SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported)
JULY 14, 1998
WASTE MANAGEMENT, INC.
(Exact name of registrant as
specified in its charter)
DELAWARE 1-12154 73-1309529
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) Number)
1001 FANNIN STREET, SUITE 4000
HOUSTON, TEXAS 77002
(Address of principal executive offices)
(713) 512-6200
(Registrant's telephone number,
including area code)
ITEM 5. OTHER EVENTS
On July 14, 1998, Waste Management, Inc. (formerly known as USA Waste
Services, Inc.) (the "Company") sold $600,000,000 of its 7% Senior Notes due
2028 and $600,000,000 of its 6 1/8% Senior Notes due 2011 in an underwritten
public offering.
ITEM 7. EXHIBITS
1.1 Underwriting Agreement dated July 14, 1998 among the Registrant and
the Underwriters named therein relating to the sale of 7% Senior Notes
due 2028.
1.2 Underwriting Agreement dated July 14, 1998 among the Registrant and
the Underwriters named therein relating to the sale of 6 1/8% Senior
Notes due 2011.
1.3 Form of Remarketing Agreement dated as of July 17, 1998 between the
Company and J.P. Morgan Securities Inc.
4.1 Form of 7% Senior Note due 2028.
4.2 Form of 6 1/8% Senior Note due 2011.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WASTE MANAGEMENT, INC.
Dated: July 17, 1998 By: /s/ Gregory T. Sangalis
---------------------------------
Gregory T. Sangalis
Vice President and Secretary
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$600,000,000
USA WASTE SERVICES, INC.
7% SENIOR NOTES DUE 2028
UNDERWRITING AGREEMENT
July 14, 1998
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
CREDIT SUISSE FIRST BOSTON CORPORATION
GOLDMAN, SACHS & CO
MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED
SALOMON BROTHERS INC.
c/o Donaldson, Lufkin & Jenrette
Securities Corporation
277 Park Avenue
New York, New York 10172
Dear Sirs:
USA Waste Services, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell $600,000,000 principal amount of its 7% Senior Notes
due 2028 (the "Securities"), to the several underwriters named in Schedule I
hereto (the "Underwriters"). The Securities are to be issued pursuant to the
provisions of an indenture (the "Senior Indenture") dated as of September 10,
1997 between the Company and Chase Bank of Texas, National Association, as
trustee (the "Trustee"). The terms of the Securities are set forth in
resolutions of the Pricing Committee of the Board of Directors of the Company
dated as of the date hereof (the "Resolutions").
1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has prepared
and filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively called the
"Act"), a registration statement on Form S-3 (Registration No. 333-52197),
including a prospectus relating to the Securities, which may be amended. The
registration statement as amended at the time when it became effective,
including all documents or information incorporated or deemed to be incorporated
by reference therein is referred to as the "Registration Statement"; and the
prospectus in the form first used to confirm sales of Securities, (including (a)
the information contained in any prospectus supplement relating to the
Securities or deemed to be part of the Registration Statement at effectiveness
pursuant to Rule 430A or Rule 434 of the Act, and (b) any documents or
information incorporated or deemed to be incorporated by reference into such
prospectus), are hereinafter referred to as the "Prospectus". Any registration
statement (including any amendment or supplement thereto or information which is
deemed to be a part thereof) filed by the Company under Rule 462(b) of the Act
(a
"Rule 462(b) Registration Statement") shall be deemed to be a part of the
Registration Statement. If the Company elects to rely on Rule 434 under the
Act, all references to the Prospectus shall be deemed to also include, without
limitation, the form of prospectus and term sheet (a "Term Sheet"), taken
together, provided to the Underwriters by the Company in reliance on Rule 434
under the Act (the "Rule 434 Prospectus"). All references in this Agreement to
financial statements and schedules and other information which is "contained,"
"included," "described" or "stated" in the Registration Statement or the
Prospectus (and all references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information which
is or is deemed to be incorporated by reference in the Registration Statement or
the Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement or the Prospectus shall
be deemed to mean and include, without limitation, even though not specifically
stated, any document filed under the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder (the
"Exchange Act") which is or is deemed to be incorporated by reference in the
Registration Statement or the Prospectus after the effective date, as the case
may be.
2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the
representations and warranties contained in this Agreement, and subject to its
terms and conditions, the Company agrees to issue and sell, and each Underwriter
agrees, severally and not jointly, to purchase from the Company the principal
amount of Securities set forth opposite the name of such Underwriter in Schedule
I hereto at 98.012% of the principal amount thereof (the "Purchase Price") plus
accrued interest thereon, if any, from July 17, 1998 to the date of payment and
delivery.
3. TERMS OF PUBLIC OFFERING. The Company is advised by you that the
Underwriters propose (i) to make a public offering of their respective portions
of the Securities as soon after the effective date of the Registration Statement
as in your judgment is advisable and (ii) initially to offer the Securities upon
the terms set forth in the Prospectus.
4. DELIVERY AND PAYMENT. Delivery to the Underwriters of and payment
for the Securities shall be made at 10:00 A.M., New York City time, on the third
or fourth business day unless otherwise permitted by the Commission pursuant to
Rule 15c6-1 of the Exchange Act (the "Closing Date") following the date of this
Agreement at such place as you shall designate. The Closing Date and the
location of delivery of and the form of payment for the Securities may be varied
by agreement between you and the Company.
The Securities shall be registered in such names and issued in such
denominations as you shall request in writing not later than two full business
days prior to the Closing Date. A global certificate for the Securities shall
be made available to you for inspection not later than 9:30 A.M., New York City
time, on the business day next preceding the Closing Date. A global certificate
for the Securities in definitive form evidencing the Securities shall be
delivered to you on the Closing Date with any transfer taxes thereon duly paid
by the Company, for the respective accounts of the several Underwriters, against
payment of the Purchase Price therefor by wire transfer in same day funds to an
account specified by the Company.
5. AGREEMENTS OF THE COMPANY. The Company agrees with you:
(a) Immediately following the determination of the Purchase
Price, to prepare, and file or transmit for filing with the Commission in
accordance with Rule 424(b) of the Act, copies of a prospectus supplement
relating to the Securities and containing all information required under
the Act.
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(b) To advise you promptly and, if requested by you, to confirm
such advice in writing, (i) when the Registration Statement has become
effective and when any post-effective amendment to it becomes effective,
(ii) of the receipt of comments from the Commission relating to the
Registration Statement, (iii) of any request by the Commission for
amendments to the Registration Statement or amendments or supplements to
the Prospectus or for additional information, (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or of the suspension of qualification of the
Securities for offering or sale in any jurisdiction, or the initiation of
any proceeding for such purposes, and (v) of the happening of any event
during the period referred to in paragraph (e) below which makes any
statement of a material fact made in the Registration Statement or the
Prospectus untrue or which requires the making of any additions to or
changes in the Registration Statement or the Prospectus in order to make
the statements therein not misleading. If at any time the Commission
shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to
obtain the withdrawal or lifting of such order at the earliest possible
time.
(c) To furnish to you, without charge, five signed copies of
the Registration Statement as first filed with the Commission and of each
amendment to it, including all exhibits, and to furnish to you and each
Underwriter designated by you such number of conformed copies of the
Registration Statement as so filed and of each amendment to it, without
exhibits, as you may reasonably request.
(d) Prior to the termination of the offering of Securities, not
to (i) file any Rule 462(b) Registration Statement, (ii) file any
amendment or supplement to the Registration Statement, (iii) file any
document under the Exchange Act which shall be deemed to be incorporated
by reference into the Prospectus, or (iv) make any amendment or
supplement to the Prospectus (including the issuance or filing of any
Term Sheet) of which you shall not previously have been advised or to
which you shall reasonably object; and to prepare and file with the
Commission, promptly upon your reasonable request, any Rule 462(b)
Registration Statement, Term Sheet or amendment or supplement to the
Registration Statement or the Prospectus which may be necessary or
advisable in connection with the distribution of the Securities by you,
and to use its best efforts to cause the same to become promptly
effective.
(e) From time to time for such period as in the opinion of
counsel for the Underwriters a prospectus is required by law to be
delivered in connection with sales by an Underwriter or a dealer, to
furnish to each Underwriter and dealer as many copies of the Prospectus
(and of any amendment or supplement to the Prospectus) as such
Underwriter or dealer may reasonably request.
(f) If during the period specified in paragraph (e) any event
shall occur as a result of which, in the opinion of counsel for the
Underwriters, it becomes necessary to amend or supplement the Prospectus
in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if it is necessary to amend or supplement the Prospectus
to comply with any law, forthwith to prepare and file with the Commission
an appropriate amendment or supplement to the Prospectus so that the
statements in the Prospectus, as so amended or supplemented, will not, in
the light of the circumstances when it is so delivered, be misleading, or
so that the Prospectus will comply with law, and to furnish to
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each Underwriter and to such dealers as you shall specify, such number of
copies thereof as such Underwriter or dealers may reasonably request.
(g) Prior to any public offering of the Securities, to
cooperate with you and counsel for the Underwriters in connection with
the registration or qualification of the Securities for offer and sale by
the several Underwriters and by dealers under the state securities or
Blue Sky laws of such jurisdictions as you may request, to continue such
qualification in effect so long as required for distribution of the
Securities and to file such consents to service of process or other
documents as may be necessary in order to effect such registration or
qualification.
(h) To mail and make generally available to its securityholders
as soon as reasonably practicable an earnings statement covering a period
of at least twelve months after the Closing Date (but in no event
commencing later than 90 days after such date) which shall satisfy the
provisions of Section 11(a) of the Act.
(i) During the period of five years after the date of this
Agreement, (i) to mail as soon as reasonably practicable after the end of
each fiscal year to the record holders of its Securities a financial
report of the Company and its subsidiaries on a consolidated basis (and a
similar financial report of all unconsolidated subsidiaries, if any), all
such financial reports to include a consolidated balance sheet, a
consolidated statement of operations, a consolidated statement of cash
flows and a consolidated statement of shareholders' equity as of the end
of and for such fiscal year, together with comparable information as of
the end of and for the preceding year, certified by independent certified
public accountants, and (ii) to make generally available as soon as
practicable after the end of each quarterly period (except for the last
quarterly period of each fiscal year) to such holders, a consolidated
balance sheet, a consolidated statement of operations and a consolidated
statement of cash flows (and similar financial reports of all
unconsolidated subsidiaries, if any) as of the end of and for such
period, and for the period from the beginning of such year to the close
of such quarterly period, together with comparable information for the
corresponding periods of the preceding year.
(j) During the period referred to in paragraph (i), to furnish
to you as soon as available a copy of each report or other publicly
available information of the Company mailed to the securityholders of the
Company or filed with the Commission and such other publicly available
information concerning the Company and its subsidiaries as you may
reasonably request.
(k) To pay all costs, expenses, fees and taxes incident to (i)
the preparation, printing, filing and distribution under the Act of the
Registration Statement (including financial statements and exhibits),
each preliminary prospectus relating to the Securities and all amendments
and supplements to any of them prior to or during the period specified in
paragraph (e), (ii) the printing and delivery of the Prospectus and all
amendments or supplements to it during the period specified in paragraph
(e), (iii) the printing and delivery of this Agreement and the Senior
Indenture, (iv) the registration or qualification of the Securities for
offer and sale under the securities or Blue Sky laws of the several
states (including in each case the fees and disbursements of counsel for
the Underwriters relating to such registration or qualification and
memoranda relating thereto), (v) the rating of the Securities by
securities rating agencies or services for rating the Securities, and
(vi) furnishing such copies of the Registration Statement, the Prospectus
and all amendments and supplements thereto as may be requested for use in
connection with the offering or sale of the Securities by the
Underwriters or by dealers to whom Securities may be sold.
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(l) To use its best efforts to maintain the listing of the
Company's common stock, par value $0.01 per share (the "Common Stock") on
the New York Stock Exchange for a period of five years after the
effective date of the Registration Statement.
(m) To use its best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by
the Company prior to the Closing Date and to satisfy all conditions
precedent to the delivery of the Securities.
(n) To use the net proceeds received by it from the sale of
Securities in the manner specified in the Prospectus under "Use of
Proceeds."
(o) During the period beginning on the date hereof and
continuing to and including the Closing Date, not to offer, sell,
contract to sell or otherwise dispose of any debt securities of the
Company or warrants to purchase debt securities of the Company (other
than (i) the Securities or the Company's 6-1/8% Mandatorily Tendered
Senior Notes due 2011 which are being offered concurrently pursuant to a
separate Prospectus Supplement and (ii) commercial paper issued in the
ordinary course of business), without your prior written consent.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each Underwriter that:
(a) The Company meets the requirements for use of Form S-3; the
Registration Statement has become effective; no stop order suspending the
effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or have been threatened
by the Commission.
(b) At the time the Registration Statement, any Rule 462(b)
Registration Statement or any post-effective amendment to the
Registration Statement became or becomes effective, on the date that any
amendment or supplement to the Prospectus is filed with the Commission,
and at the Closing Date, (i) each part of the Registration Statement,
when such part became effective, did not contain and each such part, as
amended or supplemented, if applicable, will not contain any 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, (ii) the Registration Statement and the Prospectus comply
and, as amended or supplemented, if applicable, will comply in all
material respects with the Act and (iii) the Prospectus did not and does
not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except that
the representations and warranties set forth in this paragraph (b) do not
apply to statements or omissions in the Registration Statement or the
Prospectus based upon information relating to any Underwriter furnished
to the Company in writing by such Underwriter through you expressly for
use therein.
(c) Any term sheet or prospectus subject to completion provided
by the Company to the Underwriters for use in connection with the
offering and sale of the Securities pursuant to Rule 434 under the Act
together are not materially different from the prospectus included in the
Registration Statement (exclusive of any information deemed a part
thereof by virtue of Rule 434(d)). The documents incorporated or deemed
to be incorporated by reference in the Prospectus pursuant to Item 12 of
Form S-3 under the Act, at the time they were, or hereafter are, filed
with
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the Commission, complied and will comply in all material respects
with the requirements of the Exchange Act, and, when read together with
other information in the Prospectus, at the time the Registration
Statement became effective and as of the Closing Date, and during the
period specified in Section 5(e), 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 the
light of the circumstances under which they were made, not misleading.
(d) Each preliminary 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 Act, and each Rule
462(b) Registration Statement, if any, complied when so filed in all
material respects with the Act; and did 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 the light of the
circumstances under which they were made, not misleading.
(e) Annex I is an accurate and complete list of all
subsidiaries of the Company (the "Material Subsidiaries") which accounted
for more than $21.5 million of revenues during the three months ended
March 31, 1998 or which, as of March 31, 1998, had assets in excess of
$151.8 million. The Company and each of its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation and has the corporate power
and authority to carry on its business as it is currently being conducted
and to own, lease and operate its properties, and each is duly qualified
and is in good standing as a foreign corporation authorized to do
business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except
where the failure to be so qualified would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole.
(f) All of the outstanding shares of capital stock of, or other
ownership interests in, each of the Company's subsidiaries have been duly
authorized and validly issued and are fully paid and non-assessable, and
are owned by the Company, free and clear of any security interest, claim,
lien, encumbrance or adverse interest of any nature (other than liens
created under the Credit Facility (as defined in the Registration
Statement)).
(g) All of the outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid,
non-assessable and not subject to, any preemptive or similar rights.
Upon payment of the Purchase Price and delivery of certificates
representing the Securities, each of the Underwriters will receive the
Securities free and clear of all liens, security interests or
encumbrances.
(h) The Securities have been duly authorized and, when executed
and authenticated in accordance with the provisions of the Senior
Indenture and delivered to the Underwriters against payment therefor as
provided by this Agreement, will be entitled to the benefits of the
Senior Indenture, and will be valid and binding obligations of the
Company, enforceable in accordance with their terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited to
equitable principles of general applicability.
(i) This Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement of the
Company enforceable in accordance with its terms
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(except as enforcement of rights to indemnity and contribution
hereunder may be limited by applicable laws or principles of public
policy and subject to the qualifications that the enforceability of
the Company's obligations hereunder may be limited by bankruptcy,
insolvency, reorganization, or other laws relating to or affecting
creditors' rights generally and by general principles of equity,
regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(j) The Senior Indenture has been duly qualified under the
Trust Indenture Act of 1939, as amended, and has been duly authorized,
executed and delivered by the Company and is a valid and binding
agreement of the Company, enforceable in accordance with its terms except
as (i) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and (ii)
rights of acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability.
(k) The Securities conform as to legal matters to the
description thereof contained in the Prospectus.
(l) Neither the Company nor any of its subsidiaries is in
violation of its respective charter or by-laws or in default in the
performance of any obligation, agreement or condition contained in any
bond, debenture, note or any other evidence of indebtedness or in any
other agreement, indenture or instrument material to the conduct of the
business of the Company and its subsidiaries, taken as a whole, to which
the Company or any of its subsidiaries is a party or by which it or any
of its subsidiaries or their respective properties are bound.
(m) The execution, delivery and performance of this Agreement,
the Senior Indenture and the Securities and compliance by the Company
with all the provisions hereof and thereof and the consummation of the
transactions contemplated hereby and thereby will not require any
consent, approval, authorization or order of any court, regulatory body,
administrative agency or other governmental body (except such as may be
required under the securities or Blue Sky laws of the various states or
jurisdictions outside the United States) and will not conflict with or
constitute a breach of any of the terms or provisions of, or a default
under, the charter or by-laws of the Company or any of its subsidiaries
or any agreement, indenture or other instrument to which it or any of its
subsidiaries is a party or by which it or any of its subsidiaries or
their respective properties are bound, or violate or conflict with any
laws, administrative regulations or rulings or court decrees applicable
to the Company, any of its subsidiaries or their respective properties.
(n) Except as otherwise set forth in the Prospectus, there are
no material legal or governmental proceedings pending to which the
Company or any of its subsidiaries is a party or of which any of their
respective properties are the subject, and, to the Company's knowledge,
no such proceedings are threatened or contemplated. No material
development has occurred with respect to the legal proceedings described
in the Registration Statement. No contract or document of a character
required to be described in the Registration Statement or the Prospectus
or to be filed as an exhibit to the Registration Statement is not so
described or filed as required.
(o) Neither the Company nor any of its subsidiaries has
violated any foreign, federal, state or local law or regulation relating
to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), nor any federal or state law relating to
discrimination in the hiring, promotion or pay of employees nor any
applicable federal or state wages and hours laws, nor any
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provisions of the Employee Retirement Income Security Act or the rules
and regulations promulgated thereunder, which in each case might result
in any material adverse change in the business, prospects, financial
condition or results of operations of the Company and its subsidiaries,
taken as a whole.
(p) The Company and each of its subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("permits"), including, without limitation, under any
applicable Environmental Laws, as are necessary to own, lease and operate
its respective properties and to conduct its business as currently being
conducted and as the Company expects it to be conducted except where the
failure to have such permits would not have a material adverse effect on
the Company and its subsidiaries, taken as a whole; the Company and each
of its subsidiaries has fulfilled and performed all of its material
obligations with respect to such permits and no event has occurred which
allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any other material impairment of the
rights of the holder of any such permit; and, except as described in the
Prospectus, such permits contain no restrictions that are materially
burdensome to the Company or any of its subsidiaries.
(q) In the ordinary course of its business, the Company
conducts a periodic review of the effect of Environmental Laws on the
business, operations and properties of the Company and its subsidiaries,
in the course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance
with Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to
third parties). On the basis of such review, the Company has reasonably
concluded that such associated costs and liabilities would not, except to
the extent properly accrued for in the Company's financial statements,
singly or in the aggregate, have a material adverse effect on the Company
and its subsidiaries, taken as a whole.
(r) Except as otherwise set forth in the Prospectus or such as
are not material to the business, prospects, financial condition or
results of operations of the Company and its subsidiaries, taken as a
whole, the Company and each of its subsidiaries has good and marketable
title, free and clear of all liens, claims, encumbrances and
restrictions, except liens for taxes not yet due and payable, to all
property and assets described in the Registration Statement as being
owned by it. All leases to which the Company or any of its subsidiaries
is a party are valid and binding and no default has occurred or is
continuing thereunder that might result in any material adverse change in
the business, prospects, financial condition or results of operations of
the Company and its subsidiaries, taken as a whole, and the Company and
its subsidiaries enjoy peaceful and undisturbed possession under all such
leases to which any of them is a party as lessee with such exceptions as
do not materially interfere with the use made by the Company or such
subsidiary.
(s) The Company and each of its subsidiaries maintains
insurance as is customary in the industry.
(t) PricewaterhouseCoopers LLP are independent public
accountants with respect to the Company and Arthur Andersen LLP are
independent public accountants with respect to Waste Management, Inc.
("Waste Management") as required by the Act.
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(u) The financial statements, together with related schedules
and notes, forming part of the Registration Statement and the Prospectus
(and any amendment or supplement thereto), present fairly the
consolidated financial position, results of operations and changes in
financial position of the Company and its subsidiaries and Waste
Management on the basis stated in the Registration Statement at the
respective dates or for the respective periods to which they apply; such
statements and related schedules and notes have been prepared in
accordance with generally accepted accounting principles consistently
applied throughout the periods involved, except as disclosed therein; and
the other financial and statistical information and data set forth in the
Registration Statement and the Prospectus (and any amendment or
supplement thereto) is, in all material respects, accurately presented
and prepared on a basis consistent with such financial statements and the
books and records of the Company and its subsidiaries and Waste
Management. No other financial statements or schedules are required by
the Act or the Exchange Act to be included in the Registration Statement
or the Prospectus.
(v) The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(w) No holder of any security of the Company has any right to
require registration of shares of Common Stock or any other security of
the Company because of the filing of the Registration Statement, which
has not been waived.
(x) There are no outstanding subscriptions, rights, warrants,
options, calls, convertible securities, commitments of sale or liens
related to or entitling any person to purchase or otherwise to acquire
any shares of the capital stock of, or other ownership interest in, the
Company or any subsidiary thereof except as otherwise disclosed in the
Registration Statement or Prospectus.
(y) Except as disclosed in the Prospectus, there are no
business relationships or related party transactions required to be
disclosed therein by Item 404 of Regulation S-K of the Commission.
(z) There is (i) no significant unfair labor practice complaint
pending against the Company or any of its subsidiaries or, to the
knowledge of the Company, threatened against any of them, before the
National Labor Relations Board or any state or local labor relations
board, and no significant grievance or significant arbitration proceeding
arising out of or under any collective bargaining agreement is so pending
against the Company or any of its subsidiaries or, to the Company's
knowledge, threatened against any of them, and (ii) no significant
strike, labor dispute, slowdown or stoppage pending against the Company
or any of its subsidiaries or, to the Company's knowledge, threatened
against it or any of its subsidiaries except for such actions specified
in clause (i) or (ii) above, which, singly or in the aggregate could not
reasonably be expected to have a material adverse effect on the Company
and its subsidiaries, taken as a whole.
