notes when the 1996 Agreement was amended and restated on March 31, 2000. The Predecessor and its subsidiaries have now undertaken a corporate reorganization (the “ Reorganization ”) which has resulted, among other

 

things, in the termination of the Predecessor’s existence, in the assumption by the Company of the Predecessor’s obligations under the 1996 Agreement and the 1998 Agreement, and in the Company and its subsidiaries assuming the corporate structure set forth on Schedule 1B. In order to confirm and clarify the relationship between the Company and the Purchasers with respect to the 1996 Notes and between the Company and the Noteholders with respect to the 1998 Notes, the Company and the Purchasers will amend and restate the 1996 Agreement and the Company and the Noteholders will amend and restate the 1998 Agreement. Each of the Guarantors listed on Schedule 10B will also execute a Guaranty Agreement to secure the performance of the Company’s obligations under this Agreement and a Guaranty to secure the performance of the Company’s obligations under the 1998 Agreement, as amended and restated as of the date hereof.

 

2. EXCHANGE OF NOTES . The Company has sold to each of you the promissory notes in the original principal amounts set forth on the Purchaser Schedule hereto and in the aggregate principal amount of $25,000,000 (the “ 1996 Notes ”). The Company hereby agrees to issue to you and, subject to the terms and conditions herein set forth, you agree to accept from the Company, in exchange for each 1996 Note, a Note, in substantially the form of Exhibit B, in the principal amounts set forth on the Purchaser Schedule hereto. Each exchange shall occur at the offices of King & Spalding, 1185 Avenue of the Americas, New York, New York, on the date of closing, which shall be March 31, 2000 or any other date upon which the Company and you may mutually agree (herein called the “ Closing ” or the “ Closing Date ”).

 

3. CONDITIONS OF CLOSING . Your obligation to enter into, execute and deliver this Agreement and exchange the Notes as described in paragraph 2 is subject to the satisfaction, on or before the Closing Date, of the following conditions, as determined in the sole judgment of each Purchaser:

 

3A. Certain Documents . You shall have received the following, each dated the date of the Closing Date:

 

(i) The Note(s) to be issued to you in exchange for the 1996 Notes held by you.

 

(ii) Duly executed copies of the Security Agreement and each other Security Document, or amendment thereto, required by the Collateral Agent with respect to the Reorganization.

 

(iii) Certified copies of the resolutions of the Board of Directors of the Company authorizing the execution and delivery of this Agreement and the issuance of the Notes, and of all documents evidencing other necessary corporate action and governmental approvals, if any, with respect to this Agreement and the Notes.

 

(iv) A certificate of the Secretary or an Assistant Secretary and one other officer of the Company certifying the names and true signatures of the officers of the Company authorized to sign this Agreement and the Notes and the other documents to be delivered hereunder.

 

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(v) Certified copies of the Articles of Incorporation and By-laws of the Company.

 

(vi) A favorable opinion of Wyrick, Robbins, Yates & Ponton, LLP, special counsel to the Company (or such other counsel designated by the Company and acceptable to the Purchasers) satisfactory to Purchasers and substantially in the form of Exhibit C attached hereto and as to such other matters as the Purchasers may reasonably request. The Company hereby directs such counsel to deliver such opinion, agrees that the exchange of the 1996 Notes for the Notes will constitute a reconfirmation of such direction, and understands and agrees that each Purchaser receiving such an opinion will and is hereby authorized to rely on such opinion.

 

(vii) A good standing certificate for the Company from the Secretary of State of North Carolina dated of a recent date and good standing or other certificates of qualification to do business as a foreign corporation for the Company in the States of South Carolina, Georgia, Tennessee and Virginia and such other evidence of the status of the Company as such Purchaser may reasonably request.

 

(viii) All fees and disbursements of King & Spalding, counsel to the Purchasers, shall have been paid in full.

 

(ix) Additional documents or certificates with respect to legal matters or corporate or other proceedings related to the transactions contemplated hereby as may be reasonably requested by any Purchaser.

 

3B. Representations and Warranties; No Default . The representations and warranties contained in paragraph 8 shall be true on and as of the Closing Date, except to the extent of changes caused by the transactions herein contemplated; there shall exist on the Closing Date no Event of Default or Default; and the Company shall have delivered to the Purchasers an Officer’s Certificate, dated the Closing Date, to both such effects.

 

3C. Exchange Permitted by Applicable Laws . The exchange of the 1996 Notes for the Notes by each Purchaser on the terms and conditions herein provided (including the use of the proceeds originally received by the Company for the 1996 Notes) shall not violate any applicable law or governmental regulation (including, without limitation, Section 5 of the Securities Act or Regulation U or X of the Board of Governors of the Federal Reserve System) and shall not subject such Purchaser to any tax (other than any income taxes arising from such Purchaser’s ownership of the Notes), penalty, liability or other onerous condition under or pursuant to any applicable law or governmental regulation, and such Purchaser shall have received such certificates or other evidence as it may request to establish compliance with this condition.

 

3D. Payment of Fees . The Company shall have paid to the Purchasers any fees due them pursuant to or in connection with this Agreement.

 

3E. No Material Adverse Change . The Purchasers shall have received a certificate from the chief financial officer of the Company, dated the Closing Date, saying that no material adverse change in the financial condition, business, operations or prospects of the Company or its subsidiaries, taken as a whole, has occurred since December 31, 1998.

 

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4. PREPAYMENTS. The Notes shall be subject to required prepayment as and to the extent provided in paragraph 4A. The Notes shall also be subject to prepayment under the circumstances set forth in paragraph 4B. Any prepayment made by the Company pursuant to any other provision of this paragraph 4 shall not reduce or otherwise affect its obligation to make any required prepayment as specified in paragraph 4A.

 

4A. Required Prepayments of Notes. Until the Notes shall be paid in full, the Company shall apply to the prepayment of the Notes, without Yield-Maintenance Amount, the sum of $3,571,429.00 commencing on April 3, 2000 and each April 3 thereafter, to and including April 3, 2005, and such principal amounts of the Notes, together with interest thereon to the payment dates, shall become due on such payment dates. The remaining unpaid principal amount of the Notes, together with interest accrued thereon, shall become due on April 3, 2006, the maturity date of the Notes.

