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WASTE MANAGEMENT, INC.
(a Delaware corporation)
20,000,000 Shares of Common Stock
PURCHASE AGREEMENT
Dated: June ___, 1998
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Table of Contents
SECTION 1. Representations and Warranties............................................................. 3
(a) Representations and Warranties by the Company................................ 3
(i) Compliance with Registration Requirements............................ 3
(ii) Incorporated Documents............................................... 4
(iii) Independent Accountants.............................................. 4
(iv) Financial Statements................................................. 4
(v) No Material Adverse Change in Business............................... 4
(vi) Good Standing of the Company......................................... 4
(vii) Good Standing of Subsidiaries........................................ 5
(viii) Capitalization....................................................... 5
(ix) Authorization of Agreement........................................... 5
(x) Authorization and Description of Securities.......................... 5
(xi) Absence of Defaults and Conflicts.................................... 5
(xii) Absence of Proceedings............................................... 6
(xiii) Accuracy of Exhibits................................................. 6
(xiv) Absence of Further Requirements...................................... 6
(xv) Possession of Licenses and Permits................................... 7
(xvi) Compliance with Cuba Act............................................. 7
(xvii) Environmental Laws................................................... 7
(xviii) Registration Rights.................................................. 7
(xix) Merger Agreement..................................................... 8
(b) Officer's Certificates....................................................... 8
SECTION 2. Sale and Delivery to Underwriters; Closing................................................. 8
(a) Securities................................................................... 8
(b) Payment...................................................................... 8
(c) Denominations; Registration.................................................. 9
SECTION 3. Covenants of the Company................................................................... 9
(a) Compliance with Securities Regulations and
Commission Requests.......................................................... 9
(b) Filing of Amendments......................................................... 9
(c) Delivery of Registration Statements..........................................10
(d) Delivery of Prospectus.......................................................10
(e) Continued Compliance with Securities Laws....................................10
(f) Blue Sky Qualifications......................................................10
(g) Rule 158.....................................................................11
(h) Use of Proceeds..............................................................11
(i) Restriction on Sale of Securities............................................11
(j) Reporting Requirements.......................................................11
SECTION 4. Payment of Expenses........................................................................11
(a) Expenses.....................................................................11
i
(b) Termination of Agreement.........................................12
SECTION 5. Conditions of Underwriters' Obligations.......................................12
(a) Effectiveness of Registration Statement..........................12
(b) Opinion of Counsel for Company...................................12
(c) Opinion of General Counsel of Company............................13
(d) Opinion of Counsel for USA Waste.................................13
(e) Opinion of Counsel for Underwriters..............................13
(f) Officers' Certificate of Company.................................13
(g) Officers' Certificate of USA Waste...............................13
(h) Accountants' Comfort Letters.....................................14
(i) Bring-down Comfort Letters.......................................14
(j) Approval of Listing..............................................14
(k) USA Waste Agreement..............................................14
(l) Additional Documents.............................................14
(m) Termination of Agreement.........................................14
SECTION 6. Indemnification...............................................................14
(a) Indemnification of Underwriters..................................14
(b) Indemnification of Company, Directors and Officers...............15
(c) Actions against Parties; Notification............................16
(d) Settlement without Consent if Failure to Reimburse...............17
SECTION 7. Representations, Warranties and Agreements to Survive Delivery................18
SECTION 8. Termination of Agreement......................................................18
(a) Termination; General.............................................18
(b) Liabilities......................................................19
SECTION 9. Default by One or More of the Underwriters....................................19
SECTION 10. Notices.......................................................................19
SECTION 11. Parties.......................................................................19
SECTION 12. GOVERNING LAW AND TIME........................................................20
SECTION 13. Effect of Headings............................................................20
ii
WASTE MANAGEMENT, INC.
(a Delaware corporation)
20,000,000 Shares of Common Stock
(Par Value $.01 Per Share)
PURCHASE AGREEMENT
------------------
June ___, 1998
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
as Representatives of the Underwriters
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
Waste Management, Inc. a Delaware corporation (the "Company"), confirms its
agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇") and the other Underwriter named in Schedule A
hereto (collectively, the "Underwriters," which term shall also include any
underwriter substituted as hereinafter provided in Section 19 hereof), for whom
▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation are acting
as representatives (in such capacity, the "Representatives"), with respect to
the sale by the Company and the purchase by the Underwriters, acting severally
and not jointly, of the respective numbers of shares of Common Stock, par value
$1.00 per share, of the Company ("Common Stock") set forth in Schedule A hereto.
The aforesaid 20,000,000 shares of Common Stock to be purchased by the
Underwriters are hereinafter called the "Securities."