(aa) The Company and each of its subsidiaries maintains a system
of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
asset accountability; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv)
the recorded accountability for assets
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is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(bb) All material tax returns required to be filed by the
Company and each of its subsidiaries in any jurisdiction have been filed,
other than those filings being contested in good faith, and all material
taxes, including withholding taxes, penalties and interest, assessments,
fees and other charges due pursuant to such returns or pursuant to any
assessment received by the Company or any of its subsidiaries have been
paid, other than those being contested in good faith and for which
adequate reserves have been provided.
(cc) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus and prior to
the Closing Date, (i) there has not been and will not have been, except
as set forth in or as contemplated by the Registration Statement and the
Prospectus any change in the capitalization, long term or short term debt
or in the capital stock or equity of the Company or any of its
subsidiaries, (ii) neither the Company nor any of its subsidiaries has
incurred any material liabilities or obligations, direct or contingent,
nor has it entered into any material transactions other than pursuant to
this Agreement, and the transactions referred to herein, or as
contemplated in the Prospectus, and (iii) there has not been any material
adverse effect, or any development involving a prospective material
adverse effect, in or affecting the general affairs, management,
financial position, shareholders' equity (or, with respect to partnership
subsidiaries, partnership capital), net worth or results of operations of
the Company and its subsidiaries, taken as a whole.
(dd) The Company and its affiliates have not taken, and will not
take, directly or indirectly, any action designed to, or which might
reasonably be expected to, cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities pursuant to the distribution
contemplated by this Agreement, and other than as permitted by the Act,
the Company has not distributed and will not distribute any prospectus or
other offering material in connection with the offering and sale of the
Securities.
Any certificate or other document signed by any officer or authorized
representative of the Company and delivered to the Underwriters or to counsel
for the Underwriters shall be deemed a representation and warranty of the
Company to each Underwriter as to the matters covered thereby.
7. INDEMNIFICATION.
(a) 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 Act or Section 20 of the Exchange Act
(each an "Underwriter Indemnified Party" and collectively the
"Underwriter Indemnified Parties"), from and against any and all losses,
claims, damages, liabilities and judgments caused by any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus (as amended or supplemented if
the Company shall have furnished any amendments or supplements thereto)
or any preliminary prospectus, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages, liabilities or judgments are
caused by any such untrue statement or omission or alleged untrue
statement or omission based upon information relating to any
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Underwriter furnished in writing to the Company by or on behalf of any
Underwriter through you expressly for use therein.
(b) The indemnity agreement contained in paragraph 7(a), with
respect to any preliminary prospectus, shall not inure to the benefit of
any Underwriter to the extent that any loss, claim, damage or liability
results from the fact that a copy of the Prospectus (not including
documents incorporated by reference herein) was not sent or given by or
on behalf of such Underwriter to the person asserting any such loss,
claim, damage or liability to the extent that the Prospectus would have
cured the defect giving rise to such loss, claim, damage, liability or
judgment if such Underwriter shall have been provided with the number of
copies of the Prospectus requested by such Underwriter and it is
judicially determined that such delivery was required under the Act and
was not so made.
(c) In case any action shall be brought against any Underwriter
Indemnified Party, based upon any preliminary prospectus, the
Registration Statement or the Prospectus or any amendment or supplement
thereto and with respect to which indemnity may be sought against the
Company, such Underwriter Indemnified Party shall promptly notify the
Company in writing and the Company shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to such
Underwriter Indemnified Party and payment of all fees and expenses. Any
Underwriter Indemnified Party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such
Underwriter Indemnified Party unless (i) the employment of such counsel
has been specifically authorized in writing by the Company, (ii) the
Company shall have failed to assume the defense and employ counsel
reasonably satisfactory to such Underwriter Indemnified Party, or (iii)
the named parties to any such action (including any impleaded parties)
include both such Underwriter Indemnified Party and the Company and such
Underwriter Indemnified Party shall have been advised by such counsel
that there may be one or more legal defenses available to it which are
different from or additional to those available to the Company (in which
case the Company shall not have the right to assume the defense of such
action on behalf of such Underwriter Indemnified Party, it being
understood, however, that the Company shall not, in connection with any
one such action or separate but substantially similar or related actions
in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) for all
such Underwriter Indemnified Parties, which firm shall be designated in
writing by Donaldson, Lufkin & Jenrette Securities Corporation and that
all such fees and expenses shall be reimbursed as they are incurred).
The Company shall not be liable for any settlement of any such action
effected without its written consent, but if settled with the written
consent of the Company, the Company agrees to indemnify and hold harmless
any Underwriter Indemnified Party from and against any loss or liability
by reason of such settlement. Notwithstanding the immediately preceding
sentence, if in any case where the fees and expenses of counsel are at
the expense of the Company and an Underwriter Indemnified Party shall
have requested the Company to reimburse the Underwriter Indemnified Party
for such fees and expenses of counsel as incurred, the Company agrees
that it shall be liable for any settlement of any action effected without
its written consent if (i) such settlement is entered into more than
forty business days after the receipt by the Company of the aforesaid
request and (ii) the Company shall have failed to reimburse the
Underwriter Indemnified Party in accordance with such request for
reimbursement prior to the date of such settlement. The Company shall
not, without the prior written consent of the Underwriter Indemnified
Party, effect any settlement of any pending or threatened proceeding in
respect of
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which any Underwriter Indemnified Party is or could have been a party
and indemnity could have been sought hereunder by such Underwriter
Indemnified Party, unless such settlement includes an unconditional
release of such Underwriter Indemnified Party from all liability on
claims that are the subject matter of such proceeding.
(d) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who
sign the Registration Statement, and any person controlling the Company
within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act (each of "Company Indemnified Party," collectively the "Company
Indemnified Parties" and together with the Underwriter Indemnified
Parties, an "Indemnified Party" or the "Indemnified Parties"), to the
same extent as the foregoing indemnity from the Company to each
Underwriter Indemnified Party but only with reference to information
relating to such Underwriter furnished in writing by or on behalf of such
Underwriter through you expressly for use in the Registration Statement,
the Prospectus or any preliminary prospectus. In case any action shall
be brought against a Company Indemnified Party based on the Registration
Statement, the Prospectus or any preliminary prospectus and in respect of
which indemnity may be sought against any Underwriter, the Underwriter
shall have the rights and duties given to the Company (except that if the
Company shall have assumed the defense thereof, such Underwriter shall
not be required to do so, but may employ separate counsel therein and
participate in the defense thereof but the fees and expenses of such
counsel shall be at the expense of such Underwriter), and the Company
Indemnified Party shall have the rights and duties given to the
Underwriter, by Section 7(c) hereof.
(e) If the indemnification provided for in this Section 7 is
unavailable to an Indemnified Party in respect of any losses, claims,
damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such Indemnified Party as a
result of such losses, claims, damages, liabilities and judgments (i) in
such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the other
hand from the offering of the Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the
Company and the Underwriters in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Underwriters shall be
deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company, and the
total underwriting discounts and commissions received by the
Underwriters, bear to the total price to the public of the Securities, in
each case as set forth in the table on the cover page of the Prospectus.
The relative fault of the Company and the Underwriters shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the Company or the
Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.
The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 7(e) were
determined by pro rata allocation (even if the Underwriters were treated
as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to
in the immediately preceding paragraph. The amount paid or payable by an
Indemnified Party as a result of the
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losses, claims, damages, liabilities or judgments referred to in the
immediately preceding paragraph shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses
reasonably incurred by such Indemnified Party in connection with
investigating or defending any such action or claim. Notwithstanding
the provisions of this Section 7, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price
at which the Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages
which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 7(e) are several in proportion to the
respective principal amount of Securities purchased by each of the
Underwriters hereunder and not joint.
(f) The Company hereby designates CT Corporation Systems, Inc.,
1633 Broadway, New York, New York 10019, (a Delaware corporation) as its
authorized agent, upon which process may be served in any action, suit or
proceeding which may be instituted in any state or federal court in the
State of New York by any Underwriter or person controlling an Underwriter
asserting a claim for indemnification or contribution under or pursuant
to this Section 7, and the Company will accept the jurisdiction of such
court in such action, and waives, to the fullest extent permitted by
applicable law, any defense based upon lack of personal jurisdiction or
venue. A copy of any such process shall be sent or given to the Company,
at the address for notices specified in Section 10 hereof.
8. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations
of the Underwriters under this Agreement are subject to the satisfaction of each
of the following conditions:
(a) All the representations and warranties of the Company
contained in this Agreement shall be true and correct on the date hereof
and on the Closing Date with the same force and effect as if made on and
as of such dates.
(b) The Registration Statement shall have become effective not
later than 5:00 P.M., (and in the case of a Registration Statement filed
under 462(b) of the Act, not later than 10:00 P.M.) New York City time,
on the date of this Agreement or at such later date and time as you may
approve in writing, and at the Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been commenced or shall be
pending before or contemplated by the Commission.
(c) (i) Since the date of the latest balance sheet included in
the Registration Statement and the Prospectus, there shall not have been
any material adverse change, or any development involving a prospective
material adverse change, in the condition, financial or otherwise, or in
the earnings, affairs or business prospects, whether or not arising in
the ordinary course of business, of the Company, (ii) since the date of
the latest balance sheet included in the Registration Statement and the
Prospectus there shall not have been any change, or any development
involving a prospective material adverse change, in the capital stock or
in the long-term debt of the Company from that set forth in the
Registration Statement and Prospectus, (iii) the Company and its
subsidiaries shall have no liability or obligation, direct or contingent,
which is material to the Company and its subsidiaries, taken as a whole,
other than those reflected in the Registration
-13-
Statement and the Prospectus and (iv) on the Closing Date you shall have
received a certificate dated the Closing Date, signed by Earl E. DeFrates
and Ronald H. Jones, in their respective capacities as Chief Financial
Officer and Treasurer of the Company, confirming the matters set forth
in paragraphs (a), (b), and (c) of this Section 8.
(d) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing
Date of Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P., counsel for the
Company, to the effect that:
(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and has the corporate power and
authority required to carry on its business as it is currently
being conducted and to own, lease and operate its properties;
(ii) the Securities have been duly authorized, and when
executed and authenticated in accordance with the provisions of
the Senior Indenture and delivered to the Underwriters against
payment therefor as provided by this Agreement, will be entitled
to the benefits of the Senior Indenture and will be valid and
binding obligations of the Company enforceable in accordance with
their terms except (a) as the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (b) rights of acceleration and
the availability of equitable remedies may be limited by equitable
principles of general applicability;
(iii) this Agreement has been duly authorized, executed
and delivered by the Company and is a valid and binding agreement
of the Company enforceable in accordance with its terms (except as
enforcement of rights to indemnity and contribution hereunder may
be limited under applicable laws or principles of public policy
and subject to the qualifications that the enforceability of the
Company's obligations hereunder may be limited by bankruptcy,
insolvency, reorganization, or other laws relating to or affecting
creditors' rights generally and by general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law));
(iv) the Senior Indenture has been duly qualified under
the Trust Indenture Act of 1939, as amended, and has been duly
authorized, executed and delivered by the Company and is a valid
and binding agreement of the Company, enforceable in accordance
with its terms except as (a) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (b) rights of acceleration and the
availability of equitable remedies may be limited by equitable
principles of general applicability;
(v) the Registration Statement has become effective
under the Act, no stop order suspending its effectiveness has been
issued and no proceedings for that purpose are, to the knowledge
of such counsel, pending before or contemplated by the Commission;
(vi) the statements under the captions "Description of
Notes" and "Description of Debt Securities" in the Prospectus and
Item 15 of Part II of the Registration Statement, insofar as such
statements constitute a summary of legal matters or documents
referred to
-14-
therein, fairly present the information called for with respect to
such legal matters or documents;
(vii) the execution, delivery and performance of this
Agreement, the Senior Indenture and the Securities by the Company,
compliance by the Company with all the provisions hereof and
thereof and the consummation of the transactions contemplated
hereby and thereby will not require any consent, approval,
authorization or other order of any court, regulatory body,
administrative agency or other governmental body (except such as
may be required under the Act or other securities or Blue Sky
laws) and will not conflict with or constitute a breach of any of
the terms or provisions of, or a default under, the charter or
by-laws of the Company;
(viii) the Company is not an "investment company" or a
company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended;
(ix) the Registration Statement, the Prospectus, any
supplement or amendment thereto and each document filed pursuant
to the Exchange Act and incorporated or deemed to be incorporated
by reference in the Prospectus (except for financial statements,
financial and statistical information contained therein as to
which no opinion need be expressed) comply as to form in all
material respects with the Act;
(e) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing
Date, of Gregory T. Sangalis, General Counsel to the Company, to the
effect that:
(i) each of the Company's Material Subsidiaries has been
duly incorporated, is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation and
has the corporate power and authority required to carry on its
business as it is currently being conducted and to own, lease and
operate its properties;
(ii) the Company and each of its Material Subsidiaries is
duly qualified and is in good standing as a foreign corporation
authorized to do business in each jurisdiction in which the nature
of its business or its ownership or leasing of property requires
such qualification, except where the failure to be so qualified
would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole;
(iii) all of the outstanding shares of capital stock of,
or other ownership interests in, each of the Company's
subsidiaries have been duly and validly authorized and issued and
are fully paid and non-assessable, and are owned by the Company,
free and clear of any security interest, claim, lien, encumbrance
or adverse interest of any nature (other than liens created under
the Credit Facility);
(iv) all the outstanding shares of Common Stock of the
Company have been duly authorized and validly issued and are fully
paid, non-assessable and not subject to any statutory preemptive
rights or, to the knowledge of such counsel, any other similar
rights;
-15-
(v) neither the Company nor any of its Material
Subsidiaries is in violation of its respective charter or by-laws
and, to the best of such counsel's knowledge after due inquiry,
neither the Company nor any of its Material Subsidiaries is in
default in the performance of any obligation, agreement or
condition contained in any bond, debenture, note or any other
evidence of indebtedness or in any other agreement, indenture or
instrument material to the conduct of the business of the Company
and its subsidiaries, taken as a whole, to which the Company or
any of its Material Subsidiaries is a party or by which it or any
of its subsidiaries or their respective properties are bound;
(vi) the execution, delivery and performance of this
Agreement, the Senior Indenture and the Securities by the Company,
compliance by the Company with all the provisions hereof and
thereof and the consummation of the transactions contemplated
hereby and thereby will not conflict with or constitute a breach
of any of the terms or provisions of, or a default under, the
charter or by-laws of any of the Company's Material Subsidiaries
or any agreement, indenture or other instrument to which the
Company or any of its Material Subsidiaries is a party or by which
the Company or any of its Material Subsidiaries or their
respective properties are bound, or violate or conflict with any
laws, administrative regulations or rulings or court decrees
applicable to the Company or any of its subsidiaries or their
respective properties;
(vii) to such counsel's knowledge there are no legal or
governmental proceedings pending or threatened to which the
Company or any of its subsidiaries is a party or to which any of
their respective properties are subject which is required to be
described in the Registration Statement or the Prospectus and is
not so described, or of any contract or other document which is
required to be described in the Registration Statement or the
Prospectus or is required to be filed as an exhibit to the
Registration Statement which is not described or filed as
required; such counsel does not have any reason to believe that
the description of litigation in the Prospectus is not accurate
and complete in all material respects;
(viii) to such counsel's knowledge, except as described in
the Prospectus, neither the Company nor any of its subsidiaries
has violated any Environmental Laws, nor any federal or state law
relating to discrimination in the hiring, promotion or pay of
employees nor any applicable federal or state wages and hours
laws, nor any provisions of the Employee Retirement Income
Security Act or the rules and regulations promulgated thereunder,
which in each case might result in any material adverse change in
the business, prospects, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole;
(ix) to such counsel's knowledge, the Company and each of
its subsidiaries has such permits, licenses, franchises and
authorizations of governmental or regulatory authorities
("permits"), including, without limitation, under any applicable
Environmental Laws, as are necessary to own, lease and operate its
respective properties and to conduct its business in the manner
described in the Prospectus except where the failure to have such
permits would not have a material adverse effect on the Company
and its subsidiaries taken as a whole; to such counsel's
knowledge, the Company and each of its subsidiaries has fulfilled
and performed all of its material obligations with respect to such
permits and no event has occurred which allows, or after notice or
lapse of time would allow,
-16-
revocation or termination thereof or results in any other material
impairment of the rights of the holder of any such permit, subject
in each case to such qualification as may be set forth in the
Prospectus; and, except as described in the Prospectus, such
permits contain no restrictions that are materially burdensome to
the Company or any of its subsidiaries;
(x) to such counsel's knowledge, no holder of any
security of the Company has any right to require registration of
shares of Common Stock or any other security of the Company as a
result of filing the Registration Statement, which have not been
waived;
(xi) such counsel believes that (except for financial
statements, financial and statistical information contained
therein, as aforesaid and except for that part of the Registration
Statement that constitutes the Form T-1) the Registration
Statement and the prospectus included therein at the time the
Registration Statement became effective did not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and that the Prospectus, as amended or
supplemented, if applicable (except for financial statements, and
financial and statistical information as aforesaid) did not, as of
its date and does not, as of the Closing Date, contain any untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
(xii) all descriptions in the Prospectus of statutes,
regulations or legal or governmental proceedings in all material
respects are accurate and fairly present the information required
to be shown;
The opinion of Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P. referred to
in subsection (d) above shall contain a statement that such counsel
believes that (except for financial statements and financial and
statistical information contained therein, as aforesaid and except for
that part of the Registration Statement that constitutes the Form T-1),
the Registration Statement and the prospectus included therein at the
time the Registration Statement became effective did not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, and that the Prospectus, as amended or supplemented, if
applicable (except for financial statements and financial and statistical
information, as aforesaid) did not, as of its date and does not, as of
the Closing Date, contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading. In making such statement, Liddell, Sapp, Zivley, Hill &
LaBoon, L.L.P. may state that its opinions and beliefs are based upon its
participation in the preparation of the Registration Statement and
Prospectus and any amendments or supplements thereto and review and
discussion of the contents thereof, but are without independent check or
verification except as specified.
In giving the opinions described in clause (d) and (e) above, such
counsel may rely as to factual matters on information set forth in
certificates of the Company or public officials.
The opinions of Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P. and
Gregory T. Sangalis described in paragraphs (d) and (e) above shall be
rendered to you at the request of the Company and shall so state therein.
-17-
(f) You shall have received on the Closing Date an opinion,
dated the Closing Date, of McDermott, Will & Emery, counsel for the
Underwriters, in form and substance satisfactory to you.
(g) You shall have received letters on and as of the Closing
Date, in form and substance satisfactory to you, from
PricewaterhouseCoopers LLP and Arthur Andersen LLP, independent public
accountants to the Company and Waste Management, respectively, with
respect to the financial statements and certain financial information
contained in the Registration Statement and the Prospectus; the letters
to be delivered on the Closing Date being substantially in the form and
substance of the letters delivered to you by PricewaterhouseCoopers LLP
and Arthur Andersen LLP, respectively, on the date of this Agreement.
(h) The Company shall not have failed at or prior to the
Closing Date to perform or comply with any of the agreements herein
contained and required to be performed or complied with by the Company at
or prior to the Closing Date.
(i) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date, there shall not have been any downgrading,
nor shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not indicate
the direction of the possible change, in the rating or outlook accorded
any of the Company's securities by any "nationally recognized statistical
rating organization," as such term is defined for purposes of Rule
436(g)(2) under the Act.
9. EFFECTIVE DATE OF AGREEMENT AND TERMINATION. This Agreement
shall become effective upon the later of (i) execution of this Agreement and
(ii) when notification of the effectiveness of the Registration Statement has
been released by the Commission.
This Agreement may be terminated at any time prior to the Closing Date
by you by written notice to the Company if any of the following has occurred:
(i) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any adverse change or development
involving a prospective adverse change in the condition, financial or
otherwise, of the Company or any of its subsidiaries or the earnings,
affairs, or business prospects of the Company or any of its subsidiaries,
whether or not arising in the ordinary course of business, which would, in
your judgment, make it impracticable to market the Securities on the terms
and in the manner contemplated in the Prospectus, (ii) any outbreak or
escalation of hostilities or other national or international calamity or
crisis or change in economic conditions or in the financial markets of the
United States or elsewhere that, in your judgment, is material and adverse
and would, in your judgment, make it impracticable to market the Securities
on the terms and in the manner contemplated in the Prospectus, (iii) the
suspension or material limitation of trading in securities on the New York
Stock Exchange, the American Stock Exchange or the Nasdaq National Market
System or limitation on prices for securities on any such exchange or
National Market System, (iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of
any court or other governmental authority which in your opinion materially
and adversely affects, or will materially and adversely affect, the business
or operations of the Company or any Subsidiary, (v) the declaration of a
banking moratorium by either federal or New York State authorities, (vi) the
taking of any action by any federal, state or local government or agency in
respect of its monetary or fiscal affairs which in your opinion has a
material adverse effect on the financial markets in the United States or
(vii) the suspension or material limitation of trading in the Company's
securities on the New York Stock Exchange or limitation on prices for the
Company's securities on such exchange.
-18-
If on the Closing Date any one or more of the Underwriters shall fail
or refuse to purchase the Securities which it or they have agreed to purchase
hereunder on such date and the aggregate principal amount of Securities which
such defaulting Underwriter or Underwriters, as the case may be, agreed but
failed or refused to purchase is not more than one-tenth of the total
principal amount of the Securities to be purchased on such date by all
Underwriters, each non-defaulting Underwriter shall be obligated severally,
in the proportion which the principal amount of Securities set forth opposite
its name in Schedule I bears to the total principal amount of Securities
which all the non-defaulting Underwriters, as the case may be, have agreed to
purchase, or in such other proportion as you may specify, to purchase the
Securities which such defaulting Underwriter or Underwriters, as the case may
be, agreed but failed or refused to purchase on such date; provided that in
no event shall the principal amount of Securities which any Underwriter has
agreed to purchase pursuant to Section 2 hereof be increased pursuant to this
Section 9 by an amount in excess of one-ninth of such principal amount of
Securities, without the written consent of such Underwriter. If on the
Closing Date any Underwriter or Underwriters shall fail or refuse to purchase
Securities and the aggregate principal amount of Securities with respect to
which such default occurs is more than one-tenth of the aggregate principal
amount of Securities to be purchased on such date by all Underwriters and
arrangements satisfactory to you and the Company for purchase of such
Securities are not made within 48 hours after such default, this Agreement
will terminate without liability on the part of any non-defaulting
Underwriter and the Company. In any such case which does not result in
termination of this Agreement, either you or the Company shall have the right
to postpone the Closing Date, but in no event for longer than seven days, in
order that the required changes, if any, in the Registration Statement and
the Prospectus or any other documents or arrangements may be effected. Any
action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any default of any such Underwriter
under this Agreement.