 

4B. Optional Prepayment With Yield-Maintenance Amount. The Notes shall be subject to prepayment, in whole at any time or from time to time in part (in integral multiples of $100,000 and in a minimum amount of $1,000,000), at the option of the Company, at 100% of the principal amount so prepaid plus interest thereon to the prepayment date and the Yield-Maintenance Amount, if any, with respect to each such Note. Any partial prepayment of Notes pursuant to this paragraph 4B shall be applied in satisfaction of required payments of principal in inverse order of their scheduled due dates.

 

4C. Notice of Optional Prepayment. The Company shall give the holder of each Note to be prepaid pursuant to paragraph 4B irrevocable written notice of such prepayment not less than 10 Business Days prior to the prepayment date, specifying such prepayment date, the aggregate principal amount of the Notes to be prepaid on such date, the principal amount of the Notes held by such holder to be prepaid on that date and that such prepayment is to be made pursuant to paragraph 4B. Notice of prepayment having been given as aforesaid, the principal amount of the Notes specified in such notice, together with interest thereon to the prepayment date and together with the Yield-Maintenance Amount, if any, herein provided, shall become due and payable on such prepayment date. The Company shall, on or before the day on which it gives written notice of any prepayment pursuant to paragraph 4B, give telephonic notice of the principal amount of the Notes to be prepaid and the prepayment date to each Significant Holder which shall have designated a recipient for such notices in the Purchaser Schedule attached hereto or by notice in writing to the Company.

 

4D. Application of Prepayments. In the case of each prepayment of less than the entire unpaid principal amount of all outstanding Notes pursuant to paragraphs 4 A or 4B, the amount to be prepaid shall be applied pro rata to all outstanding Notes (including, for the purpose of this paragraph 4D only, all Notes prepaid or otherwise retired or purchased or otherwise acquired by the Company or any of its Subsidiaries or Affiliates other than by prepayment pursuant to paragraph 4A or 4B) according to the respective unpaid principal amounts thereof.

 

4E. Retirement of Notes. The Company shall not, and shall not permit any of its Subsidiaries or Affiliates to, prepay or otherwise retire in whole or in part prior to their stated final maturity (other than by prepayment pursuant to paragraphs 4A or 4B or upon acceleration of such final maturity pursuant to paragraph 7A), or purchase or otherwise acquire, directly or

 

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indirectly, Notes held by any holder unless the Company or such Subsidiary or Affiliate shall have offered to prepay or otherwise retire or purchase or otherwise acquire, as the case may be, the same proportion of the aggregate principal amount of Notes held by each other holder of Notes at the time outstanding upon the same terms and conditions. Any Notes so prepaid or otherwise retired or purchased or otherwise acquired by the Company or any of its Subsidiaries or Affiliates shall not be deemed to be outstanding for any purpose under this Agreement, except as provided in paragraph 4D.

 

5. AFFIRMATIVE COVENANTS.

 

5A. Reporting Requirements.

 

5A(1) General Information. The Company covenants that it will deliver to each Significant Holder in triplicate:

 

(i) as soon as practicable and in any event within 45 days after the end of each quarterly period (other than the fourth quarterly period) in each fiscal year,

 

(1) Consolidated statements of income, stockholders’ equity and cash flows for the period from the beginning of the current fiscal year to the end of such quarterly period, and

 

(2) a Consolidated balance sheet as at the end of such quarterly period,

 

setting forth in each case in comparative form figures for the corresponding period in the preceding fiscal year, all in reasonable detail and reasonably satisfactory in form to the Required Holder(s) and certified by an authorized financial officer of the Company as fairly presenting, in all material respects, the financial condition of the Company and its Consolidated Subsidiaries as of the end of such period and the results of their operations for the period then ended in accordance with generally accepted accounting principles, subject to changes resulting from normal year-end adjustments and the inclusion of abbreviated footnotes; provided, however, that delivery pursuant to clause (iii) below of copies of the Quarterly Report on Form 10-Q of the Company for such quarterly period filed with the Securities and Exchange Commission shall be deemed to satisfy the requirements of this clause (i);

 

(ii) as soon as practicable and in any event within 90 days after the end of each fiscal year,

 

(1) Consolidated statements of income, stockholders’ equity and cash flows for such year, and

 

(2) a Consolidated balance sheet as at the end of such year,

 

setting forth in each case in comparative form corresponding Consolidated figures from the preceding annual audit, all in reasonable detail and reasonably satisfactory in scope to the Required Holder(s) and reported on by independent public accountants of recognized standing selected by the Company whose report shall be without limitation as to the

 

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scope of the audit and reasonably satisfactory in substance to the Required Holder(s); provided, however, that delivery pursuant to clause (iii) below of copies of the Annual Report on Form 10-K of the Company for such year filed with the Securities and Exchange Commission shall be deemed to satisfy the requirements of this clause (ii);

 

(iii) if the Company shall be publicly held, promptly upon transmission thereof, copies of all such financial statements, proxy statements, notices and reports as it shall send to its public stockholders and copies of all registration statements (without exhibits) and all reports (other than any registration statement filed on Form S-8) which it files with the Securities and Exchange Commission (or any governmental body or agency succeeding to the functions of the Securities and Exchange Commission);

 

(iv) promptly upon receipt thereof, a copy of each other report (including, without limitation, management letters) submitted to the Company or any Subsidiary by independent accountants in connection with any annual, interim or special audit made by them of the books of the Company or any Subsidiary;

 

(v) promptly upon receipt thereof, a copy of each report, survey, study, evaluation, assessment or other document prepared by any consultant, engineer, Environmental Authority or other Person relating to compliance by the Company or any Subsidiary with any Environmental Requirements, if the cost of remediation, repair or compliance may be reasonably expected to exceed $250,000 in any one case or in the aggregate;

 

(vi) with reasonable promptness, upon the request of the holder of any Note, provide such holder, and any qualified institutional buyer designated by such holder, such financial and other information as such holder may reasonably determine to be necessary in order to permit compliance with the information requirements of Rule 144 A under the Securities Act in connection with the resale of Notes, except at such times as the Company is subject to the reporting requirements of section 13 or 15(d) of the Exchange Act. For the purpose of this clause (vi), the term “qualified institutional buyer” shall have the meaning specified in Rule 144A under the Securities Act; and

 

(vii) with reasonable promptness, such other data relating to the business, operations, properties or financial condition of the Company or any of its Subsidiaries as a Significant Holder may reasonably request;

 

5A(2) Officer’s Certificates. (a) Together with each delivery of financial statements required by clauses 5A(l)(i) and (ii) above, the Company will deliver to each Significant Holder an Officer’s Certificate demonstrating (with computations in reasonable detail) compliance with the provisions of paragraphs 6A, 6B, 6C, 6E(1) and 6E(2) and stating that there exists no Event of Default or Default, or, if any Event of Default or Default exists, specifying the nature and period of existence thereof and what action the Company has taken, is taking or proposes to take with respect thereto.