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after
this Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-56337) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus. Promptly after
execution and delivery of this Agreement, the Company will either (i)
prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule
434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a
"Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b). The
information included in any such prospectus or in any such Term Sheet, as the
case may be, that was omitted from such registration statement at the time it
became effective but that is deemed to be part of such registration statement at
the time it became effective (a) pursuant to paragraph (b) of Rule 430A is
referred to as "Rule 430A Information" or (b) pursuant to paragraph (d) of Rule
434 is referred to as "Rule 434 Information." The form of Prospectus used before
such registration statement became effective, and any prospectus that omitted,
as applicable, the rule 430A Information or the Rule 434 Information, that was
used after such effectiveness and prior to the execution and delivery of this
Agreement, is herein called a "preliminary prospectus." Such registration
statement, including the exhibits thereto, schedules thereto, if any, and the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act (including the USA Waste Information (as defined below)), at
the time it became effective and including the Rule 430A Information and the
Rule 434 Information, as applicable, is herein called the "Registration
Statement." Any registration statement filed pursuant to Rule 462(b) of the 1933
Act Regulations is herein referred to as the "Rule 462(b) Registration
Statement," and after such filing the term "Registration Statement" shall
include the Rule 462(b) Registration Statement. The final form of Prospectus,
including the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the 1933 Act (including the USA Waste Information), in the form
first furnished to the Underwriters for use in connection with the offering of
the Securities is herein called the "Prospectus." For purposes of this
Agreement, all references to the Registration Statement, any preliminary
prospectus, the Prospectus or any Term Sheet or any amendment or supplement to
any of the foregoing shall be deemed to include the copy filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
system ("▇▇▇▇▇"). All information (i) contained in any document filed by USA
Waste Services, Inc. ("USA Waste") with the Commission pursuant to the 1934 Act
and incorporated by reference and made a part of the Registration Statement or
(ii) supplied by USA Waste for inclusion in the Waste Management/USA Waste Joint
Proxy Statement/Prospectus (as such term is defined in the Prospectus),
including all financial statements and schedules, is collectively referred to
herein as the "USA Waste Information." The Company, the Underwriters and USA
Waste are entering into an Indemnification Agreement (the "USA Waste Agreement")
relating to the USA Waste Information.
All references in this Agreement to financial statements and schedules and
other information which is "contained", "included", or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934, as amended (the "1934
Act"), which is or is deemed to be incorporated by reference in the
Registration Statement, such preliminary prospectus or the Prospectus, as the
case may be.
2
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company represents
and warrants to each Underwriter as of the date hereof, and as of the Closing
Time referred to in Section 2(c) hereof, and agrees with each Underwriter, as
follows:
(i) Compliance with Registration Requirements. The Company meets the
requirements for use of Form S-3 under the 1933 Act. Each of the
Registration Statement and any Rule 462(b) Registration Statement has been
declared effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or are pending or, to the knowledge of the
Company, are contemplated by the Commission, and any request on the part of
the Commission for additional information has been complied with.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time, the Registration Statement, the Rule
462(b) Registration Statement and any amendments and supplements thereto
complied and will comply in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations and did not and will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading. Neither the Prospectus nor any amendments or supplements
thereto, at the time the Prospectus or any amendments or supplements
thereto were issued and at the Closing Time, included or will include an
untrue statement of a material fact or omitted or will omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. If
Rule 434 is used, the Company will comply with the requirements of Rule
434. The representations and warranties in this subsection shall not apply
to statements in or omissions from the Registration Statement or the
Prospectus (A) made in reliance upon and in conformity with information
furnished to the Company in writing by any Underwriter through the
Representatives expressly for use in the Registration Statement or the
Prospectus or (B) contained in the USA Waste Information
Each preliminary prospectus and the prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectus delivered to the Underwriters for
use in connection with this offering were identical to the electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇,
except to the extent permitted by Regulation S-T.
(ii) Incorporated Documents. The documents filed by the Company with
the Commission and incorporated or deemed to be incorporated by reference
in the Prospectus (other than the USA Waste Information), at the time they
were or hereafter are filed with the Commission, complied and will comply
in all material respects with the requirements of the 1934 Act and the
rules and regulations of the Commission thereunder (the "1934 Act
3
Regulations") and, when read together with the other information in the
Prospectus, at the time the Registration Statement became effective, at the
time the Prospectus was issued and at the Closing Time, did not and will
not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading; provided that no representation is made in this
subsection with respect to the USA Waste Information.
(iii) Independent Accountants. The accountants who certified the
financial statements and supporting schedules of the Company and its
subsidiaries included in the Registration Statement are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(iv) Financial Statements. The consolidated financial statements of
the Company and its subsidiaries included in the Registration Statement and
the Prospectus, together with the related schedules and notes, present
fairly the financial position of the Company and its consolidated
subsidiaries at the dates indicated and the statement of operations,
stockholders' equity and cash flows of the Company and its consolidated
subsidiaries for the periods specified; said financial statements have been
prepared in conformity with generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods involved. The
supporting schedule included in the Registration Statement presents fairly
in accordance with GAAP the information required to be stated therein. The
selected financial data and the summary financial information included in
the Prospectus present fairly the information shown therein and have been
compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement. The pro forma financial
statements and the related notes thereto included in the Registration
Statement present fairly the information shown therein, have been prepared
in accordance with the Commission's rules and guidelines with respect to
pro forma financial statements and have been properly compiled on the bases
described therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect
to the transactions and circumstances referred to therein; provided,
however, that the representation contained in this sentence shall not apply
to any adjustments relating solely to USA Waste.