10. MISCELLANEOUS. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (a) if to the Company, to USA Waste
Services, Inc., 1001 Fannin Street, Suite 4000, Houston, Texas 77002 and (b)
if to any Underwriter or to you, to you c/o Donaldson, Lufkin & Jenrette
Securities Corporation, 277 Park Avenue, New York, New York 10172, Attention:
Corporate Bond Syndicate Department, or in any case to such other address as
the person to be notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company, its officers and directors
and of the several Underwriters set forth in or made pursuant to this
Agreement shall remain operative and in full force and effect, and will
survive delivery of and payment for the Securities, regardless of (i) any
investigation, or statement as to the results thereof, made by or on behalf
of any Underwriter or by or on behalf of the Company, the officers or
directors of the Company or any controlling person of the Company, (ii)
acceptance of the Securities and payment for them hereunder and (iii)
termination of this Agreement.
If this Agreement shall be terminated by the Underwriters because of
any failure or refusal on the part of the Company to comply with the terms or
to fulfill any of the conditions of this Agreement, the Company agrees to
reimburse the several Underwriters for all out-of-pocket expenses (including
the fees and disbursements of counsel) reasonably incurred by them.
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the
Underwriters, any controlling persons referred to herein and their respective
successors and assigns, all as and to the extent provided in this Agreement,
and no other person shall acquire or have any right under or by virtue of
this Agreement. The term "successors and assigns"
-19-
shall not include a purchaser of any of the Securities from any of the
several Underwriters merely because of such purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
[The next page is the signature page.]
-20-
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Underwriters.
Very truly yours,
USA WASTE SERVICES, INC.
By: /s/ Ronald H. Jones
--------------------------------
Ronald H. Jones
Vice President and Treasurer
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
CREDIT SUISSE FIRST BOSTON CORPORATION
GOLDMAN, SACHS & CO
MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED
SALOMON BROTHERS INC.
By: DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /s/ Mark A. Pytosh
------------------------------------
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SCHEDULE I
PRINCIPAL AMOUNT OF
SECURITIES
UNDERWRITERS TO BE PURCHASED
------------ ---------------
Donaldson, Lufkin & Jenrette Securities Corporation $ 120,000,000
Credit Suisse First Boston Corporation 120,000,000
Goldman, Sachs & Co. 120,000,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated 120,000,000
Salomon Brothers Inc. 120,000,000
-------------
TOTAL $ 600,000,000
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ANNEX I
MATERIAL SUBSIDIARIES
STATE OF
NO. SUBSIDIARY INCORPORATION
--- ---------- -------------
1 Chambers Development Company, Inc. Delaware
2 United Waste Systems, Inc. Delaware
3 Envirofil, Inc. Delaware
4 Sanifill, Inc. Delaware
5 Western Waste Services, Inc. California
6 Canadian Waste Services, Inc. Ontario, Canada
7 Quebec Waste Services, Inc. Quebec, Canada
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$600,000,000
USA WASTE SERVICES, INC.
6-1/8% MANDATORILY TENDERED SENIOR NOTES DUE 2011
UNDERWRITING AGREEMENT
July 14, 1998
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
J.P. MORGAN SECURITIES INC.
BANCAMERICA ROBERTSON STEPHENS
CHASE SECURITIES INC.
DEUTSCHE BANK SECURITIES
c/o Donaldson, Lufkin & Jenrette
Securities Corporation
277 Park Avenue
New York, New York 10172
Dear Sirs:
USA Waste Services, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell $600,000,000 principal amount of its 6-1/8%
Mandatorily Tendered Senior Notes due 2011 (the "Securities"), to the several
underwriters named in Schedule I hereto (the "Underwriters"). The Securities
are to be issued pursuant to the provisions of an indenture (the "Senior
Indenture") dated as of September 10, 1997 between the Company and Chase Bank
of Texas, National Association, as trustee (the "Trustee"). The Securities
are also subject to a Remarketing Agreement dated as of July 17, 1998 between
the Company and J.P. Morgan Securities, Inc. (the "Remarketing Agreement").
The terms of the Securities are set forth in resolutions of the Pricing
Committee of the Board of Directors of the Company dated as of the date
hereof (the "Resolutions").
1. Registration Statement and Prospectus. The Company has
prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act of
1933, as amended, and the rules and regulations of the Commission thereunder
(collectively called the "Act"), a registration statement on Form S-3
(Registration No. 333-52197), including a prospectus relating to the
Securities, which may be amended. The registration statement as amended at
the time when it became effective, including all documents or information
incorporated or deemed to be incorporated by reference therein is referred to
as the "Registration Statement"; and the prospectus in the form first used to
confirm sales of Securities, (including (a) the information contained in any
prospectus supplement relating to the Securities or deemed to be part of the
Registration Statement at effectiveness pursuant to Rule 430A or Rule 434 of
the Act, and (b) any documents or information incorporated or deemed to be
incorporated by reference into such prospectus), are hereinafter referred to
as the "Prospectus". Any registration statement (including any amendment or
supplement thereto or
information which is deemed to be a part thereof) filed by the Company under
Rule 462(b) of the Act (a "Rule 462(b) Registration Statement") shall be
deemed to be a part of the Registration Statement. If the Company elects to
rely on Rule 434 under the Act, all references to the Prospectus shall be
deemed to also include, without limitation, the form of prospectus and term
sheet (a "Term Sheet"), taken together, provided to the Underwriters by the
Company in reliance on Rule 434 under the Act (the "Rule 434 Prospectus").
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included," "described" or "stated"
in the Registration Statement or the Prospectus (and all references of like
import) shall be deemed to mean and include all such financial statements and
schedules and other information which is or is deemed to be incorporated by
reference in the Registration Statement or the Prospectus, as the case may
be; and all references in this Agreement to amendments or supplements to the
Registration Statement or the Prospectus shall be deemed to mean and include,
without limitation, even though not specifically stated, any document filed
under the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission thereunder (the "Exchange Act") which is or is
deemed to be incorporated by reference in the Registration Statement or the
Prospectus after the effective date, as the case may be.
2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the
representations and warranties contained in this Agreement, and subject to
its terms and conditions, the Company agrees to issue and sell, and each
Underwriter agrees, severally and not jointly, to purchase from the Company
the principal amount of Securities set forth opposite the name of such
Underwriter in Schedule I hereto at 99.345% of the principal amount thereof
(excluding the premium payment of $14.7 million to the Company by J.P. Morgan
Securities Inc. pursuant to the Remarketing Agreement) (the "Purchase Price")
plus accrued interest thereon, if any, from July 17, 1998 to the date of
payment and delivery.
3. TERMS OF PUBLIC OFFERING. The Company is advised by you that
the Underwriters propose (i) to make a public offering of their respective
portions of the Securities as soon after the effective date of the
Registration Statement as in your judgment is advisable and (ii) initially to
offer the Securities upon the terms set forth in the Prospectus.
4. DELIVERY AND PAYMENT. Delivery to the Underwriters of and
payment for the Securities shall be made at 10:00 A.M., New York City time,
on the third or fourth business day unless otherwise permitted by the
Commission pursuant to Rule 15c6-1 of the Exchange Act (the "Closing Date")
following the date of this Agreement at such place as you shall designate.
The Closing Date and the location of delivery of and the form of payment for
the Securities may be varied by agreement between you and the Company.
The Securities shall be registered in such names and issued in such
denominations as you shall request in writing not later than two full
business days prior to the Closing Date. A global certificate for the
Securities shall be made available to you for inspection not later than 9:30
A.M., New York City time, on the business day next preceding the Closing
Date. A global certificate for the Securities in definitive form evidencing
the Securities shall be delivered to you on the Closing Date with any
transfer taxes thereon duly paid by the Company, for the respective accounts
of the several Underwriters, against payment of the Purchase Price therefor
by wire transfer in same day funds to an account specified by the Company.
5. AGREEMENTS OF THE COMPANY. The Company agrees with you:
(a) Immediately following the determination of the Purchase
Price, to prepare, and file or transmit for filing with the Commission in
accordance with Rule 424(b) of the Act, copies
-2-
of a prospectus supplement relating to the Securities and containing all
information required under the Act.
(b) To advise you promptly and, if requested by you, to confirm
such advice in writing, (i) when the Registration Statement has become
effective and when any post-effective amendment to it becomes effective,
(ii) of the receipt of comments from the Commission relating to the
Registration Statement, (iii) of any request by the Commission for
amendments to the Registration Statement or amendments or supplements to
the Prospectus or for additional information, (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or of the suspension of qualification of the
Securities for offering or sale in any jurisdiction, or the initiation of
any proceeding for such purposes, and (v) of the happening of any event
during the period referred to in paragraph (e) below which makes any
statement of a material fact made in the Registration Statement or the
Prospectus untrue or which requires the making of any additions to or
changes in the Registration Statement or the Prospectus in order to make
the statements therein not misleading. If at any time the Commission
shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to
obtain the withdrawal or lifting of such order at the earliest possible
time.
(c) To furnish to you, without charge, five signed copies of
the Registration Statement as first filed with the Commission and of each
amendment to it, including all exhibits, and to furnish to you and each
Underwriter designated by you such number of conformed copies of the
Registration Statement as so filed and of each amendment to it, without
exhibits, as you may reasonably request.
(d) Prior to the termination of the offering of Securities, not
to (i) file any Rule 462(b) Registration Statement, (ii) file any
amendment or supplement to the Registration Statement, (iii) file any
document under the Exchange Act which shall be deemed to be incorporated
by reference into the Prospectus, or (iv) make any amendment or
supplement to the Prospectus (including the issuance or filing of any
Term Sheet) of which you shall not previously have been advised or to
which you shall reasonably object; and to prepare and file with the
Commission, promptly upon your reasonable request, any Rule 462(b)
Registration Statement, Term Sheet or amendment or supplement to the
Registration Statement or the Prospectus which may be necessary or
advisable in connection with the distribution of the Securities by you,
and to use its best efforts to cause the same to become promptly
effective.
(e) From time to time for such period as in the opinion of
counsel for the Underwriters a prospectus is required by law to be
delivered in connection with sales by an Underwriter or a dealer, to
furnish to each Underwriter and dealer as many copies of the Prospectus
(and of any amendment or supplement to the Prospectus) as such
Underwriter or dealer may reasonably request.
(f) If during the period specified in paragraph (e) any event
shall occur as a result of which, in the opinion of counsel for the
Underwriters, it becomes necessary to amend or supplement the Prospectus
in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if it is necessary to amend or supplement the Prospectus
to comply with any law, forthwith to prepare and file with the Commission
an appropriate amendment or supplement to the Prospectus so that the
statements in
-3-
the Prospectus, as so amended or supplemented, will not, in the light of
the circumstances when it is so delivered, be misleading, or so that the
Prospectus will comply with law, and to furnish to each Underwriter and
to such dealers as you shall specify, such number of copies thereof as
such Underwriter or dealers may reasonably request.
(g) Prior to any public offering of the Securities, to
cooperate with you and counsel for the Underwriters in connection with
the registration or qualification of the Securities for offer and sale by
the several Underwriters and by dealers under the state securities or
Blue Sky laws of such jurisdictions as you may request, to continue such
qualification in effect so long as required for distribution of the
Securities and to file such consents to service of process or other
documents as may be necessary in order to effect such registration or
qualification.
(h) To mail and make generally available to its securityholders
as soon as reasonably practicable an earnings statement covering a period
of at least twelve months after the Closing Date (but in no event
commencing later than 90 days after such date) which shall satisfy the
provisions of Section 11(a) of the Act.
(i) During the period of five years after the date of this
Agreement, (i) to mail as soon as reasonably practicable after the end of
each fiscal year to the record holders of its Securities a financial
report of the Company and its subsidiaries on a consolidated basis (and a
similar financial report of all unconsolidated subsidiaries, if any), all
such financial reports to include a consolidated balance sheet, a
consolidated statement of operations, a consolidated statement of cash
flows and a consolidated statement of shareholders' equity as of the end
of and for such fiscal year, together with comparable information as of
the end of and for the preceding year, certified by independent certified
public accountants, and (ii) to make generally available as soon as
practicable after the end of each quarterly period (except for the last
quarterly period of each fiscal year) to such holders, a consolidated
balance sheet, a consolidated statement of operations and a consolidated
statement of cash flows (and similar financial reports of all
unconsolidated subsidiaries, if any) as of the end of and for such
period, and for the period from the beginning of such year to the close
of such quarterly period, together with comparable information for the
corresponding periods of the preceding year.
(j) During the period referred to in paragraph (i), to furnish
to you as soon as available a copy of each report or other publicly
available information of the Company mailed to the securityholders of the
Company or filed with the Commission and such other publicly available
information concerning the Company and its subsidiaries as you may
reasonably request.
(k) To pay all costs, expenses, fees and taxes incident to (i)
the preparation, printing, filing and distribution under the Act of the
Registration Statement (including financial statements and exhibits),
each preliminary prospectus relating to the Securities and all amendments
and supplements to any of them prior to or during the period specified in
paragraph (e), (ii) the printing and delivery of the Prospectus and all
amendments or supplements to it during the period specified in paragraph
(e), (iii) the printing and delivery of this Agreement and the Senior
Indenture, (iv) the registration or qualification of the Securities for
offer and sale under the securities or Blue Sky laws of the several
states (including in each case the fees and disbursements of counsel for
the Underwriters relating to such registration or qualification and
memoranda relating thereto), (v) the rating of the Securities by
securities rating agencies or services, and (vi) furnishing such copies
of the Registration Statement, the Prospectus and all amendments and
supplements thereto as may be
-4-
requested for use in connection with the offering or sale of the
Securities by the Underwriters or by dealers to whom Securities may be
sold.
(l) To use its best efforts to maintain the listing of the
Company's common stock, par value $0.01 per share (the "Common Stock") on
the New York Stock Exchange for a period of five years after the
effective date of the Registration Statement.
(m) To use its best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by
the Company prior to the Closing Date and to satisfy all conditions
precedent to the delivery of the Securities.
(n) To use the net proceeds received by it from the sale of
Securities in the manner specified in the Prospectus under "Use of
Proceeds."
(o) During the period beginning on the date hereof and
continuing to and including the Closing Date, not to offer, sell,
contract to sell or otherwise dispose of any debt securities of the
Company or warrants to purchase debt securities of the Company (other
than (i) the Securities or the Company's 7% Senior Notes due 2028 which
are being offered concurrently pursuant to a separate Prospectus
Supplement and (ii) commercial paper issued in the ordinary course of
business), without your prior written consent.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each Underwriter that:
(a) The Company meets the requirements for use of Form S-3; the
Registration Statement has become effective; no stop order suspending the
effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or have been threatened
by the Commission.
(b) At the time the Registration Statement, any Rule 462(b)
Registration Statement or any post-effective amendment to the
Registration Statement became or becomes effective, on the date that any
amendment or supplement to the Prospectus is filed with the Commission,
and at the Closing Date, (i) each part of the Registration Statement,
when such part became effective, did not contain and each such part, as
amended or supplemented, if applicable, will not contain any 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, (ii) the Registration Statement and the Prospectus comply
and, as amended or supplemented, if applicable, will comply in all
material respects with the Act and (iii) the Prospectus did not and does
not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except that
the representations and warranties set forth in this paragraph (b) do not
apply to statements or omissions in the Registration Statement or the
Prospectus based upon information relating to any Underwriter furnished
to the Company in writing by such Underwriter through you expressly for
use therein.
(c) Any term sheet or prospectus subject to completion provided
by the Company to the Underwriters for use in connection with the
offering and sale of the Securities pursuant to Rule 434 under the Act
together are not materially different from the prospectus included in the
-5-
Registration Statement (exclusive of any information deemed a part
thereof by virtue of Rule 434(d)). The documents incorporated or deemed
to be incorporated by reference in the Prospectus pursuant to Item 12 of
Form S-3 under the Act, 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 Exchange Act, and, when read together with
other information in the Prospectus, at the time the Registration
Statement became effective and as of the Closing Date, and during the
period specified in Section 5(e), 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 the
light of the circumstances under which they were made, not misleading.
(d) Each preliminary 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 Act, and each Rule
462(b) Registration Statement, if any, complied when so filed in all
material respects with the Act; and did 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 the light of the
circumstances under which they were made, not misleading.
(e) Annex I is an accurate and complete list of all
subsidiaries of the Company (the "Material Subsidiaries") which accounted
for more than $21.5 million of revenues during the three months ended
March 31, 1998 or which, as of March 31, 1998, had assets in excess of
$151.8 million. The Company and each of its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation and has the corporate power
and authority to carry on its business as it is currently being conducted
and to own, lease and operate its properties, and each is duly qualified
and is in good standing as a foreign corporation authorized to do
business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except
where the failure to be so qualified would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole.
(f) All of the outstanding shares of capital stock of, or other
ownership interests in, each of the Company's subsidiaries have been duly
authorized and validly issued and are fully paid and non-assessable, and
are owned by the Company, free and clear of any security interest, claim,
lien, encumbrance or adverse interest of any nature (other than liens
created under the Credit Facility (as defined in the Registration
Statement)).
(g) All of the outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid,
non-assessable and not subject to any preemptive or similar rights. Upon
payment of the Purchase Price and delivery of certificates representing
the Securities, each of the Underwriters will receive the Securities free
and clear of all liens, security interests or encumbrances.
(h) The Securities have been duly authorized and, when executed
and authenticated in accordance with the provisions of the Senior
Indenture and delivered to the Underwriters against payment therefor as
provided by this Agreement, will be entitled to the benefits of the
Senior Indenture, and will be valid and binding obligations of the
Company, enforceable in accordance with their terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited to
equitable principles of general applicability.
-6-
(i) Each of this Agreement and the Remarketing Agreement has
been duly authorized, executed and delivered by the Company and is a
valid and binding agreement of the Company enforceable in accordance with
its terms (except as enforcement of rights to indemnity and contribution
may be limited by applicable laws or principles of public policy and
subject to the qualifications that the enforceability of the Company's
obligations may be limited by bankruptcy, insolvency, reorganization, or
other laws relating to or affecting creditors' rights generally and by
general principles of equity, regardless of whether such enforceability
is considered in a proceeding in equity or at law).
(j) The Senior Indenture has been duly qualified under the
Trust Indenture Act of 1939, as amended, and has been duly authorized,
executed and delivered by the Company and is a valid and binding
agreement of the Company, enforceable in accordance with its terms except
as (i) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and (ii)
rights of acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability.
(k) The Securities conform as to legal matters to the
description thereof contained in the Prospectus.
(l) Neither the Company nor any of its subsidiaries is in
violation of its respective charter or by-laws or in default in the
performance of any obligation, agreement or condition contained in any
bond, debenture, note or any other evidence of indebtedness or in any
other agreement, indenture or instrument material to the conduct of the
business of the Company and its subsidiaries, taken as a whole, to which
the Company or any of its subsidiaries is a party or by which it or any
of its subsidiaries or their respective properties are bound.
(m) The execution, delivery and performance of this Agreement,
the Remarketing Agreement, the Senior Indenture and the Securities and
compliance by the Company with all the provisions hereof and thereof and
the consummation of the transactions contemplated hereby and thereby will
not require any consent, approval, authorization or order of any court,
regulatory body, administrative agency or other governmental body (except
such as may be required under the securities or Blue Sky laws of the
various states or jurisdictions outside the United States) and will not
conflict with or constitute a breach of any of the terms or provisions
of, or a default under, the charter or by-laws of the Company or any of
its subsidiaries or any agreement, indenture or other instrument to which
it or any of its subsidiaries is a party or by which it or any of its
subsidiaries or their respective properties are bound, or violate or
conflict with any laws, administrative regulations or rulings or court
decrees applicable to the Company, any of its subsidiaries or their
respective properties.
(n) Except as otherwise set forth in the Prospectus, there are
no material legal or governmental proceedings pending to which the
Company or any of its subsidiaries is a party or of which any of their
respective properties are the subject, and, to the Company's knowledge,
no such proceedings are threatened or contemplated. No material
development has occurred with respect to the legal proceedings described
in the Registration Statement. No contract or document of a character
required to be described in the Registration Statement or the Prospectus
or to be filed as an exhibit to the Registration Statement is not so
described or filed as required.
-7-
(o) Neither the Company nor any of its subsidiaries has
violated any foreign, federal, state or local law or regulation relating
to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), nor any federal or state law relating to
discrimination in the hiring, promotion or pay of employees nor any
applicable federal or state wages and hours laws, nor any provisions of
the Employee Retirement Income Security Act or the rules and regulations
promulgated thereunder, which in each case might result in any material
adverse change in the business, prospects, financial condition or results
of operations of the Company and its subsidiaries, taken as a whole.
(p) The Company and each of its subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("permits"), including, without limitation, under any
applicable Environmental Laws, as are necessary to own, lease and operate
its respective properties and to conduct its business as currently being
conducted and as the Company expects it to be conducted except where the
failure to have such permits would not have a material adverse effect on
the Company and its subsidiaries, taken as a whole; the Company and each
of its subsidiaries has fulfilled and performed all of its material
obligations with respect to such permits and no event has occurred which
allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any other material impairment of the
rights of the holder of any such permit; and, except as described in the
Prospectus, such permits contain no restrictions that are materially
burdensome to the Company or any of its subsidiaries.
(q) In the ordinary course of its business, the Company
conducts a periodic review of the effect of Environmental Laws on the
business, operations and properties of the Company and its subsidiaries,
in the course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance
with Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to
third parties). On the basis of such review, the Company has reasonably
concluded that such associated costs and liabilities would not, except to
the extent properly accrued for in the Company's financial statements,
singly or in the aggregate, have a material adverse effect on the Company
and its subsidiaries, taken as a whole.
(r) Except as otherwise set forth in the Prospectus or such as
are not material to the business, prospects, financial condition or
results of operations of the Company and its subsidiaries, taken as a
whole, the Company and each of its subsidiaries has good and marketable
title, free and clear of all liens, claims, encumbrances and
restrictions, except liens for taxes not yet due and payable, to all
property and assets described in the Registration Statement as being
owned by it. All leases to which the Company or any of its subsidiaries
is a party are valid and binding and no default has occurred or is
continuing thereunder that might result in any material adverse change in
the business, prospects, financial condition or results of operations of
the Company and its subsidiaries, taken as a whole, and the Company and
its subsidiaries enjoy peaceful and undisturbed possession under all such
leases to which any of them is a party as lessee with such exceptions as
do not materially interfere with the use made by the Company or such
subsidiary.
(s) The Company and each of its subsidiaries maintains
insurance as is customary in the industry.
-8-
(t) PricewaterhouseCoopers LLP are independent public
accountants with respect to the Company and Arthur Andersen LLP are
independent public accountants with respect to Waste Management, Inc.
("Waste Management") as required by the Act.