 

(b) Should the Company elect to include the EBITA or EBITDA of companies acquired by the Company in the calculation of the Company’s consolidated EBITA or EBITDA,

 

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respectively, as described in the definitions of “ Consolidated Earnings Before Interest, Taxes and Amortization or EBITA ” and “ Consolidated Earnings Before Interest, Taxes, Depreciation and Amortization or EBITDA ”, then simultaneously with the delivery of the financial statements referred to in (A) and (B) of such definitions, the chief executive officer or the chief financial officer of the Company shall deliver to the Purchasers an Officer’s Certificate and appropriate documentation certifying the historical operating results, adjustments and balance sheet of each such acquired company;

 

5A(3) Annual Accountant’s Letter. Together with each delivery of financial statements required by clause 5A(1)(ii) above, the Company will deliver to each Significant Holder a certificate of the independent public accountants giving the report on such financial statements stating that, in making the audit necessary for their report, they have obtained no knowledge of any Event of Default or Default, or, if they have obtained knowledge of any Event of Default or Default, specifying the nature and period of existence thereof. The accountants, however, shall not be liable to anyone as a result of this provision by reason of their failure to obtain knowledge of any Event of Default or Default which would not be disclosed in the course of an audit conducted in accordance with generally accepted auditing standards;

 

5A(4) Special Information. The Company also covenants that immediately after any Responsible Officer obtains actual knowledge of:

 

(a) an Event of Default or Default;

 

(b) a material adverse change in the financial condition, business or operations of the Company and its Subsidiaries, taken as a whole;

 

(c) legal proceedings filed against the Company and/or any of its Subsidiaries, which reasonably could be expected to have a material adverse effect on the financial condition, business or operations of the Company and its Subsidiaries, taken as a whole, or which in any manner draws into question the validity of or reasonably could be expected to impair the ability of the Company to perform its obligations under this Agreement or the Notes;

 

(d) a default under any agreement or note evidencing Indebtedness for which the Company or any Subsidiary is liable, which individually or in the aggregate with all other agreements and notes in default for which the Company or any of its Subsidiaries liable, exceeds $250,000;

 

(e) the occurrence of any other event that reasonably could be expected to impair the ability of the Company to meet its obligations hereunder;

 

(f) any (i) Environmental Liabilities, (ii) pending, threatened or anticipated Environmental Proceedings, (iii) Environmental Notices, (iv) Environmental Judgments and Orders, or (v) Environmental Releases at, on, in, under or in any way affecting the Properties which reasonably could be expected to have a material adverse effect on the business, operations or financial condition of the Company and its Subsidiaries, taken as a whole; or

 

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(g) with respect to any Plan that is subject to the funding requirements of Section 302 of ERISA or Section 412 of the Code, the Company (i) has given or is required to give notice to the Pension Benefit Guaranty Corporation that a material reportable event has occurred with respect to such Plan, (ii) has delivered notice to the Pension Benefit Guaranty Corporation of any intent to withdraw from or terminate any such Plan, or (iii) has failed to make timely a contribution to any such Plan;

 

the Company will deliver to each Significant Holder an Officer’s Certificate specifying the nature and period of existence thereof and what action the Company or such Subsidiary has taken, is taking or proposes to take with respect thereto.

 

5B. Inspection of Property. The Company covenants that, at such reasonable times and as often as a Significant Holder may reasonably request, it will permit any Person designated by a Significant Holder in writing, at such Significant Holder’s expense unless a Default has occurred and is continuing in which case at the Company’s expense, to:

 

(i) visit and inspect any of the properties of the Company and any Subsidiary;

 

(ii) examine the corporate or company books and financial records of the Company and its Subsidiaries and make copies thereof or extracts therefrom; and

 

(iii) discuss the affairs, finances and accounts of any of such corporations with the principal officers of the Company or any of its Subsidiaries and their independent public accountants.

 

5C. Covenant to Secure Notes Equally. The Company covenants that if it or any of its Subsidiaries shall create or assume any Lien upon any of its property or assets, whether now owned or hereafter acquired, other than Liens permitted by paragraph 6C (unless prior written consent shall have been obtained under paragraph 11C), it will make or cause to be made effective provision whereby the Notes will be secured by such Lien equally and ratably with any and all other Indebtedness thereby secured so long as any such other Indebtedness shall be so secured.

 

5D. Guaranteed Obligations. The Company covenants that if any Person (other than the Company) provides a Guarantee or provides collateral in any manner for any Indebtedness of the Company or any Subsidiary, it will simultaneously cause such Person to provide a Guarantee or provide collateral for the Notes equally and ratably with all Indebtedness Guaranteed or secured by such Person for so long as such Indebtedness is so Guaranteed and pursuant to documentation in form and substance reasonably satisfactory to such holder.

 

5E. New Guarantors. The Company covenants that at the time that any newly-created or acquired Subsidiary becomes a Borrower (as defined in the Bank Agreement) in accordance with Section 6.16 of the Bank Agreement, the Company will cause such Subsidiary to become simultaneously a Guarantor by executing and delivering to the Purchasers a Guaranty Agreement. The delivery of such Guaranty Agreement shall be accompanied by such other documents as the Required Holders may reasonably request including charter, bylaws, appropriate resolutions of the Board of Directors of any such Subsidiary providing such a

 

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Guaranty Agreement and legal opinions with respect thereto. Upon the delivery thereof, such Guaranty Agreement and such other documents shall constitute Related Documents hereunder.