(v) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Registration Statement and
the Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change, or any development which may reasonably be
expected to result in a material adverse change, in the condition,
financial or otherwise, or in the earnings or business affairs of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business (a "Material Adverse Effect"),
(B) there have been no transactions entered into by the Company or any of
its subsidiaries, other than those in the ordinary course of business,
which are material with respect to the Company and its subsidiaries
considered as one enterprise, and (C) except for regular dividends on its
Common Stock, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock.
(vi) Good Standing of the Company. The Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the State of Delaware and has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into and perform its
obligations under this Agreement and the USA Waste Agreement; and the
Company is duly qualified as a foreign corporation to transact business and
is in good standing in each other jurisdiction in which such qualification
is required, whether by reason of the ownership or
4
leasing of property or the conduct of business, except where the failure so
to qualify or to be in good standing would not result in a Material Adverse
Effect.
(vii) Good Standing of Subsidiaries. Each of the Company's active
subsidiaries which contributed 5% or more to the Company's consolidated
revenues, net income or net assets during the Company's most recent fiscal
year (each a "Subsidiary" and collectively, the "Subsidiaries") has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has corporate
power and authority to own, lease and operate its properties and to conduct
its business as described in the Prospectus and is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not result
in a Material Adverse Effect; except as otherwise disclosed in the
Registration Statement, all of the issued and outstanding capital stock of
each such Subsidiary is owned by the Company, directly or through
subsidiaries, free and clear of any lien, encumbrance, claim or equity
(except for such shares of capital stock of the Subsidiaries subject to
liens, encumbrances, equities and claims not material to the Company and
its Subsidiaries taken as a whole).
(viii) Capitalization. The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectus in the column
entitled "Company Actual" under the caption "Capitalization" (except for
subsequent issuances, if any, pursuant to this Agreement, pursuant to
reservations, agreements or employee benefit plans referred to in the
Prospectus or pursuant to the exercise of convertible securities or options
referred to in the Prospectus); the shares of issued and outstanding
capital stock of the Company have been duly authorized and validly issued
and are fully paid and non-assessable; and none of the outstanding shares
of capital stock of the Company was issued in violation of the preemptive
or other similar rights of any securityholder of the Company.
(ix) Authorization of Agreement. Each of this Agreement and the USA
Waste Agreement has been duly authorized, executed and delivered by the
Company.
(x) Authorization and Description of Securities. The Securities to
be purchased by the Underwriters from the Company have been duly authorized
for issuance and sale to the Underwriters pursuant to this Agreement and,
when issued and delivered by the Company pursuant to this Agreement against
payment of the consideration set forth herein, will be validly issued,
fully paid and non-assessable; the Common Stock conforms in all material
respects to all statements relating thereto contained in the Prospectus and
such description conforms in all material respects to the rights set forth
in the instruments defining the same; no holder of the Securities will be
subject to personal liability by reason of being such a holder; and the
issuance of the Securities is not subject to the preemptive or other
similar rights of any securityholder of the Company.
(xi) Absence of Defaults and Conflicts. Neither the Company nor any
of its Subsidiaries is in violation of its charter or by-laws or in default
in the performance or observance of any obligation, agreement, covenant or
condition contained in any contract,
5
indenture, mortgage, deed of trust, loan or credit agreement, note, lease
or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which it or any of them may be bound, or to
which any of the property or assets of the Company or any subsidiary is
subject (collectively, "Agreements and Instruments") except for such
defaults that would not result in a Material Adverse Effect; and the
execution, delivery and performance of this Agreement and the USA Waste
Agreement and the consummation of the transactions contemplated in this
Agreement and in the Registration Statement (including the issuance and
sale of the Securities and the use of the proceeds from the sale of the
Securities as described in the Prospectus under the caption "Use of
Proceeds", but excluding the Merger (as such term is defined in the
Registration Statement)) and compliance by the Company with its obligations
under this Agreement and the USA Waste Agreement have been duly authorized
by all necessary corporate action and do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined below)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any Subsidiary
pursuant to, the Agreements and Instruments (except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would not
result in a Material Adverse Effect), nor will such action result in any
violation of the provisions of the charter or by-laws of the Company or any
Subsidiary, or any applicable law, statute, rule, regulation, judgment,
order, writ or decree of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over the Company or any
Subsidiary or any of their respective assets, properties or operations. As
used herein, a "Repayment Event" means any event or condition which gives
the holder of any note, debenture or other evidence of indebtedness (or any
person acting on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by the
Company or any Subsidiary.
(xii) Absence of Proceedings. There are no legal or governmental
proceedings pending or, to the knowledge of the Company, threatened which
are required to be disclosed in the Registration Statement or the
Prospectus, other than those disclosed therein, and there is no pending
legal or governmental proceeding to which the Company or any subsidiary is
a party or of which any of their property or assets is the subject which is
not described in the Registration Statement, including ordinary routine
litigation incidental to the business, which might reasonably be expected
to result in a Material Adverse Effect, or which might reasonably be
expected to materially and adversely affect the consummation of the
transactions contemplated in this Agreement; provided that no
representation is made in this subsection with respect to the USA Waste
Information.