(u) The financial statements, together with related schedules
and notes, forming part of the Registration Statement and the Prospectus
(and any amendment or supplement thereto), present fairly the
consolidated financial position, results of operations and changes in
financial position of the Company and its subsidiaries and Waste
Management on the basis stated in the Registration Statement at the
respective dates or for the respective periods to which they apply; such
statements and related schedules and notes have been prepared in
accordance with generally accepted accounting principles consistently
applied throughout the periods involved, except as disclosed therein; and
the other financial and statistical information and data set forth in the
Registration Statement and the Prospectus (and any amendment or
supplement thereto) is, in all material respects, accurately presented
and prepared on a basis consistent with such financial statements and the
books and records of the Company and its subsidiaries and Waste
Management. No other financial statements or schedules are required by
the Act or the Exchange Act to be included in the Registration Statement
or the Prospectus.
(v) The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(w) No holder of any security of the Company has any right to
require registration of shares of Common Stock or any other security of
the Company because of the filing of the Registration Statement, which
has not been waived.
(x) There are no outstanding subscriptions, rights, warrants,
options, calls, convertible securities, commitments of sale or liens
related to or entitling any person to purchase or otherwise to acquire
any shares of the capital stock of, or other ownership interest in, the
Company or any subsidiary thereof except as otherwise disclosed in the
Registration Statement or Prospectus.
(y) Except as disclosed in the Prospectus, there are no
business relationships or related party transactions required to be
disclosed therein by Item 404 of Regulation S-K of the Commission.
(z) There is (i) no significant unfair labor practice complaint
pending against the Company or any of its subsidiaries or, to the
knowledge of the Company, threatened against any of them, before the
National Labor Relations Board or any state or local labor relations
board, and no significant grievance or significant arbitration proceeding
arising out of or under any collective bargaining agreement is so pending
against the Company or any of its subsidiaries or, to the Company's
knowledge, threatened against any of them, and (ii) no significant
strike, labor dispute, slowdown or stoppage pending against the Company
or any of its subsidiaries or, to the Company's knowledge, threatened
against it or any of its subsidiaries except for such actions specified
in clause (i) or (ii) above, which, singly or in the aggregate could not
reasonably be expected to have a material adverse effect on the Company
and its subsidiaries, taken as a whole.
(aa) The Company and each of its subsidiaries maintains a system
of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary
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to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in accordance
with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to
any differences.
(bb) All material tax returns required to be filed by the
Company and each of its subsidiaries in any jurisdiction have been filed,
other than those filings being contested in good faith, and all material
taxes, including withholding taxes, penalties and interest, assessments,
fees and other charges due pursuant to such returns or pursuant to any
assessment received by the Company or any of its subsidiaries have been
paid, other than those being contested in good faith and for which
adequate reserves have been provided.
(cc) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus and prior to
the Closing Date, (i) there has not been and will not have been, except
as set forth in or as contemplated by the Registration Statement and the
Prospectus any change in the capitalization, long term or short term debt
or in the capital stock or equity of the Company or any of its
subsidiaries, (ii) neither the Company nor any of its subsidiaries has
incurred any material liabilities or obligations, direct or contingent,
nor has it entered into any material transactions other than pursuant to
this Agreement, and the transactions referred to herein, or as
contemplated in the Prospectus, and (iii) there has not been any material
adverse effect, or any development involving a prospective material
adverse effect, in or affecting the general affairs, management,
financial position, shareholders' equity (or, with respect to partnership
subsidiaries, partnership capital), net worth or results of operations of
the Company and its subsidiaries, taken as a whole.
(dd) The Company and its affiliates have not taken, and will not
take, directly or indirectly, any action designed to, or which might
reasonably be expected to, cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities pursuant to the distribution
contemplated by this Agreement, and other than as permitted by the Act,
the Company has not distributed and will not distribute any prospectus or
other offering material in connection with the offering and sale of the
Securities.
Any certificate or other document signed by any officer or authorized
representative of the Company and delivered to the Underwriters or to counsel
for the Underwriters shall be deemed a representation and warranty of the
Company to each Underwriter as to the matters covered thereby.
7. INDEMNIFICATION.
(a) 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 Act or Section 20 of the Exchange Act
(each an "Underwriter Indemnified Party" and collectively the
"Underwriter Indemnified Parties"), from and against any and all losses,
claims, damages, liabilities and judgments caused by any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus (as amended or supplemented if
the Company shall have furnished any amendments or supplements thereto)
or any preliminary prospectus, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except
insofar as
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such losses, claims, damages, liabilities or judgments are caused by any
such untrue statement or omission or alleged untrue statement or
omission based upon information relating to any Underwriter furnished in
writing to the Company by or on behalf of any Underwriter through you
expressly for use therein.
(b) The indemnity agreement contained in paragraph 7(a), with
respect to any preliminary prospectus, shall not inure to the benefit of
any Underwriter to the extent that any loss, claim, damage or liability
results from the fact that a copy of the Prospectus (not including
documents incorporated by reference therein) was not sent or given by or
on behalf of such Underwriter to the person asserting any such loss,
claim, damage or liability to the extent that the Prospectus would have
cured the defect giving rise to such loss, claim, damage, liability or
judgment if such Underwriter shall have been provided with the number of
copies of the Prospectus requested by such Underwriter and it is
judicially determined that such delivery was required under the Act and
was not so made.
(c) In case any action shall be brought against any Underwriter
Indemnified Party, based upon any preliminary prospectus, the
Registration Statement or the Prospectus or any amendment or supplement
thereto and with respect to which indemnity may be sought against the
Company, such Underwriter Indemnified Party shall promptly notify the
Company in writing and the Company shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to such
Underwriter Indemnified Party and payment of all fees and expenses. Any
Underwriter Indemnified Party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such
Underwriter Indemnified Party unless (i) the employment of such counsel
has been specifically authorized in writing by the Company, (ii) the
Company shall have failed to assume the defense and employ counsel
reasonably satisfactory to such Underwriter Indemnified Party, or (iii)
the named parties to any such action (including any impleaded parties)
include both such Underwriter Indemnified Party and the Company and such
Underwriter Indemnified Party shall have been advised by such counsel
that there may be one or more legal defenses available to it which are
different from or additional to those available to the Company (in which
case the Company shall not have the right to assume the defense of such
action on behalf of such Underwriter Indemnified Party, it being
understood, however, that the Company shall not, in connection with any
one such action or separate but substantially similar or related actions
in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) for all
such Underwriter Indemnified Parties, which firm shall be designated in
writing by Donaldson, Lufkin & Jenrette Securities Corporation and that
all such fees and expenses shall be reimbursed as they are incurred).
The Company shall not be liable for any settlement of any such action
effected without its written consent, but if settled with the written
consent of the Company, the Company agrees to indemnify and hold harmless
any Underwriter Indemnified Party from and against any loss or liability
by reason of such settlement. Notwithstanding the immediately preceding
sentence, if in any case where the fees and expenses of counsel are at
the expense of the Company and an Underwriter Indemnified Party shall
have requested the Company to reimburse the Underwriter Indemnified Party
for such fees and expenses of counsel as incurred, the Company agrees
that it shall be liable for any settlement of any action effected without
its written consent if (i) such settlement is entered into more than
forty business days after the receipt by the Company of the aforesaid
request and (ii) the Company shall have failed to reimburse the
Underwriter Indemnified Party in accordance with such request for
reimbursement prior to the date of such
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settlement. The Company shall not, without the prior written consent
of the Underwriter Indemnified Party, effect any settlement of any
pending or threatened proceeding in respect of which any Underwriter
Indemnified Party is or could have been a party and indemnity could
have been sought hereunder by such Underwriter Indemnified Party, unless
such settlement includes an unconditional release of such Underwriter
Indemnified Party from all liability on claims that are the subject
matter of such proceeding.
(d) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who
sign the Registration Statement, and any person controlling the Company
within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act (each a "Company Indemnified Party," collectively the "Company
Indemnified Parties" and together with the Underwriter Indemnified
Parties, an "Indemnified Party" or the "Indemnified Parties"), to the
same extent as the foregoing indemnity from the Company to each
Underwriter Indemnified Party but only with reference to information
relating to such Underwriter furnished in writing by or on behalf of such
Underwriter through you expressly for use in the Registration Statement,
the Prospectus or any preliminary prospectus. In case any action shall
be brought against a Company Indemnified Party based on the Registration
Statement, the Prospectus or any preliminary prospectus and in respect of
which indemnity may be sought against any Underwriter, the Underwriter
shall have the rights and duties given to the Company (except that if the
Company shall have assumed the defense thereof, such Underwriter shall
not be required to do so, but may employ separate counsel therein and
participate in the defense thereof but the fees and expenses of such
counsel shall be at the expense of such Underwriter), and the Company
Indemnified Party shall have the rights and duties given to the
Underwriter, by Section 7(c) hereof.
(e) If the indemnification provided for in this Section 7 is
unavailable to an Indemnified Party in respect of any losses, claims,
damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a
result of such losses, claims, damages, liabilities and judgments (i) in
such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the other
hand from the offering of the Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the
Company and the Underwriters in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Underwriters shall be
deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company, and the
total underwriting discounts and commissions received by the
Underwriters, bear to the total price to the public of the Securities, in
each case as set forth in the table on the cover page of the Prospectus.
The relative fault of the Company and the Underwriters shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the Company or the
Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.
The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 7(e) were
determined by pro rata allocation (even if the Underwriters were treated
as one entity for such purpose) or by any other method of allocation
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which does not take account of the equitable considerations referred to
in the immediately preceding paragraph. The amount paid or payable by an
Indemnified Party as a result of the losses, claims, damages, liabilities
or judgments referred to in the immediately preceding paragraph shall be
deemed to include, subject to the limitations set forth above, any legal
or other expenses reasonably incurred by such Indemnified Party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages
which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this Section 7(e) are
several in proportion to the respective principal amount of Securities
purchased by each of the Underwriters hereunder and not joint.
(f) The Company hereby designates CT Corporation Systems, Inc.,
1633 Broadway, New York, New York 10019, (a Delaware corporation) as its
authorized agent, upon which process may be served in any action, suit or
proceeding which may be instituted in any state or federal court in the
State of New York by any Underwriter or person controlling an Underwriter
asserting a claim for indemnification or contribution under or pursuant
to this Section 7, and the Company will accept the jurisdiction of such
court in such action, and waives, to the fullest extent permitted by
applicable law, any defense based upon lack of personal jurisdiction or
venue. A copy of any such process shall be sent or given to the Company,
at the address for notices specified in Section 10 hereof.
8. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several
obligations of the Underwriters under this Agreement are subject to the
satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company
contained in this Agreement shall be true and correct on the date hereof
and on the Closing Date with the same force and effect as if made on and
as of such dates.
(b) The Registration Statement shall have become effective not
later than 5:00 P.M., (and in the case of a Registration Statement filed
under 462(b) of the Act, not later than 10:00 P.M.) New York City time,
on the date of this Agreement or at such later date and time as you may
approve in writing, and at the Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been commenced or shall be
pending before or contemplated by the Commission.
(c) (i) Since the date of the latest balance sheet included in
the Registration Statement and the Prospectus, there shall not have been
any material adverse change, or any development involving a prospective
material adverse change, in the condition, financial or otherwise, or in
the earnings, affairs or business prospects, whether or not arising in
the ordinary course of business, of the Company, (ii) since the date of
the latest balance sheet included in the Registration Statement and the
Prospectus there shall not have been any change, or any development
involving a prospective material adverse change, in the capital stock or
in the long-term debt of the Company from that set forth in the
Registration Statement and Prospectus, (iii) the Company and its
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subsidiaries shall have no liability or obligation, direct or contingent,
which is material to the Company and its subsidiaries, taken as a whole,
other than those reflected in the Registration Statement and the
Prospectus and (iv) on the Closing Date you shall have received a
certificate dated the Closing Date, signed by Earl E. DeFrates and Ronald
H. Jones, in their respective capacities as Chief Financial Officer and
Treasurer of the Company, confirming the matters set forth in paragraphs
(a), (b), and (c) of this Section 8.
(d) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing
Date of Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P., counsel for the
Company, to the effect that:
(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and has the corporate power and
authority required to carry on its business as it is currently
being conducted and to own, lease and operate its properties;
(ii) the Securities have been duly authorized, and when
executed and authenticated in accordance with the provisions of
the Senior Indenture and delivered to the Underwriters against
payment therefor as provided by this Agreement, will be entitled
to the benefits of the Senior Indenture and will be valid and
binding obligations of the Company enforceable in accordance with
their terms except as (a) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (b) rights of acceleration and the
availability of equitable remedies may be limited by equitable
principles of general applicability;
(iii) each of this Agreement and the Remarketing Agreement
has been duly authorized, executed and delivered by the Company
and is a valid and binding agreement of the Company enforceable in
accordance with its terms (except as enforcement of rights to
indemnity and contribution may be limited under applicable laws or
principles of public policy and subject to the qualifications that
the enforceability of the Company's obligations may be limited by
bankruptcy, insolvency, reorganization, or other laws relating to
or affecting creditors' rights generally and by general principles
of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law));
(iv) the Senior Indenture has been duly qualified under
the Trust Indenture Act of 1939, as amended, and has been duly
authorized, executed and delivered by the Company and is a valid
and binding agreement of the Company, enforceable in accordance
with its terms except as (a) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (b) rights of acceleration and the
availability of equitable remedies may be limited by equitable
principles of general applicability;
(v) the Registration Statement has become effective
under the Act, no stop order suspending its effectiveness has been
issued and no proceedings for that purpose are, to the knowledge
of such counsel, pending before or contemplated by the Commission;
(vi) the statements under the captions "Description of
Notes" and "Description of Debt Securities" in the Prospectus and
Item 15 of Part II of the Registration Statement,
-14-
insofar as such statements constitute a summary of legal matters
or documents referred to therein, fairly present the information
called for with respect to such legal matters or documents;
(vii) the execution, delivery and performance of this
Agreement, the Remarketing Agreement, the Senior Indenture and the
Securities by the Company, compliance by the Company with all the
provisions hereof and thereof and the consummation of the
transactions contemplated hereby and thereby will not require any
consent, approval, authorization or other order of any court,
regulatory body, administrative agency or other governmental body
(except such as may be required under the Act or other securities
or Blue Sky laws) and will not conflict with or constitute a
breach of any of the terms or provisions of, or a default under,
the charter or by-laws of the Company;
(viii) the Company is not an "investment company" or a
company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended;
(ix) the Registration Statement, the Prospectus, any
supplement or amendment thereto and each document filed pursuant
to the Exchange Act and incorporated or deemed to be incorporated
by reference in the Prospectus (except for financial statements,
financial and statistical information contained therein as to
which no opinion need be expressed) comply as to form in all
material respects with the Act;
(e) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing
Date, of Gregory T. Sangalis, General Counsel to the Company, to the
effect that:
(i) each of the Company's Material Subsidiaries has been
duly incorporated, is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation and
has the corporate power and authority required to carry on its
business as it is currently being conducted and to own, lease and
operate its properties;
(ii) the Company and each of its Material Subsidiaries is
duly qualified and is in good standing as a foreign corporation
authorized to do business in each jurisdiction in which the nature
of its business or its ownership or leasing of property requires
such qualification, except where the failure to be so qualified
would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole;
(iii) all of the outstanding shares of capital stock of,
or other ownership interests in, each of the Company's
subsidiaries have been duly and validly authorized and issued and
are fully paid and non-assessable, and are owned by the Company,
free and clear of any security interest, claim, lien, encumbrance
or adverse interest of any nature (other than liens created under
the Credit Facility);
(iv) all of the outstanding shares of Common Stock of the
Company have been duly authorized and validly issued and are fully
paid, non-assessable and not subject to any statutory preemptive
rights or, to the knowledge of such counsel, any other similar
rights;
-15-
(v) neither the Company nor any of its Material
Subsidiaries is in violation of its respective charter or by-laws
and, to the best of such counsel's knowledge after due inquiry,
neither the Company nor any of its Material Subsidiaries is in
default in the performance of any obligation, agreement or
condition contained in any bond, debenture, note or any other
evidence of indebtedness or in any other agreement, indenture or
instrument material to the conduct of the business of the Company
and its subsidiaries, taken as a whole, to which the Company or
any of its Material Subsidiaries is a party or by which it or any
of its subsidiaries or their respective properties are bound;
(vi) the execution, delivery and performance of this
Agreement, the Remarketing Agreement the Senior Indenture and the
Securities by the Company, compliance by the Company with all the
provisions hereof and thereof and the consummation of the
transactions contemplated hereby and thereby will not conflict
with or constitute a breach of any of the terms or provisions of,
or a default under, the charter or by-laws of any of the Company's
Material Subsidiaries or any agreement, indenture or other
instrument to which the Company or any of its Material
Subsidiaries is a party or by which the Company or any of its
Material Subsidiaries or their respective properties are bound, or
violate or conflict with any laws, administrative regulations or
rulings or court decrees applicable to the Company or any of its
subsidiaries or their respective properties;
(vii) to such counsel's knowledge there are no legal or
governmental proceedings pending or threatened to which the
Company or any of its subsidiaries is a party or to which any of
their respective properties are subject which is required to be
described in the Registration Statement or the Prospectus and is
not so described, or of any contract or other document which is
required to be described in the Registration Statement or the
Prospectus or is required to be filed as an exhibit to the
Registration Statement which is not described or filed as
required; such counsel does not have any reason to believe that
the description of litigation in the Prospectus is not accurate
and complete in all material respects;
(viii) to such counsel's knowledge, except as described in
the Prospectus, neither the Company nor any of its subsidiaries
has violated any Environmental Laws, nor any federal or state law
relating to discrimination in the hiring, promotion or pay of
employees nor any applicable federal or state wages and hours
laws, nor any provisions of the Employee Retirement Income
Security Act or the rules and regulations promulgated thereunder,
which in each case might result in any material adverse change in
the business, prospects, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole;
(ix) to such counsel's knowledge, the Company and each of
its subsidiaries has such permits, licenses, franchises and
authorizations of governmental or regulatory authorities
("permits"), including, without limitation, under any applicable
Environmental Laws, as are necessary to own, lease and operate its
respective properties and to conduct its business in the manner
described in the Prospectus except where the failure to have such
permits would not have a material adverse effect on the Company
and its subsidiaries taken as a whole; to such counsel's
knowledge, the Company and each of its subsidiaries has fulfilled
and performed all of its material obligations with respect to such
permits and no event has occurred which allows, or after notice or
lapse of time would allow,
-16-
revocation or termination thereof or results in any other material
impairment of the rights of the holder of any such permit, subject
in each case to such qualification as may be set forth in the
Prospectus; and, except as described in the Prospectus, such
permits contain no restrictions that are materially burdensome
to the Company or any of its subsidiaries;
(x) to such counsel's knowledge, no holder of any
security of the Company has any right to require registration of
shares of Common Stock or any other security of the Company as a
result of filing the Registration Statement, which have not been
waived;
(xi) such counsel believes that (except for financial
statements, financial and statistical information contained
therein, as aforesaid and except for that part of the Registration
Statement that constitutes the Form T-1) the Registration
Statement and the prospectus included therein at the time the
Registration Statement became effective (including the documents
incorporated by reference therein) did not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and that the Prospectus, as amended or
supplemented, if applicable (except for financial statements, and
financial and statistical information, as aforesaid) did not, as
of its date, and does not, as of the Closing Date, contain any
untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading;
(xii) all descriptions in the Prospectus of statutes,
regulations or legal or governmental proceedings in all material
respects are accurate and fairly present the information required
to be shown;
The opinion of Liddell, Sapp, Zivley, Hill & LaBoon, L. L.P.
referred to in subsection (d) above shall contain a statement that such
counsel believes that (except for financial statements and financial and
statistical information contained therein, as aforesaid and except for
that part of the Registration Statement that constitutes the Form T-1),
the Registration Statement and the prospectus included therein at the
time the Registration Statement became effective (including the documents
incorporated by reference therein) did not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
that the Prospectus, as amended or supplemented, if applicable (except
for financial statements and financial and statistical information, as
aforesaid) did not, as of its date, and does not, as of the Closing Date,
contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
In making such statement, Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P.
may state that its opinions and beliefs are based upon its participation
in the preparation of the Registration Statement and Prospectus and any
amendments or supplements thereto and review and discussion of the
contents thereof, but are without independent check or verification
except as specified.
In giving the opinions described in clause (d) and (e) above, such
counsel may rely as to factual matters on information set forth in
certificates of the Company or public officials.
-17-
The opinions of Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P. and
Gregory T. Sangalis described in paragraphs (d) and (e) above shall be
rendered to you at the request of the Company and shall so state therein.
(f) You shall have received on the Closing Date an opinion,
dated the Closing Date, of McDermott, Will & Emery, counsel for the
Underwriters, in form and substance satisfactory to you.
(g) You shall have received letters on and as of the Closing
Date, in form and substance satisfactory to you, from
PricewaterhouseCoopers LLP and Arthur Andersen LLP, independent public
accountants to the Company and Waste Management, respectively, with
respect to the financial statements and certain financial information
contained in the Registration Statement and the Prospectus; the letters
to be delivered on the Closing Date being substantially in the form and
substance of the letters delivered to you by PricewaterhouseCoopers LLP
and Arthur Andersen LLP, respectively, on the date of this Agreement.
(h) The Company shall not have failed at or prior to the
Closing Date to perform or comply with any of the agreements herein
contained and required to be performed or complied with by the Company at
or prior to the Closing Date.
(i) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date, there shall not have been any downgrading,
nor shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not indicate
the direction of the possible change, in the rating or outlook accorded
any of the Company's securities by any "nationally recognized statistical
rating organization," as such term is defined for purposes of Rule
436(g)(2) under the Act.
9. EFFECTIVE DATE OF AGREEMENT AND TERMINATION. This Agreement shall
become effective upon the later of (i) execution of this Agreement and (ii) when
notification of the effectiveness of the Registration Statement has been
released by the Commission.
This Agreement may be terminated at any time prior to the Closing Date by
you by written notice to the Company if any of the following has occurred: (i)
since the respective dates as of which information is given in the Registration
Statement and the Prospectus, any adverse change or development involving a
prospective adverse change in the condition, financial or otherwise, of the
Company or any of its subsidiaries or the earnings, affairs, or business
prospects of the Company or any of its subsidiaries, whether or not arising in
the ordinary course of business, which would, in your judgment, make it
impracticable to market the Securities on the terms and in the manner
contemplated in the Prospectus, (ii) any outbreak or escalation of hostilities
or other national or international calamity or crisis or change in economic
conditions or in the financial markets of the United States or elsewhere that,
in your judgment, is material and adverse and would, in your judgment, make it
impracticable to market the Securities on the terms and in the manner
contemplated in the Prospectus, (iii) the suspension or material limitation of
trading in securities on the New York Stock Exchange, the American Stock
Exchange or the Nasdaq National Market System or limitation on prices for
securities on any such exchange or National Market System, (iv) the enactment,
publication, decree or other promulgation of any federal or state statute,
regulation, rule or order of any court or other governmental authority which in
your opinion materially and adversely affects, or will materially and adversely
affect, the business or operations of the Company or any Subsidiary, (v) the
declaration of a banking moratorium by either federal or New York State
authorities,
-18-
(vi) the taking of any action by any federal, state or local government or
agency in respect of its monetary or fiscal affairs which in your opinion has
a material adverse effect on the financial markets in the United States or
(vii) the suspension or material limitation of trading in the Company's
securities on the New York Stock Exchange or limitation on prices for the
Company's securities on such exchange.