 

5F. Maintenance of Insurance. The Company covenants that it and each of its Subsidiaries will maintain, with responsible insurers, insurance with respect to its properties and business against such casualties and contingencies (including, but not limited to, public liability, larceny, embezzlement or other criminal misappropriation) and in such amounts as is customary in the case of similarly situated corporations engaged in the same or similar businesses; provided, however, that the Company and each of its Subsidiaries may elect to continue to self-insure (i) their waste containers; (ii) certain immaterial assets such as radio towers consistent with their business practices in effect on the date hereof; and (iii) certain risks under their medical and short-term disability plans.

 

5G. Maintenance of Corporate Existence/Compliance with Law/Preservation of Property. The Company covenants that, except as permitted under paragraphs 6E(1) and 6E(2), it and each Subsidiary will do or cause to be done all things necessary to, at all times:

 

(i) preserve, renew and keep in full force and effect the corporate or company existence of the Company and its Subsidiaries (other than those Subsidiaries not material to the financial condition, business or operations of the Company and its Subsidiaries taken as a whole);

 

(ii) comply with all laws and regulations (including, without limitation, laws and regulations relating to equal employment opportunity and employee safety) applicable to it and any Subsidiary except where the failure to comply could not reasonably be expected to have a material adverse effect on the business, operations or financial condition of the Company and its Subsidiaries, taken as a whole;

 

(iii) maintain, preserve and protect all material licenses, certificates, permits, franchises and intellectual property of the Company and its Subsidiaries; and

 

(iv) preserve all the remainder of its property used or useful in the conduct of its business and keep the same in good repair, working order and condition excluding normal wear and tear, except where the failure to preserve such property could not be reasonably expected to have a material adverse effect on the business, operations or financial condition of the Company and its Subsidiaries, taken as a whole.

 

5H. Compliance with Environmental Laws . The Company covenants that it and each of its Subsidiaries will, comply in a timely fashion with, or operate pursuant to valid waivers of the provisions of, all applicable Environmental Requirements, including, without limitation, the emission of wastewater effluent, solid and hazardous waste and air emissions together with any other applicable Environmental Requirements for conducting, on a timely basis, periodic tests and monitoring for contamination of ground water, surface water, air and land and for biological toxicity of the aforesaid, and all applicable regulations of the Environmental Protection Agency or other relevant federal, state or local governmental authority, except where the failure to comply could not reasonably be expected to have a material adverse effect on the business, operations or financial condition of the Company and its Subsidiaries, taken as a whole. The

 

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Company agrees to indemnify and hold you, your officers, agents and employees (each an “ Indemnified Person ”) harmless from any loss, liability, claim or expense that you may incur or suffer as a result of a breach by the Company or any of its Subsidiaries, as the case may be, of this covenant other than as a result of the gross negligence or wilful misconduct of such Indemnified Person. The Company shall not be deemed to have breached or violated this paragraph 5H if the Company or any of its Subsidiaries is challenging in good faith by appropriate proceedings diligently pursued the application or enforcement of such Environmental Requirements for which adequate reserves have been established in accordance with generally accepted accounting principles.

 

5I. No Integration. The Company covenants that it has taken and will take all necessary action so that the issuance of the Notes does not and will not require registration under the Securities Act. The Company covenants that no future offer and sale of debt securities of the Company of any class will be made if there is a reasonable possibility that such offer and sale would, under the doctrine of “integration”, subject the issuance of the Notes to you to the registration requirements of the Securities Act.

 

5J. Financial Records. The Company covenants that it and each of its Subsidiaries will keep proper books of record and account in which full and correct entries (in all material respects and subject to normal year end adjustments and, as to interim statements, the absence of footnotes) will be made of the business and affairs of the Company or such Subsidiary under generally accepted accounting principles consistently applied (except for changes disclosed in the financial statements furnished to you pursuant to paragraph 5A and concurred in by the independent public accountants referred to in paragraph 5A).

 

6. NEGATIVE COVENANTS. Unless the Required Holders otherwise agree in writing, the Company shall not, and shall not permit any Subsidiary, to take any of the following actions or permit the occurrence or existence of any of the following events or conditions:

 

6A. Financial Limitations. The Company covenants that it will not permit at any time:

 

(a) Funded Debt to EBITDA. The ratio of (x) Funded Debt as at the end of any fiscal quarter to (y) EBITDA for the period of four (4) consecutive fiscal quarters ending on such date to be greater than the ratio set forth opposite such fiscal quarters:

 

 

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(b) Senior Funded Debt to EBITDA. The ratio of (x) Senior Funded Debt as at the end of any fiscal quarter to (y) EBITDA for the period of four (4) consecutive fiscal quarters to be greater than the ratio set forth opposite such fiscal quarters:

 

 

(c) Consolidated Net Worth. Commencing with the fiscal quarter ended September 30, 1999, Consolidated Net Worth at the end of any fiscal quarter to be less than the sum of $62,000,000 plus the sum of (a) 50% of positive Consolidated Net Income for each fiscal quarter, beginning with the fiscal quarter ended December 31, 1999, and (b) 100% of the net proceeds of any sale by the Company or any of its Subsidiaries of (A) equity securities issued by the Company or any of its Subsidiaries or (B) warrants or subscription rights for equity securities issued by the Company or any of its Subsidiaries occurring after the Effective Date.

 

(d) Interest Coverage. The ratio of (x) actual reported EBITA for any fiscal quarter to (y) Consolidated Total Interest Expense for such fiscal quarter to be less than the ratio set forth in the following table opposite such fiscal quarter:

 

 

(e) Profitable Operations. Consolidated Net Income to be less than $1.00 for any fiscal quarter.

 

(f) Capital Expenditures. Capital Expenditures for any fiscal year shall not exceed (i) $30,000,000 for the fiscal year 2001, and (ii) thereafter, 2.0 times the sum of (a) actual depreciation expenses plus (b) amortization expenses pertaining to landfills for such year.