(xiii) Accuracy of Exhibits. There are no contracts or documents which
are required to be described in the Registration Statement, the Prospectus
or the documents filed by the Company with the Commission and incorporated
by reference therein or to be filed as exhibits thereto which have not been
so described and filed as required; provided that no representation is made
in this subsection with respect to the USA Waste Information.
(xiv) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental
6
authority or agency is necessary or required for the performance by the
Company of its obligations hereunder in connection with the offering,
issuance or sale of the Securities under this Agreement or the consummation
of the transactions contemplated by this Agreement, except such as have
been already obtained or as may be required under the 1933 Act or the 1933
Act Regulations or state securities laws.
(xv) Possession of Licenses and Permits. The Company and each of the
Subsidiaries has obtained all such certificates, licenses and permits of a
material nature from all federal, state, municipal and other public
authorities as are now required by such public authorities to enable them
to carry on the business and operations now operated by them and which are
material to the business of the Company and its subsidiaries considered as
one enterprise.
(xvi) Compliance with Cuba Act. The Company has complied with, and is
and will be in compliance with, the provisions of that certain Florida act
relating to disclosure of doing business with Cuba, codified as Section
517.075 of the Florida statutes, and the rules and regulations thereunder
(collectively, the "Cuba Act") or is exempt therefrom.
(xvii) Environmental Laws. Except as described in the Registration
Statement and except as would not, singly or in the aggregate, result in a
Material Adverse Effect, (A) to the best of the Company's knowledge,
neither the Company nor any of its subsidiaries is in violation of any
federal, state, local or foreign statute, law, rule, regulation, ordinance,
code, policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative order,
consent, decree or judgment, relating to pollution or protection of human
health, the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata) or wildlife,
including, without limitation, laws and regulations relating to the release
or threatened release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, "Environmental Laws"), (B) the Company
and its subsidiaries have all permits, authorizations and approvals
required under any applicable Environmental Laws and are each in compliance
with their requirements, (C) there are no pending or, to the best of the
Company's knowledge, threatened administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigation or proceedings relating to any
Environmental Law against the Company or any of its subsidiaries and (D) to
the best of the Company's knowledge, there are no events or circumstances
that might reasonably be expected to form the basis of an order for clean-
up or remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any of its
subsidiaries relating to Hazardous Materials or any Environmental Laws.
(xviii) Registration Rights. Except as described in the Registration
Statement, there are no persons with rights to have any securities
registered pursuant to the Registration Statement or otherwise registered
by the Company under the 1933 Act.
7
(xix) Merger Agreement. The Merger Agreement (as such term is defined
in the Registration Statement) has been duly authorized, executed and
delivered by the Company and, assuming the due authorization, execution and
delivery by the other parties thereto, constitutes a valid and binding
agreement of the Company and the execution, delivery and performance of the
Merger Agreement and the consummation of the Merger have been duly
authorized by all necessary corporate action (other than the adoption of
the Merger Agreement by the affirmative vote of a majority of the
outstanding shares of Common Stock entitled to vote with respect thereto
and the filing and recordation of the Certificate of Merger relating
thereto) and do not and will not, whether with or without the giving of
notice or passage of time or both, conflict with or constitute a breach of,
or default or Repayment Event under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets
of the Company or any Subsidiary pursuant to, the Agreements and
Instruments (except as set forth in the Company Disclosure Schedule
attached to the Merger Agreement and except for such conflicts, breaches or
defaults or Repayment Events or liens, charges or encumbrances that would
not result in a Material Adverse Effect), nor will such action result in
any violation of (A) the provisions of the charter or by-laws of the
Company or any Subsidiary, or, (B) assuming that all consents, approvals,
authorizations and permits described in Section 3.05(b) of the Merger
Agreement have been obtained and all filings and notifications described in
Section 3.05(b) of the Merger Agreement have been made, any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any Subsidiary or any of their
respective assets, properties or operations (except with respect to clause
(B) for such violations that would not result in a Material Adverse
Effect).
(b) Officer's Certificates. Any certificate signed by any officer of the
Company and delivered to the Representatives or to counsel for the Underwriters
shall be deemed a representation and warranty by the Company to each Underwriter
as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Securities. On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
agrees to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Company, at
the price per share set forth in Schedule B, the number of Securities set forth
in Schedule A opposite the name of such Underwriter, subject to such adjustments
among the Underwriters as the Representatives in their sole discretion shall
make to eliminate any sales or purchases of fractional securities.
(b) Payment. Payment of the purchase price for, and delivery of
certificates for, the Securities shall be made at the offices of ▇▇▇▇▇, ▇▇▇▇▇ &
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, or at such other place as
shall be agreed upon by the Representatives and the Company, at 10:00 A.M.
(Eastern time) on the third (fourth, if the pricing occurs after 4:30 P.M.