If on the Closing Date any one or more of the Underwriters shall fail or
refuse to purchase the Securities which it or they have agreed to purchase
hereunder on such date and the aggregate principal amount of Securities which
such defaulting Underwriter or Underwriters, as the case may be, agreed but
failed or refused to purchase is not more than one-tenth of the total principal
amount of the Securities to be purchased on such date by all Underwriters, each
non-defaulting Underwriter shall be obligated severally, in the proportion which
the principal amount of Securities set forth opposite its name in Schedule I
bears to the total principal amount of Securities which all the non-defaulting
Underwriters, as the case may be, have agreed to purchase, or in such other
proportion as you may specify, to purchase the Securities which such defaulting
Underwriter or Underwriters, as the case may be, agreed but failed or refused to
purchase on such date; provided that in no event shall the principal amount of
Securities which any Underwriter has agreed to purchase pursuant to Section 2
hereof be increased pursuant to this Section 9 by an amount in excess of
one-ninth of such principal amount of Securities, without the written consent
of such Underwriter. If on the Closing Date any Underwriter or Underwriters
shall fail or refuse to purchase Securities and the aggregate principal
amount of Securities with respect to which such default occurs is more than
one-tenth of the aggregate principal amount of Securities to be purchased on
such date by all Underwriters and arrangements satisfactory to you and the
Company for purchase of such Securities are not made within 48 hours after
such default, this Agreement will terminate without liability on the part of
any non-defaulting Underwriter and the Company. In any such case which does
not result in termination of this Agreement, either you or the Company shall
have the right to postpone the Closing Date, but in no event for longer than
seven days, in order that the required changes, if any, in the Registration
Statement and the Prospectus or any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default of any such
Underwriter under this Agreement.
10. MISCELLANEOUS. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (a) if to the Company, to USA Waste
Services, Inc., 1001 Fannin Street, Suite 4000, Houston, Texas 77002 and (b) if
to any Underwriter or to you, to you c/o Donaldson, Lufkin & Jenrette Securities
Corporation, 277 Park Avenue, New York, New York 10172, Attention: Corporate
Bond Syndicate Department, or in any case to such other address as the person to
be notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company, its officers and directors and
of the several Underwriters set forth in or made pursuant to this Agreement
shall remain operative and in full force and effect, and will survive delivery
of and payment for the Securities, regardless of (i) any investigation, or
statement as to the results thereof, made by or on behalf of any Underwriter or
by or on behalf of the Company, the officers or directors of the Company or any
controlling person of the Company, (ii) acceptance of the Securities and payment
for them hereunder and (iii) termination of this Agreement.
If this Agreement shall be terminated by the Underwriters because of any
failure or refusal on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement, the Company agrees to reimburse
the several Underwriters for all out-of-pocket expenses (including the fees and
disbursements of counsel) reasonably incurred by them.
-19-
Except as otherwise provided, this Agreement has been and is made solely
for the benefit of and shall be binding upon the Company, the Underwriters, any
controlling persons referred to herein and their respective successors and
assigns, all as and to the extent provided in this Agreement, and no other
person shall acquire or have any right under or by virtue of this Agreement.
The term "successors and assigns" shall not include a purchaser of any of the
Securities from any of the several Underwriters merely because of such purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
This Agreement may be signed in various counterparts which together shall
constitute one and the same instrument.
[The next page is the signature page.]
-20-
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Underwriters.
Very truly yours,
USA WASTE SERVICES, INC.
By: /s/ Ronald H. Jones
--------------------------------
Ronald H. Jones
Vice President and Treasurer
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
J.P. MORGAN SECURITIES INC.
BANCAMERICA ROBERTSON STEPHENS
CHASE SECURITIES INC.
DEUTSCHE BANK SECURITIES
By: DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /s/ Mark A. Pytosh
---------------------------------
-21-
SCHEDULE I
PRINCIPAL AMOUNT OF
SECURITIES
UNDERWRITERS TO BE PURCHASED
------------ -------------------
Donaldson, Lufkin & Jenrette Securities Corporation $ 120,000,000
J.P. Morgan Securities Inc. 120,000,000
BancAmerica Robertson Stephens 120,000,000
Chase Securities Inc. 120,000,000
Deutsche Bank Securities. 120,000,000
-------------
TOTAL $ 600,000,000
-22-
ANNEX I
MATERIAL SUBSIDIARIES
STATE OF
NO. SUBSIDIARY INCORPORATION
1 Chambers Development Company, Inc. Delaware
2 United Waste Systems, Inc. Delaware
3 Envirofil, Inc. Delaware
4 Sanifill, Inc. Delaware
5 Western Waste Services, Inc. California
6 Canadian Waste Services, Inc. Ontario, Canada
7 Quebec Waste Services, Inc. Quebec, Canada
-23-
REMARKETING AGREEMENT
BETWEEN
WASTE MANAGEMENT, INC.
(formerly known as USA Waste Services, Inc.)
AND
J.P. MORGAN SECURITIES INC.,
as Remarketing Dealer
TABLE OF CONTENTS
Page
----
Section 1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2. Representations and Warranties. . . . . . . . . . . . . . . . 5
Section 3. Covenants of the Company. . . . . . . . . . . . . . . . . . . 6
Section 4. Appointment and Obligations of the Remarketing Dealer . . . . 9
Section 5. Fees and Expenses . . . . . . . . . . . . . . . . . . . . . .11
Section 6. Resignation of the Remarketing Dealer . . . . . . . . . . . .11
Section 7. Dealing in the Notes; Purchase of Notes by the Company. . . .12
Section 8. Conditions to Remarketing Dealer's Obligations . . . . . . .12
Section 9. Indemnification . . . . . . . . . . . . . . . . . . . . . . .15
Section 10. Termination of Agreement. . . . . . . . . . . . . . . . . . .18
Section 11. Remarketing Dealer's Performance; Duty of Care. . . . . . . .19
Section 12. Governing Law . . . . . . . . . . . . . . . . . . . . . . . .19
Section 13. Term of Agreement . . . . . . . . . . . . . . . . . . . . . .19
Section 14. Successors and Assigns. . . . . . . . . . . . . . . . . . . .20
Section 15. Headings. . . . . . . . . . . . . . . . . . . . . . . . . . .20
Section 16. Severability. . . . . . . . . . . . . . . . . . . . . . . . .20
Section 17. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . .20
Section 18. Amendments; Waivers . . . . . . . . . . . . . . . . . . . . .20
Section 19. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . .20
REMARKETING AGREEMENT
REMARKETING AGREEMENT dated as of July 17, 1998 (the "AGREEMENT")
between Waste Management, Inc. (formerly known as USA Waste Services, Inc.), a
Delaware corporation (the "COMPANY"), and J.P. Morgan Securities Inc.
("JPMSI") and, in its capacity as the remarketing dealer hereunder, the
"REMARKETING DEALER").
WHEREAS, the Company has issued $600,000,000 aggregate principal amount
of its 6 1/8% Mandatorily Tendered Notes (the "NOTES") due July 15, 2011 (the
"STATED MATURITY DATE") pursuant to an Indenture dated as of September 10,
1997, as supplemented (the "INDENTURE"), between the Company and Chase Bank
of Texas, National Association, as trustee (the "TRUSTEE"); and
WHEREAS, the Notes are being sold initially pursuant to an Underwriting
Agreement dated as of July 14, 1998 (the "UNDERWRITING AGREEMENT") between
the Company and Donaldson, Lufkin & Jenrette Securities Corporation, JPMSI
and others, as Underwriters; and
WHEREAS, the Company has filed with the Securities and Exchange
Commission (the "COMMISSION") a registration statement (No. 333-52197) under
the Securities Act of 1933, as amended (the "SECURITIES ACT"), in connection
with the offering of debt securities, including the Notes, which registration
statement was declared effective by order of the Commission, and has filed
such amendments thereto and such amended or supplemented prospectuses as may
have been required to the date hereof, and will file such additional
amendments and supplements thereto and such additional amended or
supplemented prospectuses as may hereafter be required (such registration
statement, including any amendments and supplements thereto, and all
documents incorporated therein by reference, as from time to time amended or
supplemented pursuant to the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"), the Securities Act, or otherwise, are referred to herein as
the "REGISTRATION STATEMENT"); all preliminary and final prospectuses
relating to such Registration Statement used in connection with the offering
of Notes, including the documents incorporated by reference therein, are
referred to herein collectively as the "PROSPECTUS"; PROVIDED that, if any
new or revised prospectus shall be provided to the Remarketing Dealer by the
Company for use in connection with any remarketing of the Notes which differs
from the Prospectus filed with the Commission at the time of the initial
issuance of the Notes (whether or not such new or revised prospectus is
required to be filed by the Company pursuant to Rule 424(b) under the
Securities Act), the term "PROSPECTUS" shall refer to such new or revised
prospectus from and after the time it is first provided to the Remarketing
Dealer for such use, and the term "REGISTRATION STATEMENT" shall refer to the
Registration Statement as deemed amended by the prospectus so provided or any
new registration statement of which such prospectus is a part; and
WHEREAS, JPMSI is prepared to act as the Remarketing Dealer with respect
to the remarketing of the Notes on July 15, 2001 (the "REMARKETING DATE")
pursuant to the terms of, but subject to the conditions set forth in, this
Agreement;
1
NOW, THEREFORE, for and in consideration of the covenants herein made,
and subject to the conditions herein set forth, the parties hereto agree as
follows:
SECTION 1. DEFINITIONS.
(a) The following terms have the following meanings:
"BASE RATE" means 5.585% per annum.
"BUSINESS DAY" means any day other than a Saturday or Sunday or other
day on which banking institutions in the City of New York are authorized or
obligated by law, executive order or governmental decree to be closed.
"CALL PRICE" means the fair market value of the embedded interest rate
option implicit in the Remarketing Dealer's right to purchase at par and
remarket on the Remarketing Date, pursuant to this Agreement, of any Notes
not purchased (due to the prior termination of this Agreement or otherwise)
by the Remarketing Dealer on the Remarketing Date (such principal amount of
Notes, the "UNPURCHASED NOTES"). This amount shall equal:
(i) if the Remarketing Dealer's request for the Call Price payment
is made before the Determination Date, the Commercially Reasonable Option
Value on the date of such request;
(ii) if the Remarketing Dealer's request for the Call Price payment
is made on or after the Determination Date, the amount, if positive, equal
to: (x) the Dollar Price less the Original Amount of Notes, multiplied by
(y) a fraction, the numerator of which is the Unpurchased Notes and the
denominator of which is the Original Amount of Notes.
"COMMERCIALLY REASONABLE OPTION VALUE" means, on any date, the amount
determined by the Remarketing Dealer on such date under Section 6(e) of the
Master Agreement on a "Market Quotation" basis in respect of the embedded
interest rate option implicit in the Remarketing Dealer's option to purchase
at par the Unpurchased Notes on the Remarketing Date, as if a "Termination
Event" had occurred on such specified date under such interest rate option
with respect to the Company under the Master Agreement and the Company was
the "Affected Party". The determination of the Commercially Reasonable Option
Value shall be made using the provisions of the Master Agreement regardless
of any termination of the Master Agreement.
"COMPARABLE TREASURY ISSUE" means the United States Treasury security
selected by the Remarketing Dealer as having an actual maturity on the
Determination Date (or the United States Treasury securities selected by the
Remarketing Dealer to derive an interpolated yield to maturity on such
Determination Date) comparable to the remaining term of the Notes.
"COMPARABLE TREASURY PRICE" means (a) the offer price for the Comparable
Treasury Issue (expressed as a percentage of its principal amount) on the
Determination Date, as set forth on Telerate Page 500 (as defined below),
adjusted to reflect settlement on the Remarketing Date, if
2
prices quoted on Telerate Page 500 are for settlement on any date other than
the Remarketing Date, or (b) if such page (or any successor page) is not
displayed or does not contain such offer prices on such Business Day, (i) the
average of five Reference Treasury Dealer Quotations (as defined below) for
the Remarketing Date, excluding the highest and lowest of such Reference
Treasury Dealer Quotations (unless there is more than one highest or lowest
quotation, in which case only one such highest and/or lowest quotation shall
be excluded), or (ii) if the Remarketing Dealer obtains fewer than five such
Reference Treasury Dealer Quotations, the average of all such Reference
Treasury Dealer Quotations. The Remarketing Dealer shall have the discretion
to select the time at which the Comparable Treasury Price is determined on
the Determination Date.
"DOLLAR PRICE" means the discounted present value to the Remarketing
Date of the cash flows on a bond
(i) with a principal amount equal to the aggregate principal
amount of the Notes,
(ii) maturing on the Stated Maturity Date, and
(iii) bearing interest at a rate equal to the Base Rate,
using a discount rate equal to the Treasury Rate (defined below), payable
semi-annually (assuming a 360-day year consisting of twelve 30-day months) on
the interest payment dates of the Notes from and including the Remarketing
Date to but excluding the Stated Maturity Date.
"MASTER AGREEMENT" means the ISDA Master Agreement dated as of
June 30, 1995 between the Company and JPMSI, as amended.
"ORIGINAL AMOUNT OF NOTES" means the principal amount of the Notes
issued by the Company on the date hereof.
"REFERENCE CORPORATE DEALER" means JPMSI; Donaldson, Lufkin & Jenrette
Securities Corporation; BancAmerica Robertson Stephens; Chase Securities,
Inc.; and Deutsche Bank Securities. If any of such persons shall cease to be
a leading dealer of publicly-traded debt securities of the Company, then the
Remarketing Dealer may replace, with the approval of the Company (not to be
unreasonably withheld), such person with any other leading dealer of
publicly-traded debt securities of the Company.
"REFERENCE TREASURY DEALER" means a primary U.S. Government securities
dealer in The City of New York (which may include the Remarketing Dealer)
selected by the Remarketing Dealer.
"REFERENCE TREASURY DEALER QUOTATIONS" means, with respect to each
Reference Treasury Dealer, the offer price(s) for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) for settlement on
the Remarketing Date, quoted in writing to the Remarketing Dealer by such
Reference Treasury Dealer by 3:30 p.m., New York City time, on the
Determination Date.
3
"STATED MATURITY DATE" means July 15, 2011.
"TELERATE PAGE 500" means the display designated as "Telerate Page 500"
on Dow Jones Markets Limited (or such other page as may replace Telerate Page
500 on such service) or such other service displaying the offer prices
specified in clause (a) of the definition of Comparable Treasury Price as may
replace Dow Jones Markets Limited.
"TREASURY RATE" means the annual rate equal to the semi-annual
equivalent yield to maturity or interpolated (on a 30/360 day count basis)
yield to maturity on the Determination Date of the Comparable Treasury Issue
(defined above) for value on the Remarketing Date, assuming a price for the
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price (as defined above).
(b) The following additional terms are defined in the following
Sections:
Defined Term Section
- ------------ -------
Commission Preamble
Company Preamble
Determination Date 4(d)
Notes Preamble
DTC 4(e)
Exchange Act Preamble
Exchange Act Documents 2(b)
Indemnified Person 9(c)
Indemnifying Person 9(c)
Indenture Preamble
Interest Rate to Maturity 4(d)
Investment Grade 8(c)
JPMSI Preamble
Moody's 8(c)
Notification Date 4(c)
Prospectus Preamble
Rating Agency 8(c)
Registration Statement Preamble
Remarketing Date Preamble
Remarketing Dealer Preamble
Remarketing Materials 3(b)
Representation Date 2(b)
S&P 8(c)
Securities Act Preamble
Trustee Preamble
Underwriting Agreement Preamble
4
(c) ADDITIONAL CERTIFICATIONS. Any certificate signed by any director
or officer of the Company and delivered to the Remarketing Dealer or to
counsel for the Remarketing Dealer in connection with the remarketing of the
Notes shall be deemed a representation and warranty by the Company to the
Remarketing Dealer as to the matters covered thereby.
SECTION 2. REPRESENTATIONS AND WARRANTIES. (a) The Company represents
and warrants to the Remarketing Dealer as of the date hereof, the
Notification Date (as defined below), the Determination Date (as defined
below) and the Remarketing Date (each of the foregoing dates being
hereinafter referred to as a "REPRESENTATION DATE"), as follows:
(i) It has filed all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act (collectively, the "EXCHANGE ACT DOCUMENTS").
(ii) The applicable Remarketing Materials (as defined below) will
not, as of their date or the Remarketing Date, include an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
(iii) The representations and warranties contained in the
Underwriting Agreement are true and correct in all material respects with
the same force and effect as though expressly made at and as of each
Representation Date; PROVIDED that, for purposes of this Agreement,
representations and warranties in the Underwriting Agreement shall be
deemed modified by the Exchange Act Documents, as well as any new or
revised registration statement and new or revised prospectus required by
subsection 3(f) hereof, and the date as of which such representations and
warranties are made shall include each Representation Date.
(iv) Since the respective dates as of which information is given in
the Remarketing Materials or the Exchange Act Documents, there has not been
any material change in the capital stock or long-term debt of the Company
or any of its subsidiaries, or any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, business, prospects, management, financial
position, stockholders' equity or results of operations of the Company and
its subsidiaries, taken as a whole, otherwise than as set forth or
contemplated in the Remarketing Materials or the Exchange Act Documents.
Except as set forth or contemplated in the Remarketing Materials or the
Exchange Act Documents, neither the Company nor any of its subsidiaries has
entered into any transaction or agreement (whether or not in the ordinary
course of business) material to the Company and its subsidiaries, taken as
a whole.
(v) This Agreement has been duly authorized, executed and
delivered by the Company.
(vi) The issue and sale of the Notes and the performance by the
Company of all of its obligations under the Notes, the Indenture and this
Agreement and the consummation
5
of the transactions herein and therein contemplated will not (i) conflict
with or result in a breach of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, (ii) result in any violation
of the provisions of the Certificate of Incorporation or the By-Laws of
the Company or (iii) result in a violation of any applicable law or statute
or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company, its subsidiaries or any of their
respective properties, except in the case of clause (i) or (iii) above
where such breach or violation (other than a violation of federal or state
securities laws) will not result in a material adverse change in the
general affairs, business, prospects, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole. No consent, approval, authorization,
order, license, registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the Notes
or the consummation by the Company of the transactions contemplated by this
Agreement or the Indenture, except such as have already been obtained and
except as may be required under the blue sky laws of any jurisdiction.
(vii) The Notes conform in all material respects to the description
thereof contained in the Prospectus.
SECTION 3. COVENANTS OF THE COMPANY. The Company covenants with the
Remarketing Dealer as follows:
(a) The Company will provide prompt notice by telephone, confirmed in
writing (which may include facsimile or other electronic transmission), to
the Remarketing Dealer of the occurrence:
(i) at any time of any event set forth in clause (i), (ii) or
(iii) of subsection 8(c), or of any amendment to the Indenture (including
the Notes); and
(ii) on or after the Notification Date, of any event set forth in
clauses (i) or (ii) of subsection 8(d).
(b) The Company will furnish to the Remarketing Dealer upon request:
(i) each Registration Statement and the Prospectus relating to the
Notes (including in each case any amendment or supplement thereto and each
document incorporated therein by reference);
(ii) each Exchange Act Document filed after the date hereof; and
6
(iii) such other information relating to the Company and the Notes
as the Remarketing Dealer may reasonably request from time to time for use
in connection with the remarketing of the Notes.
The Company agrees to provide the Remarketing Dealer with as many copies of
the foregoing written materials and information (collectively, the
"REMARKETING MATERIALS," including in each case any document incorporated by
reference therein) as the Remarketing Dealer may reasonably request for use
in connection with the remarketing of Notes and consents to the use thereof
for such purpose.
(c) If, at any time within three months of the Remarketing Date, any
event or condition known to the Company relating to or affecting the Company,
any subsidiary thereof or the Notes shall occur which could reasonably be
expected to cause any of the Remarketing Materials to contain an untrue
statement of a material fact or omit to state a material fact, the Company
shall promptly notify the Remarketing Dealer in writing of the circumstances
and details of such event or condition.
(d) So long as the Notes are outstanding, the Company will file all
documents required to be filed with the Commission pursuant to the Exchange
Act within the time periods required by the Exchange Act and the rules and
regulations thereunder.
(e) The Company will comply with the Securities Act, the Exchange Act,
the Trust Indenture Act of 1939, as amended (the "TRUST INDENTURE ACT"), and
the rules and regulations of the Commission thereunder so as to permit the
completion of the remarketing of the Notes as contemplated in (i) this
Agreement, (ii) the Prospectus first used to confirm sales of the Notes when
the Notes were originally issued, and (iii) the prospectus, if any, used in
connection with the Remarketing.
(f) If a new or amended Registration Statement in respect of the Notes
is in the opinion of counsel for the Remarketing Dealer or for the Company
necessary to sell Notes on an unrestricted basis on the Remarketing Date,
then the Company, at its expense, will, on or before such Remarketing Date:
(i) prepare and file with the Commission such amended or new
Registration Statement (including a Prospectus) covering such sale of Notes
by the Remarketing Dealer, and cause such Registration Statement to become
effective on or prior to such Remarketing Date;
(ii) furnish to the Remarketing Dealer such number of copies of
such Prospectus as the Remarketing Dealer may reasonably request;
(iii) furnish to the Remarketing Dealer and any other securities
dealer participating in the remarketing of the Notes, an officers'
certificate, an opinion, including a statement as to the absence of
material misstatements in or omissions from the Registration Statement and
the Prospectus, of Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P. or such
other
7
counsel to the Company reasonably satisfactory to the Remarketing Dealer
and a "comfort letter" from the Company's independent accountants, in each
case dated as of such Remarketing Date and in form and substance
satisfactory to the Remarketing Dealer, of the same tenor as the officers'
certificate, opinion and comfort letter, respectively, delivered to satisfy
the closing conditions of the Underwriting Agreement, but modified to
relate to such new or amended Registration Statement and the Prospectus;
and
(iv) provide to the Remarketing Dealer and any other securities
dealer participating in the remarketing of the Notes the opportunity to
conduct an underwriters' due diligence investigation of the Company in a
scope customarily provided in connection with a public offering of the
Company's debt securities.
Furthermore, if at any time when, in the opinion of counsel for the
Remarketing Dealer, a prospectus is required by the Securities Act to be
delivered in connection with sales of the Notes, 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
such 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 is necessary to amend or supplement
the Prospectus to comply with law, the Company, at its expense, will promptly
furnish to the Remarketing Dealer such amendments or supplements to the
Prospectus as may be needed so that the statements in the Prospectus as so
amended or supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus will comply with law.