 

6B. Restrictions on Indebtedness. Neither the Company nor any of its Subsidiaries shall become or be a guarantor or surety of, or otherwise create, incur, assume, or be or remain liable, contingently or otherwise, with respect to any Indebtedness, or become or be responsible in any manner (whether by agreement to purchase any obligations, stock, assets, goods or services, or to supply or advance any funds, assets, goods or services or otherwise) with respect to any undertaking or Indebtedness of any other Person, or incur any Indebtedness other than:

 

(a) Indebtedness to the Purchasers hereunder or Indebtedness arising under the 1998 Note Agreement;

 

(b) incurrence by the Company or any of its Subsidiaries of guaranty, suretyship or indemnification obligations in connection with such Person’s performance of services for its respective customers in the ordinary course of its business;

 

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(c) incurrence by the Company or any of its Subsidiaries (other than a Designated LLC) of Indebtedness to the Company or to another of its Subsidiaries (other than a Designated LLC);

 

(d) other Indebtedness existing on the date hereof and listed and described on Schedule 6B hereto;

 

(e) (i) purchase money Indebtedness incurred in connection with the acquisition after the Effective Date of any real or personal property or under equipment leases or equipment chattel, (ii) existing Indebtedness of any Subsidiary acquired after the Effective Date (the “ Acquired Subsidiary ”) originally incurred by the Acquired Subsidiary in connection with the lease or acquisition of property or fixed assets used in the business of the Acquired Subsidiary; or with respect to industrial finance bonds issued to finance the purchase of such property or assets; (iii) Indebtedness with respect to Capitalized Leases; (iv) other unsecured Indebtedness; and (v) Indebtedness with respect to Subordinated Debt; provided that in the event that after the Effective Date any Subsidiary of the Company guaranties any Subordinated Debt, the terms of such guaranty shall provide for the release of such guaranty upon the sale of stock or all or substantially all of the assets of such Subsidiary (even if such sale was made in a foreclosure); provided that the aggregate amount of such Indebtedness under this subsection (e) shall not exceed .5x EBITDA for the period of four (4) consecutive fiscal quarters most recently ended;

 

(f) Indebtedness with respect to landfill closure bonds of the Company and its Subsidiaries in an aggregate amount not to exceed $5,000,000;

 

(g) Bank Debt in principal amount not to exceed $300,000,000;

 

(h) Indebtedness to the Designated LLCs evidenced by Designated Intercompany Debentures in an aggregate amount not to exceed $100,000,000; and

 

(i) incurrence by a Designated LLC of Indebtedness to the Company or any of it Subsidiaries in an aggregate amount not to exceed $100,000,000, whether in the form of intercompany payables, advances, notes or debentures, each of which, regardless of form, shall be pledged to the Collateral Agent, the proceeds of which are loaned or contributed as capital to a direct or indirect Subsidiary of such Designated LLC, which Subsidiary is a Guarantor;

 

(j) Guaranty obligations of the Company with respect to undertakings by Sampson County Disposal, Inc. (or Sampson County Disposal, LLC as successor to Sampson County Disposal, Inc.) under (i) the Remarketing and Interest Services Agreement by and between Sampson County Disposal, Inc., the Company and Wachovia Securities, Inc. and (ii) the Bond Purchase Agreement by and among Wachovia Securities, Inc., The Sampson County Industrial Facilities and Pollution Control Financing Authority, Sampson County Disposal, Inc. and the Company;

 

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provided that if the creation, incurrence, assumption or existence of any Indebtedness would constitute a default or an event of default under the Bank Debt, then the creation, incurrence, assumption or existence of such Indebtedness shall not be permitted hereunder.

 

6C. Restrictions on Liens. Neither the Company nor any of its Subsidiaries shall create or incur or suffer to be created or incurred or to exist any lien, encumbrance, mortgage, pledge, charge, restriction or other security interest of any kind upon any property or assets of any character, whether now owned or hereafter acquired, or upon the income or profits therefrom; or transfer any of such property or assets or the income or profits therefrom for the purpose of subjecting the same to the payment of Indebtedness or performance of any other obligation in priority to payment of its general creditors; or acquire, or agree or have an option to acquire, any property or assets upon conditional sale or other title retention or purchase money security agreement, device or arrangement; or suffer to exist for a period of more than thirty (30) days after the same shall have been incurred any Indebtedness or claim or demand against it which if unpaid might by law or upon bankruptcy or insolvency, or otherwise, be given any priority whatsoever over its general creditors; or sell, assign, pledge or otherwise transfer any accounts, contract rights, general intangibles or chattel paper, with or without recourse, except as follows (the “ Permitted Liens ”):

 

(a) liens to secure taxes, assessments and other government charges or claims for labor, material or supplies in respect of obligations not overdue;

 

(b) deposits or pledges made in connection with, or to secure payment of, workmen’s compensation, unemployment insurance, old age pensions or other social security obligations;

 

(c) liens in respect of judgments or awards which have been in force for less than the applicable period for taking an appeal so long as execution is not levied thereunder or in respect of which the Company or any such Subsidiary shall at the time in good faith be prosecuting an appeal or proceedings for review and in respect of which a stay of execution shall have been obtained pending such appeal or review and in respect of which the Company or any such Subsidiary maintains adequate reserves;

 

(d) liens of carriers, warehousemen, mechanics and materialmen, and other like liens on properties, in existence less than 120 days from the date of creation thereof in respect of obligations not overdue, provided that such liens may continue to exist for a period of more than 120 days if the validity or amount thereof shall currently be contested by the Company or any such Subsidiary in good faith and if the Company or any such Subsidiary shall have set aside on its books adequate reserves with respect thereto as required by GAAP, and provided further that the Company or any such Subsidiary will pay any such claim forthwith upon commencement of proceedings to foreclose any such lien;

 

(e) encumbrances consisting of easements, rights of way, zoning restrictions, restrictions on the use of real property and defects and irregularities in the title thereto, landlord’s or lessor’s liens under leases to which the Company or any such Subsidiary is a party, and other minor liens or encumbrances none of which in the opinion of the

 

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Company or any such Subsidiary interferes materially with the use of the property affected in the ordinary conduct of the business of the Company or any such Subsidiary, which defects do not individually or in the aggregate have a materially adverse effect on the business of the Company or any such Subsidiary individually or of the Company and its Subsidiaries on a consolidated basis;

 

(f) liens existing on the date hereof and listed on Schedule 6C hereto;

 

(g) liens in favor of Fleet National Bank (f/k/a BankBoston, N.A.), as Collateral Agent for the benefit of the Banks (the “ Collateral Agent ”), the Purchasers hereunder and the noteholders under the 1998 Agreement; and

 

(h) purchase money security interests in or purchase money mortgages on real or personal property acquired after the Effective Date hereof to secure purchase money Indebtedness of the type permitted by paragraph 6B(e)(i), (ii) and (iii), incurred in connection with the acquisition of such property, which security interests cover only the real or personal property so acquired.