(Eastern time) on any given day) business day after the date hereof (unless
postponed in accordance with the provisions of Section 9), or such other time
not later than seven business days after such date as
8
shall be agreed upon by the Representatives and the Company (such time and date
of payment and delivery being herein called "Closing Time").
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company against delivery to
the Representatives, through the facilities of The Depository Trust Company
("DTC"), for the respective accounts of the Underwriters of the Securities to be
purchased by them. It is understood that each Underwriter has authorized the
Representatives, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Securities which it has agreed to
purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Securities to be purchased by any Underwriter whose funds have not
been received by the Closing Time, but such payment shall not relieve such
Underwriter from its obligations hereunder.
(c) Denominations; Registration. Unless delivery is to be made through the
facilities of DTC, certificates for the Securities shall be in such
denominations and registered in such names as the Representatives may request in
writing at least two full business days before the Closing Time. Unless delivery
is to be made through the facilities of DTC, the certificates for the Securities
will be made available for examination and packaging by the Representatives in
the City of New York not later than 10:00 A.M. (Eastern time) on the business
day prior to the Closing Time.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will comply with the requirements of Rule 430A
or Rule 434, as applicable, and will notify the Representatives immediately, and
confirm the notice in writing, (i) when any post-effective amendment to the
Registration Statement shall become effective, or any supplement to the
Prospectus or any amended Prospectus shall have been filed, (ii) of the receipt
of any comments from the Commission, (iii) of any request by the Commission for
any amendment to the Registration Statement or any amendment or supplement to
the Prospectus or for additional information, and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Company will promptly effect the
filings necessary pursuant to Rule 424(b) and will take such steps as it deems
necessary to ascertain promptly whether the form of prospectus transmitted for
filing under Rule 424(b) was received for filing by the Commission and, in the
event that it was not, it will promptly file such prospectus. The Company will
make every reasonable effort to prevent the issuance of any stop order and, if
any stop order is issued, to obtain the lifting thereof at the earliest possible
moment.
(b) Filing of Amendments. The Company will give the Representatives notice
of its intention to file or prepare any amendment to the Registration Statement
(including any filing under Rule 462(b)), any Term Sheet or any amendment,
supplement or revision to either the prospectus included in the Registration
Statement at the time it became effective or to the Prospectus, will
9
furnish the Representatives with copies of any such documents a reasonable
amount of time prior to such proposed filing or use, as the case may be, and
will not file or use any such document to which the Representatives or counsel
for the Underwriters shall reasonably object, provided that any such objection
shall not prevent the filing of any such amendment or supplement which, in the
opinion of counsel to the Company, is required to be filed at such time pursuant
to the 1933 Act or the 1933 Act Regulations.
(c) Delivery of Registration Statements. The Company has furnished or will
deliver to the Representatives and counsel for the Underwriters, without charge,
signed copies (or photocopies thereof) of the Registration Statement as
originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein and documents incorporated or
deemed to be incorporated by reference therein) and signed copies (or
photocopies thereof) of all consents and certificates of experts, and will also
deliver to the Representatives, without charge, a conformed copy of the
Registration Statement as originally filed and of each amendment thereto
(without exhibits) for each of the Underwriters. The copies of the Registration
Statement and each amendment thereto furnished to the Underwriters will be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectus. The Company hereby consents to the use of the
copies of each preliminary prospectus previously delivered to the Underwriters
for purposes permitted by the 1933 Act. The Company will furnish to each
Underwriter, without charge, during the period when the Prospectus is required
to be delivered under the 1933 Act or the 1934 Act, such number of copies of the
Prospectus (as amended or supplemented) as such Underwriter may reasonably
request. The Prospectus and any amendments or supplements thereto furnished to
the Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the extent
permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations so as to permit the completion of
the distribution of the Securities as contemplated in this Agreement and in the
Prospectus. If at any time when a prospectus is required by the 1933 Act to be
delivered in connection with sales of the Securities, any event shall occur or
condition shall exist as a result of which it is necessary to amend the
Registration Statement or amend or supplement the Prospectus in order that the
Prospectus will not include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion of such
counsel, at any such time to amend the Registration Statement or amend or
supplement the Prospectus in order to comply with the requirements of the 1933
Act or the 1933 Act Regulations, the Company will promptly prepare and file with
the Commission, subject to Section 3(b), such amendment or supplement as may be
necessary to correct such statement or omission or to make the Registration
Statement or the Prospectus comply with such requirements, and the Company will
furnish to the Underwriters such number of copies of such amendment or
supplement as the Underwriters may reasonably request.
(f) Blue Sky Qualifications. Promptly from time to time, the Company will
use its best efforts when and as requested by you to qualify the Securities for
offering and sale under the
10
securities laws of such jurisdictions as you may request and to comply with such
laws as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution;
provided that in connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction;
(g) Rule 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its security
holders as soon as practicable an earnings statement for the purposes of, and to
provide the benefits contemplated by, the last paragraph of Section 11(a) of the
1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received by it
from the sale of the Securities in the manner specified in the Prospectus under
"Use of Proceeds".