The Company agrees to reimburse the Remarketing Dealer for all of its
reasonable out-of-pocket expenses (including reasonable fees and
disbursements of counsel) incurred in connection with any remarketing under
circumstances described in this subsection 3(f).
(g) The Company agrees that neither it nor any of its subsidiaries or
affiliates shall purchase or otherwise acquire, or enter into any agreement
to purchase or otherwise acquire, any of the Notes on or prior to the
Remarketing, other than (i) a repurchase of the Notes in accordance with
subsection 4(g) or (ii) a redemption of the Notes in accordance with
subsection 4(h).
(h) The Company will comply with each of the covenants set forth in the
Underwriting Agreement.
(i) In connection with the Remarketing, the Company will arrange for
the qualification of the Notes for sale under the laws of such jurisdictions
as the Remarketing Dealer may designate, and will maintain such
qualifications in effect so long as required for the Remarketing; the Company
will pay all expenses in connection with such qualification, including the
fees and disbursements of counsel for any dealers participating in the
Remarketing in connection with such qualification and in connection with blue
sky and legal investment surveys.
8
(j) During the five Business Day period ending on the Remarketing
Date, the Company will not, without the consent of the Remarketing Dealer,
offer, sell or contract to sell, or otherwise dispose of, directly or
indirectly, or announce the offering of, any debt securities, except debt
securities issued in connection with acquisitions by the Company or any of
its subsidiaries.
SECTION 4. APPOINTMENT AND OBLIGATIONS OF THE REMARKETING DEALER.
(a) Unless this Agreement is otherwise terminated in accordance with
Section 10 hereof, in accordance with the terms, but subject to the
conditions, of this Agreement, the Company hereby appoints JPMSI, and JPMSI
hereby accepts such appointment, as the exclusive Remarketing Dealer with
respect to the Notes, subject further to (i) the obligation of the Company to
repurchase the Notes in accordance with subsection 4(g) or (ii) the option of
the Company to redeem the Notes in accordance with subsection 4(h) hereof.
(b) The obligations of the Remarketing Dealer hereunder to purchase the
tendered Notes on the Remarketing Date, to determine the Interest Rate to
Maturity pursuant to subsection 4(d) below and to remarket the Notes are
conditioned on:
(i) the issuance and delivery of such Notes pursuant to the terms
and conditions of the Underwriting Agreement;
(ii) the Remarketing Dealer's election on the Notification Date to
purchase the Notes for remarketing on the Remarketing Date; and
(iii) satisfaction on the Remarketing Date of all the conditions set
forth in Section 8 hereof, to the satisfaction of the Remarketing Dealer.
(c) On a Business Day not later than fifteen Business Days prior to
the Remarketing Date (the "NOTIFICATION DATE"), the Remarketing Dealer will
notify the Company and the Trustee as to whether it elects to purchase the
Notes on the Remarketing Date. If, and only if, the Remarketing Dealer so
elects, the Notes shall be subject to mandatory tender to the Remarketing
Dealer for purchase and remarketing on the Remarketing Date, upon the terms
and subject to the conditions described herein. The purchase price of the
Notes shall be equal to 100% of the principal amount thereof.
(d) The Remarketing Dealer shall determine a new stated interest rate
on the Notes as of the Remarketing Date (the "INTEREST RATE TO MATURITY") on
the third Business Day immediately preceding the Remarketing Date (the
"DETERMINATION DATE") by soliciting by 3:30 p.m., New York City time, the
Reference Corporate Dealers for firm, committed bids to purchase all
outstanding Notes at the Dollar Price and by selecting the lowest such firm,
committed bid (regardless of whether each of the Reference Corporate Dealers
actually submits a bid). Each bid shall be expressed in terms of the Interest
Rate to Maturity that the Notes would bear (quoted as a spread over the Base
Rate), based on the following assumptions:
9
(i) the Notes would be sold to such Reference Corporate Dealer on
the Remarketing Date for settlement on the same day;
(ii) the Notes would mature on the Stated Maturity Date; and
(iii) the Notes would bear interest from and including the
Remarketing Date to but excluding the Stated Maturity Date at a stated rate
equal to the Interest Rate to Maturity bid by such Reference Corporate
Dealer, payable semi-annually on the interest payment dates for the Notes.
The Interest Rate to Maturity announced by the Remarketing Dealer as a
result of such process will be quoted to the nearest one hundred-thousandth
(0.00001) of one percent per annum and, absent manifest error, will be
binding and conclusive upon holders of the Notes, the Company and the
Trustee. Subject only to subsection 4(e) below, the Remarketing Dealer shall
have the discretion to select the time at which the Interest Rate to Maturity
is determined on the Determination Date.
The Remarketing Dealer shall have the right in its sole discretion to
either (i) remarket the Notes for its own account or (ii) sell the Notes to
the Reference Corporate Dealer submitting the lowest firm, committed bid
pursuant to this subsection 4(d). If two or more Reference Corporate Dealers
submit equivalent bids which constitute the lowest firm, committed bid, the
Remarketing Dealer may in its sole discretion elect to sell the Notes to any
such Reference Corporate Dealer.
(e) If the Remarketing Dealer has elected to remarket the Notes as
provided in subsections 4(c) and 4(d), then it shall notify the Company, the
Trustee and The Depository Trust Company ("DTC") by telephone, confirmed in
writing (which may include facsimile or other electronic transmission), by
5:00 p.m., New York City time, on the Determination Date of the Interest Rate
to Maturity applicable to the Notes effective from and including the
Remarketing Date.
(f) If the Notes are Remarketed as provided herein, then, subject to
Section 8 hereof, the Remarketing Dealer will make, or cause the Trustee to
make, payment to DTC by the close of business on the Remarketing Date
against delivery through DTC of the Notes tendered in such Remarketing, of
the purchase price for all of the tendered Notes. The purchase price of the
tendered Notes will be equal to 100% of the principal amount thereof and
shall be paid in immediately available funds.
(g) If the Remarketing Dealer (i) does not elect to purchase the Notes
for Remarketing pursuant to subsection 4(c); (ii) shall not have received by
the required time on the Determination Date any firm, committed bids to
purchase all of the Notes pursuant to subsection 4(d); or (iii) for any
reason does not purchase all of the Notes on the Remarketing Date, then the
Company shall repurchase on the Remarketing Date any Notes that have not been
purchased by the Remarketing Dealer at a price equal to 100% of the principal
amount of such Notes plus all accrued interest, if any, on such Notes to (but
excluding) the Remarketing Date. The Remarketing Dealer shall notify the
Company promptly about the occurrence of circumstances set forth in clause
(ii) or (iii) above.
10
(h) If the Remarketing Dealer has elected to remarket the Notes on the
Remarketing Date in accordance with subsection 4(c) hereof, the Company may
irrevocably elect to exercise its right to redeem the Notes, in whole but not
in part, from the Remarketing Dealer on the Remarketing Date, by giving
written notice of such election to the Remarketing Dealer no later than the
later of
(i) the Business Day immediately prior to the Determination Date
or
(ii) if fewer than three Reference Corporate Dealers submit firm,
committed bids in accordance with subsection 4(d) hereof, immediately after
the deadline set by the Remarketing Dealer for receiving such bids has
passed;
and by paying the amount equal to the greater of (x) 100% of the aggregate
principal amount of the Notes and (y) the Dollar Price with respect to such
Notes.
In either such case, the Company shall pay such redemption price for the
Notes in same-day funds by wire transfer on the Remarketing Date to an
account designated by the Remarketing Dealer. For purposes of calculating
the Dollar Price, the Remarketing Dealer shall be deemed to have made the
request for the Dollar Price on the date the Company makes its election to
redeem the Notes.
If the Company exercises its right to redeem the Notes pursuant to
clause 4(h)(ii) above, it shall promptly reimburse the Remarketing Dealer for
any and all expenses (including any and all hedge losses resulting from
intra-day hedging associated with the determination of the Dollar Price on
the Determination Date by the Remarketing Dealer) incurred by the Remarketing
Dealer in connection with its having to break such associated intra-day
hedging transactions to enable the Company to exercise such redemption right.
If any such broken hedges result in a profit to the Remarketing Dealer, the
Remarketing Dealer shall promptly pay such profit over to the Company. The
amount of any hedge losses or profits shall be calculated by the Remarketing
Dealer on a reasonable basis.
(i) In accordance with the terms and provisions of the Notes, the
tender and settlement procedures set forth in this Section 4 shall be subject
to modification without the consent of the holders of the Notes, to the
extent required by DTC or, if the book-entry system is no longer available
for the Notes at the time of the Remarketing, to the extent required to
facilitate the tendering and remarketing of Notes in certificated form. In
addition, the Remarketing Dealer may, without the consent of the holders of
the Notes, modify the settlement procedures set forth in the Indenture and/or
the Notes in order to facilitate the settlement process.
(j) In accordance with the terms and provisions of the Notes, the
Company hereby (i) agrees that at all times, it will use its best efforts to
maintain the Notes in book-entry form with DTC or any successor thereto and
to appoint a successor depositary to the extent necessary to maintain the
Notes in book-entry form and (ii) waives any discretionary right it otherwise
may have under the Indenture to cause the Notes to be issued in certificated
form.
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SECTION 5. FEES AND EXPENSES. Subject to subsection 3(f), the last
paragraph of subsection 4(h) and Section 10 hereof, the Remarketing Dealer
will not receive any fees or reimbursement of expenses from the Company for
its remarketing services set forth herein.
SECTION 6. RESIGNATION OF THE REMARKETING DEALER. The Remarketing
Dealer may resign and be discharged from its duties and obligations hereunder
at any time prior to its giving notice of its intention to remarket the
Notes, such resignation to be effective ten Business Days after delivery of a
written notice to the Company and the Trustee of such resignation. The
Remarketing Dealer also may resign and be discharged from its duties and
obligations hereunder at any time, such resignation to be effective
immediately, upon termination of this Agreement in accordance with subsection
10(b) hereof. The Company shall have the right, but not the obligation, to
appoint a successor Remarketing Dealer.
SECTION 7. DEALING IN THE NOTES; PURCHASE OF NOTES BY THE COMPANY.
(a) JPMSI, when acting as the Remarketing Dealer or in its individual
or any other capacity, may, to the extent permitted by law, buy, sell, hold
and deal in any of the Notes. JPMSI, as holder or beneficial owner of the
Notes, may exercise any vote or join as a holder or beneficial owner, as the
case may be, in any action which any holder or beneficial owner of Notes may
be entitled to exercise or take pursuant to the Indenture with like effect as
if it did not act in any capacity hereunder. The Remarketing Dealer, in its
capacity either as principal or agent, may also engage in or have an interest
in any financial or other transaction with the Company as freely as if it did
not act in any capacity hereunder.
(b) The Company may purchase Notes in the Remarketing, PROVIDED that
the Interest Rate to Maturity established with respect to Notes in the
Remarketing is not different from the Interest Rate to Maturity that would
have been established if the Company had not purchased such Notes in such
Remarketing.
SECTION 8. CONDITIONS TO REMARKETING DEALER'S OBLIGATIONS. The
obligations of the Remarketing Dealer to purchase the Notes on the
Remarketing Date in accordance with the provisions of this Agreement, to
determine the Interest Rate to Maturity pursuant to subsection 4(d), and to
remarket the Notes have been undertaken in reliance on, and are subject to,
the following conditions:
(a) the due performance in all material respects by the Company of its
obligations and agreements as set forth in this Agreement and the accuracy in
all material respects of the representations and warranties in this Agreement
and any certificate delivered pursuant hereto;
(b) the due performance in all material respects by the Company of its
obligations and agreements set forth in, and the accuracy in all material
respects as of the dates specified therein of the representations and
warranties contained in, the Underwriting Agreement;
12
(c) none of the following events shall have occurred at any time on or
prior to the Remarketing Date:
(i) an Event of Default (as defined in the Indenture), or any
event which, with the giving of notice or passage of time, or both, would
constitute an Event of Default thereunder, with respect to the Notes shall
have occurred and be continuing;
[(ii) an Event of Default or a Termination Event (each as defined in
the Master Agreement) shall have occurred and be continuing under the
Master Agreement (if the Master Agreement shall have terminated, then this
provision shall continue to have effect as if such agreement were still in
force and effect); or]
(iii) without the prior written consent of the Remarketing Dealer,
the Indenture (including the Notes) shall have been amended in any manner,
or otherwise contain any provision not contained therein as of the date
hereof, that in either case in the judgment of the Remarketing Dealer
materially changes the nature of the Notes or the remarketing procedures;
(d) none of the following events shall have occurred after the
Remarketing Dealer elects on the Notification Date to purchase the Notes:
(i) there shall have occurred any downgrading, or any notice shall
have been given of (A) any downgrading, (B) any intended or potential
downgrading or (C) any review or possible change that does not indicate an
improvement, in the rating accorded any debt securities of, or guaranteed
by, the Company by any "nationally recognized statistical rating
organization", as such term is defined for purposes of Rule 436(g)(2) under
the Securities Act;
(ii) trading of any securities of, or guaranteed by, the Company
shall have been suspended on any exchange or in any over-the-counter
market;
(iii) a material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
business, prospects, management, financial position, stockholders' equity
or results of operations of the Company and its subsidiaries, taken as a
whole, the effect of which is such as to make it, in the judgment of the
Remarketing Dealer, impracticable or inadvisable to remarket the Notes or
to enforce contracts for the sale of the Notes;
(iv) if a prospectus is required under the Securities Act to be
delivered in connection with the Remarketing, the Company shall fail to
furnish to the Remarketing Dealer on the Remarketing Date the officers'
certificate, opinion and comfort letter referred to in subsection 3(f) of
this Agreement and such other documents and opinions as counsel for the
Remarketing Dealer may reasonably require for the purpose of enabling such
counsel to pass upon the sale of Notes in the Remarketing as herein
contemplated and related
13
proceedings, or in order to evidence the accuracy and completeness of any
of the representations and warranties, or the fulfillment of any of the
conditions, herein contained;
(v) trading generally shall have been suspended or materially
limited on or by, as the case may be, any of the New York Stock Exchange,
the American Stock Exchange, the National Association of Securities
Dealers, Inc., the Chicago Board Options Exchange, the Chicago Mercantile
Exchange or the Chicago Board of Trade; or a general moratorium on
commercial banking activities in New York shall have been declared by
either Federal or New York State authorities;
(vi) there shall have occurred any outbreak or escalation of
hostilities or any change in financial markets or any calamity or crisis
that, in the judgment of the Remarketing Dealer, is material and adverse
and which, in the judgment of the Remarketing Dealer, makes it
impracticable to remarket the Notes or to enforce contracts for the sale of
the Notes;
(vii) the Treasury Rate used to determine the Dollar Price on the
Determination Date exceeds the Base Rate; or
(viii) the Remarketing Dealer shall not have received by the required
time on the Determination Date any firm, committed bids to purchase all of
the Notes in accordance with subsection 4(d) hereof,
(e) the Remarketing Dealer shall have received (as soon as practicable
following notification by the Remarketing Dealer to the Company on the
Notification Date of its election to purchase the Notes and in any event
prior to the Determination Date) a certificate of any of the Chief Financial
Officer, the Treasurer, or the Controller of the Company, satisfactory to the
Remarketing Dealer, dated as of the Notification Date, to the following
effect:
(i) the Company has, prior to the Remarketing Dealer's election on
the Notification Date to remarket the Notes, provided the Remarketing
Dealer with notice of all events as required under subsection 3(a) of this
Agreement;
(ii) the representations and warranties in this Agreement are true
and correct in all material respects at and as of the Notification Date;
and
(iii) the Company has complied in all material respects with all
agreements and satisfied in all material respects all conditions on its
part to be performed or satisfied at or prior to the Notification Date; and
(f) the Remarketing Dealer shall have received on the Remarketing Date
a certificate of any of the Chief Financial Officer, the Treasurer or the
Controller of the Company, satisfactory to the Remarketing Dealer, dated as
of Remarketing Date, to the following effect:
14
(i) the representations and warranties in this Agreement are true
and correct in all material respects with the same force and effect as
though expressly made at and as of the Remarketing Date;
(ii) the Company has complied in all material respects with all
agreements and satisfied in all material respects all conditions on its
part to be performed or satisfied respects at or prior to the Remarketing
Date;
(iii) no material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
business prospects, management, financial position, stockholders' equity or
results of operations of the Company and its subsidiaries, taken as a
whole, shall have occurred since the date of the most recent financial
statements of the Company filed with the Commission; and
(iv) the conditions specified in clauses (i), (ii) and (iii) of
subsection 8(c) and clauses (i) and (ii) of subsection 8(d) of this
Agreement have been satisfied.
SECTION 9. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless the Remarketing
Dealer and each person, if any, who controls the Remarketing Dealer within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages and
liabilities (including, without limitation, the reasonable legal fees and
other expenses incurred in connection with any suit, action or proceeding or
any claim asserted):
(i) arising out of the failure to have an effective registration
statement under the Securities Act relating to the Notes, if required, or
the failure to satisfy the prospectus delivery requirements of the
Securities Act because the Company failed to notify the Remarketing Dealer
of such delivery requirement or failed to provide the Remarketing Dealer
with a prospectus for delivery,
(ii) caused by any untrue statement or alleged untrue statement of
a material fact contained in any of the Remarketing Materials or caused by
any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages or liabilities
are caused by any untrue statement or omission or alleged untrue statement
or omission made in reliance upon and in conformity with information
relating to the Remarketing Dealer furnished to the Company in writing by
the Remarketing Dealer expressly for use therein, or
(iii) any violation by the Company of, or any failure by the Company
to perform any of its obligations under, this Agreement, or
15
(iv) the acts or omissions of the Remarketing Dealer in connection
with its duties and obligations hereunder, except to the extent finally
judicially determined to be due primarily to its gross negligence or
willful misconduct.
(b) The Remarketing Dealer agrees to indemnify and hold harmless the
Company, its directors and its officers and each person who controls the
Company within the meaning of Section 15 of the Securities Act and Section 20
of the Exchange Act, to the same extent as the foregoing indemnity from the
Company to the Remarketing Dealer in subsection 9(a)(ii) of this Agreement,
but only with reference to information relating to such Remarketing Dealer
furnished to the Company in writing by such Remarketing Dealer expressly for
use in any of the Remarketing Materials.
(c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted
against any person in respect of which indemnity may be sought pursuant to
either of the two preceding paragraphs, such person (the "INDEMNIFIED
PERSON") shall promptly notify the person against whom such indemnity may be
sought (the "INDEMNIFYING PERSON") in writing, and the Indemnifying Person,
upon request of the Indemnified Person, shall retain counsel reasonably
satisfactory to the Indemnified Person to represent the Indemnified Person in
such proceeding and shall pay the reasonable fees and expenses of such
counsel related to such proceeding. In any such proceeding, any Indemnified
Person shall have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Person
unless
(i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary,
(ii) the Indemnifying Person has failed within a reasonable time to
retain counsel reasonably satisfactory to the Indemnified Person, or
(iii) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them.
It is understood that the Indemnifying Person shall not, in connection with
any proceeding or related proceeding in the same jurisdiction, be liable for
the fees and expenses of more than one separate firm (in addition to any
local counsel) for all Indemnified Persons, and that all such fees and
expenses shall be reimbursed as they are incurred. Any such separate firm for
the Remarketing Dealer and its directors and officers shall be designated in
writing by it and any such separate firm for the Company, its directors and
its officers who sign the Registration Statement and such control persons of
the Company or authorized representatives shall be designated in writing by
the Company. The Indemnifying Person shall not be liable for any settlement
of any proceeding effected without its written consent, but if settled with
such consent or if there be a final judgment for the
16
plaintiff, the Indemnifying Person agrees to indemnify any Indemnified Person
from and against any loss or liability by reason of such settlement or
judgment.
(d) Notwithstanding the foregoing subsection 9(c), if at any time an
Indemnified Person shall have requested an Indemnifying Person to reimburse
the Indemnified Person for fees and expenses of counsel as contemplated by
such subsection 9(c), the Indemnifying Person agrees that it shall be liable
for any settlement of any proceeding effected without its written consent if
(i) such settlement is entered into more than 30 days after receipt by such
Indemnifying Person of the aforesaid request and (ii) such Indemnifying
Person shall not have reimbursed the Indemnified Person in accordance with
such request prior to the date of such settlement; PROVIDED, HOWEVER, that
the Indemnifying Person shall not be liable for any settlement effected
without its consent pursuant to this sentence if the Indemnifying Person is
contesting in good faith the request for reimbursement and all other fees and
expenses of counsel not so contested shall have been reimbursed. No
Indemnifying Person shall, without the prior written consent of the
Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party and indemnity could have been sought hereunder by such Indemnified
Person, unless such settlement includes an unconditional release of such
Indemnified Person from all liability on claims that are the subject matter
of such proceeding.
(e) If the indemnification provided for in subsections 9(a) and 9(b) is
unavailable to an Indemnified Person or insufficient in respect of any
losses, claims, damages or liabilities referred to, then each Indemnifying
Person, in lieu of indemnifying such Indemnified Person thereunder, shall
contribute to the amount paid or payable by such Indemnified Person as a
result of such losses, claims, damages or liabilities (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company,
on the one hand, and the Remarketing Dealer, on the other hand, from the
remarketing of the Notes or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company, on the one hand, and
the Remarketing Dealer, on the other, in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Company, on the one hand, and the Remarketing Dealer, on the
other, shall be deemed to be in the same respective proportions as the
aggregate principal amount of the Notes bears to the amount, if any, by which
the price at which the Notes are sold by the Remarketing Dealer in the
Remarketing exceeds the price paid by the Remarketing Dealer for the Notes
tendered on the Remarketing Date. The relative fault of the Company, on the
one hand, and the Remarketing Dealer, on the other, shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or by the
Remarketing Dealer and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
(f) The Company and the Remarketing Dealer agree that it would not be
just and equitable if contribution pursuant to this Section 9 were determined
by PRO RATA allocation or by any other method of allocation that does not
take account of the equitable considerations referred to in
17
the immediately preceding paragraph. The amount paid or payable by an
Indemnified Person as a result of the losses, claims, damages and liabilities
referred to in the immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth above, any legal or other
expenses incurred by such Indemnified Person in connection with investigating
or defending any such action or claim.
(g) Notwithstanding the provisions of this Section 9, in no event shall
the Remarketing Dealer be required to contribute any amount in excess of the
amount by which the total price at which the Notes remarketed by it and
distributed to the public were offered to the public exceeds the amount of
any damages that such Remarketing Dealer has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 9 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(h) The indemnity and contribution agreements of the Company and the
Remarketing Dealer contained in this Section 9 and the representations and
warranties of the Company set forth in this Agreement shall remain operative
and in full force and effect regardless of (i) any termination of this
Agreement and (ii) any investigation made by or on behalf of the Remarketing
Dealer or any person controlling the Remarketing Dealer or by or on behalf of
the Company, its officers or directors or any other person controlling the
Company.