 

6D. Restrictions on Investments. Neither the Company nor any of its Subsidiaries shall purchase or acquire, or make any commitment therefor, any capital stock, equity interest, or other obligations or securities of, or any interest in, any other Person, or make or commit to make any acquisition under paragraph 6E, or make or commit to make any advance, loan, extension of credit or capital contribution to or any other investment in, any other Person, other than:

 

(a) marketable direct or guaranteed obligations of the United States of America that mature within one (1) year from the date of purchase;

 

(b) demand deposits, certificates of deposit, bankers acceptances and time deposits of United States banks having unimpaired capital and surplus in excess of $250,000,000;

 

(c) securities commonly known as “commercial paper” issued by a corporation organized and existing under the laws of the United States of America or any state thereof that at the time of purchase have been rated and the ratings for which are not less than “P 1” if rated by Moody’s Investors Service, Inc., and not less than “A 1” if rated by Standard and Poor’s Rating Group;

 

(d) Investments existing on the date hereof and listed on Schedule 6D hereto;

 

(e) Investments permitted under paragraph 6E;

 

(f) Extensions of credit in the nature of accounts receivable or notes receivable arising from the sale or lease of goods or surplus in the ordinary course of business;

 

(g) Investments consisting of loans and advances to the Company or to another of its Subsidiaries (other than a Designated LLC);

 

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(h) other Investments not to exceed the sum of $2,000,000 in the aggregate at any one time outstanding with respect to non-hazardous solid waste collection, transfer, hauling, recycling or disposal businesses, projects, joint-ventures or enterprises or purchase options; and

 

(i) Investments consisting of the Company or any Subsidiary’s ownership interests in the Designated LLCs (and the related capital contributions in respect thereof) as set forth in Schedule 6D and Investments in the Guarantors by the Designated LLCs constituting Indebtedness permitted under paragraph 6B.

 

6E. Merger, Consolidation and Disposition of Assets.

 

6E(1) Mergers and Acquisitions. Neither the Company nor any of its Subsidiaries will become a party to any merger or consolidation, or agree to or effect any asset acquisition or stock acquisition (other than the acquisition of assets in the ordinary course of business consistent with past practices) except the merger or consolidation of, or asset or stock acquisitions between the Company and its existing Subsidiaries and between existing Subsidiaries of the Company and except as otherwise provided in this paragraph. The Company or any of its Subsidiaries may purchase or otherwise acquire all or substantially all of the assets or stock or other equity interests of any other Person provided that:

 

(a) the Company is in current compliance with and, giving effect to the proposed acquisition (including any borrowings made or to be made in connection therewith), will continue to be in compliance with all of the covenants in paragraph 6A hereof on a pro forma historical combined basis as if the transaction occurred on the first day of the period of measurement; provided, that, in the case of transactions involving cash consideration to be paid by the Company or any of its Subsidiaries (including cash deferred payments, contingent or otherwise, and the aggregate amount of all Funded Debt assumed) in excess of $15,000,000, the Purchasers shall have received an Officer’s Certificate demonstrating compliance with paragraph 6A on a pro forma historical combined basis as if the transaction occurred on the first day of the period of measurement;

 

(b) at the time of such acquisition, no Default or Event of Default has occurred and is continuing, and such acquisition will not otherwise create a Default or an Event of Default hereunder;

 

(c) the business to be acquired is predominantly in the same lines of business as the Company, or businesses reasonably related or incidental thereto (e.g., non-hazardous solid waste collection, transfer, hauling, recycling, or disposal);

 

(d) the business to be acquired operates predominantly in the continental United States;

 

(e) all of the assets to be acquired shall be owned by an existing or newly created Subsidiary of the Company which Subsidiary shall be a Guarantor, 100% of the assets (other than motor vehicle titles and real estate) and stock or other equity interests of which have been or, simultaneously with such acquisition, will be pledged to the

 

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Collateral Agent on behalf of the Banks, the noteholders under the 1998 Note Agreement and the Purchasers in accordance with the Intercreditor Agreement or, in the case of a stock or other equity interest acquisition, the acquired company, simultaneously with such acquisition, shall become a Guarantor or shall be merged with and into a wholly owned Subsidiary of the Company that is a Guarantor and such newly acquired or created Subsidiary shall otherwise comply with the provisions of paragraph 5E hereof;

 

(f) not later than seven (7) days prior to the proposed acquisition date, a copy of the purchase agreement and financial projections, together with audited (if available, or otherwise unaudited) financial statements for any Subsidiary to be acquired or created, for the preceding two (2) fiscal years or such shorter period of time as such Subsidiary has been in existence shall have been furnished to the Purchasers, only in cases of Material Acquisitions or upon request by the Purchasers;

 

(g) not later than seven (7) days prior to the proposed acquisition date, (1) a summary of the Company’s results of their standard due diligence review, and (2) in the case of a landfill acquisition, a review by a Consulting Engineer and a copy of the Consulting Engineer’s report shall have been furnished to the Purchasers, only in cases of Material Acquisitions or upon request by the Purchasers;

 

(h) the board of directors and (if required by applicable law) the shareholders, or the equivalent thereof, of the business to be acquired has approved such acquisition;

 

(i) if such acquisition is made by a merger, a Guarantor, or a wholly-owned Subsidiary of the Company which shall become a Guarantor in connection with such merger, shall be the surviving entity; and

 

(j) cash consideration to be paid by the Company or such Subsidiary in connection with any such acquisition or series of related acquisitions (including cash deferred payments, contingent or otherwise, and the aggregate amount of all Funded Debt assumed), shall not exceed $15,000,000 without the consent of the Required Holders (any acquisition requiring cash consideration in excess of $15,000,000 being referred to as a “ Material Acquisition ”); provided , however , from the date of this Agreement until the delivery by the Company to each of the Purchasers of (i) the Officer’s Certificate delivered under paragraph 5A(2) for the fiscal quarter ending March 31, 2002 showing the Company’s compliance with the financial covenants contained in this Agreement, and (ii) the Company’s financial statements described in paragraph 5A(1) for the fiscal year ended December 31, 2001, all references to “$15,000,000” in this paragraph 6E(l)(j) shall be replaced with “$5,000,000”.