(i) Restriction on Sale of Securities. Except as described in the
Registration Statement, during a period of 90 days from the date of the
Prospectus, the Company will not, without the prior written consent of ▇▇▇▇▇▇▇
▇▇▇▇▇, (i) directly or indirectly, offer, pledge, sell, contract to sell, sell
any option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase or otherwise transfer or dispose
of any share of Common Stock or any securities convertible into or exercisable
or exchangeable for Common Stock or file any registration statement under the
1933 Act with respect to any of the foregoing or (ii) enter into any swap or any
other agreement or any transaction that transfers, in whole or in part, directly
or indirectly, the economic consequence of ownership of the Common Stock,
whether any such swap or transaction described in clause (i) or (ii) above is to
be settled by delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to (A) the sale of the
Securities hereunder, (B) any shares of Common Stock issued by the Company upon
the exercise of an option or warrant outstanding on the date hereof and referred
to in the Prospectus, (C) any shares of Common Stock issued by the Company upon
the conversion of debt of the Company outstanding on the date hereof and
referred to in the Prospectus, (D) any shares of Common Stock issued or options
to purchase Common Stock granted pursuant to existing employee benefit plans of
the Company referred to in the Prospectus or (E) up to 2,000,000 shares of
previously registered Common Stock issued pursuant to the Company's Common Stock
"acquisition shelf" registration statement.
(j) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
SECTION 4. Payment of Expenses. (a) Expenses. The Company will pay or
cause to be paid all expenses incident to the performance of its obligations
under this Agreement, including (i) the printing and filing of the Registration
Statement (including financial statements and exhibits) as originally filed and
of each amendment thereto, (ii) the printing of this Agreement, and such other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Securities, (iii) the preparation, issuance and
delivery of the certificates for the Securities to the Underwriters, including
any stock or other transfer taxes and any stamp or other duties payable
11
upon the sale, issuance or delivery of the Securities to the Underwriters, (iv)
the fees and disbursements of the Company's counsel, accountants and other
advisors, (v) the qualification of the Securities under securities laws in
accordance with the provisions of Section 3(f) hereof, including filing fees and
the reasonable fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation of the Blue Sky
Survey and any supplement thereto, (vi) the printing and delivery to the
Underwriters of copies of the preliminary prospectus, any Term Sheets and of the
Prospectus and any amendments or supplements thereto, (vii) the preparation,
printing and delivery to the Underwriters of copies of the Blue Sky Survey and
any supplement thereto, (viii) the fees and expenses of any transfer agent or
registrar for the Securities, (ix) the filing fees, if any, incident to the
review by the National Association of Securities Dealers, Inc. (the "NASD") of
the terms of the sale of the Securities and (x) the fees and expenses incurred
in connection with the listing of the Securities on the New York Stock Exchange.
It is understood, however, that except as provided in this Section and Section 6
hereof, you will pay all of your own costs and expenses, including the fees of
your counsel, transfer taxes on resale of any of the Securities by you and any
advertising expenses connected with any offers you may make.
(b) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section
8(a)(i) hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses to third parties, including the reasonable fees and
disbursements of counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of the
several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof and
of USA Waste contained in Section 1 of the USA Waste Agreement or in
certificates of any officer of the Company or USA Waste delivered pursuant to
the provisions hereof, to the performance by the Company of its covenants and
other obligations hereunder and by USA Waste of its covenants and other
obligations under the USA Waste Agreement, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective and at
Closing Time no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the
reasonable satisfaction of counsel to the Underwriters. A prospectus containing
the Rule 430A Information shall have been filed with the Commission in
accordance with Rule 424(b) (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with the
requirements of Rule 430A) or, if the Company has elected to rely upon Rule 434,
a Term Sheet shall have been filed with the Commission in accordance with Rule
424(b).
(b) Opinion of Counsel for Company. At Closing Time, the Representatives
shall have received the favorable opinion, dated as of Closing Time, of Skadden,
Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ (Illinois), counsel for the Company, in form and
substance satisfactory to counsel for the Underwriters, to the effect set forth
in Exhibit A hereto.
12
(c) Opinion of General Counsel of Company. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, General Counsel of the Company, in form and substance
satisfactory to counsel for the Underwriters, to the effect set forth in Exhibit
B hereto.
(d) Opinion of Counsel for USA Waste. At Closing Time, the Representatives
shall have received the favorable opinion, dated as of Closing Time, of
___________________________, counsel for USA Waste, in form and substance
satisfactory to counsel for the Underwriters, to the effect set forth in Exhibit
C hereto.
(e) Opinion of Counsel for Underwriters. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, counsel for the Underwriters, with respect to the
matters set forth in clauses ( i) through (v), inclusive, and (vi) (solely as to
the information in the Prospectus under "Description of Capital Stock--Common
Stock") and the penultimate paragraph of Exhibit A hereto and in clauses (i) and
(iv) (solely as to preemptive or other similar rights arising by operation of
law or under the charter or by-laws of the Company) of Exhibit B hereto . In
giving such opinion such counsel may rely, as to all matters governed by the
laws of jurisdictions other than the law of the State of New York, the federal
law of the United States and the General Corporation Law of the State of
Delaware, upon the opinions of counsel satisfactory to the Representatives. Such
counsel may also state that, insofar as such opinion involves factual matters,
they have relied, to the extent they deem proper, upon certificates of officers
of the Company and its subsidiaries and certificates of public officials.