SECTION 10. TERMINATION OF AGREEMENT.
(a) This Agreement shall terminate as to the Remarketing Dealer on the
earliest of:
(i) the effective date of the resignation of the Remarketing
Dealer pursuant to Section 6 hereof;
(ii) the date of the occurrence of any of the events described in
clause (i) or (ii) of subsection 4(g); or
(iii) the date the Company gives notice of its intention to redeem
all of the outstanding Notes in accordance with subsection 4(h).
(b) In addition, the Remarketing Dealer may terminate all of its
obligations under this Agreement immediately by notifying the Company and the
Trustee of its election to do so, at any time on or before the Remarketing
Date, if:
(i) any of the conditions referred to or set forth in subsection
8(a) or 8(b) hereof have not been met or satisfied in full or any of the
events set forth in subsection 8(c) or 8(d) shall have occurred; or
18
(ii) the Remarketing Dealer determines, in its sole discretion,
after consultation with the Company, that there is material, non-public
information about the Company that is not available to the Remarketing
Dealer which is necessary for it to fulfill its obligations under this
Agreement.
(c) If this Agreement is terminated pursuant to this Section 10, such
termination shall be without liability of any party to any other party,
except that, in the case of a termination resulting from a failure to observe
the conditions set forth in subsection 8(a) or 8(b), or the occurrence of any
of the events set forth in subsection 8(c) or any of clauses (i) through (iv)
of subsection 8(d), the Company shall reimburse the Remarketing Dealer for
all of its reasonable out-of-pocket expenses, including the reasonable fees
and disbursements of counsel for the Remarketing Dealer. Section 9 and
subsections 4(h), 10(c) and 10(d) shall survive such termination and remain
in full force and effect.
(d) Upon the termination of this Agreement pursuant to subsection 10(b)
(except as a result of any event described in subsection 8(d)(vii) and
subject to the Remarketing Dealer's obligation to comply with Section 4(d)
hereof if the determination is on or after the Determination Date), then,
upon the request of the Remarketing Dealer, the Company shall pay the Call
Price to the Remarketing Dealer.
The Remarketing Dealer shall promptly notify the Company of the Call Price by
telephone, confirmed in writing (which may include facsimile or other
electronic transmission). The Call Price shall be paid in same-day funds by
wire transfer to an account designated by the Remarketing Dealer and shall be
paid as soon as practicable, and in any event not later than the earlier of
(x) three Business Days after written notification to the Company and (y) the
Remarketing Date.
The Remarketing Dealer's determination of the Call Price, absent
manifest error, shall be binding and conclusive upon the parties hereto.
(e) This Agreement shall not be subject to termination by the Company.
SECTION 11. REMARKETING DEALER'S PERFORMANCE; DUTY OF CARE. The duties
and obligations of the Remarketing Dealer shall be determined solely by the
express provisions of this Agreement and the Indenture. No implied covenants
or obligations of or against the Remarketing Dealer shall be read into this
Agreement or the Indenture. In the absence of bad faith on the part of the
Remarketing Dealer, the Remarketing Dealer may conclusively rely upon any
document furnished to it, which purports to conform to the requirements of
this Agreement and the Indenture, as to the truth of the statements expressed
in any of such documents. The Remarketing Dealer shall be protected in acting
upon any document or communication reasonably believed by it to have been
signed, presented or made by the proper party or parties. The Remarketing
Dealer shall incur no liability to the Company or to any beneficial owner or
holder of Notes in its individual capacity or as Remarketing Dealer for any
action or failure to act in connection with the remarketing or otherwise,
except to the extent finally judicially determined to be due primarily to its
gross negligence or willful misconduct.
19
SECTION 12. GOVERNING LAW. This agreement shall be governed by and
construed in accordance with the laws of the State of New York, without
giving effect to the conflicts of laws provisions thereof.
SECTION 13. TERM OF AGREEMENT. Unless otherwise terminated in accordance
with the provisions hereof, this Agreement shall remain in full force and
effect from the date hereof until the earlier of the first day thereafter on
which no Notes are outstanding or the completion of the Remarketing.
Regardless of any termination of this Agreement pursuant to any of the
provisions hereof, the obligations of the Company and the Remarketing Dealer
pursuant to Section 9 and subsections 4(h), 10(c) and 10(d) hereof shall
remain operative and in full force and effect until fully satisfied.
SECTION 14. SUCCESSORS AND ASSIGNS. The rights and obligations of the
Company hereunder may not be assigned or delegated to any other person (other
than as specified in Article Eight of the Indenture) without the prior
written consent of the Remarketing Dealer. The rights and obligations of the
Remarketing Dealer hereunder may not be assigned or delegated to any other
person (other than an affiliate of the Remarketing Dealer, with the consent
of the Company, not to be unreasonably withheld) without the prior written
consent of the Company. This Agreement shall inure to the benefit of and be
binding upon the Company and the Remarketing Dealer and their respective
successors and assigns, and will not confer any benefit upon any other
person, partnership, association or corporation other than persons, if any,
controlling the Remarketing Dealer within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act or any other indemnified
party to the extent provided in Section 9 hereof. The terms "successors" and
"assigns" shall not include any purchaser of any Notes merely because of such
purchase.
SECTION 15. HEADINGS. Section headings have been inserted in this
Agreement as a matter of convenience of reference only, and it is agreed that
such section headings are not a part of this Agreement and will not be used
in the interpretation of any provisions of this Agreement.
SECTION 16. SEVERABILITY. If any provision of this Agreement shall be
held or deemed to be or shall, in fact, be invalid, inoperative or
unenforceable as applied in any particular case in any or all jurisdictions
because it conflicts with any provision of any constitution, statute, rule or
public policy or for any other reason, such circumstances shall not have the
effect of rendering the provision in question invalid, inoperative or
unenforceable in any other case, circumstance or jurisdiction, or of
rendering any other provision or provisions of this Agreement invalid,
inoperative or unenforceable to any extent whatsoever.
SECTION 17. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be regarded as an original and all of which
shall constitute one and the same document.
SECTION 18. AMENDMENTS; WAIVERS. This Agreement may be amended or
portions thereof may be waived by any instrument in writing signed by each of
the parties hereto so long as this
20
Agreement as amended or the provisions as so waived are not inconsistent with
the Indenture in effect as of the date of any such amendment or waiver.
SECTION 19. NOTICES. Unless otherwise specified, any notices, requests,
consents or other communications given or made hereunder or pursuant hereto
shall be made in writing (which may include facsimile or other electronic
transmission) and shall be deemed to have been validly given or made when
delivered or, if earlier, three days after it was mailed, registered or
certified mail, return receipt requested and postage prepaid, addressed as
follows:
(a) to the Company:
Waste Management, Inc.
1001 Fannin Street, Suite 4000
Houston, Texas 77002
Attention: Treasurer
Facsimile No.: (713) 209-9710
(b) to JPMSI:
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Attention: Syndicate Department
Facsimile No.: 212/648-5909
or to such other address as the Company or the Remarketing Dealer shall
specify in writing.
21
IN WITNESS WHEREOF, each of the Company and the Remarketing Dealer has
caused this Agreement to be executed in its name and on its behalf by one of
its duly authorized officers as of the date first above written.
WASTE MANAGEMENT, INC.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
J. P. MORGAN SECURITIES INC.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
22
THIS SECURITY IS A BOOK-ENTRY SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS
SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO
A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY
OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN SUCH LIMITED
CIRCUMSTANCES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK LIMITED PURPOSE TRUST COMPANY ("DTC"), TO
THE COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION FOR TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
BOOK -ENTRY SECURITY
No. 1 U.S. $200,000,000
CUSIP 902917AH6
WASTE MANAGEMENT, INC.
7% SENIOR NOTE DUE 2028
WASTE MANAGEMENT, INC. (formerly known as USA WASTE SERVICES, INC.), a
Delaware corporation (the "Company"), for value received, hereby promises to
pay to CEDE & CO. or registered assigns, at the office or agency of the
Company, the principal sum of $200,000,000 U.S. dollars on July 15, 2028 in
such coin or currency of the United States of America as at the time of
payment shall be legal tender for the payment of public and private debts,
and to pay interest at an annual rate of 7% payable on January 15 and July 15
in each year, to the person in whose name the Security is registered at the
close of business on the record date for such interest which shall be the
preceding December 31 or June 30, respectively, payable commencing January
15, 1999, with interest on January 15, 1999 consisting of interest accrued
from July 17, 1998.
Reference is made to the further provisions of this Security set forth on
the reverse hereof. Such further provisions shall for all purposes have the
same effect as though fully set forth at this place.
The statements in the legend set forth above are an integral part of the
terms of this Security and by acceptance hereof the Holder of this Security
agrees to be subject to, and bound by, the terms and provisions set forth in
such legend.
This Security is issued in respect of a series of Securities of an
aggregate of U.S. $600,000,000 in principal amount designated as the 7% Senior
Notes due 2028 of the Company and is governed by the Indenture dated as of
September 10, 1997, duly executed and delivered by the Company to Chase Bank of
Texas, National Association, as trustee (the "Trustee"), as supplemented by
Board Resolutions (as defined in the Indenture) (such Indenture and Board
Resolutions, collectively, the "Indenture"). The terms of the Indenture are
incorporated herein by reference. This Security shall in all respects be
entitled to the same benefits as definitive Securities under the Indenture.
If and to the extent that any provision of the Indenture limits, qualifies,
or conflicts with any other provision of the Indenture which is required to be
included in the Indenture or is deemed applicable to the Indenture by virtue of
the provisions of the Trust Indenture Act of 1939, as amended, such required
provision shall control.
The Company hereby irrevocably undertakes to the Holder hereof to exchange
this Book-Entry Security in accordance with the terms of the Indenture without
charge.
This Security shall not be valid or become obligatory for any purpose until
the Certificate of Authentication hereon shall have been manually signed by the
Trustee under the Indenture.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
WASTE MANAGEMENT, INC.,
a Delaware corporation
By:
------------------------------------
Earl E. DeFrates
Executive Vice President and
Chief Financial Officer
[Corporate Seal]
Attest:
By:
----------------------------------
Gregory T. Sangalis
Vice President and Secretary
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
Dated: July 17, 1998
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
as Trustee
By:
------------------------------------
Authorized Signatory
2
REVERSE OF BOOK-ENTRY SECURITY
WASTE MANAGEMENT, INC.
7% SENIOR NOTE DUE 2028
This Book-Entry Security is one of a duly authorized issue of Securities
or other evidences of indebtedness of the Company (the "Securities") of the
series hereinafter specified, all issued or to be issued under and pursuant to
the Indenture, to which Indenture reference is hereby made for a description of
the rights, limitations of rights, obligations, duties and immunities thereunder
of the Trustee, the Company and the Holders of the Securities. The Securities
may be issued in one or more series, which different series may be issued in
various aggregate principal amounts, may mature at different times, may bear
interest (if any) at different rates, may be subject to different sinking,
purchase or analogous funds (if any) and may otherwise vary as provided in the
Indenture. This Security is one of a series designated as the 7% Senior Notes
due 2028 of the Company, limited in aggregate principal amount to $600,000,000.
1. Interest.
USA Waste Services, Inc., a Delaware corporation (hereinafter called the
"Company," which term includes any successors under the Indenture hereinafter
referred to), promises to pay interest on the principal amount of this Security
at the rate of 7% per annum. To the extent it is lawful, the Company promises
to pay interest on any interest payment due but unpaid on such principal amount
at a rate of 7% per annum.
The Company will pay interest semi-annually on January 15 and July 15 of
each year (each an "Interest Payment Date"), commencing January 15, 1999.
Interest on the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid on the Securities, from
July 17, 1998. Interest will be computed on the basis of a 360-day year
consisting of twelve 30-day months.
2. Method of Payment.
The Company shall pay interest on the Securities (except Defaulted
Interest) to the persons who are the registered Holders at the close of business
on the Regular Record Date immediately preceding the Interest Payment Date. Any
such interest not so punctually paid ("Defaulted Interest"), may be paid to the
persons who are registered Holders at the close of business on a Special Record
Date for the payment of such Defaulted Interest, or in any other lawful manner
not inconsistent with the requirements of any securities exchange on which such
Securities may then be listed if such manner of payment shall be deemed
practicable by the Trustee, as more fully provided in the Indenture referred to
below. Except as provided below, the Company shall pay principal and interest
in such coin or currency of the United States of America as at the time of
payment shall be legal tender for payment of public and private debts ("U.S.
Legal Tender"). Payments in respect of the Book-Entry Securities (including
principal, premium, if any, and interest) will be made by wire transfer of
immediately available funds to the accounts specified by the Depositary.
Payments in respect of Securities in definitive form (including principal,
premium, if any, and interest) will be made at the office or agency of the
Company maintained for such purpose within the Borough of Manhattan, The City of
New York, or at the option of the Company, payment of interest may be made by
check mailed to the Holders on the Regular Record Date or on the Special Record
Date at their addresses set forth in the Security Register of Holders.
3. Paying Agent and Registrar.
Initially, Chase Bank of Texas, National Association (the "Trustee") will
act as Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or co-Registrar at any time upon notice to the Trustee and the
Holders. The Company or any of its Subsidiaries may, subject to certain
exceptions, act as Paying Agent, Registrar or co-Registrar.
4. Indenture.
This Security is one of a duly authorized issue of Securities of the
Company issued and to be issued in one or more series under an Indenture, dated
as of September 10, 1997 (the "Indenture"), between the Company and the Trustee.
Capitalized terms herein are used as defined in the Indenture unless otherwise
defined herein. The terms of the Securities
3
include those stated in the Indenture, all indentures supplemental thereto,
those made part of the Indenture by reference to the Trust Indenture Act of
1939, as amended, as in effect on the date of the Indenture, and those terms
stated in the Resolutions of the Pricing Committee of the Board of Directors
of the Company dated July 14, 1998 (the "Resolutions"). The Securities are
subject to all such terms, and Holders of Securities are referred to the
Indenture, all indentures supplemental thereto, said Act and said Resolutions
for a statement of them. The Securities of this series are general unsecured
obligations of the Company limited in aggregate principal amount to
$600,000,000.
5. Redemption.
The Securities will be redeemable at the option of the Company at any time
and from time to time, in whole or in part, upon not less than 30 nor more than
60 days notice to each Holder of Securities, at a redemption price equal to the
Make-Whole Price. "Make-Whole Price" means an amount equal to the greater of
(i) 100% of the principal amount of such Securities and (ii) as determined by an
Independent Investment Banker, the sum of the present values of the remaining
scheduled payments of principal and interest thereon (not including any portion
of such payments of interest accrued as of the date of redemption) discounted to
the date of redemption on a semi-annual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Adjusted Treasury Rate, plus, in each
case accrued and unpaid interest to the date of redemption. Unless the Company
defaults in payment of the redemption price, on and after the date of
redemption, interest will cease to accrue on the Securities or portions thereof
called for redemption.
"Adjusted Treasury Rate" means, with respect to any date of redemption, the
rate per annum equal to the semi-annual yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
such date of redemption, plus 0.25%.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the Securities to be redeemed that would be utilized, at
the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of such Securities.
"Comparable Treasury Price" means, with respect to any date of redemption,
(i) the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
Business Day preceding such date of redemption, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations of U.S.
Government Securities", or (ii) if such release (or any successor release) is
not published or does not contain such prices on such Business Day, (A) the
average of the Reference Treasury Dealer Quotations for such date of redemption,
after excluding the highest and lowest such Reference Treasury Dealer
Quotations, or (B) if the Trustee obtains fewer than three such Reference
Treasury Dealer Quotations, the average of all such Reference Treasury Dealer
Quotations.
"Independent Investment Banker" means one of the Reference Treasury Dealers
appointed by the Trustee after consultation with the Company.
"Reference Treasury Dealer" means each of Donaldson, Lufkin & Jenrette
Securities Corporation, Credit Suisse First Boston Corporation, Goldman, Sachs &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Salomon Brothers
Inc. and their respective successors; provided, however, that if any of the
foregoing shall not be a primary U.S. government securities dealer in New York
City (a "Primary Treasury Dealer"), the Company shall substitute therefor
another Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any date of redemption, the average, as determined
by the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the
third Business Day preceding such date of redemption.
In the case of a partial redemption, the Company or the Trustee shall
select the Securities or portions thereof for redemption by such method as the
Company or the Trustee shall deem fair and appropriate. The Securities may be
redeemed in part in multiples of $1,000 only.
Any such redemption will also comply with Article Eleven of the Indenture.
4
Notice of redemption will be given in the manner provided in the Indenture
to the Holders of Securities to be redeemed not less than 30 days and not more
than 60 days prior to the Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Make-Whole Price and, except as set forth in the Indenture, from and after
such Redemption Date, (unless the Company shall default in the payment of the
Make-Whole Price), the Securities called for redemption will cease to bear
interest and the only right of the Holders of such Securities will be to
receive payment of the Make-Whole Price.
6. Denominations; Transfer; Exchange.
The Securities are issued in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder may register
the transfer of, or exchange, Securities in accordance with the Indenture. The
Securities Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture.
7. Person Deemed Owners.
The registered Holder of a Security may be treated as the owner of it for
all purposes.
8. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented, and any existing Event of Default or compliance with
any provision may be waived, with the written consent of the Holders of a
majority in aggregate principal amount of the Securities then outstanding.
Without notice to or consent of any Holder, the parties thereto may amend or
supplement the Indenture or the Securities to, among other things, cure any
ambiguity, defect or inconsistency, or make any other change that does not
adversely affect the rights of any Holder of a Security. Any such consent or
waiver by the Holder of this Security (unless revoked as provided in the
Indenture) shall be conclusive and binding upon such Holder and upon all future
Holders and owners of this Security and any Securities which may be issued in
exchange or substitution herefor, irrespective of whether or not any notation
thereof is made upon this Security or such other Securities.
9. Defaults and Remedies.
If an Event of Default occurs and is continuing, then in every such case,
the Trustee or the Holders of 25% in aggregate principal amount of the
Securities then outstanding may declare the principal amount of all the
Securities to be due and payable immediately in the manner and with the effect
provided in the Indenture. Notwithstanding the preceding sentence, however, if
at any time after the unpaid principal amount of the Securities shall have been
so declared due and payable and before any judgment or decree for the payment of
the moneys due shall have been obtained or entered as hereinafter provided, the
Company shall pay or shall deposit with the Trustee a sum sufficient to pay all
overdue installments of interest, if any, upon all of the Securities and the
principal of any and all Securities which shall have become due otherwise than
by acceleration and any interest thereon at the rate prescribed therefor herein
and, to the extent that payment of such interest is lawful, interest upon
overdue interest at the rate prescribed therefor herein, as well as the
reasonable compensation, disbursements, expenses and advances of the Trustee,
and any and all defaults under the Indenture, other than the nonpayment of such
portion of the principal amount of and accrued interest, if any, on such
Securities which shall become due by acceleration, shall have been cured or
shall have been waived or provision deemed by the Trustee to be adequate shall
have been made therefor -- then in every such case the Holders of a majority in
aggregate principal amount of the Securities then Outstanding, by written notice
to the Company and to the Trustee, may rescind and annul such declaration and
its consequences; but no such rescission and annulment shall extend to or shall
affect any subsequent default, or shall impair any right consequent thereon.
Holders of Securities may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may require indemnity satisfactory to it
before it enforces the Indenture or the Securities. Subject to certain
limitations, Holders of a majority in aggregate principal amount of the
Securities then outstanding may direct the Trustee in its exercise of any trust
or power.
5
10. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any other capacity,
may make loans to, accept deposits from, and perform services for the Company or
its Affiliates or any subsidiary of the Company's Affiliates, and may otherwise
deal with the Company or its Affiliates as if it were not the Trustee.
11. Authentication.
This Security shall not be valid until the Trustee or authenticating agent
signs the certificate of authentication on the other side of this Security.
12. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a Security
or an assignee, such as: TEN COM (=tenant in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with right of survivorship and not as
tenants in common), CUST (=Custodian), and U/G/M/A (=Uniform Gifts to Minors
Act).
13. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform Note
Identification Procedures, the Company will cause CUSIP numbers to be printed on
the Securities as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such number as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
14. Absolute Obligation.
No reference herein to the Indenture and no provision of this Security or
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this
Security in the manner, at the respective times, at the rate and in the coin or
currency herein prescribed.
15. No Recourse.
No recourse under or upon any obligation, covenant or agreement contained
in the Indenture or in any Security, or because of any indebtedness evidenced
thereby, shall be had against any incorporator, past, present or future
stockholder, officer or director, as such of the Company or of any successor,
either directly or through the Company or of any successor, under any rule of
law, statute or constitutional provision or by the enforcement of any assessment
or by any legal or equitable proceeding or otherwise, all such liability being
expressly waived and released by the acceptance of the Security by the Holder
and as part of the consideration for the issue of the Security.
16. Governing Law.
This Security shall be construed in accordance with and governed by the
laws of the State of New York.
6
THIS SECURITY IS A BOOK-ENTRY SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR
SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR
ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND
NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A
WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE
REGISTERED EXCEPT IN SUCH LIMITED CIRCUMSTANCES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK LIMITED PURPOSE TRUST COMPANY
("DTC"), TO THE COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION FOR
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
BOOK-ENTRY SECURITY
No. 1 U.S. $200,000,000
CUSIP 902917AG8
WASTE MANAGEMENT, INC.
6-1/8% MANDATORILY TENDERED SENIOR NOTE
DUE 2011
WASTE MANAGEMENT, INC. (formerly known as USA WASTE SERVICES, INC.), a
Delaware corporation (the "Company"), for value received, hereby promises to
pay to CEDE & CO. or registered assigns, at the office or agency of the
Company, the principal sum of $200,000,000 U.S. dollars on July 15, 2011 in
such coin or currency of the United States of America as at the time of
payment shall be legal tender for the payment of public and private debts,
and to pay interest on January 15 and July 15 in each year (each an "Interest
Payment Date'), to the person in whose name the Security is registered at the
close of business on the record date for such interest which shall be the
preceding December 31 or June 30, respectively, payable commencing January
15, 1999, with interest on January 15, 1999 consisting of interest accrued
from July 17, 1998.
The rate of interest on this Security shall be 6-1/8% per annum to but
excluding July 15, 2001 (the "Remarketing Date"). If, acting pursuant to the
Remarketing Agreement dated as of July 17, 1998 (the "Remarketing Agreement")
between J.P. Morgan Securities Inc., as Remarketing Dealer (the "Remarketing
Dealer") and the Company, the Remarketing Dealer elects to remarket the
Securities on the Remarketing Date, then, from and including the Remarketing
Date the interest rate on the Securities shall be reset to but excluding July
15, 2011 (the "Stated Maturity Date"), and the rate of interest shall be
determined by the Remarketing Dealer in accordance with the procedures set
forth in Section 4 on the reverse hereof. If the Remarketing Dealer elects
to remarket the Securities on the Remarketing Date, then this Security shall
be subject to mandatory tender to the Remarketing Dealer for remarketing on
such Remarketing Date, on the terms and subject to the conditions set forth
on the reverse hereto. Interest will be computed on the basis of a 360-day
year consisting of twelve 30-day months.