 

6E(2) Disposition of Assets. Neither the Company nor any Subsidiary will become a party to or agree to or effect any disposition of assets in excess of $500,000 in the aggregate (the “ Basket ”) without the prior written consent of the Required Holders, provided , that the sale of inventory, the licensing of intellectual property and the disposition of obsolete assets, in each case in the ordinary course of business consistent with past practices, are permitted hereunder without being charged against the Basket.

 

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6E(3) Permitted Transfers. Notwithstanding the other provisions of this paragraph 6E, transfers of Designated Property (each, a “ Permitted Transfer ”) will be permitted, provided, that the following conditions are met:

 

(a) such Permitted Transfer is made for fair market value;

 

(b) the proceeds of such Permitted Transfer are applied to pay down the revolving loans outstanding under the Bank Agreement (but without reducing the commitments of the banks under the Bank Agreement);

 

(c) in the case of a transfer of the ownership interests in a Designated LLC, the Designated LLC subject to such transfer shall reaffirm its joint and several obligations with respect to the Secured Obligations by entering into a guaranty agreement in form and substance satisfactory to the Purchasers (the “ Designated Guaranty ”); and

 

(d) all assets of a transferred Designated LLC other than Designated Property shall remain subject to the lien thereon that has been granted to the Collateral Agent for the benefit of the Banks and the Purchasers as security for the Secured Obligations, and the transferee of such Designated LLC and the Designated LLC shall each have acknowledged the full force and effect of such lien and of the Designated Guaranty executed by such Designated LLC pursuant to (c) above.

 

In the event of a proposed Permitted Transfer of any membership units or interests of a Designated LLC or any Designated Property, the proposed transferor will give the Collateral Agent and the Purchasers at least fifteen Business Days prior written notice of the proposed Permitted Transfer. Subject to the Purchasers’ election to exercise their rights of first refusal as set forth below, the Collateral Agent will, in accordance with Section 24 of the Security Agreement, within ten Business Days of receipt of such notice, endorse, assign and deliver to the transferor the requested certificates, if any, of membership units or ownership interests, or any other Designated Property in the Collateral Agent’s possession or under its control, which are included in the Permitted Transfer by the transferor and any other instruments or documents evidencing the ownership of such membership units or ownership interest or Designated Property in the Collateral Agent’s possession or under its control. Upon receipt of the proceeds of the Permitted Transfer for application to the revolving loans outstanding under the Bank Agreement (but without reducing the commitments of the banks under the Bank Agreement), the Collateral Agent, the banks party to the Bank Agreement and the Purchasers shall have no further interest or right to such membership units or interests or such Designated Property, and, if requested by transferor or transferor’s transferee, the Collateral Agent, in accordance with Section 24 of the Security Agreement, shall execute an appropriate termination of the lien with respect to such units or interests, or such Designated Property, as applicable; provided that any Designated LLC subject to a Permitted Transfer shall retain its joint and several obligations with respect to the Secured Obligations by executing a Designated Guaranty and the liens on the assets of such Designated LLC (other than Designated Property) granted to the Collateral Agent for the benefit of the banks party to the Bank Agreement and the Purchasers as security for the Secured Obligations shall continue in force and shall be reaffirmed by the Designated LLC as a condition of such Permitted Transfer. To the extent that, notwithstanding the above, any Permitted Transfer of membership units or ownership interests or Designated Property by the

 

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Company or any of its Subsidiaries occurs during the Designated Property Notice Period, the proceeds shall be applied to pay the outstanding Secured Obligations pursuant to the terms of the Intercreditor Agreement. Upon the commencement of a Designated Property Notice Period, the provisions set forth in this Agreement and the Security Documents allowing the Permitted Transfers shall terminate until such time, if ever, as restored by the written election of the Purchasers.

 

6E(4) Right of First Refusal. If at any time following the date of this Agreement, the owner of Designated Property (the “ Seller of Designated Property ”) receives a bona fide offer from a third party to purchase all or any part of its Designated Property for a purchase price that has been reached through arms-length negotiation and such Seller of Designated Property wishes to accept such offer (the “ Third Party Offer ”), such Seller of Designated Property shall, as a condition precedent to its right to sell such Designated Property to the third party, comply with the following procedure:

 

(a) By written notice (the “ Notice of Sale of Designated Property ”), such Seller of Designated Property shall inform the Collateral Agent of the Third Party Offer. The Notice must contain the name of the offeror, a description of the Designated Property to be sold, the purchase price therefor, the proposed closing date (which shall in no event be sooner than twenty Business Days from the date of the Notice of Sale of Designated Property), all other terms and conditions of the Third Party Offer and shall further contain an offer to sell all of such Designated Property to the Collateral Agent or its assign pursuant to the terms and provisions of this paragraph 6E(4) on the same terms and conditions contained in the Third Party Offer.

 

(b) The Collateral Agent may elect, in accordance with Section 24 of the Security Agreement, with the consent of the Majority Banks (as defined in the Bank Agreement), the Required Holders and the Administrative Agent, exercisable within twenty Business Days of the receipt of the Notice of Sale of Designated Property, to purchase all of such Designated Property contained in the Third Party Offer. In addition, the Collateral Agent, in accordance with Section 24 of the Security Agreement, with the consent of the Majority Banks, the Required Holders and the Administrative Agent, shall be entitled to assign its right to purchase such Designated Property to one or more third parties.