(f) Officers' Certificate of Company. At Closing Time, there shall not
have been, since the date hereof or since the respective dates as of which
information is given in the Prospectus, any material adverse change, or any
development which may reasonably be expected to result in a material adverse
change, in the condition, financial or otherwise, or in the earnings or business
affairs of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, and the
Representatives shall have received a certificate of the President or a Vice
President of the Company and of the chief financial or chief accounting officer
of the Company, dated as of Closing Time, to the effect that (i) there has been
no such material adverse change or development, (ii) the representations and
warranties in Section 1(a) hereof are true and correct with the same force and
effect as though expressly made at and as of Closing Time, (iii) the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to Closing Time, and (iv) no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been instituted or are pending or, to the
Company's knowledge, are contemplated by the Commission.
(g) Officers' Certificate of USA Waste. At Closing Time, there shall not
have been, since the date hereof or since the respective dates as of which
information is given in the Waste Management/USA Waste Joint Proxy
Statement/Prospectus, any material adverse change, or any development which may
reasonably be expected to result in a material adverse change, in the condition,
financial or otherwise, or in the earnings or business affairs of USA Waste and
its subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, and the Representatives shall have received a
certificate of the President or a Vice President of USA
13
Waste and of the chief financial or chief accounting officer of USA Waste, dated
as of Closing Time, to the effect that (i) there has been no such material
adverse change or development and (ii) the representatives and warranties in
Section 1 of the USA Waste Agreement are true and correct with the same force
and effect as though expressly made at and as of Closing Time.
(h) Accountants' Comfort Letters. At the time of the execution of this
Agreement, the Representatives shall have received from each of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
LLP and Coopers & ▇▇▇▇▇▇▇ LLP a letter dated such date, in form and substance
satisfactory to the Representatives, containing statements and information of
the type ordinarily included in accountants' "comfort letters" to Underwriters
with respect to the financial statements and certain financial information
contained in the Registration Statement and the Prospectus.
(i) Bring-down Comfort Letters. At Closing Time, the Representatives shall
have received from each of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP and Coopers & ▇▇▇▇▇▇▇ LLP a
letter, dated as of Closing Time, to the effect that they reaffirm the
statements made in their respective letters furnished pursuant to subsection (h)
of this Section, except that the specified date referred to shall be a date not
more than three business days prior to Closing Time.
(j) Approval of Listing. At Closing Time, the Securities shall be listed
on the New York Stock Exchange.
(k) USA Waste Agreement. The Company, USA Waste and the Underwriters shall
have executed and delivered the USA Waste Agreement.
(l) Additional Documents. At Closing Time, counsel for the Underwriters
shall have been furnished with such documents as they may reasonably require for
the purpose of enabling them to pass upon the issuance and sale of the
Securities as herein contemplated, or in order to evidence the accuracy of any
of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Securities as herein contemplated
shall be reasonably satisfactory in form and substance to the Representatives
and counsel for the Underwriters.
(m) Termination of Agreement. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Representatives by notice to the Company at
any time at or prior to Closing Time, and such termination shall be without
liability of any party to any other party except as provided in Section 4 and
except that Sections 6 and 7 shall survive any such termination and remain in
full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act to the extent and in the manner set forth in clauses (i), (ii) and
(iii) below.
14
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the
Rule 434 Information, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact included in any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(d) below) any such settlement is effected with the written consent of the
Company; and
(iii) against any and all expense whatsoever, as incurred (including,
subject to Section 6(c) below, the fees and disbursements of counsel chosen
by ▇▇▇▇▇▇▇ ▇▇▇▇▇), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such expense
is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission (A) made in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through the Representatives expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) or (B)
contained in the USA Waste Information; and provided, further, that as to any
preliminary prospectus, the Prospectus or any amendment or supplement thereto,
this indemnity agreement shall not inure to the benefit of any Underwriter on
account of any loss, liability, claim, damage or expense arising from the fact
that such Underwriter sold Securities to a person as to whom it shall be
established that there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the Prospectus or of the Prospectus as then
amended or supplemented in any case where such delivery is required by the 1933
Act if the Company has previously furnished copies thereof in sufficient
quantity to such Underwriter and the loss, claim, damage or liability of such
Underwriter results from an untrue statement or omission of a material fact
contained in such preliminary prospectus, Prospectus or amendment or supplement
thereto, which was corrected in the Prospectus or in the Prospectus as then
amended or supplemented.