If the Remarketing Dealer for any reason does not purchase all of the
Securities on the Remarketing Date, then the Company shall repurchase on such
Remarketing Date, at a price equal to 100% of the principal amount of the
Securities plus all accrued interest, if any, on the Securities to (but
excluding) the Remarketing Date, any Securities that have not been purchased
by the Remarketing Dealer on the Remarketing Date.
This Security will be redeemable by the Company on and after the
Remarketing Date pursuant to the terms and conditions set forth on the
reverse hereof.
Reference is made to the further provisions of this Security set forth
on the reverse hereof. Such further provisions shall for all purposes have
the same effect as though fully set forth at this place.
The statements in the legend set forth above are an integral part of the
terms of this Security and by acceptance hereof the Holder of this Security
agrees to be subject to, and bound by, the terms and provisions set forth in
such legend.
This Security is issued in respect of a series of Securities of an
aggregate of U.S. $600,000,000 in principal amount designated as the 6-1/8%
Mandatorily Tendered Senior Notes due 2011 of the Company and is governed by
the Indenture dated as of September 10, 1997, duly executed and delivered by
the Company to Chase Bank of Texas, National Association, as trustee (the
"Trustee"), as supplemented by Board Resolutions (as defined in the
Indenture) (such Indenture and Board Resolutions, collectively, the
"Indenture"). The terms of the Indenture are incorporated herein by
reference. This Security shall in all respects be entitled to the same
benefits as definitive Securities under the Indenture.
If and to the extent that any provision of the Indenture limits,
qualifies, or conflicts with any other provision of the Indenture which is
required to be included in the Indenture or is deemed applicable to the
Indenture by virtue of the provisions of the Trust Indenture Act of 1939, as
amended, such required provision shall control.
The Company hereby irrevocably undertakes to the Holder hereof to
exchange this Book-Entry Security in accordance with the terms of the
Indenture without charge.
This Security shall not be valid or become obligatory for any purpose
until the Certificate of Authentication hereon shall have been manually
signed by the Trustee under the Indenture.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
WASTE MANAGEMENT, INC.,
a Delaware corporation
By:
------------------------------------
Earl E. DeFrates
Executive Vice President and
Chief Financial Officer
[Corporate Seal]
Attest:
By:
--------------------------------
Gregory T. Sangalis
Vice President and Secretary
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
Dated: July 17, 1998
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, as
Trustee
By:
----------------------------------------------
Authorized Signatory
2
REVERSE OF BOOK-ENTRY SECURITY
WASTE MANAGEMENT, INC.
6-1/8% MANDATORILY TENDERED SENIOR NOTE DUE 2011
This Book-Entry Security is one of a duly authorized issue of Securities
or other evidences of indebtedness of the Company (the "Securities") of the
series hereinafter specified, all issued or to be issued under and pursuant
to the Indenture, to which Indenture reference is hereby made for a
description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the Holders of the
Securities. The Securities may be issued in one or more series, which
different series may be issued in various aggregate principal amounts, may
mature at different times, may bear interest (if any) at different rates, may
be subject to different sinking, purchase or analogous funds (if any) and may
otherwise vary as provided in the Indenture. This Security is one of a series
designated as the 6-1/8% Mandatorily Tendered Senior Notes due 2011 of the
Company, limited in aggregate principal amount to $600,000,000. The
Securities are sometimes referred to herein as the "Notes."
1. Definitions.
(a) The following terms have the following meanings:
"Base Rate" means 5.585% per annum.
"Business Day" means any day other than a Saturday or Sunday or
other day on which banking institutions in the City of New York are
authorized or obligated by law, executive order or governmental decree to be
closed.
"Call Price" means the fair market value of the embedded interest
rate option implicit in the Remarketing Dealer's right to purchase at par and
remarket on the Remarketing Date, pursuant to this Agreement, of any Notes
not purchased (due to the prior termination of this Agreement or otherwise)
by the Remarketing Dealer on the Remarketing Date (such principal amount of
Notes, the "Unpurchased Notes"). This amount shall equal:
(i) if the Remarketing Dealer's request for the Call Price
payment is made before the Determination Date, the Commercially
Reasonable Option Value on the date of such request;
(ii) if the Remarketing Dealer's request for the Call Price
payment is made on or after the Determination Date, the amount, if
positive, equal to: (x) the Dollar Price less the Original Amount of
Notes, multiplied by (y) a fraction, the numerator of which is the
Unpurchased Notes and the denominator of which is the Original Amount
of Notes.
"Commercially Reasonable Option Value" means, on any date, the
amount determined by the Remarketing Dealer on such date under Section 6(e)
of the Master Agreement on a "Market Quotation" basis in respect of the
embedded interest rate option implicit in the Remarketing Dealer's option to
purchase at par the Unpurchased Notes on the Remarketing Date, as if a
"Termination Event" had occurred on such specified date under such interest
rate option with respect to the Company under the Master Agreement and the
Company was the "Affected Party". The determination of the Commercially
Reasonable Option Value shall be made using the provisions of the Master
Agreement regardless of any termination of the Master Agreement.
"Comparable Treasury Issue" means the United States Treasury
security selected by the Remarketing Dealer as having an actual maturity on
the Determination Date (or the United States Treasury securities selected by
the Remarketing Dealer to derive an interpolated yield to maturity on such
Determination Date) comparable to the remaining term of the Notes.
"Comparable Treasury Price" means (a) the offer price for the
Comparable Treasury Issue (expressed as a percentage of its principal amount)
on the Determination Date, as set forth on Telerate Page 500 (as defined
below), adjusted to reflect settlement on the Remarketing Date, if prices
quoted on Telerate Page 500 are for settlement on any date other than the
Remarketing Date, or (b) if such page (or any successor page) is not
displayed or does not contain such offer prices on such Business Day, (i) the
average of five Reference Treasury Dealer Quotations (as defined below) for
the Remarketing Date,
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excluding the highest and lowest of such Reference Treasury Dealer Quotations
(unless there is more than one highest or lowest quotation, in which case
only one such highest and/or lowest quotation shall be excluded), or (ii) if
the Remarketing Dealer obtains fewer than five such Reference Treasury Dealer
Quotations, the average of all such Reference Treasury Dealer Quotations.
The Remarketing Dealer shall have the discretion to select the time at which
the Comparable Treasury Price is determined on the Determination Date.
"Dollar Price" means the discounted present value to the
Remarketing Date of the cash flows on a bond
(i) with a principal amount equal to the aggregate principal
amount of the Notes,
(ii) maturing on the Stated Maturity Date, and
(iii) bearing interest at a rate equal to the Base Rate,
using a discount rate equal to the Treasury Rate (defined below),
payable semi-annually (assuming a 360-day year consisting of twelve 30-day
months) on the Interest Payment Dates of the Notes from and including the
Remarketing Date to but excluding the Stated Maturity Date.
"Master Agreement" means the ISDA Master Agreement dated as of
June 30, 1995 between the Company and J.P. Morgan Securities Inc., as amended
"Original Amount of Notes" means the principal amount of the Notes
issued by the Company on the date hereof.
"Reference Corporate Dealer" means J.P. Morgan Securities Inc.;
Donaldson, Lufkin & Jenrette Securities Corporation; BancAmerica Robertson
Stephens; Chase Securities, Inc.; and Deutsche Bank Securities. If any of
such persons shall cease to be a leading dealer of publicly-traded debt
securities of the Company, then the Remarketing Dealer may replace, with the
approval of the Company (not to be unreasonably withheld), such person with
any other leading dealer of publicly-traded debt securities of the Company.
"Reference Treasury Dealer" means a primary U.S. Government
securities dealer in The City of New York (which may include the Remarketing
Dealer) selected by the Remarketing Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer, the offer price(s) for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) for settlement on
the Remarketing Date, quoted in writing to the Remarketing Dealer by such
Reference Treasury Dealer by 3:30 p.m., New York City time, on the
Determination Date.
"Telerate Page 500" means the display designated as "Telerate Page
500" on Dow Jones Markets Limited (or such other page as may replace Telerate
Page 500 on such service) or such other service displaying the offer prices
specified in clause (a) of the definition of Comparable Treasury Price as may
replace Dow Jones Markets Limited.
"Treasury Rate" means the annual rate equal to the semi-annual
equivalent yield to maturity or interpolated (on a 30/360 day count basis)
yield to maturity on the Determination Date of the Comparable Treasury Issue
(defined above) for value on the Remarketing Date, assuming a price for the
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price (as defined above).
(b) Capitalized terms herein are used as defined in the Indenture
unless otherwise defined herein.
2. Mandatory Tender on each Remarketing Date; Purchase and Settlement.
On a Business Day not later than fifteen Business Days prior
to the Remarketing Date (the "Notification Date"), the Remarketing Dealer
will notify the Company and the Trustee as to whether it elects to purchase
the Notes on the Remarketing Date. If, and only if, the Remarketing Dealer so
elects, the Notes shall be subject to mandatory tender to the Remarketing
Dealer for purchase and remarketing on the Remarketing Date, upon the terms
and subject to the conditions described herein. The purchase price of the
Notes shall be equal to 100% of the principal amount thereof. No holder or
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beneficial owner of any Securities shall have any rights or claims under the
Remarketing Agreement or against the Company or the Remarketing Dealer as a
result of the Remarketing Dealer not purchasing such Securities on the
Remarketing Date.
3. Maintenance of Book-Entry System.
(a) The tender and settlement procedures with respect to the
Securities set forth in the Remarketing Agreement shall be subject to
modification, without the consent of the holders of the Securities, to the
extent required by DTC or, if the book-entry system is no longer available
for the Securities at the time of the remarketing, to the extent required to
facilitate the tendering and remarketing of Securities in certificated form.
In addition, the Remarketing Dealer may modify the settlement procedures
without the consent of the holders of the Securities in order to facilitate
the settlement process.
(b) The Company hereby agrees with the Trustee and the holders of
Securities that (i) at all times, it will use its best efforts to maintain
the Securities in book-entry form with DTC or any successor thereto and to
appoint a successor depositary to the extent necessary to maintain the
Securities in book-entry form and (ii) it waives any discretionary right that
it otherwise may have under the Indenture to cause the Securities to be
issued in certificated form.
4. Determination of Reset Interest Rates; Notification Thereto.
The Remarketing Dealer shall determine a new stated interest rate on the
Notes as of the Remarketing Date (the "Interest Rate to Maturity") on the
third Business Day immediately preceding the Remarketing Date (the
"Determination Date") by soliciting by 3:30 p.m., New York City time, the
Reference Corporate Dealers for firm, committed bids to purchase all
outstanding Notes at the Dollar Price and by selecting the lowest such firm,
committed bid (regardless of whether each of the Reference Corporate Dealers
actually submits a bid). Each bid shall be expressed in terms of the Interest
Rate to Maturity that the Notes would bear (quoted as a spread over the Base
Rate), based on the following assumptions:
(i) the Notes would be sold to such Reference Corporate
Dealer on the Remarketing Date for settlement on the same day;
(ii) the Notes would mature on the Stated Maturity Date; and
(iii) the Notes would bear interest from and including the
Remarketing Date to but excluding the Stated Maturity Date at a stated
rate equal to the Interest Rate to Maturity bid by such Reference
Corporate Dealer, payable semi-annually on the interest payment dates
for the Notes.
The Interest Rate to Maturity announced by the Remarketing Dealer
as a result of such process will be quoted to the nearest one
hundred-thousandth (0.00001) of one percent per annum and, absent manifest
error, will be binding and conclusive upon holders of the Notes, the Company
and the Trustee. Except as set forth below, the Remarketing Dealer shall have
the discretion to select the time at which the Interest Rate to Maturity is
determined on the Determination Date.
The Remarketing Dealer shall have the right in its sole discretion
to either (i) remarket the Notes for its own account or (ii) sell the Notes
to the Reference Corporate Dealer submitting the lowest firm, committed bid
pursuant to this section 4. If two or more Reference Corporate Dealers
submit equivalent bids which constitute the lowest firm, committed bid, the
Remarketing Dealer may in its sole discretion elect to sell the Notes to any
such Reference Corporate Dealer.
If the Remarketing Dealer has elected to remarket the Notes as
provided in section 2 and this section 4, then it shall notify the Company,
the Trustee and DTC by telephone, confirmed in writing (which may include
facsimile or other electronic transmission), by 5:00 p.m., New York City
time, on the Determination Date of the Interest Rate to Maturity applicable
to the Notes effective from and including the Remarketing Date.
5. Repurchase.
If the Remarketing Dealer for any reason does not purchase all of the
Securities on the Remarketing Date, then the Company shall repurchase on such
Remarketing Date, at a price equal to 100% of the principal amount of the
Securities plus all accrued interest, if any, on the Securities to (but
excluding) the Remarketing Date, any Securities that have not been purchased
by the Remarketing Dealer on the Remarketing Date.
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6. Redemption.
(a) On the Remarketing Date.
If the Remarketing Dealer has elected to remarket the Notes on the
Remarketing Date in accordance with sections 2 and 4 hereof, the Company may
irrevocably elect to exercise its right to redeem the Notes, in whole but not
in part, from the Remarketing Dealer on the Remarketing Date, by giving
written notice of such election to the Remarketing Dealer no later than the
later of
(i) the Business Day immediately prior to the Determination Date or
(ii) if fewer than three Reference Corporate Dealers submit firm,
committed bids in accordance with section 4 hereof, immediately after the
deadline set by the Remarketing Dealer for receiving such bids has passed;
and by paying the amount equal to the greater of (x) 100% of the aggregate
principal amount of the Notes and (y) the Dollar Price with respect to such
Notes.
In either such case, the Company shall pay such redemption price for the
Notes in same-day funds by wire transfer on the Remarketing Date to an
account designated by the Remarketing Dealer. For purposes of calculating
the Dollar Price, the Remarketing Dealer shall be deemed to have made the
request for the Dollar Price on the date the Company makes its election to
redeem the Notes.
(b) After the Remarketing Date.
After the Remarketing Date, if the Remarketing Dealer has elected to
remarket the Notes on the Remarketing Date, the Notes will be redeemable (a
"Post-Remarketing Redemption"), in whole or in part, at the option of the
Company at any time at a redemption price equal to the greater of (i) 100% of
the principal amount of such Notes or (ii) the sum of the present values of
the remaining scheduled payments of principal and interest thereon (not
including the portion of any such payments of interest accrued as of the
redemption date) discounted to the redemption date on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Adjusted
Treasury Rate (as defined below) (determined on the third Business Day
preceding such redemption date), plus, in each case, accrued and unpaid
interest thereon to (but excluding) the redemption date.
Notice of any Post-Remarketing Redemption will be mailed at least 30
days but not more than 60 days before the redemption date to each holder of
the Notes to be redeemed. Unless the Company defaults in payment of the
redemption price, on and after the redemption date, interest will cease to
accrue on the Notes or portions thereof called for redemption pursuant to a
Post-Remarketing Redemption.
"Adjusted Treasury Rate" means (i) the arithmetic means of the yields
under the heading "Week Ending" published in the Statistical Release most
recently published prior to the date of determination under the caption
"Treasury Constant Maturities" for the maturity (rounded to the nearest
month) corresponding to the remaining life to the maturity, as of the
redemption date, of the principal being redeemed plus (ii) 0.10%. If no
maturity set forth under such heading exactly corresponds to the maturity of
such principal, yields for the two published maturities most closely
corresponding to the maturity of such principal shall be calculated pursuant
to the immediately preceding sentence, and the Adjusted Treasury Rate shall
be interpolated or extrapolated from such yields on a straight-line basis,
rounding in each of the relevant periods to the nearest month.
"Statistical Release" means the statistical release designated
"H.15(519)" or any successor publication which is published weekly by the
Federal Reserve System and which establishes yields on actively-traded United
States government securities adjusted to constant maturities, or, if such
statistical release is not published at the time of any determination under
the terms of the Notes, then such other reasonably comparable index which
shall be designated by the Company.
7. Tax Treatment; Agreement to Tender.
The Company and the holders of this Security (and each holder of a
beneficial interest herein) by accepting this Security, agree to treat the
Notes as fixed rate debt instruments that mature on the Remarketing Date for
United States Federal
6
income tax purposes. Furthermore, each holder of this Security irrevocably
agrees that this Security shall automatically be tendered to the Remarketing
Dealer if the Remarketing Dealer elects to remarket the Securities on the
terms and conditions as set forth herein.
8. Method of Payment.
The Company shall pay interest on the Securities (except Defaulted
Interest) to the persons who are the registered Holders at the close of
business on the Regular Record Date immediately preceding the Interest
Payment Date. Any such interest not so punctually paid ("Defaulted
Interest"), may be paid to the persons who are registered Holders at the
close of business on a Special Record Date for the payment of such Defaulted
Interest, or in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Securities may then be
listed if such manner of payment shall be deemed practicable by the Trustee,
as more fully provided in the Indenture referred to below. Except as
provided below, the Company shall pay principal and interest in such coin or
currency of the United States of America as at the time of payment shall be
legal tender for payment of public and private debts ("U.S. Legal Tender").
Payments in respect of the Book-Entry Securities (including principal,
premium, if any, and interest) will be made by wire transfer of immediately
available funds to the accounts specified by the Depositary. Payments in
respect of Securities in definitive form (including principal, premium, if
any, and interest) will be made at the office or agency of the Company
maintained for such purpose within the Borough of Manhattan, The City of New
York, or at the option of the Company, payment of interest may be made by
check mailed to the Holders on the Regular Record Date or on the Special
Record Date at their addresses set forth in the Security Register of Holders.
9. Paying Agent and Registrar.
Initially, Chase Bank of Texas, National Association (the "Trustee")
will act as Paying Agent and Registrar. The Company may change any Paying
Agent, Registrar or co-Registrar at any time upon notice to the Trustee and
the Holders. The Company or any of its Subsidiaries may, subject to certain
exceptions, act as Paying Agent, Registrar or co-Registrar.
10. Indenture.
This Security is one of a duly authorized issue of Securities of the
Company issued and to be issued in one or more series under an Indenture,
dated as of September 10, 1997 (the "Indenture"), between the Company and the
Trustee. The terms of the Securities include those stated in the Indenture,
all indentures supplemental thereto, those made part of the Indenture by
reference to the Trust Indenture Act of 1939, as amended, as in effect on the
date of the Indenture, and those terms stated in the Resolutions of the
Pricing Committee of the Board of Directors of the Company dated July 14,
1998 (the "Resolutions"). The Securities are subject to all such terms, and
Holders of Securities are referred to the Indenture, all indentures
supplemental thereto, said Act and said Resolutions for a statement of them.
The Securities of this series are general unsecured obligations of the
Company limited in aggregate principal amount to $600,000,000.
11. Denominations; Transfer; Exchange.
The Securities are issued in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder may
register the transfer of, or exchange, Securities in accordance with the
Indenture. The Securities Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and to pay
any taxes and fees required by law or permitted by the Indenture.
12. Person Deemed Owners.
The registered Holder of a Security may be treated as the owner of it
for all purposes.
13. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented, and any existing Event of Default or compliance with
any provision may be waived, with the written consent of the Holders of a
majority in aggregate principal amount of the Securities then outstanding.
Without notice to or consent of any Holder, the parties thereto may amend or
supplement the Indenture or the Securities to, among other things, cure any
ambiguity, defect or inconsistency, or make any other change that does not
adversely affect the rights of any Holder of a Security. Any such consent or
waiver
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by the Holder of this Security (unless revoked as provided in the Indenture)
shall be conclusive and binding upon such Holder and upon all future Holders
and owners of this Security and any Securities which may be issued in
exchange or substitution herefor, irrespective of whether or not any notation
thereof is made upon this Security or such other Securities.
14. Defaults and Remedies.
If an Event of Default occurs and is continuing, then in every such
case, the Trustee or the Holders of 25% in aggregate principal amount of the
Securities then outstanding may declare the principal amount of all the
Securities to be due and payable immediately in the manner and with the
effect provided in the Indenture. Notwithstanding the preceding sentence,
however, if at any time after the unpaid principal amount of the Securities
shall have been so declared due and payable and before any judgment or decree
for the payment of the moneys due shall have been obtained or entered as
hereinafter provided, the Company shall pay or shall deposit with the Trustee
a sum sufficient to pay all overdue installments of interest, if any, upon
all of the Securities and the principal of any and all Securities which shall
have become due otherwise than by acceleration and any interest thereon at
the rate prescribed therefor herein and, to the extent that payment of such
interest is lawful, interest upon overdue interest at the rate prescribed
therefor herein, as well as the reasonable compensation, disbursements,
expenses and advances of the Trustee, and any and all defaults under the
Indenture, other than the nonpayment of such portion of the principal amount
of and accrued interest, if any, on such Securities which shall become due by
acceleration, shall have been cured or shall have been waived or provision
deemed by the Trustee to be adequate shall have been made therefor -- then in
every such case the Holders of a majority in aggregate principal amount of
the Securities then Outstanding, by written notice to the Company and to the
Trustee, may rescind and annul such declaration and its consequences; but no
such rescission and annulment shall extend to or shall affect any subsequent
default, or shall impair any right consequent thereon. Holders of Securities
may not enforce the Indenture or the Securities except as provided in the
Indenture. The Trustee may require indemnity satisfactory to it before it
enforces the Indenture or the Securities. Subject to certain limitations,
Holders of a majority in aggregate principal amount of the Securities then
outstanding may direct the Trustee in its exercise of any trust or power.
15. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for
the Company or its Affiliates or any subsidiary of the Company's Affiliates,
and may otherwise deal with the Company or its Affiliates as if it were not
the Trustee.
16. Authentication.
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on the other side of this
Security.
17. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (=tenant in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with right of
survivorship and not as tenants in common), CUST (=Custodian), and U/G/M/A
(=Uniform Gifts to Minors Act).
18. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Note Identification Procedures, the Company will cause CUSIP numbers to be
printed on the Securities as a convenience to the Holders of the Securities.
No representation is made as to the accuracy of such number as printed on the
Securities and reliance may be placed only on the other identification
numbers printed hereon.
19. Absolute Obligation.
No reference herein to the Indenture and no provision of this Security
or the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and interest on this
Security in the manner, at the respective times, at the rate and in the coin
or currency herein prescribed.
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20. No Recourse.
No recourse under or upon any obligation, covenant or agreement
contained in the Indenture or in any Security, or because of any indebtedness
evidenced thereby, shall be had against any incorporator, past, present or
future stockholder, officer or director, as such of the Company or of any
successor, either directly or through the Company or of any successor, under
any rule of law, statute or constitutional provision or by the enforcement of
any assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance of the
Security by the Holder and as part of the consideration for the issue of the
Security.
21. Governing Law.
This Security shall be construed in accordance with and governed by the
laws of the State of New York.
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