 

(c) If the Collateral Agent shall elect to purchase all of such Designated Property, it shall, in accordance with Section 24 of the Security Agreement, deliver notice of the exercise of its option to the Seller of Designated Property not later than the expiration of the twentieth Business Day following receipt of the Notice of Sale of Designated Property. In addition, if the Collateral Agent shall assign some or all of its right to purchase such Designated Property to a third party, it shall, in accordance with Section 24 of the Security Agreement, deliver notice of such assignment, together with notice of Designated Property to be purchased by such third party, not later than the twentieth Business Day following receipt of the Notice of Sale of Designated Property. Following delivery of the Collateral Agent’s (or the third party’s) notice of the exercise of the option granted herein to purchase such Designated Property, the Collateral Agent (or such third party) shall, in accordance with Section 24 of the Security Agreement, set a

 

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closing date, which shall be not later than thirty days following the delivery of the Collateral Agent’s (or the third party’s) notice of exercise of right to purchase such Designated Property.

 

(d) To the extent that the Collateral Agent and its assigns shall not elect to purchase all of such Designated Property, the Seller of Designated Property shall thereafter be entitled to sell all of such Designated Property upon the terms and conditions set forth in the Notice of Sale of Designated Property. Any modification of such terms and conditions shall require additional compliance with the provisions of this paragraph.

 

6F. Sale and Leaseback. Neither the Company nor any of its Subsidiaries shall enter into any arrangement, directly or indirectly, whereby the Company or any Subsidiary shall sell or transfer any property owned by it in order then or thereafter to lease such property or lease other property which the Company or such Subsidiary intends to use for substantially the same purpose as the property being sold or transferred, without the prior written consent of the Required Holders.

 

6G. Restricted Distributions and Redemptions. Neither the Company nor any of its Subsidiaries shall redeem, convert, retire or otherwise acquire shares of any class of its capital stock or other equity interest, or make any Distributions, except Distributions to the Company or another Subsidiary of the Company. In addition, neither the Company nor any of its Subsidiaries shall effect or permit any change in or amendment to any document or instrument pertaining to the terms of the Company or any of its Subsidiaries capital stock or other equity interest. Notwithstanding the foregoing, neither the Company nor any of its Subsidiaries shall make any Distribution under this paragraph 6G if a Default or Event of Default exists or would be created by the making of such Distribution.

 

6H. Debt Modification, etc. Neither the Company nor any of its Subsidiaries will (i) amend, supplement or otherwise modify (A) the terms of any Subordinated Debt or (B) any negative covenant, financial covenant or event of default set forth in the Bank Debt or (ii) prepay, redeem or repurchase any of the Subordinated Debt. Prior to any principal payment or prepayment of the Bank Debt having the effect of reducing the commitments of banks under the Bank Agreement, the Company shall deliver to the Purchasers a certificate setting forth in reasonable detail computations evidencing the pro forma effect of the contemplated payment on the Company’s compliance with the financial covenants contained in paragraph 6A hereof.

 

6I. Employee Benefit Plans. Neither the Company nor any of its Subsidiaries nor any ERISA Affiliate will:

 

(a) engage in any “prohibited transaction” within the meaning of section 406 of ERISA or section 4975 of the Code which could result in a material liability for the Company or any of its Subsidiaries; or

 

(b) permit any Guaranteed Pension Plan to incur an “accumulated funding deficiency”, as such term is defined in section 302 of ERISA, whether or not such deficiency is or may be waived; or

 

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(c) fail to contribute to any Guaranteed Pension Plan to an extent which, or terminate any Guaranteed Pension Plan in a manner which, could result in the imposition of a lien or encumbrance on the assets of the Company or any of its Subsidiaries pursuant to section 302(f) or section 4068 of ERISA; or

 

(d) amend any Guaranteed Pension Plan in circumstances requiring the posting of security pursuant to section 307 of ERISA or section 401(a)(29) of the Code; or

 

(e) permit or take any action which would result in the aggregate benefit liabilities (with the meaning of section 4001 of ERISA) of all Guaranteed Pension Plans exceeding the value of the aggregate assets of such Plans, disregarding for this purpose the benefit liabilities and assets of any such Plan with assets in excess of benefit liabilities.

 

6J. Negative Pledges. Except for Permitted Liens, and subject to the Intercreditor Agreement, neither the Company nor any of its Subsidiaries shall enter into or permit to exist any arrangement or agreement, enforceable under applicable law, which directly or indirectly prohibits the Company or such Subsidiary from creating or incurring any lien, encumbrance, mortgage, pledge, charge, restriction or other security interest in favor of the Collateral Agent for the benefit of the Purchasers and the noteholders under the 1998 Agreement under the Security Documents other than customary anti-assignment provisions in leases and licensing agreements entered into by the Company or such Subsidiary in the ordinary course of its business.

 

6K. Business Activities. Neither the Company nor any of its Subsidiaries will engage directly or indirectly (whether through subsidiaries or otherwise) in any type of business other than the businesses conducted by the Company or such Subsidiary on the Effective Date and in related businesses.

 

6L. Transactions with Affiliates. Neither the Company nor any of its Subsidiaries will engage in any transaction with any Affiliate (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any such Affiliate or, to the knowledge of the Company and its Subsidiaries, any corporation, partnership, trust or other entity in which any such Affiliate has a substantial interest or is an officer, director, trustee or partner, on terms more favorable to such Person than would have been obtainable on an arm’s-length basis in the ordinary course of business.

 

7. EVENTS OF DEFAULT.

 

7A. Acceleration. If any of the following events shall occur and be continuing for any reason whatsoever (and whether such occurrence shall be voluntary or involuntary or come about or be effected by operation of law or otherwise):

 

(i) the Company defaults in the payment of any principal of, or Yield-Maintenance Amount payable with respect to, any Note when the same shall become due, either by the terms thereof or otherwise as herein provided; or

 

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(ii) the Company defaults in the payment of any interest on any Note for more than 10 days after the date due; or

 

(iii) the Company or any of its Subsidiaries defaults (whether as primary obligor or as guarantor or other surety) in any payment of principal of or interest on any other obligation for money borrowed other than the Bank Debt (or any Capitalized Lease, any obligation under a conditional sale or other title retention agreement, any obligation issued or assumed as full or partial payment for property whether or not secured by a purchase money mortgage or any obligation under notes payable or drafts accepted representing extensions of credit) beyond any period of grace provided with respect thereto, or the Company or any of its Subsidiaries fails to perform or observe any other agreement, term or condition contained in any agreement under which any such obligation is created (or if any other event thereunder or under any such agr