(b) Indemnification of Company, Directors and Officers. Each Underwriter
severally agrees to indemnify and hold harmless the Company, its directors, each
of its officers who signed
15
the Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act,
against any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto),
including the Rule 430A Information and the Rule 434 Information, if applicable,
or any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Underwriter through the Representatives expressly for use
in the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by ▇▇▇▇▇▇▇ ▇▇▇▇▇, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company, subject to the further
provisions of this paragraph regarding assumption of defense by an indemnifying
party. An indemnifying party may participate at its own expense in the defense
of any such action; provided, however, that counsel to the indemnifying party
shall not (except with the consent of the indemnified party) also be counsel to
the indemnified party. If it so elects within a reasonable time after receipt of
such notice, an indemnifying party, jointly with any other indemnifying parties
receiving such notice, may assume the defense of such action with counsel chosen
by it and approved by the indemnified parties defendant in such action (which
approval will not be unreasonably withheld), unless such indemnified parties
reasonably object to such assumption on the ground that there may be legal
defenses available to them which are different from or in addition to those
available to such indemnifying party. If an indemnifying party assumes the
defense of such action, the indemnifying parties shall not be liable for any
fees and expenses of counsel for the indemnified parties incurred thereafter in
connection with such action. In no event shall the indemnifying parties be
liable for fees and expenses of more than one counsel (in addition to any local
counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 6 (if the indemnified parties are parties thereto), unless
such settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
16
(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement; provided that an indemnifying party shall not be liable for any such
settlement effected without its consent if such indemnifying party, prior to the
date of such settlement, (1) reimburses such indemnified party in accordance
with such request for the amount of such fees and expenses of counsel as the
indemnifying party believes in good faith to be reasonable and (2) provides
written notice to the indemnified party that the indemnifying party disputes in
good faith the reasonableness of the unpaid balance of such fees and expenses.
SECTION 7. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its subsidiaries submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any Underwriter or controlling
person, or by or on behalf of the Company, and shall survive delivery of the
Securities to the Underwriters.
SECTION 8. Termination of Agreement.
(a) Termination; General. The Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or the international
financial markets, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of the
Representatives, impracticable to market the Securities or to enforce contracts
for the sale of the
17
Securities, or (iii) if trading in any securities of the Company has been
suspended or materially limited by the Commission or the New York Stock
Exchange, or if trading generally on the American Stock Exchange or the New York
Stock Exchange or in the Nasdaq National Market has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of said exchanges or by such system
or by order of the Commission, the National Association of Securities Dealers,
Inc. or any other governmental authority, or (iv) if a banking moratorium has
been declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 6
and 7 shall survive such termination and remain in full force and effect.
SECTION 9. Default by One or More of the Underwriters. If any of the
Underwriters shall fail at Closing Time to purchase the Securities which it is
obligated to purchase under this Agreement (the "Defaulted Securities"), the
Representatives shall have the right, but not the obligation, within 24 hours
thereafter, to make arrangements for any of the non-defaulting Underwriters, or
any other underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms herein set
forth; if, however, the Representatives shall not have completed such
arrangements within such 24-hour period, then the obligation of the Underwriters
to purchase and of the Company to sell the Securities shall terminate without
liability on the part of any non-defaulting Underwriter or the Company.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement, either the Representatives or the Company shall have the right
to postpone Closing Time for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or the Prospectus or
in any other documents or arrangements. As used herein, the term "Underwriter"
includes any person substituted for an Underwriter under this Section 9.
SECTION 10. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if hand delivered,
mailed, delivered by a nationally recognized next-day air courier or transmitted
by any standard form of telecommunication. All such notices and communications
shall be deemed to have been duly given: when delivered by hand, if personally
delivered; one business day after being timely delivered to a next-day air
courier; five business days after being deposited in the mail, postage prepaid,
if mailed; and when receipt is acknowledged by the recipient's telecopier
machine, if telecopied. Notices to the Underwriters shall be directed to the
Representatives at ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., North Tower, World Financial Center, New
York, New York 10281-1201, attention of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇; notices to the Company
shall be directed to it at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
attention of General Counsel.
SECTION 11. Parties. This Agreement shall inure to the benefit of and be
binding upon the Underwriters and the Company and their respective successors.
Nothing expressed or mentioned in
18
this Agreement is intended or shall be construed to give any person, firm or
corporation, other than the Underwriters and the Company and their respective
successors and the controlling persons and officers and directors referred to in
Section 6 and their heirs and legal representatives, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
herein contained. This Agreement and all conditions and provisions hereof are
intended to be for the sole and exclusive benefit of the Underwriters and the
Company and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities from
any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
SECTION 12. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT AS
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 13. Effect of Headings. The Article and Section headings herein and
the Table of Contents are for convenience only and shall not affect the
construction hereof.
19
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Underwriters and the Company in accordance with its terms.
Very truly yours,
WASTE MANAGEMENT, INC.
By:
------------------------
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇ SECURITIES CORPORATION
By: ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By:
---------------------------------
Authorized Signatory
For themselves and as Representatives of the Underwriters named in Schedule A
hereto.
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SCHEDULE A
Number of
Name of Underwriter Securities
------------------- ----------
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated..........
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation.........
----------
Total 20,000,000
==========
Sch A-1
SCHEDULE B
WASTE MANAGEMENT, INC.
20,000,000 Shares of Common Stock
(Par Value $1.00 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $____________.
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $________, being an amount equal to the initial
public offering price set forth above less $_________ per share.
Sch B-1